---

         T R O U B L E D   C O M P A N Y   R E P O R T E R

            Tuesday, May 20, 2008, Vol. 12, No. 119

                             Headlines

AARDVARK ABS: Moody's Assigns B2 Rating on Class A1 Extended Notes
ABCDS 2006-1: Moody's Chips Notes Ratings on Three Classes to Ca
ABFC 2002-SB1: S&P Slashes 'AAA' Rating on Class M-1 Loans to 'BB'
ABITIBIBOWATER INC: Posts $248 Million Net Loss in 2008 First Qtr.
ACA ABS 2003-2: Moody's Slashes A1 Rating on $36MM Notes to C

ACACIA CDO: Moody's Chips Rating on $41MM Notes to B1 from A1
ADVANTEX MARKETING: March 31 Balance Sheet Upside-Down by C$1MM
AIRLIE CDO: Moody's Puts Ba2 Rating Under Review for Possible Cut
ALESCO FINANCIAL: Updates on Impact of IndyMac's Deferral
BLUE HERON: Moody's Slashes Rating on $1.113BB Notes to 'Baa1'

BLUEGREEN CORP: Moody's Rates $20MM Line of Credit Caa1
CANADIAN TRUSTS: Court Delays Approval of ABCP Restructuring Plan
CANARGO ENERGY: Posts $1.2 Million Net Loss in 2008 First Quarter
CASH SYSTEMS: March 31 Balance Sheet Upside-Down by $1.9 Million
CATHOLIC CHURCH: Fairbanks Wants Claims Bar Date Set Dec. 2

CATHOLIC CHURCH: Fairbanks Wants to Hire Future Claims Rep.
CATHOLIC CHURCH: Fairbanks May File Chapter 11 Plan on July 15
CATHOLIC CHURCH: Judge Closes Spokane Diocese's Bankruptcy Case
CATHOLIC CHURCH: Spokane's Plan Trust Has $6 Million Cash Left
C-BASS CBO: Moody's Junks Ratings on Three Note Classes

CELL THERAPEUTICS: March 31 Balance Sheet Upside-Down by $124.1MM
CHARLES RIVER: Moody's Slices Note Ratings on Three Classes to C
CHARMING SHOPPES: Board Member Strandjord to Forego Re-Election
CHARTER COMMS: Gets Nasdaq Compliance Notice on Price Listing
CHASE FUNDING: S&P Junks Rating on Class IB Certificates

CHRISTAL DISTRIBUTION: Seeks Protection from Creditors Under CCAA
DAVENPORT CDO: Moody's Slices Ratings on Three Classes to Caa3
DELPHI CORP: WTC Balks at $750 Million Intercompany Loan Transfer
DORADO BECKVILLE: May Use Cash Collateral on Interim Basis
DORADO BECKVILLE: Various Parties Oppose Use of Cash Collateral

DORADO BECKVILLE: U.S. Trustee Forms Four-Member Creditors' Panel
DUTCH HILL: Moody's Cuts Ratings, to Undertake Review
EIRLES TWO: Moody's Slashes A3 Rating on Class Notes to Ba3
E*TRADE ABS: Moody's Chips Note Ratings on Two Classes to Ca
E*TRADE ABS: Moody's Trims Preference Shares Rating to Ca from Ba1

EXUM RIDGE: Moody's Says Ba2 Rating on Notes May be Cut
EXUM RIDGE: Moody's Places Ratings Under Review for Possible Cut
EXUM RIDGE: Moody's Puts Ba2 Rating on $12MM Notes Under Review
EXUM RIDGE: Moody's Places $13.5MM Ba2 Note Rating Under Review
EXUM RIDGE: Poor Credit Quality Cues Moody's Rating Reviews

EXUM RIDGE: Moody's Puts $12MM Ba1 Notes Rating Under Review
FORD CREDIT AUTO: S&P Assigns 'BB' Initial Rating on Class D Notes
FRONTIER AIRLINES: "Golden Parachute Deal" Irks Teamsters
FRONTIER AIRLINES: Seeks OK on Director & Officer Severance Plan
FX REAL ESTATE: Posts $25 Million Net Loss in 2008 First Quarter

GAINEY CORP: High Probability of Default Cues Moody's Rating Cut
GALLERIA CBO: Moody's Chips Ratings on Three Note Classes to Ca
GALLERIA CBO: Moody's Cuts B3 Rating on Two Note Classes to Caa1
HALCYON SECURITIZED: Moody's Chips $76MM Baa2 Notes Rating to Caa1
HAMILTON GARDENS: Moody's Downgrades Ratings on Six Note Classes

