TCR_Public/080208.mbx          T R O U B L E D   C O M P A N Y   R E P O R T E R

            Friday, February 8, 2008, Vol. 12, No. 33

                             Headlines

614/616 CONTI: Case Summary & Largest Unsecured Creditor
AMERICAN HOME: Committee Taps Trenwith Sec. as Investment Banker
AMERICAN HOME: S&P Puts Three Low-B Ratings on Negative Watch
AMERICAN LAFRANCE: Can Employ Kurtzman Carson as Claims Agent
AMERICAN RAILCAR: Earns $4.9 Million in 2007 Third Quarter

ASARCO LLC: Asarco Inc.'s Examiner Request Unpopular to Parties
ASARCO LLC: Wants Lehman to Produce Asset Valuation Report
ASPEN INSURANCE: Earns $135.2 Million in 2007 Fourth Quarter
ATHERTON-NEWPORT: Gets Initial OK to Use I.I.G.'s Cash Collateral
AVISTA CORP: Fitch Holds 'BB+' ID Rating with Positive Outlook

BLACKBOARD INC: Earns $4.2 Million in Quarter Ended December 31
BRISTOW GROUP: Quarter Ended Dec. 31 Earnings Increase to $20 Mil.
BRUCE STRICKLAND: Case Summary & Largest Unsecured Creditor
BUFFETS HOLDING: Landlords, et al., Cry Foul Over DIP Loan Motion
BUILDING MATERIALS: Expected Neg. Trends Cue Fitch to Cut Ratings

CALPINE CORP: Inks Settlement Pact With Debtholders' Committee
CENTRAL ILLINOIS: To Sell Plant to Secured Lenders for $80 Million
CHARMING SHOPPES: Discloses Changes in Executive Management
CHEETAH GYMS: MB Financial to Auction Assets on Feb. 29
CHRISTENSEN REALTY: Case Summary & Five Largest Unsec. Creditors

CHRYSLER LLC: Still Out to Grab Tooling Equipment from Plastech
COLLIN DWAYNE: Voluntary Chapter 11 Case Summary
CONTINENTAL AIR: WSJ Says United Merger Talks "Have Grown Serious"
CROWN HOLDINGS: S&P Changes Outlook to Positive; Holds BB- Rating
CREDIT-BASED: Fitch Downgrades Ratings on $511 Mil. Certificates

COUNTRYWIDE ASSET: Fitch Junks Ratings on Seven Cert. Classes
DEATH ROW: Warner Tenders $25-Mil. Cash Bid to Buy All Assets
DELTA AIR: Merger Talks with Northwest Intensifies
DOLLAR THRIFTY: Moody's Reviews B1 Corporate Rating for Likely Cut
DOMAIN INC: Wants To Access Wells Fargo's $6 Mil Credit Facility

DUKE FUNDING: Fitch Assigns DR6 on Ten Classes of 'C' Rated Notes
DURA AUTOMOTIVE: To Bypass Executives From 2008 Bonuses
DURA AUTOMOTIVE: Reaches Settlement Pact w/ Nyloncraft for $2 Mil.
FORTUNOFF: Can Access BofA's $85 Mil. DIP Fund on Interim Basis
FORTUNOFF: Obtains Interim Nod to Use Lenders' Cash Collateral

FORTUNOFF: NRDC Arm Executes Deal to Buy Assets for $80 Million
FOXTON NORTH: Disclosure Statement Hearing Scheduled for March 27
FOXTON NORTH: Unsecured Creditors To Be Paid in Full Under Plan
GRANT FOREST: S&P Puts B- Corporate Rating on CreditWatch Neg
GMAC COMMERCIAL: Fitch Holds 'B-' Rating on $3.8MM Class P Certs.

GMAC LLC: Financial Unit Posts $724MM Net Loss in Fourth Qtr.
GS ENERGY: Earns $461,456 in Third Quarter Ended Sept. 30, 2007
HANCOCK FABRICS: Asks Court's Nod to Assume 177 Unexpired Leases
HANCOCK FABRICS: Asks Court's Nod to Modify Lease Agreements
HANCOCK FABRICS: Court to Talk on Plan Exclusivity Issues Feb. 25

HARMAN INTERNATIONAL: Earns $43 Mil. in Quarter Ended December 31
IAC/INTERACTIVECORP: Incurs $144.1 Million Net Loss in Year 2007
IAC/INTERACTIVECORP: May Purchase AOL Biz For a "Ridiculous" Price
IAC/INTERACTIVECORP: Won't Let Liberty Dispute Distract Operations
INDEPENDENCE COUNTY: S&P Puts BB+ Bond Rating on CreditWatch Neg

ING RE (UK): Court Recognizes Ch. 15 Case as Foreign Proceeding
INTERSTATE HOTELS: Completes $208MM Buyout of Blackstone's Hotels
K-SEA TRANSPO: Earns $9.9 Million in 2nd Fiscal Qtr. Ended Dec. 31
LAKE ENTERPRISES: Case Summary & Nine Largest Unsecured Creditors
L2L EDUCATION: S&P Cuts Ratings on All Notes on High Default Rate

MARJORIE FORD: Case Summary & 20 Largest Unsecured Creditors
MARKETING & REFERRAL: Case Summary & Four Largest Unsec. Creditors
MARS CDO: Seven Classes Gets Moody's Junk Ratings on High Losses
MBS MANAGEMENT: to Sell Austin Apartment to Steelwood for $9.6MM
MCGUIRK OIL: Case Summary & 12 Largest Unsecured Creditors

MONITOR OIL: Committee Taps Thompson & Knight as Counsel
MOVIE GALLERY: Court Extends Plan Voting Deadline to March 24
MUELLER WATER: Posts $1.6 Mil. Net Loss in Qtr. Ended December 31
NEO CDO: S&P Junks Ratings on Seven Tranches on Liquidation Plan
NEWCASTLE CDO: Fitch Places 'BB' Rating Under Negative Watch

NORBORD INC: Net Loss Up to $13 Mil. in Qtr. Ended December 31
NORBORD INC: Declining Risk Profile Cues S&P to Chip Rating to BB
NORTHWEST AIRLINES: Merger Talks with Delta Air Lines Intensifies
OZYMANDIUS LP: Sale of Kress Building Fails to Attract Bids
PACIFIC LUMBER: Heartlands Commission Files Competing Plan

PACIFIC LUMBER: Sale of Scotia School & Recreation Center Approved
PALM BEACH: Defaults on Acquisition Agreement with Manchester Inc.
PERFORMANCE TRANSPORTATION: Can Secure $15 Million DIP Financing
PERFORMANCE TRANSPORTATION: Court OKs Use of All Cash Collateral
PERFORMANCE TRANSPORTATION: Court OKs Use of All Cash Collateral

PLASTECH ENGINEERED: Chrysler Still Out to Grab Tooling Equipment
PLASTECH ENGINEERED: Can Obtain $38 Million of DIP Financing
PLASTECH ENGINEERED: Moody's Puts D Probability of Default Rating
QUEBECOR WORLD: ISDA Launches Protocol to Settle Derivate Trades
RADIATION THERAPY: Shareholders OK Merger Deal with RTSHI & RTS

RADIO SYSTEM: Moody's Chips Secured Credit Facility Rating to B2
RFSC SERIES: S&P Cuts Ratings; Rating on Class M-3 Tumbles to 'D'
SEA CONTAINERS: Court Approves SC Iberia and YMCL Guarantees
SEA CONTAINERS: Reaches Pact with Pension Schemes Trustees
SECURITY CAPITAL: Moody's Cuts Insurance Strength Rating to 'A3'

SEG DEVELOPMENT: Case Summary & Four Largest Unsecured Creditors
SEMINOLE TRIBE: Moody's Affirms 'Ba1' Rating on $459 Mil. Bonds
SOLUTIA INC: Compels Banking Group to Honor $2 Bil. Exit Financing
SRH INVESTORS: Asset Sale Slated for March 5
STANDARD BEEF: Case Summary & 20 Largest Unsecured Creditors

TAUBMAN CENTERS: Fitch Affirms and Withdraws Low-B Ratings
TESORO CORP: Posts $40 Million Net Loss in 2007 Fourth Quarter
TEXAS INDUSTRIES: Earns $29.3 Million in 2nd Quarter Ended Nov. 30
TRIBUNE CO: Appoints Ed Wilson as Pres. of Broadcasting Tribune
UMMA RESOURCES: Must File Disclosure Statement & Chapter 11 Plan

UNITED AIR: WSJ Says Continental Merger Talks "Have Grown Serious"
WENDY'S INT'L: Earnings Improved to $14MM in Qtr. Ended Dec. 30
W.R GRACE: Reports Fourth Quarter 2007 Financial Results

* Fitch Cuts Ratings on Eight CLO Tranches, Removes Neg. Watch
* Fitch Says US Loan CDO Delinquencies Are Up from Last Month
* S&P Lowers Ratings on 94 Tranches From 17 Cash Flows and CDOs
* S&P Downgrades Ratings on Five Classes of RMBS From Seven Deals
* S&P's Lists New Actions to Strengthen Rating Process

* S&P Undertakes Actions Aimed at Strengthening Rating Process

* BOOK REVIEW: How To Measure Managerial Performance

                             *********

614/616 CONTI: Case Summary & Largest Unsecured Creditor
--------------------------------------------------------
Debtor: 614/616 Conti Street, L.L.C.
        8654 Pontchartrain Boulevard
        20 Peninsula
        New Orleans, LA 70124

Bankruptcy Case No.: 08-10227

Type of Business: The Debtor owns and manages real estate.

Chapter 11 Petition Date: February 6, 2008

Court: Eastern District of Louisiana (New Orleans)

Debtor's Counsel: Emile L. Turner, Jr., Esq.
                  424 Gravier Street
                  New Orleans, LA 70130
                  Tel: (504) 586-9120

Total Assets:   $500,000 to $1 Million

Total Debts: $1 Million to $10 Million

Debtor's Largest Unsecured Creditor:

   Entity                      Nature of Claim       Claim Amount
   ------                      ---------------       ------------
Earl North                     C.P.A. fees           unknown
Certified Public Accountant
1010 Common Street, Suite 2440
New Orleans, LA 70112


AMERICAN HOME: Committee Taps Trenwith Sec. as Investment Banker
----------------------------------------------------------------
The Official Committee of Unsecured Creditors in American Home
Mortgage Investment Corp. and its debtor-affiliates' Chapter 11
cases seek permission from the U.S. Bankruptcy Court for the
District of Delaware to retain Trenwith Securities LLC to provide
investment banking advisory services, nunc pro tunc to Aug. 14,
2007.

Trenwith Securities is an affiliate of BDO Seidman.

The Creditors Committee has previously sought and obtained
permission to retain BDO Seidman LLP, as advisor.  In that
application, the Committee sought authority to retain Trenwith
Securities to provide investment banking advisory services on an
as-needed basis.

Judge Christopher S. Sontchi advised the Creditors Committee to
file a separate application to engage Trenwith Securities.

Trenwith Securities has extensive experience in providing
investment banking advisory services in Chapter 11 cases, in
particular, with assisting creditors' committees in connection
with the structure and process for conducting sales under
Section 363 of the Bankruptcy Code, the Committee told the Court.

The Creditors Committee believes that Trenwith Securities is well
qualified to provide the Committee with investment banking
advisory services, particularly, in assisting with the structure
and process for conducting sales under Section 363.

James McGinley, of the Wilmington Trust Company and co-chairman
of the Creditors Committee, relates that Trenwith Securities is
not being engaged to market and sell any specific estate asset.  
Rather, the Creditors Committee currently desires only to retain
Trenwith Securities for the limited purpose of providing limited
investment advisory services on an hourly basis.

Trenwith Securities will be paid in its customary hourly rates
for services rendered and for actual expenses incurred in
connection with its retention:

      Professionals                 Hourly Rate
      -------------                 -----------
      Managing Directors            $600 to $775
      Directors                     $300 to $600
      Managers                      $225 to $375
      Vice President                $175 to $275
      Staff                         $125 to $200

Jeffrey R. Manning, a member of Trenwith Securities, assures the
Court that the firm neither holds nor represents any interest
adverse to the Debtors or the bankruptcy estates.  He adds that
Trenwith Securities is a "disinterested person," as defined in
Section 101(14) of the Bankruptcy Code.

                      About American Home

Based in Melville, New York, American Home Mortgage Investment
Corp. (NYSE: AHM) -- http://www.americanhm.com/-- is a mortgage   
real estate investment trust engaged in the business of investing
in mortgage-backed securities and mortgage loans resulting from
the securitization of residential mortgage loans originated and
serviced by its subsidiaries.

American Home Mortgage and seven affiliates filed for
chapter 11 protection on Aug. 6, 2007 (Bankr. D. Del. Case Nos.
07-11047 through 07-11054).  James L. Patton, Jr., Esq., Joel A.
Waite, Esq., and Pauline K. Morgan, Esq. at Young, Conaway,
Stargatt & Taylor LLP represent the Debtors.  Epiq Bankruptcy
Solutions LLC acts as the Debtors' claims and noticing agent.  The
Official Committee of Unsecured Creditors selected Hahn & Hessen
LLP as its counsel.  As of March 31, 2007, American Home
Mortgage's balance sheet showed total assets of $20,553,935,000,
total liabilities of $19,330,191,000.  The Debtors' exclusive
period to file a plan expires on March 3, 2008.  (American Home
Bankruptcy News, Issue No. 25, Bankruptcy Creditors' Service,
Inc., http://bankrupt.com/newsstand/or 215/945-7000).


AMERICAN HOME: S&P Puts Three Low-B Ratings on Negative Watch
-------------------------------------------------------------
Standard & Poor's Ratings Services placed its ratings on 18
classes from American Home Mortgage Assets Trust 2006-6 on
CreditWatch with negative implications.
     
S&P placed these ratings on CreditWatch negative because of the
amount of delinquent loans that are in foreclosure or classified
as real estate owned so early in this transaction's life.  This
transaction is supported by residential mortgage loans that are
only seasoned 15 months.  Over the past six months, total
delinquencies have increased 4.17% to 5.68% of the current pool
balance, and the amount of loans classified as severely delinquent
(90 days, foreclosure, and REO) has increased 3.38% to 4.24%.   
Credit enhancement for this transaction is provided by
subordination.
     
Standard & Poor's will continue to closely monitor the performance
of this transaction.  If the delinquent loans begin to perform to
a point at which, in S&P's view, there would be no loss to the
principal balance of a class, S&P will affirm the applicable
rating and remove it from CreditWatch negative.  Conversely, if
delinquencies continue to increase and cause substantial realized
losses in the coming months, thereby eroding subordination for
these classes, S&P will take further negative rating actions.
     
At origination, the collateral consisted of Alternative-A, option
adjustable-rate mortgage loans, and adjustable-rate mortgage loans
secured by first liens on one- to four-family residential
properties.

              Ratings Placed on CreditWatch Negative

            American Home Mortgage Assets Trust 2006-6

                                             Rating
                                             ------
       Class                          To                From
       -----                          --                ----
       A1-A, A1-B, A1-C, A2-A, A2-B   AAA/Watch Neg     AAA
       R, X-P                         AAA/Watch Neg     AAA
       M-1                            AA+/Watch Neg     AA+
       M-2                            AA/Watch Neg      AA
       M-3                            AA-/Watch Neg     AA-
       M-4                            A+/Watch Neg      A+
       M-5                            A/Watch Neg       A
       M-6                            A-/Watch Neg      A-
       M-7                            BBB+/Watch Neg    BBB+
       M-8                            BBB-/Watch Neg    BBB-
       M-9                            B+/Watch Neg      B+
       B-1                            B/Watch Neg       B
       B-2                            B/Watch Neg       B


AMERICAN LAFRANCE: Can Employ Kurtzman Carson as Claims Agent
-------------------------------------------------------------
American LaFrance LLC, sought and obtained the authority of the
U.S. Bankruptcy Court for the District of Delaware to employ
Kurtzman Carson Consultants LLC, as its claims, noticing and
balloting agent.

KCC is a data processing firm that specializes in Chapter 11
administration, consulting and analysis, including noticing,
claims processing, voting and other administrative tasks in
Chapter 11 cases.

According to William Hinz, president and chief executive officer,  
KCC has assisted and advised numerous Chapter 11 debtors in
connection with noticing, claims administration and
reconciliation and administration of plan votes.  KCC has
provided identical or substantially similar services in other
Chapter 11 cases, including Tweeter Home Entertainment Group,
Inc., ResMae Corp., Dura Auto Sys., Inc., and Calpine Corp.

As Claims, Noticing and Balloting Agent, KCC will, among other
things:

     * serve as the Court's noticing agent to mail notices to the
       estate's creditors and parties-in-interest;

     * provide computerized claims, objection and balloting
       database services; and

     * provide expertise, consultation and assistance in claim
       and ballot processing and other administrative information
       with respect to ALF's Chapter 11 case.

KCC will be paid for its services, expenses and supplies at the
rates or prices set by KCC and in effect on the day the services
or supplies are provided to ALF, in accordance with KCC's fee
structure.  

Where the fees and expenses is expected to exceed $10,000 in any
single month, KCC may require advance payment.

The firm will submit its invoice to ALF within 15 days of the end
of each calendar month.  ALF agrees that the amount invoiced is
due and payable upon receipt of the invoice.  A late charge will
apply to any unpaid amount, as of 30 days from receipt.  If the
invoice amount is disputed, a notice will be sent to KCC within
10 days of receipt of the invoice by ALF.  Late charges will not
accrue on any amounts in dispute.

KCC will receive a retainer of $10,000 for services to be
performed and expenses to be incurred.

A full-text copy of the KCC Agreement is available for free at:

               http://researcharchives.com/t/s?27b6

As an administrative agent and an adjunct to the Court, ALF does
not believe that KCC is a "professional" whose retention is
subject to approval under Section 327 of the Bankruptcy Code, or
whose compensation is subject to Court approval under Sections
330 and 331 of the Bankruptcy Code.

Sheryl Betance, director of restructuring for KCC, told the Court
that neither KCC, nor any of its employee, is connected with the
Debtor, its creditors, other parties-in-interest or the United
States Trustee or any person employed by the Office of the U.S.
Trustee.  KCC is a disinterested person, as the term is defined
in Section 101(14) of the Bankruptcy Code.

                          *      *      *

ALF is authorized to pay, without further Court order, the
reasonable fees and expenses of KCC incurred in connection with
services rendered to the Debtor as Claims Agent, from the assets
of the Debtor's estate, upon KCC's submission, on a monthly
basis, of reasonably detailed invoices to ALF.

The Hon. Brendan Linehan Shannon also approves of the KCC
Agreement.  As part of the overall compensation payable to KCC
under the terms of the KCC Agreement, ALF has agreed to certain
limitations of liability and indemnification obligations.

                     About American LaFrance

Headquartered in Summerville, South Carolina, American LaFrance
LLC --  http://www.americanlafrance.com/-- is one of the oldest   
fire apparatus manufacturers and one of the top six suppliers of
emergency vehicles in North America.  Thee company filed for
Chapter 11 protection on Jan. 28, 2008 (Bankr. D. Del. Case No.
08-10178).  Ian T. Peck, Esq., and Abigail W. Ottmers, Esq., at
Haynes and Boone LLP, is the Debtor's proposed Lead Counsel.  
Christopher A. Ward, Esq., at Klehr, Harrison, Harvey, Branzburg &
Ellers LLP, is the Debtor's proposed local counsel.  When the
Debtor filed for protection against its creditors, it listed
assets and liabilities of between $100 Million and $500 Million.

The Debtor's exclusive period to file a plan expires on May 27,
2008. (American LaFrance Bankruptcy News, Issue No. 3; Bankruptcy
Creditors' Service, Inc., http://bankrupt.com/newsstand/or   
215/945-7000).


AMERICAN RAILCAR: Earns $4.9 Million in 2007 Third Quarter
----------------------------------------------------------
American Railcar Industries reported net earnings of $4.9 million
and revenues of $139.9 million for the three months ended
Sept. 30, 2007.  In comparison, the company reported net earnings
of $11.0 million and revenues of $150.5 million for the three
months ended Sept. 30, 2006.  

Results for the three months ended Sept. 30, 2007, included a pre-
tax benefit of $9.3 million related to insurance recoveries from
the April 2006 tornado at the company's tank railcar facility.  
The $9.3 million included $5.0 million of business interruption
insurance compensation for lost profits while the tank railcar
facility was shutdown due to the damage from the tornado, along
with a $4.3 million gain, which was related to the involuntary
conversion of assets that were destroyed by the tornado.  

During the three months ended Sept. 30, 2007, the company shipped
1,276 railcars compared to 1,546 railcars in the same period of
2006.

Revenues and railcar shipments decreased in the third quarter of
2007 compared to the same period in 2006 primarily due to a
reduction of hopper railcar shipments, reflecting less demand and
increased competition for some of the company's hopper railcar
products.  

EBITDA was $12.7 million in the third quarter of 2007 compared to
EBITDA of $20.5 million in the third quarter of 2006, including
the effect of insurance recoveries.  The decrease in EBITDA was
driven primarily by the decrease in revenues.

For the nine months ended Sept. 30, 2007, revenues were
$536.2 million and net earnings were $29.4 million.  In
comparison, for the nine months ended Sept. 30, 2006, the company
had revenues of $480.7 million and net earnings of $28.5 million,
including a pre-tax benefit of $14.3 million related to insurance
recoveries.  The $14.3 million included $10.0 million of business
interruption insurance compensation for lost profits while the
tank railcar facility was shutdown due to the damage from the
tornado, along with a $4.3 million gain, which was related to the
involuntary conversion of assets that were destroyed by the
tornado.  

During the nine months ended Sept. 30, 2007, the company shipped
5,465 railcars compared to 5,260 railcars in the same period of
2006.

Revenues increased in the nine months ended Sept. 30, 2007,
compared to the same period in 2006, primarily due to an increase
in tank railcar shipments, resulting from increased tank railcar
plant capacity in 2007 and the recovery from the tornado related
shutdown in 2006.  

EBITDA was $59.8 million in the nine months ended Sept. 30, 2007,
compared to EBITDA of $54.2 million in the nine months ended
Sept. 30, 2006, including the effect of insurances recoveries of
$14.3 million in 2006.  The increases in EBITDA and net earnings
in 2007 resulted primarily from increased revenue.  

"We are pleased that our year-to-date earnings and gross profit
are both ahead of the prior year, which reflects the strength of
our tank railcar business.  However, we have experienced less
demand and increased competition for some of our hopper railcar
products in the third quarter of 2007, resulting in lower earnings
for the quarter when compared to the prior year.  In addition, the
third quarter of 2006 included insurance related gains," said
James J. Unger, president and chief executive officer of ARI.

"Management is controlling costs at our hopper railcar facility
during this time of lower production levels.  We are pleased with
the outstanding performance of our tank railcar plant, which
partially offset the lower hopper railcar deliveries for the
quarter.  Our backlog remains at a high level, totaling 13,384
railcars at Sept. 30, 2007, and our tank railcar lines are fully
booked through 2008 and for most of 2009.  We have hopper railcar
orders through 2008 but not at capacity levels.  We are pursuing a
number of inquiries to fill our available capacity for hopper
railcars."

                 Liquidity and Capital Resources

As of Sept. 30, 2007, the company had working capital of
$391.4 million, including $297.6 million of cash and cash
equivalents.  At Sept. 30, 2007, the company had no borrowings
outstanding under its $100.0 million revolving credit facility.

On Feb. 28, 2007, the company issued $275.0 million of senior
unsecured notes that are due in 2014.  The offering resulted in
net proceeds to the company of approximately $272.2 million.  As
of Sept. 30, 2007, the company was in compliance with all of its
covenants under the notes.

                         Balance Sheet

At Sept. 30, 2007, the company's consolidated balance sheet showed
$634.0 million in total assets, $352.7 million in total
liabilities, and $281.3 million in total stockholders' equity.

Full-text copies of the company's consolidated financial
statements for the quarter ended Sept. 30, 2007, are available for
free at http://researcharchives.com/t/s?27d9

                     About American Railcar

American Railcar Industries Inc., (NasdaqGS: ARII) --
http://www.americanrailcar.com/-- through its subsidiaries,    
engages in the design, manufacture, sale, and marketing of covered
hopper and tank railcars in North America.  It operates in two
segments, Manufacturing Operations and Railcar Services.

                         *     *     *

American Railcar Industries carries Moody's Investors Service
'Ba3' corporate family and 'B1' senior unsecured debt ratings.


ASARCO LLC: Asarco Inc.'s Examiner Request Unpopular to Parties
---------------------------------------------------------------
Seven entities object to Asarco Incorporated's request to appoint
a Chapter 11 examiner in ASARCO LLC and its debtor-affiliates'
bankruptcy cases.

These entities are:

   1. ASARCO LLC and debtor-affiliates;

   2. Official Committee of Unsecured Creditors for ASARCO LLC;

   3. Official Committee of Unsecured Creditors for the Asbestos
      Subsidiary Debtors and Robert C. Pate, the Future Claims
      Representative;

   4. United Steel, Paper and Forestry, Rubber, Manufacturing,
      Energy, Allied Industrial and Service Workers International
      Union, AFL-CIO;

   5. The U.S. Government;

   6. Harbinger Capital Partners Master Fund I, Ltd., Harbinger
      Capital Partners Special Situations Fund, L.P., and
      Citigroup Global Markets, Inc.; and

   7. Wells Fargo Bank, N.A., as successor Indenture Trustee
      under an Indenture and Bankers Trust Company.

The Objecting Parties point out that it is Asarco Inc.'s fifth
attempt to take over the bankruptcy case of ASARCO LLC, and
another attempt to delay the Debtors' reorganization efforts.

As reported in the Troubled Company Reporter on Jan. 22, 2008,
Asarco Inc. wants the U.S. Bankruptcy Court for the Southern
District of Texas to appoint an examiner to:

   (a) investigate the facts and circumstances surrounding the
       good faith of the ongoing negotiations among the Debtors
       and certain other constituents with respect to the terms
       of the future plan of reorganization for the Debtors;

   (b) determine the value of the Debtors;

   (c) investigate the good faith of the settlements of claims
       reached among the Debtors, the asbestos claimants and the
       United States Department of Justice with respect to
       asbestos and environmental claims asserted against the
       Debtors; and

   (d) investigate whether ASARCO LLC has fulfilled its fiduciary
       duties to its parent company, Asarco Inc.

The Debtors assert that Asarco Inc. has waived its right to
invoke Section 1104(c)(2) of the Bankruptcy Code based on:

   (a) the timing of the Appointment Request, which was filed two
       and a half years after ASARCO LLC's date of bankruptcy and
       as ASARCO LLC works to select a Chapter 11 plan sponsor and
       negotiate the terms of what the Debtor anticipates will be
       a consensual reorganization plan;

   (b) Asarco Inc.'s agreement to the appointment of a Board of
       Directors with a majority of independent directors to
       manage the Debtors;

   (c) Asarco Inc.'s motive behind the Appointment Request, which
       is to delay ASARCO LLC's progress towards confirmation;

   (d) the fact that the appointment of an examiner at this late
       stage in ASARCO LLC's reorganization process will
       needlessly prolong the company's exit from bankruptcy and
       waste the Court's time and the Debtors' assets; and

   (e) Asarco Inc.'s allegations that reiterate those it already
       asserted before the Court, which arguments the Court
       repeatedly stated should be heard at the confirmation
       hearing of a reorganization plan.

The ASARCO LLC Committee asserts that "the court may appoint an
examiner any time before the plan is confirmed, a creditor cannot
use the provision to disrupt the proceedings," citing In re
Schepps Food Stores, Inc., 148 B.R. 27 (S.D. Tex. 1992).  

The ASARCO LLC Committee and the USW agree that should the Court
appoint a Chapter 11 examiner, its duties should be of a limited
scope and its expenses should be limited to $75,000.

The U.S. Trustee for Region 7, however, tells the Court that it
appears that the debt threshold of Section 1104(c)(2) has been met
in ASARCO LLC's case.  The U.S. Trustee asks the Court to consider
all facts and circumstances to determine the proper scope of an
examiner's duties.  The U.S. Trustee says it is willing to move
quickly to identify a qualified candidate to perform the
examination.

The city of El Paso, Texas, supports the appointment of an
examiner to determine whether ASARCO LLC is solvent or insolvent.
El Paso contends that appointment of an examiner to investigate
ASARCO LLC's reorganization value could assist in streamlining
the plan confirmation process.

                          About ASARCO

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).

The Debtors' exclusive period to file a plan expires on
Feb. 11, 2008.  (ASARCO Bankruptcy News Issue No. 65;
Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000).


ASARCO LLC: Wants Lehman to Produce Asset Valuation Report
----------------------------------------------------------
ASARCO LLC and its debtor-affiliates seek authority from the U.S.
Bankruptcy Court for the Southern District of Texas to expand the
scope of services of Lehman Brothers Inc., the company's exclusive
financial advisor and investment banker, and increase the firm's
compensation for certain completed services.

ASARCO had asked permission from the Court in August 2007 to
expand the scope of Lehman Brothers' services and increase its
compensation structure.  That application, however, was met with
many objections.

Jack L. Kinzie, Esq., at Baker Botts, L.L.P., in Dallas, Texas,
says negotiations regarding the production of documents and the
deposition schedule relating to that application are ongoing.

Mr. Kinzie relates that before the Court can hear the August
2007 Amended Employment Application, ASARCO asked Lehman Brothers
to perform additional services relating to the pending fraudulent
transfer complaint asserted against Grupo Mexico S.A. de C.V.,
and Americas Mining Corporation.  

Those services included the preparation on a highly expedited
basis of a voluminous, detailed valuation report of ASARCO's
assets, to be used in support of certain fraudulent transfer
actions, Mr. Kinzie says.  

Subsequently, ASARCO and Lehman Brothers amended the 2005
Engagement Letter to include the terms and conditions under which
Lehman Brothers would act as the exclusive valuation consultant
regarding the value of ASARCO's operating assets in those
proceedings.

The Amended Engagement Letter provides that Lehman Brothers will
perform these additional services:

   (a) Assist ASARCO in developing exit financing alternatives
       that may result in a "Liquidity Event," which, if asked by
       ASARCO, will include Lehman Brothers' assistance in the
       formulation and execution of an exit working capital
       facility;

   (b) Advise and assist ASARCO in connection with the
       recruitment of independent members of the company's board
       of directors, a new chief executive officer and a new
       chief financial officer;

   (c) Advise and assist ASARCO in connection with the creation
       and implementation of a new employee incentive program and
       new key employee retention program; and

   (d) Develop and implement a hedging program designed to
       protect ASARCO from copper price volatility.

Mr. Kinzie also relates that ASARCO's Board has asked assistance
and advice from Lehman Brothers in connection with certain labor
negotiations, the retention of a crisis management firm, and the
fraudulent transfer proceeding related to the South Mill
Property.

The Amended Engagement Letter provides that Lehman Brothers will:

   (a) receive a $150,000 monthly cash fee effective as of March
       2007, which Advisory Fee will not be creditable against
       the Transaction Fee;

   (b) be entitled to a $4,000,000 flat fee on the closing of a
       sale of substantially all of ASARCO's assets;

   (c) receive 0.5% of the cash consideration involved in a
       Liquidity Event, which payment is capped at $2,500,000,
       pursuant to agreements with the Official Committee of
       Unsecured Creditors for the Asbestos Subsidiary Debtors
       and the Court-appointed Future Claims Representative;

   (d) receive $800,000 for analyzing and preparing a written
       report regarding the current value of ASARCO's operating
       assets for use in connection with the fraudulent transfer
       proceedings pending against Americas Mining and Montana
       Resources Inc.; and

   (e) receive additional $200,000 on delivery of valuation
       reports if ASARCO identifies Lehman Brothers as its
       valuation expert in the litigations against Montana
       Resources and August Resource Corporation.

                          About ASARCO

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).

The Debtors' exclusive period to file a plan expires on
Feb. 11, 2008.  (ASARCO Bankruptcy News Issue No. 64;
Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000).


ASPEN INSURANCE: Earns $135.2 Million in 2007 Fourth Quarter
------------------------------------------------------------
Aspen Insurance Holdings Limited reported net income for the
fourth quarter of 2007 of $135.2 million, an increase of 20.0%
over the same quarter last year.

For the three months ended Dec. 31, 2007, Aspen reported gross
written premiums of $305.0 million, a increase of 6.3% over the
same quarter last year.

Chris O'Kane, chief executive officer, commented, "For the fourth
quarter and full year 2007, Aspen delivered record net income and
earnings per share.  These outstanding results reflect that all
areas of the company are executing in-line with our strategy to
diversify and leverage our underwriting platforms, and generate
strong consistent results from our investment portfolio.  We are
well positioned for the softening markets in 2008 and expect to
continue delivering value for our shareholders."

                    2007 Operating Highlights

  -- net investment income for the year was $299.0 million, up
     46.3% on last year with the Funds of Hedge Funds producing an
     11.4% return over the year.

  -- Assets under management increased to $5.9 billion at the end
     of 2007 from $5.2 billion at the end of 2006.

  -- Cash flows from operating activities increased from
     $723.0 million in 2006 to $774.0 million in 2007.

  -- Limited catastrophe losses for the year of $77.0 million,
     including $18.0 million of losses resulting from the
     California wildfires in the fourth quarter.

  -- Following the $50.0 million share buyback in the third
     quarter, Aspen completed the final $50.0 million tranche in
     the fourth quarter.  This completes the $300.0 million
     buyback program authorized by the Board in November 2006.

  -- During 2007, Aspen continued to implement its successful
     diversification strategy across business lines and
     geographies, with new initiatives including entry into
     Political Risk, Global Excess Casualty and Professional
     Liability insurance markets, and the establishment of  
     operating platforms in Zurich and Dublin.

                 2007 Business Segment Highlights

In the third quarter of 2007, the Company disclosed a change in
the composition of its business segments to reflect the manner in
which the business is managed.  The new segments are Property
Reinsurance, Casualty Reinsurance, International Insurance, and
U.S. Insurance.

a) Property Reinsurance Segment

The Property Reinsurance segment finished the year with a strong
quarter recording a combined ratio of 74.8% compared with 80.1%
last year, with the only substantial loss of $18.0 million
attributable to the California wildfires.  The full year combined
ratio improved to 72.6% from 79.2% in 2006.  In 2006, there were
virtually no catastrophic events whereas 2007 has produced losses
from Windstorm Kyrill, U.K. floods and the California wildfires.
While not insignificant, losses from these events were comfortably
within the initial catastrophe loss guidance of $135.0 million for
the year.  The loss ratio for the year was 39.7% versus 43.2% last
year, and gross written premium fell by only 3% to $602 million
despite pressure on prices.

b) Casualty Reinsurance Segment

Casualty Reinsurance finished the year with a combined ratio of
94.6% compared with 83.4% in the prior year reflecting increased
loss experience and lower rate levels.  In addition, 2006 included
favorable reserve development of $60.0 million compared with
$32.0 million in 2007.

c) International Insurance Segment

The International Insurance segment covers a wide range of classes
of business with the overall combined ratio for the year of 80.7%
compared with 79.1% last year.  2007 includes some moderate-sized
losses in both the marine and aviation books, offset by strong
prior year releases within the U.K. liability account from 2006
and prior years.  In the fourth quarter of 2007, the new lines,
excess casualty and professional liability, began contributing to
the top line with increased contributions from all new teams and
distribution platforms expected in 2008.

d) U.S. Insurance Segment

The U.S. Insurance operation has been strategically repositioned
in 2007 against the backdrop of challenging market conditions in
both the casualty and property lines.  Full year combined ratio of
98.3% compared favorably to 111.4% last year and the segment moved
from an underwriting loss of $12.0 million last year to a profit
of $2.0 million in 2007.  A reshaping of the property book in
particular lowered gross written premium by 20.0% to
$123.0 million.

                     Share Repurchase Program

On Feb. 6, 2008, Aspen's Board authorized a new buyback program
for up to $300.0 million of ordinary equity.  The authorization
covers the next two years.

                          Balance Sheet

At Dec. 31, 2007, the company's consolidated balance sheet showed
$7.19 billion in total assets, $4.37 billion in total liabilities,
and $2.82 billion in total shareholders' equity.

                      About Aspen Insurance

Headquartered in Hamilton, Bermuda, Aspen Insurance Holdings
Limited (NYSE: AHL) -- http://www.aspen.bm/-- provides  
reinsurance and insurance coverage to clients in various domestic
and global markets through wholly-owned subsidiaries and offices
in Bermuda, France, Ireland, the United States, the United
Kingdom, and Switzerland.

                          *     *     *

Aspen Insurance Holdings Limited still carries Moody's Investors
Services 'Ba1' Preferred Stock rating assigned on Dec. 21, 2005.  
Outlook is Stable.


ATHERTON-NEWPORT: Gets Initial OK to Use I.I.G.'s Cash Collateral
-----------------------------------------------------------------
The United States Bankruptcy Court for the Central District of
California authorized Atherton-Newport Investments LLC to access,
on an interim basis, I.I.G. Financial LLC's cash collateral until
April 25, 2008.

The Debtor tells the Court that it requires immediate access to
I.I.G Financial's cash collateral to fund its daily obligations
and it business operations.

Joseph A. Eisenberg, Esq., at Jeffer Mangels Butler & Marmaro LLP,
says that I.I.G. Financial, as secured creditor of the Debtor, has
an equity cushion of approximately 280% in its collateral, as
adequate protection.

The Debtor states that it will not exceed 110% of the individual
line item and aggregate expenditures under its cash flow analysis.

A final hearing on the request has been set on Feb. 20, 2008, at
1:30 p.m.  Objections, if any, must be filed before Feb. 15, 2008.

                      About Atherton-NewPort

Headquartered in Irvine, California, Atherton-Newport Investments,
L.L.C. -- http://www.atherton-newport.com--  is a real estate
investment and development.  The company filed for protection on
Jan. 16, 2008 (Bankr. C.D. Calif. Case No. 08-10230).  Joseph A.
Eisenberg, Esq., at Jeffer, Mangels, Butler & Marmaro, L.L.P.,
represents the Debtor in its restructuring efforts.  No Official
Committee of Unsecured Creditors has been appointed in this
case to date.  When the company filed for protection against
it creditors, it list assets and debts between $10 Million to
$50 Million.


AVISTA CORP: Fitch Holds 'BB+' ID Rating with Positive Outlook
--------------------------------------------------------------
Fitch Ratings has affirmed Avista Corporation's ratings as:

Avista Corporation
  -- Long-term Issuer Default Rating 'BB+';
  -- Senior Secured Debt 'BBB';
  -- Secured Bank Facility 'BBB';
  -- Senior Unsecured Debt 'BBB-';
  -- Trust Preferred 'BB+';
  -- Short-term IDR 'B'.

Avista Capital II
AVA Capital Trust III
  -- Trust Preferred 'BB+'.

The Rating Outlook is Positive.  Approximately $1.1 billion of
debt and trust preferred securities are affected by the rating
action.

The Positive Rating Outlook reflects the constructive outcome in
AVA's recently concluded Washington general rate case which is
expected by Fitch to result in improved earnings and cash flow and
strengthening underlying credit metrics in 2008.  The ratings also
reflect lower business risk as the result of the June 30, 2007
divestiture of AVA's energy marketing and resource management
subsidiary, Avista Energy, and continued strategic focus on the
core electric and gas utility business in the Pacific Northwest.  
Favorable resolution of the Positive Rating Outlook will depend on
future regulatory developments and their impact on Fitch's
earnings and cash flow expectations, among other things.  The
ratings and Outlook also consider regulatory mechanisms in
Washington and Idaho that allow the utility to defer certain power
supply costs for future recovery, reducing, but not eliminating,
commodity cost exposure.  Fitch estimates that AVA's earnings
before interest, taxes and depreciation and amortization-to-
interest expense and will improve from an estimated 2.7 times in
2007 to 3.8x in 2008, primarily reflecting higher electric and
natural gas rates in Washington and lower financing costs.

AVA reached a settlement agreement on Oct. 30, 2007 resolving all
issues in its GRC.  The settlement was filed with the commission
and approved on Dec. 19, 2007.  The WUTC-approved settlement
authorized electric and natural gas rate increases of
$30.1 million (9.4%) and $3.3 million (1.7%), respectively,
effective January 1, 2008.  The new rates are based on an
authorized 10.2% return on equity and an equity ratio as a
proportion of total capital of 46%.  While the 10.2% allowed ROE
represents a 20 basis points decline relative to AVA's previous
levels, the equity ratio is six percentage points higher.  The
rate increases represent approximately 60% of the requested
amount.  AVA filed the GRC with the WUTC in April 2007 requesting
a $51.1 million (15.9%) electric and $4.5 million (2.3%) natural
gas rate increase.

Under the terms of the settlement, the company's 'power cost only
rate case,' which would create a mechanism to adjust rates between
general rate case proceedings to reflect net power supply and
transmission costs, will be considered in AVA's next GRC filing.  
In addition, AVA agreed to take a charge of $3.9 million related
to certain debt repurchase costs to resolve accounting issues
related to debt amortization.  The charge was booked in the third
quarter 2007.

The potential negative cash flow impact from a prolonged period of
below normal hydro conditions and high natural gas prices are
primary sources of concern for fixed income investors.  While the
utility's power supply cost mechanisms in Washington and Idaho
pass through the large majority of such costs to ratepayers, they
also require that AVA absorb a portion of the increased operating
costs that arise when actual power supply costs exceed amounts
reflected in base rates.  Avista Utilities' margins suffer during
periods of below normal hydroelectric output because the utility
is forced to rely on higher cost thermal resources to meet a
larger proportion of its load requirement compared to a normal
water year.

AVA is a combination electric and natural gas utility that
provides integrated electric and natural service in parts of
eastern Washington and northern Idaho and natural gas distribution
service in parts of northeast and southwest Oregon.  At the end of
2006, AVA had 345,000 retail electric 304,000 natural gas
distribution customers.


BLACKBOARD INC: Earns $4.2 Million in Quarter Ended December 31
---------------------------------------------------------------
Blackboard Inc. reported financial results for the fourth quarter
and year ended Dec. 31, 2007.

Net income was $4.2 million for the fourth quarter of 2007
compared to net income of $201,000 in the same period last year.

Net income was $12.9 million for the full year 2007 compared to a
net loss of $10.7 million in the same period last year.

"This was a tremendous year for Blackboard," Michael Chasen, chief
executive officer and president for Blackboard, said.  "We are
pleased with our financial results, made possible by our global
client base adopting Blackboard products and services to manage
their most mission-critical technologies. During the year, we
realized strong revenue and earnings performance and generated
operating cash-flows of more than $69 million."

At Dec. 31, 2007, the company's balance sheet showed total assets
of $307.3 million, total liabilities of $167.18 million and total
stockholders' equity of $140.12 million.

                    About Blackboard Inc.

Headquartered in Washington D.C., Blackboard Inc. (Nasdaq: BBBB)
-- http://www.blackboard.com/-- is a provider of enterprise  
software applications and related services to the education
industry.  Founded in 1997, Blackboard's software applications are
used by colleges, universities, K-12 schools and other education
providers, well as textbook publishers and student-focused
merchants that serve education providers and their students.

                          *     *     *

As reported in the Troubled Company Reporter on Jan, 16, 2008,
Standard & Poor's Ratings Services said its ratings and outlook on
Blackboard Inc. (B+/Positive/--) would not be affected by the
company's disclosed acquisition of The NTI Group Inc.


BRISTOW GROUP: Quarter Ended Dec. 31 Earnings Increase to $20 Mil.
------------------------------------------------------------------
Bristow Group Inc. reported financial results for its three and
nine-month ended Dec. 31, 2007.

The company reported net income of $20.1 million, a 91% increase
from $10.5 million for the December 2006 quarter.  Net income for
the December 2007 quarter includes the loss of $6.2 million on the
sale of our Grasso Production Management business in November
2007, which is presented as discontinued operations.
.
For the nine months ended Dec. 31, 2007, net income of
$76.8 million increased 64% from $46.8 million for the nine months
ended Dec. 31, 2006.  Net income for the nine months
ended Dec. 31, 2007, includes the loss of $6.2 million on the sale
of our Grasso business in November 2007, which is presented as
discontinued operations.
    
                     Capital and Liquidity

   -- the Dec. 31, 2007 consolidated balance sheet reflected
      $959.3 million in stockholders' investment and
      $607.8 million of indebtedness.

   -- the company has $315.3 million in cash and an undrawn
      $100 million revolving credit facility.

   -- the company generated $57.8 million of cash from
      operating activities, $344.8 million in net proceeds
      from the issuance of 7 1/2% senior notes, $23 million of
      cash from asset dispositions and $22 million in net cash
      from the sale of Grasso during the nine months ended
      Dec. 31, 2007.

   -- the company used $288.8 million for capital expenditures

   -- for aircraft -- and $14.6 million for the acquisitions,
      net of cash acquired, of Bristow Academy and Vortex
      during the nine months ended Dec. 31, 2007.

   -- Aircraft purchase commitments totaled $344.7 million for
      28 aircraft, with options totaling $472.6 million for 34
      aircraft as of Dec. 31, 2007.

"We remain very pleased with our operational and financial
performance," William E. Chiles, president and chief executive
officer of Bristow Group Inc., said.  The delivery of new aircraft
well as rate increases in several operating regions produced
strong revenues and earnings performance in the December quarter."

"We renegotiated and extended the last of our major contracts in
Nigeria at significantly better rates during the quarter, which
should result in improved operating margins for our West Africa
business unit and move us closer to meeting our return on capital
goal for this region. We also saw improved rates from the North
Sea," he added.

"We continued to invest in our fleet with the exercise of options
on eight additional aircraft, including five large- and three
medium-sized helicopters from Sikorsky and Eurocopter,"
Mr. Chiles continued.

"During the quarter we also completed the sale of our Grasso
Production Management business, which makes Bristow Group a pure
play in helicopter transportation services principally to the
offshore energy industry," Mr. Chiles ended.

                  About  Bristow Group Inc.

Headquartered in Houston, Texas, Bristow Group Inc. (NYSE:BRS) --
http://www.bristowgroup.com/-- fka Offshore Logistics Inc.,     
provides helicopter transportation services to the worldwide
offshore oil and gas industry with operations in the United States
Gulf of Mexico and the North Sea.  The company also has
operations, both directly and indirectly, in offshore oil and gas
producing regions of the world, including Australia, Brazil,
China, Mexico, Nigeria, Russia and Trinidad.  The company also
provides production management services for oil and gas production
facilities in the United States Gulf of Mexico.

                         *     *     *

Standard & Poor's Ratings Services placed Bristow Group Inc.'s
long-term corporate family and senior unsecured debt ratings at
'Ba2' in January 2006.  The ratings still hold today with a
negative outlook.


BRUCE STRICKLAND: Case Summary & Largest Unsecured Creditor
-----------------------------------------------------------
Debtor: Bruce E. Strickland
        Katrina Woodard Strickland  
        17 Ball Creek Way
        Atlanta, Georgia 30350

Bankruptcy Case No.: 08-62233

Chapter 11 Petition Date: February 5, 2008

Court: Northern District of Georgia (Atlanta)

Judge: Paul W. Bonapfel

Debtor's Counsel: David L. Miller, Esq.
                  Law Offices of David L. Miller
                  The Galleria - Suite 960
                  300 Galleria Parkway, NW
                  Atlanta, Georgia 30339
                  Tel: 404-231-1933

Estimated Assets: $1,000,001 to $10 million

Estimated Debts: $1,000,001 to $10 million

Debtor's list of its Largest Unsecured Creditor:

   Entity                        Nature of Claim   Claim Amount
   ------                        ---------------
------------                                         
Carey Steele                     Alleged Security  Unknown
dba Steele Security              Services
7357 Indian Hill Trail
Riverdale, GA 30296


BUFFETS HOLDING: Landlords, et al., Cry Foul Over DIP Loan Motion
-----------------------------------------------------------------
Ten groups of landlords, Shapco Printing, Inc., U.S. Bank National
Association, and Levine Leichtman Capital Partners Deep Value Fund
L.P. ask the U.S. Bankruptcy Court for the District of Delaware to
deny the request of Buffets Holdings Inc., and its debtor-
affiliates to obtain up to $385,000,000 in postpetition financing
and use their lenders' cash collateral.

The Landlords are:

   * Kimco Realty Corporation;

   * CRI Easton LLC;

   * Macerich Company, RREEF Management Company, The Prudential
     Insurance Company of America, Watt Management Company, and
     Westwood Financial Corporation;

   * Seekonk Square Realty Trust;

   * Serve (MN)QRS 14-38, Inc.;

   * Centro Properties Group, Federal Realty Investment Trust,
     General Growth Management, Inc., and Levin Management
     Corporation;

   * Drawbridge Special Opportunities Fund;

   * Granite Village West L.P.;

   * Weingarten Realty Investors, Developers Diversified Realty
     Corporation, Gregory Greenfield & Associates, Ltd. and
     Turnberry Associates; and

   * Simon Property Group, Inc.

The Landlords complain that the Debtors' request to obtain
postpetition financing contains a provision proposing to grant
Credit Suisse, Cayman Islands Branch, the administrative agent
under the DIP facility, various rights and remedies to their
properties, including the right to obtain possession of the
premises and to foreclose the Debtors' leasehold rights under the
leases.

Macerich contends that the terms in the DIP Facility compromises
the integrity of the Landlords' control over their spaces, their
ability to market their properties, and risks putting the
Landlords into default of their own financing and investment
covenants.

The Landlords argue that no authority exists allowing the DIP
Lender to replace the Debtors as "tenant" or allowing the Leases
to be assigned to a third party without further hearing before the  
Court, with proper notices to all parties.  If the Lender wants
the benefit of the Debtors' rights to the Leases, Kimco says that
the Lender must pay for the rights to the same extent as the
Debtors would in the event of default.

Serve contends that the the DIP Facility should not be approved
unless the liability of both tenant and guarantor is strictly
limited to the net borrowing benefit each receives under the DIP
Facility.  Serve notes that the DIP Facility treats the Debtors as
if they have been substantively consolidated.

The Landlords argue that any order granting the Debtors' request
should specifically provide that the DIP Lender cannot exercise
any rights it may have with respect to the Leases unless the
Debtor timely performs all of its obligations under the Leases as
required by Section 365(d)(3) of the Bankruptcy Code.

In addition to the Leases, Shapco points out that the Debtors' DIP
Loan creates a purported carve-out granting certain administrative
claims, but not others, priority over the DIP Lender's
superpriority lien.

The proposed Carve-out is:

   -- the accrued and unpaid fees due and payable to the Clerk of
      the Court and the Office of the United States Trustee
      pursuant o Section 1930 of the Judiciary and Judicial
      Procedures;

   -- all approved fees and expenses incurred by professionals
      retained pursuant to an order of the Court until the
      earlier of the occurence of a default under the DIP
      financing documents, or the conversion of the cases to
      Chapter 7; and

   -- up to $400,000 in approved fees and expenses incurred by
      Chapter 11 professionals retained pursuant to an order of
      the Court upon and after the occurence of a default under
      the DIP financing documents.

Shapco says that the combined result of the Lender's superpriority
status and the Carve-out will be to alter the statutory priorities
for distribution in a plan of Chapter 7 liquidation.  Appellate
courts have unanimously denied these arrangements, Shapco
contends.  Shapco argues that the present agreement is not a true
carve-out but a priority shift to the prejudice of all claimants,
the U.S. Trustee, the professionals, and the DIP Lender.

Accordingly, Shapco asks the Court to deny the proposed Carve-out
and provide that all administrative priority claimants will share
pro rata in the Carve-out; or provide that the DIP Lender will
absorb all adverse consequences of the Carve-out, in effect making
it a true carve-out.

U.S. Bank is a lender under a $640,000,000 prepetition secured
credit facility arranged by Credit Suisse for the Debtors.  
Pursuant to the terms of the Credit Agreement, the Debtors have no
rights to the Credit-linked deposits and accounts, U.S. Bank says.

As security for the DIP Facility, the DIP Lenders will receive a
priming lien on all assets of the Debtors with priority over
prepetition liens and a superpriority claim against the Debtors
with priority over all administrative expenses, according to U.S.
Bank.

U.S. Bank asks the Court to clarify that the Credit-linked
Deposits and Accounts are not the Debtors' property and that the
DIP Lenders do not have a lien thereon.

Levine Leichtman says that the Debtors' DIP Motion is a textbook
example of giving away too much for too little.  Although lauded
as a traditional DIP financing with terms "favorable" to the
Debtors, the DIP Facility is neither traditional nor favorable to
the Debtors and their creditors.  Levine Leichtman contends that
the DIP Facility is structured more to fix apparent collateral
problems of prepetition senior lenders.

According to Levine Leichtman, the $300,000,000 roll-up is
inappropriate as it will only enhance the position of the
Prepetition Lenders to the detriment unsecured creditors.  
Pursuant to the Roll-up, $300,000,000 of the $385,000,000 will be
used to repay nearly half of Prepetition Lenders' claims.  Levine
Leichtman notes that the Debtors have failed to establish that the
proposed Roll-Up is necessary.

Levine Leichtman contends that the Debtors also failed to
establish that $85,000,000 in new loans is necessary to preserve
the assets of their estates.  Levine Leichtman says that the true
beneficiaries of the New Loans are the Debtors' lenders and trade
creditors.

In addition, Levine Leichtman argues that the DIP Documents
contain other objectionable provisions that should be stricken
like the DIP Facility's one-year term, the Debtors' pledge of
avoidance actions, and the Debtors' waiving of Section 506(c) of
the Bankruptcy Code.

Against this backdrop, Levine Leichtman asks the Court to deny the
Debtors' request in its entirety.

               Committee Wants Hearing Postponed

As previously reported, the final hearing of the Debtors' request
to obtain postpetition financing is scheduled for February 13,
2008, with February 6 as the objection deadline.

