TCR_Public/080509.mbx          T R O U B L E D   C O M P A N Y   R E P O R T E R

            Friday, May 9, 2008, Vol. 12, No. 110

                             Headlines

ACANDS INC: Bankruptcy Court Confirms Reorganization Plan
ADVANCED MARKETING: Demands $1.8MM From 'Hooked on Phonics' Maker
ADVANCED MARKETING: Settles Mascot Books Claim for $266,000
AEGIS MORTGAGE: Seeks to Terminate 401(k) Plan for Employees
AIRTRAN HOLDINGS: Shareholder ComVest Has 5.3% Equity Ownership

ALESCO FINANCIAL: Earns $84.9 Million in First Quarter
ALPHA MEZZ: Moody's Junks Ratings on Five Note Classes
AMERICAN CAPITAL: Moody's Holds Ratings After $813MM Asset Decline
AMERICAN LAFRANCE: Court Approves Sale Agreement with ArvinMeritor
AMERICAN LAFRANCE: Assumption of Contracts Under Plan Opposed

AMERICAN AXLE: Gets $200 Mil. Aid from GM to Resolve Labor Dispute
ATLANTIC EXPRESS: Constrained Liquidity Cues S&P to Chip Ratings
ARVINMERITOR INC: Gets Go-Signal to Buy American LaFrance Assets
BANC OF AMERICA: Moody's Holds Ba3 Rating on $10.228MM Cl. N Cert.
BLOCKBUSTER INC: State Street Bank Reports 5.1% Stake Ownership

BLOUNT INTERNATIONAL: Shareholders Declare 5% Equity Ownership
BMB MARKETPLACE: Files Schedules of Assets and Liabilities
BNG HOLDINGS: Case Summary & 43 Largest Unsecured Creditors
BOMBARDIER INC: Moody's Holds Ba2 Ratings; Changes Outlook to Pos.
BON-TON STORES: State Street Owns 5.3% of Outstanding Stake

BRUCE ROSEMAN: Voluntary Chapter 11 Case Summary
CABLEVISION SYSTEMS: Unit Buying Sundance Channel for $496 Million
CABLEVISION SYSTEMS: Sundance Buyout Won't Affect S&P's 'BB' Rtng.
CABLEVISION SYSTEMS: Newsday Bid Gets Thumbs Down from Consumers
CBA COMMERCIAL: Realized Losses Prompt Moody's to Lower Ratings

CENTEX CORP: S&P Chips Ratings to BB from BB+ with Neg. Outlook
CHALLENGER POWERBOATS: Jaspers Hall Expresses Going Concern Doubt
CHARMING SHOPPES: Reaches Agreement to End Board Appointees Battle
CHEMTURA CORP: S&P Cuts Ratings to BB; Retains Developing Watch
CHRYSLER LLC: Revenue Decline Cues Fitch to Cut IDR to B from B+

CHURCH OF GOD: Case Summary & Eight Largest Unsecured Creditors
CLEAR CHANNEL: Judge Allows Breach of Contract Suit Against Banks
CLEBURNE & TM: Sunrise Mall Auction Halted by Bankruptcy Filing
COMM 2006-C8: Moody's Junks Rating on $9.439MM Class Q Certs.
CONSUMER ACCEPTANCE: Case Summary & Largest Unsecured Creditor

COREY LANDINGS: Files Schedules of Assets and Liabilities
COUNTRYWIDE FINANCIAL: Vows to Keep Watch Over Mistakes in Lending
COUNTRYWIDE FIN'L: S&P Cuts Ratings on Deals, Outlook Developing
DAN RIVER: Board Names John Hedge of Scouler & Company as CRO
DAVIS SQUARE: Fitch Downgrades Ratings on Five Note Classes

DIRECTV HOLDINGS: Moody's Rates Proposed $1.35BB Sr. Notes Ba3
DIRECTV HOLDINGS: S&P Lifts Ratings on Two Note Classes to 'BB'
DOLE FOOD: Credit Protection Remains Weak for Fitch's 'B-' Rating
ENCAP GOLF: Files Chapter 11 After State Stops $1 Billion Project
ENCAP GOLF: Case Summary & 20 Largest Unsecured Creditors

EOS AIRLINES: Wants Management Incentive Plan for Employees OK'd
FANNIE MAE: Posts $2.2BB Net Loss; Plans to Raise $6BB New Capital
FIRST HORIZON: Moody's Downgrades Ratings on 11 ALT-A Tranches
FRED LEIGHTON: Says Merrill Lynch and Christie's Violated Stay
FRONTIER AIRLINES: Gets Court Authority to Assume Airbus Sale LOI

FTS GROUP: R.E. Bassie Expresses Going Concern Doubt
GENERAL MOTORS: Liquidity Negatively Impacted by $2.1 Billion
GENERAL MOTORS: To Provide $200 Million to Axle to End Strike
GENERAL MOTORS: In Talks on $750 Million Pledge for ResCap Bailout
GMAC LLC: Parents In Talks on $750 Mil. Bailout for ResCap

GRENADIER FINDING: Fitch Junks Ratings on Three Note Classes
HCA INC: Earns $170 Million in First Quarter Ended March 31
HEALTHSOUTH CORP: March 31 Balance Sheet Upside-Down by $1.5BB
HOME INTERIORS: Gets Initial OK to Use NexBank's Cash Collateral
HOME INTERIORS: Wants to Access $5.1 Million Facility of NexBank

HOVNANIAN ENTERPRISES: Reports Prelim. Results for Second Quarter
HSI ASSET: S&P Places 13 Ratings Under Negative CreditWatch
ICEBOX ADVERTISING: Case Summary & 20 Largest Unsecured Creditors
IMAGEKING VISUAL: Case Summary & 25 Largest Unsecured Creditors
JP MORGAN MORTGAGE: Moody's Affirms Ratings on Stable Performance

JUPITER HIGH-GRADE: Fitch Junks Rating on $39.957MM Class C Notes
KRONOS: S&P Cuts Rating on $400MM Senior Secured Notes to 'B'
LB-UBS: Fitch Affirms Low-B Ratings on Three Certificate Classes
LINENS N THINGS: To Pay $8,000,000 for Sales and Use Taxes
LINENS N THINGS: To Pay $26.5MM for Warehouse Obligations

LOMBARDO'S RAVIOLI: Case Summary & 20 Largest Unsecured Creditors
MAGUIRE PROPERTIES: Moody's Cuts Corp. Family Rtng. to B1 from Ba2
MASTR ASSET: S&P Junks Ratings on Two Certificate Classes
MAXXAM INC: Deloitte & Touche Raises Going Concern Doubt
MERCURY GROUP: Case Summary & 19 Largest Unsecured Creditors

MGM MIRAGE: S&P Holds 'BB' Rating and Revises Outlook to Stable
MILLSTONE FUNDING: Fitch Puts 'B' Rating on $879.961MM Notes
MORGAN STANLEY: Fitch Cuts Certificate Rating to C/DR4 from CC/DR2
NEFF CORP: Weak Performance Prompts S&P to Cut Corp. Credit to B
NETWOLVES CORP: Bankruptcy Court Approves Disclosure Statement

NETWOLVES CORP: Court Sets Plan Confirmation Hearing June 24
OCONEE CLUB: Voluntary Chapter 11 Case Summary
ONLINE INSURANCE: Case Summary & 20 Largest Unsecured Creditors
ON SEMICONDUCTOR: Moody's Lifts Corp. Family Rating to Ba3 from B1
OP1-CRH III: Case Summary & Nine Largest Unsecured Creditors

ORLANDO POU: Case Summary & 8 Largest Unsecured Creditors
PACIFIC BAY: Fitch Slashes Rating on $6.317MM Notes to 'CCC'
PEOPLES COMMUNITY BANKCORP: BKD LLP Expresses Going Concern Doubt
PETROHAWK ENERGY: Announces $500 Million Offering of Senior Notes
PETROHAWK ENERGY: $1BB Add'l Capital Cues S&P to Hold 'B' Ratings

PETROHAWK ENERGY: Moody's Assigns B3 Rating on $500MM Sr. Notes
PSEG ENERGY: Fitch Won't Take Rating Actions on IRS Disallowance
QUAIL LAKE: Files Schedules of Assets and Liabilities
QUAKER FABRIC: Court Moves Exclusive Plan Filing Period to May 19
QUEBECOR WORLD: Seeks Extension of the CCAA Stay Until July 25

QUEBECOR WORLD: Ernst & Young Reports Updates on CCAA Proceedings
RECYCLED PAPER: Payment Default Cues Moody's to Cut Rating to Caa3
REFCO INC: TH Lee Partners, et al., Want Access to Secret Docs
REFCO INC: Claim Transfers Between Feb. 13 and May 2, 2008
RESIDENTIAL CAPITAL: To Get $750 Mil. Bailout from GM & Cerberus

RF MICRO DEVICES: Begins Restructuring; Lays Off 350 Employees
ROYALTY PHARMA: S&P Rates Proposed $300MM Unsecured Loan BB+
SECURITY CAPITAL: Posts $96.1 Million Net Loss in 2008 1st Quarter
SHERMAG INC: Files for Creditor Protection Under the CCAA
SIRVA INC: Court Sets June 16 as Class 5-A Claims Bar Date

SOLO CUP: Moody's Holds B2 CF Rating, Revises Outlook to Stable
SOUTH COAST: Collateral Deterioration Cues Fitch to Lower Ratings
SOUTH COAST: Fitch Chips Rating on $30MM Cl. B Notes to B from AA
SPANSION INC: Fitch Holds $207MM Sr. Debentures Rating at CCC-/RR6
SPRINT NEXTEL: Forges Wireless Communications Biz with Clearwire

SPRINT NEXTEL: Combines Applications & Services with Google Inc.
TRIBUNE CO: News Corp. Close to Clinching Newsday Deal
TRIBUNE CO: Says Consumers are Wary about Cablevision's Bid
TRICOM SA: Bancredito Panama Sends Subpoena to BDO Seidman, et al
TRICOM SA: Asks Court to Fix July 8 As Claims Bar Date

TROPICANA ENTERTAINMENT: Taps Kirkland & Ellis as Bankr. Counsel
TROPICANA ENT: Noteholders Want Court to Appoint Ch. 11 Trustee
TROPICANA ENT: Can Hire Kurtzman Carson as Notice and Claims Agent
TWEETER HOME: Opens First Store Since Schultze Acquisition
TWEETER HOME: Wants to Extend Removal Period to October 31

TWEETER HOME: Wants to Employ Ask Financial as Special Counsel
UPPER BEAR CREEK: Case Summary & Largest Unsecured Creditors
U.S. ANTIMONY: DeCoria Maichel Expresses Going Concern Doubt
U.S. ENERGY: Court Sets July 1 as Claims Bar Date
U.S. ENERGY: Has Until July 8 to File Chapter 11 Plan

VALHI INC: S&P Lowers Corporate Credit Rating to B from B+
VALLEJO CITY: S&P Cuts Improvement Project Rating to B from A
VALLEJO PUBLIC: S&P Slashes Revenue Bonds Rating to B from A-
VION PHARMACEUTICALS: Receives Nasdaq Delisting Notice
WACHOVIA BANK: Fall of Property Value Cues Moody's to Cut Ratings

WELLMAN INC: Panel Seeks Inquiry on $375 Mil. Refinancing Deal
WS PARK: Case Summary & Largest Unsecured Creditor

* Fitch Performs Analysis on 2002 Through 2004 Vintages in US CMBS
* Student Loan Market Disruptions Pressure Lenders, Fitch Says
* CREL CDO Delinquency Rate Down in April, Fitch's Index Show
* Fitch Says ANLs On Auto Loan Securities Rise Higher in April
* Fitch Comments on Ford and GM Outlook After 1st Quarter Earnings

* Fitch Says Bonds Affected by Cuts in '08 Stays High at $88.4BB
* Fitch Says Auction-Rate Closed-End Fund Refinancing Increase
* S&P's Outlook for Media Ent. Industry Calls For Boost in Ads
* S&P Says Most CMBS Borrowers Were Able to Refinance Loans
* Consumer Products Cos. Will Face Tougher Test in '08, S&P Says

* S&P Says Mounting Default in 2008 Come As Hardly Surprising
* Moody's Says Measures of Liquidity Strains U.S. SG Companies
* Moody's Says Global SG Default Rate Rises to 1.7% in April
* Roberta DeAngelis Appointed as Acting U.S. Trustee for Region 3

* BOOK REVIEW: Long-Term Care in Transition: The Regulation of
                          Nursing Homes

                             *********

ACANDS INC: Bankruptcy Court Confirms Reorganization Plan
---------------------------------------------------------
The Honorable Judith K. Fitzgerald at the United States District
Court for the District of Delaware confirmed on Tuesday the
chapter 11 reorganization plan of ACandS Inc.,
Bankruptcylaw360.com says, citing the Debtor's lead counsel.

ACandS still needs to get a stamp of approval from the Court
before it can exit bankruptcy.

As reported by the Troubled Company Reporter, ACandS' bankruptcy
plan, as amended, provides for the issuance of injunctions under
Section 524(g) of the U.S. Bankruptcy Code that result in
channeling of certain asbestos-related liabilities of the Debtor
into a trust.  The Debtor said the Trust will (i) possess the
status and features of a "qualified settlement fund" for the
purposes of Section 468B of the Internal Revenue Code, (ii) assume
the Debtor's liabilities with respect to all Asbestos Personal
Injury Claims, and (iii) use Trust Assets and income to pay
Asbestos Personal Injury Claims, as provided in the Plan and Trust
Documents.

When it sought Chapter 11 protection in September 2002, ACandS had
already settled 247,000 asbestos claims, but had 300,000 left to
deal with, according to an Associated Press report.

The Debtor said that its $449,000,000 insurance claim against
Travelers Casualty and Surety Company is its most valuable asset,
and will be used to fund the trust.  The TCR also noted that the
Trust will be funded with various assets, which includes, among
other things:

   a) an $11,600,000 cash contribution by Irex Corporation;

   b) 100% of common stock of the Reorganized Debtor and 100% of
      the common stock of the Debtor;

   c) Pre-Petition trust assets and remaining collateral in the
      Pre-Petition trust as of the effective date; and

   d) the ACandS QSF Trust, which had a value of $2,665,336 as of
      July 31, 2007.

Under the Debtor's Amended Plan, all Administrative and Priority
Tax Claims will be receive cash in full satisfaction of the claim.  
Priority Claims against the Debtor will receive, either:

   a) cash in the allowed amount of its priority claim; or

   b) other, lesser treatment as agreed in writing by the holder
      and the Debtor.

Holders of this claim is expected to receive 100% of the allowed
amount of their claims.

Holders of Non-Asbestos Secured Claims will retain, unlatered,
legal, equitable and contractual rights, including any liens that
secure the allowed claim.  The Debtor further says that holders of
this claim will also receive 100% of the allowed amount of their
claims.

All holders of Asbestos Personal Injury Claims will be assumed by
the Trust without further act and will be channeled to and
resolved in accordance with the asbestos personal injury claim
treatment.  

The Debtor estimates Asbestos PI Claims to aggregate
$3,000,000,000.  Associated Press said Asbestos PI Claimants would
receive roughly 6% recovery under the Plan.

Holders of General Unsecured Claims will receive cash equal to 10%
of their claims.  The Debtor estimates general unsecured claims to
total $1,116,000.

Holders of Non-Asbestos Unsecured Insured Litigation Claims will
be allowed to liquidate their claims.  The recovery of these
claims depends on the amount of any available applicable insurance
coverage for each claim.  If these holders have not received 10%
of the principal amount of their allowed claim, the Debtor said
that it will distribute cash to these holders in the sum of 10% of
the principal amount plus 6% interest rate.

Holders of Equity Interests will retain their interest under the
Amended Plan.

The Amended Plan has been met with criticisms by the United States
Trustee for Region 3, who insisted that the Debtor justify the
proposed release of claims belonging to certain third-party
claimants.  The U.S. Trustee said in court documents that with
respect to proposed claims release, there appears to be no
evidence or basis for releasing widespread claims against certain
parties and other entities including, as defined in the Debtor's
Plan, officers, counsel, bankers, advisors, or agents of the
Debtor.

Creditor Owens-Illinois Inc., also noted that the trust to be
created under the plan has "overly broad powers".

                        About AcandS Inc.

Based in Lancaster, Pennsylvania, ACandS Inc. was an insulation
contracting company, primarily engaged in the installation of
thermal and mechanical insulation.  In later years, the Debtor
also performed a significant amount of asbestos abatement and
other environmental remediation work.  The company filed for
chapter 11 protection on Sept. 16, 2002 (Bankr. Del. Case No. 02-
12687).

Laura Davis Jones, Esq., Curtis A. Hehn, Esq., James E. O'Neill,
Esq., and Michael Paul Migliore, Esq., at Pachulski Stang Ziehl &
Jones, P.C., represent the Debtor in its restructuring efforts.

Kathleen Campbell Davis, Esq., Aileen F. Maguire, Esq., Mark T
Hurford, Esq., and Marla Rosoff Eskin, Esq., at Campbell & Levine,
LLC, represent the Official Committee of Asbestos Personal Injury
Claimants.

At Dec. 31, 2006, the Debtor disclosed that it had book assets of
approximately $11.78 million and book liabilities, including
liabilities for the payment of asbestos-related and other claims
of $11.78 million.  At June 30, 2007, net book assets before
liabilities for  asbestos-related and other claims was
approximately $9,010,000.

The Court set April 21, 2008 to consider confirmation of the
Debtor's Second Amended Chapter 11 Plan of Reorganization.


ADVANCED MARKETING: Demands $1.8MM From 'Hooked on Phonics' Maker
-----------------------------------------------------------------
Bankruptcylaw360.com reports that Advanced Marketing Services Inc.
filed a complaint against the producers of "Hooked on Phonics" for
wrongfully withholding funds.  Advanced Marketing has asserted a
claim for $1,860,000 against the defendants, Bankruptcylaw360
relates.

The Debtor is hoping to recoup money for customer returns on
several educational book products, Bankruptcylaw360 notes.

Hooked on Phonics creates educational products that help teach
English, Math and other skills to children.

Educate, Inc. acquired the company, now known as Smarterville
Productions LLC., in 2005.

                    About Advanced Marketing

Based in San Diego, Calif., Advanced Marketing Services, Inc.
-- http://www.advmkt.com/-- provides customized merchandising,
wholesaling, distribution and publishing services, currently
primarily to the book industry.  The company has operations in the
U.S., Mexico, the United Kingdom and Australia and employs
approximately 1,200 people Worldwide.

The company and its two affiliates, Publishers Group Incorporated
and Publishers Group West Incorporated filed for chapter 11
protection on Dec. 29, 2006 (Bankr. D. Del. Case Nos. 06-11480
through 06-11482).  Suzzanne S. Uhland, Esq., Austin K. Barron,
Esq., Alexandra B. Feldman, Esq., O'Melveny & Myers, LLP,
represent the Debtors as Lead Counsel.  Chun I. Jang, Esq., Mark
D. Collins, Esq., and Paul Noble Heath, Esq., at Richards, Layton
& Finger, P.A., represent the Debtors as Local Counsel.
Lowenstein Sandler PC represents the Official Committee of
Unsecured Creditors.

In schedules filed with the Court, Advanced Marketing disclosed
total assets of $213,384,791 and total debts of $216,608,357.  
Publishers Group West disclosed total assets of $39,699,451 and
total debts of $83,272,493.  Publishers Group Inc. disclosed zero
assets but $41,514,348 in liabilities.

On Aug. 24, 2007, the Debtors' exclusive period to file a chapter
11 plan expired.  On the same date, the Debtors and Creditors
Committee filed a Plan & Disclosure Statement.  On September 26,
the Court approved the adequacy of the Disclosure Statement
explaining the Second Amended Plan.  On Nov. 13, 2007, the Debtors
filed a Third Amended Plan and that plan was confirmed by the
Court on November 15.  The Plan became effective December 4 and
Curtis R. Smith was appointed Plan Administrator.


ADVANCED MARKETING: Settles Mascot Books Claim for $266,000
-----------------------------------------------------------
The Hon. Christopher S. Sontchi of the U.S. Bankruptcy Court for
the District of Delaware approved a stipulation settling
reclamation and all other claims asserted by Mascot Books, Inc.
against the bankruptcy estates of Advanced Marketing Services
Inc., Publishers Group Incorporated and Publishers Group West
Incorporated.

The Debtors agreed that Mascot Books has a $266,293 general
unsecured claim against Advanced Marketing Services.  The allowed
claim will be paid pursuant to the Debtors' confirmed Third
Amended Joint Chapter 11 Plan of Liquidation.  The parties
executed mutual releases.

                    About Advanced Marketing

Based in San Diego, Calif., Advanced Marketing Services, Inc.
-- http://www.advmkt.com/-- provides customized merchandising,
wholesaling, distribution and publishing services, currently
primarily to the book industry.  The company has operations in the
U.S., Mexico, the United Kingdom and Australia and employs
approximately 1,200 people Worldwide.

The company and its two affiliates, Publishers Group Incorporated
and Publishers Group West Incorporated filed for chapter 11
protection on Dec. 29, 2006 (Bankr. D. Del. Case Nos. 06-11480
through 06-11482).  Suzzanne S. Uhland, Esq., Austin K. Barron,
Esq., Alexandra B. Feldman, Esq., O'Melveny & Myers, LLP,
represent the Debtors as Lead Counsel.  Chun I. Jang, Esq., Mark
D. Collins, Esq., and Paul Noble Heath, Esq., at Richards, Layton
& Finger, P.A., represent the Debtors as Local Counsel.
Lowenstein Sandler PC represents the Official Committee of
Unsecured Creditors.

In schedules filed with the Court, Advanced Marketing disclosed
total assets of $213,384,791 and total debts of $216,608,357.  
Publishers Group West disclosed total assets of $39,699,451 and
total debts of $83,272,493.  Publishers Group Inc. disclosed zero
assets but $41,514,348 in liabilities.

On Aug. 24, 2007, the Debtors' exclusive period to file a chapter
11 plan expired.  On the same date, the Debtors and Creditors
Committee filed a Plan & Disclosure Statement.  On September 26,
the Court approved the adequacy of the Disclosure Statement
explaining the Second Amended Plan.  On Nov. 13, 2007, the Debtors
filed a Third Amended Plan and that plan was confirmed by the
Court on November 15.  The Plan became effective December 4 and
Curtis R. Smith was appointed Plan Administrator.



AEGIS MORTGAGE: Seeks to Terminate 401(k) Plan for Employees
------------------------------------------------------------
Aegis Mortgage Corp. and its debtor-affiliates ask the U.S.
Bankruptcy Court for the District of Delaware to terminate their
401(k) plan effective no earlier than May 31, 2008, and no later
than July 31, 2008.

The Debtors offered the 410(k) plan to their eligible employees
through Transamerica Retirement Services, under which the
employees contribute a portion of their pre-tax compensation to
the plan.  The Debtors administratively maintained the 410(k)
plan postpetition pending its termination.  As of the Petition
Date, the Debtors were current on any amounts owed on account of
the plan.

James E. O'Neill, Esq., at Pachulski Stang Ziehl & Jones, LLP, in
Wilmington, Delaware, says the Debtors have no need for the
410(k) plan and its termination will help them reduce their
administrative expenses.

"The Debtors' prompt termination of their 410(k) plan will
benefit both current and former employees by helping ensure a
smooth transition of employee funds as the Debtors' management
will serve as a liaison between the employees and Transamerica,"
Mr. O'Neill further says.

The Debtors will inform former employees with an interest in the
401(k) plan about the transfer of their funds, and will file all
Internal Revenue Service forms and returns necessary to effect
the termination and maintain tax qualification of the plan.

Headquartered in Houston, Texas, Aegis Mortgage Corporation --
http://www.aegismtg.com/-- offers a variety of mortgage loan       
products to brokers through its subsidiaries.  The company
together with 10 affiliates filed for chapter 11 protection on
Aug. 13, 2007 (Bankr. D. Del. Case No. 07-11119).  Curtis A. Hehn,
Esq., James E. O'Neill, Esq., Laura Davis Jones, Esq., and Timothy
P. Cairns, Esq., at Pachulski, Stang, Ziehl, & Jones, L.L.P.,
serve as counsel to the Debtors.  The Official Committee of
Unsecured Creditors is represented by Landis Rath & Cobb LLP. In
schedules filed with the Court, Aegis disclosed total assets of
$138,265,342 and total debts of $4,125,470.  (Aegis Bankruptcy
News, Issue No. 20; Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000).


AIRTRAN HOLDINGS: Shareholder ComVest Has 5.3% Equity Ownership
---------------------------------------------------------------
ComVest Investment Partners III, L.P., Comvest III Partners, LLC,
Robert L. Priddy and Michael S. Falk have declared that they
beneficially own 6,931,458 shares, representing 5.3% in Airtran
Holdings Inc. common stock.

Robert L. Priddy owns an additional 800,000 shares, bringing his
total common stock stake at 5.99%.

Headquartered in Orlando Florida, AirTran Holdings Inc. (NYSE:
AAI) -- http://www.airtran.com/-- a Fortune 1000 company, is the      
parent company of AirTran Airways Inc., which offers more than 700
daily flights to 56 U.S. destinations.  

                          *     *     *

To date, AirTran Holdings Inc. carries Moody's Investors Service
'B3' long-term corporate family and 'Caa2' senior unsecured debt
ratings.  Outlook is Stable.


ALESCO FINANCIAL: Earns $84.9 Million in First Quarter
------------------------------------------------------
Alesco Financial Inc. disclosed Tuesday financial results for its
first quarter ended ended March 31, 2008.

The company reported GAAP net income for the three-months ended
March 31, 2008, of $84.9 million, as compared to net income of
$11.8 million for the three-months ended March 31, 2007.  GAAP net
income for the three-months ended March 31, 2008, includes
$72.7 million of non-cash net gains resulting from fair value
adjustments on financial instruments, net of minority interest
allocations.

The company reported Adjusted Earnings for the three-months ended
March 31, 2008, of $20.2 million, as compared to Adjusted Earnings
of $17.2 million, for the three-months ended March 31, 2007.  
Adjusted Earnings, a non-GAAP measure of performance, excludes the
effects of certain adjustments in accordance with GAAP that
management believes may not have a direct financial impact on
distributable earnings.

                      Net Investment Income

Net investment income for the three month period ended March 31,
2008, was $26.5 million, compared with net investment income of
$16.8 million during the same three month period of 2007.

                  Investment in Debt Securities

At March 31, 2008, the estimated fair value of the company's  
investments in debt securities was $5.7 billion.  

As previously disclosed, the Kleros Real Estate CDOs have all
failed overcollateralization tests as a result of significant
ratings agency downgrade activity and are no longer making cash
distributions to the company.  The net cash flows of the Kleros
Real Estate CDOs are currently being used to pay down the
controlling class debtholders in each of the Kleros Real
Estate CDOs.  Despite the fact that each Kleros Real Estate CDO
has failed overcollateralization tests, the net interest earnings
of these CDOs continue to be reflected in the company's net
investment income and taxable income.

In addition, the company received written notice from the trustees
of Kleros Real Estate I, II, and III that each CDO has experienced
an event of default.  These events of default resulted from the
failure of certain additional overcollateralization tests
primarily due to credit rating agency downgrades.  The events of
default provide the controlling class debtholder in each CDO with
the option to liquidate all of the MBS assets collateralizing the
particular CDO.  The proceeds of any such liquidation would be
used to repay the controlling class debtholder.  

On May 1, 2008, the company received written notice from the
trustee of Kleros Real Estate III that the controlling class
debtholder has submitted a notice of liquidation.  Although
liquidation of the underlying collateral has not yet occurred,
once the liquidation process commences the company will no longer
able to include the liquidated assets and the related income as a
component of its REIT qualifying assets and income.  

As of the current date, the controlling class debtholders of
Kleros Real Estate I and II have not exercised their rights to
liquidate either CDO.  Since the company is not receiving any cash
flow from its investments in any of the Kleros Real Estate CDOs,
the events of default and liquidation notices do not have any
further impact on the company's cash flows.  

However, the assets of the Kleros Real Estate I, II and III CDOs
and the income they generate for tax purposes are a component of
the company's REIT qualifying assets and income.  If more than one
of the Kleros Real Estate CDOs is liquidated the company may have
to deploy additional capital into REIT qualifying assets in order
to continue to qualify as a REIT.  If the company is not able to
invest in sufficient other REIT qualifying assets, its ability
to qualify as a REIT could be materially adversely affected.

                       Investments in Loans

At March 31, 2008, the company's total investments in loans, net
was $1.8 billion.

                            Liquidity

As of March 31, 2008, the company's consolidated financial
statements include $135.2 million of available, unrestricted cash
and cash equivalents.  This amount includes $15.1 million of cash
dividends that were paid to company shareholders on April 10,
2008.  

As of March 31, 2008, the company's consolidated financial
statements include $87.8 million of restricted cash.  The
$87.8 million is primarily restricted for the following purposes:
$43.7 million at consolidated CDO entities to be used to acquire
additional assets and $44.1 million of undistributed cash flows
from operations at consolidated CDO entities.

                         Share Repurchase

On Aug. 3, 2007, the company's Board of Directors approved a share
repurchase plan that authorizes the company to purchase up to
$50.0 million of company common shares.  Under the plan, the
company may make purchases from time to time through open market
or privately negotiated transactions.  The timing and exact
number of shares purchased will be determined at AFN's discretion
and will depend on market conditions.  This plan may be modified
or discontinued at any time.  During the three-months ended
March 31, 2008, the company did not repurchase shares of its
common stock.

                         Dividend Summary

On Mar. 10, 2008, the company announced a cash dividend for the
quarter ended March 31, 2008, of $0.25 per common share.  The
dividend was paid on April 10, 2008, to shareholders of record as
of the close of business on March 20, 2008.

                          Balance Sheet

At March 31, 2008, the company's consolidated balance sheet showed
$7.9 billion in total assets, $7.5 billion in total liabilities,
$80.4 million in minority interests, and $258.1 million in total
stockholders' equity.

                      About Alesco Financial

Headquartered in Philadelphia, Alesco Financial Inc. (NYSE: AFN)
-- http://www.alescofinancial.com/-- is a specialty finance real  
estate investment trust (REIT).  The company is externally managed
by Cohen & Company Management LLC, a subsidiary of Cohen Brothers
LLC (which does business as Cohen & Company), an alternative
investment management firm, which, since 2001, has provided
financing to small and mid-sized companies in financial services,
real estate and other sectors.

                          *     *     *

The Kleros Real Estate CDOs have all failed overcollateralization
tests as a result of significant ratings agency downgrade activity
and are no longer making cash distributions to the company.  

The disruption in the credit markets, which has been particularly
severe in the residential mortgage lending sector, directly
impacts the company's business as its investment portfolio
includes investments in MBS financed through its on-balance sheet
Kleros Real Estate CDO subsidiaries and other CDO investments.

There can be no assurance that the company will not experience
further declines in fair value given market conditions.  Temporary
declines, if any, would be recorded as losses within accumulated
other comprehensive loss in the company's balance sheet and would
have a negative impact on book value, which the company
experienced during the twelve-months ended Dec. 31, 2007.  

Other-than-temporary declines, if any, would be recorded as an
impairment charge in the company's consolidated statement of
income and would have a negative impact on the company's net
income, which the company also experienced during the twelve-
months ended Dec. 31, 2007.  


ALPHA MEZZ: Moody's Junks Ratings on Five Note Classes
------------------------------------------------------
Moody's Investors Service has downgraded the ratings it has
assigned to a swap transaction entered into by and to six classes
of notes issued by Alpha Mezz CDO 2007-I, Ltd. and left on review
for possible further downgrade two of the ratings.  The rating
actions are:

Class Description: $325,000,000 Supersenior Swap

  -- Prior Rating: Aa2, on review for possible downgrade
  -- Current Rating: Ba1, on review for possible downgrade

Class Description: $70,000,000 Class II Senior Floating Rate Notes
Due 2047

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

Class Description: $30,000,000 Class III Senior Floating Rate
Notes Due 2047

  -- Prior Rating: Baa2, on review for possible downgrade
  -- Current Rating: Ca

Class Description: $5,000,000 Class IV Senior Floating Rate Notes
Due 2047

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

Class Description: $23,000,000 Class V Mezzanine Floating Rate
Deferrable Notes Due 2047

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

Class Description: $22,500,000 Class VI Mezzanine Floating Rate
Deferrable Notes Due 2047

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

Class Description: $7,000,00 Class VII Mezzanine Floating Rate
Deferrable Notes Due 2047

  -- Prior Rating: Caa2
  -- Current Rating: C

The rating actions reflect deterioration in the credit quality of
the underlying portfolio, as well as the occurrence as reported by
the Trustee on April 30, 2008, of an event of default described in
Section 5.1(d) of the Indenture dated March 1, 2007.

Alpha Mezz CDO 2007-I, Ltd. is a collateralized debt obligation
backed primarily by a portfolio of structured finance securities.

As provided in Article V of the Indenture during the occurrence
and continuance of an Event of Default, certain parties to the
transaction may be entitled to direct the Trustee to take
particular actions with respect to the Collateral Debt Securities
and the Notes.

The rating actions taken reflect the increased expected loss
associated with each tranche.  Losses are attributed to diminished
credit quality on the underlying portfolio.  The severity of
losses of certain tranches may be different, however, depending on
the timing and choice of further remedies to be pursued following
the default event.  Because of this uncertainty, the ratings
assigned to the Supersenior Swap and the Class II Notes remain on
review for possible further action.


AMERICAN CAPITAL: Moody's Holds Ratings After $813MM Asset Decline
------------------------------------------------------------------
Moody's Investors Service affirmed the Senior Unsecured Baa2
rating of American Capital Strategies, Ltd.  The affirmation
follows the company's announcement of a first quarter 2008 decline
in net assets of $813 million.  The composition of the loss
includes net operating income of $151 million, net realized gains
of $33 million and net unrealized depreciation of $997 million.  
The outlook remains stable.

While the amount of unrealized depreciation on the portfolio is
significant, the majority of losses are non-cash and relate to
accounting rules to value the investment portfolio at current
market values.  Furthermore, ACAS's loss in the quarter does not
result in any non-compliance with mandated leverage and asset
coverage requirements.  The depreciation of ACAS's investment
portfolio includes both market-related devaluations (spread
widening, market price declines in the case of European Capital,
comparable trading multiple declines) and SFAS 157 adjustments.  
These losses reflect the difficult market at March 31, 2008.  
ACAS's conservative capital structure gives it the ability to hold
these impaired investments to maturity, thus allowing for future
realized gains.

Should material losses occur in future quarters, ACAS's ability to
comply with required capital ratios, in particular the BDC asset
coverage restriction of 200%, could be affected.  Moody's views
long-term compliance with the asset coverage covenant as important
for the investment grade rating for BDCs.  However, Moody's
believes that ACAS is adequately positioned relative to its
capital and liquidity positions, in the context of the potential
for further valuation charges.

"The ability of ACAS to recognize significant portfolio
realizations during the first quarter and raise $317 million from
an equity offering supports Moody's view that ACAS will be able to
generate sufficient capital to remain in compliance with the BDC
covenants," said Andrew Forsyth, Moody's Senior Analyst.  "The
company's strong liquidity profile with limited near-term
maturities provides additional protection in the event that
economic conditions worsen," he added.

Moody's said that expanding economic weakness could result in
credit-related challenges to ACAS's financial performance.  ACAS
has invested significant resources in its Finance Accounting
Compliance Team that executes both pre and post deal due diligence
along with its internal Operations Teams, which should provide
support should credit issues arise.  For the first quarter, non-
accrual loans at face value as a percentage of total loans
increased to 8.2% from 7.9% at year-end.

Moody's will continue to monitor credit quality at the firm, given
its potential to affect the firm's financial performance and
access to confidence-sensitive investors.  This is particularly
important given the growth of the investment portfolio the last
few years.  The maintenance of market confidence is critical for
BDCs, due to their limited capital retention and consequent need
to frequently access the market for growth capital.

Moody's noted that the stable outlook reflects the expectation
that future portfolio depreciation will be contained.

These ratings were affirmed:

  -- Long-Term Issuer RatingBaa2
  -- Senior Unsecured RatingBaa2
  -- Senior Unsecured Shelf Rating(P)Baa2
  -- Preferred Stock Shelf Rating(P)Ba1

Outlook: Stable

American Capital Strategies, Ltd. is headquartered in Bethesda,
Maryland, and reported assets of approximately $10.2 billion at
March 31, 2008.


AMERICAN LAFRANCE: Court Approves Sale Agreement with ArvinMeritor
------------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware approved
the Bill of Sale and Repurchase Agreement that American LaFrance
LLC entered into with ArvinMeritor, Inc. pursuant to Section
363(f) of the Bankruptcy Code.

The Debtor filed a request to approve its agreement with
ArvinMeritor on February 14, 2008, but withdrew it days later for
unstated reasons.

Christopher A. Ward, Esq., at Klehr, Harrison, Harvey, Branzburg
& Ellers, LLP, in Wilmington, Delaware, related that the proposed
agreement contemplates ArvinMeritor's repurchase of axles, free
and clear of liens, claims, and interests that ArvinMeritor
previously sold to the Debtor.  In exchange for the repurchase:

   (i) ArvinMeritor will reduce the Debtor's outstanding balance
       to ArvinMeritor;

  (ii) The axles will remain at the Debtor's facilities;

(iii) The Debtor will repurchase the axles from ArvinMeritor as
       needed for the Debtor's production during the next 12
       months;

  (iv) ArvinMeritor will continue to supply new products to the
       Debtor on a cash-on-order basis; and

   (v) The Debtor will also waive the Chapter 5 cause of action
       against ArvinMeritor.

Mr. Ward notes that ArvinMeritor will repurchase the axles for
92% of their original purchase price or $1,044,723.  "This price  
exceeds the value that the Debtor can obtain if it were to sell
these axles in a piecemeal fashion.

                       About ArvinMeritor

Headquartered in Troy, Michigan, ArvinMeritor, Inc. (NYSE: ARM)
-- http://www.arvinmeritor.com/-- supplies integrated systems,
modules and components to the motor vehicle industry.  The
company serves light vehicle, commercial truck, trailer and
specialty original equipment manufacturers and certain
aftermarkets.  ArvinMeritor employs about 19,000 people at more
than 120 manufacturing facilities in 24 countries which includes
China, India, Japan, Singapore, Thailand, Australia, Venezuela,
Brazil, Argentina, Belgium, Czech Republic, France, Germany,
Hungary, Italy, Netherlands, Spain, Sweden, Switzerland, United
Kingdom, among others.

                           *     *     *

As reported by the Troubled Company Reporter on May 8, 2008,
Standard & Poor's Ratings Services affirmed its 'B+' corporate
credit rating and other ratings on ArvinMeritor Inc., with
negative outlook.  The affirmations followed ArvinMeritor's
announcement of its plan to spin off its light vehicle systems
business to shareholders.  S&P is concerned about how
profitability and cash flow will unfold before the legal
separation, given uncertainty about production among many
automotive and heavy-truck customers.

Fitch also placed on the same day the company's ratings on Rating
Watch Negative:

  -- Issuer Default Rating 'B';
  -- Senior Unsecured 'B/RR4'
  -- Bank Credit Facility 'BB/RR1'.

                    About American LaFrance

Headquartered in Summerville, South Carolina, American LaFrance
LLC -- http://www.americanlafrance.com/-- is one of the
oldest           
fire apparatus manufacturers and one of the top six suppliers of
emergency vehicles in North America.  The company filed for
Chapter 11 protection on Jan. 28, 2008 (Bankr. D. Del. Case No.
08-10178).  Ian T. Peck, Esq., and Abigail W. Ottmers, Esq., at
Haynes and Boone LLP, are the Debtor's proposed Lead Counsel.  
Christopher A. Ward, Esq., at Klehr, Harrison, Harvey, Branzburg &
Ellers LLP, are the Debtor's proposed local counsel.  In its
schedules of assets and debts filed Feb. 4, 2008, the Debtor
disclosed $188,990,680 in total assets and $89,065,038 in total
debts.

The Debtor's exclusive period to file a plan expires on May 27,
2008. (American LaFrance Bankruptcy News, Issue No. 15; Bankruptcy
Creditors' Service, Inc., http://bankrupt.com/newsstand/or            
215/945-7000).


AMERICAN LAFRANCE: Assumption of Contracts Under Plan Opposed
-------------------------------------------------------------
Several parties-in-interest object to American LaFrance LLC's
proposed assumption of executory contracts under its Third Amended
Plan of Reorganization, including:

   * Town of Shadeland, Indiana,
   * Village of Larchmont, New York,
   * Borough of Downingtown, PA and Minquas Fire Company No. 2,
   * Fire Service, Inc., and
   * RT Jedburg Commerce Park, LLC.

American LaFrance asked the U.S. Bankruptcy Court for the District
of Delaware on April 14, 2008, for authority to assume more than
1,000 executory contracts pursuant to its Third Amended Plan.

On March 19, 2008, pursuant to its Asset Sale Motion, the Debtor
filed a Notice of its intent to assume approximately 1,100
contracts.  The Debtor subsequently filed a supplement to its
Notice of Intent for the purpose of excluding certain contracts
from the Contract List.

A list of Contracts to be Assumed under the Plan is available for
free at http://bankrupt.com/misc/ALF_ContractstobeAssumed.pdf

Jeff Findlay, president of Shadeland Town Council, relates that
the Council entered into a contract with the Debtor, which has
expired 10 months prepetition and has incurred multiple defaults.  
Fire Service shares the same sentiment with the Council as its
manufacturer's representative agreement has expired prepetition
and thus, Fire Service believes that there is nothing left in the
Agreement for the Debtor to assume or assign.

Mary E. Augustine, Esq., at Bayard, P.A., in Wilmington,
Delaware, counsel to Larchmont, explains that Larchmont and the
Debtor entered into an equipment contract in which the Debtor
agreed to pay $100 Larchmont for every day past the delivery
date.  She asserts that the Debtor's Assumption Motion attempts
to circumvent the liquidated damages provision in the Larchmont
Contract.

Downingtown and the Debtor have an agreement with a surety bond
issued by DaimlerChrysler, and Downingtown asserts a secured
claim for $756,931.  Downingtown reiterates that does not object
to the Plan or to Assumption Motion under the Plan, however, it
opposes the insufficient information provided by the Debtor on
the treatment and assumption of the DaimlerChrysler bonds.

David W. Carickhoff, Esq., at Blank Rome LLP, in Wilmington,
Delaware, representing RT Jedburg, relates that pursuant to
Section 365(d)(4)(A) of the Bankruptcy Code, leases of
nonresidential real property are "deemed rejected" unless assumed
"by the date of the entry of an order confirming a plan."  
Accordingly, RT Jedburg contends that unless the Debtor assumes
the Summerville Property Lease at or prior to confirmation of its
Plan, the Lease is rejected and Debtor must immediately surrender
the Property to RT Jedburg, unless it can cure all defaults to
the Lease.

Among others, the Objecting Parties ask the Court to:

   -- prohibit the Debtor from assuming and assigning Contracts
      that have expired, been terminated and accrued multiple
      defaults prepetition;

   -- direct the Debtor to provide adequate assurance of future
      performance, in the case of defaults, like setting new
      delivery dates and stipulation to the accrual of liquidated
      damages if the Equipment is delivered after the new
      delivery date; and

   -- compel the Debtor to clarify the treatment of surety bonds   
      under the Assumption Motion.

                   Debtor Respond to Objections

The Debtor acknowledges that the Assumption Motion under the Plan
has received responses.  The Debtor has advised the
counterparties that if they already filed an objection to the
previous assumption motions and notices, the Debtor will treat
the objections as filed to the current Assumption motion.  

"In an attempt to alleviate the concerns raised in certain of the
Objections and to better frame the issues remaining for the Court
at the confirmation hearing, the Debtor has prepared a
comprehensive response detailing the proposed treatment or
resolutions of the objections," Christopher A. Ward, Esq., at
Klehr, Harrison, Harvey, Branzburg & Ellers, LLP, in Wilmington,
Delaware, explains.

The adequate assurance of future performance issue will be
addressed at the confirmation hearing, the Debtor maintains.  If
the cure amount is unresolved prior to the confirmation hearing,
the Debtor will seek a hearing regarding the cure amount at a
later date.  The Debtor informs the Court that it is continuing
negotiations with these Objecting Parties:

   * South Carolina Electric & Gas Co.
   * RT Jedburg Commerce Park, LLC
   * Southwest Emergency Response Team
   * Clay Volunteer Fire Department, Inc.
   * GGS Information Services, Inc.
   * Village of Larchmont, New York
   * City of Camilla, Georgia
   * Clayton County, Georgia
   * Hi-Tech Emergency Vehicle Service, Inc.

Meanwhile, the Debtor has identified that the Children's Hospital
of Akron's, City of Strongville's, and the City of Plantation,
Florida's cure amount objections do not constitute a confirmation
issue.  However, the Debtor will seek the Court for a hearing at
a later date regarding the assumption or rejection of these
parties' Contracts.

According to the Debtor, the cure amount objections, separately
filed by Vogelpohl Fire Equipment, Inc., of nine parties have
been resolved and the underlying contract belonging to each Party
has not been completed and therefore commissions, if due, have
not been earned:

   * USEC
   * City of Winchester
   * City of Columbus, Ohio Fire Truck A
   * City of Columbus, Ohio Fire Truck B
   * The Southwest Council of Governments
   * The Village of Pomeroy
   * City of West Carrollton
   * Harrison County Fire Protection District
   * Tri-Community Joint Fire District

If the cure amount objection of Vogelpohl for its Dealer Sales
and Service Agreement is unresolved prior to the confirmation
hearing, the Debtor will ask the Court to schedule a hearing at a
later date and continue negotiating with Vogelpohl.

The Debtor and Apple Rock Advertising & Promotion, Inc., have
agreed to the cure amount of $24,500.

The Debtor maintains that the objections of the Parties
concerning the production of a vehicle do not constitute a cure
objection under Section 365.  However, the Debtor relates that it
intends to pay penalties, if owing, when the vehicles are
delivered to these parties:

   * City of Phoenix, Arizona
   * Town of Buckeye, Arizona
   * Augusta County, Virginia
   * City of Columbus, Indiana
   * Village of Larchmont, New York

Furthermore, the Debtor reiterates that the objections of these
five parties are moot since their contracts are already rejected
pursuant to the Plan Supplement and the Assumption Motion under
the Plan:

   * Town of Buckeye, Arizona
   * United Telephone Company of the Carolinas, d/b/a Embarq
   * International Business Machines
   * Diehl and Sons, Inc.
   * Kootenay Boundary Regional Fire Rescue

Though the Debtor rejects the IBM Agreement, the Debtor agrees to
IBM's asserted cure amount of $5,600 under the IBM Lease.  The
Debtor is also assuming the Diehl and Sons' dealership agreement,
which is not the subject of the objection.

The Debtor and Oracle USA, Inc., have agreed to $563,851 as cure
amount.  However, the Debtor clarifies, the objection related to
costs owed April 30, 2008, is not a cure objection, but will be
paid in the ordinary course of business by the Debtor.

The Debtor is seeking to assume the Asset Purchase Agreement of
Daimler Trucks North America LLC formerly known as Freightliner
LLC and terminate the "TSA."  At the confirmation hearing, the
Debtor and Daimler Trucks will present a stipulation asking the
Court that the matter be set for a hearing at a later date.  The
Debtor and Freightliner of Vancouver Ltd. will also follow the
same procedures.

The objection of the City of Cambridge, Ontario, Canada is
resolved since the Claimant does not object to the assumption but
to the assignment of the contract by any third party, the Debtor
note.  On the other hand, CCS Holdings, Inc., agrees to the
Debtor's proposed treatment of CCS Holdings' sublease and the
Objection will be resolved at a later date.

For the Town of Shadeland and Fire Service, Inc., the Debtor does
not believe that each Party's contract has expired or was
terminated.  Accordingly, the Debtor will ask the Court for a
hearing regarding both parties' objections at a later date.

In addition, pursuant to the Plan, any executory contracts or
unexpired leases of non-residential real property that are not
included in the Assumption Motion are deemed rejected, Mr. Ward
reminds the Court.
                    About American LaFrance

Headquartered in Summerville, South Carolina, American LaFrance
LLC -- http://www.americanlafrance.com/-- is one of the
oldest           
fire apparatus manufacturers and one of the top six suppliers of
emergency vehicles in North America.  The company filed for
Chapter 11 protection on Jan. 28, 2008 (Bankr. D. Del. Case No.
08-10178).  Ian T. Peck, Esq., and Abigail W. Ottmers, Esq., at
Haynes and Boone LLP, are the Debtor's proposed Lead Counsel.  
Christopher A. Ward, Esq., at Klehr, Harrison, Harvey, Branzburg &
Ellers LLP, are the Debtor's proposed local counsel.  In its
schedules of assets and debts filed Feb. 4, 2008, the Debtor
disclosed $188,990,680 in total assets and $89,065,038 in total
debts.

The Debtor's exclusive period to file a plan expires on May 27,
2008. (American LaFrance Bankruptcy News, Issue No. 15; Bankruptcy
Creditors' Service, Inc., http://bankrupt.com/newsstand/or            
215/945-7000).


AMERICAN AXLE: Gets $200 Mil. Aid from GM to Resolve Labor Dispute
------------------------------------------------------------------
American Axle & Manufacturing Holdings Inc. will receive upfront
financial support from General Motors Corp. capped at $200 million
to help fund employee buyouts, early retirements and buydowns to
facilitate a settlement of the work stoppage, according to GM
filing with the Securities and Exchange Commission.

As reported in the Troubled Company Reporter on April 24, 2008,
the strike called by the UAW union at Axle's original U.S.
locations continues into its 57th day on Tuesday.  Approximately
3,650 associates are represented by the UAW at these five
facilities in Michigan and New York.  AAM and the UAW worked
effectively last week with the objective of reaching a new
collective bargaining agreement for the original U.S. locations.  
Tentative agreements were achieved on many issues and AAM was
encouraged by the progress.

Although AAM has made several economic proposals to the UAW with
"all-in" hourly wage and benefit packages that were considerably
higher than the market rate of AAM's UAW-represented competitors
in the U.S., the UAW has repeatedly rejected these economic
proposals.

AAM needs a U.S. market competitive labor agreement for the
original U.S. locations.  This is necessary because the UAW
previously negotiated market competitive labor agreements with
many of AAM's U.S. competitors in the driveline market segment.
This includes Dana, FormTech, Chinese-owned Neapco and Indian-
owned Bharat Forge.  The "all-in" wage and benefit package granted
by the UAW to these companies averages approximately $30 per hour.

In order for AAM to be able to compete for new business and
sustain employment at the original U.S. locations, the UAW must
offer AAM economic terms and conditions that are comparable to
those it has already granted to AAM's competitors.  The UAW's
latest economic proposal to AAM dated April 14, 2008, included an
"all-in" wage and benefit package that is almost double the market
rate established by the UAW with AAM's competitors.

The TCR reported in March 2008 that GM president and chief
operating officer Frederick A. Henderson said that although many
of its assembly plants have been partially or fully shut down by
the strike of United Auto Workers union members at Axle, GM won't
interfere with the parties' labor dispute.

Mr. Henderson added that GM were not losing sales because of the
strike, which started on Feb. 26, 2008, following expiration of a
four-year master labor agreement.  However, he said, if GM was
struggling because of the union protest, the company would be one
of those sitting on the negotiation table.

According GM's quarterly results filing, Axle's work stoppage
unfavorably impacted GM North America earnings by $800 million.

GM has about 30 facilities affected by the strike as the supplier
attempts to negotiate with the union.

                             About GM

Headquartered in Detroit, Michigan, General Motors Corp. (NYSE:
GM) -- http://www.gm.com/-- was founded in 1908.  GM employs
about 266,000 people around the world and manufactures cars and
trucks in 35 countries.  In 2007, nearly 9.37 million GM cars and
trucks were sold globally under the following brands: Buick,
Cadillac, Chevrolet, GMC, GM Daewoo, Holden, HUMMER, Opel,
Pontiac, Saab, Saturn, Vauxhall and Wuling.  GM's OnStar
subsidiary is the industry leader in vehicle safety, security and
information services.

                         About American Axle

Headquartered in Detroit, Michigan, American Axle & Manufacturing
Holdings Inc. (NYSE:AXL) -- http://www.aam.com/-- and its
wholly owned subsidiary, American Axle & Manufacturing, Inc.,
manufactures, engineers, designs and validates driveline and
drivetrain systems and related components and modules, chassis
systems and metal-formed products for light trucks, sport utility
vehicles and passenger cars.  In addition to locations in the
United States (in Michigan, New York and Ohio), the company also
has offices or facilities in Brazil, China, Germany, India, Japan,
Luxembourg, Mexico, Poland, South Korea and the United Kingdom.

                            *     *     *

As reported in the Troubled Company Reporter on April 4, 2008,
Moody's Investors Service placed American Axle & Manufacturing
Holdings, Inc.'s Ba3 Corporate Family Rating under review for
downgrade.


ATLANTIC EXPRESS: Constrained Liquidity Cues S&P to Chip Ratings
----------------------------------------------------------------
Standard & Poor's Ratings Services lowered its ratings on Atlantic
Express Transportation Corp., including the long-term corporate
credit rating to 'CCC' from 'CCC+'.  All ratings were removed from
CreditWatch, where they had been placed with negative implications
on Feb. 19, 2008.  The outlook is now negative.
     
At the same time, S&P lowered the rating on the senior secured
debt rating to 'CCC', the same as the new corporate credit rating,
from 'CCC+'.  S&P assigned a '4' recovery rating to this debt,
indicating expectations of average (30%-50%) recovery in the event
of a payment default.
      
"The downgrade reflects our expectations that the bus
transportation provider's liquidity will remain tightly
constrained, given the $11 million interest payment due Oct. 15,
2008, on the senior secured notes and required interest-rate swap
reserves that occur during its peak borrowing season in October
through December," said Standard & Poor's credit analyst Funmi
Afonja.  S&P also expect that rising fuel prices and increasing
labor costs will constrain earnings and cash flow over the next
year.
     
The ratings reflect Atlantic Express's highly leveraged financial
profile, significant customer concentration, and vulnerability to
unanticipated cost increases.  Positive credit factors include the
company's leading market share in New York City school bus
transportation and stable revenue base as a result of multiyear
contracts and long-standing customer relationships.  Atlantic
Express derives just over half of its revenues from its contract
with the New York City Department of Education.  Under the
terms of the current contract with the DOE, which expires on June
30, 2010, the company received price increases, the recapture of
increases tied to changes in the CPI not given in prior years,
full annual CPI increases, the full reimbursement of all costs
related to escorts, plus a 5% administrative fee.  

The company received a CPI increase of 2.5% for the fiscal year
ending June 30, 2008.  However, a change in the configuration of
routes for the current year effectively reduced the increase to
less than 1.5%.  The company remains exposed to increases in fuel
prices beyond what is covered by the CPI increase and other
unexpected cost increases.  Although fuel represents a small
proportion of total expenses, significant price changes can
affect earnings.
     
Atlantic Express is the leading provider (albeit in a very
fragmented industry) of school bus transportation in New York
City, the largest market in which it operates. School bus services
account for about 88% of revenues.  The company also provides
paratransit services for disabled passengers, and other services,
including express commuter lines and tour buses.  At Dec 31, 2007,
the company operated a fleet of approximately 5,700 vehicles with
an average age of about 9 years (excluding vehicles provided by
various transportation authorities).
     
The company's financial profile has weakened as a result of rising
fuel prices, higher labor costs, and liquidity constraints.  S&P
expect these trends to continue over the next year and cause
Atlantic Express's credit measures to weaken somewhat from current
levels.  Further deterioration beyond what is expected or a
financial covenant violation would result in a downgrade.  S&P
could revise the outlook to stable if the company meets
obligations later this year and begins to builds more adequate
liquidity.


ARVINMERITOR INC: Gets Go-Signal to Buy American LaFrance Assets
----------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware approved
the Bill of Sale and Repurchase Agreement that American LaFrance
LLC entered into with ArvinMeritor, Inc. pursuant to Section
363(f) of the Bankruptcy Code.

The Debtor filed a request to approve its agreement with
ArvinMeritor on February 14, 2008, but withdrew it days later for
unstated reasons.

Christopher A. Ward, Esq., at Klehr, Harrison, Harvey, Branzburg
& Ellers, LLP, in Wilmington, Delaware, related that the proposed
agreement contemplates ArvinMeritor's repurchase of axles, free
and clear of liens, claims, and interests that ArvinMeritor
previously sold to the Debtor.  In exchange for the repurchase:

   (i) ArvinMeritor will reduce the Debtor's outstanding balance
       to ArvinMeritor;

  (ii) The axles will remain at the Debtor's facilities;

(iii) The Debtor will repurchase the axles from ArvinMeritor as
       needed for the Debtor's production during the next 12
       months;

  (iv) ArvinMeritor will continue to supply new products to the
       Debtor on a cash-on-order basis; and

   (v) The Debtor will also waive the Chapter 5 cause of action
       against ArvinMeritor.

Mr. Ward notes that ArvinMeritor will repurchase the axles for
92% of their original purchase price or $1,044,723.  "This price  
exceeds the value that the Debtor can obtain if it were to sell
these axles in a piecemeal fashion.

                    About American LaFrance

Headquartered in Summerville, South Carolina, American LaFrance
LLC -- http://www.americanlafrance.com/-- is one of the
oldest           
fire apparatus manufacturers and one of the top six suppliers of
emergency vehicles in North America.  The company filed for
Chapter 11 protection on Jan. 28, 2008 (Bankr. D. Del. Case No.
08-10178).  Ian T. Peck, Esq., and Abigail W. Ottmers, Esq., at
Haynes and Boone LLP, are the Debtor's proposed Lead Counsel.  
Christopher A. Ward, Esq., at Klehr, Harrison, Harvey, Branzburg &
Ellers LLP, are the Debtor's proposed local counsel.  In its
schedules of assets and debts filed Feb. 4, 2008, the Debtor
disclosed $188,990,680 in total assets and $89,065,038 in total
debts.

The Debtor's exclusive period to file a plan expires on May 27,
2008. (American LaFrance Bankruptcy News, Issue No. 15; Bankruptcy
Creditors' Service, Inc., http://bankrupt.com/newsstand/or            
215/945-7000).

                       About ArvinMeritor

Headquartered in Troy, Michigan, ArvinMeritor, Inc. (NYSE: ARM)
-- http://www.arvinmeritor.com/-- supplies integrated systems,
modules and components to the motor vehicle industry.  The
company serves light vehicle, commercial truck, trailer and
specialty original equipment manufacturers and certain
aftermarkets.  ArvinMeritor employs about 19,000 people at more
than 120 manufacturing facilities in 24 countries which includes
China, India, Japan, Singapore, Thailand, Australia, Venezuela,
Brazil, Argentina, Belgium, Czech Republic, France, Germany,
Hungary, Italy, Netherlands, Spain, Sweden, Switzerland, United
Kingdom, among others.

                           *     *     *

As reported by the Troubled Company Reporter on May 8, 2008,
Standard & Poor's Ratings Services affirmed its 'B+' corporate
credit rating and other ratings on ArvinMeritor Inc., with
negative outlook.  The affirmations followed ArvinMeritor's
announcement of its plan to spin off its light vehicle systems
business to shareholders.  S&P is concerned about how
profitability and cash flow will unfold before the legal
separation, given uncertainty about production among many
automotive and heavy-truck customers.

Fitch also placed on the same day the company's ratings on Rating
Watch Negative:

  -- Issuer Default Rating 'B';
  -- Senior Unsecured 'B/RR4'
  -- Bank Credit Facility 'BB/RR1'.