HEALTH SYSTEMS: March 31 Balance Sheet Upside Down by $1.1 Million
HELIX BIOMEDIX: March 31 Balance Sheet Upside Down by $833,173
HOME EQUITY: S&P Lowers Ratings on 98 Certificate Classes
HOME INTERIORS: U.S. Trustee Selects Seven-Member Creditor's Panel
HOVNANIAN ENTERPRISES: S&P Rates Proposed $600MM Sr. Notes 'B+'

HOVNANIAN ENTERPRISES: Moody's Rates $600MM Sr. Secured Notes Ba3
HSPI DIVERSIFIED: Moody's Junks Ratings on Several Note Classes
HUDSON FUNDING: Moody's Junks Ratings on Five Note Classes
ICEWEB INC: March 31 Balance Sheet Upside Down by $2.2 Million
IDLEAIRE TECHNOLOGIES: Locations Expected to Remain Open

INMAN SQUARE: Moody's Junks Ratings on Four Note Classes
JACOBS ENTERTAINMENT: S&P Revises Outlook to Negative From Stable
JUPITER HIGH-GRADE: Moody's Junks Rating on $1.29BB Senior Notes
KITTY HAWK: Plan Confirmation Hearing Scheduled for June 24
KITTY HAWK: Judge Nelms Approves Disclosure Statement

KLEROS PREFERRED: Poor Credit Quality Cues Moody's Rating Cuts
KRONOS ADVANCED: Posts $2.3MM Loss for 9 Months Ended March 31
LA PALOMA: S&P Puts Ratings Under Neg. Watch After Merger Notice
LAM RESEARCH: S&P Lifts Corporate Credit Rating to BB from BB-
LENNAR CORP: Weak Profitability Cues S&P to Chip Rating to BB

LEXINGTON CAPITAL: Moody's Chips Ba2 Ratings on Two Classes to Ca
LIBERTAS PREFERRED: Moody's Trims Ratings on Seven Classes to Ca
LIBERTAS PREFERRED: Moody's Pares Ratings on Two Classes to Caa2
LONGPORT FUNDING: Moody's Cuts $13MM Notes Rating to B2 from Baa2
LOUISIANA RIVERBOAT: Files Schedules of Assets and Liabilities

MONTROSE HARBOR: Moody's Chips Ratings on Five Note Classes to 'C'
MRS. FIELDS: March 29 Balance Sheet Upside-Down by $100 Million
MSGI SECURITY: March 31 Balance Upside Down by $2 Million
NEPTUNE CDO: Moody's Lowers Ratings, to Undertake Review
NEPTUNE CDO: Moody's Cuts Rating on $7.5MM Class A-2L Notes to Ba2

NEPTUNE CDO: Moody's Lowers Ratings on Five Note Classes to Ca
NEPTUNE CDO: Moody's Lowers Rating on $270MM Notes to Ba3 from Aa1
NETWOLVES CORP: Posts $60,000 Net Loss in 3rd Quarter Fiscal 2008
NORANDA ALUMINUM: March 31 Balance Sheet Upside Down by $133.1MM
ORAGENICS INC: Has Until October 27 to Comply with AMEX Criteria

ORCHID STRUCTURED: Moody's Chips A3 Rating on $15MM Notes to Ca
ORIGEN FINANCIAL: Posts $25 Million Net Loss in 2008 First Quarter
PEBBLE CREEK: Moody's Puts Ba2 Rating on Review for Possible Cut
PEBBLE CREEK: Moody's Puts $20.75MM Ba2 Notes Rating Under Review
PHOENIX FOOTWEAR: Posts $280,000 Net Loss in 2008 First Quarter

PINE MOUNTAIN: Moody's to Review Ratings for Possible Downgrade
PINE MOUNTAIN: Moody's Downgrades Ratings on Three Notes to C
PLASTECH ENGINEERED: Will Close Elwood Plant on July 13
PQ CORP: Moody's Rates Corp. Family B2, Outlook Stable
PREMD INC: March 31 Balance Sheet Upside-Down by C$5 Million

PROGRESSIVE GAMING: Posts $8.4 Million Net Loss in 2008 1st Qtr.
PROPEX INC: Court Extends Plan-Filing Deadline Until August 21
PSIVIDA LIMITED: Posts $5.5 MM Net Loss in 3rd Qtr. Ended March 31
PYXIS ABS: Moody's Junks Ratings on Four Classes of Notes
QUEBECOR WORLD: Wants Schedules Filing Period Extended to July 18

