TCR_Public/080209.mbx          T R O U B L E D   C O M P A N Y   R E P O R T E R

            Saturday, February 9, 2008, Vol. 12, No. 34

                             Headlines


AMERICAN HOME: AHMHI Files Operating Report for September 2007
AMERICAN HOME: AHMV Files Operating Report for September 2007
AMERICAN HOME: Great Oak Files Operating Report for September 2007
AMERICAN HOME: Homegate Files Operating Report for September 2007
AVADO BRANDS: Incurs $11,226,700 Net Loss in December 2007

DELPHI CORPORATION: Incurs $964 Million Net Loss in December 2007
DUNMORE HOME: Posts $490,271 Net Loss in Month Ended November 30
DUNMORE HOME: Posts $1,150,136 Net Loss in Month Ended December 31
HANCOCK FABRICS: Posts $1,569,000 Net Loss in Month Ended Jan. 5
HYDRAULIC TECH: Posts December 2007 Net Loss of $17,020,529

KITTY HAWK: Posts $236,951 Net Loss in December 2007
KITTY HAWK: AirCargo Posts $1,078,842 Net Loss in December 2007
KITTY HAWK: Cargo Posts $434,543 Net Loss in December 2007
KITTY HAWK: Ground Posts $987,944 Net Loss in December 2007
KITTY HAWK: KH Ground Posts $987,944 Net Loss in December 2007

LEVITZ FURNITURE: Has $70,951,000 Net Loss in Month Ended Jan. 6
MARCAL PAPER: Incurs $5,411,000 Net Loss in November 2007
MUSICLAND HOLDING: Posts $77,000 Net Loss in December 2007
NEW CENTURY: Incurs $14,549,259 Net Loss in Month Ended Nov. 30
SOLUTIA INC: Incurs $134,000,000 Net Loss in December 200


                             *********

AMERICAN HOME: AHMHI Files Operating Report for September 2007
--------------------------------------------------------------
American Home Mortgage Holdings Inc., a debtor-affiliate of
American Home Mortgage Investment Corp. submitted its monthly
operating report for September 2007.

              American Home Mortgage Holdings, Inc.
                Statement of Financial Condition
                    As of September 30, 2007

Assets:
   Cash and cash equivalents                              $1,000
   Accounts receivable                                   134,546
   Intercompany receivable                           133,122,337
   Investment in subsidiaries                       (535,195,641)
   Other assets
                                                    ------------
      Total Assets                                 ($401,937,758)
                                                    ============

Liabilities and Stockholders' Equity

   Liabilities:
      Junior subordinated note                      $304,214,000
      Accrued expenses & other liabilities             4,733,874
                                                    ------------
         Total Liabilities                           308,947,874

   Stockholders' Equity
      Additional paid-in capital                      94,597,808
      Retained earnings                             (805,483,440)
                                                    ------------
         Total Stockholders' Equity                 (710,885,632)
                                                    ------------
Total Liabilities & Stockholders' Equity           ($401,937,758)
                                                    ============


              American Home Mortgage Holdings, Inc.
                       Statement of Income
                 Month Ended September 30, 2007

Income from subsidiaries
   Non-interest income                             ($688,756,350)
                                                    ------------
      Non-interest income                           (688,756,350)

Loss before income taxes                            (688,756,350)
Income taxes                                                   -
                                                    ------------
Net loss                                           ($688,756,350)
                                                    ============

American Home Mortgage Holdings, Inc., also discloses that its
cash as of Sept. 1, 2007, was $1,000.  Since there was no cash
receipts and disbursements for September, AHM Holdings' cash at
the  end of the month is still $1,000.

                      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: AHMV Files Operating Report for September 2007
-------------------------------------------------------------
Great Oak Abstract Corp., a debtor-affiliate of American Home
Mortgage Investment Corp. submitted its monthly operating report
for September 2007.

              American Home Mortgage Ventures, LLC
                Statement of Financial Condition
                    As of September 30, 2007
Assets:
   Cash and cash equivalents                            $613,049
   Intercompany receivable                                     -
   Premises and equipment, net                             2,200
   Other assets                                                -
                                                    ------------
      Total Assets                                      $615,249
                                                    ============

Liabilities and Stockholders' Equity

   Liabilities:
      Accrued expenses & other liabilities                  (568)
      Intercompany payable                               156,507
                                                    ------------
         Total Liabilities                               155,939

   Stockholders' Equity
      Additional paid-in capital                         395,500
      Retained earnings                                   63,810
                                                    ------------
         Total Stockholders' Equity                      459,310
                                                    ------------
Total Liabilities & Stockholders' Equity                $615,249
                                                    ============


              American Home Mortgage Ventures, LLC
                       Statement of Income
                 Month Ended September 30, 2007

Non-Interest Income:
   Fee income                                              1,125
                                                    ------------
      Non-interest income                                  1,125

Expenses
   Salaries, commissions & benefits, net                       1
   Occupancy and equipment                                   231
   Data processing and communications                         (1)
   Marketing and promotion                                   250
   Travel and entertainment                                   (1)
   Other                                                       1
                                                    ------------
      Total expenses                                         481

Loss before income taxes                                     644
Income taxes                                                   -
                                                    ------------
Net loss                                                    $644
                                                    ============


              American Home Mortgage Ventures, LLC
           Schedule of Cash Receipts and Disbursements
                 Month Ended September 30, 2007

Cash - Beginning of Month, 09/01/2007                   $611,549

Receipts:
   Cash sales                                                  -
   Accounts receivable                                         -
   Sale of assets                                              -
   Loans and advances                                      1,500
   Administrative                                              -
   Net payroll                                                 -
   Other                                                       -
   Transfers (from DIP accounts)                               -
                                                    ------------
      Total Receipts                                       1,500

Disbursements:
   Net payroll                                                 -
   Payroll taxes                                               -
   Sales, use & other taxes                                    -
   Loans and advances                                          -
   Inventory purchases                                         -
   Secured/rental/leases                                       -
   Insurance                                                   -
   Administrative                                              -
   Selling                                                     -
   Other                                                       -
   Transfers (from DIP accounts)                               -
   Professional fees                                           -
   U.S. Trustee quarterly fees                                 -
   Court costs                                                 -
                                                    ------------
      Total Disbursements                                      -
                                                    ------------
      Net Cash Flow                                        1,500
                                                    ------------
Cash - End of Month - 09/30/07                          $613,049
                                                    ============

                      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: Great Oak Files Operating Report for September 2007
-----------------------------------------------------------------
Great Oak Abstract Corp., a debtor-affiliate of American Home
Mortgage Investment Corp. submitted its monthly operating report
for September 2007.

                    Great Oak Abstract Corp.
                Statement of Financial Condition
                    As of September 30, 2007

Assets:
   Cash and cash equivalents                            $380,941
   Accounts receivable                                    36,615
   Intercompany receivable                               693,132
   Premises and equipment, net                             5,339
   Other assets                                          104,800
                                                    ------------
      Total Assets                                    $1,220,827
                                                    ============

Liabilities and Stockholders' Equity

   Liabilities:
      Accrued expenses & other liabilities                76,743
                                                    ------------
         Total Liabilities                                76,743

   Stockholders' Equity
      Additional paid-in capital                          95,520
      Retained earnings                                1,048,564
                                                    ------------
         Total Stockholders' Equity                    1,144,084
                                                    ------------
Total Liabilities & Stockholders' Equity              $1,220,827
                                                    ============

Great Oak Abstract Corp. also discloses that as of Sept. 1,
2007, it has cash amounting to $380,941.  There had been no
transactions related to cash receipts and disbursements.  Hence,
Great Oak's cash at the end of September was still $380,941.

                      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: Homegate Files Operating Report for September 2007
-----------------------------------------------------------------
Great Oak Abstract Corp., a debtor-affiliate of American Home
Mortgage Investment Corp. submitted its monthly operating report
for September 2007.