Laura Davis Jones, Esq., at Pachulski Stang Ziehl & Jones LLP, in
Wilmington, Delaware, relates that the Official Committee of
Unsecured Creditors needs additional time to analyze the Financing
Motion and its impact upon the Debtors' restructuring and
creditors.  She says that the Committee has asked that the Final
Hearing be continued to the omnibus hearing scheduled for February
27, 2008 and that the objection deadline be extended, but the
Debtors' postpetition lenders refused the request.

According to Ms. Jones, the terms of the proposed financing are
complex and contain aggressive provisions, including:

   -- a significant roll-up of prepetition debt, with less than
      the full amount of debt being rolled-up at a time when
      there are questions as to the value of the collateral
      securing debt;

   -- cross collateralization,

   -- adequate protection payments at an enhanced interest rate,

   -- liens and super-priority claims on the proceeds of
      avoidance actions,

   -- certain milestone restructuring covenants that provide
      control over the Debtors' restructuring to the DIP Lenders,

   -- an inadequate carve-out, and

   -- numerous other problematic provisions.

The Committee wants the Final Hearing continued to February 27,
2008, and the Objection Deadline for the Committee extended to
February 25.

Ms. Jones contends that the requested extensions will not
negatively impact the Debtors or their creditors because the
Debtors have advised the Committee that they have sufficient
liquidity to continue operations through February 27.  In
addition, Ms. Jones argues that that the Committee has only been
appointed for a few days in the Debtors' Chapter 11 cases.

As reported in the Troubled Company Reporter on Jan. 24, 2008, the
Delaware Bankruptcy Court granted the Debtors permission to access
up to $30 million of the $85 million of new funding available
under its $385 million debtor-in-possession credit facility.

The DIP credit facility, which includes $300 million carried over
from the company's prepetition credit facility, will be used to
enhance the company's liquidity during the reorganization process.

Headquartered in Eagan, Minnesota, Buffets Holdings Inc. --
http://www.buffet.com/-- is the parent company of Buffets, Inc.,
the nation's largest steak-buffet restaurant company, currently
operates 626 restaurants in 39 states, comprised of 615 steak-
buffet restaurants and eleven Tahoe Joe's Famous Steakhouse
restaurants, and franchises sixteen steak-buffet restaurants in
six states.  The restaurants are principally operated under the
Old Country Buffet, HomeTown Buffet, Ryan's and Fire Mountain
brands.  Buffets, Inc. employs approximately 37,000 team members
and serves approximately 200 million customers annually.

The company and all of its subsidiaries filed Chapter 11
protection on Jan. 22, 2008 (Bankr. D. Del. Case Nos. 08-10141 to
08-10158).  The Debtors have selected Paul, Weiss, Rifkind,
Wharton & Garrison LLP to represent them.  Young Conaway Stargatt
& Taylor, LLP, are the Debtors' proposed legal advisor and
Houlihan Lokey Howard & Zukin Capital, Inc. and Kroll Zolfo Cooper
LLC, their proposed financial advisors.  The Debtors' balance
sheet as of Sept. 19, 2007, showed total assets of $963,538,000
and total liabilities of $1,156,262,000.

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


BUILDING MATERIALS: Expected Neg. Trends Cue Fitch to Cut Ratings
-----------------------------------------------------------------
Fitch Ratings has downgraded these ratings on Building Materials
Holding Corporation:

  -- Issuer Default Rating to 'B+' from 'BB';
  -- Senior secured debt to 'BB-/RR3' from 'BB+'.

Fitch has also placed BMHC on Rating Watch Negative.  Fitch's '3'
Recovery Rating on BMHC's secured term loan and revolving credit
facility indicate good (50%-70%) recovery prospects for holders of
these debt issues.  Fitch applied a going concern value analysis
for these RRs.  The downgrade on the senior secured debt applies
to BMHC's $850 million senior secured credit facilities, including
the company's $500 million secured revolving credit facility.

The downgrade reflects the difficult U.S. housing environment,
current and expected negative trends in BMHC's operating results
and meaningful deterioration in credit metrics.

The Rating Watch Negative reflects BMHC's exposure to liquidity
risk given ongoing discussions with its bank group regarding a
permanent amendment to its existing syndicated credit facility.  
BMHC received a temporary waiver of certain conditions relating to
borrowing under its revolving credit facility, which allows the
company to borrow up to $75 million through Feb. 29, 2008.  As of
Dec. 31, 2007, there were no borrowings under the revolver and
$346 million were outstanding under the term loan.  Resolution of
the Rating Watch Negative will be based on the company's ability
to negotiate a new bank credit facility.  Fitch will review the
terms and conditions of the new agreement, including the amount of
funds the company can access under it.

The company's financial results have been adversely affected by
the meaningful downturn in the homebuilding market, especially as
the large public builders sharply reduced production of new homes
to balance supply with demand.  BMHC's revenues fell 28.4% through
Sept. 30, 2007 while gross margins for the year-to-date period
declined 170 basis points to 19.6% compared to 21.3% during the
same period in 2006.  Fitch is encouraged that the margins have
not declined more, given the very challenging environment and the
large public builders aggressively negotiating lower prices with
their labor and materials suppliers.  In response to the housing
downturn, BMHC is reducing capital expenditures and is deferring
discretionary capital spending, limiting its acquisition
activities and reducing SG&A expenses by consolidating business
infrastructure and optimizing its staffing levels.

Fitch expects that BMHC's margins and credit metrics will continue
to be under pressure as the housing environment remains difficult
and is unlikely to meaningfully turn around in the current year.  
In 2008, Fitch projects that total and single family starts will
decline 13.9% and 15.1%, respectively.

The rating reflects BMHC's diverse range of product and service
offerings and its focus on the large production homebuilders.  
Risk factors include BMHC's exposure to the cyclicality of the
homebuilding industry and the continued consolidation of BMHC's
customer base.  The rating also incorporates BMHC's growth
strategy.  Although the company has not been acquisitive over the
past year, Fitch believes that acquisitions will continue to be a
primary strategy for the company to grow its business.  In the
near term, Fitch expects that acquisitions will be limited as the
company navigates through the housing downturn.

BMHC conducts business with 17 of the 25 largest production
homebuilders in 16 of the 25 most significant new home
construction markets in the U.S.  The major builders are typically
significant players in many of the largest, often high-growth
metropolitan housing markets.  BMHC's focus on the major
homebuilders should benefit the company in the long-term.  These
companies should be able to continue to gain market penetration
and grow their businesses.

The past decade has seen consolidation in the distribution
channels of the building products industry.  New home sales from
the top 10 U.S. homebuilders increased from approximately 10% of
industry sales in 1993 to over 20% in 2007.  Fitch expects more
consolidation in the industry, with the large builders continuing
to principally buy private, midsize companies and to take share
from smaller builders.  The continued growth of the large
homebuilders may eventually limit the pricing power of building
products and construction services providers like BMHC.  However,
Fitch believes that the continued consolidation of the
homebuilding industry will create a long-term need for broad-based
suppliers like BMHC to enable national homebuilders to lower costs
and reduce logistics complexity in their business.  Large builders
are the ones who will value BMHC's services, allowing them to
focus on what they do best.

A key element of the company's business strategy for the past
several years entails shifting its product and service mix from
commodity lumber to value-added manufactured building components
and construction services.  Through acquisitions, the company now
delivers a growing range of residential construction services in
key growth markets in the U.S.  The focus on construction services
as well as value-added manufactured building components somewhat
lessens the impact of lumber volatility on the company's margins.   
During this current housing downturn, BMHC has also pursued some
light commercial construction projects to help offset a portion of
the drop-off in new residential construction.  Additionally, the
acquisition of Davis Brothers Framing, Inc. in 2006 allows the
company to focus somewhat more heavily on mid-rise multifamily
construction, particularly in an often land-constrained market
like California.

Founded in 1987, BMHC is one of the largest residential
construction services and building materials companies in the
United States.  BMHC competes in the homebuilding industry through
two business segments: BMC West and SelectBuild Construction.   
With locations in the western and southern United States, BMC West
distributes building products and manufactures building components
for professional builders and contractors.  SelectBuild
Construction provides construction services to high-volume
production homebuilders through operations in key growth markets
across the United States.


CALPINE CORP: Inks Settlement Pact With Debtholders' Committee
--------------------------------------------------------------
Calpine Corporation has reached an agreement-in-principle with its
Unofficial Committee of Second Lien Debtholders with respect to
the Second Lien Debtholders' remaining secured claims for payment
of compound and default interest, as well as claims for the
transaction fee of Houlihan Lokey, the Unofficial Committee's
financial advisors.  

Under the Settlement, which is subject to definitive
documentation, the Second Lien Debtholders shall receive their
allocable share of $51,836,191 in cash in full and final
satisfaction of such secured claims, which amount shall be funded
through:

   1) an allowed general unsecured claim in Calpine's
      chapter 11 case in the amount of $65,000,000 (subject to a
      $51,836,191 cap on distributions based on Calpine's total
      enterprise value set forth in its plan of reorganization),      
      which the Second Lien Debtholders intend to assign for  
      value; plus

   2) an additional cash payment from Calpine to the extent
      required.  

The Second Lien Debtholders will not be permitted to retain
any amounts in excess of $51,836,191 in connection with the
assignment of such claim with any excess being paid to Calpine.

The Settlement will result in Second Lien Debtholders receiving
the following additional amounts over and above amounts previously
allowed by the Bankruptcy Court:

   -- holders of the 8.5% notes will receive $13,334,509;
   -- holders of the 8.75% notes will receive $10,817,498;
   -- holders of the 9.875% notes will receive $2,210,264;
   -- holders of the floating rate notes will receive $4,906,139;
      and
   -- holders of term loan debt will receive $20,567,780.

Upon receipt of the amounts set forth above, the Second Lien
Debtholders, the indenture trustee and term loan agent shall be
deemed to have waived any and all rights that they now have or may
hereafter have against other parties or property including,
without limitation, under or with respect to the subordination
provisions contained in Calpine's 6.00% Contingent Senior
Convertible Notes due September 30, 2014 and the 7.750% percent
Contingent Senior Convertible Notes due June 1, 2015.

                    About Calpine Corporation

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 and its affiliates 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.,
Kirkland & Ellis LLP, represents 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 Nov. 31, 2007, the Debtors disclosed
total assets of $18,212,000,000, total liabilities not subject to
compromise of $11,024,000,000, total liabilities subject to
compromise of $11,859,000,000 and stockholders' deficit of
$4,675,000,000.

On Feb. 3, 2006, two more affiliates, Geysers Power Company, LLC,
and Silverado Geothermal Resources, Inc., filed voluntary chapter
11 petitions (Bankr. S.D.N.Y. Case Nos. 06-10197 and 06-10198).
On Sept. 20, 2007, Santa Rosa Energy Center, LLC, another
affiliate, also filed a voluntary chapter 11 petition (Bankr.
S.D.N.Y. Case No. 07-12967).

On June 20, 2007, the Debtors filed their Chapter 11 Plan and
Disclosure Statement.  On Aug. 27, 2007, the Debtors filed their
Amended Plan and Disclosure Statement.  Calpine filed a Second
Amended Plan on Sept. 19, 2007 and on Sept. 24, 2007, filed a
Third Amended Plan.  On Sept. 25, 2007, the Court approved the
adequacy of the Debtors' Disclosure Statement and entered a
written order on September 26.  On Dec. 19, 2007, the Court
confirmed the Debtors' Plan.

(Calpine Bankruptcy News, Issue No. 80; Bankruptcy Creditors'
Service Inc.; http://bankrupt.com/newsstand/or 215/945-7000).   

                           *    *    *

As reported in the Troubled Company Reporter on Feb. 6, 2008,  
Standard & Poor's Ratings Services assigned its 'B' corporate
credit rating to San Jose, California-headquartered power company
Calpine Corp. following the company's emergence from bankruptcy
Chapter 11 filing on Jan. 31, 2008.  The outlook is stable.


CENTRAL ILLINOIS: To Sell Plant to Secured Lenders for $80 Million
------------------------------------------------------------------
Central Illinois Energy LLC intends to sell its unfinished ethanol
plant at Canton to secured creditors for $80 million credited
debt, subject to better offers, Bill Rochelle of Bloomberg News
relates.

The Debtor said that the mortgages on the plant is significantly
more than its value, Mr. Rochelle reports.  The Debtor intends to
get permission from the U.S. Bankruptcy Court for the Central
District of Illinois to publicly sell the plant to commence the
solicitation of bids by March 17 and hold an auction on March 20,
2008, Mr. Rochelle says.

Mr. Rochelle reveals that Credit Suisse Group, agent for secured
lenders with $95 million claims, won't lend money to the Debtor
for the construction of the plant until it's sold.  The plant was
designed to process around 37 million gallons of ethanol per year,
he adds.

                    $5 Million Letters of Credit

As reported in the Troubled Company Reporter yesterday, Feb. 7,
2008, documents recently filed with the U.S. Bankruptcy Court for
the Central District of Illinois show that around 74 shareholders
of Central Illinois Energy LLC signed letters of credit in the
aggregate amount of $5 million to back up costs of building an
ethanol plant.

The estimated cost of the plant located outside Canton, Illinois,
was $40 million during the year 2001.  When Central Illinois
Energy went bankrupt late last year, at least $130 million was
already applied to the still unfinished plant.

                   About Central Illinois Energy

Based in Canton, Illinois, Central Illinois Energy LLC --
http://www.centralillinoisenergy.com/-- operates a 37-million
gallons-per-year ethanol plant.  The Debtor filed for Chapter 11
protection on Dec. 13, 2007 (Bankr. C.D. Ill. Case No 07-82817).
Barry M. Barash, Esq., at Barash & Everett, LLC, represents the
Debtor in its restructuring efforts.  The U.S. Trustee for Region
10 has not appointed creditors to serve on an Official Committee
of Unsecured Creditors in this case.  When the Debtor filed for
protection from its creditors, it listed assets between $1 million
to $100 million, and more than $100 million in liabilities.


CHARMING SHOPPES: Discloses Changes in Executive Management
-----------------------------------------------------------
Charming Shoppes, Inc. disclosed an executive management change.

Joseph M. Baron, executive vice president and chief operating
officer, has assumed leadership of the company's Bensalem-based
retail businesses on an interim basis, following the departure of
Diane M. Paccione, who has left the company to assume the position
of chief executive officer at DEB Shops Inc.  The company's
Bensalem-based retail businesses include Fashion Bug, Catherines
Plus Sizes, Lane Bryant Outlet and Petite Sophisticate Outlet.   
Charming Shoppes Inc. is conducting a search for an appropriate
successor to Paccione.

Since 2002, Baron has served as executive vice president and chief
operating officer of Charming Shoppes.  His career in retailing
has spanned over 35 years, including various management and
executive management positions during his 30-year career at Sears,
Roebuck & Co.

"In the last six years, Joe has made many strong contributions to
Charming Shoppes, including leading the development and launch of
our outlet channel business, and building a platform which has
supported the strong growth of our e- commerce business," Dorrit
J. Bern, chairman, chief executive officer and president of
Charming Shoppes Inc. commented.  "A few years ago, Joe was
instrumental in the repositioning of our Lane Bryant brand
following our acquisition of Lane Bryant in 2001."

"Most recently, we called upon Joe's leadership and organizational
talents to transition our direct-to-consumer business through an
executive leadership change, which led to the successful launch of
the Lane Bryant Woman catalog, and improvements in our core
catalog businesses," Ms. Bern continued.

"This is an important time for our organization, as we build a
strong foundation for the support of our Bensalem-based retail
businesses," Mr. Baron, commenting on his appointment, stated.    
"During my time with Charming Shoppes, I have had the pleasure of
working closely with many associates throughout the organization,
and I look forward to continuing our work together."

Paccione joined Charming Shoppes in 2004 as the president of the
company's Catherines Plus Sizes brand, and most recently served
the company as the group divisional president of the company's
Bensalem-based retail businesses.

                      About Charming Shoppes

Based in Bensalem, Pennsylvania, Charming Shoppes Inc.
(NASDAQ:CHRS) -- http://www.charmingshoppes.com -- is a retailer  
focused on womens plus-size specialty apparel.  The company
operates in two segments: retail stores segment and direct-to-
consumer segment.  The companys retail stores segment operates
retail stores and related e-commerce websites through brands, such
as Lane Bryant, Fashion Bug, Catherines Plus Sizes, Lane Bryant
Outlet and Petite Sophisticate outlet.  The companys direct-to-
consumer segment operates a number of apparel, accessories,
footwear, and gift catalogs and related e-commerce Websites
through its Crosstown Traders business.  During the fiscal year
ended Feb. 3, 2007, the sale of plus-size apparel represented
approximately 74% of the Companys total net sales.  As of Feb. 3,
2007, Charming Shoppes Inc. operated 2,378 stores in 48 states.

                           *     *     *

As reported in the Troubled Company Reporter on Feb. 6, 2008,
Standard & Poor's Ratings Services said that its ratings on
Charming Shoppes Inc. (BB-/Negative/--) remain unchanged after the
company's announcement of a restructuring program designed to
streamline operations and reduce expenses.


CHEETAH GYMS: MB Financial to Auction Assets on Feb. 29
-------------------------------------------------------
MB Financial Bank NA, secured creditor of David Wilshire, will
hold a public foreclosure of Mr. Wilshire's shares of stock
pledged as security to his obligations to MB Financial.

The shares to be sold are Mr. Wilshire's interests in Jungle Gym
Fitness Corporation, Wild Kingdom Fitness Enterprises Inc.,
Wilshire Enterprises Inc., Energia Cafe Inc., and Top Cat
Enterprises Inc.  Jungle Gym, Wild Kingdom and Wilshire
Enterprises each owns a separate gym doing business as Cheetah
Gyms in the City of Chicago.  Energia and Top Cat do not own any
currently operating business.

The secured party has accepted a $2,300,000 "stalking horse" cash
bid from an independent third party in exchange for the stock of
each of the operating clubs as a lot, subject to higher and better
bids and the payment of certain retained liabilities.  The
stalking horse bidder has indicated the he intends to continue to
operate the clubs.

The secured party is also submitting a floor credit bid of $10,000
for the stock of Energia and Top Cat.

The sale will be held on an "as is" basis, without any
representations and warranties.  The secured party reserves the
right to offer the shares in bulk or in lots.  The secured party
reserves the right to establish other reasonable bidding
procedures and close the sale to reasonable satisfaction of the
secured party.  The secured party also reserves the right to
cancel or adjourn the auction without further notice.

A copy of the stalking horse bid is available upon request from
the secured party's counsel, Robert E. Richards, Esq., at
Sonnenschein Nath & Rosenthal LLP, in Chicago.  Parties interested
in further information on the assets should contact the counsel of
the secured party or appear at the foreclosure sale on Feb. 29,
2008, at 10 a.m., at the office of:

             Robert E. Richards, Esq.
             Sonnenschein Nath & Rosenthal LLP
             7800 Sears Towers
             Chicago, Illinois 60606
             Tel: (312) 876-8000
             Fax: (312) 876-7934
             http://www.sonnenschein.com/


CHRISTENSEN REALTY: Case Summary & Five Largest Unsec. Creditors
----------------------------------------------------------------
Debtor: Christensen Realty Investment II, L.L.C.
        P.O. Box 2781
        Boise, ID 83701

Bankruptcy Case No.: 08-00193

Type of Business: The Debtor is a real estate investor.

Chapter 11 Petition Date: February 6, 2008

Court: District of Idaho (Boise)

Judge: Jim D. Pappas

Debtor's Counsel: Howard R. Foley, Esq.
                  Patrick John Geile, Esq.
                  Foley Freeman, P.L.L.C.
                  P.O. Box 10
                  Meridian, ID 83680
                  Tel: (208) 888-9111
                  Fax: (208) 888-5130

Estimated Assets: $1 Million to $10 Million

Estimated Debts:  $1 Million to $10 Million

Debtor's Five Largest Unsecured Creditors:

   Entity                      Nature of Claim       Claim Amount
   ------                      ---------------       ------------
Sandy Smith                    services              $126,000
Commercial Real Estate Co.
1401 Shoreline Drive, Suite 3
Boise, ID 83702

iBeam Systems                  goods                 $3,233
280 North 8th Street, Suite 30
Boise, ID 83702

American Geotechnics           goods                 $2,452
5260 West Chinden Boulevard
Garden City, ID 83714

Wood Windows, Inc.             goods                 $1,771

T.M.L. Heating and Cooling     goods                 $467


CHRYSLER LLC: Still Out to Grab Tooling Equipment from Plastech
---------------------------------------------------------------
Chrysler LLC CEO Robert Nardelli disclosed that the auto-maker is
still in pursuit of its tooling equipment holed up at Plastech
Engineered Products Inc.'s plants, and continues to seek component
supplies from other vendors, Jeff Bennett of the Wall Street
Journal reports.

As reported in the Troubled Company Reporter on Feb. 6, 2008, a
temporary disruption in Chrysler's production was caused by a
tooling dispute over the parties, with Chrysler attempting to
retrieve its tooling equipment over at Plastech's plants and
transfer them to other suppliers so its operations would not
suffer.

The parties however, reached an agreement early this week that
ended the idling of Chrysler plants.  Pursuant to an interim
agreement, Plastech resumed its shipment of car parts and
components to Chrysler, which enabled the auto maker to resume its
plant operations.  The arrangement will continue until Feb. 15.

"This was not hard-ball tactics, it was a solid business
practice," WSJ quotes Nardelli during an auto show.  "We never
meant to create an adversarial relationship with Plastech or any
other suppliers."

Nardelli related to WSJ that Plastech was going to raise its
prices.  "We have to stay competitive," Nardelli insisted.  "No
hard feelings, no animosity, just solid business practices."

As reported in the Troubled Company Reporter on Feb. 7, 2008,
while Chrysler said that it could close four of its U.S. plants
due to Plastech's failure to deliver component parts, Ford Motor
Co. and Toyota Motor Corp. said their automotive production won't
be affected by the auto-parts supplier's Chapter 11 filing.

Ford said that Plastech's Chapter 11 filing won't adversely
affect the auto maker's production, The Wall Street Journal
reports.  "We've had no impact," said Mark Fields, Ford's
President of the Americas.  "We anticipate, for the time being,
to be able to continue our production."

                       About Chrysler LLC

Based in Auburn Hills, Michigan, Chrysler LLC --
http://www.chrysler.com/-- a unit of Cerberus Capital
Management LP, produces Chrysler, Jeep(R), Dodge and Mopar(R)
brand vehicles and products.  The company has dealers worldwide,
including Canada, Mexico, U.S., Germany, France, U.K.,
Argentina, Brazil, Venezuela, China, Japan and Australia.

                          *     *     *

As reported in the Troubled Company Reporter on Nov. 12, 2007,
Standard & Poor's Ratings Services affirmed its 'B' corporate
credit rating on Chrysler LLC and DaimlerChrysler Financial
Services Americas LLC and removed it from CreditWatch with
positive implications, where it was placed Sept. 26, 2007.  S&P
said the outlook is negative.

                   About Plastech Engineering

Based in Dearborn, Michigan, Plastech Engineered Products, Inc. --
http://www.plastecheng.com/-- is full-service automotive supplier    
of interior, exterior and underhood components.  It designs and
manufactures blow-molded and injection-molded plastic products
primarily for the automotive industry.  Plastech's products
include automotive interior trim, underhood components, bumper and
other exterior components, and cockpit modules.  Plastech's major
customers are General Motors, Ford Motor Company, and Toyota, as
well as Johnson Controls, Inc.

Plastech is a privately held company and is the largest family-
owned company in the state of Michigan.  The company is certified
as a Minority Business Enterprise by the state of Michigan.  
Plastech maintains more than 35 manufacturing facilities in the
midwestern and southern United States.  The company's products are
sold through an in-house sales force.

The company and eight of its affiliates filed for Chapter 11
protection on Feb. 1, 2008 (Bankr. E.D. Mich. Lead Case No. 08-
42417).  Gregg M. Galardi, Esq., at Skadden Arps Slate Meagher &
Flom LLP, and Deborah L. Fish, Esq., at Allard & Fish, P.C.,
represent the Debtors in their restructuring efforts.  The Debtors
chose Jones Day as their special corporate and litigation counsel.  
Lazard Freres & Co. LLC serves as the Debtors' investment bankers,
while Conway, MacKenzie & Dunleavy provide financial advisory
services.  The Debtors also employed Donlin, Recano & Company as
their claims and noticing agent.

As of Dec. 31, 2006, the company's books and records
reflected assets totaling $729,000,000 and total liabilities of
$695,000,000.


COLLIN DWAYNE: Voluntary Chapter 11 Case Summary
------------------------------------------------
Debtor: Collin Dwayne Porterfield
        3336 Hanover
        Dallas, Texas 75225
        Tel: 214 3693380

Bankruptcy Case No.: 08-30653-11

Chapter 11 Petition Date: February 5, 2008

Court: Northern District of Texas (Dallas)

Debtor's Counsel: Collin D. Porterfield, Esq.
                  3336 Hanover Street
                  University Park, Texas 75225
                  Tel: 214 8376532

Estimated Assets: $1,000,001 to $50 million

Estimated Debts: $1,000,001 to $50 million

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


CONTINENTAL AIR: WSJ Says United Merger Talks "Have Grown Serious"
------------------------------------------------------------------
United Air Lines could likely end up marrying Continental Airlines
in the event of a merger, instead of with Delta Air Lines, various
report say.  According to The Wall Street Journal, exploratory
merger talks between United and Continental have grown serious.

Moreover, the reports also note that merger talks between Delta
Air and Northwest Airlines Corp. have intensified that could lead
to an agreement being announced in the next two weeks.  However,
key details of the Delta-Northwest deal have yet to be hammered
out and negotiations could still fall apart, according to the Wall
Street Journal, citing people familiar with the talks.

As reported in the Troubled Company Reporter on Jan. 22, 2008,
Mr. Anderson obtained approval from Delta's board of directors on
Jan. 11, 2007, to engage in formal merger talks with both
Northwest and United.

WSJ, citing people briefed on the matter, says Delta and United
have continued exploratory talks over the past month.

Pardus Capital Management, a New York-based hedge fund, and major
stakeholder in both United and Delta, had urged both carriers to
consolidate, to save money and counter escalating jet-fuel prices
which rose by around 53% last year.

Delta, the No. 3 U.S. carrier in terms of passenger traffic, has a
market value of over $4,100,000,000 -- higher than UAL's
$3,800,000,000, and Northwest's $3,700,000,000.  United is the
second-largest U.S. carrier, while Northwest takes the fifth spot.  
Continental, in Houston, Texas, is the No. 4 carrier.

A Delta merger with either Northwest or United would create the
largest passenger airline in the world.

                    Delta-Northwest Merger

Reports note the potential dealbreaker in a Delta-Northwest
combination was the structure of the new company's management,
specifically Northwest CEO Doug Steenland and his management
team's role in the new company.  The Journal's source says those
issues were overcome earlier this week.

When companies merge, it's not uncommon for the chief executives
to divide the leadership roles, with one taking the CEO post and
the other becoming chairman, according to TheStreet.com.  In the
case of Delta and Northwest, the situation is complicated by the
role of Daniel Carp, who became chairman of Delta when the carrier
emerged from bankruptcy in May 2007, TheStreet.com says.

Since Mr. Carp was brought in to enhance Delta's position, there
is a feeling that he should remain because of the progress the
company has made, TheStreet.com says, citing a source.  
TheStreet.com's source says Mr. Steenland has apparently accepted
the idea that Mr. Carp and Delta CEO Richard Anderson will retain
their current posts in a new company.

Mr. Anderson, a former Northwest Airlines chief executive, assumed
the Delta CEO post from Gerald Grinstein in August.  That decision
to hire Mr. Anderson "raised new questions about Delta's future
strategy", WSJ reported at that time.

Mr. Anderson's appointment raises speculations that with an
outsider at the helm, Delta may reverse its "go it alone" strategy
and pursue a consolidation with Northwest, United Air Lines or
Continental Airlines, Business Week had said.

At the time of its bankruptcy, Delta and its unsecured creditors
committee fended off a $8,000,000,000 to $10,000,000,000  
hostile takeover bid from US Airways Group, Inc.   Delta said it
was better off as a stand-alone carrier.

In January 2007, about two months since US Airways launched its
hostile bid, Delta and NWA were reported to have held discussions
about a potential merger.  While both companies denied the
reports, Mr. Grinstein subsequently admitted to sharing
information with Northwest.  "At the behest of our creditors'
committee we recently retained an investment banker to obtain
information from Northwest, a far cry from negotiating for a
merger with them," Mr. Grinstein told members of the Delta Board
Council, according to Reuters.

Delta did not discount any possibility of a merger post-
bankruptcy.  According to a prior WSJ report, the Creditors
Committee conditioned its support of Delta's stand-alone Chapter
11 plan of reorganization to a number of concessions, including
the appointment of a new board that favors consolidation as a
strategic opotion.

In October, Mr. Anderson said he saw "obvious benefits" for
Delta's employees and shareholders in Delta's merging with another
carrier, Meg Marco at The Star Tribune reported.  Although Mr.
Anderson did not name a potential merger target for Delta at that
time, analysts have argued that Northwest would make a good
partner because the carriers' routes complement each other, Ms.
Marco said.

As proposed, the Delta-Northwest deal would be a stock-for-stock
transaction, done "at market," meaning at roughly where the two
stocks are trading, with little or no premium for either side, WSJ
says.   The Journal adds that the dynamic has made non-economic
issues the center of the deal negotiations.

                      Compressed Timeline

The Journal says Delta's intent was to pursue tandem negotiations
with Northwest and United on a compressed timeline, get a deal
inked by mid-February and quickly begin the process for winning
antitrust approval.  Executives at the airlines believe any
mergers are more likely to pass regulatory muster during the
waning days of the Bush administration, the Journal relates.

A United-Continental deal will have to be done very near a
Northwest-Delta announcement, so the two potential combinations
would undergo regulatory scrutiny at the same time, the Journal
says citing a source familiar with the matter.  A different source
told the Journal United and Continental are poised to act quickly
once another airline merger is announced.

Northwest holds a "golden share" of preferred stock in Continental
that allows Northwest to block a merger of Continental with
another large carrier, WSJ notes.  But if Northwest agrees to
merge with Delta, Continental could redeem that stock for a total
of $100, even if the deal is never consummated, freeing
Continental to entertain other suitors, WSJ says.

Continental executives have repeatedly said they prefer to remain
independent, but would do what is best for the company if the
competitive landscape changes, WSJ notes.

Experts in the airline industry believe that a Northwest-Delta
merger is more likely as Delta's Anderson was previously CEO at
Northwest, and is already well acquainted with Northwest's
operations.

Bloomberg, citing an unnamed person familiar with Air France-KLM
Group's plans, has reported that Air France is encouraging a
merger between Delta and Northwest and may make a financial
investment to foster a tie-up.  A Delta-Northwest combination
would preserve the SkyTeam Alliance, a marketing group that
includes Delta, Northwest and United.

                         Other Issues

Other issues that will have to be taken up in a Delta-Northwest
combination include both carriers' labor groups.  The Air Line
Pilots Association branches at Delta and Northwest have signaled
that they could support a merger if they receive equity in the
combined airline and achieve a labor contract with improved terms,
WSJ says.

Some analysts worry a Delta merger would face antitrust hurdles,
Bankruptcylaw360 says.

Analysts also said mergers could lead to higher fares in some
markets, at least in the long term, The New York Times state.  
Congress could also oppose a combination due to possible job loss
and reduction in competition, Times relates.

                       About UAL Corp.

Based in Chicago, Illinois, UAL Corporation (NASDAQ: UAUA)
-- http://www.united.com/-- is the holding company for United  
Airlines, Inc.  United Airlines is the world's second largest
air carrier.  The airline flies to Brazil, Korea and Germany.

The company filed for chapter 11 protection on Dec. 9, 2002
(Bankr. N.D. Ill. Case No. 02-48191).  James H.M. Sprayregen,
Esq., Marc Kieselstein, Esq., David R. Seligman, Esq., and
Steven R. Kotarba, Esq., at Kirkland & Ellis, represented the
Debtors in their restructuring efforts.  Fruman Jacobson, Esq.,
at Sonnenschein Nath & Rosenthal LLP represented the Official
Committee of Unsecured Creditors before the Committee was
dissolved when the Debtors emerged from bankruptcy.  Judge
Wedoff confirmed the Debtors' Second Amended Plan on
Jan. 20, 2006.  The company emerged from bankruptcy protection
on Feb. 1, 2006.  (United Airlines Bankruptcy News, Bankruptcy
Creditors' Service Inc., http://bankrupt.com/newsstand/  
or 215/945-7000).

                        *     *     *

Moody's Investor Service placed UAL Corp.'s long term corporate
family and probability ratings at 'B2' in January 2007.  The
ratings still hold to date with a stable outlook.

                        About Delta Air

Based in Atlanta, Georgia, Delta Air Lines Inc. (NYSE:DAL) --
http://www.delta.com/-- is the world's second-largest airline
in terms of passengers carried and the leading U.S. carrier
across the Atlantic, offering daily flights to 328 destinations
in 56 countries on Delta, Song, Delta Shuttle, the Delta
Connection carriers and its worldwide partners.  Delta flies to
Argentina, Australia and the United Kingdom, among others.  The
company and 18 affiliates filed for chapter 11 protection on
Sept. 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-17923).
Marshall S. Huebner, Esq., at Davis Polk & Wardwell, represents
the Debtors in their restructuring efforts.  Timothy R. Coleman
at The Blackstone Group L.P. provides the Debtors with financial
advice.  Daniel H. Golden, Esq., and Lisa G. Beckerman, Esq., at
Akin Gump Strauss Hauer & Feld LLP, provide the Official
Committee of Unsecured Creditors with legal advice.  John
McKenna, Jr., at Houlihan Lokey Howard & Zukin Capital and James
S. Feltman at Mesirow Financial Consulting, LLC, serve as the
Committee's financial advisors.

The Debtors filed a chapter 11 plan of reorganization and
disclosure statement explaining that plan on Dec. 19, 2007.  On
Jan. 19, 2007, they filed revisions to the plan and disclosure
statement, and submitted further revisions to the plan on
Feb. 2, 2007.  On Feb. 7, 2007, the Court approved the Debtors'
disclosure statement.  In April 25, 2007, the Court confirmed
the Debtors' plan.  That plan became effective on
April 30, 2007.  The Court entered a final decree closing 17
cases on Sept. 26, 2007.

As of Sept. 30, 2007, the company's balance sheet showed total
assets of $32.7 billion and total liabilities of $23 billion,
resulting in a $9.7 billion stockholders' equity.  At Dec. 31,
2006, deficit was $13.5 billion.

(Delta Air Lines Bankruptcy News; Bankruptcy Creditors' Service,
Inc., http://bankrupt.com/newsstand/or 215/945-7000).

                        *     *     *

As reported in the Troubled Company Reporter on Jan. 17, 2008,
Standard and Poor's said that media reports that Delta Air Lines
Inc. (B/Positive/--) entered into merger talks with UAL Corp.
(B/Stable/--) and Northwest Airlines Corp. (B+/Stable/--) will
have no effect on the ratings or outlook on Delta, but that
confirmed merger negotiations would result in S&P's placing
ratings of Delta and other airlines involved on CreditWatch, most
likely with developing or negative implications.

                  About Northwest Airlines

Northwest Airlines Corp. (NYSE: NWA) -- http://www.nwa.com/--  
is the world's fourth largest airline with hubs at Detroit,
Minneapolis/St. Paul, Memphis, Tokyo and Amsterdam, and about
1,400 daily departures.  Northwest is a member of SkyTeam, an
airline alliance that offers customers one of the world's most
extensive global networks.  Northwest and its travel partners
serve more than 1000 cities in excess of 160 countries on six
continents.  Northwest and its travel partners serve more than
1000 cities in excess of 160 countries on six continents,
including Italy, Spain, Japan, China, Venezuela and Argentina.

The company and 12 affiliates filed for chapter 11 protection on
Sept. 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-17930).  Bruce
R. Zirinsky, Esq., and Gregory M. Petrick, Esq., at Cadwalader,
Wickersham & Taft LLP in New York, and Mark C. Ellenberg, Esq.,
at Cadwalader, Wickersham & Taft LLP in Washington represent the
Debtors in their restructuring efforts.  The Official Committee
of Unsecured Creditors has retained Akin Gump Strauss Hauer &
Feld LLP as its bankruptcy counsel in the Debtors' chapter 11
cases.

When the Debtors filed for bankruptcy, they listed US$14.4
billion in total assets and $17.9 billion in total debts.  On
Jan. 12, 2007 the Debtors filed with the Court their Chapter 11
Plan.  On Feb. 15, 2007, they Debtors filed an Amended Plan &
Disclosure Statement.  The Court approved the adequacy of the
Debtors' Disclosure Statement on March 26, 2007.  On
May 21, 2007, the Court confirmed the Debtors' Plan.  The Plan
took effect May 31, 2007.

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

                        *     *     *

Moody's Investor Service placed Northwest Airlines Corp.'s long
term corporate family and probability of default ratings at 'B1'
in May 2007.  The ratings still hold to date with a stable
outlook.

                    About Continental Airlines

Continental Airlines Inc. (NYSE: CAL) -- http://continental.com/  
-- is the world's fifth largest airline.  Continental, together
with Continental Express and Continental Connection, has more than
2,900 daily departures throughout the Americas, Europe and Asia,
serving 144 domestic and 139 international destinations.  More
than 500 additional points are served via SkyTeam alliance
airlines.  With more than 45,000 employees, Continental has hubs
serving New York, Houston, Cleveland and Guam, and together with
Continental Express, carries approximately 69 million passengers
per year.

                          *     *     *

As reported in the Troubled Company Reporter on Dec. 27, 2007,
Fitch Ratings affirmed Continental Airlines 'B-' issuer default
rating with a stable outlook.


CROWN HOLDINGS: S&P Changes Outlook to Positive; Holds BB- Rating
-----------------------------------------------------------------
Standard & Poor's Ratings Services revised its outlook on Crown
Holdings Inc. to positive from stable and affirmed the 'BB-'
corporate credit and other existing ratings.  The outlook revision
reflects S&P's expectations that earnings growth and free cash
generation could support strengthening of Crown's financial
profile to levels appropriate for a 'BB' rating in the next couple
of years.  The key ratio of funds from operations to total debt
(adjusted for capitalized operating leases, receivables
securitizations, asbestos liabilities, and unfunded pension and
postretirement obligations) is expected to approach 20% by 2009
from the midteens percent area at Dec. 31, 2007.
      
"We could raise the ratings if Crown continues to prioritize its
free cash flows for debt reduction while maintaining a limited
allocation for share repurchases, and asbestos-related liability
trends remain reasonable," said Standard & Poor's credit analyst
Liley Mehta.
     
At Dec. 31, 2007, Philadelphia, Pennsylvania-based Crown had total
adjusted debt outstanding of about $4.3 billion.
     
The ratings reflect Crown's satisfactory business risk profile,
characterized by market leadership, global operations, and
relative earnings stability.  Nevertheless, the financial profile
remains aggressive, and the company continues to face risks
associated with asbestos litigation.
     
With annual sales of about $7.7 billion, Crown is primarily a
metal container manufacturer.  The company benefits from a broad
geographic presence, a well-diversified customer base, and leading
market positions in food, beverage, and aerosol cans.


CREDIT-BASED: Fitch Downgrades Ratings on $511 Mil. Certificates
----------------------------------------------------------------
Fitch Ratings has taken various rating actions on these Credit-
Based Asset Servicing & Securitization mortgage pass-through
certificates.  Downgrades total $511.0 million.  In addition,
$359.9 million is placed or remains on Rating Watch Negative.  
Break Loss percentages and Loss Coverage Ratios for each class,
rated 'B' or higher, are included with the rating actions as:

C-BASS, 2006-SL1
  -- $135.5 million class A-1 rated 'AAA,' placed on Rating Watch
     Negative (BL: 76.98, LCR: 1.51);

  -- $85.2 million class A-2 downgraded to 'BB' from 'A-'
     (BL: 61.28, LCR: 1.2);

  -- $21.3 million class A-3 downgraded to 'BB' from 'A-'
     (BL: 58.89, LCR: 1.16);

  -- $31.5 million class M-1 downgraded to 'B' from 'BBB'
     (BL: 51.86, LCR: 1.02);

  -- $30.1 million class M-2 downgraded to 'C/DR6' from 'BBB-';
  -- $19.4 million class M-3 downgraded to 'C/DR6' from 'BB+';
  -- $17 million class M-4 downgraded to 'C/DR6' from 'BB';
  -- $18.1 million class M-5 downgraded to 'C/DR6' from 'B+';
  -- $17.7 million class M-6 downgraded to 'C/DR6' from 'B';
  -- $19.7 million class B-1 revised to 'C/DR6' from 'C/DR5';
  -- $16 million class B-2 remains at 'C/DR6';
  -- $13.7 million class B-3 remains at 'C/DR6';
  -- $15 million class B-4 remains at 'C/DR6'.

Deal Summary
  -- Originators: Countrywide (73.25%) and OwnIt (19.42%);
  -- 60+ day Delinquency: 16.3%;
  -- Realized Losses to date (% of Original Balance): 11.65%;
  -- Expected Remaining Losses (% of Current Balance): 50.88%;
  -- Cumulative Expected Losses (% of Original Balance): 45.23%.

C-BASS, 2007-SL1
  -- $94.2 million class A1 downgraded to 'A' from 'AAA,' remains
     on Rating Watch Negative (BL: 38.37, LCR: 0.79);

  -- $130 million class A2 downgraded to 'A' from 'AAA,' remains
     on Rating Watch Negative (BL: 37.72, LCR: 0.77);

  -- $9.9 million class M1 downgraded to 'C/DR6' from 'BB+';
  -- $7.6 million class M2 downgraded to 'C/DR6' from 'BB';
  -- $8.4 million class B1 downgraded to 'C/DR6' from 'BB-';
  -- $7.1 million class B2 downgraded to 'C/DR6' from 'B+';
  -- $6.4 million class B3 downgraded to 'C/DR6' from 'B';
  -- $6.4 million class B4 downgraded to 'C/DR6' from 'B'.

Deal Summary
  -- Originators: Countrywide (71.21%) and OwnIt (10.69%), MLN
     (10.61%);
  -- 60+ day Delinquency: 11.2%;
  -- Realized Losses to date (% of Original Balance): 3.98%;
  -- Expected Remaining Losses (% of Current Balance): 48.70%;
  -- Cumulative Expected Losses (% of Original Balance): 45.53%.

The rating actions are based on deterioration in the relationship
between credit enhancement and expected losses and reflect
continued poor loan performance and home price weakness.  Minimum
LCR's specifically for subprime second lien transactions are: AAA:
2.00; AA: 1.75; A: 1.50; BBB: 1.30; BB 1.10; B: 1.00.


COUNTRYWIDE ASSET: Fitch Junks Ratings on Seven Cert. Classes
-------------------------------------------------------------
Fitch Ratings has taken these rating actions on two Countrywide
Asset Backed Securities mortgage pass-through certificates.  
Unless stated otherwise, any bonds that were previously placed on
Rating Watch Negative are removed from Rating Watch Negative.  
Downgrades total $398.9 million.

Series 2006-SPS1
  -- $106.7 million class A downgraded to 'CC/DR2' from 'BBB-';
  -- $13.1 million class M-1 downgraded to 'C/DR6' from 'BB';
  -- $11.5 million class M-2 downgraded to 'C/DR6' from 'B+';
  -- $7 million class M-3 remains at 'C/DR6';
  -- $6.3 million class M-4 remains at 'C/DR6';
  -- $6.3 million class M-5 remains at 'C/DR6';
  -- $4.4 million class M-6 remains at 'C/DR6'.

Deal Summary
  -- Originators: Countrywide (100%);
  -- 60+ day Delinquency: 15.84%;
  -- Realized Losses to date (% of Original Balance): 20.32%;
  -- Expected Remaining Losses (% of Current Balance): 54%;
  -- Cumulative Expected Losses (% of Original Balance): 53.91%.

Series 2006-SPS2
  -- $204.8 million class A downgraded to 'CC/DR2' from 'BBB-';
  -- $26.7 million class M-1 downgraded to 'C/DR6' from 'BB';
  -- $22.5 million class M-2 downgraded to 'C/DR6' from 'B+';
  -- $13.5 million class M-3 downgraded to 'C/DR6' from 'B';
  -- $12.5 million class M-4 revised to 'C/DR6' from 'C/DR5';
  -- $12.2 million class M-5 remains at 'C/DR6';
  -- $11.7 million class M-6 remains at 'C/DR6';
  -- $12 million class M-7 remains at 'C/DR6';
  -- $10.5 million class M-8 remains at 'C/DR6';
  -- $780,788 class M-9 remains at 'C/DR6'.

Deal Summary
  -- Originators: Countrywide (100%);
  -- 60+ day Delinquency: 13.57%;
  -- Realized Losses to date (% of Original Balance): 15.96%;
  -- Expected Remaining Losses (% of Current Balance): 56.43%;
  -- Cumulative Expected Losses (% of Original Balance): 52.92%.

The rating actions are based on deterioration in the relationship
between credit enhancement and expected losses and reflect
continued poor loan performance and home price weakness.


DEATH ROW: Warner Tenders $25-Mil. Cash Bid to Buy All Assets
-------------------------------------------------------------
R. Todd Neilson, the chapter 11 trustee appointed to oversee the
bankrupt estate of rap music producer Marion "Suge" Knight and his
record label Death Row Records, Inc., received a $25,000,000 cash
offer from Warner Music Group Corp. to buy all of the record
label's assets, including  all of the company's recorded music and
publishing rights, various reports say.

Koch Music and EverGreen Copyrights are also eyeing to acquire the
company.  Thuglifearmy.com reports that Koch Music is expected to
be an active bidder as well.  David Schulhof, Co-CEO of EverGreen
Copyrights, announced through Billboard.biz that EverGreen
Copyrights is bidding on Death Row Records' assets,
Thuglifearmy.com also relates.

The Chapter 11 trustee has named Warner Music as lead bidder.  The
Chapter 11 Trustee will appear before the U.S. Bankruptcy Court
for the Central District of California in Los Angeles on Feb. 26
to seek approval of competitive bidding and auction procedures.

The Chapter 11 Trustee will continue to receive competing offers
by April 11, and hold an auction April 24.  The Trustee expects to
return to the Court May 12 to seek approval of the sale to the
winning bidder.

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.


DELTA AIR: Merger Talks with Northwest Intensifies
--------------------------------------------------
Merger talks between Delta Air Lines Inc. and Northwest Airlines
Corp. have intensified that could lead to an agreement being
announced in the next two weeks, various reports say.

Key details of the deal have yet to be hammered out and
negotiations could still fall apart, according to The Wall Street
Journal, citing people familiar with the talks.

The reports note the potential dealbreaker was the structure of
the combined Delta-Northwest management, specifically Northwest
CEO Doug Steenland and his management team's role in the new
company.  The Journal's source says those issues were overcome
earlier this week.

When companies merge, it's not uncommon for the chief executives
to divide the leadership roles, with one taking the CEO post and
the other becoming chairman, according to TheStreet.com.  In the
case of Delta and Northwest, the situation is complicated by the
role of Daniel Carp, who became chairman of Delta when the carrier
emerged from bankruptcy in May 2007, TheStreet.com says.

Since Mr. Carp was brought in to enhance Delta's position, there
is a feeling that he should remain because of the progress the
company has made, TheStreet.com says, citing a source.  
TheStreet.com's source says Mr. Steenland has apparently accepted
the idea that Mr. Carp and Delta CEO Richard Anderson will retain
their current posts in a new company.

Mr. Anderson, a former Northwest Airlines chief executive, assumed
the Delta CEO post from Gerald Grinstein in August.  That decision
to hire Mr. Anderson "raised new questions about Delta's future
strategy", WSJ reported at that time.

Mr. Anderson's appointment raises speculations that with an
outsider at the helm, Delta may reverse its "go it alone" strategy
and pursue a consolidation with Northwest, United Air Lines or
Continental Airlines, Business Week had said.

At the time of its bankruptcy, Delta and its unsecured creditors
committee fended off a $8,000,000,000 to $10,000,000,000  
hostile takeover bid from US Airways Group, Inc.   Delta said it
was better off as a stand-alone carrier.

In January 2007, about two months since US Airways launched its
hostile bid, Delta and NWA were reported to have held discussions
about a potential merger.  While both companies denied the
reports, Mr. Grinstein subsequently admitted to sharing
information with Northwest.  "At the behest of our creditors'
committee we recently retained an investment banker to obtain
information from Northwest, a far cry from negotiating for a
merger with them," Mr. Grinstein told members of the Delta Board
Council, according to Reuters.

Delta did not discount any possibility of a merger post-
bankruptcy.  According to a prior WSJ report, the Creditors
Committee conditioned its support of Delta's stand-alone Chapter
11 plan of reorganization to a number of concessions, including
the appointment of a new board that favors consolidation as a
strategic opotion.

In October, Mr. Anderson said he saw "obvious benefits" for
Delta's employees and shareholders in Delta's merging with another
carrier, Meg Marco at The Star Tribune reported.  Although Mr.
Anderson did not name a potential merger target for Delta at that
time, analysts have argued that Northwest would make a good
partner because the carriers' routes complement each other, Ms.
Marco said.

As proposed, the Delta-Northwest deal would be a stock-for-stock
transaction, done "at market," meaning at roughly where the two
stocks are trading, with little or no premium for either side, WSJ
says.   The Journal adds that the dynamic has made non-economic
issues the center of the deal negotiations.

               United & Continental Talks Gain Steam

There is also a possibility Delta could wind up with United.  Both
carriers have continued exploratory talks over the past month, WSJ
says, citing people briefed on the matter.

Pardus Capital Management, a New York-based hedge fund, and major
stakeholder in both United and Delta, had urged both carriers to
consolidate, to save money and counter escalating jet-fuel prices
which rose by around 53% last year.

As reported in the Troubled Company Reporter on Jan. 22, 2008, Mr.
Anderson obtained approval from Delta's board of directors on Jan.
11, 2007, to engage in formal merger talks with both Northwest and
United.

Various reports, however, relate that a United-Continental merger
is more likely.  The reports state that exploratory merger talks
between the two carriers have grown serious.

Delta, the No. 3 U.S. carrier in terms of passenger traffic, has a
market value of over $4,100,000,000 -- higher than UAL's
$3,800,000,000, and Northwest's $3,700,000,000.  United is the
second-largest U.S. carrier, while Northwest takes the fifth spot.  
Continental, in Houston, Texas, is the No. 4 carrier.

A Delta merger with either Northwest or United would create the
largest passenger airline in the world.

Some analysts worry a Delta merger would face antitrust hurdles,
Bankruptcylaw360 says.

The Journal says Delta's intent was to pursue tandem negotiations
with Northwest and United on a compressed timeline, get a deal
inked by mid-February and quickly begin the process for winning
antitrust approval.  Executives at the airlines believe any
mergers are more likely to pass regulatory muster during the
waning days of the Bush administration, the Journal relates.

A United-Continental deal will have to be done very near a
Northwest-Delta announcement, so the two potential combinations
would undergo regulatory scrutiny at the same time, the Journal
says citing a source familiar with the matter.  A different source
told the Journal United and Continental are poised to act quickly
once another airline merger is announced.

Northwest holds a "golden share" of preferred stock in Continental
that allows Northwest to block a merger of Continental with
another large carrier, WSJ notes.  But if Northwest agrees to
merge with Delta, Continental could redeem that stock for a total
of $100, even if the deal is never consummated, freeing
Continental to entertain other suitors, WSJ says.

Continental executives have repeatedly said they prefer to remain
independent, but would do what is best for the company if the
competitive landscape changes, WSJ notes.

Experts in the airline industry believe that a Northwest-Delta
merger is more likely as Delta's Anderson was previously CEO at
Northwest, and is already well acquainted with Northwest's
operations.

Bloomberg, citing an unnamed person familiar with Air France-KLM
Group's plans, has reported that Air France is encouraging a
merger between Delta and Northwest and may make a financial
investment to foster a tie-up.  A Delta-Northwest combination
would preserve the SkyTeam Alliance, a marketing group that
includes Delta, Northwest and United.

                         Other Issues

Other issues that will have to be taken up in a Delta-Northwest
combination include both carrier's labor groups.  The Air Line
Pilots Association branches at Delta and Northwest have signaled
that they could support a merger if they receive equity in the
combined airline and achieve a labor contract with improved terms,
WSJ says.

Analysts also said mergers could lead to higher fares in some
markets, at least in the long term, The New York Times state.  
Congress could also oppose a combination due to possible job loss
and reduction in competition, Times relates.

                  About Northwest Airlines

Northwest Airlines Corp. (NYSE: NWA) -- http://www.nwa.com/--  
is the world's fourth largest airline with hubs at Detroit,
Minneapolis/St. Paul, Memphis, Tokyo and Amsterdam, and about
1,400 daily departures.  Northwest is a member of SkyTeam, an
airline alliance that offers customers one of the world's most
extensive global networks.  Northwest and its travel partners
serve more than 1000 cities in excess of 160 countries on six
continents.  Northwest and its travel partners serve more than
1000 cities in excess of 160 countries on six continents,
including Italy, Spain, Japan, China, Venezuela and Argentina.

The company and 12 affiliates filed for chapter 11 protection on
Sept. 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-17930).  Bruce
R. Zirinsky, Esq., and Gregory M. Petrick, Esq., at Cadwalader,
Wickersham & Taft LLP in New York, and Mark C. Ellenberg, Esq.,
at Cadwalader, Wickersham & Taft LLP in Washington represent the
Debtors in their restructuring efforts.  The Official Committee
of Unsecured Creditors has retained Akin Gump Strauss Hauer &
Feld LLP as its bankruptcy counsel in the Debtors' chapter 11
cases.