BANC OF AMERICA: Moody's Holds Ba3 Rating on $10.228MM Cl. N Cert.
------------------------------------------------------------------
Moody's Investors Service affirmed the ratings of 23 classes of
Banc of America Commercial Mortgage Inc., Commercial Mortgage
Pass-Through Certificates, Series 2006-4 as:

  -- Class A  -- 1, $38,093,757 affirmed at Aaa
  -- Class A  -- 1A, $577,640,648 affirmed at Aaa
  -- Class A  -- 2, $162,000,000 affirmed at Aaa
  -- Class A  -- 3A, $132,000,000 affirmed at Aaa
  -- Class A  -- 3B, $25,000,000 affirmed at Aaa
  -- Class A  -- 4, $885,100,000 affirmed at Aaa
  -- Class A  -- AB, $81,332,000 affirmed at Aaa
  -- Class A  -- J, $201,152,000 affirmed at Aaa
  -- Class A  -- M, $272,747,000 affirmed at Aaa
  -- Class XC, Notional, affirmed at Aaa
  -- Class XP, Notional, affirmed at Aaa
  -- Class B, $20,456,000 affirmed at Aa1
  -- Class C, $34,093,000 affirmed at Aa2
  -- Class D, $23,866,000 affirmed at Aa3
  -- Class E, $17,046,000 affirmed at A1
  -- Class F, $23,866,000 affirmed at A2
  -- Class G, $34,093,000 affirmed at A3
  -- Class H, $34,094,000 affirmed at Baa1
  -- Class J, $27,274,000 affirmed at Baa2
  -- Class K, $37,503,000 affirmed at Baa3
  -- Class L, $10,228,000 affirmed at Ba1
  -- Class M, $6,819,000 affirmed at Ba2
  -- Class N, $10,228,000 affirmed at Ba3

Moody's is affirming the transaction due to overall stable pool
performance.

As of the April 10, 2008 distribution date, the transaction's
aggregate certificate balance has decreased by approximately 0.3%
to $2.72 billion from $2.73 billion at securitization.  The
Certificates are collateralized by 164 loans ranging in size from
less than 1.0% to 7.0% of the pool with the top 10 loans
representing 33.8% of the pool.  The pool includes two loans (0.9%
of the pool) with underlying ratings.

Moody's was provided with year-end 2006 and 2007 operating results
for 84.3% and 56.1% of the pool, respectively.  Moody's weighted
average loan to value ratio for the conduit component is 104.6%
compared to 103.8% at securitization.

The trust has not realized any losses since securitization and
currently there are no loans in special servicing.  Twenty-one
loans, representing 9.3% of the pool, are on the master servicer's
watchlist.  The master servicer's watchlist includes loans which
meet certain portfolio review guidelines established as part of
the Commercial Mortgage Securities Association monthly reporting
package.  As part of Moody's ongoing monitoring of a transaction,
Moody's reviews the watchlist to assess which loans have material
issues that could impact performance.  Not all loans on the
watchlist are delinquent or have significant issues.

The largest loan with an underlying rating is the Glen Oaks
Shopping Center Loan ($20.0 million -- 0.7%), which is secured by
a 244,000 square foot retail center located in Nassau County, New
York.  Moody's current underlying rating is Aa2, the same as at
securitization.  The second loan with an underlying rating is the
345 86th Street Apartments Loan ($5.2 million -- 0.2%), which is
secured by a 114 unit residential co-op building.  Moody's current
underlying rating is Aaa, the same as at securitization.

The top three conduit loans represent 16.1% of the outstanding
pool balance.  The largest conduit loan is the Technology Corners
at Moffett Park Loan ($190.0 million -- 7.0%), which is secured by
a 716,000 square foot Class A office property located in
Sunnyvale, California.  The property is 100.0% occupied by Ariba,
Inc. through January 2013.  The loan matures in August 2016.   
Moody's LTV is 119.0%, the same as at securitization.

The second largest conduit loan is the BlueLinx Holdings Portfolio
Loan ($147.5 million -- 5.4%), which represents a 50.0% pari passu
interest in a $295.0 million first mortgage.  The loan is secured
by 57 industrial properties and one office property located in 36
states and totaling 9 million square feet.  The properties are
100.0% leased to BlueLinx Corporation through June 2021.  The loan
matures in July 2016.  Moody's LTV is 105.0%, the same as at
securitization.

The third largest conduit loan is the Marriott Indianapolis Loan
($101.8 million -- 3.7%), which is secured by a 615-room full
service hotel located in downtown Indianapolis, Indiana.  
Occupancy and RevPAR for calendar year 2006 was 72.6% and
$113.69, respectively, compared to 72.5% and $108.03 at
securitization.  Moody's LTV is 105.4%, the same as at
securitization.


BLOCKBUSTER INC: State Street Bank Reports 5.1% Stake Ownership
---------------------------------------------------------------
State Street Bank and Trust Company, as trustee, reported owning
6,183,214 shares in Blockbuster Inc. common stock, representing
5.1% of the company's outstanding stock.

Based in Dallas, Texas, Blockbuster Inc. (NYSE: BBI,
BBI.B) -- http://www.blockbuster.com/-- is a leading global       
provider of in-home movie and game entertainment, with over 7,800
stores throughout the Americas, Europe, Asia and Australia.  

At Jan. 6, 2008, the company's total debt, including capital lease
obligations was $757.8 million compared with $984.2 million in
Dec. 31, 2006.

                          *     *     *

As reported in the Troubled company Reporter on Dec. 28, 2007,
Fitch Ratings affirmed Blockbuster Inc.'s long-term Issuer
Default Rating at 'CCC' and the senior subordinated notes at
'CC/RR6'.  The rating outlook is stable.  


BLOUNT INTERNATIONAL: Shareholders Declare 5% Equity Ownership
--------------------------------------------------------------
Gates Capital Management, Inc., Gates Capital Partners, L.P., ECF
Value Fund, L.P., ECF Value Fund II, L.P., ECF Value Fund
International, Ltd., and Jeffrey L. Gates beneficially owns
2,372,686 shares of Blount International Inc. common stock,
representing 5% of the company's outstanding shares.

Blount International Inc. (NYSE: BLT) -- http://www.blount.com/--      
is a diversified international company operating in two
principal business segments: Outdoor Products and Industrial and
Power Equipment.  The company's Outdoor Products segment provides  
chain, bars and sprockets to the chainsaw industry, accessories to
the lawn care industry and concrete cutting saws.

As reported in the Troubled Company Reporter on April 29, 2008,
Blount International Inc.'s balance sheet at Dec. 31, 2007, showed
total assets of $411.9 million and total liabilities of
$466.0 million, resulting in a total shareholders' deficit of
$54.1 million.


BMB MARKETPLACE: Files Schedules of Assets and Liabilities
----------------------------------------------------------
Corey Landings Development, LLC delivered to the United States
Bankruptcy Court for the Middle District of Florida its schedules
of assets and liabilities disclosing:

   Name of Schedule                   Assets      Liabilities
   ----------------                -----------    -----------
   A. Real Property                $35,000,000
   B. Personal Property                     26
   C. Property Claimed
      as Exempt
   D. Creditors Holding                           $41,745,066
      Secured Claims
   E. Creditors Holding                                     0
      Unsecured Priority
      Claims
   F. Creditors Holding                             1,690,473
      Unsecured Nonpriority
      Claims
                                   ------------   -------------
      TOTAL                         $10,389,852    $8,471,918

Based in Scottsdale, Arizona, BMB Marketplace, LLC filed for
Chapter 11 protection on Mar. 21, 2008 (Bankr. D. Ariz. Case No.
08-02945).  Lyndon B. Steimel, Esq. represents the Debtor in its
restructuring efforts.  When the Debtor filed for protection from
its creditors, it listed estimated assets and debts both of
$10 million to $50 million.


BNG HOLDINGS: Case Summary & 43 Largest Unsecured Creditors
-----------------------------------------------------------
Lead Debtor: BNG Holdings, LLC
             1584 Parkside Avenue
             Trenton, NJ 08638  

Bankruptcy Case No.: 08-11615

Debtor-affiliates filing separate Chapter 11 petitions:

        Entity                                     Case No.
        ------                                     --------
        Hamilton Memorial Home, Inc.               08-18132

        Parkside Memorial Home, Inc.               08-18118
        dba Parkside Brenna-Cellini Memorial
        Funeral Home

Type of Business: The Debtors offer payment services.
                  See: http://bngholdingsinc.com/

Chapter 11 Petition Date: January 30, 2008

Court: District of New Jersey (Trenton)

Judge: Michael B. Kaplan

Debtors' Counsel: Joseph Markowitz, Esq.
                  Markowitz, Gravelle & Schwimmer
                  3131 Princeton Pike
                  Lawrenceville, NJ 08648
                  Tel: (609) 896-2660
                  http://www.mgs-law.com/

Total Assets: $1,400,000

Total Debts:  $1,156,055

A. BNG Holdings, LLC's List of Three Largest Unsecured Creditors:

   Entity                      Nature of Claim       Claim Amount
   ------                      ---------------       ------------
Donald Cox                     personal loan         $50,000
865 Lower Ferry Road
Suite 120                  
Ewing, NJ 08638           

Internal Revenue Service       federal taxes         unknown
District Director
Insolvency Function
P.O. Box 724
Springfield, NJ 07081-0724

New Jersey Division of         state taxes           unknown
Taxation Bankruptcy Section
P.O. Box 269               
Trenton, NJ 08695

B. Hamilton Memorial Home, Inc's List of 20 Largest Unsecured
Creditors:

   Entity                      Nature of Claim       Claim Amount
   ------                      ---------------       ------------
Internal Revenue Service       Federal Taxes         $54,837
District Director
Insolvency Function
Springfield, NJ 07081-0724

American Casket                                      $16,228
1859 Stout Drive
Warwick, PA 18974

Milso Industries, Inc.                               $12,604
The York Group
P.O. Box 200557
Pittsburgh, PA 15212-0557

NJ Division of Labor                                 $11,000

Proformance Insurance Co.                            $10,454

New Jersey Division of         CBT, NJ 927, GIT,     $10,281
Taxation                       State taxes

Trentonian                                           $8,945

Bartolomei Pucciarelli, LLC    Accounting Services   $8,805

Linowitz & Co.                 Accounting Services   $6,100

Walker's Lawn Service                                $5,358

Oxford Health Plans                                  $4,132

PSE&G Co.                                            $3,969

Joe Carney Funeral Supplies,                         $2,170
LLC

One Beacon Insurance                                 $1,855

Empire Funeral Supply                                $1,742

Panfili Heating & Air                                $1,450
Conditioning

Fiori's Flowers                                      $1,239

Liturgical Publications                              $1,200

Bucks County Courier Times                           $874

Champion Co.                                         $801

C. Parkside Memorial Home, Inc's List of 20 Largest Unsecured
Creditors:

   Entity                      Nature of Claim       Claim Amount
   ------                      ---------------       ------------
Yorktown Casket Co.                                  $56,090
654 Lincoln St.
York, PA 17401-3374

Internal Revenue Service       Federal Taxes         $54,837
District Director
Insolvency Function
Springfield, NJ 07081-0724

Campbell Vault Co.                                   $50,000
219 Delaware Ave.
Bordentown, NJ 08505

American Casket                                      $16,228

Milso Industries, Inc.                               $12,604

Proformance Insurance Co.                            $10,454

New Jersey Division of         CBT, GIT, NJ927,      $10,281
Taxation                       State taxes

Trentonian                                           $8,945

Bartolomei Pucciarelli                               $8,805

Walker's Lawn Service                                $5,358

Oxford Health Plans                                  $4,132

PSE&G Co.                                            $3,969

Joe Carney Funeral Supplies,                         $2,170
LLC

One Beacon Insurance                                 $1,855

Empire Funeral Supply                                $1,742

Panfili Heating & Air                                $1,450
Conditiioning

Fiori's Flowers                                      $1,239

Liturgical Publications                              $1,200

Bucks County Courier Times                           $874

Champion Co.                                         $801


BOMBARDIER INC: Moody's Holds Ba2 Ratings; Changes Outlook to Pos.
------------------------------------------------------------------
Moody's Investors Service changed the rating outlook for
Bombardier Inc. to positive from stable and affirmed the company's
Ba2 corporate family, Ba2 senior unsecured and SGL-2 liquidity
ratings.  The outlook change reflects Moody's belief that
Bombardier's record backlog levels and strong demand from
international end-markets positions the company for continued
revenue growth, profitability improvements and cash flow
generation into the medium term.  Coupled with the meaningful
reduction in debt levels that occurred towards the end of the
company's last fiscal year, the balance of the company's key
credit metrics are likely to evidence continuing improvement,
bolstering support for upwards rating momentum.

These ratings have been affirmed:

  -- Corporate family rating at Ba2
  -- Probability of default rating at Ba2
  -- Senior unsecured debt rating at Ba2
     (to LGD4, 52% from LGD4, 54%)

  -- Speculative grade liquidity rating at SGL-2

Outlook Actions:

  -- Outlook, Changed To Positive From Stable

Darren Kirk, lead analyst with Moody's, said that "Bombardier's
sizeable backlog in each of its two business segments positions
the company for further growth and margin improvement beyond the
gains achieved in fiscal 2008".

Bombardier's fiscal 2008 operating results evidenced continued
improvement driven by strong demand for business jets, turboprops
and Transportation segment products and services.  A prolonged
period of declining demand for regional jet products appears to
have stabilized, which also contributed to the good results.

Despite the poor financial condition of the airline industry and
challenging economic backdrop in the U.S., reducing dependence on
the U.S. market for cyclical aerospace activity and record backlog
levels in each of Bombardier's business segments, provide the
basis for continued operating momentum.  Targeted operating
margins of 8% in the Aerospace segment have essentially been
attained while Transportation segment margins continue to improve
toward the company's goal of 6% by fiscal 2010.  The company's
ability to further enhance current coverage and cash flow metrics
through sustained margin improvement remains a key factor
influencing the rating.

Lower interest costs associated with recent debt reductions should
amplify improvement to key credit metrics through fiscal 2009 from
levels that have in recent history constrained the Ba2 rating.  
Bombardier's liquidity profile is good summarized by significant
balance sheet cash with no near term debt maturities, and a
positive free cash flow profile.  Lack of committed bank operating
lines for funded borrowing constrains the liquidity rating at SGL-
2.

The Company's good liquidity profile and favorable cash flow
trends may eventually be counterbalanced by incremental financial
and operating risks associated with the potential investment in
the CSeries mainline aircraft.  Kirk added, "The company's
improving credit profile should nonetheless provide the capacity
to absorb these risks within context of its rating and outlook".

Bombardier Inc., headquartered in Montreal, Quebec, is a
diversified manufacturing company involved in the aerospace and
transportation markets.


BON-TON STORES: State Street Owns 5.3% of Outstanding Stake
-----------------------------------------------------------
State Street Bank and Trust Company, as trustee, declares that it
beneficially owns 784,929 shares of The Bon-Ton Stores, Inc.
common stock, representing 5.3% of the company's outstanding
common stock.

York, Pennsylvania-based The Bon Ton Stores Inc. (Nasdaq: BONT) --
http://www.bonton.com/-- operates 280 department stores, which   
includes eleven furniture galleries, in 23 states in the
Northeast, Midwest and upper Great Plains under the Bon-Ton,
Bergner's, Boston Store, Carson Pirie Scott, Elder-Beerman,
Herberger's and Younkers nameplates and, under the Parisian
nameplate, three stores in the Detroit, Michigan area.  The stores
offer a broad assortment of brand-name fashion apparel and
accessories for women, men and children, as well as cosmetics and
home furnishings.

                          *     *     *

As reported in the Troubled Company Reporter on March 17, 2008,
Fitch Ratings affirmed The Bon-Ton Stores, Inc.'s 'B' issuer
default rating.  The rating outlook has been revised to negative
from stable.

As reported in the Troubled Company Reporter on Feb. 13, 2008,
Moody's Investors Service downgraded the corporate family rating
of Bon-Ton Stores Inc. to B2 from B1, downgraded the probability
of default rating to B2 from B1, and downgraded the rating on the
$510 million senior unsecured notes to Caa1 (LGD 5, 78%) from B3
(LGD 5, 83%).  The company's speculative grade liquidity rating of
SGL-3 was affirmed.  The outlook on all ratings is stable.


BRUCE ROSEMAN: Voluntary Chapter 11 Case Summary
------------------------------------------------
Debtor:    Bruce Roseman
           125 South Broadway
           White Plains, NY 10605

Bankruptcy Case No.:  08-22445

Chapter 11 Petition Date:  April 3, 2008

Court:     U.S. Bankruptcy Court
           Southern District of New York (White Plains)

Judge:     Adlai S. Hardin Jr.

Debtor's Counsel:  Wayne M. Greenwald
                   Wayne M. Greenwald, P.C.
                   99 Park Avenue
                   Suite 800
                   New York, NY 10016
                   Tel: (212) 983-1922
                   Fax: (212) 953-7755
                   E-mail: grimlawyers@aol.com

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

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

Debtor's 16 Largest Unsecured Creditors:

   Entity                      Nature of Claim       Claim Amount
   ------                      ---------------       ------------
John Murphy                    used to purchase      $125,000.00
                               remaining interest
                               in 125 S. Broadway

                               personal loan         $90,000.00
                               Personal Loan         $45,000.00

Chase Bank                     Living expenses       $125,000.00

Internal Revenue Service       2006 Taxes            $65,000.00
11601 Roosevelt Blvd
PO Box 21126
Philadelphia, PA 19114

American Express               --                    $32,000.00
                    
                               Credit Line           $17,000.00
                        

Chase Manhattan                2007 Porche           $42,375.00
                               Boxter
                                                     ($34,000.00
                                                     secured)
                     

Chase Auto Finance             --                    $41,341.71

Denise Fuchs                   personal loan for     $40,000.00
                               living expenses

Jack Hughes, Esq.              Prof. services for    $31,000.00
                               dissolution of
                               practice.

Timothy Brennan, Esq.          Legal services in     $26,990.35
                               connection with
                               matrimonial
                               litigation.

Eisner, LLP                    Accounting            $23,000.00
                               Services for
                               dissolution of
                               business

RSM McGladrey                  Personal and          $21,500.00
                               business service in
                               connection with
                               dissolution of
                               practice; personal
                               tax service.

New York State Dept Tax &      2007 taxes            $15,000.00

New York State Dept Tax &      2006 taxes            $15,000.00

Chubb Insurance                --                    $7,806.00

Mark A. Modano LLC                                   $7,258.00

Chase                          Credit Card           $5,240.00

Elaine Lieberman                                     $5,000.00


CABLEVISION SYSTEMS: Unit Buying Sundance Channel for $496 Million
------------------------------------------------------------------
Rainbow Media Holdings LLC, a subsidiary of Cablevision Systems
Corporation, reached an agreement to acquire Sundance Channel for
$496 million.

Sundance Channel is owned by General Electric Company's NBC
Universal, CBS Corporation's Showtime Networks, and entities
controlled by Robert Redford.

Under the terms of the transaction, the total consideration will
be paid through a tax-free exchange of approximately 12.7 million
shares of common stock of General Electric Company held by Rainbow
Media, with a cash adjustment at closing based upon the value of
the General Electric shares in relation to the total purchase
price.

Under the transaction structure, General Electric Company will
receive all of the GE Shares and the CBS and Redford entities will
receive cash in exchange for their interests.  In connection with
the exchange of the GE shares, Cablevision will repay the
monetization debt associated with such shares.  

Upon completion of the transaction, Rainbow Media will own a 100%
interest in Sundance Channel. The completion of this transaction
is subject to certain customary closing conditions.

The company states that for Rainbow Media, the purchase expands
and strengthens its entertainment presence with the addition of a
recognizable and desirable brand that attracts loyal viewers.  
Sundance Channel will join AMC, IFC and WE tv as another network
within Rainbow Media's portfolio of national services.

The company relates that for NBC Universal, Showtime and Robert
Redford, the sale of Sundance Channel highlights their success in
developing this heralded programming service.

After the transaction, Sundance Channel relates that it will
benefit from its continuing relationship with Mr. Redford, one of
the most respected, admired and successful people in
entertainment.  

"We are always looking for strategic opportunities for our
business and Sundance Channel adds another valuable asset to
Rainbow's award-winning lineup of programming networks," said
James L. Dolan, Cablevision president and CEO.

"Programming that attracts a dedicated viewing audience has always
been Rainbow's mission and we think that Sundance Channel is an
excellent fit and consistent with that rich heritage," stated
Tom Rutledge, Cablevision's chief operating officer.  "We also
believe that with Rainbow's resources we will have a tremendous
opportunity to build upon Sundance Channel's success,"

"Robert Redford is a true visionary and, through everything he has
accomplished with Sundance Channel, has made immeasurable
contributions to the world of independent film," Joshua Sapan,
Rainbow Media president and CEO, said.  "Rainbow has experienced
firsthand how impressive original programming like Mad Men and
Breaking Bad can distinguish a network's brand.  Sundance Channel
has already established its own distinct voice through impressive
programming like The Green and Iconoclasts and our vision is to
build on this type of original content, further strengthening the
uniqueness of the network."

"The Sundance Channel team, led by CEO Larry Aidem, has exceeded
every expectation I had for this venture," Robert Redford,
Sundance Founder, said.  "Innovation and integrity in both
business and creative models have continually resulted in new ways
of bringing dynamic programming to wider audiences."  

"We look forward to working with Rainbow to further distinguish
Sundance Channel and to create even greater value for this
important service," he continued.

"The challenges facing an independent programmer are profound,"  
Larry Aidem, Sundance Channel president and CEO, commented.  
"Rainbow unquestionably has the programming and distribution
prowess necessary to run cable networks successfully over the long
term.  The opportunity to be a wholly owned, core asset in the
Rainbow/Cablevision portfolio ensures a very bright future for
Sundance Channel."

                      About Sundance Channel

Sundance Channel was launched in 1996 under the direction of
Robert Redford.  Sundance Channel reaches nearly 30 million
subscribers and offers a diverse and engaging selection of films,
documentaries and original programs.  Along with films and
documentaries, Sundance Channel's original programming provides a
mix of series and specials that promote artistic freedom of
expression and the impact that expression can have on the world.

Rainbow Media Holdings LLC is a subsidiary of Cablevision Systems
Corporation.  Rainbow Media is a producer of multi-platform
content for global distribution, creating and managing some of the
world's most compelling and dynamic entertainment brands,
including AMC, IFC, WE tv, Lifeskool, Sportskool, and VOOM HD
Networks.

                  About Cablevision Systems

Cablevision Systems Corporation (NYSE: CVC) -- is a cable operator
in the United States that operates cable programming networks,
entertainment businesses and telecommunications companies.  As of
Dec. 31, 2006, the company served approximately 3.1 million basic
video subscribers in and around the New York City metropolitan
area.  Through its wholly owned subsidiary, Rainbow Media Holdings
LLC, Cablevision owns interests in and manages numerous national
and regional programming networks, the Madison Square Garden
sports and entertainment businesses, and cable television
advertising sales companies.  Through Cablevision Lightpath Inc.,
its wholly owned subsidiary, the company provides telephone
services and Internet access to the business market.  The company
operates in three segments: Telecommunications Services, Rainbow
and Madison Square Garden.

As reported in the Troubled Company Reporter on March 11, 2008,
Cablevision Systems Corporation balance sheet at Dec. 31, 2007,
showed total assets of $9.1 billion and total debts of
$14.2 billion, resulting in a $5.0 billion stockholders' deficit.  

                          *     *     *

As reported in the Troubled Company Reporter on Feb. 11, 2008,
Moody's Investors Service upgraded to Ba3, from B1, the corporate
family ratings for Cablevision System Corporation and its wholly-
owned indirect subsidiary Rainbow National Services LLC.  The
rating outlooks for both companies were also changed to stable
from developing.


CABLEVISION SYSTEMS: Sundance Buyout Won't Affect S&P's 'BB' Rtng.
------------------------------------------------------------------
Standard & Poor's Ratings Services said that Bethpage, N.Y.-based
Cablevision Systems Corp.'s (BB/Negative/--) announcement that it
has agreed to purchase the Sundance Channel does not affect the
company's corporate credit rating or outlook.  Approximately
$11.5 billion of debt is outstanding. Under terms of the
transaction, Cablevision subsidiary Rainbow Media Holding LLC will
acquire 100% of Sundance Channel through a tax-free exchange of
General Electric Co. common shares, plus cash for a total
consideration of approximately $496 million.  The Sundance Channel
acquisition bolsters Rainbow Media's portfolio of cable networks.

S&P anticipate that Cablevision will incur only a modest
amount of debt to repay the monetization debt associated with the
General Electric stock in order to free up those shares for the
exchange.  Coupled with S&P's expectation that Sundance Channel
will be free cash flow accretive, the transaction does not
meaningfully affect Cablevision's consolidated credit quality.  
S&P will, however, examine details of the acquisition's debt
financing component to determine if any individual recovery
ratings might be affected.  Cablevision's ratings continue to
recognize the well-above average operating metrics generated by
the company's three million well-clustered, metropolitan New York
cable subscribers.  

However, the rating does incorporate the increasing level of
competition from Verizon Communications Inc.'s FiOS video service.  
Importantly, Cablevision's demonstrated willingness to undertake
major shareholder-friendly actions is a significant rating
constraint and the negative outlook recognizes that the company
has little capacity for special dividends or stock repurchases at
the current rating level.


CABLEVISION SYSTEMS: Newsday Bid Gets Thumbs Down from Consumers
----------------------------------------------------------------
Consumer groups disfavor Cablevision Systems Corporation's leading
bid for Tribune Company's Newsday, The Deal.com reported.

As reported in the Troubled Company Reporter on May 1, 2008,
Cablevision Systems offered to acquire Newsday for $650 million or
$70 million more than the previous offers of News Corp. and Daily
News owner Mortimer Zuckerman.

According to The Deal, public interest advocates have expressed
concern about a Cablevision purchase, but they admit that neither
the Federal Communications Commission nor the Department of
Justice would oppose it.

The Deal quotes Andrew Schwartzman, president of public interest
law firm Media Access Project as saying: "A Cablevision buy of
Newsday from a policy standpoint would pose serious questions
about how much control one entity was having in the Long Island
region.  But it doesn't raise F.C.C. issues, and it's unlikely
the Department of Justice would oppose anything."

Buying Newsday would give Cablevision a firm hold on the
advertising market on Long Island, Newsday's home, The Deal
relates.  Cablevision is the primary provider of cable television
on Long Island, it owns the only television news station, News12,
which is a cable channel, and it is also a big supplier of
Internet and phone service, The Deal notes.

But, the Deal says, the F.C.C. would not review the transaction
because no broadcast or cable license would be transferred.  The
Deal notes that a federal appeals court in 2001 threw out an
F.C.C. rule that prohibited one company from owning both a cable
service and newspaper in the same market.

Furthermore, since News12 is not a broadcast station, it does not
fall under the F.C.C.'s license renewal process, The Deal adds.

                  About Tribune Company

Headquartered in Chicago, Tribune Company (NYSE: TRB) --
http://www.tribune.com/-- is a media company, operating           
businesses in publishing, interactive and broadcasting.  It
reaches more than 80% of U.S. households and is the only media
organization with newspapers, television stations and websites in
the nation's top three markets.  In publishing, Tribune's leading
daily newspapers include the Los Angeles Times, Chicago Tribune,
Newsday (Long Island, New York), The Sun (Baltimore), South
Florida Sun-Sentinel, Orlando Sentinel and Hartford Courant.  The
company's broadcasting group operates 23 television stations,
Superstation WGN on national cable, Chicago's WGN-AM and the
Chicago Cubs baseball team.

                  About Cablevision Systems

Cablevision Systems Corporation (NYSE: CVC) -- is a cable operator
in the United States that operates cable programming networks,
entertainment businesses and telecommunications companies.  As of
Dec. 31, 2006, the company served approximately 3.1 million basic
video subscribers in and around the New York City metropolitan
area.  Through its wholly owned subsidiary, Rainbow Media Holdings
LLC, Cablevision owns interests in and manages numerous national
and regional programming networks, the Madison Square Garden
sports and entertainment businesses, and cable television
advertising sales companies.  Through Cablevision Lightpath Inc.,
its wholly owned subsidiary, the company provides telephone
services and Internet access to the business market.  The company
operates in three segments: Telecommunications Services, Rainbow
and Madison Square Garden.

As reported in the Troubled Company Reporter on March 11, 2008,
Cablevision Systems Corporation's balance sheet at Dec. 31, 2007,
showed total assets of $9.1 billion and total debts of $14.2
billion, resulting in a $5.0 billion stockholders' deficit.  

                          *     *     *

As reported in the Troubled Company Reporter on Feb. 11, 2008,
Moody's Investors Service upgraded to Ba3, from B1, the corporate
family ratings for Cablevision System Corporation and its wholly-
owned indirect subsidiary Rainbow National Services LLC.  The
rating outlooks for both companies were also changed to stable
from developing.


CBA COMMERCIAL: Realized Losses Prompt Moody's to Lower Ratings
---------------------------------------------------------------
Moody's Investors Service downgraded the ratings of three classes
and confirmed or affirmed the ratings of four classes of CBA
Commercial Mortgage Pass-Through Certificates, Series 2006-1 as:

  -- Class A, $103,903,363, affirmed at Aaa
  -- Class X  -- 1, Notional, affirmed at Aaa
  -- Class M  -- 1, $4,587,000, affirmed at Aa2
  -- Class M  -- 2, $4,587,000, confirmed at A2
  -- Class M  -- 3, $5,004,000, downgraded to Baa3 from Baa2
  -- Class M  -- 4, $2,919,000, downgraded to Ba2 from Baa3
  -- Class M  -- 5, $1,877,000, downgraded to B2 from B1

Moody's is downgrading classes M-3, M-4, and M-5 due to an
increase in realized losses and projected losses from specially
serviced loans.

Moody's classifies this deal as a small balance commercial loan
securitization.  Small balance deals represent approximately 0.5%
of the outstanding commercial mortgage backed securities universe.

As of the April 25, 2008 distribution date, the transaction's
aggregate certificate balance has decreased by approximately 24.4%
to $126.1 million from $166.8 million at securitization.  The
Certificates are collateralized by 229 mortgage loans with the top
10 loans representing 25.6% of the pool.


CENTEX CORP: S&P Chips Ratings to BB from BB+ with Neg. Outlook
---------------------------------------------------------------
Standard & Poor's Ratings Services lowered its corporate credit
and senior unsecured debt ratings on Centex Corp. to 'BB' from
'BB+'.  The outlook is negative.  This downgrade affects
approximately $3.3 billion of senior unsecured notes.
     
"The downgrade acknowledges that operating conditions in many of
the nation's key housing markets have continued to worsen through
the first four months of 2008, and we anticipate that Centex, like
most public builders, will face significant earnings challenges
into 2009," explained Standard & Poor's credit analyst, James
Fielding.  "Centex's homebuilding gross margins have already
reached all-time lows on lower sales prices.  Furthermore, a large
fourth-quarter GAAP loss further eroded Centex's shareholder
equity and lifted adjusted leverage to 60% of capital, the highest
level in over 20 years."
     
Standard & Poor's negative outlook reflects our belief that many
of Centex's most important housing markets will remain challenging
well into 2009.  S&P would lower its ratings further if currently
adequate liquidity becomes impaired because of weaker-than-
anticipated sales, or if additional inventory impairments trigger
another round of covenant negotiations with credit facility
lenders.  Conversely, S&P would revise our outlook to stable if
higher cash balances prove sustainable, gross margins strengthen
as previously impaired land reduces future cost of goods sold, and
if the recent sharp reduction in speculative inventory eases
pressure to offer overly aggressive sales incentives.


CHALLENGER POWERBOATS: Jaspers Hall Expresses Going Concern Doubt
-----------------------------------------------------------------
Jaspers + Hall, P.C., raised substantial doubt about the ability
of Challenger Powerboats, Inc., to continue as a going concern
after it audited the company's financial statements for the year
ended Dec. 31, 2007.  

Jaspers + Hall reported that Challenger Powerboats' current
liabilities exceed the current assets by $1,722,562 as of Dec. 31,
2007.  The company had operating losses of $7,046,691 and
$5,211,514 in 2007 and 2006, respectively and has ceased
operations.  The auditing firm also pointed to the company's
recurring losses from operations and its difficulties in
generating sufficient cash flow to meet its obligation and sustain
its operations.

The company posted a net loss of $4,656,940 on total revenues of
$7,399,703 for the year ended Dec. 31, 2007, as compared with a
net loss of $6,815,407 on total revenues of $238,171 in the prior
year.

At Dec. 31, 2007, the company's consolidated balance sheet showed
$6,408,050 in total assets and $11,301,142 in total liabilities,
resulting in $4,893,092 stockholders' deficit.  

The company's consolidated balance sheet at Dec. 31, 2007, also
showed strained liquidity with $2,769,550 in total current assets
available to pay $4,492,112 in total current liabilities.

A full-text copy of the company's 2007 annual report is available
for free at: http://ResearchArchives.com/t/s?2b95   

                 About Challenger Powerboats

Washington, Missouri-based Challenger Powerboats Inc. (OTC:
CPBI) -- http://www.challengerpowerboats.com/-- designs and  
manufactures boats, family sport cruisers, jet boats and water
ski tow boats under the brands Challenger Powerboats, Sugar Sand
and Gekko.  The company is a design-to-manufacturing
organization, creating or licensing designs, and creating
tooling, molds, and parts necessary to assemble its products in-
house.  The company markets its products through a dealer
network comprising more than 100 dealers throughout the United
States, Canada, Mexico, Europe, Australia, the Middle East and
Japan.  On Jan. 1, 2007, the company acquired International
Marine and Recreation, and Gekko Sports Corporation.


CHARMING SHOPPES: Reaches Agreement to End Board Appointees Battle
------------------------------------------------------------------
Charming Shoppes Inc., in a press statement, stated that the
company and The Charming Shoppes Full Value Committee have reached
an agreement to resolve the proxy contest related to the company's
2008 Annual Meeting of Shareholders.

According to The Wall Street Journal, Charming Shoppes Full Value
Committee, the investor group that holds an 8% stake in the Lane
Bryant and Fashion Bug owner, has called for the sale of noncore
assets, cost cutting and slower store expansion.

The company stated in a press statement that under the terms of
the agreement, the company will nominate to its board of
directors:

   -- two of management's nominees, Dorrit J. Bern, the company's
      chairman, president and chief executive officer and Alan
      Rosskamm;

   -- two of the Committee's nominees, Arnaud Ajdler and Michael
      C. Appel; and

   -- two experienced retail executives, Richard W. Bennet III,
      former vice chairman of The May Department Stores Company
      and Michael Goldstein, former chairman and chief executive
      officer of Toys "R" Us Inc.

The company and the Committee have each agreed to vote their
shares in favor of these nominees and all of the proposals to be
presented to shareholders at the Annual Meeting.

With the addition of Messrs. Ajdler, Appel, Bennet and Goldstein,
Charming Shoppes' board will be expanded to eleven directors, ten
of whom will be independent.

"We are pleased to have reached this agreement with the Committee,
which we believe is in the best interests of the company and all
Charming Shoppes shareholders," Dorrit J. Bern, chairman and chief
executive officer, said.  "During the past few months, we have met
with a large number of our shareholders, and we value their
insights regarding the future of our company.  Our board remains
committed to enhancing value for all shareholders and we look
forward to working with our new directors to continue our progress
in building a stronger future for Charming Shoppes."

"We are happy to have reached an amicable resolution which we
believe is in the best interests of all shareholders," Eric
Rosenfeld, president and CEO of Crescendo Partners, stated.  "Our
nominees, Arnaud Ajdler and Michael Appel, look forward to working
diligently and constructively with the other members of the board
to maximize shareholder value.  This agreement would not have been
possible without the tremendous support we received from the
company's shareholders."

In addition, the company will present a proposal to eliminate its
classified board structure, subject to shareholder approval, at
the 2008 Annual Meeting.  If this proposal is approved by
shareholders, the company intends for all directors to stand for
election to one-year terms beginning at the 2009 Annual Meeting of
Shareholders.

WSJ says that Charming Shoppes will separate the duties of
chairman and chief executive to improve its corporate governance.  

In a press statement, the company relates that after the company's
2008 Annual Meeting, the board will appoint an independent non-
executive board member as chairman.

As a result of the agreement, the company adjourned its 2008
Annual Meeting until Thursday, June 26, 2008 at 10:00 a.m.,  
Eastern Time, to be held at 450 Winks Lane, Bensalem,
Pennsylvania.  

The company intends to revise its definitive proxy materials and
resubmit them to the Securities and Exchange Commission.

After the SEC's review, the company will mail the revised
definitive proxy materials to all shareholders.  Shareholders of
record as of March 28, 2008, will be entitled to vote at and
attend the Annual Meeting.

                     About Charming Shoppes

Headquartered in Bensalem, Pennsylvania, Charming Shoppes Inc.
(NASDAQ:CHRS) -- http://www.charmingshoppes.com -- is a retailer      
focused on women's plus-size specialty apparel.  The company
operates in two segments: retail stores segment and direct-to-
consumer segment.  The company's retail stores segment operates
retail stores and related e-commerce websites through brands, such
as Lane Bryant, Fashion Bug, Catherines Plus Sizes, Lane Bryant
Outlet and Petite Sophisticate outlet.  The company's direct-to-
consumer segment operates a number of apparel, accessories,
footwear, and gift catalogs and related e-commerce Websites
through its Crosstown Traders business.  During the fiscal year
ended Feb. 3, 2007, the sale of plus-size apparel represented
approximately 74% of the Company#s total net sales.  As of Feb. 2,
2008, Charming Shoppes Inc. operated 2,409 stores in 48 states.

                          *     *     *

As reported in the Troubled Company Reporter on March 25, 2008,
Standard & Poor's Ratings Services lowered the corporate credit
rating on Charming Shoppes Inc. to 'B+' from 'BB-.'  The outlook
remains negative.


CHEMTURA CORP: S&P Cuts Ratings to BB; Retains Developing Watch
---------------------------------------------------------------
Standard & Poor's Ratings Services lowered its corporate credit
and senior secured debt ratings of Chemtura Corp. to 'BB' from
'BB+'.  The ratings remain on CreditWatch with developing
implications, where they were placed Dec. 19, 2007.  The downgrade
reflects S&P's expectation that cash flow protection measures will
not strengthen to, and be sustained at, levels appropriate for the
prior rating, although profitability should improve near term.
      
"The CreditWatch developing reflects management's ongoing
consideration of strategic alternatives, which calls into question
its financial policies," said Standard & Poor's credit analyst
Wesley E. Chinn.
     
CreditWatch with developing implications means S&P could raise,
lower, or affirm the ratings, depending on management's actions.  
Chemtura's diversified portfolio of specialty and industrial
chemical businesses (generating annual revenues of over $3.5
billion) presents management with a range of options.  S&P would
lower the ratings if a leveraged buyout of the firm were to occur
or if management initiated actions detrimental to our expectations
of prospective financial metrics.  Conversely, S&P would raise the
ratings if a substantially stronger entity acquired Chemtura, but
this does not appear to be a strong possibility at this time.
     
If management's review of strategic alternatives concludes that
the company should not take any actions at this time, S&P could
affirm the ratings and assign a stable outlook.  This would be
based on the expectation that the company will be able to achieve
earnings progress in the next few years and that debt levels would
not experience any increase because of acquisitions.
     
Overall earnings for 2008 could show good improvement from 2007's
weak results, helped by a strong agricultural economy in Europe,
cost savings in pool chemicals, another strong contribution by the
performance specialties segment (mostly the petroleum additives
and urethanes businesses), and reduced manufacturing costs and
selling, general, and administrative expenses in polymer
additives.  S&P also expect operating margins to strengthen from
the lackluster 12% for 2007.  However, the company's ability to
increase selling prices and manage the continuing inflation in raw
material and energy costs against the backdrop of a slowing U.S.
economy will continue to be major challenges and constrain
consolidated earnings progress.  If Chemtura does not initiate any
strategic actions near term, we expect acquisitions for the
balance of 2008 to be limited to bolt-on transactions.
     
Moreover, operating earnings for 2008 will benefit from lower
total charges associated with facility closures and severance and
impairment of long-lived assets, and reduced losses on the sale of
assets, all arising from the substantial portfolio realignment
projects of recent years.  Outlays for legacy antitrust
liabilities will also be lower.  Consequently, the company could
generate a moderate amount of discretionary cash flow this year,
which it could use to partially address $400 million of debt due
in 2009.
     
Higher earnings as well as possible debt reduction would benefit
the key funds from operations to adjusted debt ratio, which is
expected to be in the area of 20% for 2008, up modestly from the
prior year's performance.  S&P view 20% to 25% as the target range
for that cash flow protection measure for the current ratings.
     
S&P will resolve the CreditWatch when information becomes
available regarding the company's plans, perhaps within the next
few months.
     

CHRYSLER LLC: Revenue Decline Cues Fitch to Cut IDR to B from B+
----------------------------------------------------------------
Fitch Ratings has downgraded the Issuer Default Rating of Chrysler
LLC to 'B' from 'B+', with a Negative Rating Outlook.  Fitch has
also downgraded the senior secured bank facilities as listed
below, based on the downgrade of the IDR and Fitch's recovery
rating methodology.  The downgrade reflects the decline in unit
volumes and revenues resulting from weak economic conditions,
modest share losses, certain strategic initiatives, and the effect
of these factors on the company's operating performance.

Chrysler's restructuring efforts remain on track, and liquidity is
expected to remain adequate over the near term to fund
restructuring costs and operating losses through a period of
economic weakness.

Since 2000, Chrysler's market share losses have been more moderate
than at Ford and GM, requiring fewer reductions in assembly
capacity and the associated fixed costs.  In a stable revenue
environment, this would allow cost reductions to flow more quickly
to the bottom line.  However, the severe impact of weakening
economic conditions has made this more challenging, and has
extended the timeline projected for a potential reversion to
positive cashflow.  The steep decline in 2008 unit sales also
results from strategic initiatives undertaken at Chrysler
following its management changes, including reduced fleet sales,
product eliminations and inventory reductions, steps that are
viewed positively for the company's long-term prospects.

Unit volumes in 2008 and into 2009 will be aided by the new Dodge
and Chrysler minivan offerings, the Dodge Journey crossover, the
low-volume Dodge Challenger, as well as the fall launch of the
redesigned Dodge Ram pickup.  Several products at the smaller end
of Chrysler's lineup, including the Dodge Caliber and Jeep
Patriot, have supported unit volumes as consumers migrate to
smaller, fuel-efficient vehicles. On a consolidated basis,
however, these factors will be more than offset by weakness in the
larger end of the company's product portfolio -- the effect of a
depressed residential construction market on Chrysler's key pickup
lineup, high gas prices, and the impact of general economic
conditions on industry sales.

Chrysler's efforts to sharply curtail fleet sales and to convert
its sales/production strategy to a 'demand-pull' model from a
'production-push' model will further affect sales declines in
2008.  International sales, representing approximately 10% of
production, are likely to continue to grow at double-digit rates,
providing modest support to consolidated sales and capacity
utilization.

Chrysler's cash flow will remain negative in 2008, due to capital
investments, restructuring costs and other one-time items.  The
company is realizing substantial reductions to its fixed-cost
structure, the bulk of which have resulted from salaried and
hourly headcount reductions.  Variable purchasing, material and
other efficiencies have been more difficult to realize as rising
commodity costs have offset other progress.  Cost reductions and
the new UAW contract have positioned the company to moderate
operating losses during the current economic weakness, but a
return to positive free cash flow is likely to require continued
execution on the company's cost reduction efforts and a
stabilization in market share and industry sales.  Chrysler also
faces pending CAW contract negotiations.

Liquidity levels (supported by incremental debt from a delayed-
draw term loan and a $1.6 billion note to the UAW as part of the
VEBA agreement), are expected to be sufficient to weather weak
economic conditions and finance operating and restructuring costs
over the near term.

New management has resulted in a number of strategic and product
adjustments that are quickly being brought to market.  Fitch
expects that Chrysler will continue to employ an 'asset-lite'
approach that could involve additional assembly plant shutdowns.  
Alliances and/or contract manufacturing will play a role in this
decision, and Chrysler is expected to continue to pursue such
arrangements on a global basis.  Tie-ins with other global OEMs
are expected to focus on growth in the company's brand,
engineering and distribution capabilities, but requiring minimal
capital investment.  The relationship with Daimler, which owns
19.9% of Chrysler, remains a modest positive to the rating because
of Chrysler's access to certain Daimler technology.

The Recovery Rating on the second lien has been downgraded from
'BB+/RR1' to 'CCC+/RR6' based on lower asset value assumptions and
associated recoveries in the event of a stress scenario.

Fitch has downgraded these :

  -- IDR to 'B' from 'B+';
  -- Senior secured first-lien bank loan to 'BB/RR1' from
     'BB+/RR1';

  -- Senior secured second-lien bank loan to 'CCC+/RR6' from
     'BB+/RR1'.


CHURCH OF GOD: Case Summary & Eight Largest Unsecured Creditors
---------------------------------------------------------------
Debtor: Church of God in Christ #2
        dba Little Chapel Church of God in Christ
        1823 Turk St.
        San Francisco, CA 94115

Bankruptcy Case No.: 08-30750

Type of Business: The Debtor owns and administers a religious
                  organization.

Chapter 11 Petition Date: May 1, 2008

Court: Northern District of California (San Francisco)

Judge: Dennis Montali

Debtor's Counsel: Ruth Elin Auerbach, Esq.
                  Email: attorneyruth@sbcglobal.net
                  711 Van Ness Ave. Ste. 440
                  San Francisco, CA 94102
                  Tel: (415) 673-0560

Total Assets: $2,613,690

Total Debts:    $534,000

Debtor's Eight Largest Unsecured Creditors:

   Entity                      Claim Amount
   ------                      ------------
Dr. David Wren, Jr.            $60,000
84 Seabreeze Drive
Richmond, CA 94804

Emma & Woodrow Person          $39,000
2018 Golden Gate Ave.
San Francisco, CA 94115

Jones & Glendale Wren          $26,000
129-24 158th Street
Jamaica, NY 11434

Sylvia & Earl Young            $10,000

April Wren                     $10,000

Kia Wren                       $10,000

Regina & Albert Williams       $7,000

Pastor William Nolen           $7,000


CLEAR CHANNEL: Judge Allows Breach of Contract Suit Against Banks
-----------------------------------------------------------------
Justice Helen Freedman of the New York Supreme Court has allowed
the litigation of the breach of contract claim of CC Media
Holdings Inc. against a consortium of banks to continue, Reuters
report.

Justice Freedman, however, rejected CC Media's claims of fraud and
civil conspiracy against them.

CC Media, a corporation formed by private-equity funds Thomas H.
Lee Partners LP and Bain Capital LLC to buy Clear Channel
Communications Inc., sued various banks to compel them to fulfill
their promise to finance the Clear Channel acquisition.

On Monday, the banks, namely Citigroup Inc., Morgan Stanley,
Credit Suisse Group , Royal Bank of Scotland Group PLC, Deutsche
Bank AG and Wachovia Corp., sought authority from a Texas Court to
dismiss a lawsuit alleging their interference in the buyout deal's
completion, Kevin Kingsbury of The Wall Street Journal relates.  
The banks have insisted that the lawsuit is immature since the
deadline for the closure of the deal is on June 12, and the deal
may still be completed.

The banks said the company is "in effect asking this court to
render an advisory opinion based on hypothetical events that have
not occurred and may never occur."

The lenders also contend that because they have offered to enter
into binding arbitration "and agreed to fund the merger based open
the arbitrator's resolution of the remaining open terms," they
aren't intentionally trying to interfere in the deal's completion.

As reported in the Troubled Company Reporter on April 14, 2008,
the Hon. Joe F. Brown Jr. of the Bexar County State District
Court in Texas, rejected the request of a consortium of banks to
dismiss a lawsuit filed against them by CC Media.  The judge
converted a temporary restraining order, which was issued by the
court to force the financiers to honor the financing deal, into a
temporary injuction, turning the state of the deal back to its
existing condition.  A trial is set for June 2, 2008.

As previously reported in the TCR, the privatization of Clear
Channel appeared in danger of collapsing after CC Media and the
lenders reportedly failed to reach agreement on the final
financing of the transaction.  Clear Channel had anticipated
closing the merger agreement by March 31, 2008. The company's
shareholders approved the adoption of the merger agreement, as
amended.  The deal includes $19.4 billion of equity and $7.7
billion of debt.

The main dispute centers on the lending syndicate's demand that
the private equity firms replace a long-term financing package of
at least six years in the original agreement with a short-term,
three-year bridge-financing agreement; and a condition that the
buyers not use a revolving credit facility or Clear Channel's cash
flow to pay down about $3.8 billion in short-term debt securities.

Subsequently, CC Media sued the bank group to compel them to honor
the agreement. CC Media filed complaints in New York state court
in Manhattan and in Bexar County, Texas. The firms alleged the
backers breached the contract entered in May to fund the deal.  
Clear Channel joined the suit in Texas. In Texas, Clear Channel
asked for an order banning the banks from interfering with the
merger agreement and sought more than $26 billion in damages.

                       About Clear Channel

Based in San Antonio, Texas, Clear Channel Communications Inc.
(NYSE:CCU) -- http://www.clearchannel.com/-- is a media
and entertainment company specializing in "gone from home"
entertainment and information services for local communities and
premiere opportunities for advertisers.  The company's
businesses include radio, television and outdoor displays. Outside
U.S., the company operates in 11 countries -- Norway,
Denmark, the United Kingdom, Singapore, China, the Czech
Republic, Switzerland, the Netherlands, Australia, Mexico and
New Zealand.  As of Dec. 31, 2007, it owned 717 core radio
stations, 288 non-core radio stations which are being marketed for
sale and a leading national radio network operating in the United
States.

                            *     *     *

In March 2008, Standard & Poor's Ratings Services said its
ratings on Clear Channel Communications Inc., including the 'B+'
corporate credit rating, remain on CreditWatch with negative
implications.

Fitch Ratings stated that in line with previous guidance, Clear
Channel Communications' 'BB-' Issuer Default Rating and Senior
Unsecured Ratings would remain in place if the going-private
transaction is not completed.

Moody's stated that assuming the transaction is completed as
currently contemplated, Clear Channel will likely be assigned a
Corporate Family Rating of B2 and the rating on the existing
senior notes is likely to be notched down to Caa1 based on their
expected subordination to the new senior secured debt facilities
and the new senior notes.


CLEBURNE & TM: Sunrise Mall Auction Halted by Bankruptcy Filing
---------------------------------------------------------------
The planned foreclosure auction of Sunrise Mall, owned by Corpus
Sunrise Mall L.P., was stopped when its owners filed for Chapter
11 protection with the U.S. Bankruptcy Court for the Northern
District of Texas, Caller-Times reported.

Corpus Sunrise is one of six affiliates of Cleburne & TM, L.P.
that filed for bankruptcy on Monday.  Corpus Sunrise Mall
defaulted on a $6.5 million worth of debt with International Bank
of Commerce, Caller-Times cites documents submitted to the Court.  
In addition, it defaulted on a loan from Austin investors worth
$1.5 million.  Consequently, the mall was scheduled to be
auctioned off.

Learning about the bankruptcy filing, Harold Shockley, president
of International Bank of Commerce-Corpus Christi, said, "This is
now a matter of the bankruptcy court and we cannot have an
auction."

Based in Arlington, Texas, Cleburne & TM L.P. and six of its
affiliates filed for Chapter 11 protection on May 5, 2008 (Bankr.
N.D. Texas. Lead Case No. 08-32193).  Joyce W. Lindauer, Esq. and
Arthur I. Ungerman, Esq. represents the Debtors in their
restructuring efforts.  When the Debtors filed for protection from
their creditors, they listed estimated assets of $10 million to
$50 million, and estimated debts of $1 million to $10 million.


COMM 2006-C8: Moody's Junks Rating on $9.439MM Class Q Certs.
-------------------------------------------------------------
Moody's Investors Service downgraded the ratings of three classes
and affirmed 23 classes of COMM 2006-C8, Commercial Mortgage
Pass-Through Certificates as:

  -- Class A  -- 1, $39,260,330, affirmed at Aaa
  -- Class A  -- 2A, $100,000,000, affirmed at Aaa
  -- Class A  -- 2B, $366,000,000, affirmed at Aaa
  -- Class A  -- 3, $244,500,000, affirmed at Aaa
  -- Class A  -- AB, $92,500,000, affirmed at Aaa
  -- Class A  -- 4, $1,118,212,000, affirmed at Aaa
  -- Class A  -- 1A, $668,671,133, affirmed at Aaa
  -- Class A  -- M, $377,571,000, affirmed at Aaa
  -- Class A  -- J, $302,056,000, affirmed at Aaa
  -- Class XP, Notional, affirmed at Aaa
  -- Class XS, Notional, affirmed at Aaa
  -- Class B, $28,318,000, affirmed at Aa1
  -- Class C, $42,476,000, affirmed at Aa2
  -- Class D, $37,758,000, affirmed at Aa3
  -- Class E, $23,598,000, affirmed at A1
  -- Class F, $28,317,000, affirmed at A2
  -- Class G, $51,916,000, affirmed at A3
  -- Class H, $37,757,000, affirmed at Baa1
  -- Class J, $42,477,000, affirmed at Baa2
  -- Class K, $42,477,000, affirmed at Baa3
  -- Class L, $18,878,000, affirmed at Ba1
  -- Class M, $18,879,000, affirmed at Ba2
  -- Class N, $4,719,000, affirmed at Ba3
  -- Class O, $9,440,000, downgraded to B2 from B1
  -- Class P, $14,159,000, downgraded to B3 from B2
  -- Class Q, $9,439,000, downgraded to Caa1 from B3

Moody's is downgrading Classes O, P and Q due to an overall
decline in pool performance, LTV dispersion and projected losses
from specially serviced loans.

As of the April 10, 2008 distribution date, the transaction's
aggregate certificate balance has decreased by approximately 0.4%
to $3.76 billion from $3.78 billion at securitization.  The
Certificates are collateralized by 172 loans ranging in size from
less than 1.0% to 9.2% of the pool with the top 10 loans
representing 36.1% of the pool.  The pool includes one loan (2.5%
of the pool) with an underlying rating.  At securitization there
were two loans with underlying ratings, however the Ryan's
Portfolio Loan, discussed below, has been transferred to special
servicing and no longer has an underlying rating.

Moody's was provided with year-end 2006 and partial year or full
year 2007 operating results for 77.6% and 68.6% of the pool,
respectively.  Moody's weighted average loan to value ratio for
the conduit component is 108.5% compared to 106.1% at
securitization.  According to Moody's analysis, 32.8% of the
conduit pool has a LTV in excess of 120.0% compared to 21.3% at
securitization.

The trust has not realized any losses since securitization.
Currently two loans, representing 2.2% of the pool, are in special
servicing.  The largest specially serviced loan is the Ryan's
Portfolio Loan ($64.5 million -- 1.7%), which is secured by 129
restaurants master leased by Buffets, Inc.  The restaurants are
primarily located in secondary and tertiary markets in 22 states.  
Buffets filed a voluntary petition for reorganization under
Chapter 11 of the U.S. Bankruptcy Code on January 22, 2008 and the
loan was transferred to special servicing in February 2008.  
Buffets has not yet filed a Reorganization Plan.  The loan is
current and the servicer is trapping all excess cash flow under a
cash management agreement established pursuant to the loan
documents.  Moody's is not estimating a loss for this loan at this
time but has estimated a $3.0 million loss for the second
specially serviced loan.

Thirty-three loans, representing 26.9% of the pool, are on the
master servicer's watchlist.  The master servicer's watchlist
includes loans which meet certain portfolio review guidelines
established as part of the Commercial Mortgage Securities
Association monthly reporting package.  As part of our ongoing
monitoring of a transaction, Moody's reviews the watchlist to
assess which loans have material issues that could impact
performance.  Not all loans on the watchlist are delinquent or
have significant issues.

The loan with an underlying rating is the First City Tower Loan
($93.0 million -- 2.5%), which is secured by a 1.3 million square
foot Class A office building located in downtown Houston, Texas.  
The property was 92.0% occupied as of September 2007 compared to
85.1% at securitization.  Major tenants include Vision & Elkins
LLP and Waste Management Inc., which together lease 65.7% of the
property.  Moody's current underlying rating is Baa3, the same as
at securitization.

The top three conduit loans represent 19.5% of the outstanding
pool balance.  The largest conduit loan is the Mall of America
Loan ($345.0 million -- 9.2%), which represents a 45.7% pari passu
interest in a first mortgage totaling $755.0 million.  The loan is
secured by the borrower's interest in a 2.8 million square foot
regional mall/entertainment center located in Bloomington,
Minnesota.  The mall is anchored by Macy's, Bloomingdales,
Nordstrom and Sears and a variety of entertainment venues.  
Moody's LTV is 98.0%, essentially the same as at securitization.

The second largest conduit loan is the Four Allen Center Loan
($240.0 million -- 6.4%), which is secured by a 1.2 million square
foot Class A office building located in Houston, Texas.  The
property is 100.0% leased by Chevron USA (Moody's long term issuer
rating of parent, Chevron Corporation, is Aa1; stable outlook)
through January 2019.  The loan matures in October 2013.  Moody's
LTV is 120.2%, the same as at securitization.

The third largest conduit loan is the EZ Storage Portfolio Loan
($150.0 million -- 4.0%), which represents a 50.0% pari passu
interest in a $300.0 million first mortgage loan.  The loan is
secured by 48 self storage properties located in six states.  The
properties are generally well-located in in-fill locations with
good access and visibility.  Approximately 50.0% of the properties
are located in Detroit, Michigan, which represents the largest
geographic concentration.  Performance has declined due to
increased expenses.  Moody's LTV is 128.3% compared to 123.1% at
securitization.


CONSUMER ACCEPTANCE: Case Summary & Largest Unsecured Creditor
--------------------------------------------------------------
Debtor: Consumer Acceptance Retail Services, Inc.
        160 Whitehorse Ave.
        Trenton, NJ 08610

Bankruptcy Case No.: 08-18238

Chapter 11 Petition Date: May 2, 2008

Court: District of New Jersey (Trenton)

Judge: Michael B. Kaplan

Debtor's Counsel: Frank Armenante, Esq.
                  Malsbury & Armenante
                  Email: frankp@malsarmlaw.com
                  12 N. Main St.
                  P.O. Box 157
                  Allentown, NJ 08501
                  Tel: (609) 259-7944
                  Fax: (609) 259-7082
                  http://www.malsarmlaw.com/

Total Assets:        $0

Total Debts: $2,831,467

Debtor's Largest Unsecured Creditor:

   Entity                      Nature of Claim       Claim Amount
   ------                      ---------------       ------------
PNC Bank, N.A.                 Bank loan; value of   $2,831,467
Commercial Loan Operations     security: $1,000,000
P.O. Box 747046
Pittsburgh, PA 15274-7046


COREY LANDINGS: Files Schedules of Assets and Liabilities
---------------------------------------------------------
Corey Landings Development, LLC delivered to the United States
Bankruptcy Court for the Middle District of Florida its schedules
of assets and liabilities disclosing:

   Name of Schedule                   Assets      Liabilities
   ----------------                -----------    -----------
   A. Real Property                $35,000,000
   B. Personal Property                     26
   C. Property Claimed
      as Exempt
   D. Creditors Holding                           $41,745,066
      Secured Claims
   E. Creditors Holding                                     0
      Unsecured Priority
      Claims
   F. Creditors Holding                             1,690,473
      Unsecured Nonpriority
      Claims
                                   ------------   -------------
      TOTAL                         $35,000,026   $43,435,540

Based in St. Petersburg, Florida, Corey Landings Development, LLC
is a real estate developer.  The company filed for Chapter 11
protection on Mar. 14, 2008 (Bankr. M.D. Fla. Case No. 08-03353).  
Arthur J. Spector, Esq. at Berger Singerman represents the Debtor
in its restructuring efforts.  When the Debtor filed for
protection from its creditors, it listed estimated assets between
$10 million and $50 million and estimated debts between $50
million and $100 million.