               Homegate Settlement Services, Inc.
                Statement of Financial Condition
                    As of September 30, 2007

Assets:
   Cash and cash equivalents                             $25,524
   Restricted cash                                             -
   Intercompany receivable                                     -
   Premises and equipment, net                           233,715
   Other assets                                                -
                                                    ------------
      Total Assets                                      $259,239
                                                    ============

Liabilities and Stockholders' Equity

   Liabilities:
      Accrued expenses & other liabilities            $3,254,299
      Intercompany payable                             8,649,207
      Income taxes payable                                 3,671
                                                    ------------
         Total Liabilities                            11,907,177

   Stockholders' Equity
      Additional paid-in capital                         250,000
      Retained earnings                              (11,897,938)
                                                    ------------
         Total Stockholders' Equity                  (11,647,938)
                                                    ------------
Total Liabilities & Stockholders' Equity                $259,239
                                                    ============


               Homegate Settlement Services, Inc.
                       Statement of Income
                 Month Ended September 30, 2007

Non-interest income:
   Tax service                                         ($716,342)
                                                    ------------
      Non-interest income                               (716,342)

Expenses:
   Salaries, commissions and benefits, net                (1,552)
   Data processing and communications                          -
   Marketing and promotion                                20,014
   Other                                                      (1)
                                                    ------------
      Total expenses                                      18,461

Loss before income taxes                                (734,803)
Income taxes                                                   -
                                                    ------------
Net loss                                               ($734,803)
                                                    ============


               Homegate Settlement Services, Inc.
           Schedule of Cash Receipts and Disbursements
                 Month Ended September 30, 2007

Cash - Beginning of Month, 09/01/2007                    $25,802

Receipts:
   Cash sales                                                  -
   Accounts receivable                                         -
   Sale of assets                                              -
   Loans and advances                                          -
   Administrative                                              -
   Net payroll                                                 -
   Other                                                       -
   Transfers (from DIP accounts)                               -
                                                    ------------
      Total Receipts                                           0

Disbursements:
   Net payroll                                               279
   Payroll taxes                                               -
   Sales, use & other taxes                                    -
   Loans and advances                                          -
   Inventory purchases                                         -
   Secured/rental/leases                                       -
   Insurance                                                   -
   Administrative                                              -
   Selling                                                     -
   Other                                                       -
   Transfers (from DIP accounts)                               -
   Professional fees                                           -
   U.S. Trustee quarterly fees                                 -
   Court costs                                                 -
                                                    ------------
      Total Disbursements                                    279
                                                    ------------
      Net Cash Flow                                         (279)
                                                    ------------
Cash - End of Month - 09/30/07                           $25,523
                                                    ============

                      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).


AVADO BRANDS: Incurs $11,226,700 Net Loss in December 2007
----------------------------------------------------------
Avado Brands Inc., aka Applesouth, and its debtor-affiliates
submitted to the U.S. Bankruptcy Court for the District of
Delaware their monthly operating report for December 2007.

For December 2007, the Debtors generated net revenue of
$16,756,100 and incurred a net loss of $11,226,700.  Total cost of
sales for the month were $5,723,800.

Madison, Georgia-based Avado Brands Inc., aka Applesouth, --
http://www.avado.com/-- operates about 120 casual dining
restaurants under the banners Don Pablo's Mexican Kitchen and Hops
Grillhouse & Brewery.  The restaurants are located in 22 states in
the U.S.  As of Sept. 5, 2007, the Debtors employed about 9,970
people.  For the year ended July 31, 2007, the Debtors generated
about $227.8 million in revenues and a negative EBITDA of
$7.8 million.

The Debtor filed for chapter 11 protection on Feb. 4, 2004 (Bankr.
N.D. Tex. Case No. 04-1555).  On April 26, 2005, Judge Steven
Felsenthal confirmed Avado's Modified Plan of Reorganization and
that Plan became effective on May 19, 2005.

On Sept. 5, 2007, Avado filed a voluntary chapter 22 petition
(Bankr. D. Del. Case No. 07-11276) to complete an orderly sale of
its assets, via Section 363 of the Bankruptcy Code.  About 10 of
Avado's affiliates also filed for bankruptcy protection on the
same date (Bankr. D. Del. Case Nos. 07-11277 through 07-11286).

Michael Tuchin, Esq., and Stacia A. Neeley, Esq., at Klee, Tuchin,
Bogdanoff & Stern LLP, represent the Debtors.  Donald J.
Detweiler, Esq., at Greenberg Traurig, LLP, is the Debtors' local
counsel.  Kurtzman Carson Consultants LLC acts as 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 to this cases.  Greenberg Traurig LLP represents the
Committee.  In their second filing, the Debtors disclosed
estimated assets and debts between $1 million to $100 million.
The Debtor's exclusive period for filing a plan is extended until
May 2, 2008.


DELPHI CORPORATION: Incurs $964 Million Net Loss in December 2007
-----------------------------------------------------------------

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

                              ASSETS

Current assets:
   Cash and cash equivalents                               $113
   Restricted cash                                          125
   Accounts receivable, net:
      General Motors and affiliates                         972
      Other third parties                                   623
      Non-Debtor affiliates                                 250
   Notes receivable from non-Debtor affiliates              278
   Inventories, net:
      Productive material, work-in-process & supplies       653
      Finished goods                                        170
   Other current assets                                     385
   Assets held for sale                                     467
                                                       --------
      TOTAL CURRENT ASSETS                                4,036

Long-term assets:
   Property, net                                          1,446
   Investment in affiliates                                 331
   Investments in non-Debtor affiliates                   3,303
   Goodwill                                                 152
   Other intangible assets                                   25
   Other                                                    487
                                                       --------
      TOTAL LONG-TERM ASSETS                              5,744
                                                       --------
TOTAL ASSETS                                             $9,780
                                                       ========

              LIABILITIES AND STOCKHOLDERS' DEFICIT

Current liabilities not subject to compromise:
   Current portion of long-term debt                     $2,782
   Accounts payable                                       1,007
   Accounts payable to non-Debtor affiliates                689
   Accrued liabilities                                    1,322
   Liabilities held for sale                                167
                                                       --------
   TOTAL CURRENT LIABILITIES                              5,967

Long-term liabilities not subject to compromise:
   Long-term debt                                            24
   Employee benefit plan obligations and other              956

Liabilities subject to compromise                        16,276
                                                       --------
   TOTAL LIABILITIES                                     23,223

Stockholders' deficit:
   TOTAL STOCKHOLDERS' DEFICIT                          (13,443)
                                                       --------
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT              $9,780
                                                       ========


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

Net sales:
   General Motors and affiliates                           $338
   Other customers                                          241
   Non-Debtor affiliates                                     27
                                                       --------
Total net sales                                             606
                                                       --------
Operating expenses:
   Cost of sales                                            676
   U.S. employee workforce transition program charges       (36)
   Long-lived asset impairment charges                       39
   Depreciation and amortization                             56
   Selling, general and administrative                      118
   Securities & ERISA litigation charge                     (10)
                                                       --------
Total operating expenses                                    843
                                                       --------
Operating loss                                             (237)

Interest expense                                            (45)
Loss on extinguishment of debt                                -
Other (expense) income, net                                  37

Reorganization items                                        (14)
Income tax benefit (expense)                                  9
Equity income from non-consolidated affiliates              (15)
Loss from discontinued operations                          (599)
Equity income from non-Debtor affiliates                   (100)
                                                       --------
NET LOSS                                                  ($964)
                                                       ========


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

Cash flows from operating activities:
   Net loss                                               ($964)
   Adjustments to reconcile net loss
    to net cash provided by operating activities:
    Depreciation and amortization                            56
    Long-lived asset impairment                              39
    Deferred income taxes                                    (8)
    Pension and other postretirement benefit expenses        71
    Equity income from unconsolidated affiliates             15
    Equity income from non-Debtor affiliates                100
    Reorganization items                                     14
    U.S. employee workforce transition program charges      (36)
    Securities and ERISA litigation credit                  (10)
   Changes in operating assets and liabilities:
    Accounts receivable, net                                433
    Inventories, net                                         31
    Other assets                                             34
    Accounts payable, accrued and other long-term debt     (285)
    U.S. employee workforce transition program payment      (30)
    Other postretirement benefit payments                   (16)
    Pension contributions                                    (1)
    Payments for reorganization items                       (14)
    Dividends from non-debtor affiliates                    568
    Dividends from joint ventures                            15
    Other                                                   (43)
    Operating cash flows from discontinued operations       664
                                                       --------
Net cash used in operating activities                       633