When the Debtors filed for bankruptcy, they listed US$14.4
billion in total assets and $17.9 billion in total debts.  On
Jan. 12, 2007 the Debtors filed with the Court their Chapter 11
Plan.  On Feb. 15, 2007, they Debtors filed an Amended Plan &
Disclosure Statement.  The Court approved the adequacy of the
Debtors' Disclosure Statement on March 26, 2007.  On
May 21, 2007, the Court confirmed the Debtors' Plan.  The Plan
took effect May 31, 2007.  (Northwest Bankruptcy News, Bankruptcy
Creditors' Service Inc., http://bankrupt.com/newsstand/or  
215/945-7000).

                        *     *     *

Moody's Investor Service placed Northwest Airlines Corp.'s long
term corporate family and probability of default ratings at 'B1'
in May 2007.  The ratings still hold to date with a stable
outlook.

                       About UAL Corp.

Based in Chicago, Illinois, UAL Corporation (NASDAQ: UAUA)
-- http://www.united.com/-- is the holding company for United  
Airlines, Inc.  United Airlines is the world's second largest
air carrier.  The airline flies to Brazil, Korea and Germany.

The company filed for chapter 11 protection on Dec. 9, 2002
(Bankr. N.D. Ill. Case No. 02-48191).  James H.M. Sprayregen,
Esq., Marc Kieselstein, Esq., David R. Seligman, Esq., and
Steven R. Kotarba, Esq., at Kirkland & Ellis, represented the
Debtors in their restructuring efforts.  Fruman Jacobson, Esq.,
at Sonnenschein Nath & Rosenthal LLP represented the Official
Committee of Unsecured Creditors before the Committee was
dissolved when the Debtors emerged from bankruptcy.  Judge
Wedoff confirmed the Debtors' Second Amended Plan on
Jan. 20, 2006.  The company emerged from bankruptcy protection
on Feb. 1, 2006.  (United Airlines Bankruptcy News, Bankruptcy
Creditors' Service Inc., http://bankrupt.com/newsstand/or  
215/945-7000).

                        *     *     *

Moody's Investor Service placed UAL Corp.'s long term corporate
family and probability ratings at 'B2' in January 2007.  The
ratings still hold to date with a stable outlook.

                    About Continental Airlines

Continental Airlines Inc. (NYSE: CAL) -- http://continental.com/  
-- is the world's fifth largest airline.  Continental, together
with Continental Express and Continental Connection, has more than
2,900 daily departures throughout the Americas, Europe and Asia,
serving 144 domestic and 139 international destinations.  More
than 500 additional points are served via SkyTeam alliance
airlines.  With more than 45,000 employees, Continental has hubs
serving New York, Houston, Cleveland and Guam, and together with
Continental Express, carries approximately 69 million passengers
per year.

                          *     *     *

As reported in the Troubled Company Reporter on Dec. 27, 2007,
Fitch Ratings affirmed Continental Airlines 'B-' issuer default
rating with a stable outlook.

                        About Delta Air

Based in Atlanta, Georgia, Delta Air Lines Inc. (NYSE:DAL) --
http://www.delta.com/-- is the world's second-largest airline
in terms of passengers carried and the leading U.S. carrier
across the Atlantic, offering daily flights to 328 destinations
in 56 countries on Delta, Song, Delta Shuttle, the Delta
Connection carriers and its worldwide partners.  Delta flies to
Argentina, Australia and the United Kingdom, among others.  The
company and 18 affiliates filed for chapter 11 protection on
Sept. 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-17923).
Marshall S. Huebner, Esq., at Davis Polk & Wardwell, represents
the Debtors in their restructuring efforts.  Timothy R. Coleman
at The Blackstone Group L.P. provides the Debtors with financial
advice.  Daniel H. Golden, Esq., and Lisa G. Beckerman, Esq., at
Akin Gump Strauss Hauer & Feld LLP, provide the Official
Committee of Unsecured Creditors with legal advice.  John
McKenna, Jr., at Houlihan Lokey Howard & Zukin Capital and James
S. Feltman at Mesirow Financial Consulting, LLC, serve as the
Committee's financial advisors.

The Debtors filed a chapter 11 plan of reorganization and
disclosure statement explaining that plan on Dec. 19, 2007.  On
Jan. 19, 2007, they filed revisions to the plan and disclosure
statement, and submitted further revisions to the plan on
Feb. 2, 2007.  On Feb. 7, 2007, the Court approved the Debtors'
disclosure statement.  In April 25, 2007, the Court confirmed
the Debtors' plan.  That plan became effective on
April 30, 2007.  The Court entered a final decree closing 17
cases on Sept. 26, 2007.

As of Sept. 30, 2007, the company's balance sheet showed total
assets of $32.7 billion and total liabilities of $23 billion,
resulting in a $9.7 billion stockholders' equity.  At Dec. 31,
2006, deficit was $13.5 billion.

(Delta Air Lines Bankruptcy News; Bankruptcy Creditors' Service,
Inc., http://bankrupt.com/newsstand/or 215/945-7000).

                        *     *     *

As reported in the Troubled Company Reporter on Jan. 17, 2008,
Standard and Poor's said that media reports that Delta Air Lines
Inc. (B/Positive/--) entered into merger talks with UAL Corp.
(B/Stable/--) and Northwest Airlines Corp. (B+/Stable/--) will
have no effect on the ratings or outlook on Delta, but that
confirmed merger negotiations would result in S&P's placing
ratings of Delta and other airlines involved on CreditWatch, most
likely with developing or negative implications.


DOLLAR THRIFTY: Moody's Reviews B1 Corporate Rating for Likely Cut
------------------------------------------------------------------
Moody's Investors Service is reviewing Dollar Thrifty Automotive
Group, Inc.'s B1 corporate family rating and B1 (LGD3,43) senior
secured credit facility rating for possible downgrade.  Moody's
also lowered the company's speculative grade liquidity rating to
SGL-3 from SGL-2.

The review for possible downgrade is prompted by the company's
reduction in its guidance for 2007 full year, non-GAAP EPS from a
range of $1.75 to $1.85 (issued in early November) to a new range
of $0.90 to $0.95.  The lowered full-year guidance is attributed
to declining fourth quarter demand, excess fleet capacity within
the rental industry, and lower used car prices.  The company also
announced its expectation that 2008 non-GAAP EPS will approximate
$1.00 to $1.50 and that corporate EBITDA will be in the range of
$97 million to $115 million.  DTG's EBITDA guidance for 2007 and
2008 are markedly lower than Moody's expectation and are occurring
as the outlook for the US economy continues to weaken.

Moody's review is focusing on DTG's ability to minimize the
erosion in its credit metrics in the face of a weakening US
economic outlook and lower EBITDA levels.  The key areas of focus
in the review will include: the pace at which the company realizes
the anticipated $20 to $24 million in savings resulting from
recently-implemented cost reduction initiatives; the degree to
which DTG and other car rental companies can efficiently reduce
their car fleets in line with any decline in demand; the buoyancy
of used car prices; the extent to which daily rental pricing can
be sustained at reasonable levels during an environment of
declining demand; and finally, DTG's ability to manage the size
and mix of its fleet in a manner that would enable it to reduce
outstanding levels of debt in line with potentially lower demand.

DTG's key credit metrics for the LTM through September 2007,
compared with those of year-end 2006, were the following: EBITDA
margin of 45.7% up from 44.6%; EBIT/interest of 1.3x down
moderately from 1.5x; EBITDA/interest of 4.7x up from 4.5x; and
debt/EBITDA of 4.2x down from 4.5x.  Moody's notes that these LTM
September 2007 metrics remain supportive of the current B1
corporate family rating.  However, the expected erosion in EBITDA
for full-year 2007 and 2008 could weaken these measures.  DTG's
corporate EBITDA (not-reflecting Moody's standard adjustments)
approximate the following: fiscal 2006 - $127 million; LTM through
September 2007 - $124 million; and, DTG guidance for 2008 -
$97 million to $115 million.

DTG's SGL-3 speculative grade liquidity rating recognizes the
potentially limited ability of the company's liquidity resources
to cover all requirements during the next twelve months.  At the
quarter ended Sept. 30, 2007, these recourses included
$190 million in unrestricted cash, $174 million availability under
a $350 million revolving credit facility, and $853 million in
unused fleet financing capacity.  Moody's notes, however, that
DTG's declining stock price could, under FAS No. 142, contribute
to a goodwill impairment charge during coming quarters and thereby
negatively impact the company's ability to comply with a minimum
net worth covenant.  This would adversely impact the company's
liquidity position absent any covenant waivers or amendments.  DTG
was comfortably in compliance with the minimum net worth test at
year end 2007.  However, DTG's share price has declined from
approximately $25 at year end to a current level of $17.

Dollar Thrifty Automotive Group, Inc., headquartered in Tulsa,
Oklahoma, is the fourth-largest daily car rental company in the
US, and operates the Dollar Rent A Car and Thrifty Car Rental
brands.


DOMAIN INC: Wants To Access Wells Fargo's $6 Mil Credit Facility
----------------------------------------------------------------
Domain Inc. and its debtor-affiliates seek the consent of Hon.
Peter J. Walsh of the United States Bankruptcy Court for the
District of Delaware to obtain up to $6 million debtor-in
possession secured financing from Wells Fargo Bank, National
Association.

Mark Minuti, Esq., at Saul Ewing LLP, says the Debtors have
an immediate need for postpetition financing in order to continue
the operations of their business and to preserve the value of
their estate for the benefit of creditors, as well as equity
holders.

Wells Fargo agreed to make advances with interest rate at 4.5%.

The Debtors agreed to pay other fees, among others:

   -- origination fee of $25,000;
   -- collateral exam fees of $900 per day;
   -- unused line fees of 0.25% per annum; and
   -- overadvance fee of $1,000.

The Debtors say Wells Fargo has provided them certain financial
contributions before they filed for bankruptcy last month,
pursuant to a credit and security agreement dated June 20, 2007.

As of Jan. 16, 2008, the Debtors recorded approximately $4,905,215
in prepetition indebtedness, Mr. Minute notes.

To secure repayment of the obligations, the Debtors grant Wells
Fargo superpriority claim over all administrative expense and
unsecured claims against their estate.

                            About Domain

Norwood, Massachussetts-based Domain Inc., dba Domain Home/Domain
Home Furnishings/Domain-Home.com, -- http://www.domain-home.com/
-- operate a chain of 27 home furnishing stores across seven
states in the Northeast and Mid-Atlantic regions of the US,
including suburbs of major metropolitan markets such as Boston,
New York, Philadelphia and Washington, D.C.

The Debtor and its affiliate, Domain Home Holding Co., LLC, filed
for chapter 11 bankruptcy on Jan. 18, 2008 (Bankr. D. Del. Case
Nos. 08-10132 and 08-10133). J. Kate Stickles, Esq., and Mark
Minuti, Esq., at Saul Ewing LLP represent the Debtors in their
restructuring efforts.  The U.S. Trustee for Region 3 has not
appointed creditors to serve on an Official Committee of Unsecured
Creditors for these cases.  When the Debtors filed for bankruptcy,
they listed assets and debts between $10 million and $50 million.


DUKE FUNDING: Fitch Assigns DR6 on Ten Classes of 'C' Rated Notes
-----------------------------------------------------------------
Fitch Ratings has assigned Distressed Recovery ratings to these
classes of notes from Duke Funding High Grade II-S/EGAM I, LTD.:

  -- $120,000,000 class A-2 notes revised to 'C/DR6' from 'C';
  -- $60,000,000 class B-1 notes revised to 'C/DR6' from 'C';
  -- $78,000,000 class B-2 notes revised to 'C/DR6' from 'C';
  -- $48,000,000 class C notes revised to 'C/DR6' from 'C';
  -- $21,000,000 class D notes revised to 'C/DR6' from 'C'.

Series 2:
  -- $50,000,000 class A-2 notes revised to 'C/DR6' from 'C';
  -- $25,000,000 class B-1 notes revised to 'C/DR6' from 'C';
  -- $32,500,000 class B-2 notes revised to 'C/DR6' from 'C';
  -- $20,000,000 class C notes revised to 'C/DR6' from 'C';
  -- $8,750,000 class D notes revised to 'C/DR6' from 'C'.

The rating actions result from notices provided by the issuer that
events of default have occurred.  Although there is a forbearance
in place with the repo counterparties, Fitch do not expect any
recovery on the notes.  The issuer is a market value structure
that closed March 15, 2006 and is managed by Ellington Global
Asset Management, LLC, a majority owned subsidiary of Ellington
Management Group, LLC.  The proceeds of the notes were used to
acquire a diversified portfolio of 'AAA' rated, primarily
floating-rate private-label prime, mid-prime, and subprime
residential mortgage-backed securities.  The portfolio is levered
using reverse repurchase agreements.

  -- 'Fitch Downgrades 5 Classes of Duke Funding High Grade II-S /
      EGAM I, LTD.' (Dec. 7, 2007);

  -- 'Fitch Downgrades 5 Classes of Duke Funding High Grade
      II-S/EGAM I, LTD.' (Nov. 29, 2007);

  -- 'Fitch Downgrades 5 Classes of Duke Funding High Grade
      II-S/EGAM I, LTD.; Rating Watch Negative' (Nov. 15, 2007);

  -- 'Fitch Downgrades 4 Classes of Duke Funding High Grade
      II-S/EGAM I, LTD.' (Sept. 19, 2007).

Fitch will continue to monitor this transaction closely.


DURA AUTOMOTIVE: To Bypass Executives From 2008 Bonuses
-------------------------------------------------------
DURA Automotive Systems Inc. and its debtor-affiliates have
amended their 2008 Key Management Incentive Plan to better focus
on the non-senior management KMIP participants with respect to two
aspects:

   (1) The Debtors are not going forward with the proposed 2008
       KMIP payments to their chief executive officer, chief
       financial officer, chief operating officer, and vice
       president of human resources; and

   (2) The Debtors intend to make all payments to approximately
       104 non-Debtor employee participants in the 2008 KMIP from
       the Debtors' European non-debtor affiliates.

The Amended 2008 KMIP maintains a two three-month performance
measurement and pay-out periods, ending on March 31 and June 30,
2008:

   * Threshold pay-out:  If the Debtors achieve 90% of adjusted
     EBITDA goals, participants will receive 50% of their
     individual target bonus opportunities;

   * Target opportunity pay-out: If the Debtors achieve 100% of
     adjusted EBITDA goals, participants will receive 100% of
     their individual target bonus opportunities.

   * Maximum pay-out: If the Debtors achieve 120% of adjusted
     EBITDA goals, participants will receive 150% of their
     individual target bonus opportunities.

Participant's individual target bonus opportunities range from 5%
to 45% of each participant's base salary at the Target Opportunity
Payout.  The Debtors have previously proposed a target bonus
opportunities range range of 5% to 80%.  Distribution of
participant to target opportunity percentages:

       Target Opportunity              Number of 2008 KMIP
       (% of base salary)                  Participants
       ------------------              -------------------
              45%                                7
              30%                               16
              25%                               20
              20%                               26
              15%                                1
              12%                               40
     
The Debtors estimate to pay approximately $2,500,000 at the Target
Opportunity Payout, compared to their previous estimate of
$6,000,000.

Accordingly, the Debtors ask the Court to approve the 2008 KMIP,
as amended.  The Debtors reserve their right to seek approval of
an incentive plan for their senior managers.

Marc Kieselstein, P.C., Esq., at Kirkland & Ellis LLP, in Chicago,
Illinois, relates the Official Committee of Unsecured Creditors
and the Debtors are in discussions regarding the merits of the
2008 KMIP.  As of February 4, 2008, Mr. Kieseltein says there has
been no appreciable progress in resolving the differences between
the Debtors and the Creditors Committee.

                      About DURA Automotive

Rochester Hills, Mich.-based DURA Automotive Systems Inc.
(Nasdaq: DRRA) -- http://www.DURAauto.com/-- is an independent  
designer and manufacturer of driver control systems, seating
control systems, glass systems, engineered assemblies, structural
door modules and exterior trim systems for the global automotive
industry.  The company is also a supplier of similar products to
the recreation vehicle and specialty vehicle industries.  DURA
sells its automotive products to North American, Japanese and
European original equipment manufacturers and other automotive
suppliers.

The company has three locations in Asia -- China, Japan and
Korea.  It has locations in Europe and Latin-America, particularly
in Mexico, Germany and the United Kingdom.

The Debtors filed for chapter 11 petition on Oct. 30, 2006 (Bankr.
D. Del. Case No. 06-11202).  Richard M. Cieri, Esq., Marc
Kieselstein, Esq., Roger James Higgins, Esq., and Ryan Blaine
Bennett, Esq., of Kirkland & Ellis LLP are lead counsel for the
Debtors' bankruptcy proceedings.  Mark D. Collins, Esq., Daniel J.
DeFranseschi, Esq., and Jason M. Madron, Esq., of Richards Layton
& Finger, P.A. Attorneys are the Debtors' co-counsel.  Baker &
McKenzie acts as the Debtors' special counsel.

Togut, Segal & Segal LLP is the Debtors' conflicts counsel.
Miller Buckfire & Co., LLC is the Debtors' investment banker.
Glass & Associates Inc., gives financial advice to the Debtor.
Kurtzman Carson Consultants LLC handles the notice, claims and
balloting for the Debtors and Brunswick Group LLC acts as their
Corporate Communications Consultants for the Debtors.

As of July 2, 2006, the Debtor had $1,993,178,000 in total assets
and $1,730,758,000 in total liabilities.  The Debtors have asked
the Court to extend their plan filing period to April 30, 2008.


DURA AUTOMOTIVE: Reaches Settlement Pact w/ Nyloncraft for $2 Mil.
------------------------------------------------------------------
DURA Automotive Systems Inc. and its debtor-affiliates ask the
U.S. Bankruptcy Courts for the District of Delaware to approve a
$2 million settlement agreement they entered into with Nyloncraft,
Inc.

In January 2002, the Debtors sold their plastics products
business to Nyloncraft, Inc., for $41,000,000.  Of the proceeds,
$6,000,000 was in the form of a subordinated note executed by
Nyloncraft, which provides that Nyloncraft will pay interest to
the Debtors quarterly, and will repay $4,000,000 of principal on
Feb. 28, 2007, with the remainder due on Feb. 28, 2008.  

Shortly after the bankruptcy filing, the Debtors were informed
that Nyloncraft was in financial covenant default with its senior
secured lenders, as well as under the Nyloncraft Note.  Nyloncraft
would not be able to make further interest payments to the Debtors
under the Nyloncraft Note.  Accordingly, during the pendency of
their Chapter 11 cases, the Debtors have not received interest
payments on the Nyloncraft Note, which interest payments have
accrued to approximately $647,500 through Feb. 15, 2008.  
Nyloncraft was also unable to make the principal payment required
by the note on Feb. 28, 2007.

The Debtors and Nyloncraft conducted discussions over a
compromise of the Nyloncraft Note amount payable to the Debtors.

As a result of good-faith negotiations, the parties agree that
Nyloncraft will pay $1,997,500 to the Debtors in exchange for a
release from obligations under the Nyloncraft Note.

Daniel DeFranceschi, Esq., at Richards, Layton & Finger, P.A., in
Wilmington, Delaware, relates that the Debtors have considered
accepting part of the settlement amount in equity but have
determined that an all-cash settlement is in the best interests
of their estates.

By settling the debt, Dura avoided becoming an unsecured creditor
if the former subsidiary itself were to file in Chapter 11,
William Rochelle at Bloomberg News says.

                      About DURA Automotive

Rochester Hills, Mich.-based DURA Automotive Systems Inc.
(Nasdaq: DRRA) -- http://www.DURAauto.com/-- is an independent  
designer and manufacturer of driver control systems, seating
control systems, glass systems, engineered assemblies, structural
door modules and exterior trim systems for the global automotive
industry.  The company is also a supplier of similar products to
the recreation vehicle and specialty vehicle industries.  DURA
sells its automotive products to North American, Japanese and
European original equipment manufacturers and other automotive
suppliers.

The company has three locations in Asia -- China, Japan and
Korea.  It has locations in Europe and Latin-America, particularly
in Mexico, Germany and the United Kingdom.

The Debtors filed for chapter 11 petition on Oct. 30, 2006 (Bankr.
D. Del. Case No. 06-11202).  Richard M. Cieri, Esq., Marc
Kieselstein, Esq., Roger James Higgins, Esq., and Ryan Blaine
Bennett, Esq., of Kirkland & Ellis LLP are lead counsel for the
Debtors' bankruptcy proceedings.  Mark D. Collins, Esq., Daniel J.
DeFranseschi, Esq., and Jason M. Madron, Esq., of Richards Layton
& Finger, P.A. Attorneys are the Debtors' co-counsel.  Baker &
McKenzie acts as the Debtors' special counsel.

Togut, Segal & Segal LLP is the Debtors' conflicts counsel.
Miller Buckfire & Co., LLC is the Debtors' investment banker.
Glass & Associates Inc., gives financial advice to the Debtor.
Kurtzman Carson Consultants LLC handles the notice, claims and
balloting for the Debtors and Brunswick Group LLC acts as their
Corporate Communications Consultants for the Debtors.

As of July 2, 2006, the Debtor had $1,993,178,000 in total assets
and $1,730,758,000 in total liabilities.

The Debtors have asked the Court to extend their plan filing
period to April 30, 2008.  (Dura Automotive Bankruptcy News, Issue
No. 45; Bankruptcy Creditors' Service Inc.,
http://bankrupt.com/newsstand/or 215/945-7000).


FORTUNOFF: Can Access BofA's $85 Mil. DIP Fund on Interim Basis
---------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of New York
gave Fortunoff Fine Jewelry and Silverware LLC and its debtor-
affiliates interim approval to access up to $85,000,000 in debtor-
in-possession financing from Bank of America, N.A., as lender and
agent to a syndicate of other banks, pursuant to a DIP Credit
Agreement.

The DIP Facility is comprised of:

   -- up to $78,000,000 in revolving loans, and

   -- up to $7,000,000 in Tranche A-1 loans, with $15,000,000
      sublimits for letters of credit and swingline loans.

A full-text copy of the DIP Facility Draft is available for free
at http://bankrupt.com/fortunoff_DIPDraft.pdf

The Debtors will use proceeds from the DIP Facility to refinance
their senior prepetition secured debt on a rolling basis, provide
working capital pursuant to a budget prepared by the Debtors, and
greater liquidity to purchase inventory, the Debtors' proposed
counsel, Sally McDonald Henry, Esq., at Skadden, Arps, Slate,
Meagher & Flom LLP, in New York, says.

As security, the Debtors will entitle the DIP Agent, on behalf of
the DIP Lenders, valid, binding, enforceable and perfected liens
in all of the Debtors' assets, subject only to:

   (a) a carve out for fees payable to the Clerk of Bankruptcy
       Court, the Office of the United States Trustee, and
       bankruptcy professionals employed in the Debtors' cases;
       and

   (b) certain liens entitled to the Senior Prepetition Lenders.

The DIP Lenders' Lien are first, prior, and superior to any
security, mortgage, or collateral interest or lien or claim to the
Collateral, i.e. all of the Debtors' assets.  Obligations under
the DIP Facility will be an allowed superpriority administrative
expense claim.

The DIP Facility provides for the payment of certain fees:

   -- an unused commitment fee equal to 0.375% of the average
      daily balance of the unused commitment;

   -- a letter of credit fee equal to 2.25% of the aggregate face
      amount of outstanding letters of credit; and

   -- an aggregate closing fee equal to 0.50% of the commitments
      payable on the closing date.

Revolving credit commitments under the DIP Facility will accrue
at an interest rate of LIBOR plus 2.25% or Prime Rate plus 0.75%.

Tranche A-1 commitments will accrue at an interest rate of LIBOR
plus 3.75% or Prime Rate plus 1.75%.

All of the Debtors' prepetition obligations and DIP Facility
obligations are due and payable on the earliest of:

   -- March 6, 2008,

   -- June 4, 2008, if a final order is entered by March 6,

   -- the occurrence of an event of default,

   -- the date on which Debtors receive first proceeds from an
      asset sale, or

   -- the effective date of a plan of reorganization.

The DIP Documents provide for customary events of default
including (i) failure to pay amounts due under the Facility; (ii)
appointment of a trustee under Chapter 7 of the Bankruptcy Code;
or (iii) failure to enter into a final DIP or sale order by
Feb. 28, 2008.
  
The DIP Facility provides that the DIP Lenders and Senior
Prepetition Lenders will not be subject to a surcharge under
Section 506(c), except to the extent that the Carve-Out is deemed
to be a surcharge.  

The Debtors will pay the reasonable fees and expenses of the DIP
Lenders in connection with the syndication and documentation of
the DIP Loans, relating to the issuance of letters of credit, and
in enforcing their rights under the DIP Loan.  The Debtors will
indemnify the DIP Lenders for all losses incurred arising out of
the execution of the DIP Loan Documents.

The Hon. James M. Peck will hold a hearing on Feb. 28, 2008, to
consider final approval of the Debtors' request.  Objections are
due February 21.

                        About Fortunoff

New York-based Fortunoff Fine Jewelry and Silverware LLC --
http://www.fortunoff.com/-- is a family owned business since 1922   
founded by by Max and Clara Fortunoff.  Fortunoff offers customers
fine jewelry and watches, antique jewelry and silver, everything
for the table, fine gifts, home furnishings including bedroom and
bath, fireplace furnishings, housewares, and seasonal shops
including outdoor furniture shop in summer and enchanting
Christmas Store in the winter.  It opened some 20 satellite stores
in the New Jersey, Long Island, Connecticut and Pennsylvania
markets featuring outdoor furniture and grills during the
Spring/Summer season and indoor furniture (and in some locations
Christmas trees and decor) in the Fall/Winter season.

Fortunoff and two affilites, M. Fortunoff of Westbury LLC and
Source Financing Corp., filed for chapter 11 petition on Feb. 4,
2008 (Bankr. S.D.N.Y. Case Nos. 08-10353 through 08-10355) in
order to effectuate a sale to NRDC Equity Partners LLC --
http://www.nrdcequity.com/-- is a private equity firm that owns   
of Lord & Taylor from Federated Department Stores.  Sally M.
Henry, Esq., and Shana Elberg, Esq., at Skadden, Arps, Slate,
Meagher & Flom represents the Debtors in their restructuring
efforts.  When the Debtors filed for bankruptcy, they listed
assets and debts between $100 million to $500 million.  (Fortunoff
Bankruptcy News, Issue No. 2; Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000)  


FORTUNOFF: Obtains Interim Nod to Use Lenders' Cash Collateral
--------------------------------------------------------------
Before filing for bankruptcy on Feb. 4, 2008, Fortunoff Fine
Jewelry and Silverware LLC and its debtor-affiliates entered into
two credit agreements:

  -- Amended and Restated Credit Agreement, dated Aug. 13, 2007,
     with Bank of America, N.A., as Administrative Agent
     and Collateral Agent for certain a syndicate of lenders,
     pursuant to which the Prepetition Lenders extended a working
     capital facility providing for revolving credit loans and
     letters of credit.  As of the bankruptcy filing, the Debtors
     owe about $67,000,000 in Revolving Loans and Tranche A-1
     Loans, issued and $3,500,000 of outstanding Letters of
     Credit; and

  -- Term D Loan Agreement, dated Feb. 23, 2007, with Trimaran
     Fund Management, L.L.C., as Administrative Agent and
     Collateral Agent, pursuant to which a group of lenders
     extended a term loan facility to the Debtors.  As of  
     Feb. 4, 2008, the Debtors owe about $17,400,000 with all
     accrued interest, costs, fees and professional fees and
     expenses.

Source Financing Corp. guaranteed all of the Debtors' obligations
under the Prepetition Credit Agreements.  The Agreements are
secured by security interests in and liens on substantially all
of the Debtors' assets, including the Debtors' cash and cash
equivalents.

On Feb. 3, 2008, the Debtors entered into an asset purchase
agreement with H Acquisition, LLC, an affiliate of NRDC Equity
Partners, LLC, pursuant to which H Acquisition will buy
substantially all of the Debtors' assets.  Pursuant to the APA, H
Acquisition has agreed to make available a $10,000,000 letter of
credit to maintain the Debtors' inventory.  As security for the
payment and performance by the Debtors of their payment
obligations under the APA, the Debtors granted to H Acquisition
security interests in all of the Collateral, which security
interests are subject only to the liens in favor of the DIP
Facility Lenders and the Prepetition Lenders' Liens, but senior
to the Term D Lenders' liens.

The Debtors need an immediate infusion of additional cash to
ensure that they have sufficient working capital and liquidity,
and preserve and maintain the going concern value of their estate
during their ongoing sale process with H Acquisition, the
Debtors' proposed counsel, Sally McDonald Henry, Esq., at
Skadden, Arps, Slate, Meagher & Flom LLP, in New York, tells the
Court.

Accordingly, the Debtors sought and obtained Court's authority to
use cash collateral securing the Prepetition Credit Agreements,
in the interim basis, pending final approval of the request.

During any five-day period after the occurrence of any event of
default under the Prepetition Credit Agreement, the Debtors may
use the Cash Collateral solely to meet payroll obligations,
provided that those payments are made in consistent with a
budget.

A full-text copy of the Budget, in draft form, is available for
free at http://bankrupt.com/misc/fortunoff_BudgetDraft.pdf

As adequate protection, BofA, on behalf of the Prepetition
Lenders, will receive:

   -- valid, perfected and enforceable security interests and
      replacement liens in the Collateral, junior to the Liens
      granted to the DIP Agent, the Prior Permitted Liens and a
      Carve-Out for payment of fees of professionals and the U.S.
      Trustee; and

   -- an allowed superpriority administrative expense claim,
      junior to the DIP Superpriority Claim and the Carve-Out.

In addition, the Debtors will establish an account in the control
of BofA, as the Prepetition Agent, into which, $250,000 of
proceeds of any sale, lease or other disposition of any of the
Collateral will be deposited as security for any reimbursement,
indemnification or similar continuing obligations of the Debtors
in favor of the Prepetition Lenders.  The Indemnity Account will
terminate and all remaining amounts under it will be released to
the Debtors on the earliest of 45 days after a specified
Challenge Period Termination Date, or the date the Court enters a
final order closing the Debtors' cases.  The Indemnity
Obligations will be secured by a first priority lien on the
Indemnity Account which will be pari passu with the Credit
Agreement Replacement Liens.

The Term D Lenders will receive, as adequate protection, valid,
perfected, and enforceable security interests and replacement
liens in the Collateral, which will be junior to the DIP Lenders'
liens, the Credit Agreement Replacement Liens, the Prior
Permitted Liens, the Carve-Out, H Acquisition's liens and the
funding of the Indemnity Account.  The Term D Lenders may receive
up to $100,000 for professional fees and expenses.

As a condition to granting the adequate protection, the Term D
Lenders are deemed to have consented to any sale or disposition
of Collateral.

The Final Hearing to consider the Debtors' cash collateral
request will be on Feb. 28, 2008, at 2:00 p.m. (Eastern Time)
before Judge Peck.  Objections are due February 21.

                        About Fortunoff

New York-based Fortunoff Fine Jewelry and Silverware LLC --
http://www.fortunoff.com/-- is a family owned business since 1922   
founded by by Max and Clara Fortunoff.  Fortunoff offers customers
fine jewelry and watches, antique jewelry and silver, everything
for the table, fine gifts, home furnishings including bedroom and
bath, fireplace furnishings, housewares, and seasonal shops
including outdoor furniture shop in summer and enchanting
Christmas Store in the winter.  It opened some 20 satellite stores
in the New Jersey, Long Island, Connecticut and Pennsylvania
markets featuring outdoor furniture and grills during the
Spring/Summer season and indoor furniture (and in some locations
Christmas trees and decor) in the Fall/Winter season.

Fortunoff and two affilites, M. Fortunoff of Westbury LLC and
Source Financing Corp., filed for chapter 11 petition on Feb. 4,
2008 (Bankr. S.D.N.Y. Case Nos. 08-10353 through 08-10355) in
order to effectuate a sale to NRDC Equity Partners LLC --
http://www.nrdcequity.com/-- is a private equity firm that owns   
of Lord & Taylor from Federated Department Stores.  Sally M.
Henry, Esq., and Shana Elberg, Esq., at Skadden, Arps, Slate,
Meagher & Flom represents the Debtors in their restructuring
efforts.  When the Debtors filed for bankruptcy, they listed
assets and debts between $100 million to $500 million.  (Fortunoff
Bankruptcy News, Issue No. 2; Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000)


FORTUNOFF: NRDC Arm Executes Deal to Buy Assets for $80 Million
---------------------------------------------------------------
At the end of January 2008, discussions with H Acquisition LLC
culminated in the execution of an asset purchase agreement with
Fortunoff Fine Jewelry and Silverware LLC and its debtor-
affiliates.  Under the purchase agreement, H Acquisition would
acquire the Debtors' business as a going concern pursuant to a
sale under Section 363(b) of the Bankruptcy Code.

H Acquisition is an affiliate of NRDC Equity Partners, which owns
the Lord & Taylor, a New York-based department store chain.

Pursuant to the APA, H Acquisition will purchase substantially
all of the Debtors' assets, free and clear of all mortgages,
liens or encumbrances of any kind, other than certain assumed
liens, and free and clear of all excluded liabilities, for the
purchase price of $80,000,000, in cash, subject to adjustment.

The Debtors' assets to be purchased by H Acquisition include:

   -- the Debtors' inventory, supplies, finished goods and goods
      in transit;

   -- all machinery, equipment, fixed assets, furniture,
      and other items of personal property of every kind and
      description;

   -- the Fortunoff marks, the intellectual property listed on
      the Debtors' disclosure schedules;

   -- all leases and contracts and its accompanying documents in
      respect of all leased property; and

   -- all credits, prepaid expenses, deferred charges, advance
      payments, security deposits and prepaid items.

The Purchase Price will be (i) increased by 70% of the amount by
which closing inventory exceeds $84,000,000, or decreased by 70%
of the amount by which Closing Inventory is less than the
inventory target; (ii) increased by the amount by which closing
cash exceeds $1,000,000, or decreased by the amount by which
Closing Cash is less than the Cash Target; and (iii)       
decreased by the amount of any payments that Sellers fail to
make, that constitute assumed liabilities.

An affiliate of H Acquisition will make available to the Debtors,
a $10,000,000 letter of credit by Feb. 4, 2008, to enable the
Debtors to continue to purchase inventory.

Under the provisions of the APA, H Acquisition agreed to serve as
a classic "stalking horse" bidder in an auction sale pursuant to
Section 363  of the Bankruptcy Code, so that the Debtors could
test whether they were receiving the highest and best price for
their Assets.

As buyer, H Acquisition will assume certain liabilities of the
Debtors, including, among other things, (i) cure amounts for
assumed contracts, (ii) post-closing liabilities under Assumed
Contracts, (3) liabilities for gift cards, merchandise credits
and deposits incurred on or after January 1, 2003, (4) one-half
the transfer taxes, (5) transferred employees, (6) welfare plans,
and (7) claims for welfare plans.

The solicitation of bids for the auction are to be conducted
pursuant to agreed upon bid protections, which provide that H
Acquisition may be entitled to a breakup fee for $2,250,000, and
expense reimbursement not exceeding $1,000,000.

A full-text copy of the Debtors' H Acquisition Asset Purchase
Agreement may be accessed at no charge at:

   http://bankrupt.com/misc/Fortunoff_HAcquisitionAPA.pdf

As widely reported, NRDC Equity Partners is expected to spend
$100,000,000 in connection with its acquisition of Fortunoff.  
NRDC Equity Partners CEO Richard Baker, who serves as chairman of
Lord & Taylor, said NRDC plans to invest the amount into the
Fortunoff business, including both existing and new stores, The
Associated Press reports.

According to the New York Post, if the sale agreement is closed,
Lord & Taylor plans to offer Fortunoff merchandise in all 47 of
its stores and open a large Fortunoff boutique within Lord &
Taylor's flagship store on Fifth Avenue, in New York.

                    Proposed Bidding Procedure

The Debtors relate to the Court that a struggling economy,
weakening home furnishing retail sales and the Debtors' inability
to access additional capital from its secured lenders or
elsewhere, led the Debtors to prepare for their Chapter 11 cases,
with the hope that they would be able to maximize value for their
creditors through a rapid sale of their business as a going
concern, or failing that, through a liquidation, Arnold Orlick,
chief executive officer of Source Financing Corp.

According to the Debtors, although they are offering to sell their
business as a going concern, the Debtors reserve the right to sell
separately any portion of the Assets, and the Debtors will
entertain all offers, Mr. Orlick states.

Given their extreme lack of liquidity, the Debtors acknowledge
that the timeline they propose for the Asset Sale is "tight but
not unreasonable", Mr. Orlick says.

A full-text copy of the Debtors' proposed Bid Procedures is
available for free at:

   http://bankrupt.com/misc/Fortunoff_ProposedBidProc.pdf

                        About Fortunoff

New York-based Fortunoff Fine Jewelry and Silverware LLC --
http://www.fortunoff.com/-- is a family owned business since 1922   
founded by by Max and Clara Fortunoff.  Fortunoff offers customers
fine jewelry and watches, antique jewelry and silver, everything
for the table, fine gifts, home furnishings including bedroom and
bath, fireplace furnishings, housewares, and seasonal shops
including outdoor furniture shop in summer and enchanting
Christmas Store in the winter.  It opened some 20 satellite stores
in the New Jersey, Long Island, Connecticut and Pennsylvania
markets featuring outdoor furniture and grills during the
Spring/Summer season and indoor furniture (and in some locations
Christmas trees and decor) in the Fall/Winter season.

Fortunoff and two affilites, M. Fortunoff of Westbury LLC and
Source Financing Corp., filed for chapter 11 petition on Feb. 4,
2008 (Bankr. S.D.N.Y. Case Nos. 08-10353 through 08-10355) in
order to effectuate a sale to NRDC Equity Partners LLC --
http://www.nrdcequity.com/-- is a private equity firm that owns   
of Lord & Taylor from Federated Department Stores.  Sally M.
Henry, Esq., and Shana Elberg, Esq., at Skadden, Arps, Slate,
Meagher & Flom represents the Debtors in their restructuring
efforts.  When the Debtors filed for bankruptcy, they listed
assets and debts between $100 million to $500 million.  (Fortunoff
Bankruptcy News, Issue No. 2; Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000)


FOXTON NORTH: Disclosure Statement Hearing Scheduled for March 27
-----------------------------------------------------------------
The Hon. Michael B. Kaplan of the United States Bankruptcy Court
for the District of New Jersey set a hearing on March 27, 2008, at
1:00 p.m., to consider the adequacy of the disclosure statement
explaining Foxtons North America Inc. and its debtor-affiliates'
Chapter 11 Plan of Liquidation and Disclosure Statement.

The hearing will be held at the United States Bankruptcy Court,
402 East State Street, Courtroom #3 in Trenton, New Jersey.

                        About Foxton North

West Long Branch, New Jersey-based Foxtons North America Inc. --
http://www.foxtons.com/-- aka YourHomeDirect.com, and its     
affiliate, Foxtons Inc., are real estate agents.  Foxtons Inc. is
also known as Foxtons Realty Inc., YHD Foxtons, and YHD-Foxtons
Inc.

Foxtons North and Foxtons Inc. filed for chapter 11 bankruptcy
protection on Oct. 5, 2005 (Bankr. D. N.J. Case Nos. 07-24497 and
07-24496).  Lawyers at Forman Holt Eliades & Ravin LLC serve as
the Debtors' counsel.  Garden City Group Inc. is the Debtors'
claims and noticing agent.  The U.S. Trustee for Region 3 has
appointed creditors to serve on an Official Committee of Unsecured
Creditors.  Allison M. Berger, Esq., at Fox Rothschild LLP,
represents the Committee.  In documents submitted to the Court,
Foxtons North America disclosed total assets of $487,757 and total
liabilities of $40,885,834.  Foxtons Inc. disclosed total assets
of $2,618,254 and total liabilities of $480,945.


FOXTON NORTH: Unsecured Creditors To Be Paid in Full Under Plan
---------------------------------------------------------------
Foxtons North American Inc. and its debtor affiliates delivered a
Chapter 11 Plan of Liquidation and Disclosure Statement explaining
that plan to the Hon. Michael B. Kaplan of the U.S. Bankruptcy
Court for the District of New Jersey.

                       Overview of the Plan

The Plan will be funded by cash on hand, liquidation of the Trust
Assets and prosecution of causes of action by John J. O'Donnell,
the appointed Trustee of the Foxtons Liquidating Trust.  Mr.
Donnell will also serve as disbursing agent under the Plan.

All assets of the Debtors and causes of action were not previously
liquidated or sold will be transferred to the Foxtons Liquidating
Trust on the effective date of the Plan.

Mr. Donnell will be paid on an hourly basis plus reimbursement for
out-of-pocket expenses and He may retain professionals to assist
and prosecute causes of action on his behalf.

                       Treatment of Claims

Under the Plan, Administrative Claims will be paid in full.

Each holder of Priority Unsecured Claim will be entitled to
receive cash equal to the allowed amount of its claim on the
effective date of the Plan.

General Unsecured Claims will receive cash in full, to the extend
possible, from the assets of each Debtors' estates liquidated by
the Trustee after superior creditors are paid in full.

All holders of Equity Interests for both Foxtons Inc. and
Foxtons North America Inc. will retain ownership of all interests.
However, no cash distribution may be made until all valid claims
are paid in full.

Foxtons was authorized in October to sell its real estate listings
for $310,000 in total to two buyers, plus 10% or more from
commissions collected, William Rochelle at Bloomberg News says.

The disclosure statement says shareholder Heven Holdings Ltd.
invested $62 million in equity in the company, Mr. Rochelle
relates.

                        About Foxton North

West Long Branch, New Jersey-based Foxtons North America Inc. --
http://www.foxtons.com/-- aka YourHomeDirect.com, and its     
affiliate, Foxtons Inc., are real estate agents.  Foxtons Inc. is
also known as Foxtons Realty Inc., YHD Foxtons, and YHD-Foxtons
Inc.

Foxtons North and Foxtons Inc. filed for chapter 11 bankruptcy
protection on Oct. 5, 2005 (Bankr. D. N.J. Case Nos. 07-24497 and
07-24496).  Lawyers at Forman Holt Eliades & Ravin LLC serve as
the Debtors' counsel.  Garden City Group Inc. is the Debtors'
claims and noticing agent.  The U.S. Trustee for Region 3 has
appointed creditors to serve on an Official Committee of Unsecured
Creditors.  Allison M. Berger, Esq., at Fox Rothschild LLP,
represents the Committee.

Foxtons North America disclosed total assets of $487,757 and total
liabilities of $40,885,834 in its chapter 11 petition.  Foxtons
Inc. disclosed total assets of $2,618,254 and total liabilities of
$480,945 in its chapter 11 petition.  Other papers filed with the
bankruptcy court on Oct. 5 disclosed $13 million in assets and
$50.4 million of debt, including a $40 million loan from Foxtons
shareholder Heven Holdings, Ltd.


GRANT FOREST: S&P Puts B- Corporate Rating on CreditWatch Neg
-------------------------------------------------------------
Standard & Poor's Ratings Services placed its 'B-' long-term
corporate credit rating on Toronto-based oriented strandboard
producer Grant Forest Products Inc. on CreditWatch with negative
implications.
     
"The CreditWatch listing reflects our expectations that Grant's
profitability and cash flow generation will be weaker than
expected in 2008 due to industry conditions that are proving to be
worse than anticipated," said Standard & Poor's credit analyst
Donald Marleau.
     
Industry leaders Norbord Inc. (BB/Negative/--) and Louisiana-
Pacific Corp. (BBB-/Negative/--) have both reported extremely weak
results for 2007.  OSB prices should remain at very low levels
throughout 2008, as producers deal with overcapacity and a
continuing decline in demand due to persistent weakness in U.S.
new home construction.
     
Grant's liquidity is weak.  In light of extremely poor industry
conditions through 2008, Standard & Poor's is concerned that
Grant's liquidity will come under pressure as it completes the
construction and ramp-up of its second OSB mill in as many years.     
Although the company had a large cash balance at Sept. 30, 2007,
the combination of very weak cash flow generation, heavy interest
costs due to its large debt burden, and remaining capital
expenditures at the Clarendon and Allendale mills will consume
considerable liquidity in 2008.
     
Standard & Poor's expects to resolve the CreditWatch after
reviewing Grant's fourth-quarter 2007 results and performance
expectations for the first half of 2008.


GMAC COMMERCIAL: Fitch Holds 'B-' Rating on $3.8MM Class P Certs.
-----------------------------------------------------------------
Fitch Ratings has affirmed GMAC Commercial Mortgage Securities,
Inc.'s mortgage pass-through certificates, series 2001-C2, as:

  -- $25.5 million class A-1 at 'AAA';
  -- $437.7 million class A-2 at 'AAA';
  -- Interest-only class X-1 at 'AAA';
  -- Interest-only class X-2 at 'AAA';
  -- $34 million class B at 'AAA';
  -- $11.3 million class C at 'AAA';
  -- $15.1 million class D at 'AAA';
  -- $9.4 million class E at 'AAA';
  -- $15.1 million class F at 'AAA';
  -- $10.4 million class G at 'AA+';
  -- $9.4 million class H at 'AA';
  -- $23.6 million class J at 'A-';
  -- $5.7 million class K at 'BBB+';
  -- $5.7 million class L at 'BBB';
  -- $11.3 million class M at 'BB+';
  -- $3.8 million class N at 'BB-';
  -- $3.8 million class O at 'B';
  -- $3.8 million class P at 'B-'.

Fitch does not rate the $10.4 million class Q.

While nine loans (8.6%) have defeased since Fitch's last rating
action, Fitch has identified additional Loans of Concern.  As of
the January 2008 distribution date, the pool's aggregate
certificate balance has decreased 15.8% to $635.9 million from
$754.9 million at issuance.  Twenty-four loans (25.4%) have fully
defeased as of January 2008.

Currently, there are 12 Fitch Loans of Concern (17.9%), including
one specially serviced asset (0.3%).  The specially serviced asset
is a real-estate owned retail property in Morrow, Georgia.  The
asset was transferred to special servicing after the largest
tenant defaulted on their lease.  The property currently is 16%
occupied.

The largest Fitch Loan of Concern (4.8%) is secured by an office
portfolio collateralized by four properties located in various
cities in central and southern Pennsylvania.  The portfolio has
experienced a decline in occupancy since 2004 and the borrower is
marketing the properties.  The consolidated occupancy is 72% as of
September 2007.

The second largest Fitch Loan of Concern (2.9%) is secured by a
178,591 square foot office complex in South Brunswick, New Jersey.   
As of the January 2008 distribution date, the loan is greater than
30 days delinquent.  Occupancy as of September 2007 was 47% with
an additional 30,000 sf to be occupied within the upcoming year.


GMAC LLC: Financial Unit Posts $724MM Net Loss in Fourth Qtr.
------------------------------------------------------------
GMAC Financial Services reported a 2007 fourth quarter net loss of
$724 million, compared to net income of $1 billion in the fourth
quarter of 2006.  

The effect on Residential Capital LLC from the continued
disruption in the mortgage, housing and capital markets was the
primary driver of adverse performance.  Affecting results in the
quarter were higher credit provision as a percent of assets,
market driven valuation adjustments and increased funding costs at
the company.

Several significant items are reflected in results for the fourth
quarter of 2007, including:

   -- $563 million consolidated gain on the repurchase and
      retirement of ResCap debt, of which $521 million was
      recognized at ResCap and $42 million was recognized at
      GMAC;

   -- $438 million gain related to the sale of residual cash
      flows and the deconsolidation of several on-balance sheet
      securitization structures, which included $281 million of
      current period provision - the effect of this was an in-
      period net benefit of $157 million;

   -- $131 million restructuring charge.

Comparisons to the fourth quarter of 2006 are affected by a $791
million gain related to GMAC's conversion to a limited liability
company and a $570 million capital gain related to rebalancing the
insurance investment portfolio in that period.

                       Full Year Results

For the full-year 2007, GMAC reported a net loss of
$2.3 billion, compared to net income of $2.1 billion for the full-
year 2006.  Profitable results in the automotive and insurance
businesses were more than offset by a $4.3 billion loss at ResCap.

Comparisons of full-year results are affected by the fourth
quarter significant items previously noted well as goodwill
impairments of $455 million at ResCap in the third quarter
of 2007 and $695 million at Commercial Finance in the third
quarter of 2006.

"Losses in the fourth quarter decreased compared to the prior
quarter," Eric Feldstein, GMAC chief executive officer, said.   
"However, GMAC's performance throughout 2007 was severely affected
by the ongoing challenges in the mortgage, credit and capital
markets.  As a result, 2007 was a year of significant
transformation for the organization -- driving aggressive
actions designed to reduce risk, streamline operations and
rationalize our cost structure.  Steps taken included reducing the
balance sheet by $40 billion, bolstering liquidity, tightening
underwriting standards, significantly restructuring operations and
refocusing our business on core fundamentals.

"We believe the steps taken position the company for future
success," Mr. Feldstein concluded.
   
                     Liquidity and Capital

GMAC's consolidated cash and certain marketable securities were
$22.7 billion as of Dec. 31, 2007, up from $18.3 billion at Dec.
31, 2006.  Of these total balances, ResCap's consolidated cash and
cash equivalents were $4.4 billion at year-end, up from $2 billion
on Dec. 31, 2006.

During the fourth quarter, GMAC purchased in the open market $740
million of ResCap debt that was subsequently contributed to ResCap
and retired as a measure to support the capital position at the
mortgage unit.

As of Dec. 31, 2007, ResCap's equity base was $6 billion,
above the minimum tangible net worth requirements in its credit
facilities, and above the amount expected to be needed to support
its ongoing operations.

In addition, GMAC and ResCap may from time to time continue to
purchase outstanding GMAC or ResCap debt in open market
transactions or otherwise, as part of its liquidity and cash
management strategy.

                      Strategic Initiatives

GMAC and ResCap continue to investigate strategic alternatives
related to all aspects of ResCap's business.  These strategic
alternatives include potential acquisitions as well as
dispositions, alliances, and joint ventures with a variety of
third parties with respect to some of ResCap's businesses.

GMAC and ResCap are in various stages of discussions with
respect to certain of these alternatives, including, in some
cases, execution of confidentiality agreements, indications of
interest, non-binding letters of intent and other exploratory
activities such as preliminary and confirmatory due diligence and
conceptual discussions.

GMAC and ResCap also have engaged advisers to explore the sale of
certain parts of ResCap's operations.  There are no substantive
binding contracts, agreements or understandings with respect to
any particular transaction.  Further, there can be no assurances
that any of these strategic alternatives will occur, or if they
do, that they will achieve their anticipated benefits.

At Dec. 31, 2007, the company's total debt amounted to
$193.15 billion compared to $236.99 billion in 2006.

                         About GMAC

GMAC LLC -- http://www.gmacfs.com/-- formerly General Motors
Acceptance Corporation, is a global, diversified financial
services company that operates in approximately 40 countries in
automotive finance, real estate finance, insurance and other
commercial businesses.  GMAC was established in 1919 and employs
approximately 26,700 people worldwide.  

                          *     *     *

As reported in the Troubled Company Reporter on Nov. 27, 2007,
Moody's Investors Service placed GMAC LLC's Ba2 senior unsecured
rating on review for possible downgrade.  The action was in
response to GMAC's affirmation of support for Residential Capital
LLC, as disclosed in ResCap's Nov. 21, 2007 debt tender
announcement.  ResCap's ratings and outlook (Ba3 senior unsecured,
negative outlook) were not affected by the tender announcement or
this GMAC rating action.

As reported in the Troubled Company Reporter on Nov. 16, 2007,
Fitch Ratings has placed GMAC LLC and its related subsidiaries
'BB+' long-term Issuer Default Ratings on Rating Watch Negative.  
This action reflects the ongoing pressures in the company's
residential mortgage subsidiary, Residential Capital LLC (ResCap,
IDR 'BB+' by Fitch with Rating Watch Negative).


GS ENERGY: Earns $461,456 in Third Quarter Ended Sept. 30, 2007
---------------------------------------------------------------
GS Energy Corp. reported net income of $461,456 on revenue of
$1,316,599 for the third quarter ended Sept. 30, 2007, compared
with a net loss of $373,725 on revenue of $1,314,279 in the same
period of 2006.

Cost of revenues for the three months ended Sept. 30, 2007, was  
$725,638.  Cost of revenues for the three months ended Sept. 30,
2006, was $1,194,083.

Selling, general and administrative expenses for the three months
ended Sept. 30, 2007, and Sept. 30, 2006, were $120,907 and  
$276,598, respectively.

Interest expense and financing cost for the three months ended
Sept. 30, 2007, and Sept. 30, 2006, was $8,238 and $29,77,
respectively.

The company incurred  $15,009 in amortization of financing costs
during the three months ended Sept. 30, 2006.  These expenses  
represent the costs incurred in connection with certain  
convertible  debentures that GS Energy Corporation had previously  
issued to YA Global Investments LP and the fees the company paid
to compensate the parties associated with these financing
transactions.

The interest expenses and financing costs decreased significantly
in 2007 due to the fact the Global Debentures were converted into
common stock and the Global Debentures were assumed by the
company's parent company, Greenshift Corporation.  

                          Balance Sheet

At Sept. 30, 2007, the company's consolidated balance sheet showed
$3,239,842 in total assets, $2,880,832 in total liabilities, and
$359,010 in total stockholders' equity.

The company's consolidated balance sheet at Sept. 30, 2007, also
showed strained liquidity with $1,156,981 in total current assets
available to pay $2,496,926 in total current liabilities.

Full-text copies of the company's consolidated financial
statements for the quarter ended Sept. 30, 2007, are available for
free at http://researcharchives.com/t/s?27d4

                       Going Concern Doubt

Rosenberg Rich Baker Berman & Co., in Bridgewater, New Jersey,
expressed substantial doubt about GS Energy Inc.'s ability to
continue as a going concern after auditing the company's
consolidated financial statements for the year ended Dec. 31,
2006.  The auditing firm reported that the company has suffered  
recurring losses from operations and has a working capital
deficiency as of Dec. 31, 2006.  