RADIAN GROUP: Amendment to Credit Agreement Now Effective
REALOGY CORP: S&P Foresees Positive Results, Likely to Hold Rating
SCOTTISH RE: S&P Puts Default Stock Rating on Dividend Non-Payment
SENTINEL MANAGEMENT: Founder to Pay $10.7MM to Settle Fraud Case
SGS HY: Poor Credit Quality Cues Moody's Rating Reviews

SHERWOOD FUNDING: Moody's Lowers Ratings on Three Notes to B1
SIGNALIFE INC: Receives Second Amex Deficiency Letter
SIX FLAGS: S&P Puts Ratings Under Neg. Watch on Note Buyout News
SKYBOX CDO: Moody's Chips Ratings on Credit Quality Deterioration
SOUTH COAST: Moody's Junks Aa3 Swap Rating, to Undertake Review

SPACEHAB INC: Posts $834,000 Net Loss in Fiscal 2007 Third Quarter
STANDARD PACIFIC: Losses Cue S&P to Junk Subordinated Debt Rating
TIRECRAFT GROUP: Gets Court's Nod on Pneus Unimax's Buyout Offer
TRAILER BRIDGE: March 31 Balance Sheet Upside Down by $329,034
TRIBUNE LIMITED: Moody's Cuts Rating on $80MM Notes to B1 from Aaa

TROPICANA ENTERTAINMENT: Section 341(a) Meeting Set for June 13
TROPICANA ENT: U.S. Trustee Picks Seven-Member Creditors Panel
VERTICAL VIRGO: Moody's Junks Ratings on Three Classes of Notes
VERTIS INC: Noteholders Agree to Changes in Forbearance Agreement
VICTORY MEMORIAL: Files Disclosure Statement and Chapter 11 Plan

WELLMAN INC: Receives Additional Extension for Bidding Protocol
WHX CORP: March 31 Balance Sheet Upside Down by $74.8 Million
WORLD HEART: Appeal on Continued Listing in Nasdaq Denied
X-RITE INC: Names Dave Rawden as Interim Chief Financial Officer

* S&P Sees Looming Problems on Pension Benefits for Retired Worker
* S&P Says Mng't Sectors Remained Among the More Stable Industry

* BDO Seidman Identifies Risk Factors at 100 Largest Retailers

* Large Companies with Insolvent Balance Sheets

                             *********

AARDVARK ABS: Moody's Assigns B2 Rating on Class A1 Extended Notes
------------------------------------------------------------------
Moody's Investors Service has withdrawn the short term rating on
the following notes issued by Aardvark ABS CDO 2007-1:

Class Description: $1,312,948,854.50 Class A1 Senior Secured
Floating Rate Notes Due October 2008 (the "Class A1 Notes")

  -- Prior Rating: P-1
  -- Current Rating: WR

Moody's has also assigned a long term rating on this notes:

  (1) B2 on watch for possible downgrade to the Class A1 Extended
      Notes

According to Moody's, the Prime-1 ratings were assigned to the
Class A1 Notes based on the existence of a put agreement provided
by a Prime-1 rated third party.  These notes had previously failed
to remarket and, consequently, the issuer exercised the put
agreement whose proceeds were used to fully redeem these notes and
issued the Class A1 Extended Notes.  Accordingly, Moody's has
withdrawn its short-term ratings on the Class A1 Notes and issued
long-term ratings of B2, on review for possible downgrade to the
Class A1 Extended Notes.


ABCDS 2006-1: Moody's Chips Notes Ratings on Three Classes to Ca
----------------------------------------------------------------
Moody's Investors Service has downgraded and left on review for
possible downgrade the ratings on these notes issued by ABCDS
2006-1, Ltd.:

Class Description: $200,000,000 Senior Swap Agreement with Royal
Bank of Canada, London Branch (the "Senior Swap")

  -- Prior Rating: Baa3, on review for possible downgrade
  -- Current Rating: B1, on review for possible downgrade

Additionally, Moody's downgraded these notes:

Class Description: $60,000,000 Class A-2 First Priority Senior
Secured Floating Rate Notes Due 2050

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

Class Description: $51,600,000 Class A-3 Second Priority Senior
Secured Floating Rate Notes Due 2050

  -- Prior Rating: B2, on review for possible downgrade
  -- Current Rating: Ca

Class Description: $48,600,000 Class B Third Priority Senior
Secured Floating Rate Notes Due 2050

  -- Prior Rating: Caa1, on review for possible downgrade
  -- Current Rating: Ca

Class Description: $8,400,000 Class C Fourth Priority Mezzanine
Secured Floating Rate Deferrable Interest Notes Due 2050

  -- Prior Rating: Ca
  -- Current Rating: C

Class Description: $12,000,000 Class D Fifth Priority Mezzanine
Secured Floating Rate Deferrable Interest Notes Due 2050

  -- Prior Rating: Ca
  -- Current Rating: C

Class Description: $5,000,000 Class E Sixth Priority Mezzanine
Secured Floating Rate Deferrable Interest Notes Due 2050

  -- Prior Rating: Ca
  -- Current Rating: C

According to Moody's, the rating actions reflect increased
deterioration in the credit quality of the underlying portfolio.