Cash flows from investing activities:
   Capital expenditures                                      (8)
   Proceeds from sale of property                             3
   Decrease (increase) in restricted cash                    (1)
   Return on investment in non-debtor affiliates            108
   Other                                                     (9)
   Investing cash flows used in discontinued operations      (4)
                                                       --------
Net cash used in investing activities                        89

Cash flows from financing activities:
   Repayments on DIP credit facility                       (555)
   Repayments on borrowings from non-Debtor affiliates      (66)
   Net repayments on borrowings from other debt              (1)
                                                       --------
Net cash used in financing activities                      (622)
                                                       --------
Increase in cash and cash equivalents                       100
Cash and cash equivalents at beginning of period             13
                                                       --------
Cash and cash equivalents at end of period                 $113
                                                       ========


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

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

The Court approved Delphi's First Amended Joint Disclosure
Statement and related solicitation procedures for the solicitation
of votes on the First Amended Plan on Dec. 20, 2007.  The Court
confirmed the Debtors' First Amended Plan on Jan. 25, 2008.  The
Debtor anticipates to emerge from bankruptcy by March 31, 2008,
the expiration date of its exclusive plan filing period.  (Delphi
Bankruptcy News, Issue No. 110; Bankruptcy Creditors' Service
Inc., http://bankrupt.com/newsstand/or 215/945-7000)

                           *     *     *

As reported in the Troubled Company Reporter on Jan. 16, 2008,
Moody's Investors Service assigned ratings to Delphi Corporation
for the company's financing for emergence from Chapter 11
bankruptcy protection: Corporate Family Rating of (P)B2;
$3.7 billion of first lien term loans, (P)Ba3; and $0.825 billion
of 2nd lien term debt, (P)B3.  In addition, a Speculative Grade
Liquidity rating of SGL-2 representing good liquidity was
assigned.  The outlook is stable.

As reported in the Troubled Company Reporter on Jan. 11, 2008,
Standard & Poor's Ratings Services expects to assign its 'B'
corporate credit rating to Troy, Michigan-based automotive
supplier Delphi Corp. upon the company's emergence from Chapter 11
bankruptcy protection, which may occur by the end of the first
quarter of 2008.  S&P expects the outlook to be negative.

In addition, Standard & Poor's expects to assign these
issue-level ratings: a 'B+' issue rating (one notch above the
corporate credit rating), and '2' recovery rating to the company's
proposed $3.7 billion senior secured first-lien term loan; and a
'B-' issue rating (one notch below the corporate creditrating),
and '5' recovery rating to the company's proposed $825 million
senior secured second-lien term loan.


DUNMORE HOME: Posts $490,271 Net Loss in Month Ended November 30
----------------------------------------------------------------

                        Dunmore Home, Inc.
                          Balance Sheet
                     As of November 30, 2007

                              ASSETS

Current Assets:
Cash and cash equivalents                              $721,306
Accounts receivable, net                                277,186
Inventory                                                     -
Other current assets                                          -
                                                    -----------
Total current assets                                    998,492

Property plant and equipment                          4,653,969
Investment in subsidiary LLC's                        6,805,958
Related party note receivable (S. Dunmore)           11,277,410
Receivable from Dunmore Land Co.                        350,750
Other long-term assets                                1,790,910
Deferred compensation investments                     1,658,998
                                                    -----------
Total Assets                                        $27,536,487
                                                    ===========

               LIABILITIES & SHAREHOLDERS' DEFICIT

Liabilities not subject to compromise:

Current liabilities:
Accounts payable trace (postpetition)                   $21,196
Accrued payroll                                         284,578
Debtor in Possession loan                               566,423
Due to S. Dunmore JMP                                   103,333
Short-term borrowings                                 1,529,191
                                                    -----------
Total current liabilities                             2,504,721
                                                    -----------
Liabilities subject to compromise:

Accounts payable prepetition                          1,709,841
Long-term unsecured debt - TPS                       20,000,000
Long-term secured debt                                2,000,000
Accrued warranty costs                                  384,577
Deferred compensation payable                         1,662,593
Other accruals                                          887,770
                                                    -----------
Total liabilities                                   $29,149,502
                                                    -----------

Shareholders' deficit:
Common stock                                            $25,000
Retained deficit                                     (1,147,744)
CY Income                                              (490,271)
                                                    -----------
                                                    ($1,613,015)
                                                    -----------
Total liabilities and shareholders' deficit         $27,536,487
                                                    ===========

                        Dunmore Home, Inc.
                     Statement of Operations
               for the month ended November 30, 2007

Revenues:
Sale of real property                                        -
Rental & service income from SBDs                       $22,757
                                                    -----------
                                                         22,757
                                                    -----------
Costs and expenses:
Costs of goods sold                                           -
Payroll and benefit related costs                       315,823
Insurance                                                 2,481
Office administrative & technology costs                  8,614
Rent                                                     49,156
Depreciation & amortization                              18,941
Professional fees                                        18,621
Other                                                     2,991
Interest                                                129,556
                                                    -----------
                                                        546,183
                                                    -----------
Earnings before reorganization & income tax            (523,426)

Reorganization items:
Loss on disposal of facility                                  -
Gain on sale of real property                                 -
Professional fees                                             -
Provision for rejected executory contracts                    -
Interest earned                                         (33,155)
                                                    -----------
                                                        (33,155)
                                                    -----------
Loss before income tax & discontinued operations       (490,271)
                                                    -----------
Income tax benefit                                            -
Loss before discontinued operations                    (490,271)
                                                    -----------
Discontinued operations:
Loss from discontinued operations                             -
                                                    -----------
Net loss                                              ($490,271)
                                                    ===========

                        Dunmore Home, Inc.
                           Cash Flow
              for the period ended November 30, 2007

Cash flows from operating activities:
Sale of Stone Mitigation Land                                 -
Rent & service fees (S. Dunmore)                        $29,430
Other sources                                            20,088
Payroll and benefits                                   (118,079)
Insurance                                                (8,123)
Corporate office expenses                               (11,534)
Consulting fees                                         (10,800)
Other                                                   (20,154)
                                                    -----------
Net cash used in operating activities                  (119,172)
                                                    -----------
Cash flows from investing activities:
Purchase of property and equipment                            -
Advances to related party                                     -
                                                    -----------
Net cash used in investing activities                         -
                                                    -----------
Cash flows from financing activities:
Debtor-in-possession loan (S. Dunmore Loan)             392,915
Debtor-in-possession loan payments                            -
Contributions to LLC to cover utilities & warranty      (33,190)
                                                    -----------
Net cash provided by financing activities               359,725
                                                    -----------
Net change in cash and cash equivalents                 240,553
                                                    -----------
Cash and cash equivalents, beg. of year                 480,753
                                                    -----------
Cash and cash equivalents, end of year                 $721,306
                                                    ===========

Headquartered in Granite Bay, California, Dunmore Homes Inc. is a
privately-owned homebuilder.  The company filed for Chapter 11
protection on Nov. 8, 2007 (Bankr. S.D.N.Y. Case No. 07-13533).
Maria A. Bove, Esq., and Debra I. Grassgreen, Esq., at Pachulski
Stang Ziehl & Jones LLP, represent the Debtor in its restructuring
efforts.  The Official Committee of Unsecured Creditors has
selected Morrison & Foerster LLP as its counsel in this bankruptcy
proceeding.  When the Debtor filed for protection against its
creditors, it listed assets and liabilities of more than
$100 million.

In January 2008, the U.S. Bankruptcy Court for the Southern
District of New York ordered the transfer of Debtor's Chapter 11
case to the U.S. Bankruptcy Court for the Eastern District of
California, Sacramento Division.  The Debtor's exclusive period to
file a plan expires on March 7, 2008.  (Dunmore Bankruptcy News,
Issue No. 9; Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000).