                         About GS Energy

Headquartered in New York City, GS Energy Corporation (OTC BB:
GSEG.OB) -- operates through its subsidiary GS Manufacturing Inc.
GS Manufacturing owns 100% of Warnecke Design Service Inc., a
specialty metal manufacturing company that provides custom
equipment manufacturing services for its clients including machine  
design, machine building, control system electronics and   
programming, and maintenance support services.  Warnecke
currently services clients in the biofuels, automotive,
electronics, lighting, plastics, rubber and food products  
industries.


HANCOCK FABRICS: Asks Court's Nod to Assume 177 Unexpired Leases
----------------------------------------------------------------
Hancock Fabrics Inc. and its debtor-affiliates ask the U.S.
Bankruptcy Court for the District of Delaware for authority to
assume 177 unexpired leases of nonresidential real property,
including:

                                                          Cure
   Address                  Landlord                     Amount
   -------                  --------                     ------
   1403 W. Pipeline, Hurst  KRG Market Street           $67,371
   Texas                    Village, LP

   8780 Pershall Rd.        Hazelwood Showcase, LLC      29,192
   Hazelwood, Missouri

   7046 Bandera Road        Parkdale Development         22,929
   San Antonio, Texas       Corporation, Inc.

   101 Verdae Blvd.         SCI Verdae Fund, LLC         24,496
   Ste. 520, Greenville
   South Carolina

   1524 Barton Road         Redland-Branson              22,677
   Redlands, California     Development, Inc.

   3901 Spencer Hwy.        CA New Plan Fixed Rate       27,125
   Pasadena, Texas          Partnership, L.P.

   2909 Richmond Rd         LVP Center, LLC              22,518
   Lexington, Kentucky

   1919 N. Central Avenue   Marshfield Centre, LLC       25,946
   Marshfield, Wisconsin

   12977 West Center Rd.    Montclair Investment II      25,494
   Omaha, Nebraska          Company

   323 S. Mason Rd., Katy   Point West Center, L.L.C.    50,474
   Texas

A complete list of the Leases is available for free at:

               http://researcharchives.com/t/s?27d8

According to the Debtors, 12 of the Leases do not require cure,
while only two leases require cure amounts more than $30,000.

The Debtors intend to cure any defaults under the Leases and
believe that adequate assurance of future performance exists
based on the Debtors' ample liquidity under their DIP financing
facilities and cash flow from ongoing operations.

Robert J. Dehney, Esq., at Morris, Nicols, Arsht & Tunnell LLP,
in Wilmington, Delaware, relates that the Debtors obtained
$122,500,000 in DIP financing and currently enjoy in excess of
$50,000,000 in availability.  He adds that, from a historical
perspective, the Debtors have paid rent on time, except for
payment for March 2007 and certain other monetary costs and
charges.

Moreover, Mr. Dehney says, the Debtors previously assumed
approximately 90 leases, and on an uncontested basis, were able
to demonstrate adequate assurance of future performance.

The Court will hold a hearing on the Debtors' request Feb. 21.

                      About Hancock Fabrics

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

The company and six of its debtor-affiliates filed for chapter 11
protection on March 21, 2007 (Bankr. D. Del. Lead Case No.
07-10353).  Robert J. Dehney, Esq., at Morris, Nichols, Arsht &
Tunnell, represent the Debtors.  As of Sept. 1, 2007, Hancock
Fabrics disclosed total assets of $159,673,000 and total
liabilities of 122,316,000.  The Debtors' exclusive period to file
a Chapter 11 Plan expires on May 30, 2008. (Hancock Fabric
Bankruptcy News, Issue No. 25, Bankruptcy Creditors' Service Inc.;
http://bankrupt.com/newsstand/or 215/945-7000).


HANCOCK FABRICS: Asks Court's Nod to Modify Lease Agreements
------------------------------------------------------------
Hancock Fabrics Inc. and its debtor-affiliates ask the U.S.
Bankruptcy Court for the District of Delaware for authority to
assume unexpired leases of non-residential real property and enter
into lease modification agreements with:

                                                          Cure
   Landlord                      Site                    Amount
   --------                      ----                    ------
   Co-Venture Development        Davenport, Iowa        $13,700

   Brookside Venture, LLC, and   Northbrook, Illinois     8,022
   GMK - Brookside LLC

Eric D. Schwartz, Esq., at Morris, Nichols, Arsht & Tunnell LLP,
in Wilmington, Delaware, relates that the modification agreements
provide the Debtors with more favorable terms under the Leases,
including reductions in rent and an option to terminate.

The Lease Modification Agreements also provides termination
rights with respect to the Leases with the same effect as if the
Leases had expired by the passage of time.

The executed Davenport Lease Modification Agreement provides,
among other things, that:

   a. the monthly installment of annual fixed rent will be
      reduced from $7,125 to $6,000; and

   b. the landlords may not object to an assignment of the
      Debtors' interests under the Leases sought by motion or
      otherwise in Bankruptcy Court.

Mr. Schwartz states that while the Debtors and the Brookside have
agreed in substance to the Northbrook Lease Modifications, they
have not yet executed an agreement.

Mr. Schwartz further notes that the Debtors' payment history is
excellent and they have ample liquidity to pay the cure amount
and rent.

The Debtors previously assumed 90 leases in their Chapter 11
cases.  Mr. Schwartz contends that the Debtors were, on an
uncontested basis, able to demonstrate, under essentially the
same set of facts and circumstances, adequate assurance of future
performance.

                      About Hancock Fabrics

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

The company and six of its debtor-affiliates filed for chapter 11
protection on March 21, 2007 (Bankr. D. Del. Lead Case No.
07-10353).  Robert J. Dehney, Esq., at Morris, Nichols, Arsht &
Tunnell, represent the Debtors.  As of Sept. 1, 2007, Hancock
Fabrics disclosed total assets of $159,673,000 and total
liabilities of 122,316,000.  The Debtors' exclusive period to file
a Chapter 11 Plan expires on May 30, 2008. (Hancock Fabric
Bankruptcy News, Issue No. 25, Bankruptcy Creditors' Service Inc.;
http://bankrupt.com/newsstand/or 215/945-7000).


HANCOCK FABRICS: Court to Talk on Plan Exclusivity Issues Feb. 25
-----------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware will hold a
status conference February 25, 2008, at 11:00 a.m., regarding
Hancock Fabrics Inc. and its debtor-affiliates' exclusive right to
file a plan of reorganization and solicit acceptances of that
plan.

As reported in the Troubled Company Reporter on January 8, 2008,
the Bankruptcy Court extended the Debtors' exclusive filing period
through May 30, 2008, and exclusive solicitation period through
July 30, 2008.

However, with respect to the Official Committee of Unsecured
Creditors, the Court shortened the Debtors' exclusive filing
period through March 31, 2008, and their exclusive solicitation
period through May 30, 2008.  Moreover, the Court required the
Debtors to deliver to the Committee's counsel a plan of
reorganization term sheet by January 15, 2008 and a draft plan of
reorganization and a draft disclosure statement by January 31,
2008.

A copy of the draft plan has not been posted on the Bankruptcy
Court docket.

If the Debtors fail to deliver to the Committee's counsel a term
sheet by the term sheet deadline, the Court held that the
exclusive periods as to the Committee will be terminated five
business days after; provided however that if the Debtors file a
plan or reorganization before the termination date of the
exclusive periods as to the Committee, the extension dates of the
exclusive periods for the Committee will be restored.

If the Debtors deliver to the Committee's counsel a term sheet by
the term sheet deadline but fail to deliver a draft plan by the
draft deadline, then the exclusive periods as to the Committee
will be terminated five business days after the draft plan
deadline; provided however, that, if the Debtors file a plan of
reorganization before the termination date, the extension of the
exclusive filing period for the Committee will still be restored.

If the Debtors receive written consent from the Committee by
March 15, 2008, to extend the exclusive filing period to a date
through May 30, 2008, and the exclusive solicitation period
through July 30, 2008, then, solely as to the Committee, the
exclusive periods will be deemed extended through the dates
agreed upon by the Debtors and the Committee without Court order.

In the event of a termination of the exclusive periods applicable
to the Creditors' Committee, the termination will also be
applicable to the Official Committee of Equity Security Holders.

The Creditors' Committee previously predicted creditors will be
paid in full over time or possibly at a discount for cash or with
stock, William Rochelle at Bloomberg News says.

                      About Hancock Fabrics

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

The company and six of its debtor-affiliates filed for chapter 11
protection on March 21, 2007 (Bankr. D. Del. Lead Case No.
07-10353).  Robert J. Dehney, Esq., at Morris, Nichols, Arsht &
Tunnell, represent the Debtors.  As of Sept. 1, 2007, Hancock
Fabrics disclosed total assets of $159,673,000 and total
liabilities of 122,316,000.  The Debtors' exclusive period to file
a Chapter 11 Plan expires on May 30, 2008. (Hancock Fabric
Bankruptcy News, Issue No. 25, Bankruptcy Creditors' Service Inc.;
http://bankrupt.com/newsstand/or 215/945-7000).


HARMAN INTERNATIONAL: Earns $43 Mil. in Quarter Ended December 31
-----------------------------------------------------------------
Harman International Industries Incorporated reported results for
the second quarter ending Dec. 31, 2007.

For the quarter, net income was $43 million.  Excluding merger-
related costs, net income was $46 million.

Foreign currency translation positively impacted quarterly results
as the Euro strengthened approximately 12% compared to the same
quarter last year.  The Euro averaged $1.45 in the second quarter
compared to $1.29 in the same period last year.

As a result, foreign currency translation improved sales by
approximately $75 million and contributed $0.15 to earnings per
diluted share in the quarter.

"Although we continue to increase sales across all divisions, our
automotive earnings are under pressure due to portable navigation
devices, product mix, and higher engineering and material costs
during a period of record launch activity," Dinesh Paliwal,
Harman' chief executive officer, said.  "We are accelerating a
number of strategic actions to improve our cost structure and
optimize our global footprint in the automotive sector, while
flattening our broader organization to instill a strong culture of
execution."

                     Strategic Appointments

Harman's board of directors has been expanded to eight members,
bringing new expertise and global range.  Brian Carroll has joined
from KKR, bringing strong financial expertise.
Dr. Harald Einsmann, a German national who has worked with such
industry leaders as Procter & Gamble, the Wallenberg Group, and
the Carlson Group, brings international business experience. Gary
Steel, a Scottish national with experience from Europe's Shell and
ABB Groups, adds deep expertise in human resources, restructuring,
and corporate governance.

The company has also disclosed several significant additions to
its senior management team in recent weeks.

   * Richard Sorota, an experienced executive with premium
     consumer brand companies, Procter & Gamble and Royal
     Phillips, has joined the company as consumer division
     president.
    
   * John Stacey, with 20 years of experience in employee and
     organizational development across the Americas and Europe,
     is joining Harman as vice president of human resources.
    
   * Robert Lardon has joined the company as vice president,
     strategy and investor relations.  In addition to his
     experience as a management consultant at PwC, Accenture,
     and Booz Allen, Mr. Lardon was chief strategy officer at
     Porter Novelli, a Top 10 communications agency.
    
   * Kent Moerk, a Danish national, has been appointed to
     manage the newly established global PND business unit
     which will integrate the company's two lines of portable
     navigation devices.
    
   * Dr. Wolfgang Ptacek, who has held senior management
     positions at T-Mobile and Bosch, has been appointed chief
     technology officer for Harman automotive operations
     worldwide.
    
   * Bronson Reed, an experienced international finance
     executive at ABB, joined the company as vice president,
     group controller.

In order to strengthen the leadership and to improve common
processes across multiple Harman businesses, the company has
created the new position of Country Manager in the United States
and Japan, and will extend this concept to Germany, China, India,
and Russia.

Blake Augsburger, who leads the professional division, has taken
this additional role in the US. Ken Yasuda, president of Harman
Consumer Japan, assumes the additional group-wide country role in
Japan.  These individuals will serve as country champion for
functional best practices, and will directly participate in such
business activities as project risk reviews, large supply or
investment proposals, restructurings, and key human resource
decisions.

                     Strategic Initiatives

During the fiscal second quarter, the company initiated an
extensive review of its footprint and launched a number of key
initiatives to improve simplicity and cost.  In the third quarter,
restructuring of the company's automotive footprint was
accelerated with the decision to close plants in Northridge,
California and Martinsville, Indiana.

Also during the third quarter, the company decided to shut down
two smaller facilities in Massachusetts serving the consumer
division.  These operations will be integrated with other Harman
facilities in California and New York.  Consolidations of
additional Harman manufacturing and engineering facilities in
Europe and Africa are under review.

These actions are expected to result in restructuring charges of
$25 to $30 million in the third quarter and $5 to $10 million in
the fourth quarter of fiscal 2008.  About 1400 jobs will be
affected, of which 500 jobs will be eliminated and the balance
transferred to other Harman facilities in the United States,
Germany, China, and Mexico.

The company has added several hundred new jobs at its plants in
Mexico and China and extensive job training is now being
completed.  The company has also decided to add capacity to its
plant in Hungary in order to expand production of audio
electronics and speakers.

The company is in the final stage of completing its plan to
outsource its information technology infrastructure.  This step
will blend an outside service provider's solutions expertise with
emerging-country resources to bring us significant gains in both
agility and cost.  This initiative will also help us take a closer
look at alternative resources for project-related software,
systems and costs.

In the third quarter, the company also decided to consolidate
resources from Washington, DC and Northridge, California to its
new corporate headquarters in Stamford, Connecticut.  This will
accelerate the speed of decision making and improve coordination
across key company functions.

                         Balance Sheet

At Dec. 31, 2007, the company's balance sheet showed total assets
of $2.65 billion, total liabilities of $1.41 billion and total
shareholders' equity of $1.24 billion  

                    About Harman International

Based in Washington, D.C., Harman International Industries Inc.
(NYSE: HAR) -- http://www.harman.com/-- manufactures, designs and  
markets a range of audio and infotainment products for the
automotive, consumer and professional markets.  The company
maintains a presence in the Americas, Europe and Asia and employs
more than 10,500 people worldwide.  The Harman International
family of brands spans some 15 leading names including AKG,
Audioaccess, Becker, BSS, Crown, dbx, DigiTech, DOD, Harman
Kardon, Infinity, JBL, Lexicon, Mark Levinson, Revel, QNX,
Soundcraft and Studer.

                         *     *     *

As reported in the Troubled company Reporter on Oct. 24, 2007,
Standard & Poor's Ratings Services revised its CreditWatch
implications for the 'BB-' corporate credit rating on Harman
International Industries Inc. to positive from developing.


IAC/INTERACTIVECORP: Incurs $144.1 Million Net Loss in Year 2007
----------------------------------------------------------------
IAC/InterActiveCorp reported a net loss of $144.1 million on net
revenues of $6.4 billion for the 12 months ended Dec. 31, 2007.  
The company had a net income of $187.1 million on net revenues of
$5.9 billion in 2006.

The company incurred a net loss of $369.9 million on net revenues
of $1.9 billion for the fourth quarter ended Dec. 31, 2007, as
compared with a net income of $15.3 million on net revenues of
$1.7 billion for the fourth quarter of 2006.

The company's balance sheet as of Dec. 31, 2007, show total assets
of $12.5 billion, total liabilities of $3.9 billion, and total
shareholders' equity of $8.6 billion.

                        Results Per Segment

Media & Advertising operating income for the current period also
reflects an increase in amortization of non-cash marketing of
$10.8 million.  Media & Advertising profit benefited from a
reduction in the current year expense of $4.6 million resulting
from the capitalization and amortization of costs related to the
distribution of toolbars which began on April 1, 2007.  These
costs had previously been expensed as incurred.

Match's revenue growth was driven by a 14% increase in revenue per
subscriber.  International subscribers grew 11%, while worldwide
subscribers grew 1%.  Flat Operating Income Before Amortization is
primarily due to higher marketing costs compared to the year ago
period.  Operating income for the current period reflects
amortization of non-cash marketing of $3.9 million and an increase
of $0.6 million in the amortization of intangibles.

ServiceMagic revenue benefited from a 20% increase in customer
service requests, improved monetization of service requests and a
9% increase in the number of service providers in the network.
Profit declines reflect increased operating expenses primarily
associated with the expansion of the sales force and higher
customer acquisition costs, including higher offline marketing
expenses versus the prior year period.

Entertainment's Revenue and Operating Income Before Amortization
declines reflect lower sales in the fundraising channel,
particularly in Sally Foster products and coupon books.  Operating
loss includes a $57.2 million impairment charge related to
goodwill and intangible assets, reflecting significant continued
deterioration in the core fundraising channels in which the
company operates.  Q4 2006 operating loss includes a $214 million
impairment charge related to goodwill and intangible assets.

Corporate expense for the period included $4.1 million in
transaction expenses related to the spin-offs and a $2.7 million
increase in payroll taxes paid related to the exercise of options
during the quarter.

Revenue reflects increased contributions from HSN Retailing,
catalogs and Shoebuy. HSN grew revenue 8% excluding America's
Store, which ceased operations on April 3, 2007.  Online sales
continued to grow at a double digit rate in the fourth quarter.

Record worldwide ticket volumes drove a 17% increase in tickets
sold, with 8% higher average overall revenue per ticket.  Domestic
revenue increased 14% primarily due to higher volume of concert
ticket sales including Bon Jovi, Celine Dion and Bruce
Springsteen. International revenue grew 54%, or 42% excluding the
effects of foreign exchange, due primarily to increased revenue in
the United Kingdom and Canada.

LendingTree's revenue declined primarily due to fewer loans sold
into the secondary market, lower revenue per loan sold, and fewer
loans closed at the exchange.  Revenue from all home loan products
declined with home equity declining the fastest.  Profits were
impacted by $11.2 million in restructuring costs and an $8.3
million provision for loan losses in the quarter, compared to $1.2
million in Q4 2006.  The Q4 2007 loan loss provision reflects the
increased losses the company is experiencing with respect to
previously sold loans.

Real Estate's results reflect fewer closings at the builder and
broker networks, partially offset by increased closings at the
company owned brokerage.  Losses decreased due to lower
administrative costs resulting in part from the restructuring of
the business during the year and lower marketing expenses.

Interval's revenue reflects a $17.5 million contribution from
ResortQuest Hawaii, acquired on May 31, 2007.

                   Liquidity and Capital Resources

As of Dec. 31, 2007, IAC had approximately $1.9 billion in cash,
restricted cash and marketable securities, $946.4 million in debt
and, excluding $79.4 million in LendingTree Loans debt that is
non-recourse to IAC, $1.1 billion in pro forma net cash and
marketable securities.

                         Overall Highlights

"There is good news and bad news this quarter -- the mix of which
is another reason why our previously announced plans to reorganize
IAC into five independent public companies makes more and more
sense," said Barry Diller, IAC Chairman and CEO.  "Bad news first:
Lending continues to be negatively affected by the mortgage
crisis, our catalog business had a difficult quarter, and our EPI
discount products business continues to underperform.  On the good
side, our revenue gains this quarter include the very promising
news of the continued turnaround at HSN; record worldwide ticket
volume at Ticketmaster; increased queries from distributed
toolbars, Fun Web Products and Ask; increased transactions and
membership at Interval, and higher revenue per subscriber at
Match.  We have begun the year on a satisfactory basis and believe
the work we are doing now to prepare each of the entities for
separate public life will greatly benefit shareholders in 2008 and
beyond."

Q4 and full year 2007 operating loss and net loss reflect a
goodwill and intangible asset impairment charge of $475.7 million,
$452.1 million after-tax, related to the Lending segment and $57.2
million, $44.7 million after-tax, related to the Entertainment
segment.  Q4 2006 and full year 2006 included a goodwill and
intangible asset impairment charge of $214 million, $167.9 million
after-tax, related to the Entertainment segment.

Free Cash Flow in 2007 was $428 million, with $879 million in net
cash provided by operating activities.

IAC repurchased 6 million shares of common stock at $24.25 per
share on Jan. 10, 2008.

A full-text copy of the company's release on full-year and fourth
quarter 2007 financial results is available for free at:
http://ResearchArchives.com/t/s?27d6

                            About IAC

IAC/InterActiveCorp (Nasdaq: IACI) -- http://iac.com/-- operates
a portfolio of specialized and global brands in the sectors:
Retailing, which includes the United States and International
segments; Services, which includes the Ticketing, Lending, Real
Estate, Teleservices and Home Services reporting segments; Media &
Advertising, and Membership & Subscriptions, which includes the
Vacations, Personals and Discounts reporting segments.

                          *     *     *

As reported in the Troubled Company Reporter on Feb. 1, 2008,
Standard & Poor's Rating Services said its ratings on
IAC/InterActiveCorp, including the 'BB' corporate credit rating,
remain on CreditWatch with negative implications, where they were
initially placed on Nov. 5, 2007, following IAC's announcement
that it plans to divide itself into five publicly traded
companies.


IAC/INTERACTIVECORP: May Purchase AOL Biz For a "Ridiculous" Price
------------------------------------------------------------------
IAC/InterActiveCorp CEO Barry Diller said he won't buy Time Warner
Inc.'s AOL Internet portal unless it was sold for a "ridiculous"
price, according to various news.

Mr. Diller informed reporters, who used to be interested in Time
Warner's unit, that he no longer feels "the same way now."  
Reports say that Mr. Diller will check on the business again and
see if the price goes to a level that's "basically free."

Reports came out Wednesday that Time Warner is planning to spin
off its Internet business at AOL and cut stake in its cable unit
in the coming months.

Meanwhile, IAC continues in its defense against a legal battle
with Liberty Media Corporation's chairman, John Malone.  Mr.
Diller remains convinced that the planned spin-off of IAC into
five separate companies is in the best for shareholders.

                       About Timer Warner

Time Warner Inc. (NYSE: TWX) -- http://www.timewarner.com/-- is a  
media and entertainment company, whose businesses include
interactive services, cable systems, filmed entertainment,
television networks and publishing.  Time Warner classifies its
business interests into five segments: AOL, Cable, Filmed
Entertainment, Networks and Publishing. The AOL segment consists
principally of interactive services.  The Cable segment consists
principally of interests in cable systems that provide video,
high-speed data and voice services. The Filmed Entertainment
segment consists principally of feature film, television, and home
video production and distribution.  The Networks segment consists
principally of cable television networks.  The Publishing segment
is principally engaged in magazine publishing.  In November 2007,
AOL acquired Yedda Inc., an Israeli online question and answer
service.

                            About IAC

IAC/InterActiveCorp (Nasdaq: IACI) -- http://iac.com/-- operates
a portfolio of specialized and global brands in the sectors:
Retailing, which includes the United States and International
segments; Services, which includes the Ticketing, Lending, Real
Estate, Teleservices and Home Services reporting segments; Media &
Advertising, and Membership & Subscriptions, which includes the
Vacations, Personals and Discounts reporting segments.

                          *     *     *

As reported in the Troubled Company Reporter on Feb. 1, 2008,
Standard & Poor's Rating Services said its ratings on
IAC/InterActiveCorp, including the 'BB' corporate credit rating,
remain on CreditWatch with negative implications, where they were
initially placed on Nov. 5, 2007, following IAC's announcement
that it plans to divide itself into five publicly traded
companies.


IAC/INTERACTIVECORP: Won't Let Liberty Dispute Distract Operations
------------------------------------------------------------------
IAC/InterActiveCorp CEO Barry Diller stated in a conference call
with analysts held Wednesday, Feb. 6, 2008 that he will not allow
the heated legal dispute with Liberty Media Corporation to affect
IAC's operations, Michele Gershberg writes for Reuters.

Meanwhile, Mr. Diller, asserted in a filing with the Delaware
Chancery Court that its legal duel with Mr. Malone has negatively
affected its operations, the Troubled Company Reporter disclosed
on Feb. 3, 2008.

In its financial report, IAC incurred a net loss of $144.1 million
on net revenues of $6.4 billion for the year ended Dec. 31, 2007.  
A more comprehensive report on the company's full-year and fourth
quarter 2007 results accompanies today's TCR.

Mr. Diller said that he will do everything possible to bar the
litigation from becoming "a significant distraction" to IAC,
although he said that the court makes the decision, Reuters
relates.

According to Reuters, Mr. Diller hopes the Chancery Court of
Delaware will issue an initial order at the March 10, 2008 trial,
regarding the dispute with John Malone at Liberty Media.

As reported in the TCR on Feb. 4, 2008, Mr. Diller, based on the
reports, blasted Mr. Malone's request to expel them from IAC's
board by saying Liberty Media does not control IAC.  According to
Mr. Diller, "Liberty has now gone off the deep end" with Mr.
Malone's latest lawsuit.

In a statement, Mr. Diller expressed that IAC's board "continues
to work" for its shareholders, and will pursue with the highly
disputed spin off plan.

The TCR said on Jan. 29, 2008, that Mr. Malone filed a case with
the Court of Delaware seeking the expulsion of seven members of
IAC's board of directors, including Mr. Diller.

Mr. Diller strongly denied the allegations of its former business
partner, Mr. Malone and called Mr. Malone's claims "preposterous",
a mere display meant only to block IAC's spin off plan.

                        About Liberty Media

Headquartered in Englewood, Colorado, Liberty Media Corporation
(NasdaqGS: LINTA) -- http://www.libertymedia.com/-- owns
interests in a broad range of electronic retailing, media,
communications and entertainment businesses.  Those interests are
attributed to two tracking stock groups: the Liberty Interactive
group, which includes Liberty's interests in QVC, Provide
Commerce, IAC/InterActiveCorp, and Expedia, and the Liberty
Capital group, which includes Liberty's interests in Starz
Entertainment, News Corporation, and Time Warner.

                             About IAC

IAC/InterActiveCorp (Nasdaq: IACI) -- http://iac.com/-- operates
a portfolio of specialized and global brands in the sectors:
Retailing, which includes the United States and International
segments; Services, which includes the Ticketing, Lending, Real
Estate, Teleservices and Home Services reporting segments; Media &
Advertising, and Membership & Subscriptions, which includes the
Vacations, Personals and Discounts reporting segments.

                           *     *     *

As reported in the Troubled Company Reporter on Feb. 1, 2008,
Standard & Poor's Rating Services said its ratings on
IAC/InterActiveCorp, including the 'BB' corporate credit rating,
remain on CreditWatch with negative implications, where they were
initially placed on Nov. 5, 2007, following IAC's announcement
that it plans to divide itself into five publicly traded
companies.


INDEPENDENCE COUNTY: S&P Puts BB+ Bond Rating on CreditWatch Neg
----------------------------------------------------------------
Standard & Poor's Ratings Services revised its CreditWatch
implications on Independence County, Arkansas' $29.3 million power
revenue bonds to negative from developing.  The rating on the
bonds is 'BB+'.  Independence County Hydroelectric is the obligor.
     
The move to CreditWatch negative from CreditWatch developing,
where S&P placed the rating on Jan. 15, 2008, reflects S&P's
conclusion following a meeting with the hydroelectric project's
management that the rating is not likely to improve and could fall
due to the project's potential exposure to outstanding claims by
the construction contractor and to operational performance.
      
"We expect to resolve the CreditWatch placement in the first
quarter of 2008, pending receipt of additional information," said
Standard & Poor's credit analyst Trevor D'Olier-Lees.


ING RE (UK): Court Recognizes Ch. 15 Case as Foreign Proceeding
---------------------------------------------------------------
The Honorable Robert E. Gerber of the U.S. Bankruptcy Court for
the Southern District of New York granted recognition of ING Re
(UK), Ltd.'s Chapter 15 case as a foreign main proceeding pursuant
to Section 101(23) and 1517(b)(1) of the U.S. Bankruptcy Code.

On Jan. 23, 2008, the U.K. Court issued a sanction order, which
sanctioned a scheme of arrangement of the company.  Pursuant to
the scheme of arrangement -- now recognized and made valid by the
Court -- the sanction order will become effective on the date on
which an office copy of the order is delivered for registration to
the Registrar of Companies in England and Wales.

Under the scheme of arrangement, all creditors will be enjoined
and restrained from, among others:

   a) taking or continuing any act to obtain possession of, or
      exercise control over, the company or any of its property
      that is located within the territorial jurisdiction of the
      U.S.;

   b) transferring, relinquishing, or disposing of any property of
      the company;

   c) commencing or continuing any action or legal proceeding
      against the company or any of its property or seeking
      discovery of any nature against the company;

   d) commencing or continuing any act to create, perfect or
      enforce any lien, set-off or other claim against the
      company and its estates;

   e) posting securities or bonds against the company
      in any way; and

   f) declaring, considering, or treating the filing of the
      Chapter 14 pleadings or the scheme of arrangement a default
      or an event of default.

Judge Gerber requires all scheme creditors that are parties to any
trust, escrow agreement or similar arrangement in which the
company has an interest, to provide notice of any withdrawal or
set-off to:

      Sara M. Tapinekis, Esq.
      Clifford Chance U.S. LLP
      31 West 52nd Street
      New York, NY 10019
      Tel: (212) 878-8569
      Fax: (212) 878-8375

Creditors should turn over and account to Michael Larry Emerson,
ING's petitioner and foreign representative, all funds resulting
from any withdrawal, set-off, or other application of property
that is the subject of any trust which the company has an
interest.

                     About ING Re (U.K.), Ltd.

ING Re (U.K.), Ltd. -- http://www.ing-re.co.uk/-- provided   
accident and health reinsurance services and was also engaged in
the retrocession business in the U.K. since 1997.

ING Re (U.K.), Ltd. ceased its business and went into run-off in
2002.  However, since it expected the run-off of its business to
continue for a number of years, it had proposed a solvent scheme
of arrangement under Section 425 of the U.K. Companies Act of 1985
as the most efficient and effective method of making full payment
to its creditors in the shortest practical time.

On Sept. 21, 2007, the ING Re (U.K.), Ltd. sought permission
from the High Court of Justice of England and Wales in the U.K. to
convene a meeting with the creditors to allow them to vote on the
Scheme of Arrangement.  On Oct. 31, 2007, the court gave the
sought permission.  On Dec. 19, 2007, the meeting between the ING
Re (U.K.), Ltd. and the creditors was convened.

The company filed for Chapter 15 bankruptcy on Jan. 4, 2008
(Bankr. S.D.N.Y. Case No. 08-10018).  Michael Larry Emerson is the
petitioner for ING.  Jennifer C. DeMarco, Esq. and Sara M.
Tapinekis, Esq., at Clifford Chance LLP, represent the Debtor in
its foreign proceeding.  The company's financial condition as of
Dec. 31, 2006, reflected total assets of $90,932,273, and total
debts of $68,476,853.


INTERSTATE HOTELS: Completes $208MM Buyout of Blackstone's Hotels
-----------------------------------------------------------------
Interstate Hotels & Resorts disclosed that its joint venture with
Harte Holdings has completed the acquisition of four hotels from
affiliates of The Blackstone Group for an aggregate price of
$207.8 million.

Interstate invested approximately $11.5 million for a 20% equity
interest in the four hotels.  Interstate funded the acquisition
with available cash and capacity under its senior revolving credit
facility.

The four properties included in the joint venture acquisition are:

   -- Property: Sheraton Frazer Great Valley    
      Rooms: 198    
      Location: Frazer, Pennsylvania (Phila MSA)                   

   -- Property: Sheraton Mahwah                 
      Rooms: 225    
      Location: Mahwah, New Jersey                     

   -- Property: Latham Hotel Georgetown         
      Rooms: 142    
      Location: Washington, DC                     

   -- Property: Hilton Lafayette                
      Rooms: 327    
      Location: Lafayette, Louisiana

Interstate manages all four hotels under new management
agreements.

                       About Harte Holdings

Headquartered in of Cork, Ireland, Harte Holdings --
http://www.harteholdings.ie/-- is an investment and development  
company which owns a wide variety of real estate projects in the
United Kingdom, Ireland and mainland Europe, with a portfolio
consisting of hotels, residential, commercial and retail assets in
these areas.

             About Interstate Hotels & Resorts Inc.

Headquartered in Arlington, Virginia, Interstate Hotels &
Resorts Inc. (NYSE: IHR)-- http://www.ihrco.com/-- as of
Nov. 30, 2007, Interstate Hotels & Resorts owned seven hotels
and had a minority ownership interest through separate joint
ventures in 22 hotels and resorts.  Together with these
properties, the company and its affiliates manages a total of 192
hospitality properties with more than 43,000 rooms in
36 states, the District of Columbia, Belgium, Canada,
Ireland, Mexico and Russia.  Interstate Hotels & Resorts also has
contracts to manage 15 hospitality properties with approximately
4,400 rooms currently under construction.

                          *     *     *

Interstate Hotels & Resorts Inc. continues to carry Moody's
Investor Services' 'B1' long term corporate family rating, which
was placed in January 2007.  The outlook is negative.


K-SEA TRANSPO: Earns $9.9 Million in 2nd Fiscal Qtr. Ended Dec. 31
------------------------------------------------------------------
K-Sea Transportation Partners L.P. reported net income of
$9.9 million for the second fiscal quarter ended Dec. 31, 2007, an
increase of $6.0 million compared to net income of $3.9 million
for the three months ended Dec. 31, 2006.  

The fiscal 2008 second quarter benefited from the $5.6 million
increase in operating income, and from the $2.1 million non-
recurring gain from the settlement of legal proceedings relating
to the company's previously reported November 2005 incident
involving the barge DBL 152.  These increases were partially
offset by a $1.9 million increase in interest expense resulting
from debt incurred to finance the Smith acquisition and vessel
newbuildings over the past year.

President and chief Timothy J. Casey said "During the second
quarter of fiscal 2008, we made significant progress in
integrating the Smith Maritime Group, and our fleet expansion and
upgrade program continues to provide us new and more efficient
vessels.  Our operating income, EBITDA, and net income per unit
are markedly ahead of last year.  Our growth plans remain on
target.  

"During the second quarter of fiscal 2008, we took delivery of two
new 28,000 barrel tank barges, and we have ten additional units
under construction.  Nine new tank barges are scheduled to be
delivered, approximately one per quarter, over the next two years,
and we have also begun construction on the previously announced
185,000-barrel articulated tug-barge unit, which is scheduled for
delivery in the fourth quarter of calendar 2009 and will then
begin work under a multi-year charter with a major customer.

For the three months ended Dec. 31, 2007, the company reported
operating income of $13.4 million, an increase of $5.6 million, or
72.0%, compared to $7.8 million of operating income for the three
months ended Dec. 31, 2006.  This increase resulted primarily from
inclusion of the recently acquired Smith Maritime Group, for which
results are included from the acquisition date of Aug. 14, 2007,
and also from the continuing addition of new barges from the
company's expansion and upgrade program.  Since Jan. 1, 2007, the
company has taken delivery of five new tank barges, and has also
purchased three tugboats that have reduced reliance on more
expensive chartered-in towing.  

Results for the second quarter of fiscal 2008 were also affected
by continued strong rates, which were partially offset by lower
vessel utilization, increases of $2.9 million in depreciation and
amortization due to the Smith acquisition and the expanded fleet,
and $2.0 million in higher general and administrative expenses as
a result of the acquisition and the company's continued growth.  
Vessel utilization was lower due to higher scheduled drydocking
days and lower utilization of certain lower-valued, single-hull
vessels.  EBITDA increased by $10.7 million, or 67.0%, to
$26.6 million for the three months ended Dec. 31, 2007, compared
to $15.9 million for the three months ended Dec. 31, 2006.  

                  Six Months Ended Dec. 31, 2007

For the six months ended Dec. 31, 2007, the company reported
operating income of $26.2 million, an increase of $10.9 million,
or 71.0%, compared to $15.3 million of operating income for the
six months ended Dec. 31, 2006.  This increase resulted primarily
from the Smith acquisition and from the continuing addition of new
barges from the company's expansion and upgrade program.  

EBITDA increased by $17.9 million, or 58%, including the non-
recurring gain, to $49.0 million for the six months ended Dec. 31,
2007, compared to $31.1 million for the six months ended Dec. 31,
2006.

Net income for the six months ended Dec. 31, 2007, was
$16.6 million, an increase of $8.6 million compared to net income
of $8.0 million for the six months ended Dec. 31, 2006.  The first
six months of fiscal 2008 benefited from the $10.9 million
increase in operating income, and from the $2.1 million non-
recurring gain on settlement of the DBL 152 legal proceedings.  
These increases were partially offset by a $4.4 million increase
in interest expense resulting from debt incurred to finance the
Smith acquisition, including $1.1 million for interest on bridge
financing, and vessel newbuildings over the past year.

                          Balance Sheet

At Dec. 31, 2007, the company's consolidated balance sheet showed
$691.7 million in total assets, $398.5 million in total
liabilities, $4.5 million in non-controlling interest in equity of
joint venture, and $288.7 million in total partners' capital.

The company's consolidated balance sheet at Dec. 31, 2007, also
showed strained liquidity with $34.3 million in total current
assets available to pay $52.3 million in total current
liabilities.

               About K-Sea Transportation Partners

Headquartered in East Brunswick, New Jersey, K-Sea Transportation
Partners (NYSE: KSP) -- http://www.k-sea.com/-- is a coastwise  
tank barge operator in the United States.  The company provides
refined petroleum products transportation, distribution and
logistics services in the U.S. domestic marine transportation
market.

As reported in the Troubled Company Reporter on Feb. 6, 2008,
Moody's Investors Service affirmed its debt ratings of K-Sea
Transportation Partners, L.P.; corporate family of B1 and
Speculative Grade Liquidity of SGL-3.  Moody's also assigned a
Probability of Default rating of B1 and a senior secured rating of
B1 to the company's existing $200 million senior secured revolving
credit facility due 2014.  The outlook is stable.


LAKE ENTERPRISES: Case Summary & Nine Largest Unsecured Creditors
-----------------------------------------------------------------
Debtor: Lake Enterprises, Inc.
        dba Captain Pete's
        6560 Highway 150 East
        Sherrills Ford, NC 28673

Bankruptcy Case No.: 08-50119

Chapter 11 Petition Date: February 6, 2008

Court: Western District of North Carolina (Wilkesboro)

Judge: J. Craig Whitley

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

Total Assets: $0

Total Debts: $1,231,713

Debtor's Nine Largest Unsecured Creditors:

   Entity                      Nature of Claim       Claim Amount
   ------                      ---------------       ------------
Merchant Cash & Capital        Trade                 $38,000
45 West Street, 6th Floor
New York, NY 10018

Bank of America                Trade                 $25,000
P.O. Box 15026
Wilmington, DE 19850

Todd Seafood                   Trade                 $16,500
624 National Highway
Thomasville, NC 27360

I.F.H.                         Trade                 $11,000

Merlin Leasing                 Trade                 $6,288

Energy United                  Trade                 $2,980

Creative Outdoor Advertising   Trade                 $2,750

U.S. Food Service, Inc.        Trade                 $2,000

Orrell's Outdoor Service       Trade                 $1,180


L2L EDUCATION: S&P Cuts Ratings on All Notes on High Default Rate
-----------------------------------------------------------------
Standard & Poor's Ratings Services lowered its ratings on all
classes of notes from L2L Education Loan Trust 2006-1 and removed
its rating on the class C notes from CreditWatch, where it was
placed with negative implications on Oct. 18, 2007.
     
The rating actions reflect the higher-than-expected default level
of the underlying pool of private student loans.  In addition, the
higher-than-expected prepayment rate has negatively affected
excess spread.  As a result, total parity (the total pool balance
excluding reserve account over total notes outstanding) decreased
to 95.4% in December 2007 from the starting total parity of 99.0%
at the deal's inception.  As of the January 2008 distribution
date, the transaction had experienced cumulative gross losses (the
cumulative balance of loans that were more than 119 days past due,
classified as defaulted and charged off from the pool balance) of
6.92% and cumulative net defaults (the cumulative gross losses net
of loans that became current post charge-off) of 5.38% of its
initial asset balance.  The trust charges off defaulted
receivables at 119 days past the original due date of the loan
payment.  The issuer has indicated that some of the defaulted
receivables became current after being charged off.  The issuer
believes that the trust's charge-off policy, which is tighter than
the industry standard of 179 days past due, has caused loans to be
charged off at an accelerated pace before the servicer can
successfully reach borrowers and their respective cosigners.   
Therefore, cumulative gross losses are higher than the cumulative
net defaults.
     
S&P expects this transaction to experience base-case cumulative
lifetime gross losses ranging between 16% and 17%, which exceeds
S&P's assumption of 7.5% at the deal's inception.  Assuming an
industry average recovery rate of 25%, the expected base-case
cumulative lifetime net losses for the trust are approximately
12%-13%.  Based on these revised expectations, S&P believes the
credit enhancement currently available to the affected classes is
no longer sufficient to meet the multiple of loss coverage
required for the original assigned ratings.  The current
subordination percentages for the class A and B notes are 10.83%
and 6.63%, respectively.  All classes also benefit from a fully
funded nondeclining reserve account (0.69% of the current total
note balances), which is available to cover monthly interest or
senior fee shortages, as well as principal shortfalls at final
maturity.
     
In the break-even cash flow runs, S&P's analysis shows that the
maximum amount of the remaining net losses that classes A, B, and
C can sustain are 18.5%-19.5%, 15.5%-16.5%, and 10%-11%,
respectively, before a payment default on the respective class
would occur.  With an expected remaining net loss of 6.5%-7.5%,
the loss coverage multiples for classes A, B, and C are 2.65x-
2.8x, 2.24x-2.34x, and 1.5x, respectively.  S&P believes these
multiples reflect sufficient credit enhancement coverage for the
revised ratings.
     
Of additional concern is the potential for an interest shortfall
to class C resulting from a reprioritization of funds on deposit
in the distribution account.  This reprioritization would occur if
the aggregate outstanding amounts of each of the class A and B
notes exceed the asset balance of the trust.  If this
reprioritization were to occur, class C interest, which is
otherwise senior to all noteholder principal payments in the cash
flow waterfall, would be used to make principal payments to senior
noteholders until the imbalance is cured.  Although a certain
level of the defaulted receivables have become current after being
charged off, and these amounts may be realized over time through
subsequent recoveries, the reduction of the asset balance of the
trust in the interim increases the risk of reprioritization.  

                         Ratings Lowered

                L2L Education Loan Trust 2006-1

                                        Rating
                                        ------
                Class               To        From
                -----               --        ----
                A-1                 AA-       AAA
                A-2                 AA-       AAA
                A-3                 AA-       AAA
                B                   BBB       A

       Rating Lowered and Removed From CreditWatch Negative

                L2L Education Loan Trust 2006-1

                                        Rating
                                        ------
                Class                To       From
                -----                --       ----
                C                    B+       BBB/Watch Neg


MARJORIE FORD: Case Summary & 20 Largest Unsecured Creditors
------------------------------------------------------------
Debtor: Marjorie Flickinger Ford
        aka Molly F. Ford
        34 John Brown Road
        Lake Placid, NY 12946

Bankruptcy Case No.: 08-10308

Chapter 11 Petition Date: February 6, 2008

Court: Northern District of New York (Albany)

Debtor's Counsel: Camille Wolnik Hill, Esq.
                  Bond, Schoeneck & King, P.L.L.C.
                  One Lincoln Center
                  Syracuse, NY 13202-1355
                  Tel: (315) 218-8000
                  Fax: (315) 218-8100

Estimated Assets: $1 Million to $10 Million

Estimated Debts:  $1 Million to $10 Million

Debtor's 20 Largest Unsecured Creditors:

   Entity                      Nature of Claim       Claim Amount
   ------                      ---------------       ------------
Catherine F. Schweitzer                              $228,215
245 Middlesex Road
Buffalo, NY 14216

Richard Ward                                         $30,000
WestWayne, Inc.
1170 Peachtree Street,
Northeast
Atlanta, GA 30309-7649

Chubb Insurance Solutions      Property Insurance    $28,058
Agency, Inc.                   for John Brown Road
15 Mountain View Road          and East Hampton and
Warren, NJ 07059               personal umbrella

United Visa                    Credit card           $22,000
                               purchases

CitiBank Visa                  Credit card           $22,000
                               purchases

M.B.N.A.                       Credit card purchases $17,000

Chase Bank of New York                               $15,000

Dr. Bonnie G. Flickinger                             $9,000

American Express               Consumer Debt         $9,000

Big D Fuel Co.                 Utility               $8,115

Amazon Visa                    Consumer Debt         $8,000

Saks Mastercard                Credit card           $8,000
                               purchases

Burt Flickinger, III                                 $6,000

Saks Department Store          Consumer Debts        $4,000

Hyatt Mountain Lodge           Condo Association     $4,000

Tax Collector                                        $3,500
Town of East Hampton

Bloomingdales                  Consumer Debt         $2,000
                               Fees

Mahoney Alarm Co.              Home Security         $1,500

Tax Collector                                        $1,500
Village of East Hampton

KeySpan                        Utility services      $1,145


MARKETING & REFERRAL: Case Summary & Four Largest Unsec. Creditors
------------------------------------------------------------------
Debtor: Marketing & Referral Co-Ordinates, Inc.
        13936 Northwest 7th Avenue
        Miami, Fl 33168

Bankruptcy Case No.: 08-11408

Chapter 11 Petition Date: February 6, 2008

Court: Southern District of Florida (Miami)

Judge: Laurel M. Isicoff

Debtor's Counsel: Esteban Anderson Jr., Esq.
                  Anderson & Ozcan, L.L.C.
                  169 East Flagler Street, Suite 1232
                  Miami, FL 33131
                  Tel: (305) 377-2166

Estimated Assets: $1 Million to $10 Million

Estimated Debts:     $500,000 to $1 Million

Debtor's Four Largest Unsecured Creditors:

   Entity                      Nature of Claim       Claim Amount
   ------                      ---------------       ------------
Internal Revenue Service       trade debt            unknown
P.O. Box 21126
Philadelphia, PA 19114

State of Florida               trade debt            unknown
Department of Revenue
Bankruptcy Section

P.O. Box 6668
Tallahassee, FL 32314-6668

Miami-Dade County              building code         $30,000
Planning & Zoning Department
11805 Coral Way
Miami, FL 33175

Miami-Dade County              trade debt            unknown
Business Tax Section


MARS CDO: Seven Classes Gets Moody's Junk Ratings on High Losses
----------------------------------------------------------------
Moody's Investors Service downgraded ratings of eight classes of
notes issued by Mars CDO I, Ltd., and left on review for possible
further downgrade ratings of two of these classes of notes.  The
notes affected by this rating action are:

Class Description: $180,000,000 Class A-1 First Priority Senior
                   Secured Floating Rate Notes Due 2052

  -- Prior Rating: Aaa, on review for possible downgrade
  -- Current Rating: Ba2, on review for possible downgrade

Class Description: $240,000,000 Class A-2 Second Priority Senior
                   Secured Floating Rate Notes Due 2052

  -- Prior Rating: A3, on review for possible downgrade
  -- Current Rating: Caa3, on review for possible downgrade

Class Description: $78,000,000 Class A-3 Third Priority Senior
                   Secured Floating Rate Notes Due 2052

  -- Prior Rating: Baa3, on review for possible downgrade
  -- Current Rating: Ca

Class Description: $39,000,000 Class B Fourth Priority Senior
                   Secured Floating Rate Notes Due 2052

  -- Prior Rating: Ba2, on review for possible downgrade
  -- Current Rating: Ca

Class Description: $10,000,000 Class C Fifth Priority Senior
                   Secured Floating Rate Notes Due 2052

  -- Prior Rating: Ba3, on review for possible downgrade
  -- Current Rating: Ca

Class Description: $15,000,000 Class D Sixth Priority Senior
                   Secured Floating Rate Notes Due 2052

  -- Prior Rating: B1, on review for possible downgrade
  -- Current Rating: Ca

Class Description: $18,500,000 Class E Seventh Priority Senior
                   Secured Floating Rate Notes Due 2052

  -- Prior Rating: B3, on review for possible downgrade
  -- Current Rating: Ca

Class Description: $13,000,000 Class F Eighth Priority Secured
                   Floating Rate Notes Due 2052

  -- Prior Rating: Caa3, on review for possible downgrade
  -- Current Rating: Ca

The rating actions reflect deterioration in the credit quality of
the underlying portfolio, as well as the occurrence, as reported
by the Trustee on Jan. 23, 2008, of an event of default caused by
a failure of the Class A-3 Overcollateralization Ratio to be
greater than or equal to 100 per cent pursuant Section 5.1(i) of
the Indenture dated April 18, 2007.

Mars CDO I, Ltd. is a collateralized debt obligation backed
primarily by a portfolio of CDO securities.

Recent ratings downgrades on the underlying portfolio caused
ratings-based haircuts to affect the calculation of
overcollateralization.  Thus, the Class A-3 Overcollateralization
Ratio failed to meet the required level.

As provided in Section 5.2 of the Indenture during the occurrence
and continuance of an Event of Default, holders of Notes may be
entitled to direct the Trustee to take particular actions with
respect to the Collateral Debt Securities and the Notes.

The rating downgrades taken reflect the increased expected loss
associated with each tranche.  Losses are attributed to diminished
credit quality on the underlying portfolio.  The severity of
losses of certain tranches may be different, however, depending on
the timing and choice of remedy to be pursued by certain
Noteholders.  Because of this uncertainty, the ratings assigned to
Class A-1 and the Class A-2 Notes remain on review for possible
further action.


MBS MANAGEMENT: to Sell Austin Apartment to Steelwood for $9.6MM
----------------------------------------------------------------
The U.S. Bankruptcy Court for the Eastern District of Louisiana
authorized multi-family real estate owner and manager MBS
Management Services Inc., to sell its Northcastle Apartment
project in Austin, Texas, to Steelwood Operating Company, a Texas
limited liability company, for $9.6 million, subject to higher and
better offers.

The Court also approved procedures allowing MBS' Northcastle Ltd.
unit to seek competing offers.  Rival bids must be at least
$9,750,000.  Competing bidders must make a $250,000 deposit.

In the event the Debtors closed a sale with another party, they
will have to pay Steelwood $100,000 as breakup fee.

Judge Elizabeth W. Magner held that all entities are permanently
enjoined and stayed from pursuing any encumbrance, including any
successor, transferee or similar liability claim, against the
apartment project or the purchaser.

However, Judge Magner authorized ING Clarion Capital Loan
Services, LLC -- the representative of the current holder of the
Debtors' loan with PNC, and holder of the PNC Lien Documents -- to
post the assets for foreclosure on February 12, 2008, for a
contemplated sale no earlier than March 4, 2008.  Judge Magner
said ING Clarion may postpone any foreclosure sale to a later date
or cancel any foreclosure sale if the sale to Steelwood or another
party closes.

Although previously given approval for auction and sale
procedures, MBS asked the Court to re-authorize the sale process
so the buyer can complete the transaction, William Rochelle at
Bloomberg News says.

According to Mr. Rochelle, MBS will continue to accept competing
offers for the project until March 3.  If more than one offers are
received, MBS will hold an auction mid-March.

                 About M.B.S. Management Services

Metairie, Louisiana-based M.B.S. Management Services Inc. and its
debtor-affiliates are real estate agents and manager, specializing
in the management of multifamily properties.  MBS Management
provides the real estate debtors with leasing, maintenance
coordination, on-site and regional management.  In most instances,
MBS Management has engaged Gray Star or Lincoln Property Company
to handle the property management for the Real Estate Debtors.

The Debtors filed for chapter 11 bankruptcy on Nov. 5, 2007
(Bankr. E.D. La. Lead Case No. 07-12151).  Tristan E. Manthey,
Esq., Jan Marie Hayden, Esq., and Douglas S. Draper, Esq. at
Heller, Draper, Hayden, Patrick & Horn and Patrick S. Garrity,
Esq., and William E. Steffes, Esq., at Steffes Vingiello &
McKenzie LLC represent the Debtors in their restructuring efforts.
No case trustee, examiner, or creditors' committee has been
appointed in the Debtors' case.  The Debtors have disclosed to the
Court $12,299,366 in total assets and $9,461,174 in total debts.

M.B.S.-The Trails Ltd. and M.B.S.-Fox Chase Ltd., affiliates of
the Debtor, filed separate chapter 11 petition on Dec. 4, 2007
(Bankr. N.D. Tex. Case Nos. 07-45430 and 07-45431, respectively).
MBS-The Trails and MBS-Fox listed assets and debts between
$1 million and $10 million when the filed for bankruptcy.


MCGUIRK OIL: Case Summary & 12 Largest Unsecured Creditors
----------------------------------------------------------
Debtor: McGuirk Oil Co., Inc.
        P.O. Box 2010
        Bowling Green, KY 42101-2010

Bankruptcy Case No.: 08-10173

Type of Business: The Debtor sells petroleum products in
                  wholesale.

Chapter 11 Petition Date: February 6, 2008

Court: Western District of Kentucky (Bowling Green)

Debtor's Counsel: Mark H. Flener, Esq.
                  P.O. Box 8
                  400 East Main Avenue, Suite 304
                  Bowling Green, KY 42102-0008
                  Tel: (270) 783-8400
                  Fax: (270) 783-8873

Estimated Assets:        Less than $50,000

Estimated Debts: $1 Million to $10 Million

Debtor's 12 Largest Unsecured Creditors:

   Entity                      Claim Amount
   ------                      ------------
B.P. Products N.A.             $1,000,000.00
28100 Torch Parkway
Warrenville, IL 60555

Integra Bank                   $942,567
2009 Scottsville Road
Bowling Green, KY 42101

Farmers National Bank          $719,063
5290 Scottsville Road
Bowling Green, KY 42101

Smiths Grove B.P.              $500,000
605 South Main
Smiths Grove, KY 42171

Michael McGuirk                $200,000

Key Oil Co.                    $180,000

Marathon Petroleum Co.         $174,000

Gordon Haynes, Jr.             $72,384

James McGuirk Estate           $15,668

J.&K. Used Cars                $10,000

Gordon Haynes, III             $6,078

Huntington National Bank       $5,979


MONITOR OIL: Committee Taps Thompson & Knight as Counsel
--------------------------------------------------------
The Official Committee of Unsecured Creditors of Monitor Oil PLC
and its debtor-affiliates asks the United States Bankruptcy Court
for the Southern District of New York for permission to retain
Thompson & Knight LLP as its counsel, nunc pro tunc Jan. 15, 2008.