COUNTRYWIDE FINANCIAL: Vows to Keep Watch Over Mistakes in Lending
------------------------------------------------------------------
Countrywide Financial Corp., in a testimony before a U.S. Senate
panel, promised to appoint an independent auditor to check on its
loan practices, and defended its conduct with homeowners who are
in bankruptcy, Reuters reports.

As reported in the Troubled Company Reporter on May 5, 2008,
Countrywide was scheduled to testify before the Senate judiciary
subcommittee for dubious and questionable lending practices,
according to Democratic senator Charles Schumer.  

In the testimony, loan servicing executive Steve Bailey admitted
that the company's loan processing activities generate mistakes
"from time to time", and subsequently pledged to reduce those
errors.

                   About Countrywide Financial

Based in Calabasas, California, Countrywide Financial Corporation
(NYSE: CFC) -- http://www.countrywide.com/-- is a
diversified financial services provider and a member of the S&P
500, Forbes 2000 and Fortune 500.  Through its family of
companies, Countrywide originates, purchases, securitizes, sells,
and services residential and commercial loans; provides loan
closing services such as credit reports, appraisals and flood
determinations; offers banking services which include depository
and home loan products; conducts fixed income securities
underwriting and trading activities; provides property, life and
casualty insurance; and manages a captive mortgage reinsurance
company.

                          *     *     *

As reported in the Troubled Company Reporter on Jan. 15, 2008,
Moody's placed the ratings of Countrywide Financial Corporation
and its subsidiaries under review for upgrade.  CFC and
Countrywide Home Loans senior debt is rated Baa3 and short-term
debt is rated Prime-3.  Countrywide Bank FSB's bank financial
strength rating is C-, deposits are rated Baa1 and short-term debt
Prime-2.  All long and short-term ratings are placed under review
for possible upgrade.

The company is continuing to face a barrage of lawsuits coming
from disgruntled homeowners that filed for bankruptcy protection.  
Countrywide has been accused by these homeowners and various
federal agencies of dubious and questionable lending practices,
and for abusing the bankruptcy system.


COUNTRYWIDE FIN'L: S&P Cuts Ratings on Deals, Outlook Developing
----------------------------------------------------------------
Standard & Poor's Ratings Services lowered its ratings on two
Countrywide Financial Corp.-related transactions (Countrywide Home
Loans Inc. and Countrywide Capital III) and placed them on
CreditWatch with developing implications.
     
The rating actions reflect our May 2, 2008, lowering of the
ratings on Countrywide Financial Corp. and its affiliates and our
revision of its CreditWatch placement to developing from positive
implications.
     
The Countrywide Home Loans Inc.-related transaction, Restructured
Asset Securities with Enhanced Returns Series 2005-13-C Trust's
restructured asset securities with enhanced returns series CFC
certificates due Sept. 20, 2010, is a credit-linked note
transaction.  The rating on the certificates issued by the trust
is based on the lower of (i) the rating assigned to the reference
obligation for the class, Countrywide Home Loans Inc.'s 5.625%
medium-term notes series K due July 15, 2009, ('BB+/Watch Dev');
and (ii) the ratings assigned to the underlying securities: (a)
$5 million Capital One Multi-Asset Execution Trust's class A
(series 2003-3) notes due May 16, 2011, ('AAA'); and (b)
approximately $20 million in cash to be invested in 'AAA' rated
asset-backed securities with a maturity date no later than the
series maturity date and conforming to additional eligibility
requirements pursuant to the indenture.
     
The Countrywide Capital III-related transaction, PreferredPlUS
Trust Series CCR-1's trust certificates series CCR-1 due June 15,
2027, is a pass-through transaction, the ratings on which are
based solely on the rating assigned to the underlying collateral,
the $25 million 8.05% notes due June 15, 2027, issued by
Countrywide Capital III ('BB-/Watch Dev').
     
       
              Ratings Lowered and Creditwatch Revised


    Restructured Asset Securities with Enhanced Returns (RACERS)   
                      Series 2005-13-C Trust
           $25 million RACERS series CFC certificates

                                       Rating
                                       ------
         Class               To                      From
         -----               --                      ----
         Certificates        BB+/Watch Dev        BBB+/Watch Pos   

                  PreferredPLUS Trust Series CCR-1
           $25 million trust certificates series CCR-1

                                       Rating
                                       ------
         Class               To                      From
         -----               --                      ----
         Certificates        BB-/Watch Dev       BBB-/Watch Pos


DAN RIVER: Board Names John Hedge of Scouler & Company as CRO
-------------------------------------------------------------
Dan River Inc.'s board of directors appointed John Hedge of  
Scouler & Company as chief restructuring officer.  The appointment
was part of the company's Chapter 11 bankruptcy proceedings.

Mr. Hedge, a principal of the Los Angeles-based financial
turnaround and restructuring firm, will be responsible for
developing and implementing a business plan to maximize the return
to all stakeholders, consulting on any potential divestitures,
providing oversight for operations, monitoring financial
performance and interacting with Dan River lenders and other
creditors throughout the recovery period.

"Scouler & Company was selected based on multiple factors
including the credentials of our personnel, demonstrably creative
solutions, and perhaps most importantly, prior niche experience
with distribution companies and big box retailers," Dan Scouler,
managing principal, noted.  

Scouler & Company consultants have performed CRO duties for
companies in a diverse range of industries such as distribution,
retailing, home improvement, mortgage origination and security
services.

                      About Dan River Inc.

Headquartered in Danville, Virginia, Dan River Inc. --
http://www.www.danriver.com/-- manufactures and markets textile   
products for the home fashions, apparel fabrics and industrial
markets.

The company first filed for chapter 11 protection on March 31,
2004 (Bankr. N.D. Ga. Case No. 04-10990). James A. Pardo, Jr.,
Esq., at King & Spalding, represented them in their restructuring
efforts.  The Debtor listed $441,800,000 in total assets and
$371,800,000 in total debts. The Court confirmed the Debtors' Plan
of Reorganization on Jan. 18, 2005, and the plan took effect on
Feb. 14, 2005.

Dan River's operations was acquired by GHCL Ltd. in January 2006
for approximately $93 million consisting of $17 million in cash
plus the assumption of $76 million in short- and long-term debt.  
On March 24, 2008, GHCL announced plans to close its home textiles
sourcing and manufacturing segment, affecting Dan River as well as
GHCL's HW Baker and Best Textiles divisions.

Dan River Holdings LLC, Dan River Inc. and three other affiliates
filed for Chapter 11 protection on April 20, 2008, (Bankr. D. Del.
Lead Case No. 08-10727).  Margaret M. Manning, Esq., at Whiteford
Taylor & Preston, represents the Debtors in their restructuring
efforts.  As of April 20, the Debtors  listed assets between
$50 million to $100 million and debts between $100 million to
$500 million.


DAVIS SQUARE: Fitch Downgrades Ratings on Five Note Classes
-----------------------------------------------------------
Fitch Ratings has downgraded five classes of notes issued by Davis
Square Funding III, Ltd.  These rating actions are effective
immediately:

  -- $332,465,078 class A-1LT-a to 'BB' from 'AAA';

  -- $986,543,258 floating-rate class A-1LT-b-1 to 'BB' from
     'AAA';

  -- $60,500,000 class A-2 to 'B' from 'AAA';
  -- $20,000,000 class B to 'CCC' from 'AA';
  -- $64,869,933 class C to 'C' from 'A-'.

Classes A-1LT-a, A-1LT-b-1 and A-2 remain on Rating Watch
Negative, while the class B and C notes are removed from Rating
Watch Negative.

Davis Square III is a collateralized debt obligation that closed
on Oct. 21, 2004 and is managed by TCW Asset Management, Co. Davis
Square III's reinvestment period ended in March 2008.  Davis
Square III contained a commercial paper class which was put to
CALYON as of the Aug. 31, 2007 trustee report.  The put was
exercised because the CP notes could not be remarketed at the
maximum remarketing spread.  The class A-1LT-b-1 notes were issued
in exchange of the CP upon the exercise of the put agreement and
are pari passu in seniority with the class A-1LT-a notes.

Davis Square III has a portfolio comprised primarily of subprime
residential mortgage-backed securities bonds (49%), Alternative-A
RMBS (20%), prime RMBS (6%), structured finance CDOs (10%) and
other SF assets.  Subprime RMBS, Alt-A and SF CDO bonds of the
2005, 2006, and 2007 vintages account for approximately 24%.  
Subprime RMBS, Alt-A and SF CDO bonds from other vintages account
for 53.5% of the portfolio.

Fitch's rating actions reflect the significant collateral
deterioration within the portfolio.  Since September 2007,
approximately 20% of the portfolio has been downgraded.  The
negative credit migration is primarily attributable to credit
deterioration in subprime RMBS bonds from the 2005, 2006 and 2007
vintages, coupled with significant downgrades in SF CDOs
originated between 2005 and 2007.  This negative credit migration
has caused under collateralization and as a result the class A/B
overcollateralization test is failing with a ratio of 100.78%
compared to its trigger of 103%.  The failing coverage test has
stopped all payments to the class C notes as interest and
principal proceeds are diverted to amortize the class A-1 notes
after paying class B interest.  Fitch does not expect the class
A/B coming back into compliance in the future.  According to
Fitch's analysis approximately 13.9% of the portfolio is of
speculative credit quality with approximately 7.9% rated 'CCC' or
lower

The Rating Watch Negative reflects the continued credit
deterioration in subprime RMBS and SF CDOs with underlying
exposure to subprime RMBS, as well as growing concerns with the
performance of Alt-A RMBS, as well as a large percentage (13.3%)
of the portfolio that remains on Rating Watch Negative.  
Additionally, Fitch is reviewing its SF CDO approach and will
comment separately on any changes and potential rating impact at a
later date.

The ratings of the class A and B notes address the likelihood that
investors will receive ultimate interest and deferred interest
payments, as per the governing documents, as well as the aggregate
outstanding amount of principal by the legal final maturity date.  
The rating of the C notes addresses the ultimate payment of
interest at a rate of 2% on, and ultimate payment of an amount
equal to the original principal amount of, such class.


DIRECTV HOLDINGS: Moody's Rates Proposed $1.35BB Sr. Notes Ba3
--------------------------------------------------------------
Moody's Investors Service assigned DIRECTV Holdings, LLC's
("DIRECTV" - Ba2 Corporate Family rating -- "CFR") proposed new
$1.0 billion senior secured Term Loan C maturing in 2013, and
$1.35 billion senior unsecured notes maturing in 2016, which may
increase to $1.5 billion, Baa3 (LGD2-19%) and Ba3 (LGD5-73%)
ratings, respectively, and affirmed all existing ratings for the
company.  Net proceeds from the new debt offerings will be used
for general corporate purposes and to fund share repurchases at
the company's parent, DIRECTV Group, Inc.  Moody's also assigned
the company an SGL-1 speculative grade liquidity rating and
changed its ratings outlook from negative to stable.

Assignments:

Issuer: DIRECTV Holdings LLC

  -- Speculative Grade Liquidity Rating, Assigned SGL-1
  -- Senior Secured Bank Credit Facility, Assigned Baa3 (LGD2-19%)
  -- Senior Unsecured Regular Bond/Debenture, Assigned Ba3
     (LGD5-73%)

Outlook Actions:

Issuer: DIRECTV Holdings LLC

  -- Outlook, Changed To Stable From Negative

The existing bank debt agreement permits the company to create a
new Term Loan C with similar terms as the existing Term Loans.  
The debt ratings for the new Term Loan C and the new senior
unsecured notes are based upon their pari-passu ranking with the
existing similarly rated bank debt and senior unsecured notes,
respectively, and the roughly consistent proportions of pro forma
debt at each priority level within the debt capital structure both
before and after completion of the proposed transactions.  The
notes are being sold in a privately-negotiated transaction without
registration under the Securities Act of 1933 under circumstances
reasonably designed to preclude a distribution thereof in
violation of the Act.  The issuance has been designed to permit
resale under Rule 144A.

The SGL-1 rating reflects the company's very good liquidity
profile, encompassing strong free cash flow, large cash balances
(>$1 billion at 3/31/2008) and low reliance on its undrawn
$500 revolving credit facility to fund a relatively modest
$65 million of term loan maturities over the next 12 months.  
Further, Moody's believes DIRECTV will continue to maintain
significant cushion under its financial covenants and have
unfettered access to its revolver should any unforeseen cash needs
arise.

While financial leverage as measured by debt-to-EBITDA will
increase from less than 1.0x before the new debt issuance, it is
still expected to be relatively modest relative to the current
ratings at about 1.5x for the near-term (and well below the
company's 2.5x-to-3.5x target), affording the company significant
financial and operational flexibility within its Ba2 CFR.  In
addition, a new stand still agreement was negotiated between
Liberty Media, LLC ("Liberty" -- Ba2 CFR) and DTVG, with the
result effectively freezing Liberty's voting control at about 48%,
regardless of their economic ownership level.  

Therefore, it is unlikely that the first of two triggers for the
change of control protection provision in DIRECTV's bond
indentures (Liberty's voting stake increasing to over 50%) will be
tripped, and the second trigger, which is a rating downgrade due
to the change of control, is also unlikely over the next 12-to-18
months. Moody's had previously maintained a negative outlook due
to anticipation of a high likelihood that Liberty's stake would
exceed 50% over the nearterm.

In Moody's view, in order for the bondholder protective covenant
to be effective as it was originally intended, it would have had
that one opportunity - at the 50% crossover point, to consider
whether we believed that leverage would likely increase over the
intermediate-term to beyond the 3.5 times debt-to-EBITDA ceiling
level considered appropriate in our view for the Ba2 CFR rating.

But, now that the first trigger has been effectively neutralized,
Moody's no longer needs to make a rating determination at the
imminent crossover point to possibly trip the second trigger if
Moody's felt it necessary due to longer term concerns.  Therefore,
despite a moderate increase in leverage, Moody's believes that the
company's significant financial flexibility makes it unlikely that
the company's ratings will face downward pressure over the coming
12 to 18 months, and therefore a stable outlook is now warranted.

"However," noted Neil Begley, Moody's Senior Vice President, "we
believe that upward leverage pressure still exists, as only a
minimal number of other large aggressive shareholders would be
needed to add to Liberty's 48% voting interest to effect greater
control and drive balance sheet change that would negatively
impact bondholders in the future, and the standstill agreement
demonstrates that the Board of Directors is less likely to be as
balanced in its consideration of protecting the interests of
bondholders."

The change in ownership prerequisite of the change of control
provision would now be triggered if at any point in the future
Liberty were to tender for all of DTVG's outstanding shares or
both parties agreed to terminate the agreement.  A trigger of the
change of control provision would require DTVG to repurchase the
outstanding notes at a price of 101.  The new bonds have a change
of control provision which considers a change in control other
than by Liberty Media.

DIRECTV Holdings LLC's is the wholly-owned, U.S. operating company
of The DIRECTV Group, Inc. and is the largest direct-to-home
digital television service provider in the United States with 17
million subscribers as of 3/31/08.  Annual revenues of DTVG and
DIRECTV approximate $17 billion and $16 billion, respectively.  
DTVG's additional revenues are generated by the company's Latin
American DBS operators.


DIRECTV HOLDINGS: S&P Lifts Ratings on Two Note Classes to 'BB'
---------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'BBB-' issue-level
rating and '1' recovery rating to El Segundo, California-based
DIRECTV Holdings LLC's proposed $1 billion Incremental Term Loan C
due 2013.  The bank debt is being issued under the Incremental
Tranche C provision of the existing credit facility.  The '1'
recovery rating indicates expectations for very high (90%-100%)
recovery in the event of a payment default.
     
At the same time, S&P assigned a 'BB' issue-level rating and a '4'
recovery rating to DIRECTV Holdings LLC's $1.35 billion of
proposed senior unsecured notes due 2016.  The '4' recovery rating
indicates expectations for average (30%-50%) recovery in the event
of a payment default.  The ratings are based on preliminary
documentation and are subject to review of final documents.   
DIRECTV Holdings LLC is the main subsidiary of The DIRECTV Group
Inc.  The proceeds are to be used for general corporate purposes,
including funding the company's share repurchase program.
     
In addition, S&P affirmed the 'BB' corporate credit rating and
raised the issue-level ratings on the company's 8.375% and 6.375%
unsecured senior notes by one notch to 'BB' from 'BB-'.  The
recovery ratings on these notes are revised to '4' from '5',
indicating expectations of average (30%-50%) recovery in the event
of default.  The upgrade of the two issue-level ratings was
precipitated by a refinement of our recovery analysis driven by
our somewhat improved view of DIRECTV's business position,
especially given the company's ability to post solid subscriber
growth at a time when most cable operators are struggling to just
retain their current video base.  The outlook is stable.
     
DIRECTV, through its DIRECTV Holdings subsidiary, provides direct-
to-home television service to more than 17 million U.S.
subscribers.  The company is about 48% owned by Liberty Media
Corp., which exercises significant influence as the largest
shareholder.  DIRECTV's U.S. operation is the second-largest U.S.
pay-TV provider after Comcast Corp., and provides 90% of
consolidated revenue.  DIRECTV Group's Latin America DTH platforms
account for the balance of its consolidated revenue.  The rating
on the satellite DTH operator incorporates an aggressive
shareholder-friendly financial profile coupled with the impact of
the intensely competitive U.S. pay-TV industry.
     
In addition to strong competition from rival DISH Network Corp.,
DIRECTV's lack of a triple play package consisting of high-speed
data, voice, and advanced two-way video services puts it at a
competitive disadvantage to cable television operators.  The
rating also recognizes the currently limited, but clearly growing
longer-term threat from Verizon Communications Inc.'s and AT&T
Inc.'s respective FiOS and u-Verse video offerings.  

Somewhat tempering these competitive risks are the company's
continued healthy operating metrics, with continued strong revenue
and subscriber growth materially outpacing the cable industry's
basic subscriber losses; a defendable niche market position due to
its differentiated programming with a focus on sports and high
definition content; scale advantages from the company's position
as the second-largest multi-channel TV provider; and good
liquidity from healthy discretionary cash flow and a sizable cash
balance.
     
S&P have previously stated that the ratings on DIRECTV were
constrained by the lack of a clearly articulated financial policy
and concerns that the company would markedly increase its
leverage.  S&P believe that recent statements by company
management that it is comfortable with the current 'BB' corporate
credit rating provide greater clarity to its policy.  While the
proposed transaction only increases leverage modestly to 1.4x debt
to latest-12-month EBITDA, S&P believe this leverage level is a
transition point toward increasing leverage toward the 3x range
over the long-term, which is consistent with the 'BB' rating.  

Ratings List
Ratings Affirmed

DIRECTV Group Inc. (The)
Corporate Credit Rating                   BB/Stable/--       

Upgraded
                                           To                 From
                                           --                 ----
DIRECTV Group Inc. (The)
Senior Unsecured
  Local Currency                           4                  5

DIRECTV Holdings LLC
Senior Unsecured
  US$1.4 billion 8.375%  sr unsecd nts due BB                 BB-
  2013                                  
   Recovery Rating                         4                  5
  US$1 bil 6.375%  sr nts due              BB                 BB-
  06/15/2015                            
   Recovery Rating                         4                  5

New Rating

DIRECTV Holdings LLC
Senior Secured
  US$1 billion  incremental term C bank ln  BBB-               
  due 2013                              
   Recovery Rating                          1                  
Senior Unsecured
  US$1.35 billion  nts due 2016             BB                 
   Recovery Rating                          4                  

Ratings Affirmed

DIRECTV Group Inc. (The)
Senior Secured
  Local Currency                            BBB-               

DIRECTV Holdings LLC
Senior Secured
  US$500 million sr secd revolv cred fac   BBB-               
  bank ln due 2011                      
   Recovery Rating                         1                  
  US$500 million sr secd term A bank ln    BBB-               
  due 2011                              
   Recovery Rating                         1                  
  US$1.5 billion sr secd term B bank ln    BBB-               
  due 2013                              
   Recovery Rating                         1                  


DOLE FOOD: Credit Protection Remains Weak for Fitch's 'B-' Rating
-----------------------------------------------------------------
On May 5, 2008, Dole Food Company, Inc. reported earnings for the
first quarter ended Mar 22, 2008.  As anticipated, the company's
revenue and operating income continues to benefit from improved
pricing in its worldwide banana operations but higher operating
costs; including fuel and EU banana tariffs, remain a drag on
overall profitability.  Fitch currently has an Issuer Default
Rating of 'B-' with a Negative Outlook on Dole.

Versus the prior year's period, consolidated revenue grew 13% to
$1.8 billion, operating income improved 50% to $50 million and
segment operating margin improved 80 basis points to 4%.  The
company's cash flow generation suffered from lower net income, due
to a $32 million unrealized loss on a cross-currency swap, and
higher working capital requirements.  Cash flow used in operating
activities was $63 million versus $42 million during the prior
year's period.  Total debt was approximately $2.5 billion, up
$67 million from year end.

Dole's credit protection measures remain weak for the 'B-' rating
category.  For the latest twelve month period ended Mar. 22, 2008,
leverage was 8.1 times, interest coverage was 1.6x and funds from
operations fixed charge coverage was 1.3x.  The company remains in
compliance with its fixed charge coverage covenant of at least 1x
if availability on its $350 million asset based revolver falls
below $35 million or 10% of the loan commitment.

Dole has significant upcoming maturities for which its current
cash flow generation and liquidity can not adequately fund.  These
maturities include $350 million of 8 5/8% unsecured notes due
May 1, 2009, $400 million of 7 1/4% unsecured notes due June 15,
2010 and $200 million of 8 7/8% unsecured notes due March 15,
2011.  Fitch currently rates these notes 'CCC+/RR5', indicating
they are highly speculative with below average recovery prospects.  
The Rating Outlook is Negative.

Unless operating performance improves more dramatically or asset
sales accelerate, liquidity will be an issue for Dole in the near-
term.  As of Mar. 22, 2008, the company had $95 million of cash on
hand and $108 million available on its asset-based revolver.  Dole
has classified $116 million of assets as held-for-sale and at
Dec. 29, 2007 had $99 million available under its uncommitted
facilities.

The company has indicated that it is working with its bankers and
advisors to assess various alternatives available for addressing
the 2009 maturity.  At this time, it plans to refinance the May 1,
2009 notes by issuing new debt before the end of 2008.

If the company is not able to access public debt markets, Fitch
believes the company's remaining options include, among other
things:

  -- refinancing its secured bank facility in order to fund its
     near term maturities;

  -- obtaining an intercompany loan from David H. Murdock Holdings
     Co., Inc. or

  -- completing a larger restructuring of its balance sheet.


ENCAP GOLF: Files Chapter 11 After State Stops $1 Billion Project
-----------------------------------------------------------------
EnCap Golf Holdings LLC and NJM Capital LLC, which owns 69% of
EnCap, filed for bankruptcy protection under Chapter 11 of the
Bankruptcy Code before the U.S. Bankruptcy Court for the District
of New Jersey after the State of New Jersey put off a $1 billion
construction project at the Meadowlands in Lyndhurst, various
sources report.

State inspector general Mary Jane Cooper said in a statement
in February 2008 that EnCap overstretched its financial ability
to construct and clean up the landfill site when it signed an
agreement with the Meadowlands Commission in 2000, The Associated
Press relates.

EnCap obtained $318 million in loans comprised of $215 million
from the state Department of Environmental Protection and a $103
million from Bergen County Improvement Authority, Maura McDermott
of Star-Ledger reports.  EnCap will use a portion of the money to
clean the landfills, Ms. McDermott says.

Pursuant to papers filed with the Court, EnCap listed assets and
debts between $100 million and $500 million.

Attorney General of New Jersey, Anne Milgram, stated in a letter
dated May 7, 2008, among other things, that:

   i) EnCap is in default under the development agreement and
      various financing agreements with all cure periods having
      expired and

  ii) there is no financing plan in place to fund the remediation
      costs.

A full-text copy of the Attorney General's letter is available for
free at http://ResearchArchives.com/t/s?2bae

EnCap Golf Holdings LLC, a subsidiary of Cherokee Investment
Parners of North Carolina, develops closed landfills and other
brownfield properties into golf courses.


ENCAP GOLF: Case Summary & 20 Largest Unsecured Creditors
---------------------------------------------------------
Debtor: EnCap Golf Holdings, LLC
        1 Meadowlands Plaza, Ste. 810
        East Rutherford, NJ 07074

Bankruptcy Case No.: 08-18581

Type of Business: The Debtor owns and operates golf courses.

Chapter 11 Petition Date: May 8, 2008

Court: District of New Jersey (Newark)

Judge: Novalyn L. Winfield

Debtor's Counsel: Michael D. Sirota, Esq.
                  Email: msirota@coleschotz.com
                  Cole, Schotz, Meisel, Forman & Leonard, P.A.
                  25 Main St.
                  Hackensack, NJ 07601
                  Tel: (201) 489-3000
                  http://www.coleschotz.com/

Estimated Assets: $100 million to $500 million

Estimated Debts:  $100 million to $500 million

Debtor's 20 Largest Unsecured Creditors:

   Entity                      Nature of Claim       Claim Amount
   ------                      ---------------       ------------
Mactec, Inc.                                         $15,753,027
1627 Cole Blvd.
Golden, CO 80401-3100

Paulus, Sokolowski & Sartor                          $4,612,694
67A Mountain Blvd. Ext.
P.O. Box 4039
Warren, NJ 07059

Township of Lyndhurst, NJ                            $3,979,614
Municipal Bldg.
367 Valley Brook Ave.
Lyndhurst, NJ 07071

PB Americas Inc./Parsons       Complaint             $1,186,683
Church Street Station
P.O. Box 6241
New York, NY 10249-6241

LIR-Fiore, LLC                                       $1,174,850
1 Washington Place
Newark, NJ 07102

Buckley Broadcasting Corp.     Complaint             $761,508
aka WOR Radio
111 Broadway
New York, NY 10006

Borough of Rutherford                                $639,619
25 West Van Ness Ave.
Rutherford, NJ 07070

Yonkers Contracting Co. Inc.                         $509,040
Attn: John L. Kolaya
969 Midland Ave.
Yonkers, NY 10704

Redevelopment Materials, Inc.                        $467,451
One Meadowlands Plaza,
Ste. 803
East Rutherford, NJ 07073

CME Associates                                       $389,304
3141 Bordentown Ave.
Parlin, NJ 08859

DMR Architects, PA                                   $348,742
777 Terrace Ave.
Heights Plaza
Hasbrouk Heights, NJ 07604

Robert A.M. Stern Architects                         $191,428

Meadowlands Development                              $191,016
Venture

Musco Sports Lighting, LLC                           $190,813

P.E.M. Construction & Dev.                           $188,299
Co., Inc.

Vulcan Sports Media Inc.                             $154,154

Borough of North Arlington                           $149,920

L. Robert Kimball & Assoc.,                          $128,949
Inc.

Bergen County Utility Auth.                          $108,938

Lucas Electric Co. Inc.                              $106,055


EOS AIRLINES: Wants Management Incentive Plan for Employees OK'd
----------------------------------------------------------------
EOS Airlines Inc. asks the United States Bankruptcy Court for
the Southern District of New York for authority to implement a
management incentive program for six executives and five non-
insider employees of the Debtor.

The inventive program is expected to provide incentive payments
to:

   i) the executives and non-insider employees if Debtor
      consummates a strategic sale of either its assets or its
      business as going concern, and

  ii) the executive and, under some circumstance, non-insider
      employees if the Debtor sells its Department of
      Transportation and Federal Aviation Administration
      certificates, aircrafts leases and the creditors in this
      case realize certain levels of recovery.

The incentive are earned on a "point" system, wherein each point
is equal to 1% of the covered employee's annual prepetition
income.

The incentive program of the Debtor is an attempt to keep key
employees from leaving and maximizing the value of the Debtor's
assets.

Insiders eligible to receive incentives are Jack Williams, chief
executive officer; Tom Martin, chief financial officer; Holly
Nelson, vice-president finance/controller and assistant secretary;
Dave Spurlock, chief commercial officer; Gil Morgan, chief
operating officer; and John Turnipseed, chief people officer.

Non-insider employees are comprised of senior vice president
technical operations; director of quality control & chief
inspector; director of safety; chief pilot and senior vice
president of flight operations.

A hearing is set for May 13, 2008, at 11: a.m., to consider
approval of the Debtor's request.  Objections, if any, are due May
11, 2008, at 4:00 p.m.

                       About EOS Airlines

Based in Purchase, New York, EOS Airlines, Inc. --
http://www.eosairlines.com/-- is a transatlantic airline.  The    
company filed for Chapter 11 protection April 26, 2008 (Bankr.
S.D.N.Y. Case No.08-22581).  Stephen D. Lerner, Esq., at Squire
Sanders & Dempsey, LLP, represents the Debtor in its restructuring
efforts.  The Debtor selected Kurztman Carson Consultants LLC as
claims agent.  The U.S. Trustee for Region 2 has not appointed
creditors to serve on an Official Committee of Unsecured Creditors
to date.  When the Debtor filed for protection against it
creditors, it listed total assets of $70,233,455 and total debts
of $34,858,485.

   
FANNIE MAE: Posts $2.2BB Net Loss; Plans to Raise $6BB New Capital
------------------------------------------------------------------
Fannie Mae reported financial results for the quarter ended March
31, 2008. The company reported a net loss of $2.2 billion,
compared with a fourth quarter 2007 net loss of $3.6 billion.  
First quarter 2008 results were driven primarily by increased
revenues from net interest income and guaranty fee income, which
were more than offset by fair value losses and credit-related
expenses due to adverse market conditions.

These conditions included a significant widening of credit
spreads, and higher-than-expected home price declines and loan
loss severity during the quarter. The mortgage credit book of
business grew by three percent, and estimated market share
increased to approximately 50 percent of new single-family
mortgage-related securities issued. Core capital totaled $42.7
billion at the end of the quarter, $5.1 billion above the
company's current regulatory requirements.

                  $6 Billion Public Offerings

The company also announced its plan to raise $6 billion in new
capital through public offerings of common stock, non-cumulative
mandatory convertible preferred stock and non-cumulative, non-
convertible preferred stock. The new capital will enable Fannie
Mae to maintain a strong, conservative balance sheet, enhance
long-term shareholder value, and provide stability to the
secondary mortgage market.

Fannie Mae said that its regulator, the Office of Federal Housing
Enterprise Oversight (OFHEO), had lifted the May 2006 Consent
Order, and would reduce the current OFHEO-directed requirement
from 20 percent capital to 15 percent upon the successful
completion of the company's capital-raising plan.  The company
said OFHEO also indicated its intention to reduce the capital
surplus by an additional 5 percentage points to a 10 percent
surplus requirement in September 2008, based upon the company's
continued maintenance of excess capital well above OFHEO's
regulatory requirement, and no material adverse change to the
company's ongoing regulatory compliance.

        Reduction of Quarterly Common Stock Dividend

As part of the company's announced plan to raise capital, Fannie
Mae's Board of Directors said it intends to reduce the company's
quarterly common stock dividend beginning with the third quarter
of 2008 to $0.25 per share, which will make available
approximately $390 million of capital annually.

A full-text copy of the company's report for the three months
ended March 31, 2008 is available for free at
         http://ResearchArchives.com/t/s?2baa

                   "Keys to Recovery"

In addition, Fannie Mae announced on May 6 a series of new
initiatives called "Keys to Recovery" on a conference call with
investors and analysts in connection with the Form 10-Q filing.
The new effort is geared toward providing liquidity, stability and
affordability to the housing and mortgage markets for the long
term, keeping struggling borrowers in their homes, assisting
prospective homebuyers with home purchases, and stabilizing
communities affected by the mortgage market downturn.

The initiatives include:

     (1) a new refinancing option for up-to-date but "underwater"
         borrowers with loans owned by Fannie Mae that will allow
         for refinancing up to 120 percent of a property's current
         value;

     (2) a renewal and expansion of the company's partnership with
         the state Housing Finance Agencies to provide $10 billion
         in financing for qualified, first-time homebuyers;

     (3) in partnership with Self-Help Credit Union, a new
         initiative that allows families in hard-hit communities
         to reside in foreclosed properties on a rent-to-own
         basis; and

     (4) new jumbo-conforming loans will be priced flat to
         conforming for portfolio asset acquisition through the
         end of the year.

Headquartered in Washington, D.C., Fannie Mae --
http://www.fanniemae.com/-- was created in 1938 under Pres.  
Franklin D. Roosevelt to provide mortgage funds to help U.S.
families become homeowners.  In 1968, Fannie Mae was re-chartered
by U.S. Congress as a shareholder-owned company, funded solely
with private capital raised from investors on Wall Street and
around the world.  It operates in America's secondary mortgage
market to expand the flow of mortgage funds in all communities.   


FIRST HORIZON: Moody's Downgrades Ratings on 11 ALT-A Tranches
--------------------------------------------------------------
Moody's Investors Service has downgraded the ratings of 11
tranches from 17 Alt-A transactions issued by First Horizon.  Two
tranches remain on review for possible further downgrade.  
Additionally, 42 tranches were placed on review for possible
downgrade.

The collateral backing these transactions consists primarily of
first-lien, fixed and adjustable-rate, Alt-A mortgage loans.  The
ratings were downgraded, in general, based on higher than
anticipated rates of delinquency, foreclosure, and REO in the
underlying collateral relative to credit enhancement levels.  The
actions described below are a result of Moody's on-going review
process.

Complete rating actions are:

Issuer: First Horizon Alternative Mortgage Securities Trust 2005-
AA11

  -- Cl. I-A-1, Placed on Review for Possible Downgrade, currently
Aaa

  -- Cl. II-A-1, Placed on Review for Possible Downgrade,
     currently Aaa

Issuer: First Horizon Alternative Mortgage Securities Trust 2005-
AA7

  -- Cl. I-A-2, Placed on Review for Possible Downgrade, currently
     Aaa

  -- Cl. II-A-2, Placed on Review for Possible Downgrade,
     currently Aaa

Issuer: First Horizon Alternative Mortgage Securities Trust 2005-
AA9


  -- Cl. I-A-1, Placed on Review for Possible Downgrade, currently
     Aaa

  -- Cl. II-A-1, Placed on Review for Possible Downgrade,
     currently Aaa

  -- Cl. III-A-1, Placed on Review for Possible Downgrade,
     currently Aaa

Issuer: First Horizon Alternative Mortgage Securities Trust 2005-
FA10

  -- Cl. B-1, Downgraded to A3 from Aa3
  -- Cl. B-2, Downgraded to Ba3 from A3
  -- Cl. B-3, Downgraded to B2 from Baa3

Issuer: First Horizon Alternative Mortgage Securities Trust 2006-
AA1

  -- Cl. I-A-2, Placed on Review for Possible Downgrade, currently
     Aa1

  -- Cl. II-A-2, Placed on Review for Possible Downgrade,
     currently Aaa

Issuer: First Horizon Alternative Mortgage Securities Trust 2006-
AA2

  -- Cl. II-A-2, Placed on Review for Possible Downgrade,
     currently Aa1

Issuer: First Horizon Alternative Mortgage Securities Trust 2006-
AA3

  -- Cl. A-2, Placed on Review for Possible Downgrade, currently
     Aa1

Issuer: First Horizon Alternative Mortgage Securities Trust 2006-
AA4

  -- Cl. I-A-1, Placed on Review for Possible Downgrade, currently
     Aaa

  -- Cl. I-A-2, Placed on Review for Possible Downgrade, currently
     Aaa

  -- Cl. 2AB3, Placed on Review for Possible Downgrade, currently
     Aa1

  -- Cl. 2IO3, Placed on Review for Possible Downgrade, currently
     Aaa

  -- Cl. IV-A-2, Placed on Review for Possible Downgrade,
     currently Aa1

  -- Cl. IV-AIO, Placed on Review for Possible Downgrade,
     currently Aaa

Issuer: First Horizon Alternative Mortgage Securities Trust 2006-
AA7

  -- Cl. A-2, Placed on Review for Possible Downgrade, currently
     Aa1

Issuer: First Horizon Alternative Mortgage Securities Trust 2006-
FA3

  -- Cl. A-1, Placed on Review for Possible Downgrade, currently
     Aaa

  -- Cl. A-2, Placed on Review for Possible Downgrade, currently
     Aaa

  -- Cl. A-3, Placed on Review for Possible Downgrade, currently
     Aaa

  -- Cl. A-4, Placed on Review for Possible Downgrade, currently
     Aaa

  -- Cl. A-5, Placed on Review for Possible Downgrade, currently
     Aaa

  -- Cl. A-7, Placed on Review for Possible Downgrade, currently
     Aa1

  -- Cl. A-9, Placed on Review for Possible Downgrade, currently
     Aaa

  -- Cl. A-10, Placed on Review for Possible Downgrade, currently
     Aa1

  -- Cl. A-11, Placed on Review for Possible Downgrade, currently
     Aaa

  -- Cl. A-12, Placed on Review for Possible Downgrade, currently
     Aaa

  -- Cl. A-13, Placed on Review for Possible Downgrade, currently
     Aaa

  -- Cl. A-PO, Placed on Review for Possible Downgrade, currently
     Aaa

  -- Cl. B-1A, Downgraded to Ba3 from Aa3
  -- Cl. B-2A, Downgraded to B2 from Baa1; Placed Under Review for
     further Possible Downgrade

Issuer: First Horizon Alternative Mortgage Securities Trust 2006-
FA4

  -- Cl. B-1A, Downgraded to Aa2 from Aa1
  -- Cl. B-1B, Downgraded to A3 from Aa3
  -- Cl. B-2A, Downgraded to Baa3 from A1
  -- Cl. B-2B, Downgraded to B1 from A3
  -- Cl. B-3A, Downgraded to B1 from Baa3; Placed Under Review for
     further Possible Downgrade

Issuer: First Horizon Alternative Mortgage Securities Trust 2006-
FA5

  -- Cl. B-1, Downgraded to Aa2 from Aa1

Issuer: First Horizon Alternative Mortgage Securities Trust 2006-
FA8

  -- Cl. I-A-6, Placed on Review for Possible Downgrade, currently
     Aa1

Issuer: First Horizon Alternative Mortgage Securities Trust 2007-
AA2

  -- Cl. I-A-1, Placed on Review for Possible Downgrade, currently
     Aaa

  -- Cl. I-A-2, Placed on Review for Possible Downgrade, currently
     Aaa

  -- Cl. I-A-3, Placed on Review for Possible Downgrade, currently
     Aaa

  -- Cl. II-A-1, Placed on Review for Possible Downgrade,
     currently Aaa

  -- Cl. II-A-2, Placed on Review for Possible Downgrade,
     currently Aaa

Issuer: First Horizon Alternative Mortgage Securities Trust 2007-
FA2

  -- Cl. I-A-4, Placed on Review for Possible Downgrade, currently
     Aaa

Issuer: First Horizon Alternative Mortgage Securities Trust 2007-
FA3

  -- Cl. A-8, Placed on Review for Possible Downgrade, currently
     Aaa

  -- Cl. A-9, Placed on Review for Possible Downgrade, currently
     Aa1

  -- Cl. A-10, Placed on Review for Possible Downgrade, currently
     Aa1

Issuer: First Horizon Mortgage Securities Trust 2005-AA12

  -- Cl. I-A-2, Placed on Review for Possible Downgrade, currently
     Aaa

  -- Cl. II-A-1, Placed on Review for Possible Downgrade,
     currently Aaa


FRED LEIGHTON: Says Merrill Lynch and Christie's Violated Stay
--------------------------------------------------------------
Fred Leighton Holding, Inc., and its debtor-affiliates ask the
U.S. Bankruptcy Court for the Southern District of New York to
compel Merrill Lynch Mortgage Capital, Inc., and Christie's Inc.
to show cause why they shouldn't be held in contempt and
sanctioned for failing to turn over property of the Debtors.

The Debtors argue that Merrill Lynch and Christie's are in
violation of the automatic stay.

The Debtors contend that Merrill Lynch and Christie's have acted
with complete and utter disregard for the automatic stay when they
refused to turn over -- after repeated demands -- the Debtors'
jewelry collection.

Joshua J. Angel, Esq., at Herrick Feinstein LLP, in New York,
relates that Merrill Lynch, through Christie's, had hoped to
auction off the jewelry collection on April 16, even after the
Debtors have filed for bankruptcy protection.

Within an hour of the Debtors' bankruptcy filing, Merrill Lynch
asked the Court to lift the stay so it could proceed with the
auction.  When it became clear during the court hearing that its
motion would be denied, Merrill Lynch withdrew its request, Mr.
Angel says.

Notwithstanding that hasty retreat, Merrill Lynch and Christie's
have continued to violate the automatic stay and hinder the
Debtors' efforts to conduct business and successfully reorganize
by failing to return the jewelry items held at Christie's in
connection with the aborted auction, according to Mr. Angel.  The
Debtors have been prevented from selling items because Merrill
Lynch and Christie's would not release them, he says.

In 2005, 101-piece collection was appraised for $89 million at
insurance replacement or retail value.  Merrill Lynch accepted the
appraisal and loaned Debtor Calypso Mines LLC $57 million or 60%
of the retail value of the Special Collection in December 2005.

In March 2006, Merrill Lynch loaned Fred Leighton $100 million to
purchase the assets of the former Fred Leighton business,
including approximately $100 million of antique jewelry at cost.  
Merrill Lynch also provided a line of credit for the new Fred
Leighton entity of $20 million.

At present, the total amount owed to Merrill Lynch under the
Calypso Loan and the Fred Leighton Loan is approximately $177
million.

The Merrill Lynch Debt is presently secured by five separate
collections of jewelry having a retail value of more than $400
million.

Merrill Lynch instituted litigation against the Debtors Fred
Leighton LLC, Phoenix Nevada 1, LLC, Fred Leighton BH LLC, Calypso
Mines LLC, Endymion, LLC, Foxtrot LLC and Tango, LLC; Ralph
Esmerian, Inc. and owner Ralph O. Esmerian in New York Supreme
Court in January 2008.  Merrill Lynch sought, unsuccessfully, to
have the State court appoint a receiver.  However, the state court
did authorize Merrill Lynch to proceed to auction off at
Christie's certain items from the Special Collection, as well as
certain other items, on April 15, 2008.

Mr. Angel also relates that Mr. Esmerian has several important
clients who are anxious to view items from the Special Collection
in the privacy of his Rockefeller Center office.  However, for the
past three weeks, Merrill Lynch and Christie's have refused to tum
over the Debtors' property to them despite repeated requests.

                      Empress Eugenie Brooch

Mr. Angel also relates that the Debtors asked the State Court to
withhold from Christie's auction the Empress Eugenie Brooch which
Mr. Esmerian had offered to the Louvre Museum for $10 million.  
Christie's placed a low estimate (the probable reserve price) on
the gem of $4 million.

The Debtors informed the State Court that Mr. Esmerian's potential
purchaser needed time to raise the funds but that he was confident
he could sell the Brooch to this purchaser for $10 million.  
Unfortunately, Merrill Lynch vigorously opposed the Debtors'
motion and the State Court denied the motion thereby enabling
Christie's to sell the Brooch for as little as $4 million.

On April 17,2008, unknown to the Debtors' counsel, Francois Curiel
from Christie's visited Mr. Esmerian in his office and informed
him that Christie's was able to sell the Empress Eugenie Brooch to
the Louvre Museum for $10.5 million.  Mr. Esmerian informed M.
Curiel that he had initiated the discussions with the Louvre
Museum and that he did not believe Christie's was entitled to a
commission on the sale.

Mr. Curiel had demanded a 10% commission on the sale.  Mr.
Esmerian ultimately agreed to a 5% commission, and Mr. Curiel
presented Mr. Esmerian with a written contract which Mr. Esmerian
signed, without benefit of review by his counsel.

When the Initial Contract was provided to the Debtors' counsel,
counsel recognized that the Contract was a nullity.  Thereafter,
the Debtors' counsel worked
out a revised Contract with counsel for Merrill Lynch, Christie's,
and the official committee of unsecured creditors in the Debtors'
cases.

Mr. Angel also notes that counsel for Mr. Esmerian had requested
in writing from counsel for Merrill Lynch a full disclosure of
Merrill Lynch's contractual relationship with Christie's and
whether Merrill Lynch was seeking to hold the Debtors' liable for
any amounts Merrill Lynch may have to pay to Christie's as a
result of the cancelled Auction.  Merrill Lynch has ignored the
request entirely.

"[I]t appears clear that, because of the financial relationship
between Merrill Lynch and Christie's, these two firms have
conspired to hold the Debtors' property hostage," Mr. Angel says.

The Debtors have attempted, unsuccessfully, to work out an
amicable arrangement with Merrill Lynch for the handling of the
jewelry collateral.  Merrill Lynch is unwilling to go back to a
September 2007 protocol the parties entered into prior to the
Debtors' default.  Merrill Lynch is insisting on retaining
physical possession of the jewelry.  "Obviously, the Debtors
cannot sell the jewelry if it is sitting in a Chase vault," Mr.
Angel tells the Court.

                       About Fred Leighton

Fred Leighton Holding Inc. -- http://www.fredleighton.com/-- is a  
New York-based jewelry retailer owned by Ralph O. Emerian.  Fred
Leighton has decked countless red-carpet-dwellers in diamonds,
including Sarah Jessica Parker, Nicole Kidman, and Catherine Zeta-
Jones.  It specializes in vintage jewelry from the 18th and 20th
centuries, including antique cushion-cut diamonds and antique and
estate brooches.  It also produces Fred Leighton signature
collection that combines past aura and the present's materials and
craftmanship.

The Debtors filed voluntary petitions for relief under Chapter 11
of the Bankruptcy Code on April 15, 2008 (Bankr. S.D.N.Y., Case
No. 08-11363).  Joshua Joseph Angel, Esq., and Frederick E.
Schmidt, Esq., at Herrick, Feinstein LLP, in New York, represents
the Debtors.  An official committee of unsecured creditors has
been appointed in these cases and its proposed counsel is Blank
Rome LLP.  No trustee or examiner has been appointed.

Fred Leighton Holding disclosed $100 million to $500 million in
total assets and total debts upon filing for bankruptcy.


FRONTIER AIRLINES: Gets Court Authority to Assume Airbus Sale LOI
-----------------------------------------------------------------
Frontier Airlines Holdings Inc. and its subsidiaries obtained
authority from the U.S. Bankruptcy Court for the Southern District
of New York to assume:

   (i) a letter of intent dated as of March 13, 2008, for the
       sale of two Airbus A319-111 aircraft and two Airbus
       A318-111 aircraft with Verulamium Finance Ltd.; and

  (ii) an Agency Agreement with respect to the remarketing of
       four A320 Series Aircraft, dated as of Dec. 17, 2007, with
       JetWorks Leasing, now known as SkyWorks Leasing LLC.

Under the Agency Agreement, SkyWorks -- appointed as the exclusive
and world-wide agent to arrange for a sale or lease of the A320
Series Aircraft -- performed these duties:

   -- compiling summary information required for the evaluation
      of the Aircraft;

   -- marketing the Aircraft, including due diligence
      investigations of potential lessees;

   -- preparing and negotiating letters of intent;

   -- liaising with Frontier's legal counsel;

   -- managing the logistics of closing a transaction; and

   -- ensuring that each potential counterparty executes a
      confidentiality agreement.

The Debtors' proposed counsel, Marshall S. Huebner, Esq., at
Davis Polk & Wardwell, in New York, related that after an
extensive sales effort by Skyworks, Frontier and Verulamium
executed the Letter of Intent, pursuant to which Verulamium would
purchase the four Aircraft for an aggregate purchase price of
$106 million.

A portion of the proceeds equal to approximately $68.5 million
will be used to repay in full the mortgages on each of the
Aircraft, resulting in a net cash gain to the estate of
$37.5 million.

The Letter of Intent stated that the Aircraft will be delivered
on May 6 and 13, 2008, and Aug. 5 and 12, 2008, by which  
Verulamium is required to deliver payment in full equal to
the purchase price for the Aircraft.

If the Letter of Intent is assumed, therefore, on or about May 6,
the Debtors will receive a substantial cash infusion equal to
$13.4 million, including security deposits due, Mr. Huebner said.

Immediate assumption of the Letter of Intent is necessary so that
Frontier can perform its obligations and receive the substantial
cash infusion that will be generated from the proceeds of the
sale, Mr. Huebner told Judge Robert D. Drain.

The Debtors, Mr. Huebner continued, rely upon the liquidity that
assumption of the Letter and sale of the Aircraft will generate
for their estates.  Assumption of the Letter will provide the
necessary cash for Frontier's continued operations and will aid
Frontier in achieving its goals of cost reduction and liquidity
maximization.

Mr. Huebner noted that the Aircraft are far from generating
useful revenue for the estates, and are a drain on the Debtors'
resources because they are underutilized.  Selling the Aircraft
will allow Frontier to save maintenance and storage expenses on
the Aircraft, he said.

"This is not a sale made in haste at a discounted price to
generate cash.  Instead, this is a thoroughly-considered and
long-planned sale that will generate needed liquidity for the
benefit of the Debtors and their estates and creditors,"
Mr. Huebner maintained.

According to Mr. Huebner, Skyworks' compensation for its services
includes a $490,000 sales success fee and an incentive fee of
approximately $241,000, which, in the aggregate, is less that
0.7% of the gross proceeds of the sale of the Aircraft and is
reasonable for the services that Skyworks will provide to
consummate the sale.

Accordingly, the Debtors' assumption of the Agency Agreement with
Skyworks is a necessary precondition to the assumption of, and
performance under, the Letter of Intent, he added.

Mr. Huebner asserted that the ultimately, assumption of the
Agreements will:

   (i) significantly contribute to the Debtors' cash flows for
       their operating plan;

  (ii) allow the Debtors to save significant costs on the
       maintenance and storage of unneeded Aircraft;

(iii) enable the Debtors to continue implementing their
       operational strategy; and

  (iv) provide more cash flow and less risk than any other
       alternative plan to lease or sell the Aircraft.

Pursuant to Sections 365(a), 363(b) and 363(f) of the Bankruptcy
Code, the Sale will be free and clear of all liens and claims,
with a portion of its proceeds used to repay the indebtedness
secured by the Aircraft, Mr. Huebner explained.

The Debtors related that no cure amounts will be required to be
paid as a condition to the assumption of the Agreements.

                   About Frontier Airlines Inc.

Headquartered in Denver, Colorado, Frontier Airlines Inc. --
http://www.frontierairlines.com/-- provide air transportation for
passengers and freight.  They operate jet service carriers linking
their Denver, Colorado hub to 46 cities coast-to-coast, 8 cities
in Mexico, and 1 city in Canada, well as provide service from
other non-hub cities, including service from 10 non-hub cities to
Mexico.  As of May 18, 2007 they operated 59 jets, including 49
Airbus A319s and 10 Airbus A318s.

The Debtor and its debtor-affiliates filed for Chapter 11
protection on April 10, 2008, (Bankr. S.D. N.Y. Case No.: 08-11297
thru 08-11299.)  Hugh R. McCullough, Esq. at Davis Polk & Wardwell
represent the Debtors in their restructuring efforts. Togul, Segal
& Segal LLP is Debtors' Conflicts Counsel, Faegre & Benson LLP is
the Debtors' Special Counsel, and Kekst and Company is the
Debtors' Communications Advisors.  At Dec. 31, 2007, Frontier
Airlines Holdings Inc. and its subsidiaries' total assets was
$1,126,748,000 and total debts was $933,176,000.  (Frontier
Airlines Bankruptcy News, Issue No. 5; Bankruptcy Creditors'
Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000)


FTS GROUP: R.E. Bassie Expresses Going Concern Doubt
----------------------------------------------------
Houston-based R.E. Bassie & Co. raised substantial doubt about the
ability of FTS Group, Inc., to continue as a going concern after
it audited the company's financial statements for the year ended
Dec. 31, 2007.  The auditor pointed to the company's recurring
losses from operations.

The company posted a net loss of $604,216 on total revenues of
$7,024,300 for the year ended Dec. 31, 2007, as compared with net
income of $1,231,367 on total revenues of $6,678,076 in the prior
year.

At Dec. 31, 2007, the company's consolidated balance sheet showed
$6,288,850 in total assets, $4,677,109 in total liabilities and
$1,611,741 in total stockholders' equity.  

The company's consolidated balance sheet at Dec. 31, 2007, showed
strained liquidity with $551,635 in total current assets available
to pay $4,562,060 in total current liabilities.

A full-text copy of the company's 2007 annual report is available
for free at: http://ResearchArchives.com/t/s?2b94

                         About FTS Group

Headquartered in Tampa, Florida, FTS Group Inc. (OTCBB: FLIP) --
http://www.ftsgroup.com/-- is a publicly traded acquisition and   
development company focused on acquiring, developing and investing
in cash flow positive businesses and viable business ventures
those in the Technology, Wireless and Internet space.  The company
generates revenue through its three wholly owned subsidiaries; See
World Satellites, Inc., FTS Wireless, Inc. and Elysium Internet
Inc.


GENERAL MOTORS: Liquidity Negatively Impacted by $2.1 Billion
-------------------------------------------------------------
The work stoppage at supplier American Axle & Manufacturing
Holdings Inc. has negatively impacted General Motors Corp.'s
liquidity by $2.1 billion for the three months ended March 31,
2008.  Approximately 30 of GM's plants in North America have been
idled by the work stoppage.

GM, however, said the work stoppage has not negatively impacted
the company's ability to meet customer demand due to the high
levels of inventory at its dealers.

GM said GM North America's results were negatively impacted by
$800 million as a result of the loss of approximately 100,000
production units in the three months ended March 31, 2008.  The
automaker anticipates that this lost production will not be fully
recovered after this work stoppage is resolved, due to the current
economic environment in the United States and to the market shift
away from the types of vehicles that have been most strongly
affected by the action at American Axle.

                   GM Shareholders' Deficit Rises

At March 31, 2008, the automaker's balance sheet showed total
assets of $145,741,000,000 and total debts of $186,784,000,000,
resulting in a stockholders' deficit of $41,043,000,000.  Deficit,
at Dec. 31, 2007, and March 31, 2007, was $37,094,000,000 and
$4,558,000,000, respectively.

For three months ended March 31, 2008, GM reported a net loss of
$3,251,000,000 on $42,670,000,000 total net sales and revenue,
compared to a net income of $62,000,000 on $43,387,000,000 total
net sales and revenue for same period last year.

As reported in the Troubled Company Reporter on May 7, 2008, GM
said that during the first quarter of 2008, it took a non-cash
charge of $731,000,000 to increase its liability for estimated net
costs associated with its support of Delphi Corp.'s bankruptcy and
restructuring efforts.  GM disclosed that the charge primarily
results from updated estimates reflecting uncertainty around the
nature, value and timing of GM's recoveries.  Delphi was scheduled
to emerge from bankruptcy in mid-April but obtained problems with
its exit equity financing from Appaloosa Management, PC, thus
affecting the timing of GM's recoveries from Delphi.

General Motors has now recorded charges totaling $8,300,000,000 in
connection with Delphi-related issues.

                             About GM

Headquartered in Detroit, Michigan, General Motors Corp. (NYSE:
GM) -- http://www.gm.com/-- was founded in 1908.  GM employs
about 266,000 people around the world and manufactures cars and
trucks in 35 countries.  In 2007, nearly 9.37 million GM cars and
trucks were sold globally under the following brands: Buick,
Cadillac, Chevrolet, GMC, GM Daewoo, Holden, HUMMER, Opel,
Pontiac, Saab, Saturn, Vauxhall and Wuling.  GM's OnStar
subsidiary is the industry leader in vehicle safety, security and
information services.

                           *     *     *

As reported in the Troubled Company Reporter on April 28, 2008,
Standard & Poor's Ratings Services said that its 'B' long-term and
'B-3' short-term corporate credit ratings on General Motors Corp.
remain on CreditWatch with negative implications, where they were
placed March 17, 2008.  The CreditWatch update follows downgrades
of 49%-owned subsidiaries GMAC LLC (B/Negative/C) and Residential
Capital LLC (CCC+/Watch Neg/C).  The rating actions on Residential
Capital LLC and GMAC were triggered by the resignation of the only
independent directors at Residential Capital LLC.


GENERAL MOTORS: To Provide $200 Million to Axle to End Strike
-------------------------------------------------------------
General Motors Corp. disclosed in a Securities and Exchange
Commission filing that it agreed to provide American Axle &
Manufacturing Holding with upfront financial support capped at
$200 million to help fund employee buyouts, early retirements and
buydowns to facilitate a settlement of the work stoppage.

As reported in the Troubled Company Reporter on April 24, 2008,
the strike called by the UAW union at Axle's original U.S.
locations continues into its 57th day on Tuesday.  Approximately
3,650 associates are represented by the UAW at these five
facilities in Michigan and New York.  AAM and the UAW worked
effectively last week with the objective of reaching a new
collective bargaining agreement for the original U.S. locations.  
Tentative agreements were achieved on many issues and AAM was
encouraged by the progress.

Although AAM has made several economic proposals to the UAW with
"all-in" hourly wage and benefit packages that were considerably
higher than the market rate of AAM's UAW-represented competitors
in the U.S., the UAW has repeatedly rejected these economic
proposals.

AAM needs a U.S. market competitive labor agreement for the
original U.S. locations.  This is necessary because the UAW
previously negotiated market competitive labor agreements with
many of AAM's U.S. competitors in the driveline market segment.
This includes Dana, FormTech, Chinese-owned Neapco and Indian-
owned Bharat Forge.  The "all-in" wage and benefit package granted
by the UAW to these companies averages approximately $30 per hour.

In order for AAM to be able to compete for new business and
sustain employment at the original U.S. locations, the UAW must
offer AAM economic terms and conditions that are comparable to
those it has already granted to AAM's competitors.  The UAW's
latest economic proposal to AAM dated April 14, 2008, included an
"all-in" wage and benefit package that is almost double the market
rate established by the UAW with AAM's competitors.

The TCR reported in March 2008 that GM president and chief
operating officer Frederick A. Henderson said that although many
of its assembly plants have been partially or fully shut down by
the strike of United Auto Workers union members at Axle, GM won't
interfere with the parties' labor dispute.  Mr. Henderson
explained that GM was not losing sales because of the strike,
which started on Feb. 26, 2008, following expiration of a four-
year master labor agreement.  However, he said, if GM was
struggling because of the union protest, the company would be one
of those sitting on the negotiation table.

According GM's recent quarterly results filing, Axle's work
stoppage unfavorably impacted GM North America earnings by
$800 million.

GM has about 30 facilities affected by the strike as the supplier
attempts to negotiate with the union.

                         About American Axle

Headquartered in Detroit, Michigan, American Axle & Manufacturing
Holdings Inc. (NYSE:AXL) -- http://www.aam.com/-- and its
wholly owned subsidiary, American Axle & Manufacturing, Inc.,
manufactures, engineers, designs and validates driveline and
drivetrain systems and related components and modules, chassis
systems and metal-formed products for light trucks, sport utility
vehicles and passenger cars.  In addition to locations in the
United States (in Michigan, New York and Ohio), the company also
has offices or facilities in Brazil, China, Germany, India, Japan,
Luxembourg, Mexico, Poland, South Korea and the United Kingdom.

                             About GM

Headquartered in Detroit, Michigan, General Motors Corp. (NYSE:
GM) -- http://www.gm.com/-- was founded in 1908.  GM employs
about 266,000 people around the world and manufactures cars and
trucks in 35 countries.  In 2007, nearly 9.37 million GM cars and
trucks were sold globally under the following brands: Buick,
Cadillac, Chevrolet, GMC, GM Daewoo, Holden, HUMMER, Opel,
Pontiac, Saab, Saturn, Vauxhall and Wuling.  GM's OnStar
subsidiary is the industry leader in vehicle safety, security and
information services.

                           *     *     *

As reported in the Troubled Company Reporter on April 28, 2008,
Standard & Poor's Ratings Services said that its 'B' long-term and
'B-3' short-term corporate credit ratings on General Motors Corp.
remain on CreditWatch with negative implications, where they were
placed March 17, 2008.  The CreditWatch update follows downgrades
of 49%-owned subsidiaries GMAC LLC (B/Negative/C) and Residential
Capital LLC (CCC+/Watch Neg/C).  The rating actions on Residential
Capital LLC and GMAC were triggered by the resignation of the only
independent directors at Residential Capital LLC.