DUNMORE HOME: Posts $1,150,136 Net Loss in Month Ended December 31
------------------------------------------------------------------

                        Dunmore Home, Inc.
                          Balance Sheet
                     As of December 31, 2007

                              ASSETS

Current Assets:
Cash and cash equivalents                            $2,733,267
Accounts receivable, net                                237,312
Inventory                                                     -
Other current assets                                          -
                                                    -----------
Total current assets                                  2,970,579

Property plant and equipment                            661,197
Investment in subsidiary LLC's                        5,812,227
Related party note receivable (S. Dunmore)           11,324,129
Receivable from Dunmore Land Co.                        350,750
Other long-term assets                                  882,932
Deferred compensation investments                     1,658,998
                                                    -----------
Total Assets                                        $23,660,812
                                                    ===========

               LIABILITIES & SHAREHOLDERS' DEFICIT

Liabilities not subject to compromise:

Current liabilities:
Accounts payable trace (postpetition)                  $116,038
Accrued payroll                                         144,858
Debtor in Possession loan                                     -
Due to S. Dunmore JMP                                   138,333
Short-term borrowings                                     1,191
                                                    -----------
Total current liabilities                               400,420
                                                    -----------
Liabilities subject to compromise:

Accounts payable prepetition                          1,834,951
Long-term unsecured debt - TPS                       20,000,000
Long-term secured debt                                2,000,000
Accrued warranty costs                                  381,229
Deferred compensation payable                         1,662,593
Other accruals                                        1,293,824
                                                    -----------
Total liabilities                                   $27,573,017
                                                    -----------

Shareholders' deficit:
Common stock                                            $25,000
Retained deficit                                     (2,296,798)
CY Income                                            (1,640,407)
                                                    -----------
                                                    ($3,912,205)
                                                    -----------
Total liabilities and shareholders' deficit         $23,660,812
                                                    ===========

                        Dunmore Home, Inc.
                     Statement of Operations
               for the month ended December 31, 2007

Revenues:
Sale of real property                                $4,360,000
Rental & service income from SBDs                        27,738
                                                    -----------
                                                      4,387,738
                                                    -----------
Costs and expenses:
Costs of goods sold                                   3,981,839
Payroll and benefit related costs                        93,697
Insurance                                               972,833
Office administrative & technology costs                 65,763
Rent                                                     68,912
Depreciation & amortization                              25,819
Professional fees                                       124,982
Other                                                     9,119
Interest                                                241,775
                                                    -----------
                                                      5,584,739
                                                    -----------
Earnings before reorganization & income tax          (1,197,001)

Reorganization items:
Loss on disposal of facility                                  -
Gain on sale of real property                                 -
Professional fees                                             -
Provision for rejected executory contracts                    -
Interest earned                                         (46,865)
                                                    -----------
                                                        (46,865)
                                                    -----------
Loss before income tax & discontinued operations     (1,150,136)
                                                    -----------
Income tax benefit                                            -
Loss before discontinued operations                  (1,150,136)
                                                    -----------
Discontinued operations:
Loss from discontinued operations                             -
                                                    -----------
Net loss                                            ($1,150,136)
                                                    ===========

                        Dunmore Home, Inc.
                            Cash Flow
              for the period ended December 31, 2007

Cash flows from operating activities:
Sale of Stone Mitigation Land                        $2,783,756
Rent & service fees (S. Dunmore)                              -
Other sources                                            89,167
Payroll and benefits                                   (343,977)
Insurance                                               (15,316)
Corporate office expenses                               (14,204)
Consulting fees                                         (35,113)
Other                                                      (140)
                                                    -----------
Net cash used in operating activities                 2,464,173
                                                    -----------
Cash flows from investing activities:
Purchase of property and equipment                            -
Advances to related party                                     -
                                                    -----------
Net cash used in investing activities                         -
                                                    -----------
Cash flows from financing activities:
Debtor-in-possession loan (S. Dunmore Loan)             235,525
Debtor-in-possession loan payments                     (635,274)
Contributions to LLC to cover utilities & warranty      (52,463)
                                                    -----------
Net cash provided by financing activities              (452,212)
                                                    -----------
Net change in cash and cash equivalents               2,011,961
                                                    -----------
Cash and cash equivalents, beg. of year                 721,306
                                                    -----------
Cash and cash equivalents, end of year               $2,733,267
                                                    ===========

Headquartered in Granite Bay, California, Dunmore Homes Inc. is a
privately-owned homebuilder.  The company filed for Chapter 11
protection on Nov. 8, 2007 (Bankr. S.D.N.Y. Case No. 07-13533).
Maria A. Bove, Esq., and Debra I. Grassgreen, Esq., at Pachulski
Stang Ziehl & Jones LLP, represent the Debtor in its restructuring
efforts.  The Official Committee of Unsecured Creditors has
selected Morrison & Foerster LLP as its counsel in this bankruptcy
proceeding.  When the Debtor filed for protection against its
creditors, it listed assets and liabilities of more than
$100 million.

In January 2008, the U.S. Bankruptcy Court for the Southern
District of New York ordered the transfer of Debtor's Chapter 11
case to the U.S. Bankruptcy Court for the Eastern District of
California, Sacramento Division.  The Debtor's exclusive period to
file a plan expires on March 7, 2008.  (Dunmore Bankruptcy News,
Issue No. 9; Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000).


HANCOCK FABRICS: Posts $1,569,000 Net Loss in Month Ended Jan. 5
----------------------------------------------------------------

              Hancock Fabrics, Inc. and Subsidiaries
                    Consolidated Balance Sheet
                       As of January 5, 2008

ASSETS
Current assets:
   Cash and cash equivalents                          $2,927,000
   Receivables, less allowance for                     6,495,000
      doubtful accounts
   Inventories                                        87,125,000
   Income taxes refundable                             8,235,000
   Prepaid expenses                                    1,857,000
                                                    ------------
   Total current assets                              106,639,000

Property and equipment                                42,878,000
Other assets                                          14,801,000
                                                    ------------
Total Assets                                        $164,318,000
                                                    ============

LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities not subject to compromise
   Accounts payable                                  $19,700,000
   Credit facility; DIP financing                     20,131,000
   Accrued liabilities                                 9,379,000
   Deferred tax liabilities                            8,273,000

Liabilities subject to compromise
   Accounts payable                                   26,593,000
   Accrued liabilities                                13,215,000
   Income taxes payable                                1,000,000
   Long-term lease financing obligations               1,674,000
   Capital lease obligations                           1,697,000
   Postretirement benefits other than pensions         9,658,000
   Pension and SERP liabilities                        9,169,000
   Other liabilities                                   9,104,000
                                                    ------------
Total Liabilities                                    129,593,000
Total Shareholders' Equity                            34,725,000
                                                    ------------
Total liabilities and shareholders' equity          $164,318,000
                                                    ============


             Hancock Fabrics, Inc., and Subsidiaries
               Consolidated Statement of Operations
               For the Month Ended January 5, 2008

Sales                                                $31,106,000
Cost of goods sold                                    19,073,000
                                                     -----------
Gross profit                                          12,033,000

Selling, general & admin expense                      11,569,000
Depreciation and amortization                            387,000
                                                     -----------
Operating income (loss)                                   77,000

Reorganization expenses                                1,366,000
Interest expense, net                                    363,000
                                                     -----------
Earnings (loss) before income taxes                   (1,652,000)
Income taxes                                             (83,000)
                                                     -----------
Net earnings (loss)                                  ($1,569,000)
                                                     ===========


             Hancock Fabrics, Inc., and Subsidiaries
               Consolidated Statement of Cash Flow
               For the Month Ended January 5, 2008