As the Committee's counsel, Thompson & Knight will:

   a) assist, advise and represent the Committee with respect
      to the administration of the cases and the exercise of
      oversight of the Debtors' affairs while they are being
      reorganized;

   b) provide all necessary legal advice relating to the
      Committee's powers and duties;

   c) review motions filed by the Debtors and by others, including
      any motions to appoint a trustee, motions to retain
      professionals, motions for debtor-in-possession
      financing, motions to extend time in which to file a plan
      or plan of reorganization, and motions for the sale of
      assets, whether in or outside the normal course of business;

   d) investigate and review the prepetition date financial
      affairs of the Debtors, including insider transactions and
      avoidance actions;

   e) represent the Committee in litigation with the Debtors and
      with other interested parties, should that be necessary in
      connection with the Chapter 11 cases;

   f) assist the Committee in maximizing the value of the
      Debtors' assets for the benefit of all unsecured creditors;

   g) negotiate the terms of funding for the Debtors including the
      use of cash collateral and debtor-in-possession financing;

   h) provide legal advice and to take any necessary action to
      negotiate a plan or plans of reorganization with the Debtors
      and other parties-in-interest, and where appropriate, pursue
      confirmation of a plan or plans of reorganization and
      approval of one or more disclosure statement;

   i) prepare all necessary motions, answers, orders, reports and
      other legal papers; and

   j) provide all other legal services that may be requested by
      the Committee in connection with the fulfilling of its
      duties, or as may become necessary.

The firm professionals and their compensation rates are:

      Professional            Designation       Hourly Rate
      ------------            -----------       -----------
      Ira L. Herman, Esq.       Partner            $695
      Rhett G. Campbell, Esq.   Partner            $695
      David M. Bennett, Esq.    Partner            $675
      Robert Saunders, Esq.     Partner            $730
      Carrie Jones, Esq.       Associate           $430
      Irene Dubowy, Esq.       Associate           $385
      Allison D. Byman, Esq    Associate           $385
      Elissa Schragger, Esq.   Associate           $240

      Paralegals                                 $170-$250

Ira L. Herman, Esq., a senior partner of the firm, assures the
Court that the firm is a "disinterested person" as the term is
defined in Section 101(14) of the Bankruptcy Code.

Mr. Herman can be reached at:

   Ira L. Herman, Esq.
   Thompson & Knight LLP
   919 Third Avenue, 39th Floor
   New York, New York, 10022-3915
   Tel: (212) 751-3001
   http://www.tklaw.com/

Monitor Oil, P.L.C. -- htpp://www.monitoroil.com/ -- an oil
and gas service company that provides oil and gas production
solutions, offshore services and engineering services.  The
company and two of its affiliates,  Monitor Single Lift 1, Ltd.,
and Monitor US FinCo, Inc., filed for Chapter 11 Protection on
Nov. 21, 2007 (Bankr. S.D.N.Y. Case No. 07-13709).  Eric Lopez
Schnabel, Esq., at Dorsey & Whitney, L.L.P., represents the
Debtor.  The U.S. Trustee for Region 2 appointed five creditors
to serve on an Official Committee of Unsecured Creditors in the
Debtors' cases.  Ira L. Herman, Esq., at Thompson & Knight, LLP,
represents the Committee.  As of Dec. 31, 2007, the company
disclosed total assets of $98,340,000 and total debts of
$56,125,000.


MOVIE GALLERY: Court Extends Plan Voting Deadline to March 24
-------------------------------------------------------------
The Honorable Douglas O. Tice of the U.S. Bankruptcy Court for the
Eastern District of Virginia established March 24, 2008, as the
deadline for creditors and interest holders to vote on Movie
Gallery Inc. and its debtor-affiliates' plan of reorganization.

Judge Tice set February 5 as record date to determine the parties-
in-interest will be entitled to receive:

   a) solicitation packages; and

   b) vote to accept or reject the Debtors' First Amended Plan of
      Reorganization.

Furthermore, Judge Tice approved the proposed solicitation
package and forms of notices to the Voting and Non-Voting
Classes; the Ballots and Master Ballots;  contract and lease
notices; the Disputed Claims Notice; the Subscription Form to the
Rights Offering; and the forms to facilitate the Cash-out
Election.

The Court also authorized the Debtors to combine the Rights
Offering solicitation with the solicitation of votes to accept or
reject the Plan.  The Debtors' proposed procedures for eligible
11% senior noteholders to exercise their subscription rights and
participate in the Rights Offering have also been approved.

              Disclosure Objections Overruled

The Bankruptcy Court approved a first amended disclosure statement
explaining the Debtors' First Amended Joint Plan at a hearing held
February 5, 2008.  Judge Tice held that the First Amended
Disclosure Statement contains adequate information that would
enable creditors to make an informed decision on whether to accept
or reject the Plan.

All objections that have not been withdrawn, sustained or settled
are overruled.

At the hearing, Movie Gallery parried objections filed by certain
landlords.  The Disclosure Statement "clearly and succinctly
inform[s] the average unsecured creditor what it is going to get,
when it is going to get it, and what contingencies there are to
getting its distribution," Michael A. Condyles, Esq., at Kutak
Rock LLP, in Richmond, Virginia, argued on the Debtors' behalf.

According to Mr. Condyles, the Debtors incorporated substantial
additional disclosures in their First Amended Disclosure
Statement, including creditor recovery allocations, financial
projections, SEC registration exemption issues and a detailed
liquidation analysis.  Moreover, the Plan has been extensively
negotiated and is supported by every key creditor constituency in
the Debtors' bankruptcy cases.

The revised Disclosure Statement also addresses lease-related
issues.

Mr. Condyles reports that to date, five objections have been
previously resolved and two landlords -- Indrio Retail, LLC and
Landing Venture Associates, LLC -- have withdrawn their
objections.

The Landlords had complained that the Disclosure Statement is
silent with respect to the Debtors' ultimate treatment of their
leases and the procedures to be employed if the leases are to be
assumed.

             Changes to Plan Solicitation Process

Pursuant to the First Amended Plan, the Debtors revised the
distribution of the solicitation packages to include these
parties as recipients:

   * the Debtors' lessors under Unexpired Leases of
     nonresidential real property whose leases have not been
     assumed as of the mailing of the Solicitation Packages;

   * holders as of the Record Date of First Lien Claims in
     Class 3, based upon the records of Goldman Sachs Credit
     Partners L.P., the administrative agent for the Holders; and

   * holders as of the Record Date of Second Lien Claims in
     Class 4, based upon the records of Wells Fargo Bank, N.A.,
     the administrative agent for the holders.

The First Amended Plan provides that the Debtors may re-assign
claims, for voting purposes only, to a different Class or
different Classes if the Debtors believe that the claim was
either filed against the wrong Debtor or multiple Debtors but
should have been filed otherwise.

A Ballot Change will be only for voting purposes and will not
constitute an objection to a claim or an allowance or
distributions under the Plan.

To dispute a Ballot Change, the claimholder must, at least five
days before the Voting Deadline, reach an agreement with the
Debtors on an appropriate Class or Classes in which such Ballot
is to be counted; or seek Court approval of the Class or Classes
in which the Ballot is sought to be counted.  The Debtors may,
in their sole discretion and without further Court order, resolve
objections to Ballot Changes, which will be disclosed in the
Voting Report.

                       About Movie Gallery

Based in Dothan, Alabama, Movie Gallery Inc. --
http://www.moviegallery.com/-- is a home entertainment
specialty retailer.  The company owns and operates 4,600 retail
stores that rent and sell DVDs, videocassettes and video games.
It operates over 4,600 stores in the United States, Canada, and
Mexico under the Movie Gallery, Hollywood Entertainment, Game
Crazy, and VHQ banners.

The company and its debtor-affiliates filed for Chapter 11
protection on Oct. 16, 2007 (Bankr. E.D. Va. Case Nos. 07-33849
to 07-33853.  Anup Sathy, Esq., Marc J. Carmel, Esq., and
Richard M. Cieri, Esq., at Kirkland & Ellis LLP, represent the
Debtors.  Michael A. Condyles, Esq., and Peter J. Barrett, Esq.,
at Kutak Rock LLP, is the Debtors' local counsel.  The Debtors'
claims & balloting agent is Kutzman Carson Consultants LLC.
When the Debtors' filed for protection from their creditors,
they listed total assets of US$891,993,000 and total liabilities
of US$1,419,215,000.

The Official Committee of Unsecured Creditors has selected
Robert J. Feinstein, Esq., James I. Stang, Esq., Robert B.
Orgel, Esq., and Brad Godshall, Esq., at Pachulski Stang Ziehl &
Jones LLP, as its lead counsel, and Brian F. Kenney, Esq., at
Miles & Stockbridge PC, as its local counsel.

The Debtors' spokeswoman Meaghan Repko said that the company
does not expect to exit bankruptcy protection before the second
quarter of 2008.  The Debtors have until June 13, 2008 to file
their plan of reorganization.  (Movie Gallery Bankruptcy News
Issue No. 18; Bankruptcy Creditors' Service Inc.;
http://bankrupt.com/newsstand/or 215/945-7000)


MUELLER WATER: Posts $1.6 Mil. Net Loss in Qtr. Ended December 31
-----------------------------------------------------------------
Mueller Water Products Inc. reported net loss of $1.6 million in
its first quarter ended Dec. 31, 2007.  

These results include restructuring charges of $16.2 million or
$9.5 million after tax, in connection with the closure of the U.S.
Pipe segment's ductile iron pipe manufacturing operations in
Burlington, New Jersey.  These charges are comprised of $14.8
million of asset impairments and $1.4 million of accrued employee-
related costs.

Cash and cash equivalents increased $38 million in the 2008 first
quarter compared to a decline of $9.9 million in the 2007 first
quarter.

"Our first-quarter results were essentially as we expected,"
Gregory E. Hyland, chairman, president and chief executive officer
of Mueller Water Products, said.  "Margins were principally
impacted by both under-absorbed overhead costs associated with our
inventory reduction plan and higher raw material costs."  

"In the near-term, the Burlington closure remains on track, and we
expect to realize the benefits of it in the second half of the
year; our inventory reduction plan is essentially complete, and we
are pleased with the free cash flow we have generated," Mr. Hyland
added.  "The actions we are taking help strengthen our current
position and will make us even more competitive in the future,
especially as we expect to continue to see an increase in public
spending to repair and replace water infrastructure."

            Burlington Closure Restructuring Charges

In November 2007, the company intented to close the U.S. Pipe
manufacturing operations in Burlington, New Jersey, while
retaining the facility as a full-service distribution center for
customers in the Northeast.

In connection with this action, the company also disclosed its
intention to record restructuring charges of $19 million, of which
approximately $4 million is expected to be cash expenditures.  In
the 2008 first quarter, the company recorded $16.2 million of
restructuring charges and expects to incur the remaining expenses
throughout the balance of fiscal 2008.

                          Balance Sheet

At Dec. 31, 2007, the company's balance sheet showed total assets
$2.98 billion, total liabilities $1.67 billion and total
stockholders' equity of $1.31 billion.  

                  About Mueller Water Products

Based in Atlanta, Georgia Mueller Water Products Inc. (NYSE: MWA,
MWA.B) -- http://www.muellerwaterproducts.com/-- is a North  
American manufacturer and marketer of infrastructure and flow
control products for use in water distribution networks and
treatment facilities.  Its product portfolio includes engineered
valves, hydrants, pipefittings and ductile iron pipe, which are
used by municipalities, well as the commercial and residential
construction, oil and gas, HVAC and fire protection industries.  
The company is comprised of three main operating segments: Mueller
Co., U.S. Pipe and Anvil.  The company employs approximately 7,000
people.

                          *     *     *

Moody's Investors Service placed Mueller Water Products Inc.'s
senior secured debt, senior unsecured debt, long term corporate
family and probability of default rating at 'Ba3' in May 2007.
The ratings still hold to date with a positive outlook.


NEO CDO: S&P Junks Ratings on Seven Tranches on Liquidation Plan
----------------------------------------------------------------
Standard & Poor's Ratings Services lowered its ratings on all
eight tranches from NEO CDO 2007-1 Ltd. after receiving
notification from the trustee of the controlling noteholders'
intent to liquidate the collateral and terminate the transaction.   
The ratings on five of the downgraded classes remain on
CreditWatch with negative implications.
     
Standard & Poor's received a notice dated Feb. 4, 2008, for NEO
CDO 2007-1 Ltd., a collateralized debt obligation of structured
finance CDOs, stating that a majority of the controlling
noteholders is directing the trustee to proceed with the
liquidation of the collateral supporting the notes.  This notice
follows a previous notice declaring an event of default as
of Dec. 18, 2007, under section 5.1(i) of the indenture dated
April 5, 2007.
     
This rating actions reflect Standard & Poor's opinion regarding
the impact on the transaction of a potential liquidation of the
collateral at the current depressed market prices.  The
controlling class' election to liquidate the collateral at this
time may result in losses for all classes of notes.  Therefore,
this rating actions are more severe than would be justified based
solely on the credit deterioration of the underlying collateral.
     
NEO CDO 2007-1 Ltd. is managed by Harding Advisory LLC.  Standard
& Poor's will continue to monitor the CDO transactions it rates
and take rating actions (including CreditWatch placements) as
appropriate given the performance of the underlying collateral,
the credit enhancement afforded by each CDO structure, and the
priority of payments specified in each transaction's legal
documentation.

       Ratings Lowered and Remaining on CreditWatch Negative

                        NEO CDO 2007-1 Ltd.

                                 Rating
                                 ------
               Class     To                  From
               -----     --                  ----
               A-1       BB/Watch Neg        AAA/Watch Neg
               A-2       CCC-/Watch Neg      AAA/Watch Neg
               A-3       CCC-/Watch Neg      AAA/Watch Neg
               B         CCC-/Watch Neg      AA/Watch Neg
               C         CCC-/Watch Neg      AA-/Watch Neg

       Ratings Lowered and Removed From CreditWatch Negative

                        NEO CDO 2007-1 Ltd.

                                  Rating
                                  ------
               Class     To                  From
               -----     --                  ----
               D         CC                  A/Watch Neg
               E         CC                  A-/Watch Neg
               F         CC                  BBB/Watch Neg


NEWCASTLE CDO: Fitch Places 'BB' Rating Under Negative Watch
------------------------------------------------------------
Fitch has placed these classes of Newcastle CDO VIII on Rating
Watch Negative:

  -- $26.125 million class XI 'BBB-';
  -- $28.5 million class XII 'BB'.

Newcastle CDO VIII is a revolving commercial real estate
collateralized debt obligation that closed on Nov. 16, 2006 and
whose revolving period ends in November 2011.  The classes have
been placed on Rating Watch Negative due to the CDOs exposure to
subprime RMBS as well as Attentus CDO I, which have experienced
significant credit deterioration and for which Fitch projects
reduced recovery prospects.  As of the Jan. 18, 2008 trustee
report, the CDOs subprime exposure totals $76,124,000 (8%) while
the Attentus CDO I class E interest totals $16,000,000 (1.7%); the
credit enhancement for the lowest rated liability, class XII, is
9.60%.

As of the Jan. 18, 2008 trustee report and based on Fitch
categorizations, Newcastle CDO VIII was substantially invested as:
commercial mortgage whole loans/A-notes (2.6%), B-notes (11.1%),
commercial real estate mezzanine loans (26.8%), RMBS (9.9%), bank
loans (17.8%), CMBS (15.6%), CDOs (9.7%), REIT Debt (6.4%), and
uninvested proceeds (0.1%).

A majority of the RMBS can be further classified as subprime,
which totals 8% of the CDO.  As of the Jan. 18, 2008 trustee
report, the CDO contained 12 different classes of RMBS subprime,
including one class that was added since Fitch's last review on
May 9, 2007.  Three of the classes are currently on Rating Watch
Negative.  Since last review, 10 of these assets (6.9%) have been
downgraded by an average of eight notches; while the remaining two
(1.1%) have had no rating changes. Newcastle CDO VIII is also
exposed to subprime assets in its investment in Newcastle CDO X
(2.7%), a structured finance CDO that has 11.7% direct exposure to
subprime (as of December 2007) with a weighted average Fitch
derived rating of 'BB+/BB'.

Further, an additional asset, Attentus CDO I class E (1.7%), was
downgraded to 'C' in December 2007.  Classes of Attentus CDO I, a
Trust Preferred CDO, were downgraded due to asset defaults as well
as negative credit migration.  

The commercial real estate loan assets within the CDO were
reviewed and generally remain stable as compared to last review.  
As of January 2008, all CREL are reported as current.  
Nevertheless, the magnitude of the credit deterioration of the
subprime assets and the Attentus CDO class E warrant the Rating
Watch Negative status at this time.  Any further negative credit
migration in the ratings of the subprime collateral, performance
of the CREL or any other asset type, or decrease in the weighted
average coupon or spread could lead to further downward pressure
on the ratings.

Fitch will resolve the CDOs class XI and class XII Rating Watch
Negative status following the resolution of the Rating Watch
Negative status of the underlying subprime RMBS assets.

For a summary of CDO collateral, including the 10 largest assets,
please refer to the Newcastle CDO VIII CREL Surveyor Snapshot,
which will be available on the Fitch web site beginning Feb. 11,
2008.


NORBORD INC: Net Loss Up to $13 Mil. in Qtr. Ended December 31
--------------------------------------------------------------
Norbord Inc. recorded a loss of $13 million compared to a loss of
$1 million in both the prior quarter and the same period last
year.  For the full year, Norbord posted a loss of $45 million.
    
"In this difficult market for our North American production,
Norbord's operations performed well in 2007," Barrie Shineton,
president and CEO, said.  "Our European facilities provided
important geographic diversification, delivering EBITDA of
$81 million for the full year."
    
"In North America, weak demand stemming from sharply lower housing
starts led to poor product prices and widespread curtailments
throughout the wood products industry," Mr. Shineton added.  
"Norbord's low cost position provided important operational
flexibility and allowed us to minimize downtime throughout the
year.  Our ability to produce and sell record North American OSB
volumes in this environment continued to validate the Company's
customer strategy."

                  Liquidity and Capital Resources

In addition to cash on hand of $128 million and cash generated
from operations, the company has $235 million of committed
unsecured revolving bank lines available to support short-term
liquidity requirements.  During the year, the company increased
its committed unsecured revolving bank lines from $200 million to
$235 million.

At Dec. 31, 2007, $193 million of these lines was available and
$42 million was utilized - $38 million drawn as cash and
$4 million utilized for letters of credit.  These committed bank
lines mature in 2010, bear interest at money market rates plus a
margin that varies with the company's credit rating, and contain
these financial covenants which the company must comply with on a
quarterly basis:

   -- minimum shareholders' equity of $300 million; and

   -- maximum net debt to total capitalization, book basis of 65%.

At period end, the company's shareholders' equity was $360 million
versus the minimum $300 million covenant; and net debt to total
capitalization, book basis was 60% versus the maximum 65%
covenant.
    
Total working capital at Dec. 31, 2007, was $151 million including
$128 million in cash and cash equivalents.

Norbord's net debt stood at $547 million at year end, representing
30% of capitalization on a market basis and 60% of capitalization
on a book basis.  Norbord believes its record of operational
performance and balance sheet management would enable it to retain
access to public and private capital markets on attractive terms.

At Dec. 31, 2007, the company's balance sheet showed total assets
of $1.40 billion compared to $1.3 billion in 2006.

             Norbord Appoints Chief Financial Officer

Norbord has appointed Robin Lampard as senior vice president and
chief financial officer, effective Feb. 15, 2008.  Ms. Lampard has
been with Norbord since 1996 and recently held the role of vice
president, treasurer.  Ms. Lampard replaces John Tremayne who will
step down on Feb. 15, 2008.

"John played a vital role in re-shaping Norbord over the past six
years," Mr. Shineton said.  "I thank him for his contributions to
the company and we wish him well."

            $100 million Unsecured Term Debt Facility

On Jan. 31, 2008, Norbord concluded a $100 million unsecured term
debt facility with its major shareholder.  This facility provides
the company with significant additional liquidity.  When added to
cash on hand and unused bank lines, Norbord now has access to
$421 million of liquidity, of which $197 million is earmarked for
the upcoming March 2008 debenture maturity.

Capital investments totaled $7 million in the quarter and $36
million for the full year.  Norbord's net debt to total
capitalization was 30% on a market basis and 60% on a book basis
at year-end.

                        Quarterly Dividend

The board of directors declared a quarterly dividend of CDN$0.10
per common share, payable on March 21, 2008 to shareholders of
record on March 1, 2008.

                        About Norbord Inc.

Headquartered in Toronto, Ontario, Norbord Inc. (TSE:NBD) --
http://www.norbord.com/-- is an international producer of wood-
based panels that employs approximately 2,700 people at 15 plant
locations in the United States, Europe and Canada.  The company's
business comprises the manufacturing, marketing and sales of
panelboards and related products.  Norbords panel products
include oriented strand board, medium density fibreboard, hardwood
plywood and particle board.  Norbords OSB and particleboard
panels are used  in the construction sector and its MDF and
hardwood plywood panels serve the furniture and fixtures markets.

                           *     *     *

Moody's Investor Service placed Norbord Inc.'s long term corporate
family and senior unsecured debt ratings at 'Ba1' in May 2007.  
The ratings still hold to date with a negative outlook.


NORBORD INC: Declining Risk Profile Cues S&P to Chip Rating to BB
-----------------------------------------------------------------
Standard & Poor's Ratings Services lowered the ratings on Norbord
Inc., including the long-term corporate credit rating, two notches
to 'BB' from 'BBB-'.  The outlook is negative.
     
"The downgrade reflects the deterioration of Norbord's financial
risk profile amid much weaker-than-expected oriented strandboard
prices and a bleak view of the U.S. housing construction market
for the next two years," said Standard & Poor's credit analyst
Jatinder Mall.  "These risks are partially offset by its low-cost
asset base and geographic diversification," Mr. Mall added.
     
Norbord is the second-largest oriented strandboard producer in the
world, with annual capacity of more than 5 billion square feet.   
The company also produces other wood products such as
particleboard, medium density fiberboard, and plywood.  Its
operating facilities are located in North America and Europe.
     
Norbord's poor 2007 performance highlights its dependence on
commodity products with volatile prices for the majority of its
cash flows.  This has led to its credit metrics deteriorating
severely in 2007.  The company's cash flow protection levels, as
measured by funds from operations to debt, were negative and its
operating margin declined drastically in 2007.  Credit metrics
should remain weak in 2008 in light of weak market conditions.  In
addition, S&P doesn't expect 2008 results to benefit from strong
cash flow generation from the company's European operations as was
the case in 2007.
     
The company's modern and efficient OSB facilities support its
competitive cost profile.  Furthermore, Norbord's business
benefits from a geographically diversified asset base, which
mitigated the negative impact of a strong Canadian dollar on the
company in 2007, while strong performance at the European
operations somewhat offset weak performance at its North American
operations.  
     
The outlook remains negative.  For the next two years, S&P expects
Norbord to continue to face challenging market conditions.  S&P
could lower the ratings again if OSB prices remain depressed and
the company's cash generation is weaker than expected.  Limited
product diversity, extreme price volatility, and industry
cyclicality limit S&P's raising the ratings.


NORTHWEST AIRLINES: Merger Talks with Delta Air Lines Intensifies
-----------------------------------------------------------------
Merger talks between Delta Air Lines Inc. and Northwest Airlines
Corp. have intensified that could lead to an agreement being
announced in the next two weeks, various reports say.

Key details of the deal have yet to be hammered out and
negotiations could still fall apart, according to The Wall Street
Journal, citing people familiar with the talks.

The reports note the potential dealbreaker was the structure of
the combined Delta-Northwest management, specifically Northwest
CEO Doug Steenland and his management team's role in the new
company.  The Journal's source says those issues were overcome
earlier this week.

When companies merge, it's not uncommon for the chief executives
to divide the leadership roles, with one taking the CEO post and
the other becoming chairman, according to TheStreet.com.  In the
case of Delta and Northwest, the situation is complicated by the
role of Daniel Carp, who became chairman of Delta when the carrier
emerged from bankruptcy in May 2007, TheStreet.com says.

Since Mr. Carp was brought in to enhance Delta's position, there
is a feeling that he should remain because of the progress the
company has made, TheStreet.com says, citing a source.  
TheStreet.com's source says Mr. Steenland has apparently accepted
the idea that Mr. Carp and Delta CEO Richard Anderson will retain
their current posts in a new company.

Mr. Anderson, a former Northwest Airlines chief executive, assumed
the Delta CEO post from Gerald Grinstein in August.  That decision
to hire Mr. Anderson "raised new questions about Delta's future
strategy", WSJ reported at that time.

Mr. Anderson's appointment raises speculations that with an
outsider at the helm, Delta may reverse its "go it alone" strategy
and pursue a consolidation with Northwest, United Air Lines or
Continental Airlines, Business Week had said.

At the time of its bankruptcy, Delta and its unsecured creditors
committee fended off a $8,000,000,000 to $10,000,000,000  
hostile takeover bid from US Airways Group, Inc.   Delta said it
was better off as a stand-alone carrier.

In January 2007, about two months since US Airways launched its
hostile bid, Delta and NWA were reported to have held discussions
about a potential merger.  While both companies denied the
reports, Mr. Grinstein subsequently admitted to sharing
information with Northwest.  "At the behest of our creditors'
committee we recently retained an investment banker to obtain
information from Northwest, a far cry from negotiating for a
merger with them," Mr. Grinstein told members of the Delta Board
Council, according to Reuters.

Delta did not discount any possibility of a merger post-
bankruptcy.  According to a prior WSJ report, the Creditors
Committee conditioned its support of Delta's stand-alone Chapter
11 plan of reorganization to a number of concessions, including
the appointment of a new board that favors consolidation as a
strategic opotion.

In October, Mr. Anderson said he saw "obvious benefits" for
Delta's employees and shareholders in Delta's merging with another
carrier, Meg Marco at The Star Tribune reported.  Although Mr.
Anderson did not name a potential merger target for Delta at that
time, analysts have argued that Northwest would make a good
partner because the carriers' routes complement each other, Ms.
Marco said.

As proposed, the Delta-Northwest deal would be a stock-for-stock
transaction, done "at market," meaning at roughly where the two
stocks are trading, with little or no premium for either side, WSJ
says.   The Journal adds that the dynamic has made non-economic
issues the center of the deal negotiations.

               United & Continental Talks Gain Steam

There is also a possibility Delta could wind up with United.  Both
carriers have continued exploratory talks over the past month, WSJ
says, citing people briefed on the matter.

Pardus Capital Management, a New York-based hedge fund, and major
stakeholder in both United and Delta, had urged both carriers to
consolidate, to save money and counter escalating jet-fuel prices
which rose by around 53% last year.

As reported in the Troubled Company Reporter on Jan. 22, 2008, Mr.
Anderson obtained approval from Delta's board of directors on Jan.
11, 2007, to engage in formal merger talks with both Northwest and
United.

Various reports, however, relate that a United-Continental merger
is more likely.  The reports state that exploratory merger talks
between the two carriers have grown serious.

Delta, the No. 3 U.S. carrier in terms of passenger traffic, has a
market value of over $4,100,000,000 -- higher than UAL's
$3,800,000,000, and Northwest's $3,700,000,000.  United is the
second-largest U.S. carrier, while Northwest takes the fifth spot.  
Continental, in Houston, Texas, is the No. 4 carrier.

A Delta merger with either Northwest or United would create the
largest passenger airline in the world.

Some analysts worry a Delta merger would face antitrust hurdles,
Bankruptcylaw360 says.

The Journal says Delta's intent was to pursue tandem negotiations
with Northwest and United on a compressed timeline, get a deal
inked by mid-February and quickly begin the process for winning
antitrust approval.  Executives at the airlines believe any
mergers are more likely to pass regulatory muster during the
waning days of the Bush administration, the Journal relates.

A United-Continental deal will have to be done very near a
Northwest-Delta announcement, so the two potential combinations
would undergo regulatory scrutiny at the same time, the Journal
says citing a source familiar with the matter.  A different source
told the Journal United and Continental are poised to act quickly
once another airline merger is announced.

Northwest holds a "golden share" of preferred stock in Continental
that allows Northwest to block a merger of Continental with
another large carrier, WSJ notes.  But if Northwest agrees to
merge with Delta, Continental could redeem that stock for a total
of $100, even if the deal is never consummated, freeing
Continental to entertain other suitors, WSJ says.

Continental executives have repeatedly said they prefer to remain
independent, but would do what is best for the company if the
competitive landscape changes, WSJ notes.

Experts in the airline industry believe that a Northwest-Delta
merger is more likely as Delta's Anderson was previously CEO at
Northwest, and is already well acquainted with Northwest's
operations.

Bloomberg, citing an unnamed person familiar with Air France-KLM
Group's plans, has reported that Air France is encouraging a
merger between Delta and Northwest and may make a financial
investment to foster a tie-up.  A Delta-Northwest combination
would preserve the SkyTeam Alliance, a marketing group that
includes Delta, Northwest and United.

                         Other Issues

Other issues that will have to be taken up in a Delta-Northwest
combination include both carrier's labor groups.  The Air Line
Pilots Association branches at Delta and Northwest have signaled
that they could support a merger if they receive equity in the
combined airline and achieve a labor contract with improved terms,
WSJ says.

Analysts also said mergers could lead to higher fares in some
markets, at least in the long term, The New York Times state.  
Congress could also oppose a combination due to possible job loss
and reduction in competition, Times relates.

                        About Delta Air

Based in Atlanta, Georgia, Delta Air Lines Inc. (NYSE:DAL) --
http://www.delta.com/-- is the world's second-largest airline
in terms of passengers carried and the leading U.S. carrier
across the Atlantic, offering daily flights to 328 destinations
in 56 countries on Delta, Song, Delta Shuttle, the Delta
Connection carriers and its worldwide partners.  Delta flies to
Argentina, Australia and the United Kingdom, among others.  The
company and 18 affiliates filed for chapter 11 protection on
Sept. 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-17923).
Marshall S. Huebner, Esq., at Davis Polk & Wardwell, represents
the Debtors in their restructuring efforts.  Timothy R. Coleman
at The Blackstone Group L.P. provides the Debtors with financial
advice.  Daniel H. Golden, Esq., and Lisa G. Beckerman, Esq., at
Akin Gump Strauss Hauer & Feld LLP, provide the Official
Committee of Unsecured Creditors with legal advice.  John
McKenna, Jr., at Houlihan Lokey Howard & Zukin Capital and James
S. Feltman at Mesirow Financial Consulting, LLC, serve as the
Committee's financial advisors.

The Debtors filed a chapter 11 plan of reorganization and
disclosure statement explaining that plan on Dec. 19, 2007.  On
Jan. 19, 2007, they filed revisions to the plan and disclosure
statement, and submitted further revisions to the plan on
Feb. 2, 2007.  On Feb. 7, 2007, the Court approved the Debtors'
disclosure statement.  In April 25, 2007, the Court confirmed
the Debtors' plan.  That plan became effective on
April 30, 2007.  The Court entered a final decree closing 17
cases on Sept. 26, 2007.

As of Sept. 30, 2007, the company's balance sheet showed total
assets of $32.7 billion and total liabilities of $23 billion,
resulting in a $9.7 billion stockholders' equity.  At Dec. 31,
2006, deficit was $13.5 billion.

(Delta Air Lines Bankruptcy News; Bankruptcy Creditors' Service,
Inc., http://bankrupt.com/newsstand/or 215/945-7000).

                        *     *     *

As reported in the Troubled Company Reporter on Jan. 17, 2008,
Standard and Poor's said that media reports that Delta Air Lines
Inc. (B/Positive/--) entered into merger talks with UAL Corp.
(B/Stable/--) and Northwest Airlines Corp. (B+/Stable/--) will
have no effect on the ratings or outlook on Delta, but that
confirmed merger negotiations would result in S&P's placing
ratings of Delta and other airlines involved on CreditWatch, most
likely with developing or negative implications.

                       About UAL Corp.

Based in Chicago, Illinois, UAL Corporation (NASDAQ: UAUA)
-- http://www.united.com/-- is the holding company for United  
Airlines, Inc.  United Airlines is the world's second largest
air carrier.  The airline flies to Brazil, Korea and Germany.

The company filed for chapter 11 protection on Dec. 9, 2002
(Bankr. N.D. Ill. Case No. 02-48191).  James H.M. Sprayregen,
Esq., Marc Kieselstein, Esq., David R. Seligman, Esq., and
Steven R. Kotarba, Esq., at Kirkland & Ellis, represented the
Debtors in their restructuring efforts.  Fruman Jacobson, Esq.,
at Sonnenschein Nath & Rosenthal LLP represented the Official
Committee of Unsecured Creditors before the Committee was
dissolved when the Debtors emerged from bankruptcy.  Judge
Wedoff confirmed the Debtors' Second Amended Plan on
Jan. 20, 2006.  The company emerged from bankruptcy protection
on Feb. 1, 2006.  (United Airlines Bankruptcy News, Bankruptcy
Creditors' Service Inc., http://bankrupt.com/newsstand/or  
215/945-7000).

                        *     *     *

Moody's Investor Service placed UAL Corp.'s long term corporate
family and probability ratings at 'B2' in January 2007.  The
ratings still hold to date with a stable outlook.

                    About Continental Airlines

Continental Airlines Inc. (NYSE: CAL) -- http://continental.com/  
-- is the world's fifth largest airline.  Continental, together
with Continental Express and Continental Connection, has more than
2,900 daily departures throughout the Americas, Europe and Asia,
serving 144 domestic and 139 international destinations.  More
than 500 additional points are served via SkyTeam alliance
airlines.  With more than 45,000 employees, Continental has hubs
serving New York, Houston, Cleveland and Guam, and together with
Continental Express, carries approximately 69 million passengers
per year.

                          *     *     *

As reported in the Troubled Company Reporter on Dec. 27, 2007,
Fitch Ratings affirmed Continental Airlines 'B-' issuer default
rating with a stable outlook.

                  About Northwest Airlines

Northwest Airlines Corp. (NYSE: NWA) -- http://www.nwa.com/--  
is the world's fourth largest airline with hubs at Detroit,
Minneapolis/St. Paul, Memphis, Tokyo and Amsterdam, and about
1,400 daily departures.  Northwest is a member of SkyTeam, an
airline alliance that offers customers one of the world's most
extensive global networks.  Northwest and its travel partners
serve more than 1000 cities in excess of 160 countries on six
continents.  Northwest and its travel partners serve more than
1000 cities in excess of 160 countries on six continents,
including Italy, Spain, Japan, China, Venezuela and Argentina.

The company and 12 affiliates filed for chapter 11 protection on
Sept. 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-17930).  Bruce
R. Zirinsky, Esq., and Gregory M. Petrick, Esq., at Cadwalader,
Wickersham & Taft LLP in New York, and Mark C. Ellenberg, Esq.,
at Cadwalader, Wickersham & Taft LLP in Washington represent the
Debtors in their restructuring efforts.  The Official Committee
of Unsecured Creditors has retained Akin Gump Strauss Hauer &
Feld LLP as its bankruptcy counsel in the Debtors' chapter 11
cases.

When the Debtors filed for bankruptcy, they listed US$14.4
billion in total assets and $17.9 billion in total debts.  On
Jan. 12, 2007 the Debtors filed with the Court their Chapter 11
Plan.  On Feb. 15, 2007, they Debtors filed an Amended Plan &
Disclosure Statement.  The Court approved the adequacy of the
Debtors' Disclosure Statement on March 26, 2007.  On
May 21, 2007, the Court confirmed the Debtors' Plan.  The Plan
took effect May 31, 2007.

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

                        *     *     *

Moody's Investor Service placed Northwest Airlines Corp.'s long
term corporate family and probability of default ratings at 'B1'
in May 2007.  The ratings still hold to date with a stable
outlook.


OZYMANDIUS LP: Sale of Kress Building Fails to Attract Bids
-----------------------------------------------------------
The 1936 vintage Kress Building owned by Ozymandius LP in Fort
Worth, Texas, did not attract a bid at a Feb. 4 auction, William
Rochelle at Bloomberg News reports, citing the Fort Worth Star-
Telegram.

Mr. Rochelle says a buyer canceled in January a contract to
purchase the building.  According to Mr. Rochelle, the building's
upper floors have been converted into loft apartments.

Forth Worth, Texas-based Ozymandius LP filed for Chapter 11
bankruptcy September 27, 2007, before the United States Bankruptcy
Court for the Northern District of Texas (Dallas) (Case No. 07-
34670).  Joyce W. Lindauer, Esq., in Dallas, represents the
Debtor.  The Debtor has disclosed to the Court $8 million in total
assets and $5.8 million in total debts, including $5.6 million in
secured claims, Mr. Rochelle says.


PACIFIC LUMBER: Heartlands Commission Files Competing Plan
----------------------------------------------------------
The Heartlands Commission submitted to the U.S. Bankruptcy Court
for the Southern District of Texas a plan of reorganization, the
fourth rival plan presented in the Debtors' Chapter 11
proceedings, on Jan. 23, 2008.

As reported in the Troubled Company Reporter on Feb. 4, 2008,
Pacific Lumber Company and its debtor-affiliates; the Bank of New
York Trust Company N.A., as Indenture Trustee for the Timber
Notes; and Marathon Structured Finance Fund L.P, the DIP Lender
and Agent under the DIP Credit Facility delivered to the Court
their own Plans of Reorganization on Jan. 30, 2008.

The Heartlands Project represents two "stakeholders" of the
Pacific Lumber Company -- the tribal members of the Bear River
Band of Rohnerville Rancheria and the PALCO employees, Steve
Lewis informed the Hon. Richard S. Schmidt, on the Heartlands
Commission's behalf.

The Heartlands Plan contemplates the creation of the PALCO
Community Corporation, an employee-owned corporation utilizing
tax incentives given for the formation of employee stock option
planned company buy-outs.

The principal elements of the Heartlands Plan are:

   (1) A lottery operation would be set up by the Plan proponents
       to fund the creation of a PALCO Community Corporation,
       where employees own and manage their own company and
       livelihoods;

   (2) Funding for the new PALCO Community Corporation economic
       development projects will also be provided by Lee & Man
       Mfg.;

   (3) The PALCO Community Corporation will be divided into
       several income-generating divisions, which will either be
       PALCO employee businesses or divisions of the parent
       company.  These divisions or businesses will include
       PALCO-kits, "down-home" kits, PALCO cottage kits, PALCO
       toys, PALCO Publishing and Palotto Systems; and

   (4) The Heartlands Plan contemplates the construction of a
       Palcoville, PALCO Emporium, PALCO Industrial Park, Pal-
       Arts and PALCO Farms and Pharmaceuticals.

Mr. Lewis contends that the PALCO assets are "underutilized", as
evidenced by the "inability" of PALCO executives to use existing
tourist draws.

"While all the reorganization plans so far offered the court are
aimed at benefiting current owners and their creditors or
conservation organization, none of the plans put forth except our
Heartlands Commission Reorganization Plan addresses the needs of
[PALCO] workers themselves or the economic needs of the local
community," Mr. Lewis contends.  "A major reason [PALCO] has gone
under financially is due to outside managers brought in to manage
[PALCO.]"

Mr. Lewis relates that the Heartlands Project is very big and
will need time to organize completely.  The Heartlands
Commissions informs the Court that it cannot officially move
forward with the Plan until the end of March, after the results
of the Bear River tribal elections are in.

A full-text copy of the Heartlands Plan is available for free at:

               http://researcharchives.com/t/s?27dd

           MAXXAM Preserves Its Rights as Equity Holder

Alan Gover, Esq., at White & Case LLP, in New York, tells the
Court that the Debtors and MAXXAM expect that three out of the
four anticipated Plans of Reorganization in the Debtors' Chapter
11 proceedings will likely provide no value to equity.

Each of the three Plans  will be inconsistent with the Bankruptcy
Code and other applicable law, Mr. Gover asserts.  The value of
the Debtors' timberlands and related real estate, if properly
reorganized, is far in excess of the Debtors' liabilities.

Accordingly, the Debtors are solvent and have a fiduciary duty to
preserve their equity value for the benefit of equity, Mr. Gover
points out.  "Any plan of reorganization that does not recognize
this fundamental fact is inconsistent with the Debtors' fiduciary
duty and the Bankruptcy Code, and cannot be confirmed by the
Court."

Nevertheless, Mr. Gover adds, there has been an indication that
MAXXAM should be unable to retain its equity interests in the
Debtors, unless it makes a cash contribution to the Debtors'
reorganization.  Any requirement that MAXXAM "pay to play",
however, imposes upon MAXXAM a greater burden than what Congress
envisioned when it enacted the Bankruptcy Code, and is
inappropriate in light of the Debtors' solvency, Mr. Gover
reasons out.

Combined, the present value of the Debtors' real estate assets
alone is approximately $1,375,000,000, well in excess of the
Debtors' liabilities, Mr. Gover informs Judge Schmidt.  Under
these circumstances, he states, the Debtors have a fiduciary duty
to preserve their substantial equity for the benefit of MAXXAM,
and any plan of reorganization that fails to do so is not
confirmable.
                                                                                      
Congress carefully balanced the interests of the debtor,
creditors and equity holders in connection with plan
confirmation in Section 1129 of the Bankruptcy Code, Mr. Gover
says.  

Mr. Gover reminds the Court that Section 1129 does not require
equity to infuse cash into a debtor to preserve its equity
interests in a solvent debtor.  "Instead, [S]ection 1129 requires
that a plan providing rights to equity meet other requirements in
order to be confirmed.  A plan must be feasible."

Thus, in determining the confirmability of a plan, MAXXAM asks
the Court to consider preserving MAXXAM's equity, and not whether
MAXXAM infuses new cash into the Debtors.

                      About Pacific Lumber

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

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

Scotia Pacific, Pacific Lumber's largest operating subsidiary, was
established in 1993, in conjunction with a securitization
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).  Jack L. Kinzie, Esq., at Baker
Botts LLP, 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.  John D. Fiero, Esq., at Pachulski Stang Ziehl & Jones
LLP, represents the Official Committee of Unsecured Creditors.

When Pacific Lumber filed for protection from its creditors, it
listed estimated assets and debts of more than $100 million.
Scotia Pacific listed total assets of $932,000,000 and total debts
of $765,978,335.  The Debtors filed their Joint Plan of
Reorganization on Sept. 30, 2007, which was amended on Dec. 20,
2007.  The Debtors' exclusive plan filing period expires on
Feb. 29, 2008.  (Scotia/Pacific Lumber Bankruptcy News, Issue No.
44, http://bankrupt.com/newsstand/or 215/945-7000).


PACIFIC LUMBER: Sale of Scotia School & Recreation Center Approved
------------------------------------------------------------------
The Hon. Richard S. Schmidt of the U.S. Bankruptcy Court for the
Southern District of Texas approved the sale of the Stanwood A.
Murphy Elementary School and Scotia Recreation Center Facilities
to the Scotia Union School District, for an amount no less than
$3,130,000.

The Property will be sold free and clear of all liens, except any
lien of the County of Humboldt, California, for secured real
property taxes that is not closed at the closing of the sale.

Real property taxes owed for the Property to the County of
Humboldt, if any, will be paid directly from escrow at the
Closing of the sale, the Court rules.  Moreover, any statutory
liens that have attached to the Property subject to taxes owed to
the County of Humboldt will remain in place, and will be released
upon payment of any real property taxes.

All liens are to be attached to the proceeds of the sale in the
order of their priority, and with the same validity, priority,
force and effect which they now have as against the Property,
subject to the rights, claims, defenses, and objections, if any,
of the Pacific Lumber Company and all parties in interest with
respect to those liens.

As reported in the Troubled Company Reporter on Jan. 17, 2008, the
School Facilities and Scotia Recreation Center Facilities
constitute approximately 5.86 acres of real property in Humboldt
County, California, which is leased by the Scotia Union School
District since its construction 30 years ago, for an annual fee
of $1.

The School Facilities remain leased by Scotia USD under the same
lease terms, but the Scotia Recreation Center Facilities is now
leased to Body Works Fitness.  

                      About Pacific Lumber

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

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

Scotia Pacific, Pacific Lumber's largest operating subsidiary, was
established in 1993, in conjunction with a securitization
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).  Jack L. Kinzie, Esq., at Baker
Botts LLP, 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.  John D. Fiero, Esq., at Pachulski Stang Ziehl & Jones
LLP, represents the Official Committee of Unsecured Creditors.

When Pacific Lumber filed for protection from its creditors, it
listed estimated assets and debts of more than $100 million.
Scotia Pacific listed total assets of $932,000,000 and total debts
of $765,978,335.  The Debtors filed their Joint Plan of
Reorganization on Sept. 30, 2007, which was amended on Dec. 20,
2007.  The Debtors' exclusive plan filing period expires on
Feb. 29, 2008.  (Scotia/Pacific Lumber Bankruptcy News, Issue No.
44, http://bankrupt.com/newsstand/or 215/945-7000).


PALM BEACH: Defaults on Acquisition Agreement with Manchester Inc.
------------------------------------------------------------------
Palm Beach Multi-Strategy Fund L.P., Manchester Inc.'s primary
lender, and its principals were declared in default, after they
refused to comply with their obligations under the acquisition and
other applicable agreements.  

Manchester has filed a suit against the fund.  Manchester's
complaint alleges that the suit arose from a series of actions the
fund, and its principals took over the last few weeks in an effort
to implement a scheme to take possession of all the assets of
Manchester and its subsidiaries to the detriment of all
Manchester's shareholders, other creditors and employees.

As part of the scheme, the complaint alleges the fund and its
principals fraudulently induced a consultant to Manchester to
provide a temporary guaranty secured by real estate collateral to
assist the fund in getting through its year-end audit.  Once the
fund had the guaranty and collateral they immediately refused to
carry out the agreements on which the temporary guaranty and
collateral were provided.

In response, the fund made a demand based on a non-existent
default and on the basis of such demand and default has purported
to accelerate all the outstanding loans.

To protect its interest and that of its shareholders, creditors
and employees, Manchester filed suit against the fund, its
affiliated entities and its five individual principals in the
101st Judicial District Court in Dallas, County, Texas.  In its
suit, Manchester alleged, among other things, that:

   (1) the fund has engaged in fraudulent conduct as part of its
       scheme to unlawfully take control of Manchester's assets,
       and

   (2) that the fund and its principals and certain employees have
       tortiously interfered with Manchester's contractual and
       other relations with its employees by unlawfully trying to
       intimidate them into leaving Manchester's employ.

Manchester is seeking a variety of relief including injunction and
compensatory and punitive damages.  In response, the fund, based
on the aforementioned alleged default, has purported to schedule a
sale of all the assets of Manchester and its subsidiaries for
Feb. 8, 2008.

Rick D. Gaines, Manchester's executive vice president of corporate
development whose responsibilities include all legal matters
related to the company stated that the company is taking all steps
it considers necessary or appropriate to protect the interest of
Manchester's shareholders, creditors and employees and will
vigorously pursue its fraud, tortious interference and other
claims against the fund and the other parties to the lawsuit.

He also disclosed the resignations of Rick L. Stanley,
Manchester's CEO and Tony Hamlin, Manchester's chief accounting
officer.  The fund's continued unlawful efforts to dissuade
Manchester employees, including Rick L. Stanley and Tony Hamlin,
and consultants from working with Manchester is also part of the
lawsuit filed against the fund and its affiliates.

As a result of the fund's inability or unwillingness to finance
any of Manchester's acquisitions, Manchester is unable to
consummate its acquisitions and other potential acquisitions it
was in the process of negotiating.

To protect its shareholders, and employees, Manchester has entered
into negotiations with another public company to assume
Manchester's rights in the acquisitions and acquire the companies
among other things.  These negotiations relate to acquisitions in
the form of letters of intent and definitive agreements as well as
potential acquisitions that Manchester was in the process of
negotiating.

Among the consideration being sought by Manchester is having the
public company assume liabilities Manchester incurred in
connection with the acquisition, particularly professional fees.
In addition, Manchester is attempting to negotiate for the public
company to agree to tender its common stock for existing common
stock of Manchester, thereby providing an opportunity for
Manchester shareholders to exchange their shares for shares in the
public company.

Payment of any consideration is expected to be contingent on the
Public Company closing at least two such acquisitions.  If these
negotiations are concluded, Manchester shareholders would have an
opportunity to participate in the acquisitions Manchester had
developed.  As part of any such transaction, there would be
potential cost sharing that could result in lowering Manchester's
overhead expense.  Although these negotiations are ongoing, there
is no assurance that the negotiations will be successful or will
lead to an agreement of any kind.

In addition to the negotiations, the board of directors and
management are exploring other alternatives designed to reduce
Manchester's operating expenses while giving it the ability to
continue to grow and expand its business.

In light of the termination of funding at this time by Palm Beach,
Manchester will not have its year end audit completed in time to
make a timely filing of its 10K due later this month.  
Manchester's board and management are working to rectify this
deficiency.

Manchester also disclosed the relocation of its headquarters to
3131 McKinny Avenue, Suite 360, Dallas, Texas.  The company's new
headquarters telephone numbers are 214-347-4263 and 214-468-8965
facsimile.  Larry Taylor, Manchester's CFO stated that the new
headquarters provided Manchester with room to add additional staff
while reducing its lease payments.


PERFORMANCE TRANSPORTATION: Can Secure $15 Million DIP Financing
----------------------------------------------------------------
Performance Transportation Services Inc. and its debtor-affiliates
obtained authority from the U.S. Bankruptcy Court for the Western
District of New York to borrow up, on a final basis, to an
aggregate principal or face amount of $15 million under the
postpetition secured revolving credit facility with Black Diamond
Commercial Finance LLC, as administrative agent for itself
and the DIP Lenders.

Performance Logistics Group Inc., and each of its domestic
subsidiaries, are authorized to guaranty the immediate
borrowings, subject to any budgetary, borrowing base or other
limitations of borrowings under the Definitive DIP Loan
Documents.

The DIP commitment will terminate on the earliest of May 18,
2008, six months after the bankruptcy filing.

Under the DIP Facility, the Debtors covenant with the Lender not
to let their Consolidated Adjusted EBITDA for each month
beginning Dec. 1, 2007, and for each period beginning  December 1
and ending on a particular date, to be less than:

                       Minimum           Minimum cumulative
                       Consolidated      Consolidated
                       Adjusted EBITDA   Adjusted EBITDA for
                       for the month     the period beginning
                       ending on the     Dec. 1, 2007, and
   Test Date           Test Date         ending on the Test Date
   ---------           ---------------   -----------------------
   Dec. 31, 2007        $971,000              $971,000
   Jan. 31, 2008          $4,000              $974,000
   Feb. 29, 2008      $1,289,000            $2,263,000
   March 31, 2008     $3,281,000            $5,544,000
   April 30, 2008     $1,605,000            $7,149,000

The Consolidated Adjusted EBITDA, however, may vary from the
amount set by no more than (i) $300,000, in the case of any one-
month period and (ii) $600,000, in the case of any cumulative
period.

The Debtors also covenant with their Lender not to permit Net
Cash Flow pursuant to the Debtors' budget for the week ending on
a particular date, and for the period beginning November 26,
2007, and ending on that particular date, to be less than:

                       Minimum           Minimum cumulative
                       Net Cash Flow     Net Cash Flow for the
                       for the week      period beginning
                       ending on         November 26, 2007, and
   Test Date           the Test Date     ending on the Test Date
   ---------           ---------------   -----------------------
   December 15, 2007     $(5,386,764)          $(2,418,130)
   December 22, 2007       $(783,170)          $(3,201,300)
   December 29, 2007      $7,202,903            $4,001,603
   January 5, 2008       $(7,178,405)          $(3,176,802)
   January 12, 2008      $(1,203,945)          $(4,380,747)
   January 19, 2008      $(5,810,947)         $(10,191,694)
   January 26, 2008      $(1,016,097)         $(11,207,791)
   February 2, 2008       $5,025,735           $(6,182,056)
   February 9, 2008      $(1,828,737)          $(8,010,793)
   February 16, 2008     $(3,600,312)         $(11,611,105)
   February 23, 2008       $(967,209)         $(12,578,313)
   March 1, 2008          $3,835,809           $(8,742,504)
   March 8, 2008         $(2,023,894)         $(10,766,398)
   March 15, 2008        $(4,192,116)         $(14,958,513)
   March 22, 2008        $(1,423,112)         $(16,381,625)
   March 29, 2008         $6,411,154           $(9,970,471)
   April 5, 2008         $(3,576,808)         $(13,547,280)
   April 12, 2008        $(1,793,709)         $(15,340,989)
   April 19, 2008        $(3,119,242)         $(18,460,231)
   April 26, 2008          $(336,508)         $(18,796,738)
   May 3, 2008            $5,079,984          $(13,716,755)
   May 10, 2008          $(1,903,550)         $(15,620,305)
   May 17, 2008          $(3,869,561)         $(19,489,866)

The Net Cash Flow, however, may vary from the amount set by no
more than (i) $400,000, in the case of any one-week period and
(ii) $800,000, in the case of any cumulative period.