GENERAL MOTORS: In Talks on $750 Million Pledge for ResCap Bailout
------------------------------------------------------------------
GMAC LLC, both owned by General Motors Corp. and Cerberus Capital
Management LP, is currently negotiating to provide a new 2-year
$3.5 billion senior secured credit facility to its wholly owned
subsidiary Residential Capital LLC, which would be conditioned on
successful completion by ResCap of a debt tender and exchange
offer for its outstanding unsecured notes.  ResCap's financing
plans also include seeking amendments to substantially all of its
secured bilateral credit facilities to extend their maturities or
to modify their tangible net worth covenants.

GM and Cerberus are in discussions to acquire $750 million first
loss participation in GMAC's proposed senior secured credit
facility, shared between Cerberus and GM on a pro rata basis.

As reported in the Troubled Company Reporter on May 7, 2008,
ResCap disclosed that it is highly leveraged relative to its cash
flow, and its liquidity position has been declining.  According to
a Securities and Exchange Commission filing, ResCap said there is
a significant risk that the company will not be able to meet its
debt service obligations, be unable to meet certain financial
covenants in its credit facilities, and be in a negative liquidity
position in June 2008.

ResCap anticipates that its new debt agreements will include
covenants to maintain minimum cash balances.  To comply with these
covenants and to satisfy its liquidity needs, ResCap expects that
it will be required, even if it successfully implements all of the
proposed actions, to generate capital in the near term through
asset sales or other actions in addition to its normal mortgage
finance activities, to obtain additional cash of approximately
$600 million by June 30, 2008.  This additional cash requirement
is an estimate based upon ResCap's internal monthly cash forecasts
targeting sufficient cash surpluses to prudently operate its
business and remain in excess of anticipated cash covenants.

According to GM, if ResCap is unsuccessful in executing the
financing transactions, including additional liquidity actions, it
would have a material adverse effect on GMAC, which could result
in a further impairment of GM's investments in GMAC and could
disrupt GMAC's ability to finance GM's dealers and customers.

                           About ResCap

Headquartered in Minneapolis, Minnesota, Residential Capital LLC
-- http://www.rescapholdings.com/-- is the home mortgage unit
of        
GMAC Financial Services, which is in turn wholly owned by GMAC
LLC.

                         About GMAC LLC

GMAC LLC -- http://www.gmacfs.com/-- formerly General Motors       
Acceptance Corporation, is a global, diversified financial
services company that operates in approximately 40 countries in
automotive finance, real estate finance, insurance and other
commercial businesses.  GMAC was established in 1919 and employs
approximately 26,700 people worldwide.  Cerberus Capital
Management LP bought 51% GMAC LLC stake from General Motors Corp.
on December 2006.

                            About GM

Headquartered in Detroit, Michigan, General Motors Corp. (NYSE:
GM) -- http://www.gm.com/-- was founded in 1908.  GM employs
about 266,000 people around the world and manufactures cars and
trucks in 35 countries.  In 2007, nearly 9.37 million GM cars and
trucks were sold globally under the following brands: Buick,
Cadillac, Chevrolet, GMC, GM Daewoo, Holden, HUMMER, Opel,
Pontiac, Saab, Saturn, Vauxhall and Wuling.  GM's OnStar
subsidiary is the industry leader in vehicle safety, security and
information services.

                          *     *     *

As reported in the Troubled Company Reporter on March 26, 2008,
Standard & Poor's Ratings Services placed the ratings on General
Motors Corp., American Axle & Manufacturing Holdings Inc., Lear
Corp., and Tenneco Inc. on CreditWatch with negative implications.   
The CreditWatch placement reflects S&P's decision to review the
ratings in light of the extended American Axle (BB/Watch Neg/--)
strike.
     
The work stoppage that began Feb. 25 at American Axle's U.S.
United Auto Workers plants has forced closure of many GM (B/Watch
Neg/B-3) plants, as well as plants of certain GM suppliers.  The
strike began after the expiration of the four-year master labor
agreement with American Axle.  Although S&P still expects American
Axle and the UAW to reach an agreement that will reflect more
competitive labor costs, the timing is unknown.

To resolve the CreditWatch listings, S&P's will assess the
strike's impact on the companies' credit profiles, particularly
liquidity, once production resumes.  S&P could lower the ratings
any time prior to a resolution of the Axle strike if the liquidity
of the companies becomes compromised, although downgrades are not
likely for another several weeks.

As reported in the Troubled Company Reporter on Feb. 28, 2008,
Fitch Ratings has affirmed the Issuer Default Rating of General
Motors at 'B', with a Rating Outlook Negative.

As reported in the Troubled Company Reporter on Nov. 9, 2007,
Moody's Investors Service affirmed its rating for General Motors
Corporation (B3 Corporate Family Rating, Ba3 senior secured, Caa1
senior unsecured and SGL-1 Speculative Grade Liquidity rating) but
changed the outlook to Stable from Positive.  In an environment of
weakening prospects for US auto sales GM has announced that it
will take a non-cash charge of $39 billion for the third quarter
of 2007 related to establishing a valuation allowance against its
deferred tax assets in the US, Canada and Germany.

As reported in the Troubled Company Reporter on Oct. 23, 2007,
Standard & Poor's Ratings Services affirmed its 'B' corporate
credit rating and other ratings on General Motors Corp. and
removed them from CreditWatch with positive implications, where
they were placed Sept. 26, 2007, following agreement on the new
labor contract.  The outlook is stable.


GMAC LLC: Parents In Talks on $750 Mil. Bailout for ResCap
----------------------------------------------------------
GMAC LLC, both owned by General Motors Corp. and Cerberus Capital
Management LP, is currently negotiating to provide a new 2-year
$3.5 billion senior secured credit facility to its wholly owned
subsidiary Residential Capital LLC, which would be conditioned on
successful completion by ResCap of a debt tender and exchange
offer for its outstanding unsecured notes.  ResCap's financing
plans also include seeking amendments to substantially all of its
secured bilateral credit facilities to extend their maturities or
to modify their tangible net worth covenants.

GM and Cerberus are in discussions to acquire $750 million first
loss participation in GMAC's proposed senior secured credit
facility, shared between Cerberus and GM on a pro rata basis.

As reported in the Troubled Company Reporter on May 7, 2008,
ResCap disclosed that it is highly leveraged relative to its cash
flow, and its liquidity position has been declining.  According to
a Securities and Exchange Commission filing, ResCap said there is
a significant risk that the company will not be able to meet its
debt service obligations, be unable to meet certain financial
covenants in its credit facilities, and be in a negative liquidity
position in June 2008.

ResCap anticipates that its new debt agreements will include
covenants to maintain minimum cash balances.  To comply with these
covenants and to satisfy its liquidity needs, ResCap expects that
it will be required, even if it successfully implements all of the
proposed actions, to generate capital in the near term through
asset sales or other actions in addition to its normal mortgage
finance activities, to obtain additional cash of approximately
$600 million by June 30, 2008.  This additional cash requirement
is an estimate based upon ResCap's internal monthly cash forecasts
targeting sufficient cash surpluses to prudently operate its
business and remain in excess of anticipated cash covenants.

According to GM, if ResCap is unsuccessful in executing the
financing transactions, including additional liquidity actions, it
would have a material adverse effect on GMAC, which could result
in a further impairment of GM's investments in GMAC and could
disrupt GMAC's ability to finance GM's dealers and customers.

                           About ResCap

Headquartered in Minneapolis, Minnesota, Residential Capital LLC
-- http://www.rescapholdings.com/-- is the home mortgage unit
of        
GMAC Financial Services, which is in turn wholly owned by GMAC
LLC.

                            About GM

Headquartered in Detroit, Michigan, General Motors Corp. (NYSE:
GM) -- http://www.gm.com/-- was founded in 1908.  GM employs
about 266,000 people around the world and manufactures cars and
trucks in 35 countries.  In 2007, nearly 9.37 million GM cars and
trucks were sold globally under the following brands: Buick,
Cadillac, Chevrolet, GMC, GM Daewoo, Holden, HUMMER, Opel,
Pontiac, Saab, Saturn, Vauxhall and Wuling.  GM's OnStar
subsidiary is the industry leader in vehicle safety, security and
information services.

                          About GMAC LLC

GMAC LLC -- http://www.gmacfs.com/-- formerly General Motors       
Acceptance Corporation, is a global, diversified financial
services company that operates in approximately 40 countries in
automotive finance, real estate finance, insurance and other
commercial businesses.  GMAC was established in 1919 and employs
approximately 26,700 people worldwide.  Cerberus Capital
Management LP bought 51% GMAC LLC stake from General Motors Corp.
on December 2006.

                           *     *     *

As reported in yesterday's Troubled Company Reporter, Fitch
Ratings has downgraded the long-term Issuer Default Rating
of GMAC LLC and related subsidiaries to 'BB-' from 'BB'.  Fitch
has also downgraded GMAC's unsecured long-term ratings to 'B+'
from 'BB-', reflecting the potential for reduced recovery in a
default scenario should the company encumber assets.  
Additionally, Fitch has affirmed the 'B' short-term ratings.  The
Rating Outlook remains Negative.

As reported in the Troubled Company Reporter on April 25, 2008,
Moody's Investors Service downgraded GMAC LLC's senior rating to
B2 from B1; the rating remains on review for further possible
downgrade.  This action follows Moody's rating downgrade of ResCap
LLC, GMAC's wholly owned residential mortgage unit, to Caa1 from
B2.


GRENADIER FINDING: Fitch Junks Ratings on Three Note Classes
------------------------------------------------------------
Fitch has affirmed one class and downgraded three classes of notes
issued by Grenadier Finding, Ltd.  These rating actions are
effective immediately:

  -- $1,319,021,956 Commercial paper notes affirmed at 'F1+', and
     removed from rating watch negative;

  -- $60,000,000 class A-1 notes downgraded to 'CCC' from 'AAA',
     and removed from rating watch negative;

  -- $15,000,000 class A-2 Notes downgraded to 'CC' from 'AAA',
     and removed from rating watch negative;

  -- $82,500,000 class B notes downgraded to 'C' from 'A-', and
     removed from rating watch negative.

Grenadier is a collateralized debt obligation that closed July 21,
2003 and is managed by ACA Management, LLC.  Grenadier's portfolio
will be revolving until August 2008.  Grenadier has a portfolio
comprised primarily of subprime residential mortgage-backed
securities, Alt-A RMBS bonds, structured finance CDOs and other
structured finance assets.  Subprime RMBS bonds of the 2005, 2006,
and 2007 vintages account for approximately 12.60%, 8.10%, and
7.04% of the portfolio, respectively.  Likewise, the SF CDO
exposure includes SF CDO originated in 2005 (2.90%), 2006 (5.15%)
and 2007 (2.56%).  Alt-A RMBS bonds of the 2005, 2006 and 2007
vintages represent approximately 16.2% of the portfolio.

Fitch's rating actions reflect the significant collateral
deterioration within the portfolio, specifically subprime RMBS,
Alt-A RMBS, and SF CDOs with underlying exposure to subprime RMBS.  
Since Fitch's last review in September 2007, approximately 26.7%
of the portfolio has been downgraded with 16.9% of the portfolio
is currently on Rating Watch Negative.  The negative credit
migration is primarily attributable to credit deterioration in
subprime RMBS bonds from the 2005, 2006 and 2007 vintages, coupled
with significant downgrades in SF CDOs originated between 2005 and
2007.  Further, the underlying portfolio currently contains 13.2%
speculative grade securities of which 9.7% are rated 'CCC' or
lower, which currently exceeds the credit enhancement available to
the A-1 notes.  The rating of the Commercial Paper Notes is based
solely on the short-term rating of Citibank N.A., the liquidity
provider.

The ratings of the Commercial Paper Notes, class A-1 notes, and
class A-2 notes address the likelihood that investors will receive
full and timely payments of interest, as per the governing
documents, as well as the stated balance of principal by the legal
final maturity date.  The rating on the class B notes addresses
the ultimate payment of principal only by the stated maturity
date. Based on Fitch's projections of future par coverage and
interest receipts, Fitch expects the class B notes to receive
aggregate collections in excess of the rated principal balance
under the related stress scenarios.


HCA INC: Earns $170 Million in First Quarter Ended March 31
-----------------------------------------------------------
HCA Inc. reported on Tuesday financial and operating results for
first quarter ended March 31, 2008.

At March 31, 2008, the company's consolidated balance sheet showed
$24.5 billion in total assets, $33.9 billion in total liabilities,
$953.0 million in minority interests in equity of consolidated
entities, and $163.0 million in equity securities with contingent
redemption rights, resulting in a $10.5 billion total  
stockholders' deficit.

Net income for the first quarter of 2008 totaled $170.0 million,
compared to $180.0 million in the prior year's first quarter.
Results for the first quarter of 2008 include gains on sales of
facilities of $51.0 million compared to $5.0 million in the first
quarter of 2007.

Revenues for the first quarter totaled $7.1 billion, compared to
$6.7 billion in the first quarter of 2007.  Adjusted EBITDA in the
quarter totaled $1.2 billion, compared to $1.3 billion in the
previous year's first quarter.

The provision for doubtful accounts increased to $888.0 million,
or 12.5% of revenues, in the first quarter of 2008 from
$691.0 million, or 10.3% of revenues, in the first quarter of
2007.  Same facility uninsured admissions increased 5.3% in the
first quarter of 2008 compared to the prior year's first quarter.

Interest expense decreased to $530.0 million in the first quarter
of 2008, compared to $557.0 million in the same period of 2007,
due primarily to a reduction in debt.

Same facility admissions increased 0.8% and same facility
equivalent admissions increased 1.1% in the first quarter of 2008
compared to the prior year's first quarter.  Same facility
inpatient surgeries declined 0.7% and outpatient surgeries
declined 2.7% in the first quarter.  Same facility revenue per
equivalent admission increased 6.9% in the first quarter of 2008
compared to the first quarter of 2007.  Same facility charity and
uninsured discounts totaled $799.0 million in the first quarter of
2008 compared to $665.0 million in the first quarter of 2007.

As of March 31, 2008, HCA's balance sheet reflected cash and cash
equivalents of $471.0 million, total debt of $27.5 billion, and
total assets of $24.5 billion.  During the first quarter, capital
expenditures totaled $308.0 million.  HCA now expects capital
expenditures to approximate $1.6 billion in 2008 compared to
previous guidance of $1.8 billion.

The 2008 gains on sales of facilities primarily reflect the
divestiture of one hospital for proceeds totaling $80.0 million
and the recognition of a net pretax gain of $43.0 million, or
$25.0 million net-of-tax.  Proceeds were used to reduce debt.

                              Merger

During November 2006, the company's shareholders approved a merger
with an acquiring consortium led by Bain Capital, Kohlberg Kravis
Roberts & Co. and Merrill Lynch Global Private Equity, along with
HCA founder, Dr. Thomas F. Frist, Jr. and certain members of his
family and HCA management in which a cash payment of $51.00 per
share was made for each share of HCA common stock held.  The
merger was accounted for as a recapitalization transaction.

                          About HCA Inc.

Headquartered in Nashville, Tennessee, HCA Inc. --
http://www.hcahealthcare.com/-- is the nation's leading provider  
of healthcare services.  As of March 31, 2008, HCA operated 169
hospitals and 109 freestanding surgery centers (including eight
hospitals and eight freestanding surgery centers operated through
equity method joint ventures).

                          *     *     *

As reported in the Troubled Company Reporter on Feb. 19, 2008,
Fitch Ratings rated HCA as: (i) issuer default rating 'B'; (ii)
asset based facility 'BB/RR1'; (iii) euro term loan 'BB/RR1'; (iv)
secured bank facility 'BB/RR1'; (v) second-lien notes 'B/RR4'; and
(vi) senior unsecured notes 'CCC+/RR6'.


HEALTHSOUTH CORP: March 31 Balance Sheet Upside-Down by $1.5BB
--------------------------------------------------------------
HealthSouth Corporation disclosed Tuesday results of operations
for the first quarter ended March 31, 2008.  

At March 31, 2008, the company's consolidated balance sheet showed
$2.0 billion in total assets, $3.1 billion in total liabilities,
$85.7 million in minority interest in equity of consolidated
affiliates, and $387.4 million in convertible perpetual preferred
stock, resulting in a $1.5 billion total stockholders' deficit.

The company's consolidated balance sheet at March 31, 2008, also
showed strained liquidity with $697.5 million in total current
assets available to pay $911.9 million in total current
liabilities.

                            Net Income

Net income available to common shareholders was $13.3 million for
the first quarter of 2008 compared to a net loss available to
common shareholders of $63.1 million for the first quarter of
2007.  

Net income available to common shareholders in the first quarter
of 2008 included a gain of approximately $19.3 million related to
the five Illinois facilities that received regulatory approval
during the first quarter of 2008 for the transfer to ASC
Acquisition LLC, who purchased the company's surgery centers
division in June 2007.

                      Net Operating Revenues

Compared to the first quarter of 2007, net operating revenues
increased by 5.8%, discharges increased by 2.7%.

Consolidated net operating revenues for the first quarter of 2008
were $469.0 million, a $25.9 million, or 5.8% increase from the
same quarter of 2007.  Net operating revenues from the company's
inpatient hospitals were $423.0 million, representing a 7.7%
increase over the same quarter of 2007.  This increase was
primarily attributable to an increase in Medicare reimbursement
that was effective Oct. 1, 2007, and a 2.7% increase in discharges
quarter over quarter.  

Increased revenues attributable to inpatient hospitals were offset
by decreased outpatient revenues.  Outpatient visits declined
10.6% in the first quarter of 2008 compared to the first quarter
of 2007 due primarily to the closing of 20 underperforming
satellites throughout 2007.  During the same quarterly periods,
outpatient net operating revenues were down only 3.6% due to
strong unit pricing.  Sequentially, outpatient visits decreased by
only 0.2% from the fourth quarter of 2007.

                        Operating Earnings

Operating earnings were $87.6 million for the first quarter of
2008 compared to $32.6 million for the first quarter of 2007.  The
company defines operating earnings, a non-GAAP measure of
performance, as income before (1) loss on early extinguishment of
debt, (2) interest expense and amortization of debt discounts and
fees, (3) other income, (4) loss on interest rate swap, and (5)
income tax expense.

            Pre-Tax Income from Continuing Operations

The company reported a pre-tax income from continuing operations
of $4.0 million for the first quarter of 2008 compared to a pre-
tax loss from continuing operations of $25.5 million for the first
quarter of 2007.  Pre-tax income from continuing operations for
the first quarter of 2008 included a $32.6 million reduction in
the company's liability associated with the securities litigation
settlement based on the value of the company's common stock and
warrants underlying the settlement as of March 31, 2007, and a
$36.6 million loss on the company's interest rate swap.

                      Management's Comments

"The results of the first quarter indicate our growth strategies
are gaining traction.  Discharges were up 2.7% quarter over
quarter and 5.3% sequentially, which drove net operating revenue
increases of 5.8% and 6.8%, respectively.  In addition to solid
organic growth, the recent announcement of our purchase of The
Rehabilitation Hospital of South Jersey demonstrates that our
development efforts are starting to yield results," said Jay
Grinney, president and chief executive officer of HealthSouth.  

"In addition to implementing our growth strategies, we also
continued to manage our expenses in a disciplined manner and, on
March 31, 2008, closed on the sale of the corporate campus, which
will yield additional expense reductions on a go-forward basis."

"HealthSouth continues to generate strong cash flow which is
reflected in the $41.8 million generated from operating activities
in the first quarter of 2008," said John Workman, executive vice
president and chief financial Officer of HealthSouth.  "With our
cash flow from operations and the proceeds from the sale of the
corporate campus, we continue to generate significant cash for
debt reduction, but also have sufficient funds to make disciplined
acquisitions in our core inpatient rehabilitation hospital
business."

                   Cash Flow and Balance Sheet

Cash and cash equivalents, which included the net proceeds from
the sale of the company's corporate campus, were $60.4 million as
of March 31, 2008.  Capital expenditures were $8.7 million for the
quarter.

During the first quarter of 2008, the company used drawings under
its revolving credit facility to redeem approximately $5.0 million
of its 10.75% Senior Notes due 2016, which carry a higher interest
rate than borrowings under the company's Credit Agreement.

                     About HealthSouth Corp.

HealthSouth Corp. (NYSE: HLS) -- http://www.healthsouth.com/-- is  
the nation's largest provider of inpatient rehabilitation
services.  Operating in 26 states across the country and in Puerto
Rico, HealthSouth serves more than 250,000 patients annually
through its network of inpatient rehabilitation hospitals, long-
term acute care hospitals, outpatient rehabilitation satellites,
and home health agencies.


HOME INTERIORS: Gets Initial OK to Use NexBank's Cash Collateral
----------------------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of Texas gave
Home Interiors & Gifts Inc. and its debtor-affiliates permission
to access, on an interim basis, the cash collateral of NexBank
SSB, as administrative agent for itself and certain other
prepetition lenders, until July 13, 2008.

A hearing is set for May 19, 2008, at 1:15 p.m., to consider
final approval of the Debtors' request.

As reported in the Troubled Company Reporter on May 5, 2008,
the Debtors owed NexBank at least $380 million in loans pursuant
to a credit agreement dated March 31, 2004, as amended.  The
Debtors' obligations under the loan are secured by their assets,
which serve as collateral.

The Debtors needed immediate access to NexBank's cash collateral
to pay their employees, purchase product, maintain services,
operate and preserve their business and prevent immediate harm to
the estate.

As adequate protection, the Debtors propose to grant NexBank liens
and security interest in substantially all of the Debtors' assets
-- including accounts, inventory and property.

A full-text copy of the initial budget is available for free
at http://ResearchArchives.com/t/s?2b6e

                       About Home Interiors

Headquartered in Carrollton, Texas, Home Interiors & Gifts, Inc.
-- http://www.homeinteriors.com/-- manufactures, imports and   
distributes indoor and outdoor home decorative accessories.  The
company and six of its affiliates filed for Chapter 11 protection
on April 29, 2008 (Bankr. N.D. Tex. Lead Case No.08-31961).  
Andrew E. Jillson, Esq., Cameron W. Kinvig, Esq., Lynnette R.
Warman, Esq., and Michael P. Massad, Jr., Esq., at Hunton &
Williams, LLP, represent the Debtors in their restructuring
efforts.  The U.S. Trustee for Region 6 has not appointed any
creditors to serve on an Official Committee of Unsecured Creditors
to date.  When the Debtors file for protection against their
creditors, they listed assets and debts between $100 million and
$500 million.


HOME INTERIORS: Wants to Access $5.1 Million Facility of NexBank
----------------------------------------------------------------
Home Interiors & Gifts Inc. and its debtor-affiliates ask the
United States Bankruptcy Court for the Northern District of Texas
to obtain up to $5.1 million in debtor-in-possession financing
from NexBank SSB, as administrative agent, under a revolving loan.

The committed $5.1 million DIP facility will be used for working-
capital and other corporate purposes of the Debtors in the
ordinary course of their business.  All properties and assets of
the Debtors and their bankruptcy estates -- excluding causes of
action under Chapter 5 of the Bankruptcy Code and subject to the
carve-out -- will serve as DIP collateral.

The DIP liens will incur interest rate at prime rate plus 1%
per the terms of the DIP credit agreement.  The Debtors will pay
a host of fees including a $50,000 closing fee and a $5,000
administrative fee per month, pursuant to the agreement.

The DIP agreement will terminate, among other things, (i) on the
180 days after the Debtors' bankruptcy filing, (ii) effective date
of a confirmed plan of liquidation or reorganization, and (iii)
closing date of any sale of all assets of the Debtors.

The DIP liens are subject to a carve-out for payments of
professional advisors to the Debtors or the committee, statutory
fees payable to the U.S. Trustee and fees payable to the clerk
of the court.  There is a $300,000 carve-out for retained
professionals to the Debtors or the committee.  If all of the
cases are converted to Chapter 7 proceedings,  there is a separate
$20,000 carve-out for reasonable, approved fees and expenses of
Chapter 7 Trustee.

To secure their DIP obligations, NexBank will be, a among other
things, entitled to superpriority-claim status and secured by
valid and perfected first-priority security interest and liens
superior to all other liens, pursuant to Section 364(c) of the
Bankruptcy Code.

A full-text copy of the DIP Credit Agreement is available for
free at http://ResearchArchives.com/t/s?2ba4

                      About Home Interiors

Headquartered in Carrollton, Texas, Home Interiors & Gifts, Inc.
-- http://www.homeinteriors.com/-- manufactures, imports and   
distributes indoor and outdoor home decorative accessories.  The
company and six of its affiliates filed for Chapter 11 protection
on April 29, 2008 (Bankr. N.D. Tex. Lead Case No.08-31961).  
Andrew E. Jillson, Esq., Cameron W. Kinvig, Esq., Lynnette R.
Warman, Esq., and Michael P. Massad, Jr., Esq., at Hunton &
Williams, LLP, represent the Debtors in their restructuring
efforts.  The U.S. Trustee for Region 6 has not appointed any
creditors to serve on an Official Committee of Unsecured Creditors
to date.  When the Debtors file for protection against their
creditors, they listed assets and debts between $100 million and
$500 million.   


HOVNANIAN ENTERPRISES: Reports Prelim. Results for Second Quarter
-----------------------------------------------------------------
Hovnanian Enterprises, Inc., reported preliminary operating
results for the second quarter ended April 30, 2008.  The company
delivered 2,494 homes during its second quarter, a decrease of 21%
from the same quarter a year ago, excluding home deliveries from
unconsolidated joint ventures in both periods.

As a result of management's continued focus and progress in
reducing inventory investment levels and generating cash flow, the
Company is increasing its projection for positive cash flow in
fiscal 2008 to greater than $300 million. The Company's prior
guidance was for cash flow in excess of $100 million for the full
fiscal year.  The company achieved positive cash flow in the
second quarter - one quarter earlier than previously anticipated.  
Net debt was reduced by approximately $30 million in the second
quarter.

Net contracts for the second quarter were 2,226 homes, a decrease
of 29% from last year's second quarter, excluding net contracts
from unconsolidated joint ventures in both periods.  Including
joint ventures, net contracts declined by 27% from last year's
second quarter.

Cancellation rates for the second quarter showed an improvement
compared to last year's second quarter and also improved from the
most recent quarter.  For the fiscal 2008 second quarter
cancellations were 29% of gross contracts, compared to a
cancellation rate of 38% for the first quarter of 2008 and 32% for
the second quarter of 2007.  Contract backlog, as of April 30,
2008, excluding unconsolidated joint ventures, was 3,577 homes, a
decrease of 54% from the same quarter a year ago.  Excluding
backlog from the Company's Fort Myers-Cape Coral operations in
both periods, backlog decreased 41%.

As a result of continued deterioration in sales pace, pricing and
gross margin since the end of the company's first quarter, the
Company expects to incur $225 million to $275 million of non-cash
pretax charges related to land impairments and write-offs of
predevelopment costs and land deposits in the second quarter.

Headquartered in Red Bank, New Jersey, Hovnanian Enterprises Inc.
(NYSE: HOV) -- http://www.khov.com/-- is a homebuilder with
operations in Arizona, California, Delaware, Florida, Georgia,
Illinois, Kentucky, Maryland, Michigan, Minnesota, New Jersey, New
York, North Carolina, Ohio, Pennsylvania, South Carolina, Texas,
Virginia and West Virginia.  The company's homes are marketed and
sold under the trade names K. Hovnanian Homes, Matzel & Mumford,
Forecast Homes, Parkside Homes, Brighton Homes, Parkwood Builders,
Windward Homes, Cambridge Homes, Town & Country Homes, Oster
Homes, First Home Builders of Florida and CraftBuilt Homes.

Hovnanian is a member of the Public Home Builders Council of
America -- http://www.phbca.org/-- a nonprofit group devoted to
improving understanding of the business practices of America's
largest publicly-traded home building companies, the competitive
advantages they bring to the home building market, and their
commitment to creating value for their home buyers and
stockholders.  The PHBCA's 14 member companies build one out of
every five homes in the United States.

Hovnanian is the 6th largest homebuilder in 2006 based on U.S.
home closings, according to data compiled by Builder magazine.  
Hovnanian sold 20,201 homes, a 14% rise from the previous year,
and had gross revenue of $7,016,000,000, Builder magazine says.

                          *     *     *

As reported in the Troubled Company Reporter on March 28, 2008,
Moody's Investors Service lowered all of the ratings of Hovnanian
Enterprises, Inc., including its corporate family rating to B3
from B2, ratings on its senior unsecured notes to Caa1 from B2,
ratings on its senior subordinated notes to Caa2 from Caa1, and
rating on its preferred stock to Caa3 from Caa2.  At the same
time, a liquidity rating of SGL-3 was assigned.  This concludes
the review that was commenced on Jan. 17, 2008.  The ratings
outlook is negative.

As reported in the Troubled Company Reporter on March 18, 2008,
Fitch Ratings has affirmed these ratings on Hovnanian Enterprises,
Inc., including IDR at 'B-'; Senior unsecured notes at 'B-/RR4';
Senior subordinated notes at 'CCC/RR6'; and Series A perpetual
preferred stock at 'CCC-/RR6'.  Fitch has also upgraded the rating
on HOV's secured revolving credit facility as: Senior secured
revolving credit facility to 'BB-/RR1' from 'B-/RR4'.  HOV's
Rating Outlook is Negative.


HSI ASSET: S&P Places 13 Ratings Under Negative CreditWatch
-----------------------------------------------------------
Standard & Poor's Ratings Services placed its ratings on the
remaining 13 rated classes of mortgage pass-through certificates
from HSI Asset Loan Obligation Trust 2007-AR2 on CreditWatch with
negative implications.
     
The CreditWatch placements reflect the rising amount of severely
delinquent loans in this transaction compared with the available
credit support.  S&P will continue to monitor this transaction as
more performance data becomes available.
     
The collateral for this transaction consists primarily of prime
jumbo adjustable-rate, first-lien mortgage loans secured by one-
to four-family residential properties.


               Ratings Placed on Creditwatch Negative

              HSI Asset Loan Obligation Trust 2007-AR2
                  Mortgage pass-through certificates

                                     Rating
                                     ------
                    Class      To              From
                    -----      --              ----
                    1-A-1      AAA/Watch Neg   AAA
                    1-A-2      AAA/Watch Neg   AAA
                    II-A-1     AAA/Watch Neg   AAA
                    II-A-2     AAA/Watch Neg   AAA
                    III-A-1    AAA/Watch Neg   AAA
                    III-A-2    AAA/Watch Neg   AAA
                    IV-A-1     AAA/Watch Neg   AAA
                    IV-A-2     AAA/Watch Neg   AAA
                    B-1        AA/Watch Neg    AA
                    B-2        A/Watch Neg     A
                    B-3        BBB/Watch Neg   BBB
                    B-4        BB/Watch Neg    BB
                    B-5        B/Watch Neg     B


ICEBOX ADVERTISING: Case Summary & 20 Largest Unsecured Creditors
-----------------------------------------------------------------
Debtor: Icebox Advertising, Inc.
        Beegun & Associates, 18401 Burbank Blvd., Ste. 208
        Tarzana, CA 91356

Bankruptcy Case No.: 08-12754

Type of Business: The Debtor provides advertising services.

Chapter 11 Petition Date: May 1, 2008

Court: Central District Of California (San Fernando Valley)

Judge: Geraldine Mund

Debtor's Counsel: Leslie A. Cohen, Esq.
                  Liner Yankelevitz Sunshine & Regenstreif, LLP
                  Email: lcohen@linerlaw.com
                  1100 Glendon Ave 14th Flr.
                  Los Angeles, CA 90024
                  Tel: (310) 500-3500
                  http://www.linerlaw.com/

Estimated Assets: $1 million to $10 million

Estimated Debts:  $1 million to $10 million

Debtor's 20 Largest Unsecured Creditors:

   Entity                      Nature of Claim       Claim Amount
   ------                      ---------------       ------------
AMC                            media placement       $375,292
Attn: Diane Schuler
P.O. Box 933
Bethpage, NY 11714

Tri Center Plaza, LP           past due rent         $176,000
5990 Sepulveda Blvd.,
Ste. 2220
Van Nuys, CA 91411

Dish Network (DSHW)            media placement       $164,874
Attn: Glen Bavero
13155 Collections Center Dr.
Chicago, IL 60693
Tel: (720) 514-5912

Women's Entertainment (WE)     media placement       $163,488

Dish Network (DSHA)            media placement       $113,936

Game Show Network (GAME)       media placement       $107,409

DirecTV                        media placement       $105,400

TV Guide Channel               media placement       $98,719

Dish Network (DSHW)            media placement       $95,237

DirecTV (DTVFEM)               media placement       $73,100

DirecTV (DTVFEL)               media placement       $70,550

CW Plus (CW+)                  media placement       $61,417

FUSE                           media placement       $52,045

ION Media Network              media placement       $48,786

Basic Research                 overpayment           $40,537

CBS Radio (KLUVFM)             media placement       $39,270

Screen Vision                  media placement       $37,500

Department of the Treasury     taxes owing           $29,165

Clear Channel Radio Sales      media placement       $21,786

Stewart Enterprises            overpayment           $21,200


IMAGEKING VISUAL: Case Summary & 25 Largest Unsecured Creditors
---------------------------------------------------------------
Lead Debtor: ImageKing Visual Solutions, Inc.
             fka Image Photographic Laboratory, Inc.
             222 East 44th Street
             New York, NY 10017

Bankruptcy Case No.: 08-11654

Debtor-affiliates filing separate Chapter 11 petitions:

        Entity                                     Case No.
        ------                                     --------
        Image Acquisition Corp.                    08-11657

Type of Business: The Debtors produce images for advertisement,
                  marketing, exhibit and communication purposes.  
                  It serves customers requiring digital prepress,
                  photo laboratory services, and large and grand
                  format print production.  See
                  http://www.imagekingvs.com/

Chapter 11 Petition Date: May 1, 2008

Court: Southern District of New York (Manhattan)

Judge: Arthur J. Gonzalez

Debtors' Counsel: Kenneth M. Lewis, Esq.
                  Email: klewis@rosenpc.com
                  Sanford P. Rosen & Associates, P.C.
                  747 Third Ave.
                  New York, NY 10017-2803
                  Tel: (212) 223-1100
                  Fax: (212) 223-1102
                  http://www.rosenpc.com/

ImageKing Visual Solutions, Inc's Financial Condition:

Estimated Assets: $1 million to $10 million

Estimated Debts:  $1 million to $10 million

A. ImageKing Visual Solutions's 20 Largest Unsecured Creditors:

   Entity                      Nature of Claim       Claim Amount
   ------                      ---------------       ------------
Schawk USA                     Rent                  $1,500,000
44 W. 28th St.
New York, NY 10001

Gerry Albertini                Loan                  $650,000
222 E. 44th St.
New York, NY 10017

Internal Revenue Service       taxes                 $573,971
110 W. 44th St.
New York, NY 10036

North Fork Bank                Loan                  $75,000

Lisa Humphrey                  Trade debt            $70,000

Win Visual                     Commissions           $70,000

Sabic Polymershapes            Trade debt            $63,499

Eastman Kodak Co.              Trade debt            $61,241

Ultraflex                      Trade debt            $60,178

John Mcafie                    Loan                  $60,000

Fedex                          Trade debt            $49,348

Chase Bank                     Loan                  $46,908

Verseidag Seemee US, Inc.      Trade debt            $46,163

Need It Now Courier            Trade debt            $39,409

Register Lithographers Ltd.    Trade debt            $33,100

Oxford Health Plans            Insurance Premium     $32,132

Axis Global Systems LLC        Trade debt            $31,895

Bank of America                Loan                  $27,003

R. Donavan Electric Co.        Trade debt            $26,500

Flexcon                        Trade debt            $25,803

B. Image Acquisition Corp's Five Largest Unsecured Creditors:

   Entity                      Nature of Claim       Claim Amount
   ------                      ---------------       ------------
Internal Revenue Service       Taxes                 $363,626
110 W. 44th St.
New York, NY 10036

Chase Bank                     Loan                  $100,000
633 Third Ave.
New York, NY 10017

NYS Dept of Taxation & Finance Taxes                 $90,645
Tax Compliance Division
55 Hanson Place
Brooklyn, NY 11217

Robert Donavan                 Mechanic's lien       $26,500

Scott-Lawrence                 Water Bill            $8,994


JP MORGAN MORTGAGE: Moody's Affirms Ratings on Stable Performance
-----------------------------------------------------------------
Moody's Investors Service upgraded the ratings of one class and
affirmed 13 classes of J.P. Morgan Chase Commercial Mortgage
Securities Corp., Commercial Mortgage Pass-Through Certificates,
Series 2002-C3 as:

  -- Class A  -- 1, $75,036,076, affirmed at Aaa
  -- Class A  -- 2, $395,432,000, affirmed at Aaa
  -- Class X  -- 1, Notional, affirmed at Aaa
  -- Class X  -- 2, Notional, affirmed at Aaa
  -- Class B, $27,950,000, affirmed at Aaa
  -- Class C, $9,316,000, affirmed at Aaa
  -- Class D, $24,224,000, upgraded to Aa1 from Aa2
  -- Class E, $9,316,000, affirmed at Aa3
  -- Class F, $22,360,000, affirmed at Baa1
  -- Class G, $11,180,000, affirmed at Baa3
  -- Class H, $14,907,000, affirmed to Ba3
  -- Class J, $13,043,000, affirmed to Caa3
  -- Class K, $2,795,000, affirmed at Ca
  -- Class L, $1,266,444, affirmed at C

Moody's is upgrading Class D due to an increased percentage of
defeased loans and overall stable pool performance.

As of the April 14, 2008 distribution date, the transaction's
aggregate certificate balance has decreased by approximately 18.6%
to $606.8 million from $745.3 million at securitization.  The
Certificates are collateralized by 79 mortgage loans ranging in
size from less than 1.0% to 6.4% of the pool, with the 10 largest
loans representing 40.2% of the pool.  Fourteen loans,
representing 32.4% of the pool, have defeased and are secured by
U.S. Government securities.

Three loans have been liquidated from the pool, resulting in a
realized loss of approximately $31.3 million.  Currently there is
one loan representing less than 1.0% of the pool in special
servicing.  Moody's is not estimating a loss from this loan at
this time.  Seventeen loans, representing 18.5% of the pool, are
on the master servicer's watchlist.  The master servicer's
watchlist includes loans which meet certain portfolio review
guidelines established as part of the Commercial Mortgage
Securities Association monthly reporting package.  

As part of our ongoing monitoring of a transaction, Moody's
reviews the watchlist to assess which loans have material issues
that could impact performance.  Not all loans on the watchlist are
delinquent or have significant issues.

Moody's was provided with full-year 2006 and partial-year 2007
operating results for 91.4% and 82.3% of the pool, respectively.  
Moody's loan to value ratio, excluding the defeased loans, is
86.4% compared to 85.6% at Moody's last review in 2007 and 92.4%
at securitization.

The top three non-defeased loans represent 11.8% of the
outstanding pool balance.  The largest loan is the Anderson Mall
Loan ($28.1 million - 4.6%), which is secured by the borrower's
interest in a 634,000 square foot regional mall located in
Anderson, South Carolina.  The mall is anchored by Belk, J.C.
Penney and Sears.  The in-line space was 76.6% occupied as of
September 2007 compared to 69.9% at last review and 87.9% at
securitization.  The center is currently being redeveloped to
accommodate a 126,000 square foot Dillard's which is expected to
be open during the fourth quarter 2008.  Despite improved
occupancy since last review, performance has declined due to
decreases in base rent and recoveries.  The sponsor is Simon
Property Group.  Moody's LTV is 94.1% compared to 92.4% at last
review.

The second largest loan is Crossways Shopping Center Loan
($23.2 million -- 3.8%), which is secured 379,000 square foot
power center located in Chesapeake, Virginia.  Major tenants
include Value City Furniture, DSW, T.J.Maxx, and Ross Dress for
Less.  The property was 96.2% occupied as of September 2007
compared to 97.2% at last review.  The loan amortizes on a 240-
month schedule and has amortized by 15.3% since securitization.  
Moody's LTV is 66.8% compared to 73.4% at last review.

The third largest loan is 276 Fifth Avenue ($20.5 million --
3.4%), which is secured by a 166,000 SF Class B office building
located in the Midtown South submarket of New York City.  The
building is occupied by a diverse tenant roster with no leased
spaced greater than 10,000 SF.  Approximately 18.0% of the
premises is occupied by tenants on a month-by-month basis.  
Moody's LTV is 73.2% compared to 75.9% at last review.


JUPITER HIGH-GRADE: Fitch Junks Rating on $39.957MM Class C Notes
-----------------------------------------------------------------
Fitch Ratings has downgraded seven classes of notes issued by
Jupiter High-Grade CDO III, Ltd. and Jupiter High-Grade CDO III,
Inc., removed one and placed three classes of notes on Rating
Watch Negative.  These rating actions are effective immediately:

  -- $1,207,789,484 class A-1 NV notes downgraded to 'BBB' from
     'AAA' and placed on Rating Watch Negative;

  -- $232,312 class A-1 VA notes downgraded to 'BBB' from 'AAA'
     and placed on Rating Watch Negative;

  -- $371,699,014 class A-1 VB notes downgraded to 'BBB' from
     'AAA' and placed on Rating Watch Negative;

  -- $74,339,803 class A-2A notes downgraded to 'BB' from 'AAA'
     and remains on Rating Watch Negative;

  -- $65,050,000 class A-2B notes downgraded to 'BB' from 'AAA'
     and remains on Rating Watch Negative;

  -- $83,632,278 class B notes downgraded to 'B' from 'AA and
     remains on Rating Watch Negative;

  -- $39,957,644 class C notes downgraded to 'CC' from 'BBB' and
     removed from Rating Watch Negative.

Jupiter High Grade III is a collateralized debt obligation that
closed on Aug. 10, 2005 and is managed by Harding Advisory LLC.  
Jupiter High Grade III substitution period ended on Aug. 10, 2007.   
The portfolio is comprised of subprime residential mortgage-backed
securities bonds (36.99%), Alternative-A RMBS (21.00%), prime RMBS
(12.78%) and structured finance CDOs (25.60%).  Most of the
subprime RMBS, Alt-A RMBS, and SF CDO exposure is of 2005 vintage,
at 34.91%, 19.91%, and 17.82%, respectively.  There is no exposure
to the later vintage RMBS and Alt-A RMBS.  Only 1.07% of the
portfolio represents 2006 vintage SF CDO; the remaining SF CDO
exposure was issued prior to 2005.

Fitch's rating actions reflect the significant collateral
deterioration of the portfolio, specifically subprime RMBS, Alt-A
RMBS, and SF CDOs with underlying exposure to subprime RMBS.  
Since the last rating action on June 8, 2007, approximately 41.6%
has been downgraded, with 17.6% of the portfolio currently on
Rating Watch Negative.  The negative credit migration is primarily
attributable to the credit deterioration in 2005 vintage subprime
RMBS and 2005 and SF CDOs.  According to Fitch's analysis
approximately 16.0% of the portfolio is of speculative credit
quality with approximately 8.9% rated 'B+' or lower.

The Rating Watch Negative reflects expected continued
deterioration in subprime RMBS, Alt-A RMBS, and SF CDOs, as well
as the large percentage of the portfolio on Rating Watch Negative.  
Additionally, Fitch is reviewing its SF CDO approach and will
comment separately on any changes and potential rating impact at a
later date.

The ratings of the class A-1 NV, A-1 VA, A-1 VB, A-2A, A-2B, and B
notes address the likelihood that investors will receive full and
timely payments of interest, as per the governing documents, as
well as the stated balance of principal by the legal final
maturity date.  The ratings of the Class C notes address the
likelihood that investors will receive ultimate interest payments,
as per the governing documents, as well as the stated balance of
principal by the legal final maturity date.


KRONOS: S&P Cuts Rating on $400MM Senior Secured Notes to 'B'
-------------------------------------------------------------
Standard & Poor's Ratings Services lowered its corporate credit
rating on Dallas, Texas-based Valhi Inc. and its subsidiary,
Kronos International Inc. to 'B' from 'B+'.  At the same time, S&P  
lowered the rating on Kronos' $400 million senior secured notes
issue due 2013 to 'B' from 'B+'.  The outlook is stable.
     
"The downgrade follows the recent announcement of weak first-
quarter operating results related to the company's titanium
dioxide business, which reflects a challenging operating
environment with weak U.S. demand and higher overall input costs,"
said Standard & Poor's credit analyst Henry Fukuchi.  "The
downgrade also accounts for the year-over-year deterioration in
operating trends versus our expectations, a weakening of the
financial profile, and the continued difficult operating
environment in the company's core TiO2 business."
     
During fiscal 2007, Kronos experienced lower average TiO2 selling
prices and higher raw material and manufacturing costs, which
narrowed operating margins beyond our expectations.  The TiO2
operating environment has become increasing challenging because of
weak U.S. demand stemming from the housing slowdown coupled with
higher energy costs driving up overall manufacturing costs.  S&P
expect this trend to continue at least through the remainder of
2008 and first half of 2009 before operating performance begins to
stabilize or improve.  In light of these factors, S&P expect cash
flow generation to be lower than in previous years, and
improvement in its credit quality will be limited for the next 12
to 18 months.
     
The downgrade also takes into consideration the aggressive
financial policy Valhi has adopted with its significant
distribution of Titanium Metals Corp. shares in 2007 and its debt-
financed repurchase of CompX International Inc. shares.
     
Valhi has about $1.5 billion in sales and approximately
$772 million in total debt, adjusted for operating leases and
postretirement benefit obligations and excluding Snake River Sugar
Co. debt.
     
The ratings on Valhi reflect the company's limited business
diversity, its exposure to cyclical commodity product cycles, and
a highly leveraged financial profile.  In addition, S&P's  
assessment of Valhi takes into consideration the potential
liability resulting from lead-pigment litigation, which may affect
future cash flows and the company's ability to address investment
opportunities. Offsetting factors include the company's well-
established position among the leading global TiO2 producers.


LB-UBS: Fitch Affirms Low-B Ratings on Three Certificate Classes
----------------------------------------------------------------
Fitch Ratings upgraded LB-UBS commercial mortgage pass-through
certificates, series 2003-C1 as:

  -- $17.1 million class F to 'AAA' from 'AA+';
  -- $18.9 million class G to 'AAA' from 'AA';
  -- $18.9 million class H to 'AA' from 'A+';
  -- $12 million class J to 'A' from 'A-';
  -- $10.3 million class K to 'A-' from 'BBB+';
  -- $18.9 million class L to 'BBB' from 'BBB-';
  -- $6.9 million class M to 'BBB-' from 'BB+';
  -- $6.9 million class N to 'BB' from 'BB-';

In addition, Fitch affirmed these classes:

  -- $13 million class A-2 at 'AAA';
  -- $105 million class A-3 at 'AAA';
  -- $537.5 million class A-4 at 'AAA';
  -- $197.3 million class A-1b at 'AAA';
  -- Interest-only (I/O) classes X-CL and X-CP at 'AAA';
  -- $25.7 million class B at 'AAA';
  -- $25.7 million class C at 'AAA';
  -- $20.6 million class D at 'AAA';
  -- $18.9 million class E at 'AAA';
  -- $10.3 million class P at 'B+';
  -- $5.1 million class Q at 'B';
  -- $5.1 million class S at 'B-'.

Class A-1 has been paid in full.  Fitch does not rate the
$12.1 million class T.

The upgrades are due to 4.3% pay down and 2.0% defeasance as well
as stable performance of the pool since the last rating action.  A
total of 18 loans (27.8%) have defeased since issuance, including
one (7.6%) shadow rated loan.  As of the April 2008 distribution
date, the pool's aggregate principal balance has decreased by
27.6% to $993 million from $1.37 billion at issuance.  One loan
(0.6%) is specially serviced, and has expected losses.

The specially serviced asset is a 161-unit real estate-owned
multifamily property located in Dallas, Texas.  The asset became
REO in January 2008 after failing to payoff at maturity.  The non-
rated class T is sufficient to absorb any of the projected losses
on the specially serviced asset.

At issuance, there were five shadow rated loans that comprised
36.1% of the pool.  Two of them, Pennmark and Riverside Square,
have paid in full and one, Candler Tower (7.9%), has fully
defeased.  The two remaining non-defeased shadow rated loans,
Stonebriar Center (17.1%) and Westmoreland Mall (7.9%), maintain
investment grade shadow ratings.

The Stonebriar Center loan is secured by 694,322 square feet of a
1.7 million square foot regional mall located in Frisco, Texas.  
The loan's collateral has exhibited improved performance since
issuance.  As of Year End 2007, occupancy was 100% compared to
98.9% at issuance.  The Fitch-stressed Debt Service Coverage Ratio
was 1.84 times compared to 1.39x at issuance.  The loan's
anticipated repayment date is Dec. 11, 2012 and the current coupon
note is 5.23%.

The Westmoreland Mall loan is secured by a 561,245 square feet of
a 1.3 million square foot regional mall located in Greensburg,
Pennsylvania.  As of YE 2007, occupancy was 91.5% compared to
94.4% at issuance.  The YE 2007 Fitch-stressed DSCR improved to
1.34x from 1.27x at issuance due to relatively stable Fitch-
stressed net cash flow and amortization of the loan.  The current
note rate is 5.05% and the loan matures on March 11, 2013.

Fitch loans of concern comprise 2.7% of the pool, an increase from
1.1% at the last review.  They include loans with performance
issues, especially low debt service coverage ratios and declining
occupancy.  There is minimal short-term maturity risk as 0.9% in
2008 and 0.8% in 2009.  The majority of the loans (63.6%) mature
in 2012 and 2013.


LINENS N THINGS: To Pay $8,000,000 for Sales and Use Taxes
----------------------------------------------------------
In the normal course of business, Linen 'N Things, Inc., and its
affiliated debtors are required to (a) collect sales taxes from
purchasers of their products on a per sale basis; and periodically
remit the Sales Tax to the applicable Taxing Authorities.  

Typically, Sales Taxes accrue as products are sold, and the taxes
are calculated based on a statutory percentage of the sale price.  
The statutory percentage required to be withheld by each store
varies by state and county in which the stores operate.  The
process by which the Debtors remit the Sales Taxes also varies,
depending on the nature of the tax at issue and the Taxing
Authority which is to be paid.  Most Taxing Authorities require
that the Sales Taxes be remitted monthly, whereas others require
quarterly or semi-annual remittances.  The frequency required by
a Taxing Authority is generally dependent upon the level of sales
volume of the stores located within that Taxing Authority's
jurisdiction.

Most jurisdictions require the Debtors to submit the appropriate
tax returns and remit the tax withholdings on the 20th day of the
month following the end of a tax period; others set the 15th,
25th or 30th day of the month as the date on which tax returns
and remittances are due.  Sales Taxes are remitted to the
relevant Taxing Authorities on the basis of sales tax actually
collected from customers during the prior period.  Some Taxing
Authorities, primarily in jurisdictions where the Debtors do a
large volume of business, require the Debtors to maintain a cash
deposit with the Taxing Authority to minimize the Taxing
Authorities' exposure to risk of non-remittance of taxes by the
Debtors.

The Debtors also incur Use Taxes.  The Debtors' liability for use
tax arises from (i) purchase of fixed asset without sales tax, or
(ii) purchase of supplies and signage without sales tax.

Purchases without sales tax occur when property or services are
purchased from vendors that have no nexus to the resident state
of the Debtors and such vendors have no obligation to charge or
remit Sales Taxes for sales to parties outside the state of the
vendor's operations.  Nevertheless, purchasers, like the Debtors,
are obligated to self-assess and pay Use Taxes, when applicable,
to the state in which the Debtors are the "end user" of the goods
or services provided by the vendor with no nexus to that state.  
The tax rate for Use Taxes is equal to the tax rate for Sales
Taxes.

The Debtors traditionally remit Sales Taxes and Use Taxes through
an automatic clearing house system or by mailing checks.  Due to
the Debtors' cash constraints, the Debtors have begun remitting
the taxes via federal wires.

As of Petition Date, the Debtors estimate that approximately
$8,000,000 in Sales Taxes and Use Taxes relating to the
prepetition period will become due and owing to the Taxing
Authorities in the ordinary course of business.

Payment of the prepetition Sales Taxes and Use Taxes is critical
to the Debtors' continued, uninterrupted operations, Mark
Collins, Esq., at Richards, Layton and Finger in Wilmington,
Delaware, says.  Non-payment of the tax obligations may cause
Taxing Authorities to take precipitous action, including, but not
limited to, filing liens, preventing the Debtors from conducting
business in the applicable jurisdictions, and seeking to lift the
automatic stay, all of which would disrupt the Debtors' day-to-
day operations and could potentially impose significant costs on
the Debtors' estates.

Notably, the Sales and Use Taxes are afforded priority status
under Section 507(a)(8) of the Bankruptcy Code, Mr. Collins says.  
As priority claims, the tax obligations must be paid in full
before any general unsecured obligations of the Debtors may be
satisfied; payment of these taxes will not prejudice the rights
of general unsecured creditors.

Additionally, the Debtors believe that many of the Sales and Use
Taxes constitute "trust fund" taxes, which are required to be
collected from their customers by the Debtors and held in trust
for payment to the Authorities and, as a result, courts have held
that such taxes are not part of the Debtors' estate.

Accordingly, the Debtors sought and obtained authority from Hon.
Christopher S. Sontchi to pay all prepetition Sales and Use Taxes
due and owing to all taxing authorities in the ordinary course of
their businesses up to a maximum amount of $8,000,000.  The United
States Bankruptcy Court for the District of Delaware also
authorized the Debtors to pay Sales and Use Taxes subsequently
determined upon audit to be owed for periods prior to the Petition
Date.

The Court also authorized the Debtors' banks to process, honor,
and pay any and all checks or electronic fund transfers drawn on
the Debtors' bank accounts to pay all prepetition Sales and Use
Taxes owing to Taxing Authorities, whether those checks or
electronic fund transfers were presented prior to or after the
Petition Date, and to make other transfers provided that
sufficient funds are available in the applicable account to make
such payments.

                     About Linens 'N Things

Clifton, New Jersey-based Linens Holding Co., which does business
through its operating subsidiary Linens 'N Things Inc. --
http://www.lnt.com/-- is the second largest specialty retailer of     
home textiles, housewares and home accessories in North America
operating 589 stores in 47 U.S. states and seven Canadian
provinces as of December 29, 2007.  The company is a destination
retailer, offering one of the broadest and deepest selections of
high quality brand-name well as private label home furnishings
merchandise in the industry.

Linens 'N Things and 11 affiliates filed separate voluntary
petitions under Chapter 11 of the United States Bankruptcy Code in
the United States Bankruptcy Court for the District of Delaware on
May 2, 2008 (Lead Case No. 08-10832).  The Canadian operations are
not included in the filings.

Linens 'N Things has secured a $700 million debtor-in-possession
financing from General Electric Capital Corp.  The company plans
to be out of chapter 11 by the end of the year, on this timetable:

    09/14/2008 DIP Facility Deadline for Filing a Chapter 11 Plan

    10/14/2008 DIP Facility Deadline for Disclosure Statement
               Approval

    11/18/2008 DIP Facility Deadline for Soliciting Votes on Plan

    11/28/2008 DIP Facility Deadline for Entry of a Confirmation
               Order

Linens 'N Things is represented by Richards, Layton & Finger,
P.A., and Morgan, Lewis & Bockius LLP.  Conway, Del Genio, Gries &
Co., LLC will serve as the retailer's restructuring advisor until
substantial consummation of a chapter 11 plan.  Conway Del Genio's
Michael F. Gries acts as the Debtors' chief restructuring officer
and interim CEO.  Kurtzman Carson Consultants LLC acts as the
Debtors' claims agent.

A Noteholder Committee has been formed and is represented by
Kasowitz, Benson, Torres & Friedman LLP, and Pachulski Stang Ziehl
& Jones.

(Linens 'n Things Bankruptcy News, Issue No. 3, Bankruptcy
Creditors' Service Inc., http://bankrupt.com/newsstand/or    
215/945-7000)


LINENS N THINGS: To Pay $26.5MM for Warehouse Obligations
---------------------------------------------------------
Mark D. Collins, Esq., at Richards, Layton & Finger, P.A., in
Wilmington, Delaware, proposed counsel to Linen 'N Things, Inc.,
and its affiliated debtors, relates that in the ordinary course of
business, the Debtors employ:

   a. the services of various domestic and import common carriers
      to ship, transport, and deliver supplies and finished goods
      from their facilities and warehouses;

   b. third-party logistics providers, yard services, and other
      unique servicers to assist in classifying, storing and
      maintaining their inventory; and

   c. the services of CASS Information Services, Inc., that audits
      the charges of common carriers, ocean carriers, import
      service providers, and logistics providers and serves as the
      Debtors' logistics payment provider.

Accordingly, the Debtors seek authority from the United States
Bankruptcy Court for the District of Delaware to pay all
prepetition amounts due to:(i) common carrier charges up to a
maximum of $11,000,000; (ii) ocean carrier charges and import
service provider charges up to a maximum of $12,000,000; (iii)
logistics charges up to a maximum of $2,800,000; (iv) yard service
and shuttle providers up to a maximum of $150,000; (v) CASS
Information Services, Inc., up to a maximum of $15,000; and (vi)
smaller logistics vendors up to a maximum of $500,000.  The
Debtors' payments of those amounts will be conditioned on the
release of, any liens that the providers may have on the goods in
their possession.

Mr. Collins avers that the services given by the Providers are
integral to the continuation of the Debtors' business that if the
Debtors do not pay these prepetition charges due to the
Providers, they may refuse to ship the Debtors' goods to the
customers, thus severely disrupting the Debtors' business.  "The
Debtors would be faced not only with a serious interruption in
the flow of products to their customers, but with the large
administrative tasks of reconciling and auditing numerous
invoices and effecting timely payments to the carriers,"
Mr. Collins concludes..

In conjunction, the Debtors further seek a waiver of the
automatic stay as the payments proposed are essential to prevent
potentially irreparable damage to the Debtors' operations, value
and ability to reorganize.

                      Court Okays Payment

At the first day hearing on their cases, the Hon. Christopher S.
Sontchi authorized the Debtors to pay their prepetition
obligations to the service providers as the payments will not
exceed to the amounts stated in the Motion.

                      About Linens 'N Things

Clifton, New Jersey-based Linens Holding Co., which does business
through its operating subsidiary Linens 'N Things Inc. --
http://www.lnt.com/-- is the second largest specialty retailer of     
home textiles, housewares and home accessories in North America
operating 589 stores in 47 U.S. states and seven Canadian
provinces as of December 29, 2007.  The company is a destination
retailer, offering one of the broadest and deepest selections of
high quality brand-name well as private label home furnishings
merchandise in the industry.

Linens 'N Things and 11 affiliates filed separate voluntary
petitions under Chapter 11 of the United States Bankruptcy Code in
the United States Bankruptcy Court for the District of Delaware on
May 2, 2008 (Lead Case No. 08-10832).  The Canadian operations are
not included in the filings.

Linens 'N Things has secured a $700 million debtor-in-possession
financing from General Electric Capital Corp.  The company plans
to be out of chapter 11 by the end of the year, on this timetable:

    09/14/2008 DIP Facility Deadline for Filing a Chapter 11 Plan

    10/14/2008 DIP Facility Deadline for Disclosure Statement
               Approval

    11/18/2008 DIP Facility Deadline for Soliciting Votes on Plan

    11/28/2008 DIP Facility Deadline for Entry of a Confirmation
               Order

Linens 'N Things is represented by Richards, Layton & Finger,
P.A., and Morgan, Lewis & Bockius LLP.  Conway, Del Genio, Gries &
Co., LLC will serve as the retailer's restructuring advisor until
substantial consummation of a chapter 11 plan.  Conway Del Genio's
Michael F. Gries acts as the Debtors' chief restructuring officer
and interim CEO.  Kurtzman Carson Consultants LLC acts as the
Debtors' claims agent.