Cash flows from operating activities:
   Net earnings                                      ($1,569,000)
   Adjustments to reconcile net
   earnings to cash flows used in
   operating activities
      Depreciation and amortization                      859,000
      Amortization of deferred loan costs                123,000
      LIFO charge (credit)                              (716,000)
      Reserve for store closings credits                 (50,000)
      Reserve for obsolete inventory                           0
      Reserve for sales returns and bad debts                  0
      Stepped rent accrual                                 1,000
      Loss on disposition of property and equipment       (2,000)
      Gain on disposition of lease financing                   0
         obligations
      Stock compensation expense                          83,000
      (Increase) decrease in assets
      Receivables and prepaid expenses                    (2,000)
      Inventory at current cost                          739,000
   Income tax refundable                                       0
      Other non-current assets                            33,000
   Increase (decrease) in liabilities
      Accounts payable                                  (773,000)
      Accrued liabilities                               (500,000)
      Income taxes payable                               (83,000)
      Postretirement benefits other than pensions        (41,000)
      Long-term pension and SERP liabilities             157,000
      Reserve for store closings                           4,000
      Other liabilities                                    7,000
                                                       ---------
Net cash used in operating activities                 (1,730,000)

Cash flows from investing activities:
   Additions to property and equipment                  (131,000)
   Proceeds from the disposition of property and           2,000
      equipment
                                                       ---------
Net cash used in investing activities                   (129,000)

Cash flows from financing activities:
   Net borrowings on revolving credit agreement        1,425,000
   Payments for lease financing                           (2,000)
   Payments for capital leases                            (3,000)
   Payments for loan costs                                     0
   Purchase of treasury stock                                  0
   Tax obligation settled with treasury stock                  0
                                                       ---------
Net cash provided by financing activities              1,420,000
                                                       ---------
Decrease in cash and cash equivalents                   (439,000)
Cash, beginning of period                              3,366,000
                                                       ---------
Cash, end of period                                   $2,927,000
                                                       =========

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).


HYDRAULIC TECH: Posts December 2007 Net Loss of $17,020,529
-----------------------------------------------------------
Hydraulic Technologies (Holdings), Inc. submitted to the United
States Bankruptcy Court for the Northern District of Ohio its
monthly operating report for the month of December 2007.

For the month ended Dec. 31, 2007, the Debtor had total revenues
of $4,457,273, gross profit of $1,915,335, and a net loss of
$17,020,529.

As of Dec. 31, 2007, the Debtor's balance sheet showed total
assets of $173,104, total postpetition liabilities of $399,020,
total secured liabilities of $4,989,897, total prepetition
liabilities of $12,866,389, and total equity deficit of
$18,082,203.

                   About Hydraulic Technologies

Headquartered in Galion, Ohio, Hydraulic Technologies (Holdings),
Inc. -- http://www.hydraulic-tech.com/-- produces cylinders,
utilized in numerous applications and markets, through their flow
line areas, as well as their custom cylinder work center.  The
company and its affiliate, Hydraulic Technologies Inc., filed for
Chapter 11 protetcion July 3, 2007 (Bankr. N.D. Ohio Lead Case No.
07-61947).

Sean Malloy, Esq. at McDonald Hopkins LLC and Jonathan
Friedland, Esq., at Schiff Hardin LLP represent the Debtors.
Donlin Recano serves as the Debtors' claims agent.  Harry
Greenfield, Esq., at Buckley King represents the Official
Committee of Unsecured Creditors.  When the Debtors filed for
protection against their creditors, they had total assets of
$26,296,505 and total liabilities of $26,945,100.


KITTY HAWK: Posts $236,951 Net Loss in December 2007
----------------------------------------------------
Kitty Hawk Inc. filed with the U.S. Bankruptcy Court for the
Northern District of Texas its monthly operating report for
December 2007.

For the month of December 2007, the Debtor generated zero net
revenues and incurred a net loss of $236,951.

   Cash Beginning of the Month                        $37,748
   Total Receipts                                  $6,741,755
   Total Cash Available                            $6,779,503
   Total Operating Disbursements                   $5,122,306
   Total Disbursement                              $5,122,306
   Net Cash Flow                                   $1,619,449
   Cash End of the Month                           $1,657,197

As of Dec. 31, 2007, the Debtor's balance sheet showed total
assets of $42,350,378, total postpetition liabilities of
$1,078,017, total prepetition liabilities of $743,929, and
total equity of $40,528,432.

A full-text copy of Kitty Hawk Ground Inc.'s December 2007 Monthly
Operating Report is available for free at
http://ResearchArchives.com/t/s?27e1

                      About Kitty Hawk

Headquartered in Texas, Kitty Hawk Inc. (AMEX: KHK) --
http://www.kittyhawkcompanies.com/-- is a holding company
providing corporate planning and administrative services.  It
operates through its three wholly owned bankrupt subsidiaries,
Kitty Hawk filed for Chapter 11 protection on May 1, 2000 (Bank.
N.D. Tex. Case No. 00-42141).  On Aug. 5, 2002, the Court
confirmed the Debtor's Plan which became effective on Sept. 30,
2002.

The Debtor, along with four affiliates, filed new voluntary
chapter 11 petitions on Oct. 15, 2007 (Bankr. N.D. Tex. Case Nos.
07-44536 to 07-44540).  Gogi Malik, Esq., and Jason S. Brookner,
Esq., at Andrews & Kurth, LLP, represent the Debtors.  The
Official Committee of Unsecured Creditors has selected Munsch,
Hardt, Kopf & Harr, P.C., as its counsel.  As of Aug. 31, 2007,
the Kitty Hawk's balance sheet showed total assets of $40 million
and total liabilities of $31 million.


KITTY HAWK: AirCargo Posts $1,078,842 Net Loss in December 2007
---------------------------------------------------------------
Kitty Hawk AirCargo Inc., a debtor-affiliate of Kitty Hawk Inc.,
filed with the U.S. Bankruptcy Court for the Northern District of
Texas its monthly operating report for December 2007.

For the month of December 2007, the Debtor generated net revenues
of $1,482,950 and incurred a net loss of $1,078,842.

   Cash Beginning of the Month                    $37,623
   Total Receipts                                $676,828
   Total Cash Available                          $714,451
   Total Operating Disbursements                 $149,945
   Total Disbursement                            $149,945
   Net Cash Flow                                 $526,883
   Cash End of the Month                         $564,506

As of Dec. 31, 2007, the Debtor's balance sheet showed total
assets of $10,280,255, total postpetition liabilities of
$1,518,868, total prepetition liabilities of $6,319,708, and
total equity of $2,441,679.

A full-text copy of Kitty Hawk Ground Inc.'s December 2007 Monthly
Operating Report is available for free at
http://ResearchArchives.com/t/s?27e4

                      About Kitty Hawk

Headquartered in Texas, Kitty Hawk Inc. (AMEX: KHK) --
http://www.kittyhawkcompanies.com/-- is a holding company
providing corporate planning and administrative services.  It
operates through its three wholly owned bankrupt subsidiaries,
Kitty Hawk filed for Chapter 11 protection on May 1, 2000 (Bank.
N.D. Tex. Case No. 00-42141).  On Aug. 5, 2002, the Court
confirmed the Debtor's Plan which became effective on Sept. 30,
2002.

The Debtor, along with four affiliates, filed new voluntary
chapter 11 petitions on Oct. 15, 2007 (Bankr. N.D. Tex. Case Nos.
07-44536 to 07-44540).  Gogi Malik, Esq., and Jason S. Brookner,
Esq., at Andrews & Kurth, LLP, represent the Debtors.  The
Official Committee of Unsecured Creditors has selected Munsch,
Hardt, Kopf & Harr, P.C., as its counsel.  As of Aug. 31, 2007,
the Kitty Hawk's balance sheet showed total assets of $40 million
and total liabilities of $31 million.


KITTY HAWK: Cargo Posts $434,543 Net Loss in December 2007
----------------------------------------------------------
Kitty Hawk Cargo Inc., a debtor-affiliate of Kitty Hawk Inc.,
filed with the U.S. Bankruptcy Court for the Northern District of
Texas its monthly operating report for December 2007.

For the month of December 2007, the Debtor generated net revenues
of$19,249 and incurred a net loss of $434,543.