The Debtors also covenant with the Lender not to let Consolidated
Capital Expenditures for each month beginning Dec. 1, 2007,
and for each period beginning December 1 and ending on a
particular date, to exceed:

                       Maximum           Maximum
                       Consolidated      Consolidated CapEx for
                       CapEx for the     the period beginning
                       month ending      December 1, 2007, and
   Test Date           on Test Date      ending on Test Date
   ---------           ---------------   -----------------------
   December 31, 2007        $750,000              $750,000
   January 31, 2008         $750,000            $1,500,000
   February 29, 2008        $750,000            $2,250,000
   March 31, 2008           $750,000            $3,000,000
   April 30, 2008           $750,000            $3,750,000
   May 31, 2008             $750,000            $4,500,000

The Court authorized the Debtors to incur overdrafts and related
liabilities arising from treasury, depository and cash management
services or in connection with any automated clearing house
transfer of funds provided to or for the benefit of the Debtors
by Black Diamond or any other DIP Lender or any of their
affiliates.  Nothing will require Black Diamond or any other
party to incur overdrafts or to provide any services or functions
to the Debtors.

Property of the Debtors subject to superiority claims will not
extend to the Debtors' claims and causes of action under Sections
502(d), 544, 545, 547, 548, 550 or 551 of the Bankruptcy Code,
and their proceeds.

According to Judge Kaplan, a Carve-out of $450,000 may be used to
pay any allowed and unpaid fees or expenses incurred by the
Debtors' counsel and the financial advisors for up to $325,000,
and the Official Committee of Unsecured Creditors up to $125,000.

Security interests and liens are granted to the DIP Agent for its
own benefit and the benefit of the DIP Lenders, subject, only in
the event of the occurrence and during the continuance of an
Event of Default, to the payment of the Carve-Out.

All Objections and reservations of rights that have not been
withdrawn, sustained or settled as set forth on the record of the
Final Hearing were overruled.

          About Performance Transportation Services Inc.

Performance Transportation Services Inc. is the second largest
transporter of new automobiles, sport-utility vehicles and light
trucks in North America, and operates under three key
transportation business lines including: E. and L. Transport,
Hadley Auto Transport and Leaseway Motorcar Transport.

The company and 13 of its affiliates previously filed for Chapter
11 protection on Jan. 25, 2006 (Bankr. W.D.N.Y. Lead Case No. 06-
00107). The Court confirmed the Debtors' plan on Dec. 21, 2006,
and that plan became effective on Jan. 29, 2007. Garry M. Graber,
Esq. of Hodgson, Russ LLP and Tobias S. Keller, Esq. of Jones Day
represented the Debtors in their retructuring efforts.  When the
Debtor filed for protection from their creditors it reported more
than $100,000,000 in total assets. It also disclosed owing more
than $100,000,000 to at most 10,000 creditors, including $708,679
to Broadspire and $282,949 to General Motors of Canada Limited.

The company and its debtor-affiliates filed their second Chapter
11 bankruptcy on Nov. 19, 2007 (Bankr. W.D.N.Y. Case Nos: 07-04746
thru 07-04760).  Tobias S. Keller, Esq., at Jones Day, represents
the Debtors.  Garry M. Graber, Esq., at Hodgson, Russ LLP, serve
as the Debtors' local counsel.  The Debtors' claims & balloting
agent is Kutzman Carson Consultants LLC.  (Performance Bankruptcy
News, Issue No. 38; Bankruptcy Creditors' Services Inc.;
http://bankrupt.com/newsstand/or 215/945-7000).


PERFORMANCE TRANSPORTATION: Court OKs Use of All Cash Collateral
----------------------------------------------------------------
Performance Transportation Services Inc. and its debtor-affiliates
obtained authority from the U.S. Bankruptcy Court for the Western
District of New York to use all Cash Collateral of their secured
lenders prior to bankruptcy filing.

All objections that have not been withdrawn, sustained or settled
are overruled.

According to Judge Lewis Kaplan, the use of Cash Collateral will
be limited to the types of expenditures contained in a DIP budget
approved by the Court, including without limitation, the funding
of a separate escrow account for $150,000, to be applied only to
satisfy any self-insured retention under the Debtors' current
directors and officers insurance policy for the benefit of
Richard Nevins and Sam Woodward in their capacity as independent
directors of Performance Logistics Group Inc.

Use of Cash Collateral will not exceed, individually or in the
aggregate, the amounts contained in the Approved DIP Budget,
Judge Kaplan clarified.

The Prepetition Secured Lenders are granted adequate protection.

Immediately upon the effectiveness of any amendment or
modification to the Approved DIP Budget, the Debtors will provide
notice of the amendment or modification to counsel for the
Official Committee of Unsecured Creditors, counsel for the
administrative agent under the Debtors' First Lien Credit and
Guaranty Agreement, counsel for the administrative agent under
the Debtors' Second Lien Credit and Guaranty Agreement, and
counsel to The CIT Group Business Credit, Inc., and Bayerische
Hypo-und Verinsbank A.G., New York Branch.

The notice of amendment or modification will be filed with the
Court concurrently with the giving of the notice to the parties.

Before filing for bankruptcy, Performance Transportation Services,  
Inc., obtained funding pursuant to:

   (1) a $150,000,000 First Lien Credit and Guaranty Agreement
       dated January 26, 2007, with Goldman Sachs Credit Partners
       L.P., as syndication agent; and The CIT Group/Business
       Credit, Inc., as administrative agent and collateral
       agent; and

   (2) a $35,000,000 Second Lien Credit and Guaranty Agreement,
       dated January 26, 2007, with Wells Fargo Bank, National
       Association, which succeeded Goldman Sachs Credit Partners
       L.P. as successor syndication, administrative and
       collateral agent.

As of the Petition Date, the total outstanding principal balance
under the First Lien Credit Facility consisted of:

   -- $49,625,000 with respect to the First Lien Term Loans,

   -- $16,500,000 with respect to the First Lien Revolving Loans,
      and

   -- $72,774,945 with respect to the First Lien Letters of
      Credit.

The Debtors owe roughly $35,000,000 under the Second Lien Credit
Facility as of the Petition Date.

Entities managed by Black Diamond Capital Management, L.L.C., and
its subsidiaries or affiliates hold in excess of 50% of the
principal amounts outstanding under the First Lien Credit
Facility.

The proceeds of the First Lien Credit Facility are secured by a
first priority lien on substantially all of PTS' assets in favor
of CIT Group, for the benefit of the First Lien Lenders.  The
proceeds of the Second Lien Credit Facility are secured by a
second priority lien on substantially all of PTS' assets in favor
of Wells Fargo, for the benefit of the Second Lien Lenders.

According to Judge Kaplan, the Debtors' right to use Cash
Collateral will automatically terminate without further Court
order:

   (a) upon prior written notice to the Debtors -- with copies of
       the Termination Notice provided concurrently to counsel
       for the First Lien Agent, counsel to the Second Lien
       Agent, counsel to the Committee and counsel to the U.S.
       Trustee --  by Black Diamond Commercial Finance, L.L.C.,
       as DIP Agent, if the Debtors use Cash Collateral in
       violation of the Approved DIP Budget;

   (b) upon three days' prior written notice to the Debtors by
       the DIP Agent if the Debtors fail to timely satisfy the
       Intermediate Milestones:

          Milestone                        Deadline
          ---------                        --------
          Deadline to Distribute           January 22, 2007
          Sale Information                 
          Package and Non-Disclosure
          Agreement to Potentially
          Interested Buyers                

          Deadline to File Acceptable      February 15, 2008
          363 and Bid Procedures Motion    

          Deadline for 363 Bid             February 29, 2008
          Protections/Procedures Approval

          Deadline for Auction             March 14, 2008
  
          Deadline for Bankruptcy Court    March 21, 2008
          Approval of 363 Sale             

          Deadline for Consummation of     April 4, 2008
          363 Sale           

   (c) upon the Revolving Commitment Termination Date, as defined
       in the Definitive DIP Loan Documents; or

   (d) a trustee under Chapter 7 or 11 of the Bankruptcy Code, a
       responsible officer, or an examiner with enlarged powers
       relating to the operation of the business under Section
       11 06(b) of the Bankruptcy Code will be appointed in any
       of the Chapter 11 cases and the order appointing the
       trustee, responsible officer or examiner is not vacated
       within 30 days.

The Debtors will file with the Court and serve CIT and HVB with
any notice provided by the DIP Agent.

                    Court Resolves Objections

Prior to the entry of the Final Order, CIT and HVB field last-
minute objections and argued that the Court should rule that
first lien lenders can take actions to (i) foreclose upon or
recover, or otherwise exercise remedies against any collateral;
and (ii) file any further financing statements, trademark
filings, copyright filings, mortgages, notices of lien or similar
instruments, or otherwise take any action to perfect their
security interests in the Collateral.

CIT and HVB asserted that adequate protection should be granted
to the prepetition Agents and each of the Prepetition Secured
Lenders.

Black Diamond, however, replied that CIT and HVB's objection
should not be entertained as this was filed way after the
deadline for filing objections.  Black Diamond asked the Court to
reject the changes proposed.

Black Diamond pointed out that the proposed change to the
provision for protection of DIP Lenders' rights, would only add
ambiguity and confusion to the Final Order and its carefully
crafted provisions.

Under the First Lien facility, Black Diamond explains, the lien
that has been granted by the Debtors was granted in favor of the
collateral agent, not each of the First Lien Lenders.

To address the objections filed by CIT and HVB, Judge Kaplan
ruled that the automatic stay is vacated and modified to the
extent necessary to permit the DIP Agent and the DIP Lenders to
exercise:

   (a) immediately upon the occurrence of an Event of Default or
       the Revolving Commitment Termination Date, all rights and
       remedies under the Definitive DIP Loan Documents; and

   (b) upon the occurrence and during the continuance of an Event
       of Default or the Revolving Commitment Termination Date
       and, in any case, after giving five business days' prior
       written notice to the Debtors, counsel to the Committee,
       counsel to the First Lien Agent, counsel to the Second
       Lien Agent and the United States Trustee for the Western
       District of New York, all rights and remedies against the
       Collateral provided for in the Definitive DIP Loan
       Documents -- including the right to set off amount of the
       Debtors in accounts maintained with the DIP Agent or any
       DIP Lender.

Concurrently with receiving any Enforcement Notice, the Debtors
will file the Enforcement Notice with the Court and serve the
Enforcement Notice on counsel for CIT and HVB.

In any hearing regarding any exercise of rights or remedies,
the only issues that may be raised by any party in opposition  --
it being agreed that CIT and HVB will have standing to raise
issues -- will be whether, in fact:

   (a) an Event of Default has occurred and is continuing; and
   (b) the Event of Default has been declared in good faith by
       the DIP Lenders,

provided that five business days after an Enforcement Notice is
filed with the Court, the Debtors and the Prepetition Secured
Lenders will be deemed to waive their right to seek relief,
including, without limitation, under Section 105 of the
Bankruptcy Code, to the extent the relief would in any way impair
or restrict the rights and remedies of the DIP Agent or the DIP
Lenders.

In no event will the DIP Agent or the DIP Lenders be
subject to the equitable doctrine of "marshaling" or any similar
doctrine with respect to the Collateral, Judge Kaplan said.

The Creditors Committee has until April 1, 2008, to file, on
behalf of the Debtors' estates, and to serve on the counsel for
the Prepetition Agents, objections or complaints respecting the
validity, extent, priority, avoidability or enforceability of the
Prepetition Debt or the Prepetition Secured Lenders' prepetition
liens and security interests.

           About Performance Transportation Services Inc.

Performance Transportation Services Inc. is the second largest
transporter of new automobiles, sport-utility vehicles and light
trucks in North America, and operates under three key
transportation business lines including: E. and L. Transport,
Hadley Auto Transport and Leaseway Motorcar Transport.

The company and 13 of its affiliates previously filed for Chapter
11 protection on Jan. 25, 2006 (Bankr. W.D.N.Y. Lead Case No. 06-
00107). The Court confirmed the Debtors' plan on Dec. 21, 2006,
and that plan became effective on Jan. 29, 2007. Garry M. Graber,
Esq. of Hodgson, Russ LLP and Tobias S. Keller, Esq. of Jones Day
represented the Debtors in their retructuring efforts.  When the
Debtors filed for protection from their creditors they reported
more than $100,000,000 in total assets, and disclosed owing more
than $100,000,000 to at most 10,000 creditors, including $708,679
to Broadspire and $282,949 to General Motors of Canada Limited.

The company and its debtor-affiliates filed their second Chapter
11 bankruptcy on Nov. 19, 2007 (Bankr. W.D.N.Y. Case Nos: 07-04746
thru 07-04760).  Tobias S. Keller, Esq., at Jones Day, represents
the Debtors.  Garry M. Graber, Esq., at Hodgson, Russ LLP, serve
as the Debtors' local counsel.  The Debtors' claims & balloting
agent is Kutzman Carson Consultants LLC.  (Performance Bankruptcy
News, Issue No. 38; Bankruptcy Creditors' Services Inc.;
http://bankrupt.com/newsstand/or 215/945-7000).


PERFORMANCE TRANSPORTATION: Court OKs Use of All Cash Collateral
----------------------------------------------------------------
Performance Transportation Services Inc. and its debtor-affiliates
obtained authority from the U.S. Bankruptcy Court for the Western
District of New York to use all Cash Collateral of their secured
lenders prior to bankruptcy filing.

All objections that have not been withdrawn, sustained or settled
are overruled.

According to Judge Lewis Kaplan, the use of Cash Collateral will
be limited to the types of expenditures contained in a DIP budget
approved by the Court, including without limitation, the funding
of a separate escrow account for $150,000, to be applied only to
satisfy any self-insured retention under the Debtors' current
directors and officers insurance policy for the benefit of
Richard Nevins and Sam Woodward in their capacity as independent
directors of Performance Logistics Group Inc.

Use of Cash Collateral will not exceed, individually or in the
aggregate, the amounts contained in the Approved DIP Budget,
Judge Kaplan clarified.

The Prepetition Secured Lenders are granted adequate protection.

Immediately upon the effectiveness of any amendment or
modification to the Approved DIP Budget, the Debtors will provide
notice of the amendment or modification to counsel for the
Official Committee of Unsecured Creditors, counsel for the
administrative agent under the Debtors' First Lien Credit and
Guaranty Agreement, counsel for the administrative agent under
the Debtors' Second Lien Credit and Guaranty Agreement, and
counsel to The CIT Group Business Credit, Inc., and Bayerische
Hypo-und Verinsbank A.G., New York Branch.

The notice of amendment or modification will be filed with the
Court concurrently with the giving of the notice to the parties.

Before filing for bankruptcy, Performance Transportation Services,  
Inc., obtained funding pursuant to:

   (1) a $150,000,000 First Lien Credit and Guaranty Agreement
       dated January 26, 2007, with Goldman Sachs Credit Partners
       L.P., as syndication agent; and The CIT Group/Business
       Credit, Inc., as administrative agent and collateral
       agent; and

   (2) a $35,000,000 Second Lien Credit and Guaranty Agreement,
       dated January 26, 2007, with Wells Fargo Bank, National
       Association, which succeeded Goldman Sachs Credit Partners
       L.P. as successor syndication, administrative and
       collateral agent.

As of the Petition Date, the total outstanding principal balance
under the First Lien Credit Facility consisted of:

   -- $49,625,000 with respect to the First Lien Term Loans,

   -- $16,500,000 with respect to the First Lien Revolving Loans,
      and

   -- $72,774,945 with respect to the First Lien Letters of
      Credit.

The Debtors owe roughly $35,000,000 under the Second Lien Credit
Facility as of the Petition Date.

Entities managed by Black Diamond Capital Management, L.L.C., and
its subsidiaries or affiliates hold in excess of 50% of the
principal amounts outstanding under the First Lien Credit
Facility.

The proceeds of the First Lien Credit Facility are secured by a
first priority lien on substantially all of PTS' assets in favor
of CIT Group, for the benefit of the First Lien Lenders.  The
proceeds of the Second Lien Credit Facility are secured by a
second priority lien on substantially all of PTS' assets in favor
of Wells Fargo, for the benefit of the Second Lien Lenders.

According to Judge Kaplan, the Debtors' right to use Cash
Collateral will automatically terminate without further Court
order:

   (a) upon prior written notice to the Debtors -- with copies of
       the Termination Notice provided concurrently to counsel
       for the First Lien Agent, counsel to the Second Lien
       Agent, counsel to the Committee and counsel to the U.S.
       Trustee --  by Black Diamond Commercial Finance, L.L.C.,
       as DIP Agent, if the Debtors use Cash Collateral in
       violation of the Approved DIP Budget;

   (b) upon three days' prior written notice to the Debtors by
       the DIP Agent if the Debtors fail to timely satisfy the
       Intermediate Milestones:

          Milestone                        Deadline
          ---------                        --------
          Deadline to Distribute           January 22, 2007
          Sale Information                 
          Package and Non-Disclosure
          Agreement to Potentially
          Interested Buyers                

          Deadline to File Acceptable      February 15, 2008
          363 and Bid Procedures Motion    

          Deadline for 363 Bid             February 29, 2008
          Protections/Procedures Approval

          Deadline for Auction             March 14, 2008
  
          Deadline for Bankruptcy Court    March 21, 2008
          Approval of 363 Sale             

          Deadline for Consummation of     April 4, 2008
          363 Sale           

   (c) upon the Revolving Commitment Termination Date, as defined
       in the Definitive DIP Loan Documents; or

   (d) a trustee under Chapter 7 or 11 of the Bankruptcy Code, a
       responsible officer, or an examiner with enlarged powers
       relating to the operation of the business under Section
       11 06(b) of the Bankruptcy Code will be appointed in any
       of the Chapter 11 cases and the order appointing the
       trustee, responsible officer or examiner is not vacated
       within 30 days.

The Debtors will file with the Court and serve CIT and HVB with
any notice provided by the DIP Agent.

                    Court Resolves Objections

Prior to the entry of the Final Order, CIT and HVB field last-
minute objections and argued that the Court should rule that
first lien lenders can take actions to (i) foreclose upon or
recover, or otherwise exercise remedies against any collateral;
and (ii) file any further financing statements, trademark
filings, copyright filings, mortgages, notices of lien or similar
instruments, or otherwise take any action to perfect their
security interests in the Collateral.

CIT and HVB asserted that adequate protection should be granted
to the prepetition Agents and each of the Prepetition Secured
Lenders.

Black Diamond, however, replied that CIT and HVB's objection
should not be entertained as this was filed way after the
deadline for filing objections.  Black Diamond asked the Court to
reject the changes proposed.

Black Diamond pointed out that the proposed change to the
provision for protection of DIP Lenders' rights, would only add
ambiguity and confusion to the Final Order and its carefully
crafted provisions.

Under the First Lien facility, Black Diamond explains, the lien
that has been granted by the Debtors was granted in favor of the
collateral agent, not each of the First Lien Lenders.

To address the objections filed by CIT and HVB, Judge Kaplan
ruled that the automatic stay is vacated and modified to the
extent necessary to permit the DIP Agent and the DIP Lenders to
exercise:

   (a) immediately upon the occurrence of an Event of Default or
       the Revolving Commitment Termination Date, all rights and
       remedies under the Definitive DIP Loan Documents; and

   (b) upon the occurrence and during the continuance of an Event
       of Default or the Revolving Commitment Termination Date
       and, in any case, after giving five business days' prior
       written notice to the Debtors, counsel to the Committee,
       counsel to the First Lien Agent, counsel to the Second
       Lien Agent and the United States Trustee for the Western
       District of New York, all rights and remedies against the
       Collateral provided for in the Definitive DIP Loan
       Documents -- including the right to set off amount of the
       Debtors in accounts maintained with the DIP Agent or any
       DIP Lender.

Concurrently with receiving any Enforcement Notice, the Debtors
will file the Enforcement Notice with the Court and serve the
Enforcement Notice on counsel for CIT and HVB.

In any hearing regarding any exercise of rights or remedies,
the only issues that may be raised by any party in opposition  --
it being agreed that CIT and HVB will have standing to raise
issues -- will be whether, in fact:

   (a) an Event of Default has occurred and is continuing; and
   (b) the Event of Default has been declared in good faith by
       the DIP Lenders,

provided that five business days after an Enforcement Notice is
filed with the Court, the Debtors and the Prepetition Secured
Lenders will be deemed to waive their right to seek relief,
including, without limitation, under Section 105 of the
Bankruptcy Code, to the extent the relief would in any way impair
or restrict the rights and remedies of the DIP Agent or the DIP
Lenders.

In no event will the DIP Agent or the DIP Lenders be
subject to the equitable doctrine of "marshaling" or any similar
doctrine with respect to the Collateral, Judge Kaplan said.

The Creditors Committee has until April 1, 2008, to file, on
behalf of the Debtors' estates, and to serve on the counsel for
the Prepetition Agents, objections or complaints respecting the
validity, extent, priority, avoidability or enforceability of the
Prepetition Debt or the Prepetition Secured Lenders' prepetition
liens and security interests.

           About Performance Transportation Services Inc.

Performance Transportation Services Inc. is the second largest
transporter of new automobiles, sport-utility vehicles and light
trucks in North America, and operates under three key
transportation business lines including: E. and L. Transport,
Hadley Auto Transport and Leaseway Motorcar Transport.

The company and 13 of its affiliates previously filed for Chapter
11 protection on Jan. 25, 2006 (Bankr. W.D.N.Y. Lead Case No. 06-
00107). The Court confirmed the Debtors' plan on Dec. 21, 2006,
and that plan became effective on Jan. 29, 2007. Garry M. Graber,
Esq. of Hodgson, Russ LLP and Tobias S. Keller, Esq. of Jones Day
represented the Debtors in their retructuring efforts.  When the
Debtors filed for protection from their creditors they reported
more than $100,000,000 in total assets, and disclosed owing more
than $100,000,000 to at most 10,000 creditors, including $708,679
to Broadspire and $282,949 to General Motors of Canada Limited.

The company and its debtor-affiliates filed their second Chapter
11 bankruptcy on Nov. 19, 2007 (Bankr. W.D.N.Y. Case Nos: 07-04746
thru 07-04760).  Tobias S. Keller, Esq., at Jones Day, represents
the Debtors.  Garry M. Graber, Esq., at Hodgson, Russ LLP, serve
as the Debtors' local counsel.  The Debtors' claims & balloting
agent is Kutzman Carson Consultants LLC.  (Performance Bankruptcy
News, Issue No. 38; Bankruptcy Creditors' Services Inc.;
http://bankrupt.com/newsstand/or 215/945-7000).


PLASTECH ENGINEERED: Chrysler Still Out to Grab Tooling Equipment
-----------------------------------------------------------------
Chrysler LLC CEO Robert Nardelli disclosed that the auto-maker is
still in pursuit of its tooling equipment holed up at Plastech
Engineered Products Inc.'s plants, and continues to seek component
supplies from other vendors, Jeff Bennett of the Wall Street
Journal reports.

As reported in the Troubled Company Reporter on Feb. 6, 2008, a
temporary disruption in Chrysler's production was caused by a
tooling dispute over the parties, with Chrysler attempting to
retrieve its tooling equipment over at Plastech's plants and
transfer them to other suppliers so its operations would not
suffer.

The parties however, reached an agreement early this week that
ended the idling of Chrysler plants.  Pursuant to an interim
agreement, Plastech resumed its shipment of car parts and
components to Chrysler, which enabled the auto maker to resume its
plant operations.  The arrangement will continue until Feb. 15.

"This was not hard-ball tactics, it was a solid business
practice," WSJ quotes Nardelli during an auto show.  "We never
meant to create an adversarial relationship with Plastech or any
other suppliers."

Nardelli related to WSJ that Plastech was going to raise its
prices.  "We have to stay competitive," Nardelli insisted.  "No
hard feelings, no animosity, just solid business practices."

As reported in the Troubled Company Reporter on Feb. 7, 2008,
while Chrysler said that it could close four of its U.S. plants
due to Plastech's failure to deliver component parts, Ford Motor
Co. and Toyota Motor Corp. said their automotive production won't
be affected by the auto-parts supplier's Chapter 11 filing.

Ford said that Plastech's Chapter 11 filing won't adversely
affect the auto maker's production, The Wall Street Journal
reports.  "We've had no impact," said Mark Fields, Ford's
President of the Americas.  "We anticipate, for the time being,
to be able to continue our production."

                       About Chrysler LLC

Based in Auburn Hills, Michigan, Chrysler LLC --
http://www.chrysler.com/-- a unit of Cerberus Capital
Management LP, produces Chrysler, Jeep(R), Dodge and Mopar(R)
brand vehicles and products.  The company has dealers worldwide,
including Canada, Mexico, U.S., Germany, France, U.K.,
Argentina, Brazil, Venezuela, China, Japan and Australia.

                          *     *     *

As reported in the Troubled Company Reporter on Nov. 12, 2007,
Standard & Poor's Ratings Services affirmed its 'B' corporate
credit rating on Chrysler LLC and DaimlerChrysler Financial
Services Americas LLC and removed it from CreditWatch with
positive implications, where it was placed Sept. 26, 2007.  S&P
said the outlook is negative.

                   About Plastech Engineering

Based in Dearborn, Michigan, Plastech Engineered Products, Inc. --
http://www.plastecheng.com/-- is full-service automotive supplier    
of interior, exterior and underhood components.  It designs and
manufactures blow-molded and injection-molded plastic products
primarily for the automotive industry.  Plastech's products
include automotive interior trim, underhood components, bumper and
other exterior components, and cockpit modules.  Plastech's major
customers are General Motors, Ford Motor Company, and Toyota, as
well as Johnson Controls, Inc.

Plastech is a privately held company and is the largest family-
owned company in the state of Michigan.  The company is certified
as a Minority Business Enterprise by the state of Michigan.  
Plastech maintains more than 35 manufacturing facilities in the
midwestern and southern United States.  The company's products are
sold through an in-house sales force.

The company and eight of its affiliates filed for Chapter 11
protection on Feb. 1, 2008 (Bankr. E.D. Mich. Lead Case No. 08-
42417).  Gregg M. Galardi, Esq., at Skadden Arps Slate Meagher &
Flom LLP, and Deborah L. Fish, Esq., at Allard & Fish, P.C.,
represent the Debtors in their restructuring efforts.  The Debtors
chose Jones Day as their special corporate and litigation counsel.  
Lazard Freres & Co. LLC serves as the Debtors' investment bankers,
while Conway, MacKenzie & Dunleavy provide financial advisory
services.  The Debtors also employed Donlin, Recano & Company as
their claims and noticing agent.

As of Dec. 31, 2006, the company's books and records
reflected assets totaling $729,000,000 and total liabilities of
$695,000,000.


PLASTECH ENGINEERED: Can Obtain $38 Million of DIP Financing
------------------------------------------------------------
Plastech Engineered Products, Inc., and its debtor-affiliates
obtained authority from the U.S. Bankruptcy Court for the Eastern
District of Michigan to borrow up to $38,000,000 in postpetition
financing under a secured revolving credit facility syndicated by
Bank of America, N.A., as administrative agent.

As reported in the Troubled Company Reporter on Feb. 7, 2008, the
Debtors instituted a plan to increase liquidity and reduce costs,
in response to decreasing liquidity, increasing raw materials
costs, fixed, long-term agreements with customers, and a resulting
decrease in earnings, said Peter Smidt, executive vice president
of Finance, and chief financial officer of Plastech.

The Debtors ultimately determined that the DIP financing offered
by the same lenders who provided the Debtors with a $200,000,000
Revolving Credit Facility entered into on Feb. 12, 2007, was the
most favorable under the circumstances, and adequately addressed
the Debtors' reasonably foreseeable liquidity needs.

The salient terms of the DIP Loan Agreement are:

   Borrowers:         Each of The Debtors.

   Administrative
   Agent:             Bank of America, N.A.

   Lenders:           A syndicate of lenders consisting of the
                      lenders under the Revolving Credit
                      Facility.

   Commitment:        A revolving credit facility in a committed
                      amount up to $38,000,000.  The $6,000,000
                      of the Committed Amount will be advanced at
                      the Borrowers' request.
         
                      Up to $17,000,000 will be advanced dollar
                      for dollar based on the amounts paid by the
                      Debtors' customers General Motors
                      Corporation, Ford Motor Company, and
                      Johnson Controls, Inc.

                      The remaining $15,000,000 will be advanced
                      for adequate assurance payments to the
                      Prepetition Revolving Lenders to the extent
                      of the cost of the goods sold by the
                      Debtors during the funding period, with
                      the amounts to be applied to the
                      obligations under the Prepetition
                      Revolving Facility.

   Use of Proceeds:   The Facility will be used solely (a)
                      for working capital and general corporate
                      purposes consistent with the budget agreed
                      to by the parties, (b) to pay the costs and
                      expenses related to the administration of
                      the bankruptcy cases, and for payment of
                      certain other prepetition expenses as
                      contemplated in the budget or as consented
                      to by the DIP Agent in its sole discretion
                      and as are approved by the Court, and (c)
                      to make the adequate protection payments.

   Application of
   Proceeds:          Amounts outstanding under the Revolving
                      Credit Facility will be reduced from
                      the net proceeds of the Liquid Collateral
                      that is sold in the ordinary course or
                      liquidated.  Additional amounts for (x)
                      payment of interest, expenses, fees, and
                      other amounts owing under the DIP Credit
                      Facility and (y) working capital and
                      corporate purposes, will be borrowed under
                      the DIP Loan Agreement.

   Maturity Date:     11:59 p.m. (Eastern time), Feb. 10, 2008;
                      may be extended without further hearing or
                      order by written agreement among Borrowers,
                      DIP Agent, and DIP Lenders for an
                      additional 15 days.

   Priority & Liens:  Subject to the Carve Out, superpriority
                      claim status pursuant to Section 364(c)(1)
                      of the Bankruptcy Code.

                      Secured by a first priority perfected
                      security interest pursuant to Sections
                      364(c)(2) and (c)(3) and 364(d) in the
                      Liquid Collateral, which, subject to the
                      conditions set forth in the DIP Loan
                      Agreement, will not include (i)
                      avoidance actions; and (ii) the proceeds of
                      any Avoidance Actions.

   Adequate
   Protection Liens
   for Prepetition
   Revolver Lenders:  (i) replacement liens on all Liquid
                      Collateral, (ii) adequate protection
                      payments in the  amount of interest, fees
                      and other amounts (including principal) due
                      under the Revolving Credit Facility from
                      the Pre-Petition Accounts, the Pre-Petition
                      Inventory, and the Other Pre-Petition
                      Revolver Collateral.

                      Representatives of the DIP Lenders will
                      be authorized to visit the Debtors'
                      business premises to monitor the Liquid
                      Collateral, and the DIP Lenders will be
                      authorized to retain appraisers,
                      consultants, and financial advisors at
                      Debtors' expense to monitor the Debtors'
                      business, verify the Debtors' compliance
                      with the terms of the DIP Financing
                      Documents and the DIP Order and the
                      Prepetition Revolver Credit Documents,
                      and appraise the Liquid Collateral.

   Fees:              Closing Fee of $100,000

   Interest Rate:     Base Rate + 1% (per annum)

   Events of Default: The DIP Documents contain usual and
                      customary events of default for facilities
                      of this type.  In addition, the failure of
                      the Borrowers to obtain final order
                      approving financing on or before March 10,
                      2008, will constitute an event of default.

   Remedies on
   Events of Default: In addition to other customary remedies,
                      upon the occurrence and during the
                      continuance of an Event of Default and
                      following the giving of 5 business days'
                      notice to counsel for the Debtors,
                      counsel for the Committee, and the
                      United States Trustee, the Agent will
                      have relief from the automatic stay and
                      may foreclose on all or any portion of
                      the Liquid Collateral, collect accounts
                      receivable and apply the proceeds
                      thereof to the obligations, or otherwise
                      exercise remedies against the Liquid
                      Collateral permitted by applicable
                      nonbankruptcy law.

   Guaranty:          The proposed financing is conditioned on
                      execution and delivery of documents
                      acceptable to DIP Agent by "Acceptable
                      Customers" evidencing a non-recourse
                      cash collateralized guarantee and non-
                      offset agreement limiting set-offs on
                      postpetition amounts to "ordinary
                      course issues" capped at 10% of invoice.

A full text copy of the draft of the Agreement is available for
free at http://researcharchives.com/t/s?27d3

                    About Plastech Engineering

Based in Dearborn, Michigan, Plastech Engineered Products, Inc. --
http://www.plastecheng.com/-- is full-service automotive supplier    
of interior, exterior and underhood components.  It designs and
manufactures blow-molded and injection-molded plastic products
primarily for the automotive industry.  Plastech's products
include automotive interior trim, underhood components, bumper and
other exterior components, and cockpit modules.  Plastech's major
customers are General Motors, Ford Motor Company, and Toyota, as
well as Johnson Controls, Inc.

Plastech is a privately held company and is the largest family-
owned company in the state of Michigan.  The company is certified
as a Minority Business Enterprise by the state of Michigan.  
Plastech maintains more than 35 manufacturing facilities in the
midwestern and southern United States.  The company's products are
sold through an in-house sales force.

The company and eight of its affiliates filed for Chapter 11
protection on Feb. 1, 2008 (Bankr. E.D. Mich. Lead Case No. 08-
42417).  Gregg M. Galardi, Esq., at Skadden Arps Slate Meagher &
Flom LLP, and Deborah L. Fish, Esq., at Allard & Fish, P.C.,
represent the Debtors in their restructuring efforts.  The Debtors
chose Jones Day as their special corporate and litigation counsel.  
Lazard Freres & Co. LLC serves as the Debtors' investment bankers,
while Conway, MacKenzie & Dunleavy provide financial advisory
services.  The Debtors also employed Donlin, Recano & Company as
their claims and noticing agent.

As of Dec. 31, 2006, the company's books and records
reflected assets totaling $729,000,000 and total liabilities of
$695,000,000.


PLASTECH ENGINEERED: Moody's Puts D Probability of Default Rating
-----------------------------------------------------------------
Moody's Investors Service lowered the Probability of Default
Ratings of Plastech Engineered Products, Inc. to D from Caa3,
Corporate Family to Ca from Caa3; senior secured ABL revolving
credit facility to Caa3 from Caa2; senior secured first lien term
loan to Ca from Caa3; and senior secured second lien term loan to
C from Ca.  The outlook is stable.

The Probability of Default rating of D reflects the filing for
Chapter 11 protection by Plastech resulting from significant
erosion in the company's financial performance and liquidity
coupled with the cancellation of a customer contract from a major
original equipment manufacturer.  Moody's noted in its press
release dated Jan. 11, 2008 concerns over the company's ability to
maintain an adequate liquidity profile brought on by depressed
automotive demand and increasing raw material costs.

These ratings were lowered:

  -- Corporate Family Rating, to Ca from Caa3

  -- Probability of Default Rating, to D from Caa3

  -- $200 million asset based revolving credit facility due 2011,
     to Caa3 (LGD3, 33%) from Caa2 (LGD3, 33%);

  -- $265 million first lien term loan due 2012, to Ca (LGD3, 48%)
     from Caa3 (LGD3, 48%);

  -- $100 million second lien term loan due 2013, to C (LGD5, 83%)
     from Ca (LGD5, 83%)

The last rating action for Plastech was on Jan. 11, 2008 when the
ratings were lowered.

Moody's will withdraw the ratings of Plastech.

Plastech Engineered Products, headquartered in Dearborn, Michigan,
is a leading designer and manufacturer of primarily plastic
automotive components and systems for OEM and Tier I customers.  
These components and systems incorporate injection-molded plastic
parts, blow-molded plastic parts, and a small percentage of
stamped metal components.  They are used for interior, exterior
and under-the-hood applications.  Annual revenues approximate
$1.4 billion.


QUEBECOR WORLD: ISDA Launches Protocol to Settle Derivate Trades
----------------------------------------------------------------
The International Swaps and Derivatives Association has announced
the launch of a protocol created to facilitate settlement of
credit derivative trades involving Quebecor World Inc., a Canadian
printing company that filed for creditor protection under the
Canadian Companies' Creditors Arrangement Act on Jan. 21, 2008.

The 2008 Quebecor CDS Protocol permits cash settlement of single-
name, index, tranche and other credit derivative transactions.  
The Protocol offers market participants an efficient way to settle
credit derivative trades referencing Quebecor.  It enables parties
to agree to settle their trades on a multilateral basis based on a
final price established at auction.  This approach to settlement
brings considerable operational efficiencies, while also
preserving a participant's right to receive or deliver obligations
if desired.  Markit and Creditex will administer the auction,
scheduled for Feb. 19, 2008, which will determine the final price
for Quebecor bonds.

"At a time when credit concerns are permeating the global
financial markets, the ISDA mechanism reassures derivatives
industry participants of a smooth and reliable settlement
process," said Robert Pickel, ISDA's Chief Executive Officer and
Executive Director.  "ISDA is committed to supporting the
integrity of credit risk management practices and operational
efficiency across privately negotiated derivatives."

While earlier ad hoc protocols enabled cash settlement only of
index trades, this is the second time this settlement methodology
has been applied to a broad range of credit derivative
transactions.  The mechanism was successfully implemented in the
2006 Dura CDS Protocol.

The Protocol is open to ISDA members and non-members alike.  The
adherence period for the Protocol runs until Feb. 8, 2008.

The text of the Protocol and form of adherence letter, guidance on
the mechanics of the Protocol, answers to frequently asked
questions and details on adherents, are all available at
http://www.isda.org/

Details on the auction are included in the Protocol.

                          About ISDA

The International Swaps and Derivatives Association, ISDA, --
http://www.isda.org/-- which represents participants in the  
privately negotiated derivatives industry, is among the world's
largest global financial trade associations as measured by number
of member firms.  ISDA was chartered in 1985, and today has
approximately 805 member institutions from 55 countries on six
continents.  These members include most of the world's major
institutions that deal in privately negotiated derivatives, as
well as many of the businesses, governmental entities and other
end users that rely on over-the-counter derivatives to manage
efficiently the financial market risks inherent in their core
economic activities.

                      About Quebecor World

Based in Montreal, Quebec, Quebecor World Inc. (TSX: IQW) (NYSE:
IQW), -- http://www.quebecorworldinc.com/-- provides market    
solutions, including marketing and advertising activities, well as
print solutions to retailers, branded goods companies, catalogers
and to publishers of magazines, books and other printed media.  It
has 127 printing and related facilities located in North America,
Europe, Latin America and Asia.  In the United States, it has 82
facilities in 30 states, and is engaged in the printing of books,
magazines, directories, retail inserts, catalogs and direct mail.  
In Canada it has 17 facilities in five provinces, through which it
offers a mix of printed products and related value-added services
to the Canadian market and internationally.

The company is an independent commercial printer in Europe with
19 facilities, operating in Austria, Belgium, Finland, France,
Spain, Sweden, Switzerland and the United Kingdom.  In March 2007,
it sold its facility in Lille, France.  Quebecor World (USA) Inc.
is its wholly owned subsidiary.

Quebecor World and 53 of its subsidiaries, including those in
Canada, filed a petition under the Companies' Creditors
Arrangement Act before the Superior Court of Quebec, Commercial
Division, in Montreal, Canada, on Jan. 20, 2008.  The Honorable
Justice Robert Mongeon oversees the CCAA case.  Francois-David
Pare, Esq., at Ogilvy Renault, LLP, represents the Company in the
CCAA case.  They obtained creditor protection until Feb. 20, 2008.  
Ernst & Young Inc. was appointed as Monitor.

On Jan. 21, 2008, Quebecor World (USA) Inc., its U.S.
subsidiary, along with other U.S. affiliates, filed for chapter
11 bankruptcy on Jan. 21, 2008 (Bankr. S.D.N.Y Lead Case No.
08-10152).  Anthony D. Boccanfuso, Esq., at Arnold & Porter LLP
represents the Debtors in their restructuring efforts.

Based in Corby, Northamptonshire, Quebecor World PLC --
http://www.quebecorworldplc.com/-- is the U.K. subsidiary of  
Quebecor World Inc. that specializes in web offset magazines,
catalogues and specialty print products for marketing and
advertising campaigns.  The company employs around 290 people.
Quebecor PLC was placed into administration with Ian Best and
David Duggins of Ernst & Young LLP appointed as joint
administrators effective Jan. 28, 2008.

As of Sept. 30, 2007, Quebecor World's unaudited consolidated
balance sheet showed total assets of $5,554,900,000, total
liabilities of $3,964,800,000, preferred shares of $175,900,000,
and total shareholders' equity of $1,414,200,000.  The company has
until May 20, 2008, to file a plan of reorganization in the
Chapter 11 case.  (Quebecor World Bankruptcy News, Issue No. 4;
Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000)


RADIATION THERAPY: Shareholders OK Merger Deal with RTSHI & RTS
---------------------------------------------------------------
Radiation Therapy Services Inc. disclosed that its shareholders
voted to approve the agreement and plan of merger dated as of
Oct. 19, 2007, among the company, Radiation Therapy Services
Holdings Inc. and RTS MergerCo Inc.

Holders of 18,057,310 shares, representing approximately 99.7% of
the total number of shares of common stock that voted on the
matter, voted in favor of approval of the merger agreement.

Upon completion of the merger, each outstanding share of the
company's common stock, other than certain shares, will be
converted into the right to receive $32.50 in cash, without
interest.

The company expects that the transactions contemplated by the
Merger Agreement will be consummated on Feb. 21, 2008, subject to
the satisfaction of the conditions to closing under the Merger
Agreement.

All material regulatory approvals that are required to be
obtained as a condition to the closing of the merger under the
Merger Agreement have been received.

The company diclosed that two lawsuits were filed in connection
with the proposed merger on Oct. 24, 2007 and Nov. 16, 2007,
against the company, each of the company's directors and Vestar
Capital Partners as purported class actions on behalf of the
public shareholders of the company in the Circuit Court of Lee
County, Florida.

On Jan. 3, 2008, the plaintiff in the first case voluntarily
dismissed his claims.  The second case was settled in principle on
Feb. 1, 2008, by the parties with no admission of any liability.
The settlement is subject to court approval and consummation of
the transactions contemplated by the merger agreement.  At this
time there are no other pending actions challenging the proposed
merger.

          About Radiation Therapy Services Holdings Inc.

Radiation Therapy Services Holdings Inc. is owned by an affiliate
of Vestar Capital Partners, an international private equity firm.

                     About RTS MergerCo Inc.

RTS MergerCo Inc. is the acquisition vehicle that will be used to
complete the leveraged buyout of Radiation Therapy Services Inc.  

                 About Radiation Therapy

Based in Fort Myers, Florida, Radiation Therapy Services Inc.
(Nasdaq: RTSX) -- http://www.rtsx.com/-- operates radiation
treatment centers under the name 21st Century Oncology.  The
company is a provider of radiation therapy services to cancer
patients.  The company's 80 treatment centers are clustered into
25 local markets in 16 states, including Alabama, Arizona,
California, Delaware, Florida, Kentucky, Maryland, Massachusetts,
Michigan, Nevada, New Jersey, New York, North Carolina,
Pennsylvania, Rhode Island and West Virginia.

                        *     *     *

As reported in the Troubled Company Reporter on Jan. 31, 2008,
Moody's Investors Service assigned a B2 corporate family rating to
RTS MergerCo Inc.  Moody's also assigned a B1 to the proposed
senior secured credit facility of up to $440 million.  The outlook
for the ratings is stable.  

Moody's Investors Service assigned a B2 corporate family rating to
RTS MergerCo Inc.  Moody's also assigned a B1 to the proposed
senior secured credit facility of up to $440 million.  The outlook
for the ratings is stable.  


RADIO SYSTEM: Moody's Chips Secured Credit Facility Rating to B2
----------------------------------------------------------------
Moody's Investors Service downgraded Radio System Corporation's
corporate family rating and its senior secured credit facility
(term loan and revolver) rating to B2 from B1, due to higher then
expected acquisition costs, which has put pressure on financial
covenants.  At the same time, Radio System's probability of
default rating was also downgraded one notch to B3 from B2.

"The downgrade principally reflects Moody's concern that the
company has incurred higher than expected acquisition related
costs subsequent to the ITI merger" said Kevin Cassidy Vice
President/Senior Credit Officer at Moody's Investors Service.   
These additional unexpected costs and high inventory balances have
put pressure on the company's liquidity position as debt balances
are higher than expected and there is very little cushion on its
financial covenants later in the year when covenants contractually
tighten.

"The negative outlook reflects Moody's concern that the
contractual tightening of a financial covenant coupled with the
potential for moderating profitability if consumer spending
continues to soften may necessitate a need for Radio System's to
seek revisions to its senior secured credit facility and amend its
covenants" said Cassidy.  "While we expect that the company will
comply with its step downed covenants in the fourth quarter of
2007 and the first quarter of 2008, an additional step down in its
required leverage covenant in the second quarter of 2008, has
increased the likelihood that the company may need to amend its
credit facility should profitability soften" said Cassidy.

Radio Systems' ratings are constrained by its modest scale with
revenue less than $250 million, narrow product focus on the
electronic pet supplies category, and, to a lesser degree,
exposure to consumer spending.  On the other hand, Radio Systems'
leading market position within pet containment and training
products, well recognized brand names, and strong operating
margins benefit its ratings.

These ratings were downgraded:

  -- Corporate family rating at B2 from B1;

  -- Probability-of-default rating to B3 from B2;

  -- $45 million senior secured revolver, due 2011, to B2 (LGD 3,
     32%) from B1 (LGD3, 32%);

  -- $150 million senior secured term loan B, due 2013, to B2 (LGD
     3, 32%) from B1 (LGD3, 32%).

Based in Knoxville, Tennessee, Radio Systems Corporation is a
provider of electronic pet containment products, pet training
products, and pet doors.  Invisible Technologies, Inc., a
subsidiary of Radio Systems, provides pet containment products
under the "Invisible Fence" brand name and other pet training
products.  Sales for the twelve month ended Sept. 30, 2007
approximated $225 million.


RFSC SERIES: S&P Cuts Ratings; Rating on Class M-3 Tumbles to 'D'
-----------------------------------------------------------------
Standard & Poor's Ratings Services lowered its ratings on two
classes of mortgage asset-backed pass-through certificates from
RFSC Series 2003-RP1 Trust and on four classes of mortgage
pass-through certificates from RBSGC Mortgage Loan Trust's series
2005-RP1.  At the same time, S&P affirmed its ratings on 27
classes from these series and on three other reperforming mortgage
transactions issued by RAAC.
     
The downgrades reflect the adverse performance of the mortgage
pools as the collateral continues to realized significant monthly
net losses.  With respect to RFSC Series 2003-RP1 Trust, monthly
net losses have consistently outpaced monthly excess interest cash
flows, resulting in the complete write-down of the
overcollateralization (O/C) and principal write-downs to class M-
3.  Consequently, S&P lowered the rating on class M-3 to 'D' from
'CCC'.  In addition, S&P lowered the rating on class M-2 to 'BB'
from 'A'.  As of the December 2007 distribution period, cumulative
realized losses, as a percentage of original pool balance, were
9.65%.  Total delinquencies were just over 50% of the current pool
balance, while severe delinquencies (90-plus days, foreclosures,
and REOs) were approximately 34%.  This transaction is 56 months
seasoned with a pool factor of 16.52%.
     
With respect to RBSGC Mortgage Loan Trust's series 2005-RP1, the
downgrades reflect the relatively high percentage of severely
delinquent loans (15.47% for collateral group one and 11.77% for
collateral group two) when compared with the amount of credit
support available to each of the four downgraded classes.  Classes
I-B-4 and I-B-5 have outstanding credit support of 0.83% and
0.18%, respectively, while classes II-B-4 and II-B-5 have
outstanding credit support of 1.42% and 0.69%, respectively.   
Collateral group one has total delinquencies and cumulative
realized losses of 28.07% and 0.42%, respectively, with a pool
factor of 51.65%.  Total delinquencies and cumulative realized
losses for collateral group two are 24.38% and 0.25%,
respectively, with a pool factor of 38.27%.  This transaction is
34 months seasoned.
     
The affirmations reflect adequate actual and projected credit
support percentages to support the ratings at their current
levels.  The three RAAC transactions are at or close to their O/C
targets and are generating monthly excess interest that exceeds
monthly net losses, on average.  As of the December 2007
distribution period, total and severe delinquencies for the three
reperforming mortgage transactions that did not see downgrades
were:

  Series             Total delinq.  Severe delinq.  Cum. losses
  ------             -------------  --------------  -----------
  RAAC 2006-RP4         41.64%           26.91%         2.54%
  RAAC 2007-RP1         42.32%           22.74%         1.37%
  RAAC 2007-RP2         45.81%           28.34%         0.76%

Either subordination alone or combined with O/C, along with excess
spread, provide credit support for these transactions.  The
collateral for these transactions consists of 30-year, fixed- or
adjustable-rate, reperforming mortgage loans secured by first
liens on residential properties.

                         Ratings Lowered

                     RFSC Series 2003-RP1 Trust
         Mortgage Asset-backed Pass-through Certificates

                                       Rating
                                       ------
             Series     Class       To        From
             ------     -----       --        ----
             2003-RP1   M-2         BB        A
             2003-RP1   M-3         D         CCC

                     RBSGC Mortgage Loan Trust
                Mortgage Pass Through Certificates

                                          Rating
                                          ------
         Series     Class              To        From
         ------     -----              --        ----
         2005-RP1   I-B-4, II-B-4      B         BB
         2005-RP1   I-B-5, II-B-5      CCC       B

                        Ratings Affirmed

                     RFSC Series 2003-RP1 Trust
          Mortgage Asset-backed Pass-through Certificates

               Series     Class              Rating
               ------     -----              ------
               2003-RP1   M-1                AA

                      RBSGC Mortgage Loan Trust
                 Mortgage Pass-through Certificates

           Series     Class                         Rating
           ------     -----                         ------
           2005-RP1   I-F, I-SF, I-SB, II-A         AAA
           2005-RP1   I-B-1, II-B-1                 AA
           2005-RP1   I-B-2, II-B-2                 A
           2005-RP1   I-B-3, II-B-3                 BBB

                      RAAC Series 2006-RP4 Trust
          Mortgage Asset-backed Pass-through Certificates

               Series     Class                Rating
               ------     -----                ------
               2006-RP4   A                    AAA
               2006-RP4   M-1                  AA
               2006-RP4   M-2                  A
               2006-RP4   M-3                  BBB+
               2006-RP4   M-4                  BBB
               2006-RP4   M-5                  BBB-

                      RAAC Series 2007-RP1 Trust
          Mortgage Asset-backed Pass-through Certificates

               Series     Class                Rating
               ------     -----                ------
               2007-RP1   A                    AAA
               2007-RP1   M-1                  AA
               2007-RP1   M-2                  A
               2007-RP1   M-3                  BBB+
               2007-RP1   M-4                  BBB

                     RAAC Series 2007-RP2 Trust
            Mortgage Asset-backed Pass-through Certificates

                 Series     Class               Rating
                 ------     -----               ------
                 2007-RP2   A                   AAA
                 2007-RP2   M-1                 AA
                 2007-RP2   M-2                 A
                 2007-RP2   M-3                 BBB+
                 2007-RP2   M-4                 BBB


SEA CONTAINERS: Court Approves SC Iberia and YMCL Guarantees
------------------------------------------------------------
The Honorable Kevin J. Carey of the U.S. Bankruptcy Court for the
District of Delaware authorized Sea Containers Ltd. and its
debtor-affiliates to enter into two Deeds of Guarantee in favor
its two wholly owned non-debtor subsidiaries, Sea Containers
Iberia SA and Yorkshire Marine Containers Ltd.

As reported in the Troubled Company Reporter on Jan. 22, 2008, the
Debtors sought permission from the Court to enter into the SC
Iberia and YMCL Guarantees, in connection with a potential
settlement by SCL and certain of its subsidiaries, of intercompany
claims asserted by GE SeaCo SRL and its subsidiaries.

Sanjay Bhatnagar, Esq., at Young Conaway Stargatt & Taylor, LLP,
in Wilmington, Delaware, related that many of the GE SeaCo
Entities' claims against the Debtors are currently under a
pending arbitration proceeding.  However, the Parties excluded
certain claims from arbitration in an attempt to consensually
resolve those claims.  The excluded claims consist of more than
$90,000,000 in intercompany claims asserted by GE SeaCo out of
ordinary course business transactions between the Parties.

After extensive negotiations among the Parties, the Official
Committee of Unsecured Creditors of Sea Containers Ltd. and the
Official Committee of Unsecured Creditors of Sea Containers
Services Ltd., reached a stipulation for the resolution of the
Intercompany Claims, the terms of which are yet to be finalized.

As a condition to their entry into the Stipulation, the directors
of SC Iberia and YMCL have required that SCL provide certain
guarantees in exchange for releasing their receivable balances
against the GE SeaCo Entities, Mr. Bhatnagar disclosed.
Accordingly, SCL made arrangements to provide postpetition
guarantees to SC Iberia and YMCL for the value of their
receivables due from the GE SeaCo Entities, amounting to $585,861
for YMCL and $189,858 for SC Iberia.

Each Guarantee is payable solely to the extent necessary to fund
recoveries of sums owed to creditors of SC Iberia and YMCL, other
than the SCL Entities, and only upon the occurrence of the
earlier of:

   -- certain insolvency events with respect to SC Iberia and
      YMCL; or

   -- the Debtors' confirmation of a plan of reorganization that
      includes a final settlement of any of the Intercompany
      Claims.

The Stipulation provides that as of June 30, 2007, the GE SeaCo
Entities owe approximately $4,300,000 to SCL and its subsidiaries
on account of all Intercompany Claims.  The amount would be
adjusted based on certain payments made by and between the GE
SeaCo Entities and the SCL Parties subsequent to June 30.

Pursuant to the Stipulation, after accounting for the post-June
30 payments, the GE SeaCo Entities agree to set aside at least
$600,000 in a segregated account as the net balance owing to the
SCL Parties.  The funds would remain in the segregated account
for SCL's benefit, pending resolution of all the GE SeaCo
Entities' claims, including those subject to arbitration.

Mr. Bhatnagar contended that the Stipulation, if finalized, would
maximize value for the bankruptcy estates, and that SCL's grant
of the Guarantees is necessary to induce SC Iberia and YMCL to
enter into the Stipulation.