A Noteholder Committee has been formed and is represented by
Kasowitz, Benson, Torres & Friedman LLP, and Pachulski Stang Ziehl
& Jones.

(Linens 'n Things Bankruptcy News, Issue No. 3, Bankruptcy
Creditors' Service Inc., http://bankrupt.com/newsstand/or    
215/945-7000)


LOMBARDO'S RAVIOLI: Case Summary & 20 Largest Unsecured Creditors
-----------------------------------------------------------------
Debtor: Lombardo's Ravioli Kitchen, Inc.
        475 John Downey Drive
        New Britain, CT 06051

Bankruptcy Case No.: 08-20774

Type of Business: The Debtor is a food processor.

Chapter 11 Petition Date: May 1, 2008

Court: District of Connecticut (Hartford)

Judge: Robert L. Krechevsky

Debtor's Counsel: Raymond C. Bliss, Esq.
                  Email: bliss@boblawyers.com
                  Baker O'Sullivan & Bliss, PC
                  Putnam Park, Ste. 100
                  100 Great Meadow Rd.
                  Wethersfield, CT 06109-2355
                  Tel: (860) 258-1993
                  Fax: (860) 258-1991
                  http://www.boblawyers.com/

Estimated Assets: $1 million to $10 million

Estimated Debts:  $1 million to $10 million

Debtor's 20 Largest Unsecured Creditors:

   Entity                      Nature of Claim       Claim Amount
   ------                      ---------------       ------------
A. Fiorillo & Co., Inc.        goods                 $65,512
Drawer 500
Milldale, CT 06467

Providence Specialty Products  goods                 $58,004
33 Dearborn St.
Providence, RI 02909-4101

Praxair, Inc.                  services              $49,809
P.O. Box 91385
Chicago, IL 60693-1385

Losurdo Foods, Inc.            goods                 $48,219

Craft-Pak                      goods                 $42,804

Packaging Progressions         packaging machine     $36,499

Girandola & Shutkind Const.    services              $35,039

American Express               credit card purchases $33,873

A. Oliveri & Sons, Inc.        goods                 $32,940

Levy & Droney, P.C.            legal fees            $31,598

Northeast Utilities            services              $30,954

R&R Corrugated Container       goods & boxes         $30,078

Long Island Power Authority    services &            $29,226
                               electricity

Connecticut Natural Gas        services              $28,848

Labor Ready, Inc.              services & temp.      $28,725

MBC Machinery Corp.            goods & equipment     $26,967

Bellissimo Foods               marketing program &   $26,297
                               rebates

Merrill Industries, Inc.       goods & boxes         $25,793

M&M Food Brokers               broker                $24,636

Sabin Meyers Corp.             New York broker       $24,405


MAGUIRE PROPERTIES: Moody's Cuts Corp. Family Rtng. to B1 from Ba2
------------------------------------------------------------------
Moody's Investors Service has lowered the ratings of Maguire
Properties, Inc. (to B1 from Ba2 Corporate Family rating; to B1
from Ba3 Senior Secured rating) and placed them on review for
possible downgrade.  The downgrade of Maguire's ratings reflect
persistent levels of high effective leverage, low fixed charge
coverage, declining operating performance, an inability to cover
dividends from operating cash flows, coupled with a sharp increase
in vacancies in the REIT's Orange County portfolio.

The REIT has been exploring several strategic alternatives to
maximize shareholder value.  The review for downgrade reflects the
uncertainty and concerns related to the REIT's ultimate capital
structure and footprint.  Moody's review will focus on the REIT's
final capital structure, strategic profile, and the ultimate
quality and composition of the portfolio.  Moody's will also
review the current notching between the corporate family rating
and the senior secured rating.

The current ratings reflect Maguire Properties' leading position
as an owner and operator of class A office properties in Southern
California.  This positive is offset by significant concentrations
in the Los Angeles CBD and Orange County, a low fixed charge
coverage ratio of less than 1.0x as of March 31, 2008, as well as
high leverage of 85% and high secured debt as a percentage of
gross assets over 80%.  Moody's does acknowledge that the REIT's
senior secured revolver is largely undrawn.

The stabilization of Maguire Properties' rating outlook would
depend upon the REIT's ability to maintain its fixed charge
coverage consistently in excess of 1.5x, and effective leverage
below 75%.  A downgrade could result from deteriorating operating
performance as indicated by fixed charge coverage consistently
below 1.0x, an inability to reduce leverage below 75%, or a
material increase in leverage as a result of the reorganization of
the REIT.

Thesse ratings were downgraded and placed on review for possible
downgrade:

  * Maguire Properties, Inc. -- Corporate family rating at B1,
    from Ba2

  * Maguire Properties, L.P. -- Senior secured revolving credit
    facility at B1, from Ba3

Maguire Properties, Inc. [NYSE: MPG], based in Los Angeles,
California, USA, is a REIT specializing in class A office
properties in Southern California.  As of March 31, 2008, the REIT
reported $5.8 billion in total assets and $288 million in equity.


MASTR ASSET: S&P Junks Ratings on Two Certificate Classes
---------------------------------------------------------
Standard & Poor's Ratings Services lowered its ratings on four
classes of mortgage pass-through certificates from MASTR Asset
Backed Securities Trust 2005-AB1.  At the same time, S&P affirmed
its ratings on the remaining 14 classes from this transaction.
     
The lowered ratings reflect a steady increase in the dollar amount
of loans in the transaction's delinquency pipeline over the past
six months, combined with deterioration in credit support due to
realized losses.  The high levels of total delinquencies and
severe delinquencies in this transaction indicate that losses will
continue to increase and further erode available credit support.  
Severe delinquencies for series 2005-AB1 have risen by 31% over
the past six remittance periods to $48.179 million, while the
average monthly net loss over the same period was $390,411.
     
As of the April 2008 remittance period, cumulative losses were
0.45% of the original principal balance.  Total and severe
delinquencies were 13.15% and 9.70% of the current principal
balance, respectively.
     
The lowered ratings are in line with the projected credit
enhancement amounts following the liquidation of many of the loans
currently in the transaction's delinquency pipeline.  S&P's  
expected losses also factor in loans that are now current but may
default in the future.
     
The affirmations reflect current and projected credit support
percentages that are sufficient to support the certificates at
their current rating levels.  The initial credit enhancement
percentages meet or exceed the amount required to support the
affirmed ratings.

A combination of subordination, excess spread, and
overcollateralization provides credit support for this
transaction.  The underlying collateral for the deal consists
primarily of fixed-rate, conventional mortgage loans secured
by first liens on one- to four-family residential properties.


                         Ratings Lowered

            MASTR Asset Backed Securities Trust 2005-AB1
                 Mortgage pass-through certificates

                                    Rating
                                    ------
                   Class      To             From
                   -----      --             ----
                   M-6        BBB            A-
                   M-7        B              BBB+
                   M-8        CCC            BBB
                   M-9        CC             BBB-

                        Ratings Affirmed

           MASTR Asset Backed Securities Trust 2005-AB1
                 Mortgage pass-through certificates

               Class                           Rating
               -----                           ------
               A-1A, A-1B, A-2, A-3A, A-3B     AAA
               A-4, A-5A, A-5B, A-6            AAA
               M-1                             AA+
               M-2                             AA
               M-3                             AA-
               M-4                             A+
               M-5                             A


MAXXAM INC: Deloitte & Touche Raises Going Concern Doubt
--------------------------------------------------------
Deloitte & Touche LLP, in Houston, expressed substantial doubt
about MAXXAM Inc.'s ability to continue as a going concern after
auditing the company's consolidated financial statements for the
year ended Dec. 31, 2007.  

The auditing firm pointed to the uncertainty surrounding the
ultimate outcome of the separate voluntary petitions for
reorganization under Chapter 11 of the Bankruptcy Code filed by
certain of the company's wholly owned subsidiaries, and its effect
on the company, as well as the company's operating losses at its
remaining subsidiaries.

On Jan. 18, 2007, The Pacific Lumber Company (Palco), Scotia
Pacific Company LLC (Scopac), Britt Lumber Co. Inc. (Britt) and
Scotia Development LLC (SDLLC) and Palco's other subsidiaries
filed for Chapter 11 protection in the U.S. Bankruptcy Court for
the Southern District of Texas.  

                             Net Loss

The company reported a net loss of $46.9 million on sales of
$95.9 million for the year ended Dec. 31, 2007, compared with net
income of $374.4 million on sales of $291.5 million in the prior
year.  

The company generated a loss before income taxes of
$46.4 million for 2007 and $60.0 million for 2006 (excluding the
reversal of the net investment in Kaiser).

               Reversal of Net Investment in Kaiser

In February 2002, Kaiser and certain of its subsidiaries filed for
reorganization under Chapter 11 of the Bankruptcy Code.  Kaiser's
plan of reorganization provided for the cancellation of Kaiser's
equity, including the common shares held by the company, without
consideration or obligation.  Kaiser's plan of reorganization
became effective on July 6, 2006, and Kaiser emerged from
bankruptcy.  As a result, the company no longer has any ownership
interest in or affiliation with Kaiser.  

Since the company's equity in Kaiser was cancelled without
obligation, the company reversed the $516.2 million of losses in
excess of its investment in Kaiser along with the accumulated
other comprehensive losses of $85.3 million related to Kaiser,
resulting in a net gain of $430.9 million, recognized in 2006.

      Proforma Financial information (Excluding the Debtors)

Sales for 2007 totaled $91.5 million, compared to $151.5 million
in 2006.  The reduction in sales in 2007 was due to a significant
decline in real estate demand in areas where the company operates
and the substantial sell-out of lots at Mirada in 2006.

Operating losses were $25.7 million in 2007, as compared to income
of $453.6 million in 2006.  This substantial change resulted
primarily from the reversal of the company's net investment in
Kaiser of $430.9 million, reduced sales volumes at the company's
real estate segment, costs associated with the expansion of the
summer concert series at Sam Houston Race Park and higher costs
incurred by the company related to the forest products' bankruptcy
proceedings.

Other income totaled $1.6 million and $8.0 million in 2007 and
2006, respectively.  Other income primarily results from returns
on the investments held by the company.  2007 investment returns
were impacted by a general market collapse in the fourth quarter
of 2007.

                  Recent Bankruptcy Developments

On Sept. 30, 2007, the Debtors filed a proposed joint plan of
reorganization.  On Dec. 21, 2007, the Bankruptcy Court approved
an agreement by the Debtors and other parties to terminate the
Exclusivity Period and permit the filing of plans of
reorganization by the Debtors, as well as the Unsecured Creditors
Committee), Marathon and the holders of Scopac's Timber Notes.  On
the Jan. 30, 2008 deadline, Marathon and the holders of the Scopac
Timber Notes filed proposed plans of reorganization.  The same
day, the Debtors filed an amended joint plan of reorganization,
and Palco and Scopac each filed alternative stand-alone plans of
reorganization.  The company is a co-proponent of each of the
Joint Plan and the Palco and Scopac Alternative Plans.

The Joint Plan provides for the payment in full of all claims and
the continuation of the businesses, but at harvest levels that are
lower than historical rates.  Under the Joint Plan, the company's
indirect equity interests in both Palco and Scopac would be
substantially diluted, such that the company would lose a
controlling interest in both companies.  Additionally, certain
assets owned by Palco would be transferred to Palco's secured
lender in satisfaction of the Palco Term Loan.  The Joint Plan
also provides for important economic contributions by the company,
including:

   (i) consenting to the dilution of its indirect equity   
       interest in both Palco and Scopac;

  (ii) providing additional liquidity to Palco throughout the
       remainder of the case through redwood log or lumber
       purchases (either directly or indirectly) in an amount not     
       to exceed $12.0 million, subject to Board approval;
  
(iii) making a $10.0 million cash equity contribution to
       reorganized Palco on the effective date;

  (iv) forgiving $40.0 million of intercompany indebtedness;

   (v) using its best efforts to assist the reorganized Debtors in
       obtaining exit financing; and

  (vi) assisting the reorganized Debtors by providing its
       extensive real estate expertise in connection with various
       post-confirmation aspects of the Joint Plan.

The Debtors do not believe that the Joint Plan is eligible to be
"crammed down" on creditors who vote against it.  Accordingly,
Alternative Plans were developed to provide the Debtors an
alternative to the Joint Plan in the event secured creditors vote
against the Joint Plan.  The Alternative Plans of Palco and Scopac
provide for (a) the delivery of a substantial portion of Scopac's
timberlands to the holders of the Scopac Timber Notes in full
satisfaction of the obligations under the Scopac Timber Notes, and
(b) the delivery of all of Palco's assets (other than its interest
in Scopac and its interest in the Headwaters Claim) to Marathon.

The Debtors' remaining obligations (including those under the DIP
Facility) would be paid with the proceeds from exit financing
secured by the remaining assets owned by Palco.  These assets
would consist of Palco's equity interest in the reorganized Scopac
and Palco's interest in the Headwaters Claim.  Both the Joint Plan
and the Alternative Plans would require, among other things, that
the Debtors obtain exit financing.

Both the plan of reorganization filed by Marathon and the plan of
reorganization filed by the holders of the Scopac Timber Notes, if
confirmed, would result in the loss entirely of the company's
indirect equity interests in both Palco and Scopac.

Voting for all of the plans has occurred and the Joint Plan and
the Palco Alternative Plan did not obtain sufficient votes to be
confirmed.  Without sufficient votes, these plans cannot legally
be  confirmed.  The Scopac Alternative Plan, the plan of
reorganization filed by Marathon and the plan of reorganization
filed by the holders of the Scopac Timber Notes did receive
sufficient votes to be confirmed.

The company said that there is substantial uncertainty as to which
plan of reorganization, if any, will be confirmed by the
Bankruptcy Court.  If no plan is confirmed, the Bankruptcy Court
may elect to convert the Bankruptcy Cases to a Chapter 7
liquidation proceeding.  The confirmation hearing, at which the
Bankruptcy Court will consider the plans of reorganization filed
by Marathon, the holders of Scopac Timber Notes, and the Debtors,
began in April 2008 and has not yet concluded.  

                          Balance Sheet

At Dec. 31, 2007, the company's consolidated balance sheet showed
$518.9 million in total assets and $780.1 million in total
liabilities, resulting in a $261.2 million total stockholders'
deficit.  

In comparison, the company's consolidated balance sheet at
Dec. 31, 2006, showed $1.0 billion in total assets and
$1.2 billion in total liabilities, resulting in a $211.8 million  
total stockholders' deficit.  

Following the bankruptcy filings, the company deconsolidated the
Debtors' financial results beginning Jan. 19, 2007, and began
reporting its investment in the Debtors using the cost method.

Full-text copies of the company's consolidated financial
statements for the year ended Dec. 31, 2007, are available for
free at http://researcharchives.com/t/s?2ba6

                        About MAXXAM Inc.

Headquartered in Houston, MAXXAM Inc. (AMEX: MXM) is a publicly-
traded company, with business interests in three industries:
forest products, real estate investment and development and racing
operations.


MERCURY GROUP: Case Summary & 19 Largest Unsecured Creditors
------------------------------------------------------------
Debtor: Mercury Group, Inc.
        Ave. Ashford 1108
        Condado
        San Juan, PR 00907

Bankruptcy Case No.: 08-02821

Chapter 11 Petition Date: May 2, 2008

Court: District of Puerto Rico (Old San Juan)

Debtor's Counsel: Carmen D. Conde Torres, Esq.
                  Email: notices@condelaw.com
                  254 San Jose St., 5th Flr.
                  San Juan, PR 00901-1523
                  Tel: (787) 729-2900
                  Fax: (787) 729-2203
                  http://www.notices@condelaw.com/

Estimated Assets:        Less than $50,000

Estimated Debts: $1 million to $10 million

Debtor's 19 Largest Unsecured Creditors:

   Entity                      Claim Amount
   ------                      ------------
Hermes Vargas                  $1,562,333
Ave. Ashford 1060
San Juan, PR 00907

IRS                            $416,380
Mercantil Plaza Bldg.
2 Ponce de Leon
Ave. Rm. 914
San Juan, PR 00918

Sucesores Lavanderos           $150,000
P.O. Box 6056
San Juan, PR 00914-6056

Departamento del Trabajo Y     $66,960
Recursos Humanos

Angeles Correa Ely             $60,000

Gomez Holding, Inc.            $50,000

Departamento de Hacienda       $10,020
Seccion de Quiebras

HCP/Aboard Publishing          $5,558

CRIM                           $4,108

Compresos Y Equipos            $3,500

San Juan Gas                   $3,083

V. Suarez                      $2,865

Jose Santiago                  $2,638

American Composers Society     $2,003

Cadillac Uniforms              $1,826

Ecolab                         $1,255

Provisiones Legran Mercado     $1,088

Destileria Serralles           $1,000

Sea World                      $953


MGM MIRAGE: S&P Holds 'BB' Rating and Revises Outlook to Stable
---------------------------------------------------------------
Standard & Poor's Ratings Services revised its rating outlook on
Las Vegas-based MGM MIRAGE to stable from positive.  Ratings on
the company, including the 'BB' corporate credit rating, were
affirmed.

"The outlook revision reflects our assessment that rating upside
potential is unlikely over the intermediate term, given current
weak operating trends on the Las Vegas Strip, which accounted for
84% and 74% of MGM MIRAGE's revenue and property level EBITDA,
respectively, during the 12 months ended March 31, 2008," said
Standard & Poor's credit analyst Ben Bubeck.
     
In addition, the company has taken a more aggressive posture
toward share repurchases in recent months than S&P had previously
anticipated, having spent $1.1 billion on buybacks during the
quarter ended March 31, 2008 (about $430 million more than S&P
expected).  A 12% year-over-year decline in property level EBITDA
in the March 2008 quarter (or 10% when Monte Carlo is excluded),
combined with the largely debt-financed share repurchase activity,
has meaningfully weakened credit measures.  Operating lease-
adjusted total debt to EBITDA, excluding income from
unconsolidated affiliates, has increased to an estimated 5.9x as
of March 31, 2008, from 4.9x as of Dec. 31, 2007.
     
The 'BB' rating reflects MGM MIRAGE's active growth strategy,
reliance on the Las Vegas Strip for a majority of its cash flow,
and moderate debt leverage.  In addition, the company's capital
spending will increase significantly over the next several years,
as spending for the MGM Grand Atlantic City ramps up. Still, MGM
maintains a satisfactory business risk profile, with a significant
position on the Las Vegas Strip.  Furthermore, the company's
business risk profile stands to improve over time, as the recent
openings of MGM Grand Detroit and MGM Grand Macau, combined with
MGM Grand Atlantic City (anticipated to open in 2012), will lessen
the company's reliance on the Las Vegas Strip and substantially
grow the cash flow base.  Joint ventures overseas, such as the MGM
Grand Abu Dhabi, also have the potential to grow and diversify MGM
MIRAGE's cash flow base over time.


MILLSTONE FUNDING: Fitch Puts 'B' Rating on $879.961MM Notes
------------------------------------------------------------
Fitch has assigned a new rating to one class of notes and
downgraded three classes of notes issued by Millstone Funding Ltd.   
Fitch has also withdrawn the 'F1+' commercial paper rating as
detailed below.  These rating actions are effective immediately:

  -- $879,961,896 Funding notes assigned a 'B' rating and placed
     on Rating Watch Negative;

  -- $ 40,000,000 class A-1 notes downgraded to 'CCC' from 'AAA'
     and removed from Rating Watch Negative;

  -- $ 10,000,000 class A-2 notes downgraded to 'CC' from 'AAA'
     and removed from Rating Watch Negative;

  -- $ 65,214,353 class B notes downgraded to 'C' from 'A-' and
     removed from Rating Watch Negative.

Millstone is a high grade collateralized debt obligation  that
closed Feb. 4, 2004 and is managed by Church Tavern Advisors, LLC.  
Millstone will exit its reinvestment period in March 2009.
Millstone has a portfolio comprised primarily of subprime
residential mortgage-backed securities, Alt-A RMBS bonds, prime
RMBS, structured finance CDOs and other diversified structured
finance assets.  Subprime RMBS bonds of the 2005, 2006, and 2007
vintages account for approximately 5.21%, 10.42%, and 1.67% of the
portfolio, respectively.  Likewise, the SF CDO exposure includes
SF CDOs originated in 2005 (7.27%), 2006 (11.05%) and 2007
(5.00%).  Alt-A RMBS bonds of the 2005, 2006 and 2007 vintages
represent approximately 21.12% of the portfolio.

Millstone was initially financed with an $880 million First
Priority Commercial Paper tranche.  On Dec. 21 2007 the liquidity
put counterparty, Citigroup N.A., did not extend the put agreement
thereby extinguishing the CP Notes by rolling the balance into the
Funding Notes with the same spread and seniority.  Fitch is
therefore withdrawing the short-term rating from the CP Notes and
assigning a long-term rating to the newly created Funding Notes.

Fitch's rating actions reflect the significant collateral
deterioration within the portfolio, specifically subprime RMBS,
Alt-A RMBS, and SF CDOs with underlying exposure to subprime RMBS.  
Since the last rating action on August 30 2007, approximately
50.8% of the portfolio has been downgraded with 41.6% of the
portfolio is currently on Rating Watch Negative.  The negative
credit migration is primarily attributable to the credit
deterioration in subprime RMBS bonds from the 2005, 2006 and 2007
vintages, coupled with significant downgrades in SF CDOs
originated between 2005 and 2007.  Further, the underlying
portfolio currently contains 24.8% speculative grade securities of
which 11.1% are rated 'CCC' or lower, which currently exceeds the
credit enhancement available to the A-1 notes.

The Rating Watch Negative reflects the continued credit
deterioration in subprime RMBS and SF CDOs with underlying
exposure to subprime RMBS, as well as growing concerns with the
performance of Alt-A RMBS.  The classes rated 'CCC' and below are
removed from Rating Watch as Fitch believes further negative
migration in the portfolio will have a lesser impact on these
classes.  Additionally, Fitch is reviewing its SF CDO approach and
will comment separately on any changes and potential rating impact
at a later date.

The ratings of the class A-1 and A-2 notes address the likelihood
that investors will receive full and timely payments of interest,
as per the transaction's governing documents, as well as the
stated balance of principal by the legal final maturity date.  The
ratings of the class B notes address the likelihood that investors
will receive ultimate and compensating interest payments, as per
the transaction's governing documents, as well as the stated
balance of principal by the legal final maturity date.


MORGAN STANLEY: Fitch Cuts Certificate Rating to C/DR4 from CC/DR2
------------------------------------------------------------------
Fitch Ratings has taken rating actions on the Morgan Stanley
mortgage pass-through certificates listed below:

Series 2002-AM3
  -- Class A-2 affirmed at 'AAA' and removed from Rating Watch  
     Negative;

  -- Class A-3 affirmed at 'AAA';
  -- Class M-1 affirmed at 'AA';
  -- Class M-2 affirmed at 'A';
  -- Class B-1 affirmed at 'B';
  -- Class B-2 downgraded to 'C/DR4' from 'CC/DR2'.

The collateral on the aforementioned transactions consists of
various term fixed- and adjustable-rated mortgages extended to
subprime borrowers.  As of the March 2008 remittance date, the
pool has experienced 2.79% of loss.  The deal has 18.46% in 60+
delinquency and the pool factor is approximately 8%.

Class A-2 has a financial guaranty provided by MBIA.


NEFF CORP: Weak Performance Prompts S&P to Cut Corp. Credit to B
----------------------------------------------------------------
Standard & Poor's Ratings Services lowered its ratings on Miami-
based equipment rental company Neff Corp. and subsidiary Neff
Rental Inc., including the corporate credit ratings, which were
lowered to 'B' from 'B+'.  Neff had total balance sheet debt of
about $721.6 million as of March 31, 2008.  The outlook is
negative.
      
"The rating action reflects the company's weakened performance
resulting from challenging conditions in the domestic residential
and certain nonresidential construction markets," said Standard &
Poor's credit analyst Helena Song.  EBIDTA in first-quarter 2008
declined to about $24 million, or by 25% from the year-earlier
period, and the company's operating margin was 36%, or down about
10 percentage points from the year-earlier period.  As a result,
leverage is at 5.7x, greater than our expectation for the prior
rating.  The operating margin remains below peak levels and could
weaken further if market conditions do not improve.
     
The ratings on Neff reflect the industry's highly competitive and
cyclical nature as well as Neff's aggressive financial policy.  
Private equity sponsor Lightyear Capital LLC purchased Neff in a
transaction valued at about $900 million, excluding fees, in May
2007.  Neff operates mainly in the Sun Belt through 66 locations
and focuses on earth-moving equipment.
     
S&P could lower the ratings if operating performance continues to
deteriorate, if cash flow worsens, or if the company's liquidity
is otherwise impacted.  S&P could revise the outlook to stable if
credit measures strengthen and operating performance stabilizes.  
However, this appears to be less likely in the near term.


NETWOLVES CORP: Bankruptcy Court Approves Disclosure Statement
--------------------------------------------------------------
The Hon. Paul M. Glenn of the U.S. Bankruptcy Court for the Middle
District of Florida approved the Disclosure Statement for a Second
Amended Joint Plan of Reorganization of NetWolves Corp. and its
debtor-affiliates, based on a finding that it contained adequate
information for the purpose of soliciting votes on its Chapter 11
plan of reorganization.

In that order, the bankruptcy court also approved solicitation and
voting procedures, accepted proposed forms of ballots, and
established a number of important deadlines relating to
confirmation of the Debtors' Chapter 11 Plan.  NetWolves expects
to send out the approved solicitation packages to creditors in the
coming week.

                       Overview of the Plan

The Plan contemplates the potential substantive consolidation of
the Debtors Estates for purposes of voting and for distributions
under the Plan.  NetWolves may seek prior to or at Confirmation to
substantively consolidate its Estate with those of its affiliated
Debtors pursuant to Section 105 of the Bankruptcy Code and
applicable law.  The Debtors believe substantive consolidation
will benefit all Holders of Claims and Interests by:

   (i) essentially eliminating the myriad of Intercompany Claims
       (and Administrative Expense Claims among the Debtors) that
       will otherwise be difficult, if not impossible, to
       accurately reconcile, and

  (ii) providing a more equitable distribution to all Holders of
       Claims and Interests under the Plan.

                         Terms of the Plan

The Debtors will be reorganized pursuant to the Plan and will
continue in operation, achieving the objectives of Chapter 11 for
the benefit of their creditors, customers, suppliers, and
employees.

Generally, Administrative Claims, Priority Tax Claims, and Other
Priority Claims will be fully paid in Cash as and when required by
the Bankruptcy Code, unless otherwise agreed by the Holders of
such Claims.

Telecommunications Providers holding Allowed Cure Claims receive
Cash payments in the full amount of such Claims over a thirty-
month period following the Effective Date, or as may otherwise be
determined by the Bankruptcy Court or agreement of the parties.

Claims classified as Secured Claims shall have the Allowed amount
of such Claims treated under the Plan as General Unsecured Claims,
unless the Holder can conclusively demonstrate the existence of a
valid, enforceable perfected Lien, which Claim shall be treated as
a Secured Claim under the Plan and the Bankruptcy Code.

Holders of Unsecured Claims will receive (i) Cash, (ii) New Common
Stock, (iii) a combination of Cash and New Common Stock, or (iv)
the right to elect whether their respective claim(s) are satisfied
through Distributions of Cash or New Common Stock, based upon the
relative positions of the respective Classes.

Existing Holders of NetWolves Common Stock will retain a diluted
Interest in NetWolves through a reverse stock split of existing
Common Stock and the issuance of the New Common Stock under the
Plan to the Holders of Allowed Claims.  NetWolves estimates that
existing Common Stockholders will retain approximately 5% of
Reorganized NetWolves on a fully diluted basis, subject to the
final Reorganization Value of the Reorganized Debtors.  However,
all other existing Old Stock Rights of NetWolves will be
cancelled, except as specifically provided in the Plan.

The Reorganized Debtors will obtain Exit Financing to support
payments required to be made under the Plan, repay any DIP
Financing, pay transaction costs, and fund working capital and
general corporate purposes of the Reorganized Debtors following
their emergence from bankruptcy.

A full-text copy of the Second Amended Joint Disclosure Statement
is available for free at http://bankrupt.com/misc/Netwolves

Based in Tampa, Florida, NetWolves Corporation (Pink Sheets: WOLV)
-- http://www.netwolves.com/-- provides telecommunications and     
Internet-managed services to more than 1,000 customers through its
neutral FCC-licensed carrier.  Some of NetWolves' customers
include General Electric, University of Florida, McLane
Company, JoAnn Stores and Marchon Eyewear.

The company and three of its affiliates filed for Chapter 11
protection on May 21, 2007 (Bankr. M.D. Fla. Case Nos. 07-04186
through 07-04196).  David S. Jennis, Esq., at Jennis Bowen &
Brundage, P.L., represent the Debtors in their restructuring
efforts.  When the Debtors filed for protection from their
creditors, it listed total assets of $8,847,572 and total
liabilities of $7,637,029.


NETWOLVES CORP: Court Sets Plan Confirmation Hearing June 24
------------------------------------------------------------
The U.S. Bankruptcy for the Middle District of Florida will
convene a hearing, on June 24, 2008, at 9:30 a.m. ET, to confirm
the second amended joint plan of reorganization of NetWolves Corp.
and its debtor-affiliates.  The hearing will be held in Courtroom
8A, Sam M. Gibbons United States Courthouse, 801 North Florida
Avenue, in Tampa, Florida.

Based in Tampa, Florida, NetWolves Corporation (Pink Sheets: WOLV)
-- http://www.netwolves.com/-- provides telecommunications and     
Internet-managed services to more than 1,000 customers through its
neutral FCC-licensed carrier.  Some of NetWolves' customers
include General Electric, University of Florida, McLane
Company, JoAnn Stores and Marchon Eyewear.

The company and three of its affiliates filed for Chapter 11
protection on May 21, 2007 (Bankr. M.D. Fla. Case Nos. 07-04186
through 07-04196).  David S. Jennis, Esq., at Jennis Bowen &
Brundage, P.L., represent the Debtors in their restructuring
efforts.  When the Debtors filed for protection from their
creditors, it listed total assets of $8,847,572 and total
liabilities of $7,637,029.


OCONEE CLUB: Voluntary Chapter 11 Case Summary
----------------------------------------------
Debtor: Oconee Club Estates, LLC
        1022 Club Estates Way
        Statham, GA 30666

Bankruptcy Case No.: 08-30425

Chapter 11 Petition Date: April 11, 2008

Court: Middle District of Georgia

Debtor's Counsel: Ernest V. Harris
                  (ehlaw@bellsouth.net)
                  P.O. Box 1586
                  Athens, GA 30603
                  Tel: (706) 613-1953
                  Fax: (706) 613-0053

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

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

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


ONLINE INSURANCE: Case Summary & 20 Largest Unsecured Creditors
---------------------------------------------------------------
Debtor: Online Insurance Services, Inc.
        2001 Wells Road
        Orange Park, FL 32073

Bankruptcy Case No.: 08-02109

Type of Business: The Debtor provides insurance-based consumer  
                  software products.
                  See http://www.oisworld.com/

Chapter 11 Petition Date: April 17, 2008

Court: Middle District of Florida

Debtor's Counsels: Albert H. Mickler
                   Bryan K. Mickler
                   (court@planlaw.com)
                   5452 Arlington Expressway
                   Jacksonville, FL 32211
                   Tel: 904-725-0822

Estimated Assets: $100,001 to $500,000

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

Debtor's 20 Largest Unsecured Creditors:

   Entity                     Nature of Claim       Claim Amount
   ------                     ---------------       ------------
Lehman Brothers Bank          real estate           $525,000
25520 Commercentre Drive      value of security:
#150                          $441,376
Lake Forest, CA 92630

Select Asset Management LLC   real estate           $500,000
230 Wescott #200              value of security:
Houston, Texas                $441,376
                              value of senior lien:
                              $785,781

Internal Revenue Service      real estate           $253,102
P.O. Box 21126                value of security:
Philadelphia, PA 19114-0326   441,376
                              value of senior lien:
                              $532,679

Direct Writers Insurance      open account          $167,343

ExecuHealth                   open account          $150,280

Companion                     open account          $122,841

Angel Worley                  open account          $88,892

Cecelia Bryant                open account          $30,500

Steve Pasch                   open account          $30,440

Peak 10, Inc.                 open account          $29,893

Compass Bank                  line of credit        $29,014
                              account

DLS/HEG                       open account          $26,414

FTI                           open account          $25,252

Ralston & Company             services              $18,000

Software Industries           open account          $13,871

UPP II                        open account          $13,502

Compass Bank                  2002 Dodge            $11,400
                              Caravan

UHP                           open account          $10,822

Dex Imaging Inc.              open account          $10,573

Compass Bank Visa             credit card           $10,079
                              purchases


ON SEMICONDUCTOR: Moody's Lifts Corp. Family Rating to Ba3 from B1
------------------------------------------------------------------
Moody's Investors Service upgraded ON Semiconductor Corporation's
corporate family rating to Ba3 from B1 and senior secured debt
ratings to Baa3 from Ba1.  Simultaneously, Moody's assigned a
speculative grade liquidity rating of SGL-1.  The outlook is
stable.  This concludes the review for possible upgrade that was
initiated in December 2007 following the company's announcement
that it would acquire AMI Semiconductor, Inc. for approximately
$915 million in an all-stock transaction.  Following completion of
the acquisition and repayment of AMI Semi's bank credit facilities
(March 2008), Moody's withdrew all ratings for AMI Semi (CFR
formerly rated Ba3/Stable).

These ratings for ON Semi were upgraded:

  -- Corporate Family Rating to Ba3 from B1
  -- Probability of Default Rating to Ba3 from B1
  -- $25.0 Million Guaranteed Sr. Secured Revolving Credit
     Facility due 2013 to Baa3 (LGD-1, 3%) from Ba1 (LGD-1, 4%)

  -- $173.7 Million Guaranteed Sr. Secured Term Loan maturing
     through 2013 to Baa3 (LGD-1, 3%) from Ba1 (LGD-1, 4%)

These rating was assigned:

  -- Speculative Grade Liquidity Rating -- SGL-1

The ratings upgrade reflects ON Semi's enhanced scale, expanded
product portfolio, broader and deeper client relationships, end
market diversification and expansion into higher margin market
segments, as well as expected manufacturing synergies (estimated
to be approximately $50 million per annum by year end 2008) from
facility closures and consolidation following the AMI Semi
acquisition.  Additionally, the upgrade considers the company's
acquisition financing strategy which results in enhanced credit
protection measures on a pro forma basis as well as the additive
EBITDA and increased free cash flow generation provided by the
merger.  Pro forma for the transaction, financial leverage as
measured by debt to EBITDA is approximately 2.4x for the LTM
period ended Dec. 31, 2007, which is comparable to Ba3 rated
industry peers.

The stable ratings outlook reflects Moody's expectation that the
company will achieve revenue growth that outpaces the industry and
expand gross and operating margins in connection with incremental
benefits from increasing semiconductor content within OEM/ODM
platforms, a shift to higher margin products with longer life
cycles (via AMI Semi) and continued cost savings.  The current
ratings and outlook incorporate expectations of moderate
integration risk associated with AMI Semi, expanding free cash
flow, nominal debt-funded acquisition activity and limited share
repurchases.

The Ba3 CFR incorporates Moody's expectations that ON Semi will
realize manufacturing efficiency improvements, better operational
execution and lower unit production costs for AMI Semi's growing
high volume ASSP (application specific standard products)
portfolio via the transfer of ON Semi's advanced manufacturing
capabilities, process technologies and expense reduction methods.  
This, together with scheduled facility shutdowns and relocation of
AMI Semi manufacturing to lower cost facilities, is expected to
improve AMI Semi's relatively lower operating margins over the
next 12--18 months to levels approaching ON Semi's operating
margins, which are in the range of 18-20% (Moody's adjusted) on a
standalone basis.

Moody's previously commented in its March 2007 press release that
although ON Semi's financial metrics suggested a Ba3 rating, the
rating was constrained to B1 at the time due to: (i) the
incremental operating costs associated with the new sub-micron
analog wafer fab in Gresham, Oregon; (ii) potential for heightened
competition; and (iii) moderate customer concentration. We note
that the complementary nature of the acquisition mitigates these
risks and supports the Ba3 rating.  Much of AMI Semi's outsourced
production will be transferred to Gresham, improving that
facility's capacity utilization and profitability.

Additionally, AMI Semi's sole source status for nearly 90% of its
product base, well-penetrated customer base with long-standing
relationships and high entry barriers for its ASIC (application
specific integrated circuits) products now lessens the competitive
forces confronting ON Semi.  Also, ON Semi's entry into AMI Semi's
market segments such as medical, industrial and
military/aerospace, which tend to have moderate ASP volatility and
relatively long product life cycles, subdues competitive elements.  
Finally, customer concentration (top ten non-EMS/non-distribution
customers equal to 26% of revenues pre-merger vs. 21% post-merger)
is reduced with the addition of AMI Semi's customer base, which
has little overlap with ON Semi's client base.

The Ba3 CFR factors possible delays in achieving acquisition
synergies given the size of the AMI Semi transaction.  It also
captures risks associated with the timing and amount of
restructuring charges, which could be deferred or larger than
planned; incremental capex, albeit lower than on a combined basis;
potential customer disengagements resulting from the change in
ownership and operating strategy at AMI Semi; and the cyclical
nature of the semiconductor industry.  Additionally, the rating
incorporates potential risks of a consumer-led U.S. economic
downturn, which could negatively impact demand for consumer
electronics (17% of combined company revenues), wireless (13%) and
automotive (21%) semiconductor products supplied by the company.

To the extent the company is able to achieve good progress towards
internal execution and integration of AMI Semi as originally
planned, Moody's could upgrade the outlook or rating over the next
6 -- 9 months.

ON Semi's speculative grade liquidity rating of SGL-1 recognizes
the company's very good liquidity position.  This is based on cash
and short-term investments of roughly $300 million, anticipated
generation of solid free cash flow levels over the next twelve
months and a $25 million undrawn revolver.  Moody's expects the
company to maintain healthy levels of gross cash flow to cover
capital expenditures and working capital requirements.  Further
supporting the company's overall liquidity is the expectation for
covenant compliance over the next four quarters.

Headquartered in Phoenix, Arizona, ON Semiconductor Corporation is
a global manufacturer of power- and data-management semiconductors
as well as standard semiconductor components.  In March 2008, ON
Semi acquired AMI Semiconductor, Inc., a leading designer and
manufacturer of analog and mixed-signal custom integrated circuits
for approximately $915 million in an all-stock transaction.  Pro
forma for the AMI Semi acquisition, combined revenues and EBITDA
(Moody's adjusted, excluding synergies) for the twelve months
ended Dec. 31, 2007 were $2.2 billion and $536 million,
respectively.


OP1-CRH III: Case Summary & Nine Largest Unsecured Creditors
------------------------------------------------------------
Debtor: OP1-CRH III, LP
        16352 Westheimer
        Houston, Tx 77082
        Tel: (713) 983-7800

Bankruptcy Case No.: 08-32737

Chapter 11 Petition Date: May 1, 2008

Court: Southern District of Texas (Houston)

Judge: Wesley W. Steen

Debtor's Counsel: Edgar A. Goldberg, Esq.
                  819 Lovett
                  Houston, TX 77006
                  Tel: (713) 629-5889
                  Email: egold56@sbcglobal.net

Total Assets: $2,700,000

Total Debts:  $3,046,199

Debtor's Nine Largest Unsecured Creditors:

   Entity                      Nature of Claim       Claim Amount
   ------                      ---------------       ------------
Series AGI Coachline Crossing  bank loan: value of   $1,640,000
of Appian. Group Investors DE, collateral:
LLC                            $2,700,000
Attn: Tom McHugh
900 Larkspur Landing Circle,
Ste. 100
Larkspur, CA 94939

Fehr Grossman Cox              trade debt            $44,135
7400 Fannin Ste. 950
Houston, TX 77054

Tierra Right of Way Services,  trade debt            $7,356
Ltd.
1575 East River Road
Tucson, AZ 85718

Curtis Lueck & Associates      trade debt            $6,660

Terrain Solutions, Inc.        trade debt            $3,700

Continental Ranch Community    trade debt            $2,584
Association

Professional Arch. Services of bank loan             $1,810
Tucson

Sign Up Sign Services          trade debt            $854

Cycomp Financial Group         bank loan             $100


ORLANDO POU: Case Summary & 8 Largest Unsecured Creditors
---------------------------------------------------------
Debtor: Orlando J. Salichs Pou
        Josianne M. Rossello Wirshing
        Estancias De Torrimar
        Calistemon 52
        Guaynabo, PR 00966

Bankruptcy Case No.: 08-02213

Chapter 11 Petition Date: April 10, 2008

Court: District of Puerto Rico (Old San Juan)

Debtor's Counsel: Wigberto Lugo Mender
                  (wlugo@lugomender.com)
                  Lugo Mender & Co.
                  Centro Internacional De Mercadeo
                  Rd 165 Torre 1 Suite 501
                  Guaynabo, PR 00968
                  Telephone (787) 707-0404

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

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

Debtor's 8 Largest Unsecured Creditors:

   Entity                      Nature of Claim       Claim Amount
   ------                      ---------------       ------------
First Bank                                           $2,492,533
P.O. Box 13817
San Juan, PR
00908-3817

Jesus Latalladi                                      $816,129
Bienteveo 15
Montehiedra SJ 00926

RG Premier Bankruptcy                                $78,000
P.O. Box 2510
Guaynado PR
00970-2510

Harley Davidson                Credit                $31,143
                               value of
                               collateral:
                               $30,000

                               value of              $13,773
                               collateral:
                               $12,000

Popular Auto                                          $24,000

Citibank                                              $8,000

Bank of America                                       $7,392

Macy's                                                $203


PACIFIC BAY: Fitch Slashes Rating on $6.317MM Notes to 'CCC'
------------------------------------------------------------
Fitch has affirmed one and downgraded four classes of notes issued
by Pacific Bay CDO, Ltd.  These rating actions are effective
immediately:

  -- $135,756,328 class A-1 notes affirmed at 'AAA';
  -- $64,000,000 class A-2 notes downgrade to 'BBB' from 'AAA',
     and removed from Rating Watch Negative;

  -- $36,000,000 class B notes downgrade to 'B' from 'AA', and
     removed from Rating Watch Negative;

  -- $6,317,500 class C notes downgrade to 'CCC' from 'A-', and
     removed from Rating Watch Negative;

  -- $17,000,000 class preference shares downgrade to 'CC' from      
     'BB-', and removed from Rating Watch Negative.

Pacific Bay is a collateralized debt obligation that closed on
Nov. 4, 2003 and is managed by Pacific Investment Management
Company LLC.  The reinvestment period ended in November 2005.  
Pacific Bay has a portfolio comprised primarily of subprime
residential mortgage-backed securities bonds (59.5%), Alternative-
A RMBS (8.5%), prime RMBS (6.1%), commercial mortgage-backed
securities (9.6%), and other structured finance assets.  Subprime
RMBS bonds of the 2003, 2004, and 2005 vintages account for
approximately 21.3%, 17.6%, and 14.8% of the portfolio,
respectively.  Subprime RMBS of vintages prior to 2003 represent
5.9% of the portfolio.  Alt-A RMBS of the 2003, 2004, and 2005
vintages represent 5.4%, 0.3%, and 2.8% of the portfolio,
respectively.

Fitch's rating actions reflect the significant collateral
deterioration within the portfolio, specifically subprime RMBS.  
Since Fitch's last review in September 2007, approximately 17.0%
of the portfolio has been downgraded net of upgrades, with 0.4% of
the portfolio currently on Rating Watch Negative.  Approximately
25.9% of the portfolio is now rated below investment grade.  The
74.13% of the portfolio rated above investment grade ('BBB-'and
above) more than covers the remaining balance of the class A-1
notes.

As of the most recent trustee report dated April 29, 2008, the
weighted average rating factor is 7.0 ('BBB/BBB-') and failing its
covenant of 4.5 ('BBB/BBB-').  Additionally, the class A/B
Interest Coverage Ratio at 108.0% is failing the covenant of
114.0% and the class C Interest Coverage Ratio at 104.5% is
failing the covenant of 110.0%.  As a result of these failures,
interest proceeds were used to cure the class A/B Interest
Coverage Test, and cutting off distributions to class C and the
preference shares for the May 2008 payment.

The ratings of the class A-1, A-2 and B notes address the
likelihood that investors will receive full and timely payments of
interest, as per the governing documents, as well as the stated
balance of principal by the legal final maturity date.  The rating
of the class C notes addresses the likelihood that investors will
receive ultimate and compensating interest payments, as per the
governing documents, as well as the stated balance of principal by
the legal final maturity date.  The rating of the preference
shares addresses the ultimate payment of a 2% yield per annum on
the preference share rated balance as well as the preference share
rated balance by the legal final maturity date.


PEOPLES COMMUNITY BANKCORP: BKD LLP Expresses Going Concern Doubt
-----------------------------------------------------------------
Cincinnati-based BKD, LLP, raised substantial doubt about the
ability of Peoples Community Bancorp, Inc., to continue as a going
concern after it audited the company's financial statements for
the year ended Dec. 31, 2007.  

The auditing firm reported that Peoples Community Bancorp has
suffered recurring losses from operations and will operate under
restrictions set forth by the formal agreements with the company's
and Bank's federal regulators, which result in uncertainty about
the company's ability to meet obligations coming due in 2008.

                             Net Loss

The company posted a net loss of $33.3 million for the year ended
Dec. 31, 2007, as compared with a net loss of $4.1 million in the
prior year.   The higher net loss was primarily due to an increase
of $15.4 million, or 88.0% in provision for loan losses and
goodwill impairment of $11.4 million.  In addition, the company
recorded a $5.2 million, or 18.0%, decrease in net interest
income, partially offset by an increase of $720,000, or 22.4%, in
other income and a $2.6 million increase in tax benefits.

                       Net Interest Income

Total interest income amounted to $60.2 million for the fiscal
year ended Dec. 31, 2007, a $5.2 million, or 8.0%, decrease over
the fiscal year ended Dec. 31, 2006.  The decrease was due to an
$82.0 million, or 8.5%, decrease in average interest-earning
assets, partially offset by a four basis point increase in the
average yield for the year ended Dec. 31, 2007, compared to the
year ended Dec. 31, 2006.

Net interest income decreased by $5.2 million, or 18.0%, during
the fiscal year ended Dec. 31, 2007, compared to fiscal year ended
Dec. 31, 2006.  The interest rate spread amounted to 2.53% for
fiscal 2007 compared to 2.84% for the year ended Dec. 31, 2006.  
The net interest margin totaled 2.69% and 3.00% for the fiscal
years ended Dec. 31, 2007, and 2006, respectively.

Interest rate spread represents the difference between the
weighted-average yield on interest-earning assets and the
weighted-average cost of interest-bearing liabilities.  Net
interest margin represents net interest income as a percentage of
average interest-earning assets.

                     Cease and Desist Orders

As disclosed in the the company's 2007 annual report, Peoples
Community Bank's primary federal regulator, the Office of Thrift
Supervision (OTS) has, in light of the company's recent losses and
levels of nonperforming assets, imposed certain operations
restrictions on the company and the Bank.

On April 2, 2008, the company and the Bank each consented to the
terms of Cease and Desist Orders issued by the OTS.  The Orders
require the company and the Bank to, among other things, file with
the OTS within proscribed time periods updated business plans,
which specifically incorporate the requirements set forth in the
Orders and comments contained in the most recently completed
examinations of the company and the Bank.  

In addition, the Orders require that the company and the Bank
receive the permission of the OTS prior to (i) making or declaring
any dividends or payments on their outstanding securities; (ii)
adding or replacing a director or hiring a senior executive
officer; and (iii) making any golden parachute payments to any
institution-affiliated party.  Pursuant to the Orders issued to
the company, the company must also receive the permission of the
OTS prior to increasing its debt position and before any
repurchase of its securities.

As required, the company and the Bank have filed a consolidated
business plan with the OTS covering operations through 2010.  The
company's business plan contemplates, among other things, a
consolidation of the company's operations through branch sales and
a reduction in adversely classified assets through loan
resolutions, repayments, sales and charge-offs.  

A full-text copy of the OTS Order to Cease and Desist with the
company dated April 2, 2008, is available for free at:

               http://researcharchives.com/t/s?2ba0  

A full-text copy of the OTC Order to Cease and Desist with the
Bank dated April 2, 2008, is available for free at:

               http://researcharchives.com/t/s?2ba1  

                      Liquidity Constraints

The company says that its $17.5 million obligation under an
outstanding line of credit is due June 30, 2008.  The line of
credit is secured by all outstanding shares of common stock of the
Bank.   

Without the ability to rely on dividends from the Bank, the
company will require funds from other funding sources to meet its
obligations such as restructuring the current line of credit or
replacing the current line of credit.  The company was not in
compliance with one of the loan covenants at Dec. 31, 2007, and
the lender has the ability to accelerate all outstanding amounts
upon notice and the passage of 30 days.  The company is currently
negotiating with the lender regarding a waiver of default, and a
modification and/or extension of the line of credit.

                          Balance Sheet

At Dec. 31, 2007, the company's balance sheet showed
$887.4 billion in total assets, $833.8 million in total
liabilities, and $53.6 million in total stockholders' equity.  

A full-text copy of the company's 2007 annual report is available
for free at: http://ResearchArchives.com/t/s?2b97  

                  About Peoples Community Bancorp

Peoples Community Bancorp, Inc., (NasdaqGM: PCBI) --
http://www.pcbionline.com/-- headquartered in West Chester, Ohio,  
is the holding company for Peoples Community Bank, a federally
chartered savings bank with 19 full service offices in Butler,
Warren and Hamilton counties in southwestern Ohio and Dearborn and
Ohio counties in southeastern Indiana.  

The Bank is an independent community bank, which offers a wide
variety of financial services and products to customers throughout
the Greater Cincinnati metropolitan area and adjoining markets.


PETROHAWK ENERGY: Announces $500 Million Offering of Senior Notes
-----------------------------------------------------------------
Petrohawk Energy Corporation reported that it intends to commence
a private placement offering to eligible purchasers of
approximately $500 million of Senior Notes due 2015.  Proceeds of
the offering are expected to be used to repay the outstanding
borrowings under its senior revolving credit facility, which,
together with cash provided by its concurrent offering of common
stock, will provide them additional financial flexibility to fund
its increased capital budget for the year ending Dec. 31, 2008 and
acquisitions.

The notes have not been registered under the Securities Act of
1933 or applicable state securities laws and may not be offered or
sold in the United States absent registration or an applicable
exemption from the registration requirements of the Securities Act
and applicable state laws.  The company plans to offer and issue
the notes only to qualified institutional buyers pursuant to Rule
144A under the Securities Act and to persons outside the United
States pursuant to Regulation S.

Petrohawk Energy Corporation (NASDAQ: HAWK) is an independent oil
and gas company engaged in the acquisition, development,
production and exploration of natural gas and oil properties
located in North America.  Petrohawk's properties are concentrated
in the East Texas/North Louisiana, Gulf Coast, South Texas,
Permian Basin, Anadarko and Arkoma regions.


PETROHAWK ENERGY: $1BB Add'l Capital Cues S&P to Hold 'B' Ratings
-----------------------------------------------------------------
Standard & Poor's Ratings Services affirmed its corporate credit
rating on Petrohawk Energy Corp. (B+/Stable/--) and its 'B' issue-
level rating on the company's senior unsecured debt.  At the same
time, S&P assigned a 'B' rating to a proposed new issue of
$500 million in seven-year unsecured senior notes.  Petrohawk's
unsecured recovery rating remains '5', indicating S&P's
expectation of modest (10% to 30%) recovery in the event of a
payment default.
     
The ratings affirmation follows the Houston-based independent
exploration and production firm's announcement that it will raise
$1 billion in additional capital through a concurrent $500 million
senior note issuance and a $500 million common stock offering.  
Petrohawk will use proceeds to fund its expanded 2008 capital
spending program and to refinance outstanding borrowings under its
revolving credit facility.
     
"We expect leverage metrics to remain largely unchanged after
these transactions," said Standard & Poor's credit analyst Jeffrey
Morrison.  "Near-term liquidity will improve," he explained.  "We
expect that Petrohawk will have full availability under its $1
billion credit facility as well as about $454 million in available
cash balances."

Pro forma for these transactions, Petrohawk will have just over
$1.5 billion in long-term debt.


PETROHAWK ENERGY: Moody's Assigns B3 Rating on $500MM Sr. Notes
---------------------------------------------------------------
Moody's assigned a B3 rating to Petrohawk Energy Corp. new
$500 million senior unsecured notes offering.  Simultaneously,
Moody's affirmed B2 corporate family rating, B2 probability of
default rating, and the B3 (LGD 5) senior unsecured notes rating
but changed the point estimate from 75% to 73% reflecting the
added senior unsecured debt in the capital structure.  Moody's
also upgraded the company's speculative grade liquidity rating to
SGL-2 from SGL-3.  The outlook remains stable.

Proceeds from the new notes along with at least $500 million from
a new equity offering will be used to repay borrowings under the
company's senior secured revolver ($535 million outstanding at
3/31/08), as well to fund the cash flow shortfall under a recently
expanded capital spending plan.  The company has announced that
its capex program is increasing from $800 million to about
$1.3 billion, resulting in a increased outspend of internal cash
flow for the year.  At least half of this increase is expected to
fund additional leasehold acquisitions, primarily in the company's
emerging Haynesville Shale play as it seeks to maintain its
leading position within the area.  

The balance of the increase will help fund increased drilling
activity with the intention of going to a five rig program by
year-end as the company attempts to prove up the play as well as
meet the shorter than historical time requirements to be able to
hold the acreage with production.

The B2 CFR continues to reflect the company's high leverage on its
PD reserves (above $13.00/boe pro forma for the offerings), which
is above the average level for the rating, as well as the need to
see evidence that HK's strategic shift to focus on growth from its
recently acquired undeveloped acreage in the Fayetteville Shale
and its emerging Haynesville Shale plays are meeting management's
expectations.  If successful, this transition could result in a
potentially lower risk reserve and production profile than the
very high decline Gulf Coast properties sold last year.

However, as HK works its way up the learning curves for these
plays, there is significantly increased execution risk embedded in
the company's strategy, particularly given the high debt levels
that partially funded the substantial up front capital invested to
acquire the prospective acreage.  While the Haynesville Shale
partly lies under the company's Elm Grove and Terryville
properties and provides the company with a first mover advantage,
the play is in its very early stages and will be the largest
component of HK's capital spending program this year.

In addition, the shale is a much deeper horizon, is more
technically challenging to drill, costs much more on a per well
basis.

The B2 also considers reflects HK's scale which is slightly larger
than the average for the single-B exploration and production peer
group, a more durable core productive base following the company's
transition away from the shorter lived Gulf Coast, and the steady
improvement in the company's cost structure.  The B2 also reflects
the ability and willingness to issue equity to fund its aggressive
capital spending plans.  Since the beginning of this year, the
company will have raised at least $800 million of proceeds from
new equity issuances which along with strong commodity prices
helps offset the company's still very high leverage.

The stable outlook assumes that leverage on the proven developed  
reserves will improve to levels more in line with the current
ratings in the face of the largest capital spending plan the
company has embarked on to date.  Pro forma for the acquisitions
and the new financings, debt/PD reserves will still be above
$13.00/boe, which is high for the B2 CFR rating and could be
pressured if the company's newly increased capital budget does not
produce results sufficient to keep leverage at or below current
levels.

However, a positive outlook and/or upgrade would be considered if
the company demonstrates that the significant spending has
resulted in the replacement of production with a balance of PD and
proven undeveloped reserves at competitive costs and that
sequential quarterly production trends reflect the impact of the
increased spending.  The outlook and ratings could also have
positive upward momentum if leverage on the PD reserves moves to
within $10/boe assuming that commodity prices remain supportive.

The upgrade of the speculative grade liquidity reflects the
enhanced liquidity position of the company pro forma for the
offerings.  While the company will outspend organic cashflow
through the remainder of 2008, the cash being raised from the
equity issuance combined with an expected $850 million borrowing
base (which includes a $100 million component that expires in
February 2009) revolver that is expected to be largely available
at closing of the new debt and equity offerings, will provide the
company with ample liquidity over the next twelve months.  

Pre-capex cash flows should increase in 2008 and range between
$700 million and $800 million, however, the company will have a
funding shortfall after covering interest expense, planned capital
expenditures, and working capital needs.  Moody's expects the
company to remain in compliance with the credit facility's
maintenance covenants, thus ensuring accessibility over the next
four quarters.  However, liquidity could be impacted if commodity
prices weaken and the company's revolver becomes subject to a
borrowing base re-determination.

Petrohawk Energy Corporation is headquartered in Houston, Texas.


PSEG ENERGY: Fitch Won't Take Rating Actions on IRS Disallowance
----------------------------------------------------------------
Fitch Ratings does not plan any immediate rating actions for
either Public Service Enterprise Group Inc. (PSEG, 'BBB+ IDR) or
PSEG Energy Holdings, L.L.C. (Holdings, 'BB+' IDR) following the
announcement by management that it may increase reserves related
to the Internal Revenue Service's disallowance of tax benefits
associated with certain lease transactions entered into by
Holdings.

Fitch currently rates both entities as:

PSEG
  -- IDR 'BBB+'.

Holdings
  -- IDR 'BB+'.

PSEG also announced that if it is unable to reach a settlement
agreement with the IRS, it may decide to pursue litigation as
early as 2008.  Previously, Fitch anticipated that a resolution
was unlikely before 2011.  While the potential tax exposure is
significant and the reserve could result in a material charge to
earnings, the amount, timing and funding of any cash payment
remains uncertain.  PSEG has sufficient liquidity to fund a worst
case payment scenario and if necessary, has the ability to absorb
a substantial increase in consolidated debt and maintain adequate
credit quality to support the existing ratings.  However, adding
any meaningful recourse debt at Holdings could adversely affect
its ratings.

Because PSEG files a consolidated tax return, the tax liability
belongs to PSEG.  However, management has indicated it will look
to Holdings to fund a portion of any payment obligation.  
Potential funding sources include proceeds from the expected sale
of SAESA, an electric distribution company in Chile, new project
debt at Holdings' generating facilities in Texas, new corporate
debt within the PSEG group and cash.

Based on disclosure in the 10K for the year ended Dec. 31, 2007,
if all tax benefits associated with these transactions are
disallowed, $878 million of tax benefits recorded through Dec. 31,
2007, would become currently payable plus interest and penalties
of approximately $179 million and $169 million, respectively.  The
decision to consider increasing reserves results from two recent
court cases involving leveraged leases decided in the favor of the
government.


QUAIL LAKE: Files Schedules of Assets and Liabilities
---------------------------------------------------------
Quail Lake Estates Associates, LP delivered to the United States
Bankruptcy Court for the Northern District of California its
schedules of assets and liabilities disclosing:

   Name of Schedule                   Assets      Liabilities
   ----------------                -----------    -----------
   A. Real Property                $23,100,000
   B. Personal Property                 10,239    
   C. Property Claimed
      as Exempt
   D. Creditors Holding                           $22,532,688
      Secured Claims
   E. Creditors Holding                                     0
      Unsecured Priority
      Claims
   F. Creditors Holding                             1,013,086
      Unsecured Nonpriority
      Claims
                                   ------------   -------------
      TOTAL                         $23,110,239   $23,545,774

Based in Emeryville, California, Quail Lake Estates Associates, LP
filed for Chapter 11 protection on Mar. 18, 2008 (Bankr. N.D.
Calif. Case No. 08-41296).  James D. Wood, Esq. represents the
Debtor in its restructuring efforts.  When the Debtor filed for
protection from its creditors, it listed estimated assets and
debts both between $10 million and $50 million.