   Cash Beginning of the Month                     $783,166
   Total Receipts                                $1,314,538
   Total Cash Available                          $2,097,704
   Total Operating Disbursements                 $2,029,259
   Total Disbursement                            $2,029,259
   Net Cash Flow                                  ($714,721)
   Cash End of the Month                            $68,445

As of Dec. 31, 2007, the Debtor's balance sheet showed total
assets of $1,774,609, total postpetition liabilities of
$23,101,991, total prepetition liabilities of $4,526,072, and
total deficit of $25,853,454.

A full-text copy of Kitty Hawk Ground Inc.'s December 2007 Monthly
Operating Report is available for free at
http://ResearchArchives.com/t/s?27e3

                      About Kitty Hawk

Headquartered in Texas, Kitty Hawk Inc. (AMEX: KHK) --
http://www.kittyhawkcompanies.com/-- is a holding company
providing corporate planning and administrative services.  It
operates through its three wholly owned bankrupt subsidiaries,
Kitty Hawk filed for Chapter 11 protection on May 1, 2000 (Bank.
N.D. Tex. Case No. 00-42141).  On Aug. 5, 2002, the Court
confirmed the Debtor's Plan which became effective on Sept. 30,
2002.

The Debtor, along with four affiliates, filed new voluntary
chapter 11 petitions on Oct. 15, 2007 (Bankr. N.D. Tex. Case Nos.
07-44536 to 07-44540).  Gogi Malik, Esq., and Jason S. Brookner,
Esq., at Andrews & Kurth, LLP, represent the Debtors.  The
Official Committee of Unsecured Creditors has selected Munsch,
Hardt, Kopf & Harr, P.C., as its counsel.  As of Aug. 31, 2007,
the Kitty Hawk's balance sheet showed total assets of $40 million
and total liabilities of $31 million.


KITTY HAWK: Ground Posts $987,944 Net Loss in December 2007
-----------------------------------------------------------
Kitty Hawk Ground Inc., a debtor-affiliate of Kitty Hawk Inc.,
filed with the U.S. Bankruptcy Court for the Northern District of
Texas its monthly operating report for December 2007.

For the month of December 2007, the Debtor generated negative net
revenues of $79,171 and incurred a net loss of $987,944.

   Cash Beginning of the Month                     $178,251
   Total Receipts                                  $841,303
   Total Cash Available                          $1,019,554
   Total Operating Disbursements                   $950,784
   Total Disbursement                              $950,784
   Net Cash Flow                                  ($109,481)
   Cash End of the Month                            $68,770

As of Dec. 31, 2007, the Debtor's balance sheet showed total
assets of $5,223,047, total postpetition liabilities of
$18,927,515, total prepetition liabilities of $8,932,438, and
total deficit of $22,636,906.

A full-text copy of Kitty Hawk Ground Inc.'s December 2007 Monthly
Operating Report is available for free at
http://ResearchArchives.com/t/s?27e2

                      About Kitty Hawk

Headquartered in Texas, Kitty Hawk Inc. (AMEX: KHK) --
http://www.kittyhawkcompanies.com/-- is a holding company
providing corporate planning and administrative services.  It
operates through its three wholly owned bankrupt subsidiaries,
Kitty Hawk filed for Chapter 11 protection on May 1, 2000 (Bank.
N.D. Tex. Case No. 00-42141).  On Aug. 5, 2002, the Court
confirmed the Debtor's Plan which became effective on Sept. 30,
2002.

The Debtor, along with four affiliates, filed new voluntary
chapter 11 petitions on Oct. 15, 2007 (Bankr. N.D. Tex. Case Nos.
07-44536 to 07-44540).  Gogi Malik, Esq., and Jason S. Brookner,
Esq., at Andrews & Kurth, LLP, represent the Debtors.  The
Official Committee of Unsecured Creditors has selected Munsch,
Hardt, Kopf & Harr, P.C., as its counsel.  As of Aug. 31, 2007,
the Kitty Hawk's balance sheet showed total assets of $40 million
and total liabilities of $31 million.


KITTY HAWK: KH Ground Posts $987,944 Net Loss in December 2007
--------------------------------------------------------------
KH Ground Inc., a debtor-affiliate of Kitty Hawk Inc., filed with
the U.S. Bankruptcy Court for the Northern District of Texas its
monthly operating report for December 2007.

For the month of December 2007, the Debtor generated zero revenues
and incurred a net loss of $250.

As of Dec. 31, 2007, the Debtor's balance sheet showed zero total
assets, zero total liabilities, and zero total equity.

A full-text copy of Kitty Hawk Ground Inc.'s December 2007 Monthly
Operating Report is available for free at
http://ResearchArchives.com/t/s?27e5

                      About Kitty Hawk

Headquartered in Texas, Kitty Hawk Inc. (AMEX: KHK) --
http://www.kittyhawkcompanies.com/-- is a holding company
providing corporate planning and administrative services.  It
operates through its three wholly owned bankrupt subsidiaries,
Kitty Hawk filed for Chapter 11 protection on May 1, 2000 (Bank.
N.D. Tex. Case No. 00-42141).  On Aug. 5, 2002, the Court
confirmed the Debtor's Plan which became effective on Sept. 30,
2002.

The Debtor, along with four affiliates, filed new voluntary
chapter 11 petitions on Oct. 15, 2007 (Bankr. N.D. Tex. Case Nos.
07-44536 to 07-44540).  Gogi Malik, Esq., and Jason S. Brookner,
Esq., at Andrews & Kurth, LLP, represent the Debtors.  The
Official Committee of Unsecured Creditors has selected Munsch,
Hardt, Kopf & Harr, P.C., as its counsel.  As of Aug. 31, 2007,
the Kitty Hawk's balance sheet showed total assets of $40 million
and total liabilities of $31 million.


LEVITZ FURNITURE: Has $70,951,000 Net Loss in Month Ended Jan. 6
----------------------------------------------------------------

                           PLVTZ, Inc.
                          Balance Sheet
                      As of January 6, 2008

ASSETS
  Current Assets
  Cash                                              $13,860,000
  Accounts receivable, net                            2,764,000
  Due from Hilco                                      4,497,000
  Prepaid expenses                                      653,000
                                                   ------------
  Total current assets                               21,774,000

Other assets                                          1,467,000
Deferred financing fees                               2,582,000
                                                   ------------
  TOTAL ASSETS                                      $25,823,000
                                                   ============

               Liabilities and Shareholders Equity

Liabilities Not Subject to Compromise
  Current Liabilities:
     Accounts payable trade                          $3,791,000
     Accrued expenses                                 6,551,000
     Customer Deposits                                5,168,000
                                                   ------------
     Total current liabilities                       15,510,000

Liabilities Subject to Compromise
  Term loan B                                        22,000,000
  Trade and other miscellaneous claims               45,280,000
  Customer Deposit                                    5,227,000
                                                   ------------
  Total                                              72,507,000
                                                   ------------
     TOTAL LIABILITIES                               88,017,000
                                                   ------------

Shareholder's (deficit):
     Preferred stock                                 47,000,000
     Class A Common stock                           139,030,000
     Class B Common stock                            10,000,000
     Retained (deficit)                            (258,224,000)
                                                   ------------
      Shareholder's deficit                         (62,194,000)
                                                   ------------
      TOTAL LIABILITIES & SHAREHOLDERS' DEFICIT     $25,823,000
                                                   ============


                           PLVTZ, Inc.
                     Statement of Operations
        For the period December 3, 2007 to January 6, 2008

Revenues:
  Sales                                              $7,708,000
Cost and expenses:
  Cost of goods sold                                  4,162,000
  Selling, operating and administrative               5,227,000
  Interest                                              918,000
                                                   ------------
     TOTAL COSTS AND EXPENSES                        10,307,000
                                                   ------------
(Loss) before reorganization items,
  amortization, and loss on sale of assets           (2,599,000)

Reorganization items:
  Professional fees                                     654,000
  Reorganization                                        825,000
                                                   ------------
                                                      1,479,000

Amortization                                            164,000
Loss on Sale of Assets                               66,709,000
                                                   ------------
     NET LOSS                                      ($70,951,000)
                                                   ============


                           PLVTZ, Inc.
                      Statement of Cash Flows
           For the period December 3 to January 6, 2008

Cash flows from operating activities:
  Cash received from customers                      $31,987,000
  Cash paid to suppliers and employees              (20,994,000)
  Interest paid                                        (208,000)
                                                   ------------
     Net cash from operating activities              10,785,000

Cash flow from financing activities:
  Cash received from sale                           $49,250,000
  Payment of long term debt                         (30,102,000)
  Payment of letters of credit                      (10,070,000)
  Cash paid to Sales agent                          (13,341,000)

     Net cash used in financing activities           (3,763,000)

Net increase in cash and cash equivalents             7,022,000
Cash and cash equivalents at beginning of month       6,838,000
                                                   ------------
Cash and cash equivalents at end of month           $13,860,000
                                                   ============

Based in New York City, Levitz Furniture Inc., nka PVLTZ Inc. --
http://www.levitz.com/-- is a specialty retailer of furniture,
bedding and home furnishings in the United States.  It has 76
locations in major metropolitan areas, principally in the
Northeast and on the West Coast of the United States.