The Guarantees serve the Debtors' interests in helping to ensure
that third-party claims against SC Iberia and YMCL are funded,
thus, avoiding the need for the third-party claimants to resort
to collection efforts, which may reach back to the bankruptcy
estates, Mr. Bhatnagar explained.

Judge Carey said that the Guarantees and the authorization are
only effective upon execution and approval of the stipulation.  He
noted that the maximum guaranteed amount will be reduced by the
amount of any offset by GE SeaCo on accounts owed by SC Iberia or
YMCL.

Judge Carey also ruled that the Debtors' and the Committees'
rights and defenses are reserved with respect to:

   -- the services agreement between SCL and SCSL;

   -- the final determination of the existence, amount and
      treatment of any related or underlying Intercompany Claims;
      and

   -- the appropriate allocation of any costs or obligations.

Judge Carey further noted that the order is without prejudice to
the rights of the Committees to oppose the approval of any
ultimate resolution of the intercompany claims.  He said that the
Committees may seek reconsideration of the Order on any grounds,
and at any time prior to the approval of the stipulation
resolving the Intercompany Claims.

                       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 disclosed total assets of
$62,400,718 and total liabilities of $1,545,384,083.

The Court gave the Debtors until Feb. 20, 2008 to file a plan of
reorganization.  (Sea Containers Bankruptcy News, Issue No. 35;
Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000).


SEA CONTAINERS: Reaches Pact with Pension Schemes Trustees
----------------------------------------------------------
Sea Containers Ltd. and its debtor-affiliates have reached an
agreement in principle with the trustees of the two main Sea
Containers Pension Schemes to agree on the amount of their claims
against the Sea Containers estate.

This is a critical and positive milestone in its efforts to emerge
from Chapter 11, the Debtors said.

Since the Chapter 11 negotiations first began in October 2006, the
board of directors and the officers of Sea Containers have been
focused on achieving a plan of reorganization that provides full
and fair settlement for all creditors.  The major creditors
involved are the 1983 and the 1990 pension funds which have almost
1500 members between them and the holders -- thought to be a
number of US hedge funds -- of the four outstanding bond
issues.

The agreement with the Trustees for the pension funds, which are
estimated to be in deficit by approximately US$200 million under
the s75 'buy out' basis prescribed by UK law, will allow the
Company and the trustees to avoid costly and protracted litigation
in multiple and potentially competing jurisdictions. The agreement
also creates an additional reserve of US$69 million for certain
potential pension scheme liabilities in respect of age-related
equalization changes.

In connection with this important agreement, Sea Containers has
withdrawn its appeal against the Financial Support Direction.  The  
FSD, which sought to oblige Sea Containers Limited -- the ultimate
parent company -- to put in place additional financial support for
the pension funds, was handed down by the Determinations Panel of
the UK Pensions Regulator on 3 July 2007. Sea Containers considers
that the settlement will adequately address any FSD and that the
current legal proceedings would be of no further benefit.  Sea
Containers is therefore pleased to have reached a timely and
consensual settlement with the Trustees.

Sea Containers, alongside the Trustees, will be seeking approval
from the Regulator for the proposed settlement.  Both sides are
confident an approval will be granted in the near future.

The proposed settlement is also subject to the Delaware Bankruptcy
Court approval and may be objected to by other creditors of the
estate.

                        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 disclosed
total assets of $62,400,718 and total liabilities of
$1,545,384,083.

The Court gave the Debtors until Feb. 20, 2008 to file a plan of
reorganization.


SECURITY CAPITAL: Moody's Cuts Insurance Strength Rating to 'A3'
----------------------------------------------------------------
Moody's Investors Service has downgraded to A3, from Aaa, the
insurance financial strength ratings of the operating subsidiaries
of Security Capital Assurance Ltd, including XL Capital Assurance
Inc., XL Capital Assurance Limited and XL Financial Assurance Ltd.
Moody's has also downgraded the debt ratings of the holding
company, Security Capital Assurance Ltd (senior debt to (P)Baa3
from (P)Aa3), and a related financing trust.  These rating actions
reflect Moody's assessment of SCA's weakened capitalization and
business profile resulting, in part, from its exposures to the US
residential mortgage market.  The rating outlook is negative.

The SCA units had already lost their key AAA grade at Fitch
Ratings, The Wall Street Journal says.  Standard & Poor's has
warned it may cut the AAA ratings of SCA, the Journal relates.

The Journal notes bond insurers play a key role in the financial
system, guaranteeing some $2.4 trillion in debt, the bulk of it
issued by municipalities that would otherwise have to pay higher
rates.  According to the Journal, the bond insurers, however,
strayed from that core business into writing protection on
collateralized debt obligations and other securities that have
since plunged in value.  Much of that protection was bought by
banks seeking to hedge exposure that could produce further losses
in the event of fresh downgrades, the Journal says.

             Impact on Ratings of Insured Obligations

As a result of this downgrade, the Moody's-rated securities that
are guaranteed or "wrapped" by XLCA, XLCA-UK and XLFA are also
downgraded to A3, except those securities with higher public
underlying ratings.

                    Overview of Rating Approach

As outlined in Moody's Rating Methodology for Financial
Guarantors, Moody's has evaluated SCA along five key rating
factors:

     1) franchise value and strategy,
     2) insurance portfolio characteristics,
     3) capital adequacy,
     4) profitability, and
     5) financial flexibility.

Of these factors, capital adequacy is given particular emphasis.   
To estimate capital adequacy, Moody's has applied its traditional
portfolio risk model for determining stress losses on the non-
mortgage related portion of SCA's insured portfolio, and
alternative stress tests for the mortgage and mortgage-related CDO
exposure.  For mortgage-related exposures, stress losses were
estimated using assumptions consistent with a scenario where 2006
subprime first-lien mortgages realize an average of 21% cumulative
pool losses, with other vintages and products stressed
accordingly.  Stress-level losses for RMBS transactions were
assessed on a transaction-by-transaction basis, while loss
estimates for ABS CDOs were derived using a stochastic simulation
model which applied stress to specific underlying collateral
tranches within the CDOs.  Estimated tranche-level losses were
computed based on the structure of those tranches (e.g.,
attachment and detachment points) and estimates of their
performance relative to the average.

Losses estimated under the approach described above were present-
valued to reflect estimates of the payout pattern that would
emerge, based on the collateral type.  For ABS CDOs, consideration
was given to specific contractual features within associated CDS
contracts.  These factors resulted in aggregate present value
discounts to principal loss estimates of approximately 11% for
RMBS and 34% for ABS CDOs.  Non-mortgage risks are discounted
within the portfolio model based on estimates of payout patterns
as well.

In view of the expected correlation between the prospective
experience of SCA and its reinsurers, and given the recent
downgrade of affiliate XL Insurance Ltd (from Aa3 to A1) and
reviews for possible downgrade of RAM Reinsurance Company Ltd.
(Aa3) and BluePoint Re Limited (Aa3), Moody's has also, for
purposes of estimating capital adequacy, reduced the estimated
credit given for reinsurance in the stress case, to 50%, on
average across the portfolio.

In comparing estimated stress losses to claims paying resources
and associated rating levels, Moody's combines an estimated loss
distribution for mortgage risks with one for non-mortgage risks,
assuming a correlation between the two that ranges from 90% (for
Aaa) down to 30% (for Baa3).  Claims paying resources are then
compared to the indicated capital need, at the target benchmark
(1.3x required capital).

               Key Rating Factors: Capital Adequacy

Based on the risks in SCA's portfolio, as assessed by Moody's
according to the approach outlined above, capitalization required
to cover losses at the Aaa target level would exceed $6 billion.   
This compares to Moody's estimate of SCA's claims paying resources
of $3.6 billion, which Moody's considers to be more consistent
with capitalization at the single A rating level.  Moody's further
noted that it estimates SCA's insured portfolio will incur
lifetime expected losses of approximately $1.2 billion in present
value terms.

SCA is currently pursuing several capital management initiatives
that, according to Moody's, if successfully executed could reduce
but would not likely eliminate the company's capital shortfall at
the Aaa rating level.  Moody's further commented that
capitalization, and the prospect for improvements in
capitalization, were considered in the context of the rating
agency's opinion about the guarantor's ongoing business and
financial profile, as summarized further below.

         Key Rating Factors: Business and Financial Profile

In Moody's opinion, SCA's significant exposure to mortgage-related
risk has had consequences for its business and financial profile
beyond the associated impact on capitalization, and affects
Moody's opinion about SCA's other key rating factors.  Moody's
believes that SCA is more weakly positioned than many of its peers
with respect to business franchise, prospective profitability and
financial flexibility.

With respect to underwriting and risk management, Moody's believes
that SCA's relatively significant exposure to the mortgage sector
is indicative of a risk posture somewhat greater than the peer
group overall.  The company's participation in super-senior
mezzanine tranches of ABS CDOs, in particular, contributed to this
view.  Going forward, Moody's believes SCA's strategic direction
could change meaningfully, with implications for the business
profile that are currently uncertain.

SCA's profitability is likely to remain depressed in the near to
intermediate term as losses on mortgage-related exposures are
incurred.  While Moody's expects the company will continue to earn
premiums on its in-force book for many years, as well as
investment income on its investment portfolio, Moody's believes
premium volume on new business production will likely diminish
significantly and operating expenses will become a greater drag on
earnings over time.

In terms of financial flexibility, SCA, like other financial
guarantors, benefits from its ability to pay claims over an
extended period of time, typically scheduled interest and
principal at maturity.  Moody's has also considered in its rating
review the potential for calls on liquidity at SCA in the context
of available resources, including the investment profile of the
operating insurance entities.  SCA's financial leverage profile is
likely to increase as incurred losses erode shareholders' equity.   
Additional debt in the capital structure would further increase
leverage and place additional demands on the operating companies
to service fixed charges.  Here, Moody's believes that holding
company liquidity remains strong due to the firm's ability to
upstream dividends from Bermuda-domiciled XLFA, which has
substantial dividend capacity under Bermuda insurance regulations.   
In Moody's opinion, SCA's access to capital is weak currently,
given the company's depressed equity valuation and wide CDS
spreads.

        Consideration of Ongoing Capital Management Efforts

Moody's is aware of a number of capital initiatives currently
being pursued by SCA, including seeking to generate capital relief
through reinsurance arrangements and restructuring certain
mortgage-related exposures, although the company has announced
that it will not raise new capital in the current market
environment.  Moody's stated that certain of these pending
initiatives, if completed, would reduce the level of uncertainty
surrounding portfolio loss estimates.  However, Moody's believes
that SCA's current business position and moderate franchise
strength are consistent with operating company insurance financial
strength ratings in the single-A range.

                    Rating Outlook: Negative

The negative outlook on SCA's ratings reflects continued
uncertainty regarding both the ultimate performance of its
mortgage and mortgage-related CDO exposures, as well as the future
strategic direction of the firm and the potential for change in
the competitive dynamics of the financial guaranty market.  
Moody's will continue to evaluate developments at the company and
communicate any changes in its opinion as appropriate.

                    List of Rating Actions

These ratings have been downgraded:

  -- XL Capital Assurance Inc.: insurance financial strength to A3
     from Aaa;

  -- XL Capital Assurance (U.K.) Limited: insurance financial
     strength to A3 from Aaa;

  -- XL Financial Assurance Ltd: insurance financial strength to
     A3 from Aaa;

  -- Security Capital Assurance Ltd: provisional rating on senior
     debt to (P)Baa3 from (P)Aa3, provisional rating on
     subordinated debt to (P)Ba1 from (P)A1 and preference shares
     to Ba2 from A2; and

  -- Twin Reefs Pass-Through Trust: contingent capital securities
     to Baa2 from Aa2.

                About Security Capital Assurance

Security Capital Assurance Ltd is a Bermuda-domiciled holding
company whose primary operating subsidiaries, XL Capital Assurance
Inc. and XL Financial Assurance Ltd, provide credit enhancement
and protection products to the public finance and structured
finance markets throughout the United States and internationally.   
For the nine months ended Sept. 30, 2007, SCA reported a net loss
available to common shareholders of $27 million.  As of Sept. 30,
2007, SCA had shareholders' equity of approximately $1.6 billion.


SEG DEVELOPMENT: Case Summary & Four Largest Unsecured Creditors
----------------------------------------------------------------
Debtor: S.E.G. Development Group II, L.L.C.
        9000 Crow Canyon Road, Suite S-144
        Danville, CA 94506

Bankruptcy Case No.: 08-40543

Chapter 11 Petition Date: February 6, 2008

Court: Northern District of California (Oakland)

Debtor's Counsel: Peter C. Califano, Esq.
                  Cooper, White and Cooper
                  201 California Street, 17th Floor
                  San Francisco, CA 94111
                  Tel: (415) 433-1900

Estimated Assets: $1 Million to $10 Million

Estimated Debts:  $1 Million to $10 Million

Debtor's Four Largest Unsecured Creditors:

   Entity                      Nature of Claim       Claim Amount
   ------                      ---------------       ------------
River City Bank                loan                  $4,600,000
Attention:
Stephen H. Johanson, Esq.
Johanson & Associates
2485 Natomas Park Drive,
Suite 340
Sacramento, CA 95833

Wood Rogers, Inc.              engineering           $765
3301 Central Street Building   services
100-B
Sacramento, CA 95616

Foothill Associates            environmental         $5,816
655 Menlo Drive, Suite B
Rocklin, CA 95765

Ram and Kamaljit Kunwar        breach of contract    unknown


SEMINOLE TRIBE: Moody's Affirms 'Ba1' Rating on $459 Mil. Bonds
---------------------------------------------------------------
Moody's Investors Service assigned a Ba1 rating to the Seminole
Tribe of Florida's proposed $105 million Series 2008A Taxable
Special Obligation Bonds due 2020.  The Ba1 ratings on the Tribe's
existing $459 million Special Obligation Bonds were affirmed along
with the Baa3 ratings on the Tribe's gaming division's
$1.235 billion term loan, $450 million Series A notes, and
$280 million Series 2005B notes.  The rating outlook is stable.

The Baa3 rating on the gaming division's bonds considers the
Tribe's continued domination of the Florida gaming market and a
gaming division financial profile that has exhibited low
investment grade characteristics since the gaming division bonds
were initially rated in Sep. 2005.  Debt/EBITDA, including the
gaming division and Special Obligation Bonds, is expected to
continue to remain below 2.5 times.  Credit concerns include the
Tribes' sole gaming concentration in one state, increased
competition in Florida, and continued expectation that most or all
of surplus cash generated each year will be distributed to the
Tribe.

The Ba1 rating on the Special Obligation Bonds considers that
these bonds will be structurally subordinate to all debt incurred
pursuant to the gaming division indenture.  The one-notch
difference between the gaming division debt and Special Obligation
Bonds reflects the Tribe's strong ability and incentive to make
debt service payments on the bonds.  This is because the payment
of all debt service requirements on the Tribe's bonds is a
prerequisite for the Tribe's having access to distributions from
the gaming division for governmental and per capita uses.  The
Baa3 rating on the Tribe's gaming division term loans and existing
2005 series A & B taxable gaming division bonds take into account
that the 2005 gaming indenture prohibits the issuance of debt
senior to these obligations.

The stable rating outlook anticipates the Tribe's gaming division
leverage and coverage metrics and financial policy will remain
consistent with an investment grade credit profile over the long-
term.  The stable outlook acknowledges the increased amount of
competition in South Florida but expects that the state market
will easily absorb it the increased supply and that Tribe's gaming
revenue will continue to exhibit growth, even though at a slower
growth rate.

The new Special Obligation Bonds will be issued under the same
indenture governing the existing Ba1-rated, $459 million 2007
Special Obligation Bonds.  Proceeds from the new Special
Obligation Bonds will be used for general governmental and
business purposes, including, without limitation, working capital
and capital expenditures for Class III gaming operations.  The
Tribe recently signed, and the federal government recently
approved, a compact with the State of Florida giving it the right
to install and operate Class III slots and limited types of table
games.  Approximately 1,100 Class III slots have already been
installed at the Hollywood Hard Rock facility.

The Seminole Tribe of Florida is a federally recognized Indian
tribe with enrolled membership of about 3,300 members, most of who
reside on Tribal lands in Florida.  The Tribe owns and operates
seven gaming and resort facilities located on Tribal lands
throughout southern and central Florida.


SOLUTIA INC: Compels Banking Group to Honor $2 Bil. Exit Financing
------------------------------------------------------------------
Solutia Inc. and its debtor-affiliates filed a complaint before
the U.S. Bankruptcy Court for the Southern District of New York
against the three banks that had executed a firm commitment to
fund a $2 billion exit financing package for Solutia, but to date
have refused to meet this commitment.

The banks are Citigroup Global Markets Inc., Goldman Sachs Credit
Partners L.P., and Deutsche Bank Securities Inc.  Solutia is
seeking a court order requiring the banks to meet their commitment
and fund Solutia's exit from bankruptcy.

The complaint also asserts that the banks should be stopped from
invoking the clause they claim relieves them of their obligation
due to their improper conduct and misrepresentations to the
company, and further claims that the banks fraudulently induced
Solutia to enter into the initial engagement by promising that
the financing was firmly committed.  Solutia and the banks have
agreed that Solutia's claim to require immediate funding of the
$2 billion package should be heard by the Court on an expedited
basis, with the trial to conclude by the end of February -- prior
to the expiration of the banks' commitment.

"This is not a 'best efforts' agreement," said Jeffry N. Quinn,
chairman, president and CEO of Solutia Inc.  "Solutia agreed to
pay the banks an enhanced fee in exchange for their firm
commitment to fund the full $2 billion exit financing facility --
regardless of the results of the syndication process.  We are
extremely disappointed by their refusal to meet this commitment
and have no choice but to pursue all of our legal remedies."

On Oct. 25, 2007 , the banks executed a firm commitment to fund a
$2 billion exit financing package for Solutia.  These substantial,
custom credit facilities and arrangements were specifically
tailored to facilitate Solutia's prompt emergence from Chapter 11.  
On November 20, 2007 , the bankruptcy court approved the exit
financing package.  Nine days later, in reliance on the banks'
firm lending commitment, the court found the plan of
reorganization to be feasible and confirmed the plan.  However, in
late January -- shortly before the anticipated closing of the exit
facility and Solutia's long-awaited emergence from Chapter 11 --
the banks notified Solutia that they were refusing to provide the
funding, citing a so-called "market MAC" provision in their
commitment letter and asserting that there has been a change in
the markets since entering into the commitment.

"It is a well-documented fact that the ongoing conditions in the
credit markets began in the summer of 2007," said Quinn.  "Well
before the banks committed to Solutia's exit financing, they
stated in public filings and through professional advice to
Solutia that the credit markets were in disarray, and that the
credit crisis would continue for months to come.  Despite their
concerns and negative outlook, the banks entered into a firm
commitment to provide Solutia with this exit financing.  The
willingness of these banks to offer committed financing that was
not subject to a successful syndication was a major factor in
deciding to award them this business."

Quinn added, "Solutia is ready to emerge from Chapter 11.  We have
successfully repositioned our company, we have confirmed a plan of
reorganization that brings significant value to our constituents,
and our businesses are performing well.  We now look to the banks
to meet their commitment."

                     The Adversary Proceeding

Solutia filed Adversary Proceeding No. 08-01057 against the
Lenders, seeking:

     * a final judgment ordering the Commitment Parties to close
       on the Exit Financing in accordance with the terms of the
       Commitment Letter;

     * in the alternative, a judgment directing the Commitment
       Parties to pay compensatory and punitive damages in an
       amount to be determined at trial, but in no event less
       than $2,250,000; and

     * payment and compensation of Solutia costs and attorney's
       fees.

Richard I. Werder, Jr., Esq., at Quinn Emanuel Urquhart Oliver &
Hedges, LLP, in New York, as the Debtors' proposed special
counsel, reiterates that Solutia specifically bargained for a
"firm commitment" from the Commitment Parties whereby the three
lenders expressly agreed to fund the Exit Financing "even if they
could not syndicate the loans."

"The credit markets were in such a state of disarray since the
summer, as everybody knows, and that's specifically why Solutia
required a firm commitment," Susheel Kirpalani, a member of Quinn
Emanuel, said in an interview, according to The Associated Press.

"If for some reason they would seek to wiggle out of their
commitment, the damages would be very, very large," Mr. Kirpalani
said.  "We never expected to be litigating with our exit
lenders," he added.

According to the Complaint, the Lenders' reliance on the Market
MAC provision in the Commitment Letter, which they downplayed
from the outset, is "utterly without basis in the midst of a
tumultuous market that was not only foreseeable, but had long
existed when they signed on to the firm commitment."

The Lenders should be held accountable for their fraudulent
conduct -- which impacts Solutia, its employees, its 20,000
retirees, its creditors and other parties-in-interest -- by
paying compensatory and punitive damages to Solutia, Mr. Werder
asserts.

Mr. Werder relates that the Commitment Parties attended Court
hearings to approve both the Commitment Letter and the Plan, but
never once suggested that the financing might not close.  He
relates that shortly after Plan confirmation, the banks told
Solutia that syndicating in January would be better for the
company than syndicating the financing earlier -- that it could
provide "only upside."  However, the Commitment Parties have
changed their approach, acting as if they never said or did those
things, he tells the Court.

As previously disclosed in its Feb. 1, 2008 filing with the U.S.
Securities and Exchange Commission, Solutia gave the Lenders a
formal demand on January 29 to fund the new loan on February 6.
The next day, the Lenders gave notice they wouldn't, Solutia said
in the SEC filing.

The Lenders' refusal to proceed to closing is a direct and
willful breach of their obligations under the Commitment Letter,
Mr. Werder maintains.

Without the Exit Financing, Solutia's confirmed Plan and its
global settlement with Monsanto Company may not be consummated,
and all of the key stakeholders in Solutia's bankruptcy case,
including noteholders, trade creditors, shareholders, and 20,000
retirees will have contemplated distributions delayed further and
threatened altogether, Mr. Werder states.

Mr. Werder adds that the commitment made by certain creditors to
backstop Solutia's $250,000,000 new equity rights offering
expires on February 28, 2008, if Solutia has not emerged from
bankruptcy by that deadline.

"Solutia not only stands to lose this valuable commitment, but
would be forced to return to creditors funds deposited pursuant
to the equity rights offering," Mr. Werder tells the Court.

Moreover, Solutia's DIP Financing matures on March 31, 2008, and
must be repaid in full by that time, Mr. Werder notes.

"Simply put, without the exit financing, the Debtors potentially
will be left to start from scratch on a bankruptcy plan that took
four years and myriad integrated compromises to achieve," Mr.
Werder avers.

                         Citigroup Reacts

Citigroup spokeswoman Danielle Romero-Apsilos said in a statement
that the bank thinks the lawsuit is "baseless," AP relates.

"We believe the suit is without merit and have complied with all
of our contractual obligations," Ms. Romero-Apsilos said in an e-
mail.

Officials at Goldman Sachs and Deutsche Bank declined to comment,
according to eFinancial News Ltd.

Moreover, several bankruptcy lawyers said they believe the
lawsuit marks the first time a company on its way out of
bankruptcy has sued to challenge a "market MAC" clause, AP says.

According to AP, at the time Solutia was negotiating the deal in
September 2007, a Citi director told Solutia's chief financial
officer that the market MAC clause was created in 1998 during a
time of turmoil in world financial markets, according to the
suit.  The clause went unused for years once the turmoil
subsided.  However, after the credit crunch last summer, Citi
revived it and inserted it into the Solutia loan contract.

Citi told Solutia, however, that the clause had never been
invoked.  As a result, the company, said, the bank left Solutia
with "the impression that the provision was nothing more than
Citi's recycled boilerplate," AP further relates.

Bloomberg News says that the Lenders evidently continue working
on a loan syndication with respect to the implementation of
Solutia's Plan of Reorganization, which was confirmed by the
Court on November 29, 2007.

KDP Investment Advisors Inc. reported that the $400,000,000 in
senior unsecured notes pursuant to the Plan are being offered
with a 12% interest rate and a 7% discount to yield 14%,
Bloomberg relates.

KDP also said that the $1,200,000,000 senior secured term loan is
being shopped with a 9% discount and a 3.5% interest rate above
the London interbank offered rate, according to Bloomberg.

In its operating report for the month ended Dec. 31, 2007, Solutia
disclosed a $21,000,000 operating loss and a $144,000,000 net
loss.  For calendar year 2007, the company's net loss was
$209,000,000 while the operating profit totaled $189,000,000.

                        About Solutia Inc.

Based in St. Louis, Missouri, Solutia Inc. (OTCBB:SOLUQ) --
http://www.solutia.com/-- and its subsidiaries, engage in the
manufacture and sale of chemical-based materials, which are used
in consumer and industrial applications worldwide.

The company and 15 debtor-affiliates filed for chapter 11
protection on Dec. 17, 2003 (Bankr. S.D.N.Y. Case No. 03-17949).
When the Debtors filed for protection from their creditors, they
listed $2,854,000,000 in assets and $3,223,000,000 in debts.

Solutia is represented by Richard M. Cieri, Esq., Jonathan S.
Henes, Esq., and Michael A. Cohen, Esq., at Kirkland & Ellis LLP,
in New York, as lead bankruptcy counsel, and David A. Warfield,
Esq., and Laura Toledo, Esq., at Blackwell Sanders LLP, in St.
Louis Missouri, as special counsel.  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 Official Committee of Retirees of Solutia, Inc., et
al., is represented by Daniel D. Doyle, Esq., Nicholas A. Franke,
Esq., and David M. Brown, Esq., at Spencer Fane Britt & Browne,
LLP, in St. Louis, Missouri, and Frank M. Young, Esq., Thomas E.
Reynolds, Esq., R. Scott Williams, Esq., at Haskell Slaughter
Young & Rediker, LLC, in Birmingham, Alabama.

On Feb. 14, 2006, the Debtors filed their Reorganization Plan &
Disclosure Statement.  On May 15, 2007, they filed an Amended
Reorganization Plan and on July 9, 2007, filed a 2nd Amended
Reorganization Plan.  The Bankruptcy Court approved the Debtors'
amended Disclosure Statement on Oct. 19, 2007.  On Oct. 22, 2007,
the Debtor re-filed a Consensual Plan & Disclosure Statement and
on Nov. 29, 2007, the Court confirmed the Debtors' Consensual
Plan.  (Solutia Bankruptcy News, Issue No. 117; Bankruptcy
Creditors' Service, Inc., http://bankrupt.com/newsstand/or   
215/945-7000).

                          *     *     *

As reported in the Troubled Company Reporter on Dec. 10, 2007,
Standard & Poor's Ratings Services assigned its 'B+' loan rating
to Solutia Inc.'s (D/--/--) proposed $1.2 billion senior secured
term loan and a '3' recovery rating, indicating the likelihood of
a meaningful (50%-70%) recovery of principal in the event of a
payment default.  The ratings are based on preliminary terms and
conditions.  S&P also assigned its 'B-' rating to the company's
proposed $400 million unsecured notes.

Standard & Poor's expects to assign its 'B+' corporate credit
rating to Solutia if the company and its subsidiaries emerge from
Chapter 11 bankruptcy proceedings in early 2008 as planned.  S&P
expect the outlook to be stable.


SRH INVESTORS: Asset Sale Slated for March 5
--------------------------------------------
The assets of S.R.H. Investors, Inc. and Support Resources
Holdings, Inc. will be auctioned at 10:00 A.M. on March 5, 2008
at:

         Proskauer Rose, L.L.P.
         1585 Broadway, 26th Floor
         New York, NY 10036

The secured lender of the Debtors is S.R.H. Capital, Inc.

Interested participants must deposit a non-refundable amount
equivalent to 20% of the starting price by cash or certified check
at the auction, with the balance due within five days thereafter.

Further inquiries must directed to:

         S.R.H. Capital, Inc.
         Attention: Paul Abrahamsen
         1209 Orange Street
         Wilmington, DE 19801


STANDARD BEEF: Case Summary & 20 Largest Unsecured Creditors
------------------------------------------------------------
Debtor: The Standard Beef Co.
        216 Food Terminal Plaza
        New Haven, CT 06532

Bankruptcy Case No.: 08-30377

Type of Business: The Debtor sells fresh meat, cheese, poultry
                  products, unpackaged frozen fish in wholesale.  
                  It also sells bird treats or snacks, poultry
                  food, live food for birds, bird seed, fresh
                  chicken, fresh meat or poultry and frozen meat
                  or poultry.

Chapter 11 Petition Date: February 6, 2008

Court: District of Connecticut (New Haven)

Judge: Lorraine Murphy Weil

Debtor's Counsel: Carl T. Gulliver, Esq.
                  Coan, Lewendon, Gulliver & Miltenberger, L.L.
                  495 Orange Street
                  New Haven, CT 06511
                  Tel: (203) 624-4756
                  Fax: (203) 865-3673

Estimated Assets: $1 Million to $10 Million

Estimated Debts:  $1 Million to $10 Million

Debtor's 20 Largest Unsecured Creditors:

   Entity                      Claim Amount
   ------                      ------------
Vande Rose Foods, L.L.C.       $340,036
302 North 10th Street
Oskaloosa, IA 52577-2942

Weinstein Wholesale Meat       $36,824
7501 Industrial Drive
Forest Park, IL 60130

Continental Meat Products      $36,162
P.O. Box 217
Freeport, FL 32439-0217

Compart Family Farms           $31,232

Quaker Valley                  $29,049

Robinson & Harrison            $27,072

Bozzuto's, Inc.                $12,890

Chiapetti                      $11,742

Strauss, Veal & Lamb           $10,384

Sommer Maid Creamery           $9,673

Arnold's Meats                 $7,421

Nebraska Meat                  $5,744

Lynch B.B.Q. Co.               $5,411

House of Raeford               $5,307

Giannone Poultry, Inc.         $5,138

Tower Isles                    $4,265

Laubsher Cheese                $3,362

Tropical Cheese Industry       $3,323

Flamingo Smoked Meats          $3,120

Pork King Sausage, Inc.        $1,837


TAUBMAN CENTERS: Fitch Affirms and Withdraws Low-B Ratings
----------------------------------------------------------
Fitch Ratings has affirmed and simultaneously withdrawn the
ratings of Taubman Centers, Inc.:

  -- Issuer Default Rating at 'BB';
  -- Preferred Securities at 'BB-'.

Fitch also affirmed and simultaneously withdrawn the 'BB' IDR on
The Taubman Realty Group Limited Partnership, the operating
partnership of Taubman Centers, Inc.

The Rating Outlook on all the ratings is Stable.

Fitch will no longer provide analytical coverage of this issuer.


TESORO CORP: Posts $40 Million Net Loss in 2007 Fourth Quarter
--------------------------------------------------------------
Tesoro Corporation reported a net loss of $40.0 million for the
fourth quarter ended Dec. 31, 2007, compared to net income of
$158.0 million for the fourth quarter of 2006.

In comparison to last year, weak crack spreads, higher operating
expenses and poor marketing margins negatively impacted earnings
at the company's West Coast refineries.  The Hawaii refinery
posted an $86.0 million pre-tax operating loss for the quarter
compared to a $19.0 million pre-tax operating profit for the same
period a year ago.  In Hawaii, finished product prices did not
reflect the rapidly rising cost and premiums paid for crude which
accounted for most of the quarter to quarter difference.
Additionally, an unplanned outage on the refinery's reformer unit
during the period negatively impacted results by an estimated
$30.0 million, including $10.0 million of higher repairs and
maintenance expenses.

In total, quarterly refining operating earnings were $9.0 million
compared to fourth quarter earnings of $284.0 million a year ago.
"The company has made significant improvements in crude purchasing
and product sales at all of our refineries with the exception of
Hawaii but lower benchmark margins in the Western United States
overwhelmed these improvements and account for most of the quarter
to quarter change.  In Hawaii, the disappointing financial results
are due to a combination of factors and the company has developed
an action plan to address the myriad issues there.  Improved
reliability, changes to our crude slate to reduce the amount of
Asian light sweet crude oil used which has been selling at lofty
premiums and a greater focus on achieving better value for
commercial products marketed in Hawaii are among the key
initiatives we have undertaken," said Bruce Smith, chairman,
president and chief executive officer of Tesoro.

For the full year of 2007, the company reported net earnings of
$566.0 million, versus earnings for the full year of 2006 of
$801.0 million.

"In 2007, Tesoro had many notable successes and fulfilled several
goals.  We acquired and fully integrated the Los Angeles refinery
and California retail assets and subsequently reduced debt to
achieve a year-end debt-to-capitalization ratio of 35.0%.  The
addition of these assets permitted us to achieve $45.0 million in
synergies for the year, mainly through shared crude cargo
benefits, and we are confident that we will meet our total goal of
$100.0 million in the first twelve months of ownership.  In May we
doubled the dividend.  The Shell and USA Gasoline acquisitions
nearly doubled our retail network.  Finally, we managed the
largest capital program in company history while achieving record
safety performance.

"In 2008, we look forward to completing several income producing
projects, realizing additional synergies associated with the
addition of Los Angeles and improving profitability in Hawaii,"
said Smith.

                        About Tesoro Corp.

Headquartered in San Antonio, Texas, Tesoro Corporation (NYSE:
TSO) -- http://www.tsocorp.com/-- is an independent refiner and  
marketer of petroleum products.  Tesoro, through its subsidiaries,
operates seven refineries in the western United States with a
combined capacity of approximately 660,000 barrels per day.
Tesoro's retail-marketing system includes over 900 branded retail
stations, of which over 445 are company operated under the
Tesoro(R), Shell(R), Mirastar(R) and USA Gasoline(TM) brands.

                          *     *     *

As reported in the Troubled Company Reporter on Feb. 6, 2008,
Moody's Investors Service affirmed Tesoro Corporation's Ba1
Corporate Family rating, Ba1 Probability of Default Rating, and
Ba1 (LGD 4, 60%) senior unsecured note ratings.  Under Moody's
Loss Given Default methodology, the rating on TSO's senior secured
bank revolver is moved from Baa1 (LGD 1; 8%) to Baa2 (LGD2; 12%).   
The revolver rating change is due to a proportionately very large
increase in accounts payable that is likely to persist due to far
higher crude oil prices and the resulting far higher monthly crude
oil purchasing costs and investment in inventory.  Moody's also
moved the rating outlook to stable from developing.


TEXAS INDUSTRIES: Earns $29.3 Million in 2nd Quarter Ended Nov. 30
------------------------------------------------------------------
Texas Industries Inc. reported net income of $29.3 million for the
quarter ended Nov. 30, 2007.  For the same period ended
Nov. 30, 2006, net income equaled $28.7 million.  Last year's
quarter included $12.9 million in after-tax income as a result of
cash received from the settlement of the U.S. antidumping order on
Mexican cement.

"After a year of exceptionally wet weather, product shipments in
our Texas markets recovered nicely in the November quarter as
weather returned to more normal patterns," stated Mel Brekhus,
chief executive officer.  "The improved weather also provided the
opportunity to show the progress made in improving operating
margins for TXI's aggregate and concrete operations."

In the November quarter, shipments of cement, aggregates and
ready-mix concrete increased 6.0%, 8.0% and 7.0%, respectively
compared to the prior year's quarter.  Average realized prices for
cement declined about 2.0% due to a shift in the mix of cement
products and markets.  Aggregate and ready-mix concrete realized
prices improved 8.0% and 7.0%.

The November quarter benefited from the absence of major scheduled
maintenance at the North Texas cement plant while scheduled
maintenance at the plant last year negatively impacted pretax
earnings by approximately $10.0 million.  In California,
production quantities and efficiencies associated with old
equipment lagged behind those of last year's quarter, reducing
pretax earnings by approximately $7.0 million.

Selling, general and administrative expenses declined $9.1 million
compared to the prior year's quarter.  Stock-based compensation
declined $5.3 million; the remaining decrease in selling, general
and administrative expenses was primarily due to lower incentive
compensation expense.  Interest expense declined from $4.6 million
in last year's quarter to zero as all interest expense was
capitalized in conjunction with cement plant modernization and
expansion projects.  Other income declined $21.4 million compared
to a year ago.  Last year's quarter included $19.8 million of
pretax income from the settlement of the long-standing U.S.
antidumping order on Mexican cement.  The remaining decline in
other income was due to lower real estate and interest income.

Texas cement consumption has remained approximately even with that
of a year ago, despite a decline in residential construction.  The
announced cement price increase for Texas of $10.0 per ton should
be effective by April 2008.  In California, reductions in cement
demand have been offset by declining imports.  Cement prices in
California have remained fairly stable.

"The commissioning of TXI's new cement capacity in California is
proceeding slower than expected and we anticipate that the plant
will be fully operational in June of 2008 instead of May as
originally planned," continued Brekhus.  "The California project
will add one million tons of additional cement production and also
replace 1.3 million tons of older, less efficient production
equipment as well.  This project, the new kiln line at TXI's
Central Texas plant and the incremental addition of production at
our North Texas plant are expected to increase TXI's total annual
cement production from today's 5 million tons to almost 8 million
tons over the next three to four years."

                          Balance Sheet

At Nov. 30, 2007, the company's consolidated balance sheet showed
$1.37 billion in total assets, $589.7 million in total
liabilities, and $778.2 million in total stockholders' equity.

Full-text copies of the company's consolidated financial
statements for the quarter ended Nov. 30, 2007, are available for
free at http://researcharchives.com/t/s?27dc

                      About Texas Industries

Headquartered in Dallas, Texas Industries Inc. (NYSE: TXI) --
http://www.txi.com/-- is the largest producer of cement in Texas  
and a major cement producer in California.  TXI is also a major
supplier of construction aggregates, ready-mix concrete and
concrete products.
  
                          *     *     *

As reported in the Troubled Company Reporter on Feb. 6, 2008,
Moody's Investors Service revised Texas Industries Inc.'s outlook
to stable from positive and affirmed its Ba3 corporate family and
senior unsecured ratings.  


TRIBUNE CO: Appoints Ed Wilson as Pres. of Broadcasting Tribune
---------------------------------------------------------------
Tribune Company named broadcast veteran Ed Wilson as president of
Tribune Broadcasting, overseeing the company's 23 television
stations, Superstation WGN, Tribune Entertainment, and WGN Radio.
His appointment is effective February 11.

"There is tremendous upside at Tribune," Mr. Wilson said.  "The
company has great stations in large, diverse markets where there
is a constant demand for local news, information, and
entertainment -- and that plays to our strength.  The combined
resources of our TV stations, newspapers and web sites, give us a
distinct advantage over our competitors in providing the most
reliable, relevant, and interesting coverage of local news and
events whenever and wherever viewers want it."

"We'll also be the first big media company that doesn't take
itself too seriously.  With Sam Zell in charge, we have a lot of
rope to break the rules and do TV differently," he added.

Mr. Wilson has served as president of the Fox Television Network
since 2004, and prior to that served in executive positions with
NBC and CBS.

"Ed is the most energetic and creative executive in broadcasting,"
Randy Michaels, chief executive officer of Tribune Interactive and
Broadcasting, said.  "Most people are too full of themselves to
learn anything new before they ever get to the level of success Ed
has achieved.  As anyone who has ever been to the bar at a
broadcasting convention knows, Ed is a great guy, who just happens
to come out on top."

In 2000, Mr. Wilson helped found NBC Enterprises and served as its
first president.  In that capacity he supervised foreign and
domestic syndication, merchandising, licensing, music and
publishing, well as domestic and foreign co-productions and co-
ventures.  Prior to that, Wilson was president and CEO of CBS
Enterprises and Entertainment.

In 1994, Mr. Wilson founded his own syndication company, MaXaM
Entertainment, in partnership with A.H. Belo Corp.  The company
was sold to CBS in January 1996.

His career began in 1980 as a sales trainee for Viacom.  
Mr. Wilson was born and raised in Rison, Arkansas and he is a
graduate of the University of Arkansas.  He is married and has two
children.

                   About Tribune Company

Headquartered in Chicago, Tribune Company (NYSE: TRB) --
http://www.tribune.com/-- is a media company, operating        
businesses in publishing, interactive and broadcasting.  It
reaches more than 80% of U.S. households and is the only media
organization with newspapers, television stations and websites in
the nation's top three markets.  In publishing, Tribune's leading
daily newspapers include the Los Angeles Times, Chicago Tribune,
Newsday (Long Island, New York), The Sun (Baltimore), South
Florida Sun-Sentinel, Orlando Sentinel and Hartford Courant.  The
company's broadcasting group operates 23 television stations,
Superstation WGN on national cable, Chicago's WGN-AM and the
Chicago Cubs baseball team.

                          *     *     *

As reported in the Troubled Company Reporter in Dec. 26, 2007,
Fitch Ratings downgraded and removed from rating watch Tribune
Co.'s ratings.  The ratings have been removed from rating watch
negative.  The rating outlook is negative.  Fitch has downgraded
these ratings: (i) issuer default rating to 'B-' from 'B+'; (ii)
senior secured revolving credit facility to 'B/RR3' from 'BB/RR2';
(iii) senior unsecured notesto 'CCC/RR6' from 'B-/RR6'; (iv)
subordinated exchangeable debentures due 2029 to 'CCC-/RR6' from
'CCC+/RR6'.  Fitch has also assigned this rating: (i) senior
unsecured bridge loan 'CCC/RR6'.

Standard & Poor's Ratings Services lowered its ratings on Tribune
Co. by one notch; the corporate credit rating was lowered to 'B'
from 'B+'.  The rating outlook is negative.


UMMA RESOURCES: Must File Disclosure Statement & Chapter 11 Plan
----------------------------------------------------------------
The Honorable Richard S. Schmidt of the United States Bankruptcy
Court for the Southern District of Texas ordered UMMA Resources
LLC to propose and file a disclosure statement and Chapter 11 plan
of reorganization.

Judge Schmidt states that the Debtor must file within 120 days
from Jan 27, 2008.  Failure to comply may result in the dismissal
or conversion of its case, he adds.

A status hearing has been set on June 2, 2008, at 9:00 a.m., at
the U.S. Bankruptcy Court, 1133 N. Shoreline, 2nd floor in Texas,
for further orders to effectuate a plan.

Judge Schmidt says that creditors, equity interest owners and the
U.S. Trustee may appear the hearing.

                       About UMMA Resources

Headquartered in Portland, Texas, UMMA Resources, LLC, sells
oil and gas.  The company filed for Chapter 11 protection on
January 27, 2008 (Bankr. D. S.D. Tex. Case No. 08-20037).  Harlin
C. Womble, Jr., Esq., at Jordan, Hyden, Womble, Culbreth & Holzer,
P.C., represents the Debtor in its restructuring efforts.  No
Official Committee of Unsecured Creditors has been appointed in
this case to date.  When the Debtor filed for protection against
it creditors, it listed assets between $50 Million to $100 Million
and debts between $1 Million to $10 Million.


UNITED AIR: WSJ Says Continental Merger Talks "Have Grown Serious"
------------------------------------------------------------------
United Air Lines could likely end up marrying Continental Airlines
in the event of a merger, instead of with Delta Air Lines, various
report say.  According to The Wall Street Journal, xploratory
merger talks between United and Continental have grown serious.

Moreover, the reports also note that merger talks between Delta
Air and Northwest Airlines Corp. have intensified that could lead
to an agreement being announced in the next two weeks.  However,
key details of the Delta-Northwest deal have yet to be hammered
out and negotiations could still fall apart, according to the Wall
Street Journal, citing people familiar with the talks.

As reported in the Troubled Company Reporter on Jan. 22, 2008,
Mr. Anderson obtained approval from Delta's board of directors on
Jan. 11, 2007, to engage in formal merger talks with both
Northwest and United.

WSJ, citing people briefed on the matter, says Delta and United
have continued exploratory talks over the past month.

Pardus Capital Management, a New York-based hedge fund, and major
stakeholder in both United and Delta, had urged both carriers to
consolidate, to save money and counter escalating jet-fuel prices
which rose by around 53% last year.

Delta, the No. 3 U.S. carrier in terms of passenger traffic, has a
market value of over $4,100,000,000 -- higher than UAL's
$3,800,000,000, and Northwest's $3,700,000,000.  United is the
second-largest U.S. carrier, while Northwest takes the fifth spot.  
Continental, in Houston, Texas, is the No. 4 carrier.

A Delta merger with either Northwest or United would create the
largest passenger airline in the world.

                    Delta-Northwest Merger

Reports note the potential dealbreaker in a Delta-Northwest
combination was the structure of the new company's management,
specifically Northwest CEO Doug Steenland and his management
team's role in the new company.  The Journal's source says those
issues were overcome earlier this week.

When companies merge, it's not uncommon for the chief executives
to divide the leadership roles, with one taking the CEO post and
the other becoming chairman, according to TheStreet.com.  In the
case of Delta and Northwest, the situation is complicated by the
role of Daniel Carp, who became chairman of Delta when the carrier
emerged from bankruptcy in May 2007, TheStreet.com says.

Since Mr. Carp was brought in to enhance Delta's position, there
is a feeling that he should remain because of the progress the
company has made, TheStreet.com says, citing a source.  
TheStreet.com's source says Mr. Steenland has apparently accepted
the idea that Mr. Carp and Delta CEO Richard Anderson will retain
their current posts in a new company.

Mr. Anderson, a former Northwest Airlines chief executive, assumed
the Delta CEO post from Gerald Grinstein in August.  That decision
to hire Mr. Anderson "raised new questions about Delta's future
strategy", WSJ reported at that time.

Mr. Anderson's appointment raises speculations that with an
outsider at the helm, Delta may reverse its "go it alone" strategy
and pursue a consolidation with Northwest, United Air Lines or
Continental Airlines, Business Week had said.

At the time of its bankruptcy, Delta and its unsecured creditors
committee fended off a $8,000,000,000 to $10,000,000,000  
hostile takeover bid from US Airways Group, Inc.   Delta said it
was better off as a stand-alone carrier.

In January 2007, about two months since US Airways launched its
hostile bid, Delta and NWA were reported to have held discussions
about a potential merger.  While both companies denied the
reports, Mr. Grinstein subsequently admitted to sharing
information with Northwest.  "At the behest of our creditors'
committee we recently retained an investment banker to obtain
information from Northwest, a far cry from negotiating for a
merger with them," Mr. Grinstein told members of the Delta Board
Council, according to Reuters.

Delta did not discount any possibility of a merger post-
bankruptcy.  According to a prior WSJ report, the Creditors
Committee conditioned its support of Delta's stand-alone Chapter
11 plan of reorganization to a number of concessions, including
the appointment of a new board that favors consolidation as a
strategic opotion.

In October, Mr. Anderson said he saw "obvious benefits" for
Delta's employees and shareholders in Delta's merging with another
carrier, Meg Marco at The Star Tribune reported.  Although Mr.
Anderson did not name a potential merger target for Delta at that
time, analysts have argued that Northwest would make a good
partner because the carriers' routes complement each other, Ms.
Marco said.

As proposed, the Delta-Northwest deal would be a stock-for-stock
transaction, done "at market," meaning at roughly where the two
stocks are trading, with little or no premium for either side, WSJ
says.   The Journal adds that the dynamic has made non-economic
issues the center of the deal negotiations.

                      Compressed Timeline

The Journal says Delta's intent was to pursue tandem negotiations
with Northwest and United on a compressed timeline, get a deal
inked by mid-February and quickly begin the process for winning
antitrust approval.  Executives at the airlines believe any
mergers are more likely to pass regulatory muster during the
waning days of the Bush administration, the Journal relates.

A United-Continental deal will have to be done very near a
Northwest-Delta announcement, so the two potential combinations
would undergo regulatory scrutiny at the same time, the Journal
says citing a source familiar with the matter.  A different source
told the Journal United and Continental are poised to act quickly
once another airline merger is announced.

Northwest holds a "golden share" of preferred stock in Continental
that allows Northwest to block a merger of Continental with
another large carrier, WSJ notes.  But if Northwest agrees to
merge with Delta, Continental could redeem that stock for a total
of $100, even if the deal is never consummated, freeing
Continental to entertain other suitors, WSJ says.

Continental executives have repeatedly said they prefer to remain
independent, but would do what is best for the company if the
competitive landscape changes, WSJ notes.

Experts in the airline industry believe that a Northwest-Delta
merger is more likely as Delta's Anderson was previously CEO at
Northwest, and is already well acquainted with Northwest's
operations.

Bloomberg, citing an unnamed person familiar with Air France-KLM
Group's plans, has reported that Air France is encouraging a
merger between Delta and Northwest and may make a financial
investment to foster a tie-up.  A Delta-Northwest combination
would preserve the SkyTeam Alliance, a marketing group that
includes Delta, Northwest and United.

                         Other Issues

Other issues that will have to be taken up in a Delta-Northwest
combination include both carriers' labor groups.  The Air Line
Pilots Association branches at Delta and Northwest have signaled
that they could support a merger if they receive equity in the
combined airline and achieve a labor contract with improved terms,
WSJ says.

Some analysts worry a Delta merger would face antitrust hurdles,
Bankruptcylaw360 says.

Analysts also said mergers could lead to higher fares in some
markets, at least in the long term, The New York Times state.  
Congress could also oppose a combination due to possible job loss
and reduction in competition, Times relates.

                        About Delta Air

Based in Atlanta, Georgia, Delta Air Lines Inc. (NYSE:DAL) --
http://www.delta.com/-- is the world's second-largest airline
in terms of passengers carried and the leading U.S. carrier
across the Atlantic, offering daily flights to 328 destinations
in 56 countries on Delta, Song, Delta Shuttle, the Delta
Connection carriers and its worldwide partners.  Delta flies to
Argentina, Australia and the United Kingdom, among others.  The
company and 18 affiliates filed for chapter 11 protection on
Sept. 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-17923).
Marshall S. Huebner, Esq., at Davis Polk & Wardwell, represents
the Debtors in their restructuring efforts.  Timothy R. Coleman
at The Blackstone Group L.P. provides the Debtors with financial
advice.  Daniel H. Golden, Esq., and Lisa G. Beckerman, Esq., at
Akin Gump Strauss Hauer & Feld LLP, provide the Official
Committee of Unsecured Creditors with legal advice.  John
McKenna, Jr., at Houlihan Lokey Howard & Zukin Capital and James
S. Feltman at Mesirow Financial Consulting, LLC, serve as the
Committee's financial advisors.

The Debtors filed a chapter 11 plan of reorganization and
disclosure statement explaining that plan on Dec. 19, 2007.  On
Jan. 19, 2007, they filed revisions to the plan and disclosure
statement, and submitted further revisions to the plan on
Feb. 2, 2007.  On Feb. 7, 2007, the Court approved the Debtors'
disclosure statement.  In April 25, 2007, the Court confirmed
the Debtors' plan.  That plan became effective on
April 30, 2007.  The Court entered a final decree closing 17
cases on Sept. 26, 2007.

As of Sept. 30, 2007, the company's balance sheet showed total
assets of $32.7 billion and total liabilities of $23 billion,
resulting in a $9.7 billion stockholders' equity.  At Dec. 31,
2006, deficit was $13.5 billion.

(Delta Air Lines Bankruptcy News; Bankruptcy Creditors' Service,
Inc., http://bankrupt.com/newsstand/or 215/945-7000).

                        *     *     *

As reported in the Troubled Company Reporter on Jan. 17, 2008,
Standard and Poor's said that media reports that Delta Air Lines
Inc. (B/Positive/--) entered into merger talks with UAL Corp.
(B/Stable/--) and Northwest Airlines Corp. (B+/Stable/--) will
have no effect on the ratings or outlook on Delta, but that
confirmed merger negotiations would result in S&P's placing
ratings of Delta and other airlines involved on CreditWatch, most
likely with developing or negative implications.

                    About Continental Airlines

Continental Airlines Inc. (NYSE: CAL) -- http://continental.com/  
-- is the world's fifth largest airline.  Continental, together
with Continental Express and Continental Connection, has more than
2,900 daily departures throughout the Americas, Europe and Asia,
serving 144 domestic and 139 international destinations.  More
than 500 additional points are served via SkyTeam alliance
airlines.  With more than 45,000 employees, Continental has hubs
serving New York, Houston, Cleveland and Guam, and together with
Continental Express, carries approximately 69 million passengers
per year.

                          *     *     *

As reported in the Troubled Company Reporter on Dec. 27, 2007,
Fitch Ratings affirmed Continental Airlines 'B-' issuer default
rating with a stable outlook.

                  About Northwest Airlines

Northwest Airlines Corp. (NYSE: NWA) -- http://www.nwa.com/--  
is the world's fourth largest airline with hubs at Detroit,
Minneapolis/St. Paul, Memphis, Tokyo and Amsterdam, and about
1,400 daily departures.  Northwest is a member of SkyTeam, an
airline alliance that offers customers one of the world's most
extensive global networks.  Northwest and its travel partners
serve more than 1000 cities in excess of 160 countries on six
continents.  Northwest and its travel partners serve more than
1000 cities in excess of 160 countries on six continents,
including Italy, Spain, Japan, China, Venezuela and Argentina.

The company and 12 affiliates filed for chapter 11 protection on
Sept. 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-17930).  Bruce
R. Zirinsky, Esq., and Gregory M. Petrick, Esq., at Cadwalader,
Wickersham & Taft LLP in New York, and Mark C. Ellenberg, Esq.,
at Cadwalader, Wickersham & Taft LLP in Washington represent the
Debtors in their restructuring efforts.  The Official Committee
of Unsecured Creditors has retained Akin Gump Strauss Hauer &
Feld LLP as its bankruptcy counsel in the Debtors' chapter 11
cases.

When the Debtors filed for bankruptcy, they listed US$14.4
billion in total assets and $17.9 billion in total debts.  On
Jan. 12, 2007 the Debtors filed with the Court their Chapter 11
Plan.  On Feb. 15, 2007, they Debtors filed an Amended Plan &
Disclosure Statement.  The Court approved the adequacy of the
Debtors' Disclosure Statement on March 26, 2007.  On
May 21, 2007, the Court confirmed the Debtors' Plan.  The Plan
took effect May 31, 2007.