QUAKER FABRIC: Court Moves Exclusive Plan Filing Period to May 19
-----------------------------------------------------------------
The Honorable Keven Gross of the U.S. Bankruptcy Court for the
District of Delaware extended Quaker Fabric Corporation and its
debtor-affiliates' exclusive periods to:

   a) file a Chapter 11 plan until May 19, 2008; and

   b) solicit acceptances of that plan until July 17, 2008.

Joseph M. Barry, Esq., at Young Conaway Stargartt & Taylor LLP
in Wilmington, Delaware, say that the Debtors and the Official
Committee of Unsecured Creditors are ironing out the last details
of the proposed joint Chapter 11 plan of liquidation.

The Debtors and the Committee, Mr. Barry says, were unable to
finalize the proposed plan before the Debtors' initial exclusive
rights to file a plan expired on Feb. 18, 2008.

According to the Debtors' motion, most of their assets were sold
in September 2007.  The Debtors say that Atlantis Charter School
purchased undeveloped 66 acres of real estate located in Fall
River, Massachusetts for $2.6 million; E&E Co., Ltd., bought
Tupelo Lee Industrial Park in Verona, Mississippi for $175,000;
and Gordon Brothers Group LLC acquired substantially all of the
Debtors' other assets for $27 million.

The Debtors say to Judge Gross that they trimmed down their
personnel to four since Aug. 16, 2007.

                      About Quaker Fabric

Based in Fall River, Mass., Quaker Fabric Corp. (NASDAQ: QFAB)
-- http://www.quakerfabric.com/-- designs, manufactures, and
markets woven upholstery fabrics primarily for residential
furniture manufacturers and jobbers.  It also develops and
manufactures specialty yarns, including chenille, taslan, and spun
products for use in the production of its fabrics, as well as for
sale to distributors of craft yarns, and manufacturers of
homefurnishings and other products.  The company is one of the
largest producers of Jacquard upholstery fabrics.

Quaker Fabric sells its products through sales representatives
andindependent commissioned sales agents in the United States,
Canada, Mexico, and internationally.

The company and its affiliate, Quaker Fabric Corporation of Fall
River, filed for chapter 11 protection on Aug. 16, 2007 (Bankr. D.
Del. Case No. 07-11146).  John D. Sigel, Esq. at Wilmer Cutler
Pickering Hale and Dorr LLP and Joel A. Waite, Esq. at Young
Conaway Stargatt & Taylor LLP are co-counsels to the Debtors.  
Epiq Bankruptcy Solutions is the Debtors' claims agent.  The
Official Committee of Unsecured Creditors has selected Shumaker,
Loop & Kendrick, LLP, as its bankruptcy counsel and Benesch,
Friedlander, Coplan & Aronoff, LLP, as co-counsel.

The Debtors' schedules reflect total assets of $41,375,191 and
total liabilities of $54,435,354.


QUEBECOR WORLD: Seeks Extension of the CCAA Stay Until July 25
--------------------------------------------------------------
Quebecor World Inc. and its affiliates ask the Quebec Superior
Court of Justice to:

   -- extend the stay under the the Companies' Creditors
      Arrangement Act to July 25, 2008, and

   -- amend the Initial Order to (i) align the provisions
      relating to the debtor-in-possession financing with those
      of the US Final DIP Order and (ii) provide adequate
      protection to the Chief Restructuring Officer recently
      appointed by Quebecor World, Inc.  

Ernst & Young, Inc., the Court-appointed monitor, relates that
pursuant to the Order of the Superior Court dated February 19,
2008, the stay period expires on May 12, 2008.  E&Y asserts that
extension of the stay period is necessary for the Applicants to
complete their revised business plans, present the business plans
to the Committees, and commence negotiations with the Committees
and the other stakeholders.  E&Y adds that all of this must occur
in order for the Applicants to be in a position to fully develop
a plan or plans of compromise or arrangement.

E&Y notes that the Applicants continue to provide their
regulatory financial reports, as well as prepare information
required in relation to the U.S. Proceedings and respond to the
requests of the Committees.  According to E&Y, the Applicants
will also need to turn their attention to the preparation of a
liquidation analysis as plans of reorganization or arrangement
are being developed.

To ensure consistency between the administration of the U.S. and
Canadian proceedings, E&Y says, it is necessary that the
provisions of the Initial Order relating to the DIP Financing be
aligned with the US Final DIP Order.

E&Y states that the key changes to the Initial Order, which have
been reviewed and discussed with the advisors and the creditors'
committees, deal with:

   (a) the exchange of information between major stakeholders;

   (b) the amendment process applicable to the DIP Credit     
       Agreement;

   (c) the intercompany claims between Applicants, secured by a
       court ordered intercompany charge ranking after the CCAA     
       Charges, the Bank Syndicate Security, the SocGen Security,
       and any other claims and Encumbrances expressly senior to,
       or on priority with, each of the CCAA Charges;

   (d) transfers of property by Applicants to Non-Applicant
       Affiliates;

   (e) the tracking of the intercompany claims and transfers of    
       property; and

   (f) the payment of pre-filing debts.

The Applicants also want the Initial Order to include details of
the indemnity of Randall C. Benson as Chief Restructuring
Officer.

A full-text copy of the proposed Revised Initial Order is
available for free at http://ResearchArchives.com/t/s?2ba7.

E&Y anticipates that the Applicants will be back before the
Superior Court on a number of occasions during the proposed
extension period.

                      About Quebecor World

Based in Montreal, Quebec, Quebecor World Inc. (TSX: IQW) (NYSE:
IQW), -- http://www.quebecorworldinc.com/-- provides market
solutions, including marketing and advertising activities, well
as print solutions to retailers, branded goods companies,
catalogers and to publishers of magazines, books and other
printed media.  It has 127 printing and related facilities
located in North America, Europe, Latin America and Asia.  In
the United States, it has 82 facilities in 30 states, and is
engaged in the printing of books, magazines, directories, retail
inserts, catalogs and direct mail.

The company has operations in Mexico, Brazil, Colombia, Chile,
Peru, Argentina and the British Virgin Islands.

Quebecor World and 53 of its subsidiaries, including those in
Canada, filed a petition under the Companies' Creditors
Arrangement Act before the Superior Court of Quebec, Commercial
Division, in Montreal, Canada, on Jan. 20, 2008.  The Honorable
Justice Robert Mongeon oversees the CCAA case.  Francois-David
Pare, Esq., at Ogilvy Renault, LLP, represents the Company in
the CCAA case.  Ernst & Young Inc. was appointed as Monitor.

On Jan. 21, 2008, Quebecor World (USA) Inc., its U.S.
subsidiary, along with other U.S. affiliates, filed for chapter
11 bankruptcy on Jan. 21, 2008 (Bankr. S.D.N.Y Lead Case No. 08-
10152).  Anthony D. Boccanfuso, Esq., at Arnold & Porter LLP
represents the Debtors in their restructuring efforts.   The
Official Committee of Unsecured Creditors is represented by Akin
Gump Strauss Hauer & Feld LLP.

Based in Corby, Northamptonshire, Quebecor World PLC --
http://www.quebecorworldplc.com/-- is the U.K. subsidiary of
Quebecor World Inc. that specializes in web offset magazines,
catalogues and specialty print products for marketing and
advertising campaigns.  The company employs around 290 people.
Quebecor PLC was placed into administration with Ian Best and
David Duggins of Ernst & Young LLP appointed as joint
administrators effective Jan. 28, 2008.

As of Sept. 30, 2007, Quebecor World's unaudited consolidated
balance sheet showed total assets of US$5,554,900,000, total
liabilities of US$3,964,800,000, preferred shares of
US$175,900,000, and total shareholders' equity of
US$1,414,200,000.

The company has until May 20, 2008, to file a plan of
reorganization in the Chapter 11 case.  The Debtors' CCAA stay
has been extended to May 12, 2008.  (Quebecor World Bankruptcy
News, Issue No. 10; Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000)

                           *     *     *

As reported in the Troubled Company Reporter-Europe on Feb. 13,
2008 Moody's Investors Service assigned a Ba2 rating to the
US$400 million super priority senior secured revolving term loan
facility of Quebecor World Inc. as a Debtor-in-Possession.  The
related US$600 million super priority senior secured term loan
was rated Ba3 (together, the DIP facilities).  The RTL's better
asset value coverage relative to the TL accounts for the
ratings' differential.


QUEBECOR WORLD: Ernst & Young Reports Updates on CCAA Proceedings
-----------------------------------------------------------------
Ernst & Young, Inc., monitor of Quebecor World Inc. and certain of
its affiliates' bankruptcy proceedings under the Companies'
Creditors Arrangement Act, presented its report to the Quebec
Superior Court of Justice with respect to the activities of the
companies and certain events occurring since April 15, 2008.

                    Stabilization Procedures

(a) Overview

E&Y relates that as of May 6, the U.S. Petitioners have disbursed
approximately $11,600,000 in relation to prepetition warehousing
and shipping charges and continue to work with the vendors in
this category.  A revised estimate of $21,000,000 has been
developed for the prepetition payables in this category.  The
original estimate was $15,000,0000 to $20,000,000.  

According to E&Y, discussions with suppliers to re-establish
supply arrangements and to negotiate credit terms wherein
suppliers will provide goods and services during the stay period
are ongoing particularly with respect to the reduction in the
number of manual payments required as creditors in general are
being paid on a more regular basis.

(b) Banking

Despite the deposit of C$20,000,000 to a segregated account at
Canadian Imperial Bank of Commerce to indemnify CIBG from
potential exposure as the Applicants' Canadian bank services
provider, the Applicants have been unable to benefit from all of
the banking services previously provided prepetition.  E&Y says
the reimplementation of these services would both reduce the
level of manual transactions currently performed by the
Applicants' accounting and treasury personnel and improve
relationships with certain suppliers by permitting the Applicants
to more efficiently manage its restricted credit limits.  The
Applicants are in discussion with CIBG to reduce the  
C$20,000,000 held in the segregated account, widen the CIBC's
services offered, and explore alternative solutions to reduce the
levels of redundant work being done by their personnel.

As previously reported, the Applicants opened a cash account at
Bank of America, their existing provider of U.S. Banking
services, to hold proceeds realized from the disposition of QW
Memphis Corp. inventory held on site as of January 21, 2008, as
prepetition collateral for the benefit of the Bank Syndicate.  
The Applicants deposited an initial $20,000,000 into the QW
Memphis Collateral Account.  In accordance with the Applicants'
agreement with the Bank Syndicate, further deposits totaling
$10,000,000 have been deposited into the account.  As May 6,
2008, the QW Memphis Collateral Account has a balance of
$30,000,000.

(c) Inter-Company Transactions

The inter-company transactions have been limited to the automatic
centralized accounting transfer of accounts payable and accounts
receivable, funding of EUR13,000,000 to Europe and $6,000,000 to
Latin America as authorized by the Initial Order and the Final
DIP Order, and certain postpetition transactions in the ordinary
course of business.

(d) 2007 Financial Statements and Reporting Issues

E&Y says that the Companies expect to release their quarterly
financial statements for the three-month period ended March 31,
2008, on May 14, 2008.

The Applicants intend to deliver to the U.S. Trustees their
Monthly Operating Report for the period January 21 to February 2
and February 3 to March 1 by mid-May, and the Monthly Operating
Report for the month of March 2008 by May 30, 2008.

The Applicants are also working on the preparation of the
Schedules of Assets and Liabilities and Statement of Financial
Affairs for each of the U.S. Petitioners.  These statements and
schedules are currently required to be completed and filed in the
U.S. Proceedings by June 4, 2008.

                          DIP Financing

When the Applicants received the $600,000,000 Term Loan Facility
on January 24, 2008, based on the financial information available
at the time, the Applicants allocated $108,200,000 of this amount
to the Canadian operations and $491,800,000 to the U.S.
Petitioners.

The Applicants have made a number of payments that have reduced
the amount of DIP Proceeds available to the Canadian operations,
including:

   * funding the Latin American Operations -- $6,000,000;
   * funding the European Operations -- EUR13,000,000; and
   * funding of CIBG collateral account -- C$20,000,000.

As a result of funding these non-operational transactions, on
April 21, 2008, QWI drew C$20,000,000 on the Revolving Loan
Facility to fund the ongoing operations of QWI.  As the U.S.
Debtors had excess available cash from the Term Loan Facility of
approximately $154,200,000 on May 4, 2008, the Applicants are
reviewing the options available to use the funds already drawn on
the Term Loan Facility and allocated to the U.S. Debtors prior to
using the Revolving Loan Facility.  According to E&Y, it is
economically unsound for the Applicants to be borrowing funds
from the Revolving Loan Facility in one jurisdiction while it has
excess cash available in the other.  Two options were drawn to
address this situation:

   (a) Obtain the authorization from the DIP Lenders to modify
       the initial allocation of the Term Loan Facility between
       the Canadian and U.S. operations; or

   (b) Make an inter-company loan from the U.S. Debtors to QWI,
       on terms to be negotiated.

The Applicants are in discussions with the Committees and the DIP
Lenders in respect of these two options.

      Current Financial Performance and Cash Flow Forecast

(1) Cash Flow Results for the Five Weeks Ended April 27, 2008

    E&Y reports that the consolidated North American operations
    of the Applicants produced negative cash flow of $37,000,000,
    approximately $59,000,000 better than the projected for the
    same period in the cash flow forecast prepared by the
    Applicants.  The $59,000,000 favorable variance includes a
    $20,000,000 draw of the Revolving Loan Facility.  According
    to E&Y, management advised that the favorable variance is
    attributable to a number of factors including higher than
    projected accounts receivable collections, drawings on the
    Revolving Loan Facility, and a deferral of the funding of the
    European and Latin American non-petitioners' financing
    requirements.  E&Y relates that the favorable variance
    resulting from these factors was partially offset by
    "catch-up" payments reducing the level of post-filing
    accounts payable which accumulated as a result of the delays
    encountered in the post-filing processing of supplier
    payments.

    A copy of the actual cash flow results and the variances from
    the cash flow forecast for the five weeks ended April 27,
    2008 is available for free at

              http://ResearchArchives.com/t/s?2ba3

(2) Cash Flow Forecast for the 13 Weeks Ending July 27, 2008

    To assist their short term financial performance and ongoing
    financing requirements during the restructuring proceedings,
    the Applicants have prepared a revised cash flow forecast for
    the 13 weeks ending July 27, 2008.  E&Y says that the Revised
    Cash Flow Forecast reflects management's expectations that
    the consolidated North American operations will incur  
    negative cash flow of $89,000,000 during the period.  

    The Applicants had an unrestricted cash balance of
    $123,000,000 at April 27, 2008 and, as a result of the
    granting of the Final DIP Order on April 1, 2008, have full
    access to the Revolving Loan Facility totaling $400,000,000.  
    The liquidity available to the Applicants is currently
    $343,000,000 and is forecasted to be at least $279,000,000
    throughout the requested extension period of the stay of
    proceedings.  According to E&Y, the Companies do not require
    any further advances on the Revolving Loan Facility and
    appear to have sufficient financing to operate their
    businesses during the CCAA and Chapter 11 proceedings.

                    Quebecor World Inc., et al.
           Consolidated North American Cash Flow Forecast
            For the Thirteen Weeks Ending July 27, 2008

   RECEIPTS
      Accounts Receivable Collections              $960,000,000    
      Sale of Assets                                 12,000,000
      DIP Advances                                            -
                                                   ------------
      Total Receipts                                972,000,000
                                                   ------------
   DISBURSEMENTS                                    
      Paper and Other Purchases                    (539,000,000)
      Ink Purchases                                 (67,000,000)
      Change in Outstanding Cheques                           -
      Customer Rebates                              (13,000,000)
      Payroll, Benefits, and Payroll Taxes         (292,000,000)
      Workers Compensation Premiums                           -
      Pension Contributions                          (2,000,000)
      Professional Fees                             (19,000,000)
      Capital Expenditures                          (48,000,000)
      DIP Repayments                                          -
      DIP Fees and Interest                         (11,000,000)
      Other Disbursements                           (26,000,000)
                                                  -------------
      Total Disbursements                        (1,017,000,000)
                                                  -------------
   Net Cash Flow from Operations                    (45,000,000)
   DIP Advances/ (Repayments)                       (20,000,000)
   Estimated Non-Petitioners Financing Requirement  (29,000,000)
   Cash Collateral Paid                               5,000,000
                                                  -------------
   NET CASH FLOW                                    (87,000,000)
   Opening Unrestricted Cash Position               123,000,000
                                                  -------------
   CLOSING UNREGISTERED CASH POSITION                34,000,000
   Cash Collateral Held by Cash Management Bank      45,000,000
                                                  -------------
   Total Cash Position                              $79,000,000
                                                  =============

   A full-text copy of the Revised Cash Flow Forecast is
   available for free at http://ResearchArchives.com/t/s?2ba2

                           Governance

On March 26, 2008, the Restructuring Committee hired Randall C.
Benson to act as Quebecor World Inc.'s Chief Restructuring
Officer.  

The Restructuring Committee considered these criteria as basis
for hiring the new CRO:

   (a) Business background, experience and qualifications;

   (b) Ability to work effectively with the Applicants'
       management team;

   (c) Input received from stakeholders, the Applicants' advisors
       and the Monitor;

   (d) Objectivity and ability to act in the best interests of
       all stakeholders; and

   (e) Terms of engagement.

Mr. Benson's engagement letter is between RC Benson Consulting
Inc. and QWI.  The engagement commenced on March 26, 2008.  The
Monitor reviewed the terms of engagement of Mr. Benson and is
satisfied that the economic terms are competitive and appropriate
in the circumstances.

Mr. Benson's engagement letter requires QWI to seek a Court order
which provides that the CRO be entitled to the benefit of the
Administration Charge, for any indemnity or unpaid fees and
expenses, ranking pari passu with the fees and disbursements of
the Monitor, legal counsel and other advisors entitled to the
benefit.

As CRO to Quebecor World, Inc., Mr. Benson is expected to:

   (a) advise, assist and provide direction to QWI in the    
       development of a restructuring plan or plans for    
       presentation to creditors and other stakeholders;

   (b) evaluate and present strategic alternatives for
       operational and financial restructuring;

   (c) manage processes involving creditors, the Monitor and
       other stakeholders;

   (d) establishing a work plan for the restructuring and
       reporting to the Restructuring Committee; and

   (e) act with the CEO as the main spokespersons for QWI in any
       communication with its stakeholders in connection with the
       restructuring.

                   Status of European Operations

The Applicants continue to assess their alternatives with respect
to the European operations with the assistance of their advisors.  
As of May 6, the Applicants have transferred EUR13,000,000 to
finance its European operations.

                Operations in the United Kingdom

E&Y relates that the firm of GVA Grimely has been retained to
market and sell the QW UK fixed assets.  Ian Best and David
Duggins of Ernst & Young UK estimate that the overall process,
including the disassembly and removal of equipment, will not be
completed until the end of 2008.  The sale of the assets is
continuing.  An auction for one of the plants has been scheduled
for June 4, 2008.

E&Y says that QW UK has accounts payable of approximately
GBP70,000,000, of which GBP41,000,000 are for pension-related
obligations and GBP15,000,000 are for intercompany payables.   
Messrs. Best and Duggins' preliminary estimate of recovery to the
unsecured creditors ranges between 18% and 25%.

            Preparation of Restructuring Business Plan

E&Y says management currently expects that the preparation of the
five-year business plans will be completed by the end May and
anticipates presenting it to the financial advisors, and the
Committees in early June.

                      About Quebecor World

Based in Montreal, Quebec, Quebecor World Inc. (TSX: IQW) (NYSE:
IQW), -- http://www.quebecorworldinc.com/-- provides market
solutions, including marketing and advertising activities, well
as print solutions to retailers, branded goods companies,
catalogers and to publishers of magazines, books and other
printed media.  It has 127 printing and related facilities
located in North America, Europe, Latin America and Asia.  In
the United States, it has 82 facilities in 30 states, and is
engaged in the printing of books, magazines, directories, retail
inserts, catalogs and direct mail.

The company has operations in Mexico, Brazil, Colombia, Chile,
Peru, Argentina and the British Virgin Islands.

Quebecor World and 53 of its subsidiaries, including those in
Canada, filed a petition under the Companies' Creditors
Arrangement Act before the Superior Court of Quebec, Commercial
Division, in Montreal, Canada, on Jan. 20, 2008.  The Honorable
Justice Robert Mongeon oversees the CCAA case.  Francois-David
Pare, Esq., at Ogilvy Renault, LLP, represents the Company in
the CCAA case.  Ernst & Young Inc. was appointed as Monitor.

On Jan. 21, 2008, Quebecor World (USA) Inc., its U.S.
subsidiary, along with other U.S. affiliates, filed for chapter
11 bankruptcy on Jan. 21, 2008 (Bankr. S.D.N.Y Lead Case No. 08-
10152).  Anthony D. Boccanfuso, Esq., at Arnold & Porter LLP
represents the Debtors in their restructuring efforts.   The
Official Committee of Unsecured Creditors is represented by Akin
Gump Strauss Hauer & Feld LLP.

Based in Corby, Northamptonshire, Quebecor World PLC --
http://www.quebecorworldplc.com/-- is the U.K. subsidiary of
Quebecor World Inc. that specializes in web offset magazines,
catalogues and specialty print products for marketing and
advertising campaigns.  The company employs around 290 people.
Quebecor PLC was placed into administration with Ian Best and
David Duggins of Ernst & Young LLP appointed as joint
administrators effective Jan. 28, 2008.

As of Sept. 30, 2007, Quebecor World's unaudited consolidated
balance sheet showed total assets of US$5,554,900,000, total
liabilities of US$3,964,800,000, preferred shares of
US$175,900,000, and total shareholders' equity of
US$1,414,200,000.

The company has until May 20, 2008, to file a plan of
reorganization in the Chapter 11 case.  The Debtors' CCAA stay
has been extended to May 12, 2008.  (Quebecor World Bankruptcy
News, Issue No. 10; Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000)

                           *     *     *

As reported in the Troubled Company Reporter-Europe on Feb. 13,
2008 Moody's Investors Service assigned a Ba2 rating to the
US$400 million super priority senior secured revolving term loan
facility of Quebecor World Inc. as a Debtor-in-Possession.  The
related US$600 million super priority senior secured term loan
was rated Ba3 (together, the DIP facilities).  The RTL's better
asset value coverage relative to the TL accounts for the
ratings' differential.


RECYCLED PAPER: Payment Default Cues Moody's to Cut Rating to Caa3
------------------------------------------------------------------
Moody's Investors Service lowered Recycled Paper Greetings, Inc.'s
ratings, including the corporate family rating to Caa3 and the
probability of default rating to Caa3/LD.  The ratings had
previously been Caa2, under review for downgrade.  In addition,
Moody's lowered the company's senior secured (1st lien) debt
ratings to Caa2 and the second lien term loan to Ca.  These rating
actions follow the company's 2nd lien payment default under its
credit agreement.

As a result, Moody's has changed the PDR to reflect both the
ongoing high probability of default for the non-defaulted
instruments as well as the payment default for the 2nd lien debt.  
The company has received forbearance regarding the interest
payment for the 2nd lien debt, although Moody's still
characterizes this missed payment as a default given the company's
failure to pay in accordance within stated terms and the likely
avoidance of a restructuring (potentially of all of its
obligations, which may still occur) in the absence of receiving
the waiver.

Based largely on uncertainties with respect to how the default
event may be cured, including the potential injection of
additional new equity capital and/or conversion of a portion of
existing debt into equity, all ratings now remain under review
with an uncertain direction.  The review is expected to be
concluded once senior management of the company and its private
equity sponsor complete their negotiations with lenders.

Any positive momentum to the ratings will be contingent upon
future flexibility under the credit agreement and the proportion
of new equity contributed by the sponsor.  Lower ratings will
reflect concerns regarding ultimate recovery.

Ratings lowered and under review direction uncertain:

  -- Corporate family rating to Caa3 from Caa2;
  -- Probability-of-default rating to Caa3/LD from Caa2;
  -- $20 million first lien senior secured revolving credit
     facility due 2010, to Caa2 (LGD2, 29%) from B3 (LGD2, 29%);
  -- $109 million first lien senior secured term loan due 2011, to
     Caa2 (LGD2, 29%) from B3 (LGD2, 29%);

  -- $80 million second lien senior secured term loan due 2012, to
     Ca (LGD5, 83%), from Caa3 (LGD5, 83%)

Recycled Paper Greetings, Inc., based in Chicago, IL, designs,
manufactures, and distributes greetings cards and social
expression products throughout the U.S. and Canada.  RPG is the
third largest greeting card company in North America, focusing on
contemporary and humorous greeting cards.  The company started as
a supplier to independent card stores, but now also supplies the
mass merchandising channel.


REFCO INC: TH Lee Partners, et al., Want Access to Secret Docs
--------------------------------------------------------------
Thomas H. Lee Partners L.P., Grant Thornton LLP, and Mayer Brown
LLP seek access to documents and transcripts that have been made
available to Marc S. Kirschner, the Trustee for the Litigation
Trust and Private Actions Trust of Refco, Inc., and its affiliates
and subsidiaries.  T.H. Lee, et al., ask the U.S. Bankruptcy Court
for the Southern District of New York for relief from the first
amended protective order governing the production and use of
confidential material, dated March 19, 2007.

T.H. Lee, et al., are parties to several litigations commenced by
the Litigation Trustee, that are presently pending before the
Judge Gerard E. Lynch in the United States District Court for the
Southern District of New York.

Discovery in litigations is ongoing on a coordinated basis,
pursuant to a deposition protocol.  As in the proceedings in the
Bankruptcy Court, the treatment of confidential documents
produced in the Litigations is governed by the amended
stipulation and agreed confidentiality order dated February 8,
2008.  The Confidentiality Order provides that all confidential
discovery materials in the possession of any party may only be
used for purposes of those actions, and disclosed only to
specified recipients.

According to Richard A. Rosen, Esq., at Paul, Weiss, Rifkind,
Wharton & Garrison LLP, in New York, although the March 19
Protective Order provides for the relief sought by T.H. Lee, et
al., they have been unable to obtain access to the relevant
documents and transcripts.  He notes that The Litigation Trustee
has access to materials produced to the Official Committee of
Unsecured Creditors and the Bankruptcy Court-appointed Examiner.

Mr. Rosen insists that T.H. Lee, et al., require access to all
documents and other materials available to the Litigation
Trustee.  T.H. Lee, et al., have attempted to work with the
Litigation Trustee, as well as the individuals and entities whose
materials are in question, to gain access.  However, the
Litigation Trustee had contended that the Protective Order
prevents him from disclosing the relevant materials.

Consequently, T.H. Lee, et al., contacted the individual parties
and sought their consent.  Several parties have agreed to
disclosure, and the remaining parties, except one, have failed to
respond to the direct requests for disclosure.  Specifically,
Beckenham Trading Co., Deerhurst Management Co., Inc., EMF
Financial Products/Delta Flyer Fund, Northbridge Capital
Management, Inc., Coast Asset Management, McDermott, Will &
Emery, Edward McElwreath/Sean O'Shea, Frank Mutterer, Stephen
Grady, David Weaver, Sukhmeet Dhillon, Eric Lipoff, and Thomas
Dittmer have failed to respond to the request.  BAWAG has
objected to the disclosure.

Mr. Rosen maintains that the Withholding Parties do not face any
prejudice or burden by the limited disclosure requested.  T.H.
Lee, et al., seek only to use the documents and transcripts in a
manner consistent with the Confidentiality Order, in connection
with the Litigations.

T.H. Lee, et al., assert that they are not imposing any
additional burden to the Withholding Parties, and ask the
Bankruptcy Court to grant them access to the confidential
material.

A hearing to consider T.H. Lee, et al.'s request will be held at
10:00 a.m. on May 13, 2008, before U.S. Bankruptcy Judge Robert
Drain.

                         About Refco

Based in New York, Refco Inc. -- http://www.refco.com/-- is a
diversified financial services organization with operations in
14 countries and an extensive global institutional and retail
client base.  Refco's worldwide subsidiaries are members of
principal U.S. and international exchanges, and are among the
most active members of futures exchanges in Chicago, New York,
London and Singapore.  In addition to its futures brokerage
activities, Refco is a major broker of cash market products,
including foreign exchange, foreign exchange options, government
securities, domestic and international equities, emerging market
debt, and OTC financial and commodity products.  Refco is one of
the largest global clearing firms for derivatives.

The Company and 23 of its affiliates filed for chapter 11
protection on Oct. 17, 2005 (Bankr. S.D.N.Y. Case No. 05-60006).
J. Gregory Milmoe, Esq., at Skadden, Arps, Slate, Meagher & Flom
LLP, represent the Debtors in their restructuring efforts.  Luc
A. Despins, Esq., at Milbank, Tweed, Hadley & McCloy LLP,
represents the Official Committee of Unsecured Creditors.  Refco
reported US$16.5 billion in assets and US$16.8 billion in debts
to the Bankruptcy Court on the first day of its chapter 11
cases.

The Court confirmed the Modified Joint Chapter 11 Plan of
Refco Inc. and certain of its direct and indirect subsidiaries,
including Refco Capital Markets Ltd. and Refco F/X Associates
LLC, on Dec. 15, 2006.  That Plan became effective on
Dec. 26, 2006.


REFCO INC: Claim Transfers Between Feb. 13 and May 2, 2008
----------------------------------------------------------
The clerk of the U.S. Bankruptcy Court for the Southern District
of New York recorded 22 transfer agreements between February 13,
2008, and May 2, 2008, in Refco Inc. and its debtor-affiliates'
chapter 11 cases.

Nomura International PLC and Ixis Corporate & Investment Bank
transferred Claim No. 11906 and Claim No. 11909, for undisclosed
amounts, to Hain Capital Holdings, Ltd.  Russian Investors
Securities Limited also assigned its claim to Dicomax
International, Inc.  Additionally, Refco Diversified Futures
transferred Claim No. 9455 to Hain Capital Holdings, LLC.

Wayzata Recovery Fund, LLC, transferred three claims to to Bear
Stearns Investment Products, Inc.:


             Claim No.         Claim Amount
             ---------         ------------
               11488               $335,861
               11448                335,861
               11451                652,991

Wayland Distressed Opportunities Fund 1-C, LLC, and Wayland
Distressed Opportunities Fund 1-B, LLC, also assigned five claims
to Bear Stearns:

             Claim No.         Claim Amount
             ---------         ------------
               11444                129,683
               11445                134,114
               11446                191,208
               11447             $4,568,101
               11449              1,718,015

Bear Stearns transferred Claim Nos. 11444, 11445, 11446, 11447,
11448, 11449, and 11451, for $3,367,176 and $4,362,796,
respectively to Aurelius Capital Master, Ltd., and Aurelius
Capital Partners, LP.

Claims Liquidation Corporation transferred three claims to
Canpartners Investments IV, LLC:

             Claim No.         Claim Amount
             ---------         ------------
               13000             $2,254,401
               13002                381,055
               13277              2,466,623

Strategic Investment Tribes Fund SPC assigned Claim No. 6868 for
$1,494,523 to APS Capital Corp.  SPCP Group LLC also assigned
Claim No. 9870 for $4,140,761 to APS Capital.  APS Capital
subsequently transferred Claim No. 9870, to ALJ Capital I, L.P.,
for $719,170, and to ALJ Capital II, L.P., for $3,421,595.

                          About Refco

Based in New York, Refco Inc. -- http://www.refco.com/-- is a
diversified financial services organization with operations in
14 countries and an extensive global institutional and retail
client base.  Refco's worldwide subsidiaries are members of
principal U.S. and international exchanges, and are among the
most active members of futures exchanges in Chicago, New York,
London and Singapore.  In addition to its futures brokerage
activities, Refco is a major broker of cash market products,
including foreign exchange, foreign exchange options, government
securities, domestic and international equities, emerging market
debt, and OTC financial and commodity products.  Refco is one of
the largest global clearing firms for derivatives.

The Company and 23 of its affiliates filed for chapter 11
protection on Oct. 17, 2005 (Bankr. S.D.N.Y. Case No. 05-60006).
J. Gregory Milmoe, Esq., at Skadden, Arps, Slate, Meagher & Flom
LLP, represent the Debtors in their restructuring efforts.  Luc
A. Despins, Esq., at Milbank, Tweed, Hadley & McCloy LLP,
represents the Official Committee of Unsecured Creditors.  Refco
reported US$16.5 billion in assets and US$16.8 billion in debts
to the Bankruptcy Court on the first day of its chapter 11
cases.

The Court confirmed the Modified Joint Chapter 11 Plan of
Refco Inc. and certain of its direct and indirect subsidiaries,
including Refco Capital Markets Ltd. and Refco F/X Associates
LLC, on Dec. 15, 2006.  That Plan became effective on
Dec. 26, 2006.


RESIDENTIAL CAPITAL: To Get $750 Mil. Bailout from GM & Cerberus
----------------------------------------------------------------
GMAC LLC, both owned by General Motors Corp. and Cerberus Capital
Management LP, is currently negotiating to provide a new 2-year
$3.5 billion senior secured credit facility to its wholly owned
subsidiary Residential Capital LLC, which would be conditioned on
successful completion by ResCap of a debt tender and exchange
offer for its outstanding unsecured notes.  ResCap's financing
plans also include seeking amendments to substantially all of its
secured bilateral credit facilities to extend their maturities or
to modify their tangible net worth covenants.

GM and Cerberus are in discussions to acquire $750 million first
loss participation in GMAC's proposed senior secured credit
facility, shared between Cerberus and GM on a pro rata basis.

As reported in the Troubled Company Reporter on May 7, 2008,
ResCap disclosed that it is highly leveraged relative to its cash
flow, and its liquidity position has been declining.  According to
a Securities and Exchange Commission filing, ResCap said there is
a significant risk that the company will not be able to meet its
debt service obligations, be unable to meet certain financial
covenants in its credit facilities, and be in a negative liquidity
position in June 2008.

ResCap anticipates that its new debt agreements will include
covenants to maintain minimum cash balances.  To comply with these
covenants and to satisfy its liquidity needs, ResCap expects that
it will be required, even if it successfully implements all of the
proposed actions, to generate capital in the near term through
asset sales or other actions in addition to its normal mortgage
finance activities, to obtain additional cash of approximately
$600 million by June 30, 2008.  This additional cash requirement
is an estimate based upon ResCap's internal monthly cash forecasts
targeting sufficient cash surpluses to prudently operate its
business and remain in excess of anticipated cash covenants.

According to GM, if ResCap is unsuccessful in executing the
financing transactions, including additional liquidity actions, it
would have a material adverse effect on GMAC, which could result
in a further impairment of GM's investments in GMAC and could
disrupt GMAC's ability to finance GM's dealers and customers.

                            About GM

Headquartered in Detroit, Michigan, General Motors Corp. (NYSE:
GM) -- http://www.gm.com/-- was founded in 1908.  GM employs
about 266,000 people around the world and manufactures cars and
trucks in 35 countries.  In 2007, nearly 9.37 million GM cars and
trucks were sold globally under the following brands: Buick,
Cadillac, Chevrolet, GMC, GM Daewoo, Holden, HUMMER, Opel,
Pontiac, Saab, Saturn, Vauxhall and Wuling.  GM's OnStar
subsidiary is the industry leader in vehicle safety, security and
information services.

                          About GMAC LLC

GMAC LLC -- http://www.gmacfs.com/-- formerly General Motors       
Acceptance Corporation, is a global, diversified financial
services company that operates in approximately 40 countries in
automotive finance, real estate finance, insurance and other
commercial businesses.  GMAC was established in 1919 and employs
approximately 26,700 people worldwide.  Cerberus Capital
Management LP bought 51% GMAC LLC stake from General Motors Corp.
on December 2006.

                           About ResCap

Headquartered in Minneapolis, Minnesota, Residential Capital LLC
-- http://www.rescapholdings.com/-- is the home mortgage unit
of        
GMAC Financial Services, which is in turn wholly owned by GMAC
LLC.

                            *     *     *

As reported in yesterday's Troubled Company Reporter, Moody's
Investors Service downgraded to Ca, from Caa1, its ratings
on the senior debt of Residential Capital, LLC subject to the bond
exchange announced by ResCap on May 2, 2008.  The rating of
ResCap's approximately $1.2 billion of bonds maturing on June 9,
2008 was affirmed at Caa1.  All ratings remain under review for
downgrade.

Standard & Poor's Ratings Services lowered selected ratings on
Residential Capital LLC, including lowering the long-term
corporate credit rating to 'CC' from 'CCC+', following the
company's launch of an exchange offer for unsecured bonds that
S&P interpret as a distressed debt exchange.  The ratings remain
on CreditWatch with negative implications, where they were placed
April 24, 2008.

Fitch Ratings has downgraded Residential Capital LLC's Issuer
Default Rating to 'C' from 'BB-' following the company's debt
exchange offer announcement.  ResCap remains on Rating Watch
Negative pending execution of the debt exchange offer.  Upon
completion of the exchange, Fitch will downgrade ResCap's IDR to
'D' indicating a default has occurred in accordance with Fitch's
criteria on distressed debt exchanges.


RF MICRO DEVICES: Begins Restructuring; Lays Off 350 Employees
--------------------------------------------------------------
RF Micro Devices, Inc. is currently undertaking a company-wide
restructuring.

The company is continuing to reduce its investments in wireless
systems, including cellular transceivers and GPS solutions, in
order to focus on core semiconductor component opportunities,
including cellular front ends and other components in RFMD's
Cellular Products Group and the expanding portfolio of
semiconductor components in RFMD's Multi-Market Products Group.

As a result, RFMD currently expects to eliminate product
development expenses related to its wireless systems business by
approximately $75 million this fiscal year beginning in the June
2008 quarter, with the full benefit expected to be realized in the
December 2008 quarter.

The company's key restructuring actions are:

   -- eliminating approximately $75 million in annual expenses by
      reducing investments in wireless systems, including cellular
      transceivers and GPS solutions;

   -- projecting approximately $40 million to $50 million in    
      restructuring charges, approximately two-thirds of which is
      expected to be non-cash, over the next two quarters with a
      global workforce reduction of approximately 350 employees.

   -- engaging in discussions with strategic and financial buyers
      for some of these assets, but is not commenting currently on
      any potential transactions, including possible proceeds.

   -- supporting cellular transceivers currently in production
      or commencing production, including POLARIS(R) 2, POLARIS 2
      Radio Module, POLARIS 3 and POLARIS 3 Silver(TM).

RFMD anticipates revenue growth in cellular transceivers in fiscal
2009, with transceiver revenue continuing in fiscal 2010.

Bob Bruggeworth, president and CEO of RFMD, said, "These strategic
actions will enable RFMD to deliver more predictable financial
results and substantially higher profitability.  We are the
industry leader in RF components and the world's largest
manufacturer of compound semiconductors.  We are investing in
growing markets where we have a demonstrated track record of
success, and we will measure our progress using operating income
and return on invested capital as key performance metrics.  We
anticipate steady financial improvement throughout the year, and
we currently forecast at least 10% non-GAAP operating income and
double-digit ROIC by the end of the calendar year.

"While this is a difficult decision because of the impact on
employees, these actions are the result of a comprehensive
strategic review, including extensive market analyses and
discussions with key customers and channel partners.  We are
confident the steps we have taken will increase shareholder value
and provide significant long-term benefits to our global customers
and stakeholders."

                            About RFMD   

Based in Greensboro, North Carolina, RF Micro Devices Inc.
(Nasdaq: RFMD) -- http://www.rfmd.com/-- is a global leader in  
the design and manufacture of high-performance semiconductor
components.  RFMD's products enable worldwide mobility, provide
enhanced connectivity and support advanced functionality in the
cellular handset, wireless infrastructure, wireless local area
network, CATV/broadband and aerospace and defense markets.  RFMD
is recognized for its diverse portfolio of semiconductor
technologies and RF systems expertise and is a preferred supplier
to the world's leading mobile device, customer premises and
communications equipment providers.

                          *     *     *

Standard and Poor's assigned its B+ long term foreign and local
issuer credit ratings to RF Micro Devices Inc. in 2003.  The
ratings still hold to date.


ROYALTY PHARMA: S&P Rates Proposed $300MM Unsecured Loan BB+
------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'BB+' rating to
Royalty Pharma Finance Trust's proposed $300 million senior
unsecured term loan due 2015.  Proceeds will be used to fund the
company's future acquisitions.
     
The corporate credit rating on New York City-based Royalty Pharma
is 'BBB-' and the rating outlook is stable.  The 'BBB-' rating
reflects the company's diverse portfolio of royalty-generating
pharmaceutical assets, the solid sales growth prospects of those
assets, and management's solid track record in conducting
acquisitions.  These strengths are partially offset by Royalty
Pharma's aggressive acquisition pace and financial policies.

Ratings List

Royalty Pharma
Corporate Credit Rating                   BBB-/Stable/--

New Rating

Royalty Pharma Finance Trust
$300 mil sr unsecd term loan due 2015     BB+


SECURITY CAPITAL: Posts $96.1 Million Net Loss in 2008 1st Quarter
-----------------------------------------------------------------
Security Capital Assurance Ltd announced yesterday results for the
three-month period ended March 31, 2008.

The net loss in the first quarter of 2008 was $96.8 million,
versus net income of $37.3 million in the first quarter of 2007.
The net loss for the quarter was primarily due to non-cash,
unrealized mark-to-market losses on financial guarantee
obligations in credit derivative form of $187.2 million.  As of
March 31, 2008, the company had total shareholders' equity of
$348.4 million and common shareholders' equity of $101.8 million.

"The credit environment in the first quarter of 2008 continued to
be very difficult," said Paul S. Giordano, SCA's president and
chief executive officer.  "We are focused on trying to restructure
our company.  In the first quarter, we also took steps to realign
our operating costs with our present situation of writing almost
no new business."

For the first quarter of 2008, the company reported an operating
loss of $2.7 million, compared to operating income of
$44.1 million for the first quarter of 2007.  The deterioration in
operating income was due to higher net losses and loss adjustment
expenses, credit impairment charges associated with net credit
default swap exposure, and restructuring related expenses
associated with severance, legal and advisory fees, offset by
higher net premiums earned and net investment income.

Operating income (loss) is a non-GAAP measure that is calculated
by taking net income excluding the after tax effect of: (i) net
realized gains (losses) on investments, (ii) unrealized gains
(losses) on derivatives net of credit impairment adjustments
included in unrealized gains (losses) on derivatives and (iii)
certain other items.

The net loss during the quarter was primarily due to a
$187.2 million net unrealized mark-to-market loss on financial
guarantee obligations executed in credit derivative form.  This
unrealized mark-to-market charge was partially offset by net
realized and unrealized gains of $72.5 million, attributable to
the exercise of the company's option under XL Financial Assurance
Ltd's capital facility to issue XLFA Series B Perpetual Preferred
Shares during the quarter.  

Of the first quarter 2008 mark-to-market loss, $22.2 million
represents credit impairment charges associated with the company's
credit derivative exposures.  These credit impairment charges
represent accretion associated with the discounted amount of net
anticipated claims and recoveries recorded during the fourth
quarter of 2007 on the collateralized debt obligations of asset
backed securities  portfolio and does not represent further
adverse developments.

         Net Cash (Used) Provided by Operating Activities

For the three months ended March 31, 2008, net cash used in
operating activities was $44.6 million compared to net cash flows
provided by operating activities of $58.8 million in the
comparable three-month period in 2007.

The change in net cash used in operating activities during the
first quarter of 2008 was primarily due to the company's decision
to cease writing substantially all new business, combined with
higher expenses and claims payments made during the quarter.  

Gross claims paid during the quarter totaled $63.3 million and
does not reflect receivables from affiliated and third-party
reinsurers of $50.1 million, including $44.9 million receivable
under an excess of loss reinsurance agreement with XL Insurance
(Bermuda) Ltd.

                    Holding Company Liquidity

As of March 31, 2008, the holding company parent, SCA, on a stand-
alone, unconsolidated basis, had cash and cash equivalents of
$17.4 million.

              Common and Preference Share Dividends

During the first quarter of 2008, SCA's Board of Directors elected
to not declare a quarterly dividend with respect to the company's  
common shares and a semi-annual dividend with respect to the SCA
Series A Preference Shares.  This election by the company's Board
of Directors reduced cash outflow by approximately $9.9 million
for the three month period ended March 31, 2008.  

                     Merrill Lynch Litigation

On Feb. 22, 2008 and March 6, 2008, the company issued notices
terminating seven CDS contracts with Merrill Lynch International.  
The company issued each of the termination notices on the basis of
Merrill Lynch's repudiation of certain contractual obligations
under each of the CDS contracts.  On March 19, 2008, Merrill Lynch
filed a complaint in a New York federal court challenging the
effectiveness of the company's terminations.  

On March 31, 2008, XL Capital Assurance Inc. filed a counterclaim
seeking a judgment from the court that its terminations were
effective along with an award of $28.0 million in damages for
Merrill Lynch's failure to make certain termination payments under
the Merrill Lynch CDS contracts.  On April 18, 2008, Merrill Lynch
filed a motion for summary judgment, which the company will
oppose, and that is scheduled to be argued to the court on June 4,
2008.  The court has also entered a scheduling order under which
the case will be ready for trial in August 2008. The notional
amount of the Merrill Lynch CDS contracts at March 31, 2008, and
Dec. 31, 2007, aggregated $3.1 billion before reinsurance.

                       Net Premiums Earned

Net premiums earned increased 50% in the first quarter of 2008 to
$58.4 million compared to $38.9 million in the first quarter of
2007.  

Net premiums earned include accelerated premiums from refundings.
Refunding premiums increased to $20.4 million in the first quarter
of 2008, compared to $1.3 million in the first quarter of 2007.
Refundings increased as a number of the company's insured auction
rate and variable rate demand municipal bond insurance policies
were refinanced.

The increase in net premiums earned was primarily due to the
significant increase in refunding premiums.

                      Net Investment Income

Net investment income for the first quarter of 2008 was
$32.3 million, representing an increase of 24% from $26.1 million
in the comparable period of 2007.  The increase in net investment
income was attributable to higher invested asset balances.  
Average invested assets were $2.7 billion in the first quarter of
2008, compared to $2.2 billion in the first quarter of 2007.

The increase was due to higher positive cash flows from investing
activities and cash flows from financing activities in 2007 and
the investment of $246.6 million of net proceeds associated with
the issuance of the SCA Series A Preference Shares in the second
quarter of 2007 and net proceeds of $200 million associated with
the issuance of  XL Financial Assurance Ltd. Series B Perpetual
Preferred Shares in the first quarter of 2008.  SCA's average book
yield decreased to 4.71% in the first quarter of 2008 versus 4.75%
in the first quarter of 2007.

             Net Losses and Loss Adjustment Expenses

Net losses and loss adjustment expenses were $41.5 million in the
first quarter of 2008, compared to a benefit of $1.8 million in
the first quarter of 2007.  Additional case loss provisions are
primarily associated with adverse development on one Home Equity
Line of Credit transaction and one closed-end second lien
transaction that experienced additional credit deterioration
during the first quarter of 2008.  The gain reported in the first
quarter of 2007 was the result of a $3.3 million reversal of a
case reserve associated with a residential mortgage-backed
securities transaction which experienced favorable development.

                        Operating Expenses

Operating expenses in the first quarter of 2008 were
$40.9 million, a 70% increase compared to $24.1 million of
operating expenses for the same period in 2007.  This quarter's
operating expenses increase was driven by a $10.3 million charge
related to workforce reductions.  Professional fees, primarily
legal expenses and advisory fees, were $5.2 million and
$1.8 million higher than in the first quarter of 2007,
respectively.

                        Acquisition Costs

Acquisition costs were $5.7 million for the first quarter of 2008,
a $1.7 million increase over the comparable period in 2007.  The
increase in acquisition costs in the first quarter of 2008 was
primarily due to accelerated amortization of acquisition costs in
the insurance segment due to refundings, calls and other
accelerations which totaled $1.6 million.

                          Balance Sheet

The company increased its net loss reserves to $167.4 million at
the end of the first quarter of 2008, versus $135.6 million at
year-end 2007 to cover anticipated losses associated with home-
equity lines of credit and closed-end second mortgage-backed
securities.

As of March 31, 2008, total assets were $3.8 billion, up 4.4% from
$3.6 billion in total assets as of Dec. 31, 2007.  Book value, or
common shareholders' equity, decreased to $101.8 million as of
March 31, 2008, from $180.5 million at the end of 2007.  The
company's total shareholders' equity as of March 31, 2008, was
$348.4 million, compared with $427.1 million at the end of 2007.

SCA's adjusted book value was $1.3 billion as of March 31, 2008,
versus $1.5 billion as of Dec. 31, 2007.  Adjusted book value is a
non-GAAP financial measure defined as common shareholders' equity,
plus the after-tax value of deferred premiums, net of prepaid
reinsurance premiums and deferred acquisition costs, plus the
after-tax net present value of estimated future installment
premiums in force discounted at 7%.

                         Ratings Actions

These ratings actions were taken with respect to SCA and its
subsidiaries XLCA, XL Capital Assurance (UK) Limited and XLFA,
during the first quarter of 2008.

On March 26, 2008, Fitch Ratings downgraded the IFS ratings of
XLCA, XLFA and XLCA-UK to "BB" (Outlook Negative) from "A" (Rating
Watch Negative).  Previously, on Jan. 23, 2008, Fitch downgraded
these IFS ratings from "AAA" to "A" (Rating Watch Negative).  On
March 4, 2008, Moody's Investors Service announced that it placed
the "A3" (Negative Outlook) IFS ratings of XLCA, XLCA-UK and XLFA
on review for downgrade.  Previously, on Feb. 7, 2008, Moody's
downgraded the IFS ratings of XLCA, XLCA-UK and XLFA from "Aaa" to
"A3" (Negative Outlook).  On Feb. 25, 2008, Standard & Poor's
downgraded the "AAA" IFS, financial enhancement and issuer credit
ratings of XLCA, XLFA and XLCA-UK to "A" (CreditWatch with
Negative Implications).

        NYSE Notice of Non-Compliance of Listing Criteria

On April 3, 2008, the New York Stock Exchange advised SCA that its
common shares were "below criteria" for the average price of a
security.  The company notified the NYSE on April 8, 2008, that it
intends to seek to cure the average price deficiency to maintain
its listing.   

                      About Security Capital

Based in Hamilton, Bermuda, Security Capital Assurance Ltd. (NYSE:
SCA) -- http://www.scafg.com-- is a holding company whose primary    
operating subsidiaries, XL Capital Assurance Inc. and XL Financial
Assurance Ltd, provide credit enhancement and protection products
to the public finance and structured finance markets throughout
the United States and internationally.  

                          *     *     *

As reported by the TCR on April 2, 2008, Standard & Poor's Rating
Services lowered its rating on Security Capital Assurance Ltd's
series A perpetual noncumulative preference shares to 'D' from
'C'.  At the same time, Standard & Poor's removed the rating from
CreditWatch with negative implications.  The rating action follows
the company's failure to make its March 31, 2008, dividend
payment.


SHERMAG INC: Files for Creditor Protection Under the CCAA
---------------------------------------------------------
Shermag Inc. has applied for creditor protection under the
Companies' Creditors Arrangement Act (Canada) in the Quebec
Superior Court.

Shermag's subsidiaries, Jaymar Furniture Corp., Scierie Montauban
Inc., Megabois (1989) Inc., Shermag Corporation and Jaymar Sales
Corporation, will also be covered by the CCAA filing.  The CCAA
filing for Shermag is a necessary step in completing its
restructuring efforts.

The CCAA protection will stay creditors, suppliers and others from
enforcing any rights against Shermag and will afford Shermag the
opportunity to restructure its affairs.

Shermag's Board of Directors authorized the company to take this
action as the best alternative for the long-term interests of the
company, its employees, customers, creditors and other
stakeholders.

Shermag will continue operations in the ordinary course during the
CCAA proceedings under the leadership of its existing management
team.  The company has made arrangements with Wachovia, its
current lender, to ensure continued financing.

RSM Richter Inc. is the proposed court appointed Monitor for the
CCAA proceedings and will monitor Shermag's ongoing operations,
assist with the development and filing of a plan of compromise and
arrangement with its creditors and other stakeholders, liaise with
creditors, customers and other stakeholders and report to the
Court.  The Monitor will also post the Court filings and other
information relating to Shermag on its website.

Based in Sherbrooke, Quebec, Shermag Inc. (TSX: SMG) --
http://www.shermag.com/-- designs, produces, markets and  
distributes high-quality residential furniture.  The company
employs more than 811 people and is a vertically integrated
manufacturer and importer with its own cutting rights, sawmill,
veneer facility, manufacturing operations and global sourcing
division.


SIRVA INC: Court Sets June 16 as Class 5-A Claims Bar Date
----------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of New York
granted the request of the Committee of Unsecured Creditors in the
bankruptcy cases of Sirva Inc. and its debtor-affiliates, and
established June 16, 2008, at 5:00 p.m., Pacific Time, as bar date
for holders of Class 5-A Claims.

Judge James M. Peck also approved the procedures for filing proofs
of claim, as well as the form and manner of notice for the Class
5-A Claims Bar Date.

The Court directs the Debtors to serve the Class 5-A Bar Date
Notice on or before May 12, 2008, on:

   (a) the United States Trustee,
   (b) holders of Class 5-A Claim, and
   (c) other parties as deemed appropriate by the Debtors.

The proofs of claim must conform substantially to Form No. 10 of
the Official Bankruptcy Forms, and must be received by Kurtzman
Carson Consultants LLC, on or before the Class 5-A Claims Bar
Date.

Headquartered in Westmont, Illinois, SIRVA Inc. (Pink Sheets :
SIRV.PK) -- http://www.sirva.com/-- is a provider of relocation
solutions to a well-established and diverse customer base.  The
company handles all aspects of relocation, including home
purchase and home sale services, household goods moving,
mortgage services and home closing and settlement services.
SIRVA conducts more than 300,000 relocations per year,
transferring corporate and government employees along with
individual consumers.  SIRVA's brands include Allied, Allied
International, Allied Pickfords, Allied Special Products, DJK
Residential, Global, northAmerican, northAmerican International,
Pickfords, SIRVA Mortgage, SIRVA Relocation and SIRVA
Settlement.  The company has operations in Costa Rica.

The company and 61 of its affiliates filed separate petitions
for Chapter 11 protection on Feb. 5, 2008 (Bankr. S.D.N.Y. Case
No. 08-10433).  Marc Kieselstein, Esq. at Kirkland & Ellis,
L.L.P. is representing the Debtor.  When the Debtors filed for
bankruptcy, it reported total assets of US$924,457,299 and total
debts of US$1,232,566,813 for the quarter ended Sept. 30, 2007.  
The Court confirmed the Debtor's First Amended Prepackaged Plan on
May 7, 2008.

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


SOLO CUP: Moody's Holds B2 CF Rating, Revises Outlook to Stable
---------------------------------------------------------------
Moody's Investors Service affirmed the B3 Corporate Family Rating
of Solo Cup Company and revised the rating outlook to stable from
negative.  Additional instrument ratings are detailed below.

The revision of the rating outlook to stable reflects Solo Cup's
improved operating performance, generation of free cash flow, and
significant reduction in debt.  The company's successful
implementation of its performance improvement plan has improved
execution and reduced costs.  Bolstered by a rational competitive
environment, Solo Cup has maintained a strong price discipline and
exited less profitable and non core segments.  Liquidity has
improved as the company has reduced debt with the proceeds of
asset sales, improved operating income and generated positive free
cash flow.

While the company made significant improvements in 2007, headwinds
still remain for 2008.  Weakness in the primary foodservice end
market, potential increases in raw material and energy prices, and
significant covenant step downs constrain the ratings.  The EBIT
margin is weak for the rating category and sensitive to changes in
raw material and energy prices as well as changes in the
competitive environment.  Solo may be challenged to achieve
further improvements as potentially ongoing economic pressure may
pressure volumes and pricing.

The downgrade of the first lien debt reflects a reduction in the
subordinated second lien debt and the resulting compression in
notching in Moody' Loss Given Default model.

Moody's took these rating actions:

  -- Affirmed Corporate Family Rating, B3
  -- Withdrew $130 million senior secured second lien term loan
     due March 31, 2012, Caa1 (LGD 4, 69%)

  -- Affirmed $325 million 8.5% subordinated notes due Feb. 15,
     2014, Caa2 (LGD 5, 87%)

  -- Downgraded $150 million senior secured revolving credit
     facility maturing Feb 27, 2010, to B2 (LGD 3, 35%) from B1
     (LGD 3, 32%)

  -- Downgraded $637 million senior secured term loan B due
     Feb. 27, 2011 ($399 million outstanding), to B2 (LGD 3, 35%)
     from B1 (LGD 3, 32%)

  -- Affirmed Probability of Default Rating, B3

The rating outlook is revised to stable.

Headquartered in Highland Park, Illinois, Solo Cup Company with
2007 annual revenues of about $2.1 billion is one of the largest
domestic manufacturers of disposable paper and plastic food and
beverage containers used in the foodservice and retail consumer
markets.  Products include cups, lids, straws, napkins, cutlery,
and plates.


SOUTH COAST: Collateral Deterioration Cues Fitch to Lower Ratings
-----------------------------------------------------------------
Fitch has downgraded four classes of notes issued by South Coast
Funding II, Ltd.  These rating actions are effective immediately:

  -- $260,824,370 class A-1 notes downgrade to 'B' from 'AAA' and
     remains on Rating Watch Negative;

  -- $40,050,000 class A-2 notes downgrade to 'CCC' from 'AAA' and
     removed from Rating Watch Negative;

  -- $42,500,000 class A-3 notes downgrade to 'CC' from 'A+' and
     removed from Rating Watch Negative;

  -- $33,831,753 class B notes downgrade to 'C' from 'B+' and
     removed from Rating Watch Negative.

South Coast II is a collateralized debt obligation that closed on
June 6, 2002 and is managed by TCW Investment Management Company.  
The reinvestment period ended in June 2006. South Coast II has a
portfolio comprised primarily of subprime residential mortgage-
backed securities bonds (59.8%), Alternative-A RMBS (13.4%), prime
RMBS (7.3%), and other structured finance assets.  Subprime RMBS
bonds of the 2004, 2005 and 2006 vintages account for
approximately 6.6%, 33.0% and 6.7% of the portfolio, respectively.  
Subprime RMBS bonds of the 2003 and prior vintages account for
approximately 13.5% of the portfolio.  Alt-A RMBS of the 2005 and
2006 vintages represent approximately 10.9% of the portfolio while
2004 and prior vintages represent 2.5%.

Fitch's rating actions reflect the significant collateral
deterioration within the portfolio, specifically subprime RMBS,
Alt-A RMBS, and SF CDOs with underlying exposure to subprime RMBS.  
Since Fitch's last review in August 2007, approximately 49.7% of
the portfolio has been downgraded net of upgrades, with 6.2% of
the portfolio currently on Rating Watch Negative.  Approximately,
61.2% of the portfolio is now rated below investment grade.

As of the most recent trustee report dated April 5, 2008, the
weighted average rating factor is 41 ('BB+/BB') and failing its
covenant of 18 ('BBB/BBB-').  The class A Principal Coverage Test
is currently at 101.0% and failing its covenant of 105.5% and the
class B Principal Coverage Test is currently at 91.9% and failing
its covenant of 102.0%.  As a result of these failures and in
order to cure the tests, interest is being diverted to pay down
the most senior notes.

The Rating Watch Negative reflects the continued credit
deterioration in subprime and Alt-A RMBS and SF CDOs.  The classes
rated 'CCC' and below are removed from Rating Watch as Fitch
believes further negative migration in the portfolio will have a
lesser impact on these classes.  Additionally, Fitch is reviewing
its SF CDO approach and will comment separately on any changes and
potential rating impact at a later date.