Levitz Furniture Inc. and 11 affiliates filed for chapter 11 on
Sept. 5, 1997.  In December 2000, the Court confirmed the Debtors'
Plan and Levitz emerged from chapter 11 on February 2001.  Levitz
Home Furnishings Inc. was created as the new holding company as a
result of the emergence.

Levitz Home Furnishings and 12 affiliates filed for chapter 11
protection on Oct. 11, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-
45189).  In their second filing, the Debtors disclosed about
$245 million in total assets and $456 million in total debts.
Nicholas M. Miller, Esq., and Richard H. Engman, Esq., at Jones
Day represented the Debtors.  Jeffrey L. Cohen, Esq., Jay R.
Indyke, Esq., and Cathy Hershcopf, Esq., at Cooley Godward Kronish
LLP served as counsel to the Official Committee of Unsecured
Creditors.  During this period, the Debtors closed around 35
stores in the Northeast, California, Minnesota and Arizona.

PLVTZ Inc., a company created by Prentice Capital Management LP,
and Great American Group purchased substantially all the assets of
Levitz Home Furnishings in December 2005.  Initially, Prentice
owned all of the equity interests in PLVTZ.  On July 6, 2007,
PLVTZ was converted into a Delaware corporation, and Harbinger
Capital Partners Special Situations Fund, LP, Harbinger Capital
Partners Master Fund I, Ltd., and their affiliates became minority
shareholders.  Great American's stake in the acquisition was in
running the going-out-of-business sales for some 27 Levitz units.

PLVTZ, dba Levitz Furniture, continued to face decline in
financial performance since December 2005.  Liquidity issues and
the inability to obtain additional capital prompted PLVTZ to seek
protection under chapter 11 on Nov. 8, 2007 (Bankr. S.D.N.Y. Lead
Case No. 07-13532).  Paul D. Leake, Esq., and Brad B. Erens, Esq.,
at Jones Day represents the Debtors in their restructuring
efforts.  Kurtzman Carson Consultants LLC serves as the Debtors'
claims and noticing agent.  The Debtor's schedules show total
assets of $123,842,190 and total liabilities of $76,421,661.   The
Debtors' exclusive period to file a chapter 11 plan expires on
March 7, 2008.  (Levitz Bankruptcy News, Issue No. 35; Bankruptcy
Creditors' Service Inc., http://bankrupt.com/newsstand/or
215/945-7000).


MARCAL PAPER: Incurs $5,411,000 Net Loss in November 2007
---------------------------------------------------------
Marcal Paper Mills Inc. delivered to the United States Bankruptcy
Court for the New Jersey its operating report for the month ended
November 2007.

The Debtor generated net sales of $23,649,000 and incurred a net
loss of $5,411,000 for the month ended Nov. 30, 2007.

As of Nov. 30, 2007, the Debtor's balance sheet showed total
assets of $169,148,000, total secured debt of $173,627,000, total
liabilities subject to compromise of $75,803,000, and total
stockholders' deficit of $80,282,000.

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

The Debtor filed for chapter 11 protection on Nov. 30, 2006
(Bankr. D. N.J. Case No. 06-21886).  Gerald H. Gline, Esq., and
Michael D. Sirota, Esq., at Cole, Schotz, Meisel, Forman &
Leonard P.A. represent the Debtor.  The Debtor selected Logan and
Company Inc. as noticing and claims agent.  Kenneth Rosen, Esq.,
and Mary E. Seymour, Esq., at Lowenstein Sandler PC represent the
Official Committee of Unsecured Creditors.  In its schedules filed
with the Court, the Debtor disclosed total assets of $178,626,436
and total debts of $178,890,725.  The Confirmation Hearing on the
Debtor's Second Amended Plan of Reorganization is set for Feb. 22,
2008.


MUSICLAND HOLDING: Posts $77,000 Net Loss in December 2007
----------------------------------------------------------

                     Musicland Holding Corp.
                   Consolidated Balance Sheet
                    As of December 31, 2007

ASSETS
Current Assets
   Cash                                            $11,706,000
   Letters of Credit/Other Deposits                    415,000
   Other
      Amounts due from TransWorld                            0
      Receivables from Sub-leases                      774,000
      Miscellaneous CC                                  29,000
      Vendors Credit due from services               1,541,000
                                                 -------------
      Total                                         14,465,000
                                                 =============

Fixed Assets                                                 0
Other assets
   Insurance Deposits                                3,977,000
   Utility and Tax Deposits                                  0
                                                 -------------
      TOTAL ASSETS                                 $18,442,000
                                                 =============

Liabilities & Shareholders' deficit
Current liabilities
   Accounts payable
      Expense accruals                              $2,840,000
   Other accrued liabilities
      Insurance Reserve                              3,380,000
      5% Admin. Fee on Wachovia L/C                    250,000
      Miscellaneous                                     29,000
                                                 -------------
      Total                                          6,499,000
                                                 -------------

DIP financing                                                0
Other LT Liabilities                                         0
Liabilities subject to compromise                  315,047,000
Shareholders' deficit                             (303,104,000)
                                                 -------------
      TOTAL LIABILITIES &
      SHAREHOLDERS' DEFICIT                        $18,442,000
                                                 =============


                    Musicland Holding Corp.
                    Statement of Operations
              For the Month Ended December 31, 2007


Merchandise revenue                                         $0
Non-merchandise revenue                                      0

   Net sales                                                 0

Cost of good sold                                            0

   Gross Profit                                              0

Store operating expenses
   Payroll                                                   0
   Occupancy                                                 0
   Other                                                     0
                                                 -------------
      Store expenses                                         0
                                                 -------------
General & administrative                                     0

-------------
EBITDA                                                       0

   Chapter 11 & related charges                       (141,000)
                                                 -------------
Operating income (Loss)                               (141,000)

   Interest income (expense)                            40,000
   Other non-operating income/expense                   24,000
                                                 -------------
      Earnings before Taxes                            (77,000)
                                                 -------------
   Income tax                                                0
                                                 -------------
      Net earnings (Loss)                             ($77,000)
                                                 =============


                    Musicland Holding Corp.
                    Statement of Cash Flow
              For the Month Ended December 31, 2007


Operating activities
   Net earnings (Loss)                                ($77,000)
   Adjustments to reconcile net earnings (loss)
      to net cash provided by (used in)
      operating activities:                              1,000
     Changes in operating assets and liabilities             0
     Other Current Assets                                    0
                                                 -------------
   Net cash provided by (used in)
      operating activities                             (76,000)


Investing activities
Net cash provided by (used in)
   investing activities                                      0
Financing activities                                         0
                                                 -------------
Increase/(decrease) in cash                            (76,000)
                                                 -------------
   Cash at the beginning of Period                  11,782,000
                                                 -------------
   Cash at the end of Period                       $11,706,000
                                                 =============

Based in New York, New York, Musicland Holding Corp., is a
specialty retailer of music, movies and entertainment-related
products.  The Debtor and 14 of its affiliates filed for chapter
11 protection on Jan. 12, 2006 (Bankr. S.D.N.Y. Lead Case No.
06-10064).  James H.M. Sprayregen, Esq., at Kirkland & Ellis,
represents the Debtors in their restructuring efforts.   Mark T.
Power, Esq., at Hahn & Hessen LLP, represents the Official
Committee of Unsecured Creditors.  At March 31, 2007, the Debtors
disclosed $20,121,000 in total assets and $321,546,000 in total
liabilities.