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

                        *     *     *

Moody's Investor Service placed Northwest Airlines Corp.'s long
term corporate family and probability of default ratings at 'B1'
in May 2007.  The ratings still hold to date with a stable
outlook.

                       About UAL Corp.

Based in Chicago, Illinois, UAL Corporation (NASDAQ: UAUA)
-- http://www.united.com/-- is the holding company for United  
Airlines, Inc.  United Airlines is the world's second largest
air carrier.  The airline flies to Brazil, Korea and Germany.

The company filed for chapter 11 protection on Dec. 9, 2002
(Bankr. N.D. Ill. Case No. 02-48191).  James H.M. Sprayregen,
Esq., Marc Kieselstein, Esq., David R. Seligman, Esq., and
Steven R. Kotarba, Esq., at Kirkland & Ellis, represented the
Debtors in their restructuring efforts.  Fruman Jacobson, Esq.,
at Sonnenschein Nath & Rosenthal LLP represented the Official
Committee of Unsecured Creditors before the Committee was
dissolved when the Debtors emerged from bankruptcy.  Judge
Wedoff confirmed the Debtors' Second Amended Plan on
Jan. 20, 2006.  The company emerged from bankruptcy protection
on Feb. 1, 2006.  (United Airlines Bankruptcy News; Bankruptcy
Creditors' Service Inc., http://bankrupt.com/newsstand/or  
215/945-7000).

                        *     *     *

Moody's Investor Service placed UAL Corp.'s long term corporate
family and probability ratings at 'B2' in January 2007.  The
ratings still hold to date with a stable outlook.


WENDY'S INT'L: Earnings Improved to $14MM in Qtr. Ended Dec. 30
---------------------------------------------------------------
Wendy's International Inc. reported its preliminary, unaudited
financial results for the full year and fourth quarter of 2007.

The company reported net income of $14.07 million in fourth
quarter ended Dec. 30, 2007, compared to net income of
$3.03 million for the same period in the previous year.

For full year ended Dec. 30, 2007, the company reported net income
of $87.90 million, compared to $94.31 million for the same period
in the previous year.  

"I am proud of our restaurant crews, franchisees and company
employees for what we accomplished in 2007," Kerrii Anderson,
chief executive officer and president, said.  "We executed our
strategic plan, implemented many initiatives to drive the business
and made tough decisions to position Wendy's for future growth.

"We produced significantly improved company store operating
margins and earnings growth in the face of an incredibly
challenging environment, with rising commodities and the
distraction of the Special Committee process," Mr. Anderson added.  
"Our goal was to deliver EBITDA in the range of $295-$315 million
for the year, and we achieved that objective with EBITDA of $305
million, up 38% over the previous year."

"Our improved financial performance reflected modest same-store
sales growth, higher average check and excellent expense control
by our employees," Jay Fitzsimmons, chief financial officer, said.  
"There is no question that our business is stronger today than a
year ago."

                 Phase 2 of its Strategic Plan

The company launched Phase 2 of its strategic plan, which focuses
on further growth in same-store sales and earnings in 2008.

"We have a powerful brand, and our objective in 2008 is to re-
ignite sales growth and drive quality and innovation throughout
our business," Mr. Anderson said.  "In addition to a strong new
product lineup for 2008 and a re-energized focus on restaurant
operations, we are excited about our new advertising that
highlights Wendy's unique competitive advantage of quality. Today,
we are launching our 'Waaaay Better' campaign, and the hero of our
new advertising will be our quality food."

The company's evolution of its advertising approach is based on
extensive consumer research over the last eight months, working in
close collaboration with its agency partners and franchise
advertising committee.

"Our new campaign leverages Wendy's red-hair iconography, but does
so in a way that is more genuine and true to our brand," Mr.
Anderson said.  "Each television spot opens and closes with an
animated version of our familiar logo - the enduring image of
Wendy, a red-headed, little girl.  Our Wendy icon stands for
wholesome authenticity and honest quality.  It's one of the most
powerful, under-used assets in the consumer world today."

                    Discontinued operations

Wendy's completed its spinoff of Tim Hortons in the third quarter
of 2006 and completed the sale of Baja Fresh(R: 56.92, -0.10,
-0.17%) Mexican Grill during the fourth quarter of 2006. During
the third quarter of 2007, the Company completed the sale of Cafe
Express.  Accordingly, the after-tax operating results of Tim
Hortons, Baja Fresh and Cafe Express appear in the "Discontinued
Operations" line on the income statement.

             Wendy's Joint Venture with Tim Hortons

Wendy's and Tim Hortons continue to operate approximately 100
combination restaurants in Canada as part of the joint venture.
The company refers to the entity that controls the real estate of
these combination restaurants as its Canadian restaurant real
estate joint venture with Tim Hortons.  Wendy's and Tim Hortons
also operate approximately 40 combination restaurants in the U.S.,
which are not included in the joint venture.

As a result of its 2006 spinoff of Tim Hortons, the company, in
accordance with generally accepted accounting principles,  
accounts for its 50% share of the Canadian restaurant real estate
joint venture with Tim Hortons under the equity method of
accounting, rather than consolidating the results of the joint
venture in the company's financial statements.

Without this change, company-operated restaurant EBITDA margins
would have been 10.9% for the full year.  This change in
accounting for the company's joint venture with Tim Hortons
impacts several lines on the company's statement of income and
resulted in an overall reduction to full-year 2007 operating
income of $7.2 million compared to the full-year of 2006.

At Dec. 30, 2007, the company's balance sheet showed total assets
of $1.79 billion, total liabilities of $0.99 billion, and total
shareholders' equity of $0.80 billion.

                  About Wendy's International

Based in Dublin, Ohio, Wendy's International Inc. (NYSE:
WEN) -- http://www.wendysintl.com/-- is one of the world's
largest and most successful restaurant operating and franchising
companies, with more than 6,300 Wendy's Old Fashioned Hamburgers
restaurants in North America and more than 300 international
Wendy's restaurants.

                          *     *     *

Moody's Investors Service placed Wendy's International Inc.'s
corporate family and probability of default ratings at 'Ba3' in
June 2007.  The ratings still hold today.


W.R GRACE: Reports Fourth Quarter 2007 Financial Results
--------------------------------------------------------
W. R. Grace & Co. reported its financial results for the fourth
quarter and full year ended December 31, 2007.  Beginning with
this financial announcement, Grace's reportable operating
segments reflect the transfer of the Darex Packaging Technologies
product group to the Grace Davison operating segment.  The
previous Grace Performance Chemicals operating segment has been
renamed "Grace Construction Products" as a result of the
transfer.  All segment information contained herein has been
retrospectively restated to reflect this realignment.  Highlights
are:

   -- Sales for the fourth quarter were $803.7 million compared
      with $697.4 million in the prior year quarter, a 15.2%
      increase (9.9% before the effects of currency translation).
      The increase was attributable primarily to higher selling
      prices in response to rising raw material costs and to
      higher volumes in most product groups, particularly outside
      the United States.  Sales increased 19.7% for the Grace
      Davison operating segment and 7.7% for the Grace
      Construction Products operating segment.  Geographically,
      sales were up 3.5% in North America, 25.0% in Europe
      Africa, 17.0% in Asia Pacific and 25.4% in Latin America.

   -- Net income for the fourth quarter was $41.6 million, or
      $0.58 per diluted share, compared with net income of $5.0
      million, or $0.07 per diluted share, in the prior year
      quarter.  The 2007 and 2006 fourth quarters were negatively
      affected by Chapter 11 expenses, litigation and other
      matters not related to core operations.  Net income for the
      2007 fourth quarter benefited from the favorable tax
      effects of Grace's global capital optimization plan
      approved by the Bankruptcy Court and executed in the
      quarter.  Excluding such costs and benefits, and after tax
      effects, net income would have been $28.9 million for the
      fourth quarter of 2007 compared with $22.4 million
      calculated on the same basis for the prior year quarter, a
      29.0% increase.

   -- Pre-tax income from core operations was $56.9 million in
      the fourth quarter compared with $50.6 million in the prior
      year quarter, a 12.5% increase. Pre-tax operating income of
      the Grace Davison operating segment was $55.0 million, up
      4.4% compared with the prior year quarter, attributable
      principally to sales increases across all product groups
      and to productivity gains.  Pre-tax operating income of the
      Grace Construction Products operating segment was $30.1
      million, up 8.3% compared with the prior year quarter,
      attributable primarily to higher sales in regions other
      than North America.  Corporate operating costs were $1.7
      million lower than the fourth quarter of 2006 due primarily
      to lower pension and insurance expenses.

   -- Sales for the year ended December 31, 2007 were $3,115.2
      million compared with $2,826.5 million for the prior year,
      a 10.2% increase (6.4% before the effects of currency
      translation).  Net income for the year ended December 31,
      2007 was $83.6 million, or $1.17 per diluted share,
      compared with net income in the prior year of $18.3
      million, or $0.27 per diluted share.  Excluding noncore and
      Chapter 11-related costs and benefits (and after tax
      effects), net income would have been $143.8 million for the
      year ended December 31, 2007 compared with $113.7 million
      calculated on the same basis for the prior year, a 26.5%
      increase.  Pre-tax income from core operations was $284.6
      million for the year ended December 31, 2007, an 18.5%
      increase over the prior year, primarily attributable to
      higher volumes in regions other than North America, higher
      selling prices to offset cost inflation, and from lower
      overall pension costs.

"We are pleased to finish 2007 with a strong quarter in a
changing global economy," said Grace's Chairman, President and
Chief Executive Officer Fred Festa.  "The full year 2007 results,
with more than an 18% increase in core operating income, reflects
the strong market position of our businesses, the diversification
of our product portfolio, and the geographic reach of our
customer base.  The realignment of our reportable segments is
designed to capture operating synergies within Grace Davison and
to enhance our regional focus within Grace Construction
Products."

                         CORE OPERATIONS

                          Grace Davison

Fourth quarter sales for the Grace Davison operating segment,
which includes specialty catalysts and materials used in
a wide range of industrial applications, were $525.9 million, up
19.7% from the prior year quarter.  Beginning with this report,
sales of the Grace Davison operating segment are being disclosed
in the following product groups:

   -- Refining Technologies - catalysts and chemical additives
      used by petroleum refineries, where sales were $266.1
      million in the fourth quarter of 2007, up 29.1% from the
      prior year quarter.

   -- Materials Technologies - engineered materials, coatings and
      sealants used in numerous industrial, consumer and
      packaging applications, where sales were $183.2 million in
      the fourth quarter, up 14.6% from the prior year quarter.

   -- Specialty Technologies - highly specialized catalysts and
      materials used in unique or proprietary applications and
      markets, where sales were $76.6 million in the fourth
      quarter, up 4.1% from the prior year quarter.

The primary factors contributing to the sales increase were:
(1) selling price increases across all product groups that offset
higher raw material costs; (2) higher volume of Refining
Technologies products in all geographic regions from continued
favorable demand for transportation fuels and from favorable
re-order patterns for certain hydroprocessing units; (3) higher
volumes of Materials Technologies products particularly in the
Europe and Latin America regions; and (4) favorable translation
effects from sales denominated in foreign currencies.

Pre-tax operating income of Grace Davison for the fourth
quarter was $55.0 million compared with $52.7 million in the
prior year quarter, a 4.4% increase.  Operating margin was 10.5%,
compared with 12.0% in the prior year quarter.  The decline in
operating margin was principally attributable to higher raw
material costs and to an increase in sales of hydroprocessing
catalysts, the profits from which are shared with our joint
venture partner.
   
Sales of Grace Davison for the year ended December 31, 2007
were $2,009.2 million, up 11.8% from the prior year, with sales
of Refining Technologies up 13.0%, Materials Technologies up
11.0% and Specialty Technologies up 9.7%.  Full year pre-tax
operating income was $240.4 million, a 15.0% increase over the
prior year, with operating margins at 12.0% compared with 11.6%
for the prior year.  Full year operating results reflect higher
sales to both refining and industrial end markets in all major
geographic regions and cost savings from productivity
initiatives, partially offset by higher raw material costs which
have increased approximately 11% year-over-year.

                   Grace Construction Products

Fourth quarter sales for the Grace Construction Products
operating segment, which includes specialty chemicals and
building materials used in commercial, infrastructure and
residential construction, were $277.8 million compared with
$257.9 million in the prior year quarter, a 7.7% increase.  Sales
of this operating segment are grouped along geographic regions as
follows:

   -- Americas - products sold to customers in North, Central and
      South America, where sales were $144.7 million, down 1.1%
      from the prior year quarter.

   -- Europe - products sold to customers in Eastern and Western
      Europe, the Middle East, Africa and India, where sales were
      $96.5 million, up 20.6% from the prior year quarter.

   -- Asia - products sold to customers in Asia (excluding
      India), Pacific Rim countries, Australia and New Zealand,
      where sales were $36.6 million, up 15.8% from the prior
      year quarter.

The primary factors contributing to the sales increase were:
(1) higher volume of products sold into commercial and
infrastructure construction in Europe, the Middle East, Asia
Pacific and Latin America, where economic activity was favorable;
(2) higher selling prices in all major geographic regions and
product groups; and (3) favorable translation effects from sales
denominated in foreign currencies.  Sales of construction
products in North America were lower in the fourth quarter of
2007 compared with the prior year primarily due to a nearly 24%
decline in housing starts in the United States.

Pre-tax operating income for Grace Construction Products was
$30.1 million compared with $27.8 million for the prior year
quarter, an 8.3% increase.  Operating margin of 10.8% was even
with the fourth quarter of 2006.  The increase in 2007 operating
income was primarily a result of sales volume growth in regions
other than North America, selling price increases that partially
offset raw material cost inflation, and productivity gains.

Sales of Grace Construction Products for the full year ended
December 31, 2007 were $1,106.0 million, up 7.5% from 2006,
attributable to sales growth in Europe (up 22.7%) and Asia
(up 17.6%), offset by softness in the Americas (down 2.4%) from a
nearly 28% decline in housing starts in the United States.  Full
year pre-tax operating income was $146.8 million compared with
$138.5 million for the prior year, a 6.0% increase, reflecting
higher sales volume globally, selling price increases, and
positive results from productivity and cost containment
initiatives, which more than offset an approximate 5% increase in
raw material costs.  Operating margin of 13.3% was about even
with last year despite lower sales volumes in the United States.

                    Corporate Operating Costs

Corporate costs related to core operations were $28.2 million
in the fourth quarter of 2007 compared with $29.9 million
in the prior year quarter, and $102.6 million for the full year
compared with $107.4 million in 2006.  The decrease in full year
corporate operating costs was primarily attributable to lower
pension costs from the effect of contributions made to defined
benefit pension plans in recent years.

          PRE-TAX INCOME (LOSS) FROM NONCORE ACTIVITIES

Noncore activities (as reflected in the attached Segment
Basis Analysis) comprise events and transactions not directly
related to the generation of operating revenue or the support of
core operations.  The pre-tax loss from noncore activities was
$14.7 million in the fourth quarter of 2007 compared with $8.8
million in the prior year quarter, and $54.3 million for the full
year 2007 compared with $97.7 million in 2006.  The full year
loss is principally due to: (1) a charge of $12.0 million in the
second quarter to adjust Grace's estimate of costs to resolve
environmental remediation claims; and (2) defense costs of $19.0
million related to legal proceedings arising from Grace's former
vermiculite mining operations in Montana.

                    INTEREST AND INCOME TAXES

Interest expense was $15.0 million for the quarter ended
December 31, 2007, compared with $18.7 million for the prior year
quarter, and $72.1 million for all of 2007 compared with $73.2
million in the prior year.  The change in interest expense is
attributable to movements in the prime rate and the effects of
compounding interest on certain liabilities subject to compromise
over the course of the Chapter 11 proceeding.  The annualized
weighted average interest rate on such pre-petition obligations
for the quarter was 5.1% and for the full year was 6.3%.

Income taxes are recorded at a global effective rate of
approximately 35% before considering the effects of certain
non-deductible Chapter 11 expenses, changes in uncertain tax
positions and other discrete adjustments.  Income taxes related
to foreign jurisdictions are generally paid in cash, while income
taxes in the United States are generally offset by available net
operating loss carryforwards and foreign tax credits.  Discrete
tax items reflected in the fourth quarter of 2007 include: 1) the
reversal of $44 million of previously established tax reserves
resulting from the implementation of Grace's global capital
optimization plan approved by the Bankruptcy Court in the fourth
quarter; 2) the recognition of $11 million in tax benefits
related to a settlement with the U.S. Internal Revenue Service
over tax attributes of a previously established liability
management company; and 3) the recording of $20 million of
deferred tax liability to reflect Grace's current expectation
that the cash value of corporate owned life insurance will be
accessed as part of reorganization financing.

                     CHAPTER 11 PROCEEDINGS

On April 2, 2001, Grace and 61 of its United States subsidiaries
and affiliates, including its primary U.S. operating subsidiary W.
R. Grace & Co.-Conn., filed voluntary petitions for reorganization
under Chapter 11 of the United States Bankruptcy Code in the
United States Bankruptcy Court for the District of Delaware in
order to resolve Grace's asbestos-related liabilities.  As part of
determining the confirmability of a plan of reorganization, the
Bankruptcy Court has approved a process and timeline for
determining the cost to resolve asbestos-related property damage
and personal injury claims.  The trial to determine the Bankruptcy
Court's estimate of Grace's pending and future asbestos personal
injury liability began in January 2008 and is currently scheduled
for approximately 20 trial days ending in mid-May.

Expenses related to Grace's Chapter 11 proceedings, net of
filing-entity interest income, were $23.7 million in the fourth
quarter compared with $17.7 million in the prior year quarter,
and $86.4 million for full year 2007 compared with $49.9 million
in the prior year, reflecting a higher level of activity in the
bankruptcy proceeding related to claims adjudication and
estimation.

Most of Grace's noncore liabilities and contingencies (including
asbestos-related litigation, environmental claims and other
obligations) are subject to compromise under the Chapter 11
process.  The Chapter 11 proceedings, including related
litigation and the claims valuation process, could result in
allowable claims that differ materially from recorded amounts.  
Grace will adjust its estimates of allowable claims as facts come
to light during the Chapter 11 process that justify a change, and
as Chapter 11 proceedings establish court-accepted measures of
Grace's noncore liabilities.
   
                     CASH FLOW AND LIQUIDITY

Grace's net cash inflow from operating activities for the
full year ended December 31, 2007 was $92.1 million, compared
with a net cash inflow of $152.7 million for the prior year.  The
decrease in cash flow from operating activities was principally
attributable to higher Chapter 11 related costs, higher working
capital, dividends to joint venture partners and cash paid to
resolve certain tax contingencies, offset by higher pre-tax
operating income.  Pre-tax income from core operations before
depreciation and amortization was $398.0 million for the full
year ended December 31, 2007, higher than in the prior year by
12.5%, a result of the performance from core operations described
above.  Net cash used for investing activities was $206.9 million
for the full year ended December 31, 2007, primarily related to
routine capital improvements, capacity expansion at certain
production sites, one acquisition and equity investment, and
investments in short-term debt securities.

At December 31, 2007, Grace had available liquidity in the
form of cash and cash equivalents of $484.4 million, short-term
investment securities of $100.9 million, net cash value of life
insurance of $81.0 million, available credit under its
debtor-in-possession facility of $178.5 million and available
credit under various non-U.S. credit facilities equivalent to
$91.5 million.  Grace believes that these sources and amounts of
liquidity are sufficient to support its business operations,
strategic initiatives and Chapter 11 proceedings for the
foreseeable future.

                       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).  
David M. Bernick, P.C., Esq., at Kirkland & Ellis, LLP, and Laura
Davis Jones, Esq., at Pachulski Stang Ziehl & Jones, LLP,
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, and Duane Morris, 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.  
Elihu Inselbuch, Esq., at Caplin & Drysdale, Chartered, and Marla
R. Eskin, Esq., at Campbell & Levine, LLC, represent the Official
Committee of Asbestos Personal Injury Claimants.  The Asbestos
Committee of Property Damage Claimants tapped Scott Baena, Esq.,
and Jay M. Sakalo, Esq., at Bilzin Sumberg Baena Price & Axelrod,
LLP, to represent it.  Thomas Moers Mayer, Esq., at Kramer Levin
Naftalis & Frankel, LLP, represents 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 expired on
July 23, 2007.

Estimation of W.R. Grace's asbestos personal injury liabilities
commenced on January 14, 2008.

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.
As of November 30, 2007, W.R. Grace's balance sheet showed total
assets of $3,335,000,000, and total debts of $3,712,000,000.  
(W.R. Grace Bankruptcy News, Issue No. 150; Bankruptcy Creditors'
Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000).  


* Fitch Cuts Ratings on Eight CLO Tranches, Removes Neg. Watch
--------------------------------------------------------------
Fitch Ratings has downgraded eight tranches of total rate of
return collateralized loan obligations and subsequently removed
them from Rating Watch Negative.  The approximately $335 million
of securities affected by these actions are from transactions
which have breached their total return swap
termination/liquidation triggers, and for which Fitch has received
confirmation from the trustee, banker, or asset manager that the
TRS counterparty has elected to terminate the swap and liquidate
the collateral.

This action follows previous actions taken by Fitch over the last
few months, and most recently in which Fitch downgraded a total of
33 classes and placed a total of 65 classes on Rating Watch
Negative from 24 TRR CLOs.

  -- 'Fitch Downgrades Canal Point I, Ltd' (Aug. 29, 2007);
  -- 'Fitch Downgrades Canal Point II, Ltd' (Aug. 29, 2007);;
  -- 'Fitch Downgrades 28 & Places 37 Classes on Watch Negative
      from 24 TRR CLOs' (Jan. 18, 2008);

  -- 'Fitch Downgrades 26 Classes from 9 TRR CLOs' (Feb. 5, 2008).

These rating actions are effective immediately:

Aladdin Managed LETTRS Fund, Ltd
  -- $43,000,000 class A to 'C' from 'CCC+';
  -- $22,500,000 class B to 'C/DR6' from 'CCC'.

Beecher Loan Fund, Ltd
  -- $66,800,000 class A to 'C' from 'CC';
  -- $44,000,000 class B to 'C/DR6' from 'CC'..

Bushnell Loan Fund, Ltd
  -- $38,300,000 class A to 'C' from 'CCC+';
  -- $25,000,000 class B to 'C/DR6' from 'CCC'..

Stedman Loan Fund, Ltd
  -- $57,400,000 class A to 'C' from 'CCC+';
  -- $38,000,000 class B to 'C/DR6' from 'CCC'.

Given the volatility in loan prices, and resultant lack of
information regarding ultimate recoveries, Fitch will be assigning
DR ratings to the senior classes once liquidation of the
underlying collateral has been completed and Fitch has received
notice of the proceeds upon liquidation.  However, absent that
information, in the case of the junior most classes in each
transaction, Fitch expects minimal to no recovery.  In the case of
Aladdin Managed LETTERS Fund, Ltd., liquidation of collateral is
scheduled to be completed by close of business.  In the case of
Beecher Loan Fund, Ltd, Bushnell Loan Fund, Ltd, and Stedman Loan
Fund, Ltd, liquidation of the underlying collateral is anticipated
to be completed by close of business.

Fitch has also received confirmation that Rivendell Loan Fund, LLC
has breached its TRS termination/liquidation trigger.  However,
Nationwide Mutual Insurance Company, the collateral manager for
that transaction, has infused additional funds into the deal in
order to bring the current net collateral value in-line with the
original NCV and thereby continue the transaction.  As a result,
Fitch is not currently taking any additional action on Rivendell.  
Fitch has received information that another transaction which is
nearing its TRS termination/liquidation trigger is in the process
of negotiating a capital infusion from the asset manager to
continue and that a third transaction, also nearing a breach in
its TRS termination/liquidation trigger, is exploring
restructuring alternatives.

In the absence of additional TRS termination elections by TRS
counterparties, or another broad decline in secondary loan market
trading levels of approximately 1.5%, Fitch will provide an update
on the performance of the portfolio of Fitch rated TRR CLOs in the
near term on a weekly basis, including additional rating actions
if and as required.  In the event of an additional termination
election by one or more TRS counterparties, or a broad decline in
secondary loan market trading levels of approximately 1.5%, Fitch
will provide an update on the affected transactions and take any
necessary rating actions in as quick a manner as is reasonably
possible.


* Fitch Says US Loan CDO Delinquencies Are Up from Last Month
-------------------------------------------------------------
U.S. commercial real estate loan CDO delinquencies are up slightly
from last month, according to the latest U.S. CREL CDO loan
delinquency index from Fitch Ratings.

Four new loans contributed to a U.S. CREL CDO loan delinquency
rate for January 2008 of 0.70%, compared to last month's
delinquency rate of 0.64%.  The loan delinquency index includes
loans that are 60 days or greater delinquent, performing matured
balloons, and repurchased loans.  Although the overall delinquency
rate for CREL CDOs remains low, it is more than double the rate of
the U.S. CMBS loan delinquency rate of 0.28% for December 2007.  
The CREL CDO delinquency rate is anticipated to be more volatile
than the CMBS delinquency index given the smaller universe of
loans; while the Fitch CREL CDO delinquency index tracks
approximately 1,100 loans, the Fitch CMBS delinquency index covers
over 48,000 loans.

The January 2008 index encompasses ten loans, which includes four
loans that are 60 days or more delinquent, four performing matured
balloons, and two repurchased loans.

Three of the new additions are performing matured balloons.  An
increase in these types of delinquencies is not surprising given
the difficulty associated with refinancing in today's market.  
These performing matured balloons include one loan, which was
subsequently paid off in full; while the other two such loans are
reported to be negotiating loan extensions.

Additionally, asset managers reported that two assets (0.19%) were
repurchased from two separate CDOs in January 2008.  One of the
loans was included in the December 2007 index as a performing
matured balloon while the other loan was reportedly less than 30
days delinquent in December, and thus not included in the index.  
Given the lower available liquidity in the market, Fitch expects
fewer repurchases of troubled loans and more workouts within the
trust.

Fitch also reviewed loans that were 30 days or less delinquent.  
Although not included in the loan delinquency index, this category
can be an early warning signal that a loan could ultimately be
classified as delinquent.  Two loans, representing 0.07% of the
CREL CDO collateral were 30 days or less delinquent in January
2008.  This statistic is down from last month's total of 0.15%,
which included a chronic late payer that is now current.

In its ongoing surveillance process, Fitch will increase the
probability of default to 100% for delinquent loans that are
unlikely to return to current.  This adjustment could increase the
loan's expected loss in the cases where the probability of default
was not already 100%.  The weighted average expected loss on all
loans is the credit metric used to monitor the performance of a
CREL CDO.  Issuers covenant not to exceed a certain PEL and Fitch
determines the ratings of the CDO liabilities based on this
covenant.  Fitch analysts monitor the as-is PEL over the life of
the CDO.  The difference between the PEL covenant and the as-is
PEL represents the transaction's cushion for reinvestment and
negative credit migration.

Fitch currently rates 35 CREL CDOs encompassing approximately
1,100 loans with a balance of $23.6 billion.  Fitch's U.S. CREL
CDO Loan Delinquency Index will be published during the first week
of every month based on asset manager and servicer reports
collected by Fitch's dedicated CRE CDO surveillance team.

In addition to publishing the monthly Loan Delinquency Index,
Fitch is committed to providing ratings that reflect current
performance and anticipate future credit events.  To achieve this
objective, it is imperative that Fitch's CRE CDO surveillance team
be provided with relevant and up-to-date loan-level information.  
Fitch recently published a report entitled 'CRE CDOs: Enhanced
Information Provides Early Warning Signals'.  In the report, Fitch
describes the on-going reports Fitch requests from asset managers,
in addition to the monthly loan delinquency status report, and
explains the value of each report.


* S&P Lowers Ratings on 94 Tranches From 17 Cash Flows and CDOs
---------------------------------------------------------------
Standard & Poor's Ratings Services lowered its ratings on 94
tranches from 17 U.S. cash flow and hybrid collateralized debt
obligation transactions.  The downgraded tranches have a total
issuance amount of $8.923 billion.  All of the affected
transactions are mezzanine structured finance CDOs of asset-backed
securities, which are CDOs of ABS collateralized in large part by
mezzanine tranches of residential mortgage backed securities and
other SF securities.  The transactions below are, s&p believes,
among the CDOs most affected by the recent RMBS rating actions.   
Thus, the results for these deals may not necessarily be
indicative of the outcomes S&P expects for all of the remaining
mezzanine SF CDOs of ABS with ratings currently on CreditWatch
negative.
     
The CDO downgrades reflect a number of factors, including credit
deterioration and recent negative rating actions on subprime RMBS
securities
     
To date, including the CDO tranches listed below and including
actions on both publicly and confidentially rated tranches, S&P
has lowered its ratings on 1,449 tranches from 426 U.S. cash flow,
hybrid, and synthetic CDO transactions as a result of stress in
the U.S. residential mortgage market and credit deterioration of
U.S. RMBS.  In addition, 2,573 ratings from 628 transactions are
currently on CreditWatch negative for the same reasons.  In all,
the affected CDO tranches represent an issuance amount of
$342.150 billion.
     
Standard & Poor's will continue to monitor the CDO transactions it
rates and take rating actions, including CreditWatch placements,
when appropriate.

                  Rating and CreditWatch Actions

                                            Rating
                                            ------
   Transaction                Class       To      From
   -----------                -----       --      ----
ACA ABS 2006-2 Ltd            A1LA        B       BB+/Watch Neg
ACA ABS 2007-1 Ltd            Rated eqty  CC      B-/Watch Neg
ACA ABS 2007-1 Ltd            A1J         CC      AA/Watch Neg
ACA ABS 2007-1 Ltd            A1S         CCC     AAA/Watch Neg
ACA ABS 2007-1 Ltd            A2          CC      BBB/Watch Neg
ACA ABS 2007-1 Ltd            A3          CC      BB/Watch Neg
ACA ABS 2007-1 Ltd            B1          CC      B+/Watch Neg
ACA ABS 2007-1 Ltd            B2          CC      B/Watch Neg
ACA ABS 2007-1 Ltd            B3          CC      B-/Watch Neg
ACA ABS 2007-1 Ltd            C           CC      CCC/Watch Neg
Adams Square Funding II Ltd.  A1          B       AAA/Watch Neg
Adams Square Funding II Ltd.  A2          CC      AA-/Watch Neg
Adams Square Funding II Ltd.  A3          CC      BBB/Watch Neg
Adams Square Funding II Ltd.  B           CC      BB/Watch Neg
Adams Square Funding II Ltd.  C           CC      CCC+/Watch Neg
Adams Square Funding II Ltd.  D           CC      CCC/Watch Neg
Adams Square Funding II Ltd.  E           CC      CCC-/Watch Neg
Adams Square Funding II Ltd.  S           CCC     AAA/Watch Neg
Arca Funding 2006-II Ltd.     Super sr    CCC     AAAsrs/WatchNeg
Arca Funding 2006-II Ltd.     II          CC      A/Watch Neg
Arca Funding 2006-II Ltd.     III         CC      BBB-/Watch Neg
Arca Funding 2006-II Ltd.     IV-A        CC      BB-/Watch neg
Arca Funding 2006-II Ltd.     IV-B        CC      BB-/Watch neg
Arca Funding 2006-II Ltd.     V           CC      B-/Watch Neg
Arca Funding 2006-II Ltd.     VI          CC      CCC+/Watch Neg
Arca Funding 2006-II Ltd.     VII         CC      CCC+/Watch Neg
CETUS ABS CDO 2006-1 Ltd      A-1         CCC     A+/Watch Neg
CETUS ABS CDO 2006-1 Ltd      A-2         CC      BBB/Watch Neg
CETUS ABS CDO 2006-1 Ltd      B           CC      B+/Watch Neg
CETUS ABS CDO 2006-1 Ltd      C           CC      CCC-/Watch Neg
CETUS ABS CDO 2006-2 Ltd      A-1         CC      A-/Watch Neg
CETUS ABS CDO 2006-2 Ltd      A-2         CC      BBB-/Watch Neg
CETUS ABS CDO 2006-2 Ltd      B           CC      B-/Watch Neg
CETUS ABS CDO 2006-2 Ltd      C           CC      CCC/Watch Neg
Cetus ABS CDO 2006-4 Ltd      A-1         CC      A+/Watch Neg
Cetus ABS CDO 2006-4 Ltd      A-2         CC      BB+/Watch Neg
Cetus ABS CDO 2006-4 Ltd      B           CC      CCC-/Watch Neg
Diogenes CDO II Ltd           A-1         B       AAA/Watch Neg
Diogenes CDO II Ltd           A-2         CCC     AAA/Watch Neg
Diogenes CDO II Ltd           B           CC      AA/Watch Neg
Diogenes CDO II Ltd           C           CC      A/Watch Neg
Diogenes CDO II Ltd           D           CC      BBB/Watch Neg
Diogenes CDO II Ltd           E           CC      BB+/Watch Neg
GSC ABS CDO 2006-4u Ltd.      A1          B       AA-/Watch Neg
GSC ABS CDO 2006-4u Ltd.      A2          CCC     BBB+/Watch Neg
GSC ABS CDO 2006-4u Ltd.      A3          CC      B/Watch Neg
GSC ABS CDO 2006-4u Ltd.      A-S1VF      BB      AAA/Watch Neg
GSC ABS CDO 2006-4u Ltd.      B           CC      CCC+/Watch Neg
GSC ABS CDO 2006-4u Ltd.      C           CC      CCC-/Watch Neg
MKP CBO VI Ltd                A-1         BB      AAA/Watch Neg
MKP CBO VI Ltd                A-2         B       AA+/Watch Neg
MKP CBO VI Ltd                B           CC      CCC-/Watch Neg
Montrose Harbor CDO I Ltd.    A-1         BB      AAA/Watch Neg
Montrose Harbor CDO I Ltd.    A-2         B       AAA/Watch Neg
Montrose Harbor CDO I Ltd.    B-1         CCC     AA/Watch Neg
Montrose Harbor CDO I Ltd.    B-2         CC      AA-/Watch Neg
Montrose Harbor CDO I Ltd.    C           CC      A-/Watch Neg
Montrose Harbor CDO I Ltd.    D           CC      BB/Watch Neg
Neptune CDO V Ltd             A-1LA-1     B       AA-/Watch Neg
Neptune CDO V Ltd             A-1LA2      CCC     A/Watch Neg
Neptune CDO V Ltd             A-1LB       CC      A-/Watch Neg
Neptune CDO V Ltd             A-2L        CC      BB/Watch Neg
Neptune CDO V Ltd             A-3L        CC      BB-/Watch Neg
Neptune CDO V Ltd             A-4L        CC      B/Watch Neg
Neptune CDO V Ltd             A-5L        CC      B-/Watch Neg
Neptune CDO V Ltd             B-1L        CC      CCC/Watch Neg
Neptune CDO V Ltd             X           A       AAA/Watch Neg
Octans III CDO Ltd            A-1         B       A+/Watch Neg
Octans III CDO Ltd            A-2         CCC     BBB+/Watch Neg
Octans III CDO Ltd            B           CC      BB/Watch Neg
Octans III CDO Ltd            C           CC      CCC-/Watch Neg
Palmer ABS CDO 2007-1 Ltd     A-1         B       AAA/Watch Neg
Palmer ABS CDO 2007-1 Ltd     A-2         CC      AA-/Watch Neg
Palmer ABS CDO 2007-1 Ltd     B           CC      BBB-/Watch Neg
Palmer ABS CDO 2007-1 Ltd     C           CC      BB/Watch Neg
Palmer ABS CDO 2007-1 Ltd     D           CC      B+/Watch Neg
Pine Mountain CDO II Ltd      A           BB      AAA/Watch Neg
Pine Mountain CDO II Ltd      B           CCC     AA/Watch Neg
Pine Mountain CDO II Ltd      C           CC      A/Watch Neg
Pine Mountain CDO II Ltd      D           CC      BBB/Watch Neg
Pine Mountain CDO II Ltd      E           CC      BB+/Watch Neg
STACK 2006-2 Ltd.             I funded    B       AAA/Watch Neg
STACK 2006-2 Ltd.             I unfunded  B       AAA/Watch Neg
STACK 2006-2 Ltd.             II          CCC     AAA/Watch Neg
STACK 2006-2 Ltd.             III         CC      AA-/Watch Neg
STACK 2006-2 Ltd.             IV          CC      A-/Watch Neg
STACK 2006-2 Ltd.             V           CC       BBB-/Watch Neg
STACK 2006-2 Ltd.             VI          CC       BB-/Watch neg
STACK 2006-2 Ltd.             VII         CC       B-/Watch Neg
TABS 2005-3 Ltd.              A-1         BB       AAA/Watch Neg
TABS 2005-3 Ltd.              A-2         B        AAA/Watch Neg
TABS 2005-3 Ltd.              B           CCC      AA/Watch Neg
TABS 2005-3 Ltd.              C           CC       A/Watch Neg
TABS 2005-3 Ltd.              D           CC       BBB/Watch Neg

                     Other Outstanding Ratings

       Transaction                       Class       Rating
       -----------                       -----       ------
       ACA ABS 2006-2 Ltd                A1LB        CC
       ACA ABS 2006-2 Ltd                A2L         CC
       ACA ABS 2006-2 Ltd                A3L         CC
       ACA ABS 2006-2 Ltd                B1L         CC
       Cetus ABS CDO 2006-4 Ltd          C           CC
       Cetus ABS CDO 2006-4 Ltd          D           CC
       Cetus ABS CDO 2006-4 Ltd          E           CC
       CETUS ABS CDO 2006-1 Ltd          D           CC
       Octans III CDO Ltd                D           CC
       Octans III CDO Ltd                E           CC
       MKP CBO VI Ltd                    C           CC
       MKP CBO VI Ltd                    D           CC


* S&P Downgrades Ratings on Five Classes of RMBS From Seven Deals
-----------------------------------------------------------------
Standard & Poor's Ratings Services lowered its ratings on five
classes of residential mortgage-backed securities from seven
transactions backed by prime jumbo mortgage collateral.  At the
same time, S&P affirmed its ratings on 142 classes from various
transactions, including those with lowered ratings.
     
The lowered ratings are based on the deterioration of available
credit support provided by the senior-subordinate structure.  Over
the past six months, most of these transactions have experienced a
negative relationship between recent realized losses and the level
of delinquencies in their delinquency pipelines.
     
Cumulative losses in these transactions range from 0.01% to 1.10%
of the original pool balances.  Severe delinquencies (90-plus
days, foreclosures, and REOs) range from 0.00% to 18.09% of the
current pool balances.
     
The affirmations are based on pool performance that has allowed
credit support to remain at levels that are adequate to support
the current ratings on the certificates.  Subordination is the
predominant form of credit support protecting the certificates
from losses.
     
The underlying collateral backing these transactions consists of
prime jumbo, first-lien mortgage loans secured by one- to four-
family residential properties.

                          Ratings Lowered

                                                        Rating
                                                        ------
   Issuer                                      Class   To   From
   ------                                      -----   --   ----
   Credit Suisse First Boston Mortgage     
   Securities Corp. 2002-29                  II-B-3  BB   BBB-
   Structured Adjustable Rate Mortgage
   Loan Trust 2004-3AC                       B5      CCC  B
   Structured Asset Securities Corp. 2003-40A  B5      CCC  B
   Structured Asset Securities Corp. 2001-15A  B3      BBB  A-
   Structured Asset Securities Corp. 2001-11   B3      D    CCC
                                  

                         Ratings Affirmed

        Credit Suisse First Boston Securities Corp. 2002-29
               Mortgage Pass-through Certificates

   Series    Class                                      Rating
   ------    -----                                      ------
   2002-29   1-A-1, I-P, II-A-2, II-A-3, A-X, II-P      AAA
   2002-29   II-B-1                                     AA+
   2002-29   I-B-1                                      AA-
   2002-29   I-B-2, II-B-2                              A-
   2002-29   I-B-3                                      BBB-

        Credit Suisse First Boston Securities Corp. 2004-4
            Mortgage-backed Pass-through Certificates

   Series    Class                                      Rating
   ------    -----                                      ------
   2004-4    I-A-1, I-A-2, I-A-3, I-A-4, I-A-5, I-A-6   AAA
   2004-4    I-A-7, I-A-8, I-A-9, I-A-10, I-A-11        AAA
   2004-4    I-A-12, II-A-13, II-A-14, II-A-15, I-X     AAA
   2004-4    II-A-1, II-A-2, II-A-3, II-A-4, II-A-5     AAA
   2004-4    II-A-6, II-A-7, II-A-8, II-A-9, II-A-10    AAA
   2004-4    II-A-11, III-A-1, III-A-2, III-A-4         AAA
   2004-4    III-A-5, III-A-6, III-A-7, III-A-8,        AAA
   2004-4    III-A-9, III-A-10, III-A-11, A-x           AAA
   2004-4    IV-A-1, V-A-1, V-A-2, V-A-3, V-A-4, D-X    AAA
   2004-4    A-P                                        AAA
   2004-4    C-B-1, D-B-1                               AA+
   2004-4    I-B-1, C-B-2, D-B-2                        AA
   2004-4    D-B-3                                      AA-
   2004-4    C-B-3, D-B-4                               A
   2004-4    D-B-5                                      BBB+
   2004-4    D-B-6                                      BB+
   2004-4    I-B-4                                      BB
   2004-4    C-B-5                                      B+
   2004-4    I-B-5, D-B-7                               B-

              Banc of America Mortgage Trust 2004-1
               Mortgage Pass-through Certificates

   Series    Class                                      Rating
   ------    -----                                      ------
   2004-1    1-A-4, 1-A-6, 1-A-13, 1-A-14, 1-A-15       AAA
   2004-1    1-A-16, 1-A-17, 1-A-18, 1-A-19, 2-A-1      AAA
   2004-1    2-A-2, 3-A-1, 4-A-1, 4-A-2, 5-A-1          AAA
   2004-1    5-A-IO, A-PO, 15-IO, 30-IO                 AAA
   2004-1    5-B-1                                      AA+
   2004-1    X-B-1, 3-B-1, 5-B-2                        AA
   2004-1    X-B-2, 3-B-2                               A
   2004-1    5-B-3                                      BBB+
   2004-1    X-B-3, 3-B-3                               BBB
   2004-1    X-B-4, 3-B-4, 5-B-4                        BB
   2004-1    1-B-5, X-B-5, 3-B-5, 5-B-5                 B

  Structured Adjustable Rate Mortgage Loan Trust (SARML) 2004-3AC
                 Mortgage Pass-through Certificates

   Series    Class                                      Rating
   ------    -----                                      ------
   2004-3AC  A1, A2, A3, PAX, AX                        AAA
   2004-3AC  B1                                         AA
   2004-3AC  B2                                         A
   2004-3AC  B3                                         BBB
   2004-3AC  B4                                         BB

             Structured Asset Securities Corp. 2003-40A
                 Mortgage Pass-through Certificates

   Series    Class                                      Rating
   ------    -----                                      ------
   2003-40A  1-A, 2-A, 2-AX, 3-A1, 3-A2, 3-A3, 3-AX     AAA
   2003-40A  3-PAX, 4-A, 5-A                            AAA
   2003-40A  B1, B1-X                                   AA
   2003-40A  B2                                         A
   2003-40A  B3                                         BBB
   2003-40A  B4                                         BB

             Structured Asset Securities Corp. 2001-15A
                 Mortgage Pass-through Certificates

   Series    Class                                      Rating
   ------    -----                                      ------
   2001-15A  1-A1, 2-A1, 2-A2, 3-A3, 3-A4, 4-A1         AAA
   2001-15A  4-A2, 5-A1, 5-A2                           AAA
   2001-15A  B1                                         AA+
   2001-15A  B2
AA                                       

              Structured Asset Securities Corp. 2001-11
                  Mortgage Pass-through Certificates

   Series    Class                                      Rating
   ------    -----                                      ------
   2001-11   2-A5, 2-AP, B1                             AAA
   2001-11   B2                                         AA


* S&P's Lists New Actions to Strengthen Rating Process
------------------------------------------------------
Standard & Poor's Ratings Services has announced steps to
strengthen the ratings process.
     
       Governance: Ensuring Integrity of the Ratings Process
     
Establish an Office of the Ombudsman that will address concerns
related to potential conflicts of interest and analytical and
governance processes that may be raised by issuers, investors,
employees and other market participants across S&P's businesses.   
The Ombudsman will have oversight of the handling of all issues,
with authority to escalate any unresolved matters, as necessary,
to the CEO of The McGraw-Hill Companies and the Audit Committee of
the Board of Directors.

  -- Engage an external firm to periodically conduct an
     independent review of S&P Ratings' compliance and governance
     processes and issue a public opinion that addresses whether
     S&P is effectively managing potential conflicts of interest  
     and maintaining the independence of its ratings.

  -- Hold periodic reviews with the Audit Committee of the
     McGraw-Hill Board to discuss S&P Ratings' overall
     governance and compliance functions.  The reviews will
     include:

(1) key business measures of ratings quality and compliance   
    effectiveness,

(2) the concerns and resolution of issues addressed by the Office
    of the Ombudsman, and

(3) results of the independent reviews, by an external firm, of
    S&P Ratings' overall governance and compliance processes.

  -- Formalize functions with responsibility for policy
     governance, compliance, criteria management and quality
     assurance of the ratings and make them separate and
     independent from the ratings business units.

  -- Establish an enterprise-wide Risk Assessment Oversight
     Committee that operates separately and independently of the
     ratings business.  The Committee will assess all risks that
     could impact the ratings process.  This committee will also
     assess the feasibility of rating new types of securities.

  -- Implement "look back" reviews to ensure the integrity of   
     prior ratings, whenever an analyst leaves to work for an
     issuer.

  -- Institute periodic rotations for lead analysts.

  -- Increase the level of existing employee training to ensure
     compliance with policies.

   Analytics: Enhancing Quality of Ratings Analysis and Opinions

  -- Improve the surveillance process through:

(a) additional resources and ongoing separation of new rating and
    rating surveillance functions in Structured Finance,

(b) strengthen surveillance in Corporates & Governments through
    the expanded use of search and market based tools and through
    oversight of surveillance separate from the business, and

(c) regular adding of surveillance tools to make the surveillance
    process more timely and effective.

  -- Establish a Model Oversight Committee within the Quantitative
     Analytics Group, which will be separate from and independent
     of the business unit, to assess and validate the quality of
     data and models used in S&P's analytical processes.

  -- Increase annual analyst training requirements, enhance
     training programs and establish an analyst certification
     program.

  -- Complement traditional credit ratings analysis by
     highlighting non-default risk factors such as liquidity,
     volatility, correlation and recovery, that can influence the
     valuation and performance of rated securities and portfolios
     of these securities.

     Information: Providing Greater Transparency and Insight to      
                      Market Participants

  -- Simplify and provide broader market access to ratings
     criteria, underlying models and analytical tools.

  -- Include "what if" scenario analysis in rating reports to
     explain key rating assumptions and the potential impact of
     positive or negative events on the rating.

  -- Improve the quality and integrity of information by working
     with market participants to improve disclosure of information
     on collateral underlying structured securities.  In addition,
     implement procedures to collect more information about the
     processes used by issuers and originators to assess the
     accuracy and integrity of their data and their fraud
     detection measures so that S&P can better understand their
     data quality capabilities.

  -- More broadly disseminate long- and short-term rating
     performance data.

  -- Better explain the comparability of ratings across asset
     classes/issuer types (structured vs. corporate vs.
     government).

  -- Make available a Landmark Deal Report which summarizes new
     structures and major issues, and distribute the report widely
     to investors, intermediaries, issuers, regulators and media.

  -- Enhance access to S&P's code of ethics and disclosures
     through a link to the Global Regulatory Affairs section of
     www.standardandpoors.com.

  -- Establish greater minimum portfolio disclosure criteria for
     structured securities servicers (e.g. ABCP and SIVs).

  -- Develop an early warning indicator to investors that a key
     credit quality attribute (e.g. delinquencies; losses) of an
     issue or issuer differs from S&P's expectations and has or
     may trigger a full review by S&P surveillance.

  -- Develop an identifier to the ratings of securitizations that
     will highlight to the market that:

(a) the rating is on a securitization, and

(b) the rating is on a new type of rating structure or
    securitization.

   Education: More Effectively Educating the Marketplace About         
                Credit Ratings and Rated Securities

  -- Publish a Credit Ratings User Manual and Investor Guidelines
     to promote better understanding of the ratings process and
     the role of ratings in the financial markets.

  -- Broaden distribution of analysis and opinions via Web and
     other media.

  -- Launch market outreach program to promote better  
     understanding of complex securities S&P rates.

  -- Establish an Advisory Council with membership that includes
     risk managers, academics and former government officials to
     provide guidance on addressing complex issues and establish
     topics for market education.

  -- Work with other NRSROs to promote ratings quality through the
     introduction of industry best practices and issuer disclosure
     standards.

              S&P's Current Policies and Practices

         Governance: Independence and Quality of Ratings

  -- Ratings decisions are always made by committees.

  -- Personnel who are involved in commercial activities may not
     vote on a rating committee.

  -- Analysts' compensation is not linked to number of ratings an
     analyst is involved in, nor is it linked to the revenues or
     profits attributable to an analyst's ratings work.

  -- Existing policies prohibit analysts from providing consulting
     or advisory services or participating in structuring
     transactions.

  -- Separate group determines appropriateness of rating new
     structures; periodically declines to rate securities that do
     not meet S&P Ratings' criteria.

  -- Existing policies restrict analysts' ownership of, and
     trading in, securities they rate and restrict information
     sharing by rating analysts.

  -- A Policy Governance Group exists that develops policies and
     ratings guidelines designed to preserve and enhance the
     integrity of S&P's ratings process.

  -- Analyst performance measurements are used to align
     compensation with quality and compliance.

  -- A strong compliance function has been instituted in the S&P
     Ratings organization.      

                   Analytics and Surveillance

  -- Ratings focus exclusively on creditworthiness/probability of
     default.

  -- Responsibility for surveillance of residential mortgage-
     backed securities and collateralized debt obligation ratings
     lies with a separate group from the initial ratings.

             Information: Transparency and Consistency

  -- Ratings track record updated and made publicly available,
     published annually with 30+ years of historic performance for
     Structured, Corporate and Government ratings.

  -- Structured finance models and underlying data are made
     available to investors and issuers.

                    Education and Outreach

  -- Rating criteria available on www.standardandpoors.com.

  -- Public input and comment solicited for all new criteria and
     models.

  -- Research and rating actions released through the media.


* S&P Undertakes Actions Aimed at Strengthening Rating Process
--------------------------------------------------------------
Standard & Poor's Ratings Services has begun implementing a broad
set of new actions to further strengthen its ratings operations
and better serve capital markets around the world.
     
"The ongoing transformation of the financial markets requires us
to continue to bring more innovative thinking, greater resources,
and improved analytics to the ratings process," Deven Sharma,
president of S&P said.  "By further enhancing independence,
strengthening the ratings process, and increasing transparency,
the actions S&P is taking will serve the public interest by
building greater confidence in credit ratings and supporting the
efficient operation of the global credit markets."
     
The actions, which will be implemented throughout S&P's global
organization, include enhancements in these four areas:

  -- Governance: S&P is implementing new measures that build on
     existing governance policies and protections and further
     strengthen the integrity of the ratings process to ensure its
     independence, make the effectiveness of S&P's governance even
     more transparent and to maintain investor confidence.

  -- Analytics: S&P is taking steps to ensure that S&P's ratings
     models, processes, and analytical talent continue to be of
     the highest quality and that S&P remains fully equipped to
     rate complex financial structures with increasing
     transparency regarding assumptions.

  -- Information: S&P is providing market participants with
     greater transparency about the ratings process and greater
     clarity about the risks that could cause a change in ratings
     assumptions.

  -- Education: S&P is undertaking an extensive educational
     outreach program to help market participants better
     understand what a credit rating is  and is not.  The goal is
     to help them use ratings appropriately.
     
S&P has already adopted a number of these enhancements and will
implement the remainder throughout the year.  S&P also is
evaluating additional actions and intends to introduce further
measures throughout the year.     

"This initial set of actions is the product of a comprehensive,
formal assessment of our policies and practices conducted in
collaboration with an independent third-party expert, as well as
active dialogue with market participants, regulators and
legislators. These actions are consistent with our commitment to
continuous improvement," Mr. Sharma said.  "Our goal is not only
to enhance specific processes but also to minimize even the
potential for perceived conflicts of interest and provide the
public a greater understanding of how our ratings are determined,
what they mean, and how market trends and events affect them."
     
"We are committed to playing a leadership role, in collaboration
with market participants, regulators, and experts, in addressing
the issues currently facing the global credit markets," Mr. Sharma
concluded.  "We will continue to engage with market participants
and policymakers on an ongoing basis and consider additional steps
in response to the feedback we receive."


* BOOK REVIEW: How To Measure Managerial Performance
----------------------------------------------------
Author:     Richard S. Sloma
Publisher:  Beard Books
Paperback:  272 pages
List Price: $34.95

Order your personal copy at:
http://www.amazon.com/exec/obidos/ASIN/1893122646/internetbankrupt

How to Measure Managerial Performance by Richard S. Sloma is a
valuable reference tool.  This practical handbook provides new
insights into enterprising management techniques.

This book is a compendium of principles and techniques to improve
and measure managerial performance in a number of areas important
to the successful operation of a business.

Rigorous application of the concepts of this instructive book will
enable an organization to perform at several levels higher in
efficiency and effectiveness.


                             *********

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.  Joseph Medel C. Martirez, Shimero R. Jainga, Ronald C. Sy,
Joel Anthony G. Lopez, Cecil R. Villacampa, Melanie C. Pador,
Ludivino Q. Climaco, Jr., Loyda I. Nartatez, Tara Marie A. Martin,
Philline P. Reluya, Ma. Cristina I. Canson, Christopher G.
Patalinghug, Frauline S. Abangan, and Peter A. Chapman, Editors.

Copyright 2008.  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 ***