The ratings of the class A-1, class A-2 and class A-3 notes
address the likelihood that investors will receive full and timely
payments of interest, as per the governing documents, as well as
the stated balance of principal by the legal final maturity date.
The rating of the class B notes addresses the likelihood that
investors will receive ultimate and compensating interest
payments, as per the governing documents, as well as the stated
balance of principal by the legal final maturity date.


SOUTH COAST: Fitch Chips Rating on $30MM Cl. B Notes to B from AA
-----------------------------------------------------------------
Fitch has affirmed one and downgraded three classes of notes
issued by South Coast Funding VI, Ltd.  These rating actions are
effective immediately:

  -- $75,289,532 class A-1 notes affirmed at 'AAA';
  -- $36,000,000 class A-2 notes downgrade to 'A' from 'AAA', and
     removed from Rating Watch Negative;

  -- $30,000,000 class B notes downgrade to 'B' from 'AA', and
     removed from Rating Watch Negative;

  -- $11,970,089 class C notes downgrade to 'CCC' from 'BBB', and
     removed from Rating Watch Negative.

South Coast VI is a collateralized debt obligation that closed on
Sept. 29, 2004 and is managed by TCW Investment Management
Company.  The substitution period ended in October 2007.  South
Coast II has a portfolio comprised primarily of subprime
residential mortgage-backed securities bonds (48.8%), Alternative-
A RMBS (11.7%), prime RMBS (12.4%), Structured Finance CDOs
(5.9%), commercial mortgage-backed securities (13.2%), and other
structured finance assets.  Subprime RMBS bonds of the 2003, 2004,
and 2005 vintages account for approximately 6.4%, 38.8%, and 3.5%,
of the portfolio, respectively.  All of the Alt-A RMBS and Prime
RMBS are of the 2004 vintage. SF CDOs of the 2004 and 2005
vintages represent 3.3% and 2.6% of the portfolio, respectively.

Fitch's rating actions reflect the significant collateral
deterioration within the portfolio, specifically subprime RMBS and
SF CDOs with underlying exposure to subprime RMBS.  Since Fitch's
last review in June 2007, approximately 29.7% of the portfolio has
been downgraded net of upgrades, with 9.5% of the portfolio
currently on Rating Watch Negative.  Approximately, 30.0% of the
portfolio is now rated below investment grade.  The 70.01% of the
portfolio rated above investment grade ('BBB-' or higher) more
than covers the remaining balance of the class A-1 notes.

As of the most recent trustee report dated March 31, 2008, the
weighted average rating factor is 7.7 ('BBB-/BB+') and failing its
covenant of 4.5 ('BBB/BBB-').  The class C Interest Coverage Test
is currently at 100.5% and failing its covenant of 105.0%.  As a
result of this failure, interest is being diverted to pay down the
most senior notes.

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


SPANSION INC: Fitch Holds $207MM Sr. Debentures Rating at CCC-/RR6
------------------------------------------------------------------
Fitch Ratings has affirmed these ratings on Spansion Inc.:

  -- Issuer Default Rating at 'B-';
  -- $175 million senior secured revolving credit facility due
     2010 at 'B/RR3';

  -- $625 million senior secured floating rate notes due 2013 at
     'B/RR3';

  -- $225 million of 11.25% senior unsecured notes due 2016 at
     'CCC/RR6'; and

  -- $207 million of 2.25% convertible senior subordinated
     debentures due 2016 at 'CCC-/RR6'.

The Rating Outlook remains Negative.  Approximately $1.2 billion
of debt securities are affected.

Ratings concerns and the Negative Outlook center on:

i) Fitch's primary credit concern centers on Spansion's weak
liquidity position and limited financial flexibility, which
worsened during the first fiscal quarter ended March 30, 2008 due
to ongoing cash usage.  Nonetheless, Fitch believes the company's
plans for meaningfully lower capital spending in the second half
of 2008 and, likely, for 2009, should enable modestly positive
free cash flow over this time-frame.  In the first quarter ended
March 30, 2008, free cash flow was negative $171 million, as
Spansion continued facilitizing its leading edge manufacturing
facility (SP1), which it funded with increased borrowings by under
revolving credit facilities, reducing available borrowing capacity
to just over $100 million.

ii) Ongoing operating losses, despite the company's increased
market share and richer sales mix.  After consistently improving
profitability in 2007, Spansion's operating margins declined
meaningfully to a Fitch-estimated negative 17.8% for the first
quarter ended March 31, 2008 versus negative 10.7% for the
comparable prior year quarter, driven by higher than anticipated
operating expenses.  Nonetheless, Fitch expects the company's
profitability will gradually improve throughout 2008 as it ramps
SP1 and continues marginally internalizing currently outsourced
manufacturing.  Fitch believes significant profitability expansion
will be somewhat constrained by a weakening operating environment,
particularly as the company continues to gain share with leading
global handset OEMs, who are predicting lower than anticipated
demand for 2008 and higher mix of low-cost devices being sold into
developing markets.

iii) reduced albeit still substantial ongoing capital spending and
research and development requirements, which should exceed 30% of
sales in 2008;

iv) Spansion's current limited diversification beyond NOR flash
memory markets (although emerging products are expected to address
certain NAND and DRAM markets), which Fitch believes reduces the
company's tolerance for shortfalls in the commercial success of
its technology roadmap or delays in transitioning to ever smaller
circuitry nodes.  Fitch believes Spansion's leading competitors,
Numonyx B.V. and Samsung Electronics Co., benefit from greater
financial flexibility and, therefore, are better able to withstand
challenging operating environments.

The ratings are supported by Fitch's expectations that:

i) Spansion will continue to gain market share in the NOR flash
memory market over the next few years, driven by ongoing industry
consolidation, including an opportunity to become a second source
supplier for customers of Intel Corp. and STMicroelectronics N.V.,
which recently formed a NOR flash memory joint venture, Numonyx;

ii) beyond the near-term, Spansion's significant recent
investments in leading edge manufacturing technology and ongoing
transition to smaller circuit geometries, as well as development
of foundry partnerships, should enable the company to achieves
sustainable operating profitability through a normalized cycle;

iii) Spansion's technology roadmap, including its MirrorBit and
ORNAND architectures, will expand the company's addressable market
beyond NOR flash memory, potentially strengthening Spansion's
longer-term unit growth and profitability prospects.

Free cash flow for the second quarter of 2008 meaningfully below
Fitch's expectations (negative $150 million) could result in
negative rating actions.  Fitch also believes that negative rating
actions could result from cash usage in the third or fourth
quarters in the absence of additional committed funding.  At the
same time, Fitch believes the ratings could be stabilized by the
company bolstering liquidity with positive free cash flow and/or
proceeds from selling non-core assets.

As of March 30, 2008, Spansion's liquidity was weak and supported
by : i) approximately $455 million of cash and cash equivalents,
of which approximately $120 million consisted of auction rates
securities that Fitch believes, given current market conditions,
remain illiquid; ii) approximately $102 million of availability
under the company's revolving credit facilities (subject to
certain borrowing base limitations), including Spansion Inc's
$175 million senior secured revolving credit facility due
September 2010 supporting liquidity in the U.S. and JPY 14 billion
(approximately $140 million as of Mar. 30, 2008) senior secured
revolving credit facility due December 2009 supporting the
company's wholly-owned subsidiary, Spansion Japan's, liquidity.

Spansion's total debt as of Mar. 30, 2008 was $1.7 billion and
Fitch believes consisted of: i) approximately $380 million
outstanding under a JPY 48.8 billion (approximately $484 million
as of Mar. 30, 2008) Spansion Japan's senior secured credit
facility expiring 2010; ii) approximately $625 million of floating
rate senior secured notes due 2013; iii) approximately
$225 million of 11.25% senior unsecured notes due 2016; iv)
$207 million of 2.25% exchangeable senior subordinated debentures
due 2016; and v) approximately $208 million of other debt,
including the aforementioned borrowings under various credit
facilities and capital leases.

The Recovery Ratings and notching reflect Fitch's expectation that
Spansion's enterprise value, and hence recovery rates for its
creditors, will be maximized as a going concern rather than as in
liquidation under a distressed scenario.  The lower recovery
ratings incorporate Spansion's meaningful decline in operating
EBITDA and increased debt levels over the past several quarters,
as well as a greater proportion of secured debt within the capital
structure.  Fitch's analysis assumes Spansion is not restricted by
covenants or borrowing bases to fully draw down on its existing
bank credit facilities.

Given the erosion of Spansion's profitability to nearly distressed
levels over the past several quarters, Fitch has reduced the
discount to operating EBITDA for 2007 to 25% from the previous
discount of 55%.  Fitch believes of $800 million of rated senior
secured debt, including $625 million of senior secured floating
rate notes and a fully drawn $175 million U.S. revolving bank
credit facility, would recover 51%-70% in a reorganization
scenario, resulting in a 'RR3' recovery rating.  A waterfall
analysis provides 0%-10% recovery for the approximately
$225 million of rated senior unsecured debt and $207 million of
senior subordinated notes, both resulting in a recovery rating of
'RR6'.


SPRINT NEXTEL: Forges Wireless Communications Biz with Clearwire
----------------------------------------------------------------
Sprint Nextel Corporation and Clearwire Corporation entered into a
definitive agreement to combine their wireless broadband
businesses to form a new wireless communications company.

The new company, which will be named Clearwire, will focus on
expediting the deployment of the nationwide mobile WiMAX network
to provide a true mobile broadband experience for consumers, small
businesses, medium and large enterprises, public safety
organizations and educational institutions.  

The new Clearwire expects to enhance the speed and manner in which
customers access all that the Internet has to offer at home, in
the office and on the road.

As reported in the Troubled Company Reporter on May 7, 2008,
The new company has secured $3.2 billion financing from several
investors as:

   $1.05 billion from Comcast Corp.,
   $1.0 billion from Intel Corp.,
   $550 million from Time Warner Cable Inc.,
   $500 million from Google Inc., and
   $100 million from Bright House.

The investment by the five strategic investors will be based on a
target price of $20 per share of Clearwire's common stock, subject
to a post-closing adjustment.  This adjustment is based upon the
trading prices of new Clearwire common stock on the NASDAQ Market
over 15 randomly selected trading days during the 30-trading day
period ending on the 90th day after the closing date.

The price per share will be based upon the volume weighted average
price on such days and is subject to a cap of $23 per share and a
floor of $17 per share.  

Upon completion of the proposed transaction, Sprint will own the
largest stake in the new company with approximately 51% equity
ownership on a fully diluted basis assuming an investment price of
$20 per share.  

The existing Clearwire shareholders will own approximately 27% and
the new strategic investors, as a group, will be acquiring
approximately 22% for their investment of $3.2 billion, both on a
fully diluted basis assuming an investment price of $20 per share.

Sprint and Clearwire also disclosed a series of commercial
agreements with the strategic investors, including 3G and 4G
wholesale agreements.

"For Sprint shareholders, this is an opportunity to unlock and
bring visibility to the value of our significant spectrum assets,
technology and expertise, by leveraging the technology,
applications and distribution strengths of our investors, who
together command nearly a half- trillion dollars in market
capitalization," Dan Hesse, president and chief executive officer
of Sprint, said.  "We've made an excellent start developing XOHM
WiMAX services."

"Contributing those advances to a strongly backed new company - in
which we'll hold the largest interest - provides Sprint with
additional financial flexibility and allows Sprint management to
leverage and focus on our core business," Mr. Hesse stated.

"Additionally, the agreements allowing the new company and our
cable company investors to bundle and resell Sprint's third-
generation wireless services strengthen the distribution of our
current services while reducing the complexity and enhancing
Sprint's cable relationships," Mr. Hesse added.

"The power of the mobile Internet, which offers speed and
mobility, home and away, on any device or screen, will
fundamentally transform the communications landscape in our
country," Craig O. McCaw, Clearwire chairman, said.  "We believe
that the new Clearwire will operate one of the fastest and most
capable broadband wireless networks ever conceived, giving us the
opportunity to return the U.S. to a leadership position in the
global wireless industry."

"The combination of robust next-generation mobile WiMAX technology
and nationwide spectrum that we believe is optimal for delivering
mobile broadband services - coupled with substantial new financial
resources, a team of experienced wireless industry veterans, and
distribution and technology agreements with some of our nation's
leading communications, technology and content companies - creates
what I believe to be a once-in-a-lifetime opportunity, said
Benjamin G. Wolff, chief executive officer of Clearwire.

"Given the complexity of this transaction, we have taken the time
and effort to do it right, by thoughtfully leveraging the
resources and opportunities that we and our investors are bringing
to the table," Mr. Wolff added.  "This transaction is tremendous
news for the entire Clearwire team - our shareholders, our
customers and our employee-partners, and we look forward to
partnering with the talented team from XOHM to achieve our shared
vision."

The strategic investors are into communications technology,
chipset development and Internet advertising, content and
distribution.  It is expected that the new Clearwire will have a
time-to-market advantage over competitors in fourth-generation
services, supported by spectrum holdings and a national footprint.

Further, it will build on the strong foundation of Clearwire's
rapidly growing subscriber base of nearly 400,000 wireless
broadband customers as of year-end 2007, well as Sprint's
continued XOHM WiMAX network build-out in certain markets
throughout this year.

"This agreement is a historic step forward for WiMAX as it
represents the first nationwide deployment of a next-generation
mobile broadband Internet in the U.S.," Paul Otellini, Intel
president and CEO, said.  "The agreement also signifies growing
industry support for WiMAX.  Given its flexibility, coverage and
speed, WiMAX will enable the mobile Internet and is already
opening doors to a host of new and exciting applications, devices
and business models around the world."

"Google is a firm believer in supporting new ways for people to
access the Internet," Eric Schmidt, chief executive officer and
chairman of Google," said.  "We are proud to invest in the new
Clearwire alongside several leading technology and communications
companies, and we believe that its planned WiMAX network will
increase the ability for users to get high-speed broadband
anytime, anywhere."

"This is a great coalition of innovative companies that have
joined together to create the next generation of mobile wireless
products," Brian L. Roberts, chairman and chief executive officer
of Comcast Corporation, said.  "It is exciting to be on the ground
floor of this new venture that we believe will create
unprecedented high-speed wireless products and make them available
across the nation."  

"This transaction is attractive to us strategically and
financially and puts in place very attractive wholesale
relationships for access to Sprint's existing 3G and Clearwire's
4G networks, giving us complete flexibility to introduce wireless
mobility in terms of product innovation and deployment," added
Mr. Roberts.

"This exciting new venture enables Time Warner Cable to help shape
the next generation of wireless services in ways that will
complement and enhance our products and services," Glenn Britt,
Time Warner Cable's president and chief executive officer, said.
"We're committed to giving our customers more control over how and
where they can easily connect to what's important to them -
entertainment, information, and each other.  The agreements we're
disclosing are a financially prudent way for us to add mobility to
our offerings when our customers demand it."

"We are pleased to join our fellow cable operators as well as the
new technology and wireless investors in this strategic venture,"
Robert J. Miron, chairman and chief executive officer of Bright
House Networks, said.  "This broadband wireless relationship will
help us to continue to provide the best possible competitive
services for our customers, today and in the future.  It is
consistent with our commitment to delivering customers the
products and services that they desire, whenever and wherever they
want."

The new Clearwire expects to offer mobile wireless Internet
services on a broad array of new devices that will be made
possible by integrated WiMAX chipsets, scalable operating expenses
and a commitment to an open architecture.

Mobile WiMAX is a standards-based wireless broadband technology
designed to operate multiple times faster than today's 3G wireless
networks.  With embedded WiMAX chipsets in laptops, phones, PDAs,
mobile Internet devices and consumer electronic equipment, mobile
WiMAX technology is expected to allow users to wirelessly access a
range of multimedia applications, such as live videoconferencing,
recorded video, games, large data files and more - anywhere in the
network coverage area.

The transaction has been approved by all of the parties' boards of
directors, and is expected to be completed during the fourth
quarter of 2008.  The transaction is subject to various closing
conditions including, but not limited to, the approval of
Clearwire's stockholders, and receipt of regulatory approvals,
including the approval of the Federal Communications Commission
and clearance under the Hart-Scott-Rodino Act.

                             Governance

The new Clearwire's board of directors will be comprised initially
of 13 members, including:

   -- seven directors to be named by Sprint of whom at least one
      will be independent;

   -- four named by the strategic investors of whom at least one
      will be independent;

   -- one named by Eagle River, the private investment company
      controlled by wireless pioneer Craig O. McCaw; and

   -- one independent member to be nominated by the new company's
      Nominating Committee.

The parties expect Craig McCaw to serve as non-executive chairman
of the board.  Along with Mr. McCaw, other directors expected to
serve for an initial one-year term as new Clearwire board members
are Dan Hesse, Sprint's president and CEO, Brian Roberts,
Comcast's chairman and CEO, and Glenn Britt, Time Warner Cable's
president and CEO.

In addition, John Stanton, chairman and CEO of Trilogy Equity
Partners and former chairman and CEO of VoiceStream and Western
Wireless, is expected to serve on the board.

                   Overview of the New Clearwire

The new Clearwire will apply for listing of its common stock on
the NASDAQ under the ticker "CLWR."  The management team will be
led by Benjamin G. Wolff, CEO of Clearwire, as the new company's
CEO and Barry West, Sprint's chief technology officer and XOHM
business unit leader, as president of the new Clearwire.

Staffing for the new Clearwire will include the talent from both
Clearwire and Sprint's XOHM business unit.  The headquarters of
the new Clearwire will be located in Kirkland, Washington.  The
new company will continue to have a significant employee presence,
including research and development, in Herndon, Virginia.

The investment by Intel Capital, Google, Comcast, Time Warner
Cable and Bright House Networks will be used to advance the
development of the new Clearwire's mobile WiMAX network.  This
nationwide footprint is underpinned by the substantial next-
generation wireless broadband spectrum portfolio that Sprint and
Clearwire collectively hold in the United States.

The combined wireless spectrum would allow the new Clearwire to
achieve greater coverage, cost and operational efficiencies, and
bandwidth-utilization than either company could by operating
alone.  The new Clearwire is targeting a network deployment that
will cover between 120 million and 140 million people in the U.S.
by the end of 2010.

In addition to spectrum, Sprint will contribute to the new
Clearwire certain hardware, software and all of its WiMAX-based
trademarks and other WiMAX-related intellectual property. The new
Clearwire expects to materially reduce capital and operating
expenditures by leveraging Sprint's existing infrastructure,
reducing the cost of building out the mobile WiMAX network
nationwide.

The new Clearwire expects to utilize Sprint's towers, fiber
network and IT support at favorable bulk rates.  Sprint also will
realize cost savings for its core business by sharing certain
costs of towers and other infrastructure.

The agreements with the strategic investor group define
significant new commercial relationships, including:

   * Intel will work with manufacturers to embed WiMAX chips into
     Intel(R) Centrino(R) 2 processor technology-based laptops
     and other Intel-based mobile Internet devices, and will
     market the new company's service in association with Intel's
     performance notebook PC brand.

   * Google will partner with the new Clearwire in the
     development of Internet services, advertising services and
     applications for mobile WiMAX devices.  In addition, Google
     will be the search provider and a preferred provider of
     other applications for the new Clearwire's retail product.
    
   * Google will partner with the new Clearwire on an open
     Internet business protocol for mobile broadband devices.  The
     new Clearwire will support Google's Android operating system
     software in its future voice and data devices that it
     provides to its retail customers.
    
   * Sprint, Comcast, Time Warner Cable, and Bright House Networks
     will enter into wholesale agreements with the new Clearwire,
     becoming 4G providers of new Clearwire's mobile WiMAX
     service.
    
   * Comcast, Time Warner Cable, and Bright House Networks and,
     after completion of the transactions, the new Clearwire, will
     enter into 3G wholesale agreements with Sprint, becoming
     bundled providers of Sprint's wireless voice and data
     services, expanding the reach of Sprint's network to more
     customers, while providing the cable companies a simpler,
     more effective vehicle to bundle wireless services.
    
   * Sprint and Google have also entered into an agreement related
     to Sprint's mobile services, whereby Google will become the
     default provider of web and local search services, both of
     which will be enabled with location information, for Sprint.
     Sprint will also preload several Google services - including
     Google Maps for mobile, Gmail and YouTube - on select mobile
     phones and provide easier access to other Google services.
    
   * Google and Intel have options to enter into 3G and 4G
     wholesale agreements with Clearwire and Sprint respectively
     and have no current plans to do so.

                     Terms of the Transaction

Under the terms of the agreement, Clearwire will merge into a
newly created indirect subsidiary.  In the merger, shares of
Clearwire's Class A Common Stock, together with all outstanding
options and warrants to purchase shares of Clearwire stock, will
be converted into an equivalent number of new shares, options or
warrants, respectively, in the new Clearwire.

Additionally, all of Clearwire's outstanding shares of Class B
common stock, which are held by Eagle River and Intel, will
convert into shares of Clearwire's Class A Common Stock prior to
the merger.  Going forward, the shares of the new Clearwire will
each have one vote per share.  The target price of $20 per share
implies a total equity value of approximately $3.9 billion for the
existing Clearwire business.

Sprint will contribute all of its 2.5 GHz spectrum and its WiMAX-
related assets into a subsidiary of the new company.  The implied
equity valuation of Sprint's contribution is approximately
$7.4 billion which will result in approximately 51% ownership,
based on the target price of $20 per share.

The investments by Intel Capital, Comcast, Time Warner Cable and
Bright House Networks and the contributions from Sprint will be
made into a limited liability company subsidiary of the new
company.  Google will invest directly in the new Clearwire's Class
A common stock.  

In a separate transaction to occur 90 days after closing, Trilogy
Equity Partners will invest $10 million in the purchase of shares
of Class A common stock on the same pricing terms as the other
investors.

The total transaction value will be approximately $14.5 billion,
assuming an investment price of $20 per share.

                   Financial and Legal Advisors

Clearwire was advised by financial advisors Morgan Stanley and
JPMorgan, and by legal counsel Davis Wright Tremaine LLP and
Kirkland & Ellis LLP.

Sprint was advised by financial advisors Citigroup and Lehman
Brothers, and by legal counsel King & Spalding LLP, well as by
Jones Day on certain matters.

                    About Clearwire Corporation

Headquartered in Kirkland, Washington, Clearwire Corporation
(NASDAQ:CLWR) -- http://www.clearwire.com/-- builds and operates   
wireless broadband networks that enable Internet communications.
Its wireless broadband networks cover entire communities and
deliver a high-speed Internet connection that not only creates a
new communications path into the home or office, but also provides
a broadband connection anytime and anywhere within its coverage
area.  It offers services in both domestic and international
markets.  The company's services consist primarily of providing
wireless broadband connectivity, but in some of its domestic
markets, it also offers voice-over Internet protocol telephony
services.

                    About Sprint Nextel
        
Headquartered in Reston, Virginia, Sprint Nextel Corporation
(NYSE:S) -- http://www.sprint.com/-- offers a comprehensive range   
of wireless and wireline communications services bringing the
freedom of mobility to consumers, businesses and government users.  
Sprint Nextel is widely recognized for developing, engineering and
deploying innovative technologies, including two robust wireless
networks serving about 54 million customers at the end of the
fourth quarter 2007; industry-leading mobile data services;
instant national and international walkie- talkie capabilities;
and a global Tier 1 Internet backbone.

                          *     *     *

As reported in the Troubled Company Reporter on May 2, 2008,
Standard & Poor's Rating Services lowered its corporate credit and
senior unsecured ratings on Sprint Nextel Corp. to 'BB' from
'BBB-' and removed the ratings from CreditWatch with negative
implications.  The outlook is stable.


SPRINT NEXTEL: Combines Applications & Services with Google Inc.
----------------------------------------------------------------
Sprint Nextel Corp. and Google Inc. disclosed a partnership aimed
at more deeply integrating Google applications and services into
Sprint customers' mobile experience.

As part of the deal, Google will become Sprint's preferred mobile
search provider and Sprint users will have easier access to Google
Maps for mobile, YouTube and more.

Sprint and Google are committed to providing users with the most
dynamic mobile experience possible.  Both companies have actively
advocated the importance of an open mobile ecosystem and
understand that users should have more choice when it comes to
selecting and accessing content on a mobile phone.

"Our partnership with Google is a great example of how Sprint is
making the mobile Internet experience even more customer-friendly
and useful to our customers," Kevin Packingham, vice president of
product management at Sprint, said.  "Sprint looks forward to
extending its partnership with Google, and to bringing customers a
mobile experience enhanced by the speed of the Now Network,
complimented by the services of Google."

"Google and Sprint have a lot in common when it comes to our
vision for the mobile web," Doug Garland, vice president of
product management at Google, said.  "We both believe in openness
and providing compelling, easy-to-use mobile services that
consumers can use every day.  We look forward to working together
to deliver a great experience."

With some capabilities available soon as this summer, the
partnership with Google and Sprint offers Sprint customers:

   -- Google mobile search: Google will become the default search    
      provider for web search and local search on the Sprint
      portal on customers' current web-enabled Sprint phones well
      as new devices.  On select new devices later this year,
      Sprint customers will be able to bring up a Google search
      box on their device's home screen, providing them with one-
      click access to Google mobile search.

   -- Google Maps for mobile: Also featured on new Sprint handsets
      and available on some current smart phones will be Google
      Maps for mobile, an application that enables users to view
      maps and satellite imagery, find local businesses, get
      driving directions and view real-time traffic information
      when they're on the go.

   -- YouTube: With this new partnership, millions of fun and
      interesting YouTube videos -- well as all the user's
      favorites, videos and channels -- will be accessible from
      select new Sprint handsets.

   -- Location-enabled search and maps: Sprint will also enable
      users to take advantage of location data for Google search
      and Google Maps for mobile, making it even easier for users
      to discover what's around them and then figure out how to
      get there.

Going forward, Sprint and Google will continue to explore ways to
provide users with compelling mobile experiences and more
application choices.

This transaction extends the two companies' collaborative history.
In November 2006, Sprint and Google made Gmail available from the
Sprint portal.  Late last year, Sprint joined Google as a founding
member of the Open Handset Alliance, which is developing the
Android open mobile platform.  And on May 7, the two companies
disclosed that they would contribute to the formation of
Clearwire, a company focused on building the first nationwide
mobile WiMAX network.

                         About Google Inc.

Headquartered in Silicon Valley, California, Google's Inc. --
http://www.google.com/-- (NASDAQ:GOOG) provides innovative search  
technologies that connect millions of people around the world with
information every day.  Founded in 1998 by Stanford Ph.D. students
Larry Page and Sergey Brin.  Google's targeted advertising program
provides businesses of all sizes with measurable results, while
enhancing the overall web experience for users.  Google has
offices throughout the Americas, Europe, and Asia.

                      About Sprint Nextel
        
Sprint Nextel Corp. -- http://www.sprint.com/-- offers a       
comprehensive range of wireless and wireline communications
services bringing the freedom of mobility to consumers, businesses
and government users.  Sprint Nextel is widely recognized for
developing, engineering and deploying innovative technologies,
including two robust wireless networks serving about 54 million
customers at the end of the fourth quarter 2007; industry-leading
mobile data services; instant national and international walkie-
talkie capabilities; and a global Tier 1 Internet backbone.

                          *     *     *

As reported in the Troubled Company Reporter on May 2, 2008,
Standard & Poor's Rating Services lowered its corporate credit and
senior unsecured ratings on Sprint Nextel Corp. to 'BB' from
'BBB-' and removed the ratings from CreditWatch with negative
implications.  The outlook is stable.


TRIBUNE CO: News Corp. Close to Clinching Newsday Deal
------------------------------------------------------
News Corp. chairman Rupert Murdoch expects to get hold of a deal
to acquire Tribune Co.'s Newsday within a week, various reports
say.

According to various reports, the news came as News Corp. reported
that its latest quarterly earnings which rose to $2.69 billion on
a one-time gain from a stock exchange with Liberty Media Corp.

News Corp. has been reported to be in a tentative deal to acquire
Newsday for $580 million.  Cablevision has extended a $650 million
offer while New York Daily News owner Mortimer Zuckerman has also
tendered $580 million for Newsday, according to reports.

Mr. Murdoch, reports say, has indicated that News Corp. was in a
pretty advanced stage with Newsday's parent company Tribune Co.  
Mr. Murdoch stressed that he didn't intend to raise his bid,
reports relate.

Various reports quote Mr. Murdoch as saying: "I trust [Tribune CEO
Sam] Zell absolutely, I consider Mr. Zell to be a man of his word.  
We think everything's in hand."

If News Corp. gets to acquire Newsday, it could realize savings by
consolidating the paper's back-office and production operations
with the News Corp.'s the New York Post, which is a consistent
money-loser, reports note.

Mr. Murdoch said acquiring Newsday and operating the two papers in
tandem "will improve our cash flow by $100 million" annually,
various reports state.

                      About News Corporation

Headquartered in New York City, News Corporation (NYSE:NWS.A) --
http://www.newscorp.com/-- is a diversified entertainment company  
with operations in eight industry segments, including Filmed
Entertainment; Television; Cable Network Programming; Direct
Broadcast Satellite Television; Magazines and Inserts; Newspapers;
Book Publishing, and Other.  

                    About Tribune Company

Headquartered in Chicago, Tribune Company (NYSE: TRB) --
http://www.tribune.com/-- is a media company, operating           
businesses in publishing, interactive and broadcasting.  It
reaches more than 80% of U.S. households and is the only media
organization with newspapers, television stations and websites in
the nation's top three markets.  In publishing, Tribune's leading
daily newspapers include the Los Angeles Times, Chicago Tribune,
Newsday (Long Island, New York), The Sun (Baltimore), South
Florida Sun-Sentinel, Orlando Sentinel and Hartford Courant.  The
company's broadcasting group operates 23 television stations,
Superstation WGN on national cable, Chicago's WGN-AM and the
Chicago Cubs baseball team.

                          *     *     *

As reported in the Troubled Company Reporter on March 20, 2008,
Standard & Poor's Ratings Services lowered its ratings on the
class A and B units from the $79.795 million Structured Asset
Trust Unit Repackaging Tribune Co. Debenture Backed Series 2006-1
to 'CCC' from 'CCC+' and removed them from CreditWatch with
negative implications.


TRIBUNE CO: Says Consumers are Wary about Cablevision's Bid
-----------------------------------------------------------
Consumer groups disfavor Cablevision Systems Corporation's leading
bid for Tribune Company's Newsday, The Deal.com reported.

As reported in the Troubled Company Reporter on May 1, 2008,
Cablevision Systems offered to acquire Newsday for $650 million or
$70 million more than the previous offers of News Corp. and Daily
News owner Mortimer Zuckerman.

According to The Deal, public interest advocates have expressed
concern about a Cablevision purchase, but they admit that neither
the Federal Communications Commission nor the Department of
Justice would oppose it.

The Deal quotes Andrew Schwartzman, president of public interest
law firm Media Access Project as saying: "A Cablevision buy of
Newsday from a policy standpoint would pose serious questions
about how much control one entity was having in the Long Island
region.  But it doesn't raise F.C.C. issues, and it's unlikely
the Department of Justice would oppose anything."

Buying Newsday would give Cablevision a firm hold on the
advertising market on Long Island, Newsday's home, The Deal
relates.  Cablevision is the primary provider of cable television
on Long Island, it owns the only television news station, News12,
which is a cable channel, and it is also a big supplier of
Internet and phone service, The Deal notes.

But, The Deal says, the F.C.C. would not review the transaction
because no broadcast or cable license would be transferred.  The
Deal notes that a federal appeals court in 2001 threw out an
F.C.C. rule that prohibited one company from owning both a cable
service and newspaper in the same market.

Furthermore, since News12 is not a broadcast station, it does not
fall under the F.C.C.'s license renewal process, The Deal adds.

                  About Cablevision Systems

Cablevision Systems Corporation (NYSE: CVC) -- is a cable operator
in the United States that operates cable programming networks,
entertainment businesses and telecommunications companies.  As of
Dec. 31, 2006, the company served approximately 3.1 million basic
video subscribers in and around the New York City metropolitan
area.  Through its wholly owned subsidiary, Rainbow Media Holdings
LLC, Cablevision owns interests in and manages numerous national
and regional programming networks, the Madison Square Garden
sports and entertainment businesses, and cable television
advertising sales companies.  Through Cablevision Lightpath Inc.,
its wholly owned subsidiary, the company provides telephone
services and Internet access to the business market.  The company
operates in three segments: Telecommunications Services, Rainbow
and Madison Square Garden.

                   About Tribune Company

Headquartered in Chicago, Tribune Company (NYSE: TRB) --
http://www.tribune.com/-- is a media company, operating           
businesses in publishing, interactive and broadcasting.  It
reaches more than 80% of U.S. households and is the only media
organization with newspapers, television stations and websites in
the nation's top three markets.  In publishing, Tribune's leading
daily newspapers include the Los Angeles Times, Chicago Tribune,
Newsday (Long Island, New York), The Sun (Baltimore), South
Florida Sun-Sentinel, Orlando Sentinel and Hartford Courant.  The
company's broadcasting group operates 23 television stations,
Superstation WGN on national cable, Chicago's WGN-AM and the
Chicago Cubs baseball team.

                          *     *     *

As reported in the Troubled Company Reporter on March 20, 2008,
Standard & Poor's Ratings Services lowered its ratings on the
class A and B units from the $79.795 million Structured Asset
Trust Unit Repackaging Tribune Co. Debenture Backed Series 2006-1
to 'CCC' from 'CCC+' and removed them from CreditWatch with
negative implications.


TRICOM SA: Bancredito Panama Sends Subpoena to BDO Seidman, et al
-----------------------------------------------------------------
Richard Smolev, Esq., at Kaye Scholer LLP, in New York -- on
behalf of Eduardo Pazmino, the official liquidator of Bancredito,
(Panama) S.A. -- issued a subpoena to four parties-in-interest,
directing them to produce and permit the inspection and copying
of certain documents at his law office on May 16, 2008.  The four
parties are BDO Seidman LLP, KPMG International, The Bear Stearns
Companies, Inc., and Sotomayor & Associates LLP.

The documents relate to the purchase of $70,000,000 of Tricom
S.A.'s stock in December 2002, through the loans extended by
Bancredito Panama to the Debtors.  Bancredit Cayman Limited  
asserts a claim on the fund, which was allegedly looted from  
Bancredit Cayman by one of its directors, Manuel Arturo
Pellerano, who is also a majority controlling owner of Tricom.

Mr. Smolev noted that if any document in the four parties'
custody is withheld on the basis of a claim of privilege or work
product protection, the companies have to identify:

   (i) the nature of the privilege being claimed, or the
       state's privilege law being invoked if the privilege
       asserted is related to a claim or defense governed by
       state law; and

  (ii) the type and date of the document, its general subject
       matter, and other information sufficient to identify
       the document for a subpoena duce tecum, unless it would
       cause disclosure of the privileged information.

To the extent the companies object to any part of the subpoena,
they are required to state with particularity both the grounds
and the reasons for their objection, and respond to all parts of
the subpoena to which the objection does not apply, Mr. Smolev
said.

The companies are further required to supplement their responses
in accordance with Rule 26(e) of the Federal Rules of Civil
Procedure, Mr. Smolev added.

                         About Tricom

Tricom, S.A., was incorporated in the Dominican Republic on
January 25, 1988, as a Sociedad Anonima.  Tricom is one of the
pre-eminent full service communications services providers in
the Dominican Republic.  Headquartered in Santo Domingo, Tricom
offers local, long distance, and mobile telephone services,
cable television and broadband data transmission and Internet
services, which are provided to more than 729,000 customers.  

Tricom's wireless network covers about 90% of the Dominican
Republic's population.  Tricom's local service network is 100%
digital.  The Company also owns interests in undersea fiber-
optic cable networks that connect and transmit
telecommunications signals between Central America, the
Caribbean, the United States and Europe.

Tricom USA, Inc., a wholly owned subsidiary of Tricom, was
incorporated in Delaware in 1992, and at that time was known as
Domtel Communications.  A name change was effected in 1997 and
Domtel Communications formally became Tricom USA, Inc.

Tricom USA originates, transports and terminates international
long-distance traffic using switching stations and other
telecommunications equipment located in New York and Florida.

Tricom S.A. and its U.S. affiliates filed for Chapter 11
protection on Feb. 29, 2008 (Bankr. S.D. N.Y. Case No. 08-
10720).  Larren M. Nashelsky, Esq., at Morrison & Foerster LLP,
in New York City, represent the Debtors.  When the Debtors'
filed for protection from their creditors, they listed total
assets of US$327,600,000 and total debts of US$764,600,000.

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


TRICOM SA: Asks Court to Fix July 8 As Claims Bar Date
------------------------------------------------------
Pursuant to Rule 3003(c)(3) of the Federal Rules of Bankruptcy
Procedure, Tricom SA and its debtor-affiliates ask the U.S.
Bankruptcy Court for the Southern District of New York to
establish July 8, 2008, as the deadline for creditors to file
proofs of claim.

Larren M. Nashelsky, Esq., at Morrison & Foerster LLP, in New
York, says that holders of these claims need not file a proof of
claim:

   (1) claims already filed with the Clerk of the Bankruptcy
       Court for the Southern District of New York;

   (2) claims listed on the Debtors' schedules of assets and
       liabilities, provided that the claim is not scheduled
       as disputed, contingent or unliquidated; the holder
       does not disagree with the amount, nature and priority
       of the claim as stated in the schedules; and the holder
       does not dispute that the claim is an obligation of the
       specific Debtor against which the claim is listed in the
       schedules;

   (3) claims that have been allowed by the Court's order;

   (4) claims that have been paid in full by any of the
       Debtors;

   (5) claims for which specific deadlines have previously been
       fixed by the Court;

   (6) claims allowable under Sections 503(b) and 507(a) of the
       Bankruptcy Code as an expense of administration; and
  
   (7) claims that arose after February 29, 2008.

Any creditor who is required but fails to file a proof of claim
will not be permitted to vote to accept or reject the Debtors'
Chapter 11 reorganization plan, and participate in any  
distribution on account of his claim, Mr. Nashelsky notes.   

Mr. Nashelsky says that they intend to provide about 60 days'
notice of the Bar Date to concerned parties, given the cross-
border nature of the Debtors' business, and given that Tricom
S.A., and TCN Dominicana S.A., are Dominican corporations.

The Debtors also intend to publish the Bar Date Notice in (i)
Listin Diario, a newspaper circulated in the Dominican Republic;
(ii) La Prensa in Panama; and (iii) the international edition of
The New York Times, within 10 days after the Court approves their
request.

Consistent with their normal notification practices for  
employees, the Debtors propose these procedures for providing the
Bar Date Notice to employees of Tricom and TCN:

   (i) post the Bar Date Notice and the proof of claim form on
       the Debtors' intranet and provide electronic notice that
       those forms are available; and

  (ii) maintain copies of the Bar Date Notice and the proof of
       claim form with the personnel departments at Tricom's
       and TCN's headquarters.

The Debtors further ask the Court that they not be required
to                                                              
provide the Bar Date Notice to their present or former customers.

Mr. Nashelsky says it would be burdensome for the Debtors to
compile customer information, and the Debtors do not have
addresses for the majority of their non-retail customers.

                         About Tricom

Tricom, S.A., was incorporated in the Dominican Republic on
January 25, 1988, as a Sociedad Anonima.  Tricom is one of the
pre-eminent full service communications services providers in
the Dominican Republic.  Headquartered in Santo Domingo, Tricom
offers local, long distance, and mobile telephone services,
cable television and broadband data transmission and Internet
services, which are provided to more than 729,000 customers.  

Tricom's wireless network covers about 90% of the Dominican
Republic's population.  Tricom's local service network is 100%
digital.  The Company also owns interests in undersea fiber-
optic cable networks that connect and transmit
telecommunications signals between Central America, the
Caribbean, the United States and Europe.

Tricom USA, Inc., a wholly owned subsidiary of Tricom, was
incorporated in Delaware in 1992, and at that time was known as
Domtel Communications.  A name change was effected in 1997 and
Domtel Communications formally became Tricom USA, Inc.

Tricom USA originates, transports and terminates international
long-distance traffic using switching stations and other
telecommunications equipment located in New York and Florida.

Tricom S.A. and its U.S. affiliates filed for Chapter 11
protection on Feb. 29, 2008 (Bankr. S.D. N.Y. Case No. 08-
10720).  Larren M. Nashelsky, Esq., at Morrison & Foerster LLP,
in New York City, represent the Debtors.  When the Debtors'
filed for protection from their creditors, they listed total
assets of US$327,600,000 and total debts of US$764,600,000.

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


TROPICANA ENTERTAINMENT: Taps Kirkland & Ellis as Bankr. Counsel
----------------------------------------------------------------
Tropicana Entertainment LLC and its debtor-affiliates seek
permission from the U.S. Bankruptcy Court for the District of
Delaware to employ Kirkland & Ellis LLP, as their counsel, in
accordance with an engagement letter between the parties dated
April 18, 2008.

The Debtors seek to retain the firm because of its recognized
expertise and extensive experience and knowledge in the field of
business reorganizations under Chapter 11, William J. Yung III,
Tropicana Entertainment, LLC's chief executive officer, relates.

Kirkland & Ellis had been actively involved in major Chapter 11
cases, including In re Dura Auto. Sys., Inc.; In re Wellman,
Inc.; In re TOUSA, Inc.; and In re Solutia Inc., Mr. Yung informs
the Court.

Contemporaneously, the Debtors have filed an application seeking
to employ Richards, Layton & Finger, P.A., as their counsel.  
Kirkland & Ellis does not maintain an office in the State of
Delaware, and the Debtors are required to retain local counsel,
Mr. Yung avers.  

Richards Layton, as conflicts counsel, will be employed to handle
matters that the Debtors may encounter that cannot be
appropriately handled by Kirkland & Ellis because of a conflict of
interest or, alternatively, that can be more efficiently handled
by Richards Layton.

Among other things, Kirkland & Ellis will:

   (a) advise the Debtors with respect to their powers and duties
       as debtors-in-possession in the continued management and
       operation of their businesses and properties;

   (b) advise the Debtors on the conduct of their Chapter 11
       cases, including all legal and administrative requirements
       or operating in bankruptcy;

   (c) prosecute actions on the Debtors' behalf, defend actions
       commenced against the Debtors, and represent the Debtors'
       interest in negotiations concerning litigation they are
       involved in;

   (d) represent the Debtors in connection with obtaining
       postpetition financing;

   (e) advise the Debtors in connection with any potential sale
       of assets; and

   (f) perform all other necessary or otherwise appropriate legal
       services.

The Debtors will pay Kirkland & Ellis according to the firm's
hourly rates and reimburse the firm's expenses incurred or to be
incurred.  Kirkland & Ellis' current hourly rates, which are
subject to periodic adjustments to reflect economic and other
conditions, are :

          Professional                  Hourly Rates
          ------------                  ------------
          Partners                      $500 to $975
          Counsel                       $380 to $870
          Associates                    $275 to $595
          Paraprofessionals             $120 to $260

According to Mr. Yung, Kirkland & Ellis received a classic
retainer of $1,000,000, consistent with the terms of the
Engagement Letter.  The firm earned the classic retainer upon
receipt, and consequently, placed it into its general cash
account.  On April 25, 2008, the Debtors increased the classic
retainer to $3,000,000.  On May 2, 2008, the firm invoiced, and
applied against the classic retainer, $1,182,990 for professional
services rendered to the Debtors and reimbursement of expenses.

As of the bankruptcy filing, the Debtors do not owe the firm any
amounts for legal services rendered before bankruptcy.

Marc Kieselstein P.C., a partner at Kirkland & Ellis, tells the
Court that the firm and certain of its professionals may have in
the past represented, may currently represent, and likely in the
future will represent, parties-in-interest in connection with
matters unrelated to the Debtors or their Chapter 11 cases.
Certain of the firm's attorneys and paraprofessionals who
previously worked at other law firms that represented certain
potential parties-in-interest in the Debtors' bankruptcy cases
have not worked on matters relating to the Debtors' restructuring
efforts while at Kirkland & Ellis, Mr. Kieselstein maintains.

Kirkland & Ellis formerly advised Innovation Capital, LLC, in
connection with a fairness opinion Innovation rendered to Aztar
Riverboat Holding Company LLC, and Tropicana Entertainment LLC,
and their members relating to the sale of Aztar Indiana Gaming
Company LLC, Mr. Kieselstein discloses.

The firm also represented President Casinos Inc., in connection
with an appeal of a summary judgment order entered by the
Missouri Bankruptcy Court in favor of non-Debtors Columbia Sussex
Corporation and Tropicana Casino and Resorts, Inc., on account of
a breach of contract claim.  Mr. Kieselstein assures the Court
that should any matter arise in the Debtors' Chapter 11 cases in
which the Debtors become adverse to President Casinos in
litigation, Richards Layton will represent the Debtors in those
matters.

Mr. Kieselstein states that Kirkland & Ellis represents, and has
represented, in matters unrelated to the Debtors' Chapter 11
cases, among others, certain affiliates, subsidiaries and entities
associated with various professionals that the Debtors seek to
retain, including:

    -- Houlihan Lokey Howard & Zukin, Inc., as financial advisors
       to certain lenders under the $440,000,000 senior secured
       credit facility dated January 3, 2007; and

    -- Alvarez & Marsal North America, LLC, as financial advisors
       to certain lenders under the $1,810,000,000 senior secured
       credit facility dated January 3, 2007.

The firm has not represented and will not represent any
professionals in connection with any matter related to the
Debtors' bankruptcy cases, Mr. Kieselstein assures the Court.

Kirkland & Ellis does not hold or represent an interest adverse
to the Debtors' estates.  The firm is a disinterested person, as
the term is defined in Section 101(14) of the Bankruptcy Code,
Mr. Kieselstein asserts.

                 About Tropicana Entertainment

Based in Crestview Hills, Kentucky, Tropicana Entertainment LLC --
http://www.tropicanacasinos.com/-- is an indirect subsidiary of  
Tropicana Casinos and Resorts.  The company is one of the largest
privately-held gaming entertainment providers in the United
States.  Tropicana Entertainment owns eleven casino properties in
eight distinct gaming markets with premier properties in Las
Vegas, Nevada and Atlantic City, New Jersey.

Tropicana Entertainment LLC filed for Chapter 11 protection on
May 5, 2008, (Bankr. D. Del. Case No. 08-10856)  Its debtor-
affiliates filed for separate Chapter 11 petitions but with no
case numbers assigned yet.  Mark D. Collins, Esq. at Richards
Layton & Finger represent the Debtors in their restructuring
efforts.  Their financial advisor is Lazard Ltd.  Their notice,
claims, and balloting agent is Kurtzman Carson Consultants LLC.  
The Debtors' consolidated financial condition as of Feb. 29, 2008,
showed $2,845,847,596 in total assets and $2,429,890,642 in total
debts. (Tropicana Bankruptcy News, Issue No. 2; Bankruptcy
Creditors' Service Inc., http://bankrupt.com/newsstand/or  
215/945-7000)


TROPICANA ENT: Noteholders Want Court to Appoint Ch. 11 Trustee
---------------------------------------------------------------
The ad hoc consortium of holders of 9-5/8% Senior Subordinated
Notes due 2014 issued by Tropicana Entertainment LLC, and
Tropicana Finance Corp. asks the U.S. Bankruptcy Court for the
District of Delaware to appoint a trustee in the Tropicana
Entertainment LLC and its debtor-affiliates' Chapter 11 cases.

Each of the Debtors, including parent company Tropicana
Entertainment, are entities operating under the absolute control
of William J. Yung III.  Mr. Yung exercises decisive control by
virtue of his being the sole director, chief executive, and 100%
owner of all of the equity securities of Tropicana Casino and
Resorts, Inc., the Debtors' ultimate parent company.

"While in the usual chapter 11 proceeding, current management is
generally deemed best suited to manage the process of
rehabilitation for the benefit of creditors and other interests
of the estate, this usual rationale for retaining a debtor-in-
possession is not present here," David B. Stratton, Esq., at
Pepper Hamilton LLP, in Wilmington, Delaware, says.

Mr. Yung -- less than two years after having acquired Tropicana
Entertainment's principal assets -- has come close to destroying
Tropicana Entertainment's prospects for continuing as a going
concern and there is no basis to believe that he is capable of
reversing course, Mr. Stratton argues.

Mr. Yung's "grossly misguided business decisions" and "autocratic
and contentious managerial style" led the Debtors and their
creditors to disaster after disaster, Mr. Stratton contends.  
He states that consequences of Mr. Yung's "gross mismanagement
and misconduct" include the loss on December 22, 2007, of the New
Jersey gaming license for the Tropicana Resort and Casino of
Atlantic City, which was Tropicana Entertainment's principal
cash-generating asset.

Section 1104(a)(1) of the Bankruptcy Code provides for the
appointment of a trustee for "cause," including "fraud,
dishonesty, incompetence or gross mismanagement of the affairs of
the debtor by current management, either before or after the
commencement of the case," Mr. Stratton notes.  Even where cause
is not established, Section 1104(a)(2) additionally provides for
the appointment of a trustee "if such appointment is in the
interests of creditors, any equity security holders, and other
interests of the estate," he adds.

Mr. Stratton points the Court to the Casino Control Commission of
the State of New Jersey's December 12, 2007 decision denying
Tropicana Entertainment's application to own and operate the
Tropicana Atlantic City.  He relates that the Gaming Commission
concluded, after months of investigation and extensive
evidentiary hearings, that Mr. Yung "lacked the business ability,
good character, honesty and integrity necessary to qualify to
operate gaming facilities in New Jersey."

Mr. Yung seeks to avoid the appointment of a trustee by
purporting to put in place new management, Mr. Stratton points
out.  Mr. Yung recently hired Scott Butera to serve, subject to
regulatory approval, as chief restructuring officer of Tropicana
Entertainment.  However, like all of the executive officers of
Tropicana Entertainment, Mr. Butera will report directly to Mr.
Yung, who proposes to continue as CEO.  Under Mr. Butera's
employment agreement with the company, he can be terminated at
Tropicana Entertainment's -- by Mr. Yung -- essentially, at will,
Mr. Stratton tells the Court.  Mr. Yung has also announced the
replacement of Tropicana Entertainment's current chief financial
officer.

Mr. Yung has also proposed to continue serving as the sole member
of the board of managers of Tropicana Entertainment and
eventually adding new "independent" members to the Board, each of
whom will have been personally vetted by him.  "Stated most
simply, Mr. Yung's proposal for 'new independent management' is
for him to remain at the helm and continue to personally direct
and control Tropicana Entertainment," Mr. Stratton argues.

The Noteholders, nevertheless, clarify that they do not object to
the appointment of Mr. Butera as CRO.

Only the immediate appointment of a trustee can ensure that the
Debtors' bankruptcy proceeding will not reflect a continuation  
of the prepetition misconduct and erosion of value of their
estates, Mr. Stratton maintains.

Moreover, non-debtor entities owned and controlled by Mr. Yung
are, through a variety of service agreements, in a position to
siphon off value from the Debtors' estates, Mr. Stratton adds.  
"The appointment of a trustee will permit a thorough
investigation into a host of related party arrangements, the
extent of which are presently unknown, that may benefit Mr. Yung
to the direct detriment of the Debtors' estates."

                 About Tropicana Entertainment

Based in Crestview Hills, Kentucky, Tropicana Entertainment LLC --
http://www.tropicanacasinos.com/-- is an indirect subsidiary of  
Tropicana Casinos and Resorts.  The company is one of the largest
privately-held gaming entertainment providers in the United
States.  Tropicana Entertainment owns eleven casino properties in
eight distinct gaming markets with premier properties in Las
Vegas, Nevada and Atlantic City, New Jersey.

Tropicana Entertainment LLC filed for Chapter 11 protection on
May 5, 2008, (Bankr. D. Del. Case No. 08-10856)  Its debtor-
affiliates filed for separate Chapter 11 petitions but with no
case numbers assigned yet.  Kirkland & Ellis LLP and Mark D.
Collins, Esq. at Richards Layton & Finger represent the Debtors in
their restructuring efforts.  Their financial advisor is Lazard
Ltd.  Their notice, claims, and balloting agent is Kurtzman Carson
Consultants LLC.  The Debtors' consolidated financial condition as
of Feb. 29, 2008, showed $2,845,847,596 in total assets and
$2,429,890,642 in total debts.

(Tropicana Bankruptcy News, Issue No. 2; Bankruptcy Creditors'
Service Inc., http://bankrupt.com/newsstand/or 215/945-7000)


TROPICANA ENT: Can Hire Kurtzman Carson as Notice and Claims Agent
------------------------------------------------------------------
Tropicana Entertainment LLC and its debtor-affiliates sought and
obtained authority from the U.S. Bankruptcy Court for the District
of Delaware to employ Kurtzman Carson Consultants LLC as their
notice, claims, and balloting agent.

According to William J. Yung III, chief executive officer of
Tropicana Entertainment LLC, Kurtzman has developed efficient
and cost-effective methods to properly handle the voluminous
mailings associated with the noticing, claims processing, and
balloting portions of Chapter 11 cases to ensure the orderly and
fair treatment of creditors, equity security holders, and all
parties-in-interest.  

As the Debtors' noticing agent, Kurtzman will prepare and serve a
variety of documents on behalf of the Debtors, including:

   -- the notice of the commencement of the Debtors' Chapter 11
      cases and the initial meeting of creditors under Section
      341(a) of the Bankruptcy Code;

   -- the notice of any claims bar date;

   -- motions, applications, and other requests for relief and
      related documents;

   -- objections, responses, and replies with respect to requests
      for relief;

   -- hearing agendas;

   -- objections to claims;

   -- any disclosure statements and Chapter 11 plans of
      reorganization and all related documents; and

   -- all notices of the filing of documents, hearings, and other
      miscellaneous notices as the Debtors or the Court may deem
      necessary for the orderly administration of the Chapter 11
      cases.

As the Debtors' claims administrator, Kurtzman will:

   * maintain an official claims register by docketing all proofs
     of claim and proofs of interest in a database;

   * maintain copies of all proofs of claim and proofs of
     interest filed in the Chapter 11 cases;

   * update the official claims register in accordance with Court
     orders;

   * implement necessary security measures to ensure the
     completeness and integrity of the claims register;

   * transmit to the office of the Clerk of the Court a copy of
     the claims register as requested;

   * maintain an up-to-date mailing list for all entries that
     have filed proofs of claim or interest and make that list
     available to the Clerk's Office or any party-in-interest;

   * provide access to the public for examination of copies of
     the proofs of claim or interest filed in the Chapter 11
     cases;

   * record all transfers of claims pursuant to Rule 3001(e) of
     the Federal Rules of Bankruptcy Procedure and, if directed,
     provide notice of those transfers; and

   * establish a case Web site with case information, including
     key dates, service lists, and free access to the case docket
     within three days of docketing.

As the Debtors' balloting agent, Kurtzman will:

   * print ballots and coordinate the mailing of solicitation
     packages to all voting and non-voting parties and provide a
     certificate or affidavit of service;

   * establish a toll-free "800" number to receive and answer
     questions regarding voting with respect to any Chapter 11
     plan;

   * receive ballots at a post office box, inspect ballots for
     conformity to voting procedures, date stamping, and number
     ballots consecutively, and tabulate and certify results; and

   * prepare voting reports by plan class, creditor, or
     shareholder and the amount for review and approval by the
     Debtors and their counsel.

Kurtzman will also provide other consulting services including
ministerial assistance in preparation of Schedules of Assets and
Liabilities and Statements of Financial Affairs, contract and
lease collection and review, and preparing custom reports.

The Debtors will pay Kurtzman according to its customary hourly
rates:

   Professional                                  Hourly Rates
   ------------                                  ------------
   Clerical                                      $45 to $65
   Project Specialist                            $80 to $140
   Senior Consultant/Senior Managing Consultant  $145 to $225
   Technology/Programming Consultant             $230 to $275
     
The Debtors will also reimburse Kurtzman for any necessary
out-of-pocket expenses.  An employment agreement, dated March 5,
2008, between the Debtors and Kurtzman provides that Kurtzman
will receive a $25,000 retainer.

James Le, chief operating officer of Kurtzman Carson Consultants
LLC, assures the Court that his firm does not represent any
interest adverse to the Debtors and their estates, and is a
"disinterested person" as the term is defined in Section 101(14)
of the Bankruptcy Code.

                 About Tropicana Entertainment

Based in Crestview Hills, Kentucky, Tropicana Entertainment LLC --
http://www.tropicanacasinos.com/-- is an indirect subsidiary of  
Tropicana Casinos and Resorts.  The company is one of the largest
privately-held gaming entertainment providers in the United
States.  Tropicana Entertainment owns eleven casino properties in
eight distinct gaming markets with premier properties in Las
Vegas, Nevada and Atlantic City, New Jersey.

Tropicana Entertainment LLC filed for Chapter 11 protection on
May 5, 2008, (Bankr. D. Del. Case No. 08-10856)  Its debtor-
affiliates filed for separate Chapter 11 petitions but with no
case numbers assigned yet.  Kirkland & Ellis LLP and Mark D.
Collins, Esq. at Richards Layton & Finger represent the Debtors in
their restructuring efforts.  Their financial advisor is Lazard
Ltd.  The Debtors' consolidated financial condition as of Feb. 29,
2008, showed $2,845,847,596 in total assets and $2,429,890,642 in
total debts. (Tropicana Bankruptcy News, Issue No. 2; Bankruptcy
Creditors' Service Inc., http://bankrupt.com/newsstand/or  
215/945-7000)


TWEETER HOME: Opens First Store Since Schultze Acquisition
----------------------------------------------------------
Tweeter Opco LLC, Tweeter Newco LLC's operating subsidiary, will
open its first new store and will test a new store format in
Boston, This Week in Consumer Electronics reported.  Tweeter
Newco is an entity formed by Schultze Asset Management LLC,
purchaser of substantially all of Tweeter Home Entertainment Group
Inc. and its debtor affiliates' assets.

According to TWICE, the store will be a 6,000-square-foot
"Playground" showroom in Chicago's Lincoln Park district, and
will showcase A/V products and whole-house systems within home-
like vignettes.  The Lincoln Park location will be Tweeter's
sixth Playground showroom, and replaces a mall-based store whose
lease was rejected, TWICE said.

"The new store is a demonstration of our intent to move the
business forward," George Granoff, president and chief executive
officer of Tweeter said.  The Playground format has been "way
outperforming" older stores on a range of performance metrics, he
told TWICE.  The new prototype store, to open for testing in
April, is a retrofit of an existing Tweeter location near company
headquarters in Boston,a and the format will feature new displays
and "bullet-proof" A/V demos.

                      Tweeter Breaks Even

Tweeter hired David Pearce as chief financial officer in January
2008, according to TWICE.  The company notes that Mr. Pearce is
concentrating on reducing costs and restructuring service and
distribution networks.

As a result, the company operated "very close" to break-even
during the fourth quarter of 2007, TWICE quoted Mr. Granoff.  

Schultze purchased Tweeter for $38,000,000 in a bankruptcy
auction last July 2007, TWICE reported.

                       About Tweeter Home

Based in Canton, Mass., Tweeter Home Entertainment Group Inc.
-- http://www.tweeter.com/-- retails mid-to high-end audio and
video consumer electronics products.  Tweeter and seven of its
affiliates filed for chapter 11 Protection on June 11, 2007
(Bankr. D. Del. Case Nos. 07-10787 through 07-10796).  Gregg M.
Galardi, Esq., Mark L. Desgrosseilliers, Esq., and Sarah E.
Pierce, Esq., at Skadden, Arps, Slate, Meagher & Flom, LLP,
represent the Debtors.  Kurtzman Carson Consultants LLC acts as
the Debtors' claims and noticing agent.

Bruce Grohsgal, Esq., William P. Weintraub, Esq., and Rachel Lowy
Werkheiser, Esq., at Pachulski Stang Ziehl & Jones LLP; and Scott
L. Hazan, Esq., Lorenzo Marinuzzi, Esq., and Todd M. Goren, Esq.,
at Otterbourg, Steindler, Houston & Rosen, P.C., represent the
Official Committee of Unsecured Creditors.