On May 12, 2006, the Debtors filed their Joint Plan of Liquidation
with the Court.  On Sept. 14, 2006, they filed an amended Plan and
a Second Amended Plan on Oct. 13, 2006.  The Court approved the
adequacy of the Amended Disclosure Statement on Oct. 13, 2006.
The hearing to consider confirmation of the 2nd Amended Joint
Plan started on Nov. 28, 2006.  The Debtor's Second Amended Joint
Plan of Liquidation was declared effective as of Jan. 30, 2008.
(Musicland Bankruptcy News, Issue No. 46; Bankruptcy Creditors'
Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000)


NEW CENTURY: Incurs $14,549,259 Net Loss in Month Ended Nov. 30
---------------------------------------------------------------

           New Century Financial Corp. and Affiliates
                   Consolidated Balance Sheet
                     As of November 30, 2007

Assets
Current Assets:
Unrestricted Cash and Equivalents                   $90,992,244
Restricted Cash and Equivalents                     [18,305,368]
Accounts Receivable, Net                                      0
Notes Receivable                                              0
Inventories                                                   0
Prepaid Expenses                                      9,979,169
Professional Retainers                                        0
Other Current Assets                                 79,131,060
                                                 --------------
Total Current Assets                                198,407,841
                                                 --------------
Property and Equipment                               57,723,190
Other Assets                                      7,594,625,697
                                                 --------------
Total Assets                                     $7,850,756,729
                                                 ==============

Liabilities and Owners' Equity
Liabilities Not Subject to Compromise:
   Accounts Payable                                          $0
   Professional Fees                                 32,562,321
Liabilities Subject to Compromise:
   Secured Debt                                   7,255,428,803
   Priority Debt                                      2,739,519
   Unsecured Debt                                   254,229,903
                                                 --------------
Total Liabilities                                 7,544,960,546
                                                 --------------
Owner Equity:
   Capital Stock                                      9,480,047
   Additional Paid-in Capital                     2,170,845,310
   Partners' Capital Account                                  0
   Owners' Equity Account                                     0
   Retained Earnings - Prepetition               (1,088,392,467)
   Retained Earnings - Postpetition                (786,136,707)
   Adjustments to Owner Equity                                0
   Postpetition Contributions                                 0
                                                 --------------
Net owner Equity                                    305,796,183
                                                 --------------
Total Liabilities and Owners' Equity             $7,850,756,729
                                                 ==============


           New Century Financial Corp. and Affiliates
             Consolidated Statement of Operations
                 Month Ended November 30, 2007

Revenues                                              ($308,673)
Cost of Goods Sold                                            0
Operating Expenses:
   Contibutions                                              36
   Employee Benefits Programs                            67,132
   Office Expense                                       545,030
   Rent and Lease Expense                             1,006,471
   Salaries, Commissions, & Fees                      1,595,408
   Travel and Entertainment                               4,464
   Other                                              1,546,315
Depreciation, Depletion & Amortization                2,105,405
                                                 --------------
Net Profit (Loss) before Other Income & Expenses     (7,178,934)
Other Expense                                                 0
Reorganization Items
   Professional Fees                                  7,875,445
   Interest Earned for Accumulated Cash                (505,120)
Total Reorganization Expenses                         7,370,325
Income Taxes                                                  0
                                                 --------------
Net Profit (Loss)                                  ($14,549,259)
                                                 ==============


           New Century Financial Corp. and Affiliates
          Schedule of Cash Receipts and Disbursements
                  Month Ended November 30, 2007

Cash, Beginning of month                           $103,119,917

Total Receipts                                        2,126,096

Total Disbursements                                 (14,553,768)
Accounts and Intercompany Transfers                     300,000
                                                 --------------
Net Cash Flow                                       (12,127,672)
                                                 --------------
Unrestricted Cash, End of month                     $90,992,244
                                                 ==============

Founded in 1995, Irvine, Calif.-based New Century Financial
Corporation (NYSE: NEW) -- http://www.ncen.com/-- is a real
estate investment trust, providing mortgage products to borrowers
nationwide through its operating subsidiaries, New Century
Mortgage Corporation and Home123 Corporation.  The company offers
a broad range of mortgage products designed to meet the needs of
all borrowers.

The company and its debtor-affiliates filed for Chapter 11
protection on April 2, 2007 (Bankr. D. Del. Lead Case No.
07-10416).  Suzzanne Uhland, Esq., Austin K. Barron, Esq., and Ana
Acevedo, Esq., at O'Melveny & Myers LLP, and Mark D. Collins,
Esq., Michael J. Merchant, Esq., and Jason M. Madron, Esq., at
Richards, Layton & Finger, P.A., represent the Debtors.  The
Official Committee of Unsecured Creditors selected Hahn & Hessen
as its bankruptcy counsel and Blank Rome LLP as its co-counsel.
When the Debtors filed for bankruptcy, they listed total assets of
$36,276,815 and total debts of $102,503,950.  The expiration of
the Debtors' exclusive plan filing period was extended to Feb. 21,
2008. (New Century Bankruptcy News, Issue No. 30; Bankruptcy
Creditors' Service, Inc., http://bankrupt.com/newsstand/or
215/945-7000).


SOLUTIA INC: Incurs $134,000,000 Net Loss in December 2007
----------------------------------------------------------

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

                            ASSETS

Cash                                                 $4,000,000
Trade Receivables, net                              176,000,000
Account Receivables-Unconsolidated Subsidiaries      72,000,000
Inventories                                         200,000,000
Other Current Assets                                 73,000,000
Assets of Discontinued Operations                     5,000,000
                                                 --------------
Total Current Assets                                530,000,000

Property, Plant and Equipment, net                  663,000,000
Investments in Subsidiaries and Affiliates          687,000,000
Intangible Assets, net                              106,000,000
Other Assets                                         69,000,000
                                                 --------------
Total Assets                                     $2,055,000,000
                                                 ==============

             LIABILITIES AND SHAREHOLDERS' DEFICIT

Accounts Payable                                   $257,000,000
Short Term Debt                                     952,000,000
Other Current Liabilities                           165,000,000
Liabilities of Discontinued Operations                2,000,000
                                                 --------------
Total Current Liabilities                         1,376,000,000

Long-Term Debt                                       19,000,000
Other Long-Term Liabilities                         195,000,000
                                                 --------------
Total Liabilities not Subject to Compromise       1,590,000,000

Liabilities Subject to Compromise                 2,038,000,000

Shareholders' Deficit                            (1,573,000,000)
                                                 --------------
Total Liabilities & Shareholders' Deficit        $2,055,000,000
                                                 ==============


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

Total Net Sales                                    $187,000,000
Total Cost Of Goods Sold                            183,000,000
                                                 --------------
Gross Profit                                          4,000,000

Total MAT Expense                                    17,000,000
                                                 --------------
Operating Income (Loss)                             (13,000,000)

Equity Earnings from Affiliates                               0
Interest Expense, net                               (15,000,000)
Other Income, net                                     4,000,000
Loss on debt modification                                     0

Reorganization Items:
Professional fees                                    (6,000,000)
Provision for rejected executory contracts                    0
Employee severance and retention costs               (2,000,000)
Adjustment to allowed claim amounts                 (91,000,000)
Settlements of prepetition claims                             0
Other                                                         0
                                                 --------------
                                                    (99,000,000)
                                                 --------------
Loss before taxes                                  (123,000,000)

Income tax expense (benefit)                                  0

Income from discontinued operations, net of tax     (11,000,000)
                                                 --------------
Net Loss                                          ($134,000,000)
                                                 ==============

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. 116; 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.

                             *********

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.  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,
Joseph Medel C. Martirez, Ma. Cristina I. Canson, Christopher G.
Patalinghug, 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.

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