As of Dec. 21, 2006, Tweeter had total assets of $258,573,353 and
total debts of $190,417,285.  The Court expects the Debtors to
file a plan of reorganization on June 5, 2008.  (Tweeter
Bankruptcy News, Issue No. 19, Bankruptcy Creditors' Service,
Inc., http://bankrupt.com/newsstand/or 215/945-7000).


TWEETER HOME: Wants to Extend Removal Period to October 31
----------------------------------------------------------
Tweeter Home Entertainment Group Inc. and its debtor affiliates
ask the U.S. Bankruptcy Court for the Southern District of Florida
to extend the period within which they may remove any actions
pending on the date of bankruptcy through the later of:

   (i) Oct. 31, 2008, or

  (ii) 30 days after the entry of an order terminating the
       automatic stay with respect to any particular action
       sought to be removed pursuant to 28 U.S.C. Section 1452
       and Rule 9027 of the Federal Rules of Bankruptcy
       Procedure.

The Debtors' current Removal Period expired on May 7, 2008.

Gregg M. Galardi, Esq., at Skadden, Arps, Slate, Meagher, & Flom,
LLP, in Wilmington, Delaware, tells Judge Walsh that

The Debtors relate that they are parties to numerous judicial and
administrative proceedings currently pending in various courts
and administrative agencies.  The Actions include discrimination,
workers compensation, and product liability claims.

The Debtors maintain that they have not completed a review of the
Actions because they have been focused primarily on (x)
finalizing a proposed plan of liquidation following the July 13
closing of the sale of substantially all of their assets to
Tweeter Newco, LLC, (y) determining their remaining assets and
liabilities, and (z) fulfilling their obligations as debtors-in-
possession.

The Debtors aver that the requested extension affords them
sufficient opportunity to make fully informed decisions regarding
the removal of the Actions, thereby protecting their valuable
right to adjudicate lawsuits pursuant to Section 1452.

The Court will convene a hearing on June 9, 2008, at 2:00 p.m.,
to consider the Debtors' request.  By application of Rule 9006-2
of the Local Rules of Bankruptcy Practice and Procedures of the
United States Bankruptcy Court for the District of Delaware, the
Debtors' Removal Period is automatically extended through the
conclusion of that hearing.

                       About Tweeter Home

Based in Canton, Mass., Tweeter Home Entertainment Group Inc.
-- http://www.tweeter.com/-- retails mid-to high-end audio and
video consumer electronics products.  Tweeter and seven of its
affiliates filed for chapter 11 Protection on June 11, 2007
(Bankr. D. Del. Case Nos. 07-10787 through 07-10796).  Gregg M.
Galardi, Esq., Mark L. Desgrosseilliers, Esq., and Sarah E.
Pierce, Esq., at Skadden, Arps, Slate, Meagher & Flom, LLP,
represent the Debtors.  Kurtzman Carson Consultants LLC acts as
the Debtors' claims and noticing agent.

Bruce Grohsgal, Esq., William P. Weintraub, Esq., and Rachel Lowy
Werkheiser, Esq., at Pachulski Stang Ziehl & Jones LLP; and Scott
L. Hazan, Esq., Lorenzo Marinuzzi, Esq., and Todd M. Goren, Esq.,
at Otterbourg, Steindler, Houston & Rosen, P.C., represent the
Official Committee of Unsecured Creditors.

As of Dec. 21, 2006, Tweeter had total assets of $258,573,353 and
total debts of $190,417,285.  The Court expects the Debtors to
file a plan of reorganization on June 5, 2008.  (Tweeter
Bankruptcy News, Issue No. 19, Bankruptcy Creditors' Service,
Inc., http://bankrupt.com/newsstand/or 215/945-7000).


TWEETER HOME: Wants to Employ Ask Financial as Special Counsel
--------------------------------------------------------------
Tweeter Home Entertainment Group Inc. and its debtor affiliates
obtained permission from the U.S. Bankruptcy Court for the
Southern District of Florida to employ ASK Financial as their
special counsel.

According to Gregg M. Galardi, Esq., at Skadden, Arps, Slate,
Meagher, & Flom, LLP, in Wilmington, Delaware, the Debtors seek
to hire ASK Financial to further their ongoing efforts to develop
and implement a liquidating plan of reorganization.

ASK Financial is an insolvency financial and legal services firm
that specializes in the area of preference analysis and
collection, Mr. Galardi notes.  In the last five years, ASK
Financial filed more than 8,500 bankruptcy proceedings, and
recovered more than 5,000,000 transaction records.

The Debtors informed the Court that during the 90-day preference
period, the gross transfers they transacted may exceed
$30,000,000.  Additionally, there may also be insider transfers
during the one-year lookback period, totaling approximately
$2,000,000.

The Debtors seek to rely on ASK Financial's advice in analyzing
avoidance claims and to pursue avoidance actions on behalf of
their estates.  

As special counsel to the Debtors, ASK Financial will perform
preference analysis of all of the Debtors' transactions that
occurred within the 90-day period prior to the Petition Date, and
for insiders, all transactions that occurred within one year from
the Petition Date.  The Preference Analysis will involve a review
of thousands of transactions covering the preference period and
the prior two-year history.

ASK Financial will also analyze Deferred Compensation Actions,
and report exclusively to the Official Committee Of Unsecured
Creditors.  The Committee has standing to pursue those actions.  
The firm has agreed to have no communicaiton with the Debtors
with respect to deferred compensation claims.

Pursuant to a retainer agreement entered into by the Debtors and
ASK Financial, the firm agreed to perform an initial preference
analysis of potential avoidance claims for no charge.  ASK
Financial will earn fees on a contingency basis:

     (i) 15% of all gross collections obtained on cases settled
         prior to the filing of a complaint;

    (ii) 24% of all collections obtained on cases settled after
         the filing of a complaint but prior to four weeks before
         scheduled trial date or entry of a judgment; and

   (iii) 28% of all collections obtained on cases settled the
         earlier of four weeks before scheduled trial date or
         entry of a judgment.

ASK Financial will be reimbursed for all the expenses it incurs
for the contemplated services.  

To expedite the handling of the Debtors' Chapter 11 cases, the
Debtors sought the Court's authority to settle cases at a certain
percentage without further notice or hearing, and the Court's
permission for ASK Financial to settle preference claims based on
the value of net preference claims.

Net Preference Claims, which refers to the total transfers made,
less subsequent new value and ordinary course amounts paid no
later than 30 days of terms, will have values of:

   * for NPC under $50,000, at least 65% of the NPC or more, with
     no consent required, and less than 65% with the Debtors'
     consent;

   * for NPC between $50,000 and $100,000, at least 75% of the
     NPC or more, with no consent required, and less than 75%
     with the Debtors' consent; and

   * for NPC over $100,000, the Debtors' consent will be
     obtained.

Joseph Steinfield, Esq., co-managing partner of ASK Financial,
assures the Court that his firm is a "disinterested person," as
the term is defined in Section 101(14) of the Bankruptcy Code.

                       About Tweeter Home

Based in Canton, Mass., Tweeter Home Entertainment Group Inc.
-- http://www.tweeter.com/-- retails mid-to high-end audio and
video consumer electronics products.  Tweeter and seven of its
affiliates filed for chapter 11 Protection on June 11, 2007
(Bankr. D. Del. Case Nos. 07-10787 through 07-10796).  Gregg M.
Galardi, Esq., Mark L. Desgrosseilliers, Esq., and Sarah E.
Pierce, Esq., at Skadden, Arps, Slate, Meagher & Flom, LLP,
represent the Debtors.  Kurtzman Carson Consultants LLC acts as
the Debtors' claims and noticing agent.

Bruce Grohsgal, Esq., William P. Weintraub, Esq., and Rachel Lowy
Werkheiser, Esq., at Pachulski Stang Ziehl & Jones LLP; and Scott
L. Hazan, Esq., Lorenzo Marinuzzi, Esq., and Todd M. Goren, Esq.,
at Otterbourg, Steindler, Houston & Rosen, P.C., represent the
Official Committee of Unsecured Creditors.

As of Dec. 21, 2006, Tweeter had total assets of $258,573,353 and
total debts of $190,417,285.  The Court expects the Debtors to
file a plan of reorganization on June 5, 2008.  (Tweeter
Bankruptcy News, Issue No. 19, Bankruptcy Creditors' Service,
Inc., http://bankrupt.com/newsstand/or 215/945-7000).


UPPER BEAR CREEK: Case Summary & Largest Unsecured Creditors
------------------------------------------------------------
Debtor: Upper Bear Creek, LLC
        P.O. Box 3297
        Evergreen, CO 80437

Bankruptcy Case No.: 08-16014

Chapter 11 Petition Date: April 30, 2008

Court: District of Colorado (Denver)

Judge: Sidney B. Brooks

Debtor's Counsel: Philipp C. Theune, Esq.
                  Email: philipp@theunelaw.com
                  1763 Franklin St.
                  Denver, CO 80218-1124
                  Tel: (303) 832-1150
                  Fax: (303) 845-6934

Total Assets: $6,000,000

Total Debts:  $5,000,000

Debtor's Largest Unsecured Creditor:

   Entity                      Nature of Claim       Claim Amount
   ------                      ---------------       ------------
West-Brandt Foundation         trade debt            $5,000,000
1000 Singing River Ranch Road
Evergreen, CO 80439


U.S. ANTIMONY: DeCoria Maichel Expresses Going Concern Doubt
------------------------------------------------------------
Spokane, Wash.-based DeCoria, Maichel & Teague, P.S., raised
substantial doubt about the ability of United States Antimony
Corporation to continue as a going concern after it audited the
company's financial statements for the year ended Dec. 31, 2007.  
The auditor pointed to the company's negative working capital and
accumulated deficit.

The company posted a net loss of $623,692 on total revenues of
$5,259,127 for the year ended Dec. 31, 2007, as compared with a
net loss of $284,658 on total revenues of $4,395,368 in the prior
year.

At Dec. 31, 2007, the company's consolidated balance sheet showed
$3,345,889 in total assets, $2,617,350 in total liabilities, and
$728,539 in total stockholders' equity.  

The company's consolidated balance sheet at Dec. 31, 2007, showed
strained liquidity with $503,037 in total current assets available
to pay $1,850,139 in total current liabilities.

A full-text copy of the company's 2007 annual report is available
for free at: http://ResearchArchives.com/t/s?2b96  

                 About United States Antimony

United States Antimony Corporation (OTC BB: UAMY.OB) --
http://www.usantimony.com-- engages in the production and sale of  
antimony and zeolite products in the United States. It produces
antimony oxide products of different particle size using
proprietary furnace technology, various grades of sodium
antimonate using hydro metallurgical techniques, and antimony
metal. Antimony oxide, a fine white powder, is used primarily in
conjunction with a halogen to form a synergistic flame retardant
system for plastics, rubber, fiberglass, textile goods, paints,
coatings, and paper.  The company was founded in 1968 and is based
in Thompson Falls, Montana.


U.S. ENERGY: Court Sets July 1 as Claims Bar Date
-------------------------------------------------
The Hon. Robert D. Drain of the United States Bankruptcy Court
for the Southern District of New York established July 1, 2008, as
deadline for creditors U.S. Energy Systems Inc. and its debtor-
affiliates to file proofs of claim.

As reported in the Troubled Company Reporter on May 6, 2008,
the Debtors proposed July 7, 2008, as claims bar date for
governmental units holding claims arising before the Debtors'
bankruptcy filing.

All original proofs of claim must be delivered to Epiq bankruptcy
Solutions LLC, claims agent of the Debtors.

                       About U.S. Energy

Based in Avon, Connecticut, U.S. Energy Systems Inc. (Pink Sheets:
USEY) --  http://www.usenergysystems.com/-- owns green power
and clean energy and resources.  USEY owns and operates energy
projects in the United States and United Kingdom that generate
electricity, thermal energy and gas production.

The company filed for Chapter 11 protection on Jan. 9, 2008 (Bank.
S.D.N.Y. Case No. 08-10054).  There are 34 affiliates who filed
for separate Chapter 11 petitions.  Peter S. Partee, Esq., at
Hunton & Williams LLP, represents the Debtor in its restructuring
efforts.  Jefferies & Company, Inc. serves as the company's
financial advisor.  The Debtor also selected Epiq Bankruptcy
Solutions LLC as noticing, claims and balloting agent.

The Official Committee of Unsecured Creditors has yet to be
appointed in these cases by the U.S. Trustee for Region 2.  When
the Debtors filed for protection from their creditors, they listed
total assets of $258,200,000 and total debts of $175,300,000.


U.S. ENERGY: Has Until July 8 to File Chapter 11 Plan
-----------------------------------------------------
The Hon. Robert D. Drain of the United States Bankruptcy Court for
the Southern District of New York extended the exclusive period of
U.S. Energy Systems Inc. and its debtor-affiliates to file a
Chapter 11 plan until July 8, 2008.

Judge Drain also extended the exclusive rights to solicit
acceptances of that plan until Sept. 8, 2008.

As reported in the Troubled Company Reporter on April 22, 2008,
the Debtors have an urgent need to resolve certain issues with
various creditors and to negotiate an effective Chapter 11 plan of
reorganization with their creditors.

                       About U.S. Energy

Based in Avon, Connecticut, U.S. Energy Systems Inc. (Pink Sheets:
USEY) --  http://www.usenergysystems.com/-- owns green power
and clean energy and resources.  USEY owns and operates energy
projects in the United States and United Kingdom that generate
electricity, thermal energy and gas production.

The company filed for Chapter 11 protection on Jan. 9, 2008 (Bank.
S.D.N.Y. Case No. 08-10054).  There are 34 affiliates who filed
for separate Chapter 11 petitions.  Peter S. Partee, Esq., at
Hunton & Williams LLP, represents the Debtor in its restructuring
efforts.  Jefferies & Company, Inc. serves as the company's
financial advisor.  The Debtor also selected Epiq Bankruptcy
Solutions LLC as noticing, claims and balloting agent.

The Official Committee of Unsecured Creditors has yet to be
appointed in these cases by the U.S. Trustee for Region 2.  When
the Debtors filed for protection from their creditors, they listed
total assets of $258,200,000 and total debts of $175,300,000.


VALHI INC: S&P Lowers Corporate Credit Rating to B from B+
----------------------------------------------------------
Standard & Poor's Ratings Services lowered its corporate credit
rating on Dallas, Texas-based Valhi Inc. and its subsidiary,
Kronos International Inc. to 'B' from 'B+'.  At the same time, S&P  
lowered the rating on Kronos' $400 million senior secured notes
issue due 2013 to 'B' from 'B+'.  The outlook is stable.
     
"The downgrade follows the recent announcement of weak first-
quarter operating results related to the company's titanium
dioxide business, which reflects a challenging operating
environment with weak U.S. demand and higher overall input costs,"
said Standard & Poor's credit analyst Henry Fukuchi.  "The
downgrade also accounts for the year-over-year deterioration in
operating trends versus our expectations, a weakening of the
financial profile, and the continued difficult operating
environment in the company's core TiO2 business."
     
During fiscal 2007, Kronos experienced lower average TiO2 selling
prices and higher raw material and manufacturing costs, which
narrowed operating margins beyond our expectations.  The TiO2
operating environment has become increasing challenging because of
weak U.S. demand stemming from the housing slowdown coupled with
higher energy costs driving up overall manufacturing costs.  S&P
expect this trend to continue at least through the remainder of
2008 and first half of 2009 before operating performance begins to
stabilize or improve.  In light of these factors, S&P expect cash
flow generation to be lower than in previous years, and
improvement in its credit quality will be limited for the next 12
to 18 months.
     
The downgrade also takes into consideration the aggressive
financial policy Valhi has adopted with its significant
distribution of Titanium Metals Corp. shares in 2007 and its debt-
financed repurchase of CompX International Inc. shares.
     
Valhi has about $1.5 billion in sales and approximately
$772 million in total debt, adjusted for operating leases and
postretirement benefit obligations and excluding Snake River Sugar
Co. debt.
     
The ratings on Valhi reflect the company's limited business
diversity, its exposure to cyclical commodity product cycles, and
a highly leveraged financial profile.  In addition, S&P's  
assessment of Valhi takes into consideration the potential
liability resulting from lead-pigment litigation, which may affect
future cash flows and the company's ability to address investment
opportunities. Offsetting factors include the company's well-
established position among the leading global TiO2 producers.


VALLEJO CITY: S&P Cuts Improvement Project Rating to B from A
-------------------------------------------------------------
Standard & Poor's Ratings Services lowered its underlying rating
(SPUR) on the City of Vallejo, California's motor vehicle license
fee secured certificates of participation, series 1999 capital
improvement project to 'B' from 'A' and placed the rating on
CreditWatch with developing implications, based on the city's
May 6, 2008, decision to file for Chapter 9 bankruptcy protection.

The rating reflects the uncertainty regarding the MVLF program
legislation's applicability under bankruptcy protection.  Pending
a bankruptcy court decision or confirmation from the state that
funds for the payment of the bonds will be directed to the trustee
directly, timely payment of bonds could be compromised.  

Therefore, the payment of the bonds is uncertain.  Standard &
Poor's does not maintain an issuer credit rating or a general fund
appropriation-backed rating on the city.  S&P will monitor
developments as information becomes available.


VALLEJO PUBLIC: S&P Slashes Revenue Bonds Rating to B from A-
-------------------------------------------------------------
Standard & Poor's Ratings Services lowered its underlying rating
(SPUR) on the Vallejo Public Financing Authority, California's
revenue bonds, issued on behalf of the Vallejo-Glen Cove Community
Assessment District No. 61, to 'B' from 'A-' and placed the rating
on CreditWatch with developing implications, based on the city's
May 6, 2008, decision to file for Chapter 9 bankruptcy protection.  
The bonds are secured by assessments levied against property
within the Glen Cove Community Assessment District No. 61.  

The lowered rating takes into account Standard & Poor's
expectation that the bonds will likely qualify as special revenues
for which there is a limited exception from the automatic stay
provisions under federal bankruptcy law, although pending a
bankruptcy court decision, timely payment of bonds could be
compromised.  The rating also takes into account the city's debt
service reserve, which could be used to meet payments.  It is
possible that the debt service reserve could be deemed
inaccessible by the courts and this could further compromise bond
payments.

Standard & Poor's does not maintain an issuer credit rating or a
general fund appropriation-backed rating on the city.  S&P will
monitor developments as information becomes available.


VION PHARMACEUTICALS: Receives Nasdaq Delisting Notice
------------------------------------------------------
Vion Pharmaceuticals, Inc. said it received a letter, dated
May 7, 2008, from The Nasdaq Stock Market Inc. stating that the
Company's common stock will be delisted from the Nasdaq Capital
Market as of the opening of business on May 16, 2008 because the
Company does not comply with Marketplace Rule 4310(c)(3) which
requires the Company to have a minimum of $2,500,000 in
stockholders' equity, or $35,000,000 market value of listed
securities, or $500,000 of net income from continuing operations
for the most recently completed fiscal year or two of the three
most recently completed fiscal years.

The Company has the right to appeal the Nasdaq Staff determination
to a Nasdaq Listings Qualifications Panel.  If the Company
requests a hearing no later than May 14, 2008, the request
for a hearing will automatically stay the delisting of the
Company's common stock until the Panel reaches a decision.

The Company intends to request a hearing before May 14, 2008.
There can be no assurance that the Panel will grant the Company's
request for continued listing.

Vion Pharmaceuticals, Inc. -- http://www.vionpharm.com--   
develops and commercializes cancer therapeutics. Vion has two
agents in clinical trials. Cloretazine(R) (VNP40101M), a unique
alkylating agent, is being evaluated in a Phase II pivotal trial
as a single agent in elderly patients with previously untreated de
novo poor-risk acute myelogenous leukemia. Clinical trials of
Cloretazine(R) (VNP40101M) with temozolomide in brain tumors, and
with stem cell transplantation in advanced hematologic
malignancies, are also being conducted. Triapine(R), a potent
inhibitor of a key step in DNA synthesis, is being evaluated in
clinical trials sponsored by the National Cancer Institute.


WACHOVIA BANK: Fall of Property Value Cues Moody's to Cut Ratings
-----------------------------------------------------------------
Moody's Investors Service downgraded the ratings of two classes,
affirmed one class, and placed the rating of one class on review
for possible downgrade of Wachovia Bank Commercial Mortgage Trust,
Commercial Mortgage Pass-Through Certificates, Series 2004-WHALE 4
as:

  -- Class X-1, Notional, affirmed at Aaa
  -- Class J, $33,960,750, rated Baa2; on review for possible
     downgrade

  -- Class K, $31,608,000, downgraded to Caa1 from Ba2
  -- Class RC, $1,986,932, downgraded to Caa2 from Ba3

Moody's is downgrading two classes and placing one class on review
for possible downgrade based on a decline in its estimate of
property value resulting from a decrease in sustainable net cash
flow.

As of the April 15, 2008 distribution date, the transaction's
aggregate certificate balance has decreased by approximately 93.9%
to $67.6 million from $1.1 billion at securitization.  Only one
loan, the Ritz Carlton New Orleans Loan, remains in the Trust.

The Ritz Carlton Loan ($65.6 million pooled loan; $2.0 million
non-pooled loan) is secured by a mixed-use complex consisting of a
527-room Ritz-Carlton Hotel, a 230-room Iberville Suites Hotel, a
20,600 square foot spa, a 23,000 square foot retail area and a
303-car parking garage.  The property, which is located on the
western border of the French Quarter near the New Orleans CBD,
suffered substantial damage in 2005 due to Hurricane Katrina and
has been open for a little over a year since repair of the damages
from the hurricane.

The Ritz-Carlton Hotel re-opened in December 2006, the Iberville
Suites Hotel re-opened in February 2007.  The borrower has
exercised three of its three one-year extension options and the
loan matures in April 2009.  The loan benefits from strong
sponsorship from AIG and Quorum Hotels and Resorts.  However the
outlook for recovery of New Orleans convention and tourism
industry for pre-Katrina levels in the next few years is bleak at
this time.  The net cash flow for the 2008 budget equaled
$2.3 million compared to a pre-Katrina Moody's 2004 securitization
NCF of $12.0 million.  The current underlying rating of the pooled
loan is Caa1 compared to Ba2 at last review.


WELLMAN INC: Panel Seeks Inquiry on $375 Mil. Refinancing Deal
--------------------------------------------------------------
The Official Committee of Unsecured Creditors in Wellman Inc. and
its debtor-affiliates' bankruptcy cases seeks permission from the
U.S. Bankruptcy Court for the Southern District of New York to
compel the Debtors to appear for oral examination pursuant to Rule
2004(d) of the Federal Rules of Bankruptcy Procedure.   

The Creditors Committee wants to examine the Debtors concerning a
transaction in 2004 wherein Wellman Inc., refinanced about
$375,000,000, in outstanding unsecured debt, which had resulted in
the Debtors accumulating secured debt.

Mark Somerstein, Esq., at Ropes & Gray LLP, in New York, recounts
Wellman, Inc., incurred the outstanding debt under a loan
agreement dated June 27, 2003, and three other unsecured note
agreements.  The company managed to refinance its debt through
the Credit Agreement, First Lien Senior Credit Agreement, and the
Second Lien Senior Credit Agreement it reached with its lenders.

The Committee has discovered that at the time of the refinancing,
the outstanding debt was primarily unsecured and was the
obligation of Wellman and a few of its subsidiaries.  After the
deal, however, the lenders imposed $675,000,000 of secured debt
on Wellman's entire capital structure, including obligations for
such debt on all the subsidiaries, Mr. Somerstein recounts.

The Committee avers that the liens and guarantees in connection
with the transaction may be avoidable as fraudulent conveyances.
"It has not been evidenced that Wellman's direct and indirect
subsidiaries received any benefit from incurring the secured
debt, obligations that likely rendered the subsidiaries  
insolvent," Mr. Somerstein points out.

The Creditors Committee, through its financial advisor FTI
Consulting, Inc., has asked the Debtors for information needed  
to evaluate the transaction and the alleged fraudulent transfer
claims.  The Debtors, however, provided limited information and
did not further contact FTI when they would provide additional
information.

In connection with the examination, the Creditors Committee
demands that the Debtors to produce:

   (1) documents concerning the three refinancing agreements
       including collateral and ancillary documents;

   (2) documents concerning any debt, note, bond or debt
       obligation, except payments to suppliers of goods or
       services, of any Debtor or Wellman's subsidiary that
       had been repaid, changed or eliminated with the proceeds
       of the refinancing agreements;

   (3) documents relating to uses of the proceeds of the
       refinancing agreements, except payments to suppliers
       of goods or services;

   (4) financial statements for any Debtor or Wellman's
       subsidiary for the period Jan. 1, 2003, to the present;

   (5) documents concerning the transfers between any Debtor or
       Wellman's subsidiary for the period Jan. 1, 2003, to the
       present;

   (6) complete corporate organization chart showing for each
       business entity, the name, business purpose, and
       financial obligations for the period Jan. 1, 2003, to the
       present;

   (7) federal and state tax returns of each Debtor or Wellman's
       subsidiary for the period Jan. 1, 2003, to the present;
       and

   (8) appraisals concerning the assets purchased through the
       proceeds of the refinancing transaction, except for
       purchases made in the ordinary course of business.

The absolute priority rule under the Bankruptcy Code prevents
unsecured creditors from receiving distributions before secured
creditors are paid in full, to the extent of the value of their
collateral.  However, to the extent the Committee obtains
avoidance of the secured creditors' liens or reclassification of
their claims to unsecured, potential recovery by unsecured
creditors may increase.

        Committee Wants Liens' Challenge Period Extended

The Creditors Committee further asks the Court to extend to
August 29, 2008, the deadline for challenging the stipulations or
other provisions in the final order approving the Debtors'
postpetition financing.

To recall, the final DIP order established June 8, 2008, as the
deadline for challenging any of its provisions, including the
Debtors' agreement that no portion of the obligations as well as
liens and security interests granted under the Revolving Credit
Agreement will be subject to avoidance, recharacterization,
recovery or subordination.

If no challenge is brought on or before the deadline, the  
obligations and liens under the refinancing agreements will not
be subject to avoidance.

                           About Wellman

Headquartered in Fort Mill, South Carolina, Wellman Inc. --
http://www.wellmaninc.com/-- manufactures and markets
packaging         
and engineering resins used in food and beverage packaging,
apparel, home furnishings and automobiles.  They manufacture
resins and polyester staple fiber a three major production
facilities.

The company and its debtor-affiliates filed for Chapter 11
protection on Feb. 22, 2008 (Bankr. S.D. N.Y. Case No. 08-10595).   
Jonathan S. Henes, Esq., at Kirkland & Ellis, LLP, in New York
City, represents the Debtors.

Wellman Inc., in its bankruptcy petition, listed total assets
of $124,277,177 and total liabilities of $600,084,885, as of
Dec. 31, 2007, on a stand-alone basis.  Debtor-affiliate ALG,
Inc., listed assets between $500 million and $1 billion on a
stand-alone basis at the time of the bankruptcy filing.  
Debtor-affiliates Fiber Industries Inc., Prince Inc., and
Wellman of Mississippi Inc., listed assets between $100 million
and $500 million at the time of their bankruptcy filings.

On a consolidated basis, Wellman Inc., and its debtor-affiliates
listed $498,867,323 in assets and $684,221,655 in liabilities as
of Jan. 31, 2008.

(Wellman Bankruptcy News, Issue No. 11; Bankruptcy Creditors'
Service Inc., http://bankrupt.com/newsstand/or 215/945-7000)    


WS PARK: Case Summary & Largest Unsecured Creditor
--------------------------------------------------
Debtor: WS Park, LLC
        3460 West 7th St., Ste. 1208
        Los Angeles, CA 90005

Bankruptcy Case No.: 08-15961

Chapter 11 Petition Date: May 1, 2008

Court: Central District Of California (Los Angeles)

Judge: Ernest M. Robles

Debtor's Counsel: Joon M. Khang, Esq.
                  Email: joon@khanglaw.com
                  Khang & Khang, LLP
                  1901 Avenue of the Stars 2nd Flr.
                  Los Angeles, CA 90067
                  Tel: (310) 461-1342
                  Fax: (310) 461-1343
                  http://www.khanglaw.com

Total Assets: $7,050,000

Total Debts:  $3,888,555

Debtor's Largest Unsecured Creditor:

   Entity                      Nature of Claim       Claim Amount
   ------                      ---------------       ------------
Won Shil Park                  loan for debtor's     $50,000
3460 West 7th St., Ste. 1208   operating capital
Los Angeles, CA 90005


* Fitch Performs Analysis on 2002 Through 2004 Vintages in US CMBS
------------------------------------------------------------------
In its continuing effort to measure all characteristics of U.S.
CMBS loans, Fitch Ratings performed a vintage analysis of the 2002
through 2004 vintages in U.S. CMBS.  This analysis completes
reviews of the vintages not already reviewed in 2008.  The
analysis included 33 transactions, of which 30 had all classes
affirmed, and yielded the following results:


Upgrades:

CSFBMSC 2004-C2
  -- Class B to 'AA+' from 'AA';
  -- Class C to 'AA' from 'AA-'.

JPMC 2002-CIBC5
  -- Class K to 'BB+' from 'BB';
  -- Class L to 'BB' from 'BB-';
  -- Class M to 'B+' from 'B';
  -- Class N to 'B' from 'B-'.

Wachovia 2003-C3
  -- Class F to 'AAA' from 'AA+';
  -- Class G to 'AA' from 'AA-'.
  -- Class H to 'A+' from 'A';
  -- Class N to 'BB+' from 'BB';
  -- Class O to 'BB-' from 'B+'.

The ratings upgrades are the result improved credit
characteristics since Fitch's last rating action.  The CSFBMSC
2004-C2 had 13.2% of additional defeasance since Fitch's last
rating action and the JPMC 2002-CIBC5 and Wachovia 2003-C3 had
5.5% and 4.56% additional pay down respectively.

The Morgan Stanley Capital I Trust - 2003-IQ4 MM transaction
remains 'Under Analysis' as Fitch expects to receive further
information.


* Student Loan Market Disruptions Pressure Lenders, Fitch Says
--------------------------------------------------------------
While the performance of U.S. FFELP student loan ABS has remained
well within expectations, disruptions in the capital markets have
put significant pressure on many student loan lenders, with
private student loan ABS showing greater vulnerability to negative
performance trends, according to Fitch Ratings in the latest
edition of 'The Student Loan Report Card'.

These latest developments in the private student loan ABS space
resulted in a series of negative rating actions from Fitch.  
Economic and legislative challenges have exacerbated the
situation, with first-quarter student loan ABS issuance down 59%
compared to the same period last year and there was no issuance of
private SLABS.  Furthermore, there are no signs that the auction-
rate market will return any time soon.

'Access to capital has been greatly curtailed by all of these
trends, causing several student loan lenders to suspend or
completely terminate their lending operations,' said Senior
Director Andrea Murad.  'With the financial guarantors and
insurance providers experiencing difficulties due to higher
projected losses, issuers that used to obtain wraps and insurance
policies now face additional challenges in accessing the public
ABS market.'

The disruption in the student loan market is resulting in
government and regulatory intervention to provide financing to
students through its lender of last resort program as well as by
purchasing FFELP student loans and student loan ABS in the
secondary market.  Industry participants, politicians and
educators are concerned about a potential shortage of funding to
students who will need financial assistance to attend school this
fall.

Fitch's newsletter also includes a summary of the legislation
intended to create contingency lending plans that are in various
stages of progress in Congress.


* CREL CDO Delinquency Rate Down in April, Fitch's Index Show
-------------------------------------------------------------
A lack of repurchased loans during the month contributed to a
slightly lower U.S. commercial real estate loan CDO delinquency
rate for April 2008 of 0.69%, down from last month's rate of
0.74%, according to the latest CREL CDO Delinquency Index from
Fitch Ratings.  The delinquency index includes loans that are 60
days or longer delinquent, matured balloon loans, and repurchased
assets.

Fitch noted 25 reported loan extensions in April 2008, which is
down from last month's total of 32.  The majority of the
extensions were again a result of options contemplated at closing.  
However, approximately 40% of these extensions were modifications
from the original loan documents.  These loan extensions, which
are typically between one to six months, continue to reflect the
lower available liquidity for CRE loans, especially those
typically found in CREL CDOs, which tend to be backed by
transitional and/or highly leveraged CRE collateral.

Although the overall delinquency rate for CREL CDOs remains low,
it is more than two times the U.S. CMBS March loan delinquency
rate of 0.33% reported in April 2008.  The CREL CDO Delinquency
Index is anticipated to be more volatile than the CMBS delinquency
index given the smaller universe of loans and the more
transitional nature of the collateral.  The Fitch CREL CDO
Delinquency Index tracks approximately 1,100 loans and 330 rated
securities/assets ($23.8 billion in 35 CREL CDOs), while the Fitch
CMBS delinquency index covers approximately 42,000 loans
($562 billion in nearly 500 CMBS transactions).

The April 2008 delinquency index encompasses 11 loans, and
includes six loans that are 60 days or more delinquent and five
matured balloons.  No rated assets were delinquent this month.  Of
the loans that are 60 days or more delinquent, two loans are in
foreclosure (0.08%).  Of note is one new matured balloon that
previously appeared in the index in February 2008 just prior to a
two month extension.  Further, two matured balloon mezzanine loans
(0.21%), which are included in the index this month, were re-
structured and extended during the month.  These now current loans
are secured by interests in the same New York City office
portfolio.

There were no repurchased loans in April 2008.  Given the
illiquidity in the market and tighter credit conditions for
issuers, Fitch continues to predict few repurchases of troubled
loans and more workouts within the trust.

Although not included in the delinquency index, 11 loans,
representing 0.36% of the CREL CDO collateral were 30 days or less
delinquent in April 2008.  This statistic is lower than last
month's total of 0.47%.  Three of these loans were brought current
after the cutoff date for this report; the other loans suggest
that overall delinquencies may be higher next month.

While no rated collateral was reported delinquent this month, 12
rated assets were considered credit impaired.  These assets are
mostly subprime RMBS assets and serve as collateral for two CREL
CDOs.  The impaired assets are equivalent to 0.38% of all CREL CDO
assets, but 7.2% and 2.8% of their respective CREL CDOs.  The two
most junior rated tranches from one of these CREL CDOs are on
Rating Watch Negative due to the subprime exposure.

In its ongoing surveillance process, Fitch will increase the
probability of default to 100% for delinquent loans that are
unlikely to return to current.  This adjustment could increase the
loan's expected loss in the cases where the probability of default
was not already 100%.  The weighted average expected loss on all
loans is the credit metric used to monitor the performance of a
CREL CDO.  Issuers covenant not to exceed a certain PEL and Fitch
determines the ratings of the CDO liabilities based on this
covenant.  Fitch analysts monitor the as-is PEL over the life of
the CDO.  The difference between the PEL covenant and the as-is
PEL represents the transaction's cushion for reinvestment and
negative credit migration.

Fitch currently rates 35 CREL CDOs encompassing approximately
1,100 loans and 330 rated assets with a balance of $23.8 billion.  
Fitch's U.S. CREL CDO Delinquency Index will be published during
the first week of every month based on asset manager and servicer
reports collected by Fitch's dedicated CRE CDO surveillance team.


* Fitch Says ANLs On Auto Loan Securities Rise Higher in April
--------------------------------------------------------------
In spite of a seasonally stronger time of the year, annualized net
loss rates on U.S. prime and subprime auto loan asset-backed
securities climbed higher in April year-over-year, though prime
auto ABS rating performance continues to remain stable through the
first four months of 2008, according to Fitch Ratings.

As predicted previously by Fitch, incoming tax refunds and rebates
did little to alleviate current loss levels recorded in April but
are still incoming.  Prime ANL were at 1.38% in April, 2.2% higher
than in March.  ANL were 86.5% higher in April versus April 2007,
the highest YOY level recorded by the index in more than eight
years.  Cumulative net losses remained relatively unchanged in
April at 0.73%, versus 0.74% posted in March.  April's CNL level
was approximately 18% above the level recorded in April 2007.  
Fitch's prime 60+ day delinquency index posted a 14% decline in
April over March, dropping to 0.54% but was 26% higher than in
April 2007.

In the subprime sector, 60+ days delinquencies dropped 5.8% in
April over March's level, to 2.76%.  However, the index was 44.5%
above the level produced in April 2007.  There was a slight
decline of 4.5% in the subprime ANL index to 7.06%.  However,
subprime ANL in April were 58% above April 2007 loss levels.

It is clear that from lender's portfolios and securitizations that
the 2007 vintage is producing weaker performance relative to 2006
and 2005 vintages.  Contributing to this is obviously the decline
in the economy, softer used vehicle values, and lending practices
including longer loan term and higher loan-to-values.

However, even in light of declining asset performance in auto ABS,
rating performance in the prime auto ABS sector continues to
remain stable although the rate of positive rating actions has
declined in 2008 when compared to 2007.  In early May, Fitch
upgraded four classes of two prime auto ABS transactions.

Fitch's auto ABS indexes track a prime and subprime portfolio
totaling approximately $64 billion, of which 66% comprises prime
auto ABS and the remaining 34% subprime.


* Fitch Comments on Ford and GM Outlook After 1st Quarter Earnings
------------------------------------------------------------------
Fitch Ratings has published these comments regarding its Outlooks
for Ford and General Motors following their first quarter
earnings.

As economic conditions and high gas prices continue to erode North
American unit sales at Ford and GM, the companies remain in the
middle stages of their lengthy restructuring efforts.  Although
both companies have achieved substantial reductions in fixed
costs, primarily through headcount reductions, Ford and GM will
continue to experience heavy cash drains in 2008 and reduced
liquidity.  In the absence of a rebound in economic conditions and
industry sales through 2009, both companies are likely to remain
cash flow negative during this period.

Fitch currently has an Issuer Default Rating of 'B' with a
Negative Outlook for both Ford and GM, and both ratings are
expected to remain on negative outlook until a clearer path toward
positive cash flow is established.  Given progress on its
restructuring program and its product profile, Ford may achieve
this during 2008, while liquidity drains in 2008 at GM pose a risk
of a further downgrade in the rating.

Ford:

Ford has demonstrated considerable progress in its restructuring
efforts - to its fixed costs, manufacturing footprint, and product
profile -- which could result in a Stable rating at some point in
2008 if cost efforts and product competitiveness continue along
the same trendline.  Ford's reported financial results over the
next several quarters will continue to reflect the benefits of the
company's restructuring efforts, particularly resulting from its
hourly buyout programs.  Ford has also benefited from having
numerous local operating agreements in place prior to negotiation
of the national contract, resulting in better integration and
smoother implementation of the downsizing efforts.  Capacity and
headcount reductions are proceeding on plan.

Ford's consolidated results will remain dependent on the critical
North American pickup market, and the company is unlikely to
return to positive free cash flow until the pickup market rebounds
along with economic conditions.  In any scenario, 2009 results
should benefit from the introduction of the new F-Series. Unit
sales in the smaller end of its lineup (Fusion, Escape, Focus)
have recently held up well, providing a modest level of support
for consolidated results.  The company's Edge crossover, and two
new product introductions this year, the Flex and the Lincoln MKS
sedan, are also expected to provide support for volumes.  Ford's
quality performance could also have a growing impact on longer-
term operating results.  International operations have
demonstrated improvement, providing a modest positive to the
company's consolidated profile.

Heavy cash drains are projected through 2008 and into 2009, but
liquidity is adequate and sufficient to weather moderating
operating losses, restructuring costs, and weak economic
conditions through 2009.  Ford has also undertaken a number of
equity-for-debt swaps over the past year in an effort to moderate
the leverage and financial impact of the restructuring efforts, an
effort that Fitch expects will continue.  The recent share
purchases by Kirk Kerkorian are not a factor in the rating.  
Although Mr. Kerkorian has historically been an activist investor
across his investments, including actions that have not been
bondholder-friendly, in the case of Ford, the interest of
bondholders and equity holders are currently very much aligned.

General Motors:
At GM, North American operating losses and restructuring costs are
likely to further erode liquidity in 2008 and 2009.  Liquidity has
been supported by numerous asset sales, but the lack of further
asset sales is likely to mean an accelerated decline in the short
term and could result in a downgrade of GM in 2008.  Additional
debt financings could boost liquidity, but high debt levels and
financing costs, coupled with lower interest income, will take a
toll on operating cash flows.

Fitch believes that inadequate contribution margins across a
number of the company's products and production facilities will
require further restructuring efforts and the closure of 2-4
assembly plants in addition to what has been announced to date.  
In addition, the continuing American Axle strike, GM's difficulty
in negotiating local operating agreements, and the lack of
resolution to the Delphi situation will delay GM's ability to
realize fixed cost reductions and other purchasing, materials and
production efficiencies in the near term.  This will most likely
prevent GM from reversing negative cash flows through 2009.  GM's
international operations continue to be a growing strength for the
company's credit profile.

Rating factors that could trigger a downgrade include:

  -- Consolidated 2008 cash drains in excess of $8 billion, which
     results in liquidity dropping below $20 billion;

  -- Lack of progress in reducing fixed costs, combined with a
     reduction in international profitability;

  -- Double-digit production cuts in North America throughout 2008
     resulting from a more severe decline in economic conditions
     or deterioration in GM's product competitiveness.

  --  Material capital infusion into GMAC.

The ratings are unaffected by the pending debt exchange at ResCap
or any associated impact on GMAC.  Given GM's focus on maintaining
liquidity to finance North American operating losses,
restructuring expenditures and the recent VEBA agreement, Fitch
views it as unlikely that GM would inject any additional capital
into GMAC, and any material assistance is not incorporated in the
rating.  Fitch's most recent recovery analysis had severely
discounted asset values of GM's ResCap and GMAC holdings, and did
not incorporate expectations of any dividends or capital
contributions.  Fitch does not believe that the challenges at GMAC
and ResCap would measurably impact sales or production at GM.


* Fitch Says Bonds Affected by Cuts in '08 Stays High at $88.4BB
----------------------------------------------------------------
While retreating from the $127.6 billion recorded in the fourth
quarter of 2007, the par value of U.S. corporate bonds affected by
downgrades in the first quarter of 2008 remained elevated at
$88.4 billion, outpacing par upgrades by nearly a 2-to-1 margin,
according to Fitch Ratings.

First quarter downgrades were split $57.4 billion investment grade
/$30.9 billion speculative grade.  On the investment-grade side,
financials once again contributed disproportionately to the
downgrades, producing $42.7 billion of the $57.4 billion in
downgrades.  In addition, investment-grade financials saw little
upgrade volume at just $3.7 billion for the quarter.

Investment-grade industrial issuers saw modest rating activity,
both on the upside and the downside in the first quarter, with
upgrades and downgrades in total affecting a little more than 1%
of high-grade industrial volume.

One of the more meaningful developments in the first quarter
continued to be the dramatic surge in risk aversion, which once
again resulted in a sharp drop in speculative-grade issuance.  
High yield issuance slowed to just $9.5 billion for the quarter.

'First quarter high yield issuance was in line with a similarly
bleak third-quarter 2007 level of $9.2 billion and down 71% from
the short-lived fourth-quarter rebound of $32.7 billion,' said
Eric Rosenthal, Director of Fitch Credit Market Research.  'CCC
issuance in particular was negligible in the first quarter'.

In contrast, investment-grade issuance, due in part to a modest
recovery in financial high-grade issuance and strength on the
industrial side, moved up to $170.0 billion in the first quarter
from $153.2 billion in the fourth quarter of 2007.  Investment-
grade industrial issuance has remained resilient through the
credit crisis.  In the first quarter, high-grade industrial
issuance totaled $63.6 billion, similar to the last quarter of
2007 and still running above levels recorded in 2006.

'Relatively strong balance sheets, exposure to global markets, and
still sizeable cash reserves have helped these companies navigate
a difficult environment,' said Mariarosa Verde, Managing Director
of Fitch Credit Market Research.  'A very different situation has
emerged for high yield issuers who continue to face soaring risk
premiums and unreceptive investors and lenders.'

The median coupon on newly originated 'B' rated bonds, rose from
just 8.25% in early 2007 to 10.88% in the first quarter of 2008.  
In contrast, the median coupon on 'A' rated bonds moved up
modestly, from 5.6% in early 2007 to 5.9% in the most recent
quarter.

Fitch finds that $437.5 billion in U.S. corporate bonds are
scheduled to mature over the remainder of 2008, most of which
consists of investment-grade issues.  At the speculative grade
level, $17.8 billion in bonds are set to mature.  All high yield
refinancing, whether bonds or loans, will come at a significantly
higher cost this year.

The new report, titled 'US Corporate Bond Market: A Review of
First-Quarter 2008 Rating and Issuance Activity', offers
additional details on issuance patterns, bonds coming due and
rating activity by broad market sector and industry.


* Fitch Says Auction-Rate Closed-End Fund Refinancing Increase
--------------------------------------------------------------
Fitch Ratings reports closed-end fund refinancing of auction-rate
securities is gaining momentum and that to date these refinancings
have not adversely affected the ratings of the remaining
outstanding Fitch-rated ARS.  However, Fitch notes that the
refinancing alternatives introduce new risks to ARS shareholders
which must be taken into account when reviewing the credit quality
of the remaining outstanding ARS.

'A number of funds responded to the auction market disruption by
replacing their outstanding auction-rate preferred stock and notes
with other forms of leverage,' Fitch stated today in a Special
Report.  'The dislocation of the auction-rate market has resulted
in higher than normal maximum rate resets and an unprecedented
level of shareholder activity.  However, to date, this has not
necessitated any negative rating actions by Fitch on the auction
rate preferred stock and notes issued by the closed-end funds.'

Fitch currently rates auction-rate securities issued by 87 closed-
end funds.  These ratings are based on the strength of the
underlying portfolios that provide ARS liquidation coverage, as
well as the quality and experience of the fund's investment
manager.  To date, all Fitch-monitored funds comply with the asset
coverage requirements imposed by both the Investment Company Act
of the 1940 Act, as well as the Fitch coverage ratio.

According to the Special Report, Fitch has reviewed a number of
refinancing alternatives, including establishing committed
borrowing facilities, issuance of extendible money market-eligible
notes backed by Letters of Credit, engaging in reverse repurchase
transactions, and other options.  In addition to actions taken by
taxable closed-end funds, municipal funds must consider taxable
status of the leverage.  As an interim solution, some fund
complexes are considering the use of tender-option bonds or the
creation of tax-exempt money-market fund eligible preferred
instruments.

Fitch highlights a number of risks which are introduced as result
of the various refinancing alternatives.  These include loss of
permanent financing in favor of term financing and the
accumulation of concentrated exposure to the financial sector.  In
addition, the refinancing process is, in most cases, only a
partial solution; after implementation, refinancing will
subordinate any remaining preferred shareholders to a more junior
rank in the fund's capital structure.


* S&P's Outlook for Media Ent. Industry Calls For Boost in Ads
--------------------------------------------------------------
Standard & Poor's Ratings Services' outlook for the U.S. media and
entertainment industry calls for a minimal boost in ad spending,
largely because of the elections and Olympics, and to continued
brisk Internet demand, according to a report, "Industry Credit
Outlook: Action Sequence Slows As U.S. Media & Entertainment
Industry Wrestles Economic And Secular Pressure."  However, these
are the few bright spots as the U.S. economy has slowed to a
crawl.  Decelerating GDP growth, restrained by a weak housing
market, spiking fuel costs, creeping food prices, and rising
unemployment, is an ominous indicator for ad spending.

Internet ad spending, when S&P include search advertising, sped
past magazine advertising in 2006 and, S&P expect, will leave
radio advertising behind in 2008.
     
Standard & Poor's also published "Issuer Ranking: U.S. Media &
Entertainment Companies, Strongest To Weakest," which lists all
the rated companies in the sector by rating and outlook, and
includes Standard & Poor's opinion of their business and financial
risks.


* S&P Says Most CMBS Borrowers Were Able to Refinance Loans
-----------------------------------------------------------
Although delinquencies among U.S. commercial mortgage-backed
securities continued to rise, most CMBS borrowers were able to
refinance their maturing loans in the first quarter despite the
reduced liquidity for real estate financing, tighter lending
standards, and a slowing economy, according to a recent report
published by Standard & Poor's Ratings Services.

"In our view, the first quarter was positive for CMBS loan
maturities overall, and better than might have been expected in
light of the current credit conditions," said credit analyst Larry
Kay, a director in Standard & Poor's CMBS Surveillance group.  The
U.S. CMBS market faces its first major wave of balloon mortgage
maturities in 2008, with roughly $16.48 billion of Standard &
Poor's rated CMBS mortgage loan collateral maturing this year,
including $14.18 billion of fixed-rate loans and $2.30 billion of
floating-rate loans.

With CMBS loan originations down significantly, borrowers looked
elsewhere to fill the void, and found that lenders haven't shut
off the refinancing spigot entirely.  "Debt financing for
commercial real estate is available, albeit at a higher cost, from
balance sheet lenders and other market participants, who see a
window of opportunity for achieving attractive pricing even on
conservatively underwritten loans," Mr. Kay said.

Loan payoffs included mortgage collateral located in 42 states and
for most of the major property types, which indicates that capital
is available for many classes of commercial real estate and in
most regions.  Although maturity refinancings went well in the
first quarter, $11.1 billion of fixed-rate and floating-rate
loans, or 67% of the year's maturing loan balance, matures in the
remainder of 2008.
     
At the same time, CMBS delinquencies continued to rise in the
first quarter, as they have done since bottoming in March 2007.  
Delinquencies among securitized loans on multifamily properties
were particularly high, surpassing the previous record set by the
lodging sector in 2003.
      
"The multifamily property segment, which we had expected to
benefit from sidelined homebuyers, has struggled with excess
supply in formerly overheated housing markets such as Las Vegas
and Southeast Florida, where there is a shadow supply of
condominiums and single-family homes for rent," said credit
analyst Eric Thompson, managing director of Standard & Poor's CMBS
Surveillance group.  Multifamily delinquencies were highest in
Texas, Florida, and Nevada, and the 2005-2007 vintages were large
contributors to 30-day delinquencies.
     
The rising delinquencies--especially among the more recent CMBS
vintages--led to further compression in the upgrade-to-downgrade
ratio, which ended the first quarter at 1.70-to-one.  Thus far in
the second quarter, downgrades are exceeding upgrades.  "We had
expected the upgrade-to-downgrade ratio to flatten, and
potentially turn negative, in 2008 in light of the rising
delinquencies and the surge in maturing loans," Mr. Thompson said.   
Standard & Poor's took 146 rating actions during the first quarter
of 2008, consisting of 92 upgrades and 54 downgrades.  There were
also 375 rating affirmations.
     

* Consumer Products Cos. Will Face Tougher Test in '08, S&P Says
----------------------------------------------------------------
In a time of rising commodity prices, reduced consumer buying
power, tighter credit markets, and a weakened dollar, U.S.
consumer products companies will face tougher tests than usual in
2008.
     
"We do see positive trends," said Standard & Poor's credit analyst
Patrick Jeffrey in a report.  "U.S. consumer products companies
have continued to expand into emerging markets, which have better
long-term growth rates and help further diversify company
operations; and companies continue to focus on new product
development efforts, which help enhance margins and increase brand
awareness.  But we believe the difficult economic environment will
dampen credit quality prospects for the sector through the rest of
the year."
     
The article, titled Top 10 Issues Facing The U.S. Consumer
Products Sector In 2008 looks at a variety of companies that
manufacture and distribute products as diverse as cosmetics,
packaged foods, soft drinks, apparel, home furnishings, and
personal care products.
     
"No single factor applies the same to all of them," said Mr.
Jeffrey.  "With that in mind, we've identified and analyzed 10 key
issues that we believe will be significant factors in assessing
credit ratings for companies in the consumer products sector
through the end of what is shaping up to be a turbulent year."


* S&P Says Mounting Default in 2008 Come As Hardly Surprising
-------------------------------------------------------------
Mounting defaults in 2008 come as hardly surprising, overdue if
anything, said an article published by Standard & Poor's.  The
article, which is titled "U.S. Credit Comment: The Bust
After The Boom (Premium)," says that years of an accommodative
economic and financial environment have emboldened many entities
to adopt more aggressive financial policies to spur growth amid
increased domestic and global competition.  For the most part,
this worked flawlessly during the boom years, with strong earnings
prompting even more leverage and risk-taking among corporates.  
"As economic conditions deteriorated, however, and volatility in
the financial markets protracted, corporate casualties began to
emerge at a rate unseen in years," said Diane Vazza, head of
Standard & Poor's Global Fixed Income Research Group.
     
Defaults so far this year have been brisk, reaching 28 entities
(including four confidentially rated), affecting debt worth
$18.4 billion.  This already exceeds the 22 defaults in all of
2007 affecting debt worth $8.1 billion and just a couple shy of
the 30 defaults in 2006 affecting debt worth $7.1 billion.  Of the
28 defaulters so far in 2008, 27 are from the U.S., and one is
from Canada.  By contrast, there were only 17 defaulters in the
U.S. in full-year 2007 and 22 in 2006.  The pace of U.S. defaults
through the first five months of the year is the fastest since
2003.


* Moody's Says Measures of Liquidity Strains U.S. SG Companies
--------------------------------------------------------------
Measures of liquidity and covenant compliance point to growing
stress among U.S. speculative-grade companies, says Moody's
Investors Service in a summary of its recent high-yield research.  
At the same time, skittish credit markets are likely to make any
refinancings more difficult.

"U.S. speculative-grade companies are increasingly exhibiting
signs of strain as pressure builds on low-rated issuers on
multiple fronts," says Moody's Chief Corporate Credit Officer for
Corporate Finance, Daniel Gates.  "Default risk is particularly
acute for highly leveraged issuers that are too weak to withstand
a period of economic slowdown."

Moody's expects that the U.S. speculative-grade default rate is
most likely to end 2008 at around 4%, a dramatic increase from its
1% level at the end of 2007 but below the long-term average of
about 5%.  The fact that a relatively small number of companies
are facing debt maturities this year will help hold the default
rate down, says Moody's.  However, the volume of maturing debt
doubles in 2009 and increases again in 2010, signaling further
upward pressure on default rates next year, especially if the U.S.
economy remains soft.

Debt maturities for U.S. speculative-grade issuers total
$13 billion in 2008.  They will more than double to $28 billion in
2009 and reach $45 billion 2010.  In all, 300 of the more than
1,300 rated speculative-grade non-financial corporate debt issuers
in the U.S. have maturities in the period 2008 through 2010.  
Credit market conditions may make this refinancing difficult.

"Refunding schedules that would have been routine during the boom
period in the capital markets now carry significantly more risk,"
says Gates.  "So rolling over even moderate debt balances could
prove challenging if current credit-market turmoil persists."

As for covenant compliance, Moody's says of the nearly 1,200 U.S.
speculative-grade issuers recently examined, 227 or 20% face
moderate or high risk of tripping a financial covenant.

Moody's says because lenders will likely remain risk averse, at
least through the end of the year, potential covenant violations
and liquidity concerns may be given increased importance in rating
decisions on low-rated companies.

Moody's says experience shows that covenant difficulty often
precedes payment default or bankruptcy.  Thirteen issuers
experienced payment defaults or bankruptcies during the first
three months of 2008.  Eight of the thirteen either amended a
covenant or violated one outright previous to their default.

One factor leading to strained covenants is reduced cash flow
because of the difficult economic environment.  Weaker cash flows
are also taking a toll on speculative-grade liquidity, says
Moody's.  For the year through April, for example, there have been
39 Speculative-Grade Liquidity rating downgrades on companies,
compared to 18 upgrades.

The title of this Moody's Special Comment is "Liquidity,
Refinancings, and Covenants Heighten High-Yield Default Risk."


* Moody's Says Global SG Default Rate Rises to 1.7% in April
------------------------------------------------------------
Moody's global speculative-grade default rate increased to 1.7% in
April from 1.5% in March, Moody's Investors Service reported.  A
year ago, the global speculative-grade default rate stood at 1.6%.

The US speculative-grade default rate also edged higher in April
to 2.1% from a revised level of 1.8% in March.  In April 2007, the
U.S. default rate was 1.5%.

"We expect continued upward pressure on default rates over the
next year as issuers increasingly feel the effects of slower
economic growth and reduced access to credit markets," says
Moody's Director of Corporate Default Research Kenneth Emery.

Moody's default rate forecasting model now predicts that the
global speculative-grade default rate will rise sharply to 5.0 %
by the end of this year.  It is expected to increase further to
6.1% a year from now.

For U.S. speculative grade issuers, Moody's forecasting model
foresees default rates increasing to 5.7% by the end of this year.

Across industries over the coming year, Moody's default rate
forecasting model indicates that the Construction & Building
sector will be the most troubled industry in the U.S. and the
Durable Consumer Goods sector will have the highest default rate
in Europe.

Moody's speculative-grade corporate distress index- which measures
the percentage of rated issuers that have debt trading at
distressed levels- edged lower from 24.5% in March to 21.3% in
April.  This is the first time that the index has declined since
last summer.  Nevertheless, the current level is much higher than
the level of 1.3% in June 2007.

A total of seven Moody's-rated corporate issuers defaulted in
April.  Five of the defaulters were based in the U.S. and two were
based in Canada.  Through April, twenty-two Moody's-rated issuers
have defaulted in 2008.

Measured on a dollar volume basis, the global speculative-grade
bond default rate was 0.9% in April, unchanged from its revised
March level.  A year ago, the global dollar-weighted bond default
rate was 1.0%.

Among U.S. speculative-grade issuers, the dollar-weighted bond
default rate edged higher from March's revised level of 1.0% to
1.1% in April.  At this time last year, the U.S. dollar-weighted
bond default rate closed at 0.9%.

In the leveraged loan market, no Moody's-rated loan issuers
defaulted in April.  The trailing 12 month U.S. leveraged loan
default rate remained unchanged at 1.5%.


* Roberta DeAngelis Appointed as Acting U.S. Trustee for Region 3
-----------------------------------------------------------------
Roberta A. DeAngelis has been appointed as the Acting United
States Trustee for Delaware, New Jersey, and Pennsylvania --
Region 3 -- for an interim period effective on May 4, 2008,
according to the Director of the Executive Office for United
States Trustees, Clifford J. White III.

Ms. DeAngelis replaces Kelly Beaudin Stapleton, who has resigned
after serving as U.S. Trustee for Region 3 since January 2005.

Ms. DeAngelis joined the U.S. Trustee Program as Assistant U.S.
Trustee in the Newark office in July 1999 after practicing
bankruptcy and insolvency law for 20 years.  She has served as
Acting General Counsel in the Executive Office for U.S. Trustees
in Washington, D.C., since May 2005.  Ms. DeAngelis received her
law degree from Seton Hall University School of Law in Newark, New
Jersey, and her Bachelor of Arts degree magna cum laude from
Alvernia College in Reading, Pennsylvania.

The U.S. Trustee Program is the component of the Justice
Department that protects the integrity of the bankruptcy system by
overseeing case administration and litigating to enforce the
bankruptcy laws.  The Program has 21 regions and 95 field offices.
Region 3 is headquartered in Philadelphia, with additional offices
in Wilmington, Delaware, Newark, New Jersey, and Harrisburg and
Pittsburgh, Pennsylvania.


* BOOK REVIEW: Long-Term Care in Transition: The Regulation of
                          Nursing Homes
-----------------------------------------------------------------
Author:     David B. Smith
Publisher:  Beard Books
Paperback:  170 pages
List Price: $34.95

Order your personal copy at
http://amazon.com/exec/obidos/ASIN/1587980304/internetbankrupt

This book is an invaluable reading for health care professionals
involved in the management of nursing homes.  It includes lessons
learned from the regulatory experience for the health sector as a
whole.

Long-Term Care in Transition is a carefully documented case study
of the changes that took place in the regulation of nursing homes
in New York between 1975 and 1980.

It covers the history of the regulatory offensive in New York and
strategies of control and their effectiveness, touching on such
subjects as professional standards, rate setting, reimbursement,
criminal prosecution, and consumers.

                             *********

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.

                    *** End of Transmission ***