ABFC 2002-SB1: S&P Slashes 'AAA' Rating on Class M-1 Loans to 'BB'
------------------------------------------------------------------
Standard & Poor's Ratings Services lowered its ratings on three
classes of asset-backed certificates from ABFC 2002-SB1 Trust.  
S&P placed one rating on CreditWatch with negative implications.  
These classes are secured primarily by U.S. subprime mortgage loan
collateral.
     
The downgrades reflect reduced credit enhancement due to monthly
realized losses, a high amount of loans that are considered
severely delinquent, and high loss severities experienced over the
past 12 months.  Realized losses have outpaced excess interest by
approximately 5.0x over the past 12 months.  As of the April 2008
remittance period, cumulative losses, as a percentage of the
original pool balance, were 6.67%.  Total delinquencies and severe
delinquencies make up 31.05% and 17.97% of the current pool
balance, respectively.  

Over the past 12 months, loss severities were approximately 103%.  
The past three months saw loss severities totaling 117%.  The high
severities reflect a large number of low-value properties being
liquidated in Michigan, Ohio, and Pennsylvania.  Some of these
properties had to be demolished due to deterioration, which caused
the transactions to incur additional losses.  There are similar
low-value properties remaining in the delinquency pipeline.  
Overcollateralization has been eroded completely, and the B class
is currently taking losses.

S&P placed its rating on class AII-1 on CreditWatch negative due
to the poor performance of this transaction and the certificate's
projected credit support relative to projected losses.  S&P will
evaluate and compare the date of projected defaults with the
projected payoff dates, as well as the relationships between
projected credit support and projected losses throughout the
remaining life of this certificate, and take further negative
rating action if necessary.  

Subordination and excess spread provide credit support for this
transaction.  The collateral for this transaction consists
primarily of conventional, fixed- and adjustable-rate, fully
amortizing, first- and second-lien residential mortgage loans with
original terms to maturity of no more than 30 years.


                          Ratings Lowered

                        ABFC 2002-SB1 Trust
                     Asset-backed certificates

                                          Rating
                                          ------
            Class      CUSIP         To             From
            -----      -----         --             ----
            M-1        04542BAS1     BB             AAA
            M-2        04542BAT9     B              BB
            M-3        04542BAU6     CC             CCC

               Rating Placed on Creditwatch Negative

                       ABFC 2002-SB1 Trust
                    Asset-backed certificates

                                          Rating
                                          ------
           Class      CUSIP         To              From
           -----      -----         --              ----
           AII-1      04542BAQ5     AAA/Watch Neg   AAA


ABITIBIBOWATER INC: Posts $248 Million Net Loss in 2008 First Qtr.
------------------------------------------------------------------
AbitibiBowater Inc. reported a net loss of $248.0 million, on
sales of $1.7 billion, for the first quarter ended March 31, 2008.
These results compare with a net loss of $35.0 million, on sales
of $772.0 million, for the first quarter of 2007, which consisted
of only Bowater Incorporated results.

The company's 2008 first quarter results reflect the full quarter
results for Abitibi-Consolidated Inc. and Bowater Incorporated as
a combined company following their combination on Oct. 29, 2007.

First quarter 2008 special items, net of tax, consisted of: a
$44.0 million gain relating to foreign currency changes, a
$16.0 million gain on asset sales, a $17.00 million loss related
to asset closures and severance and a $76.0 million charge related
to tax adjustments.  Excluding these special items, the net loss
for the quarter would have been $215.0 million.

"Important progress was achieved during the first full quarter of
AbitibiBowater," stated president and chief executive officer
David J. Paterson.  "We set out with a disciplined approach and a
commitment to deliver sustainable long-term value.  Our EBITDA
improvement, this quarter over the fourth quarter of last year, is
an important step in positioning the company as the industry's
great turnaround story."

AbitibiBowater said that during the first quarter it successfully
completed a series of financing transactions, totaling
$1.4 billion, designed to address near-term debt maturities and
general liquidity needs for its Abitibi-Consolidated subsidiary.

                         Strategic Review

In November 2007, AbitibiBowater announced the results of a Phase
1 comprehensive strategic review, which resulted in the removal of
approximately 1 million metric tons of unprofitable newsprint and
commercial printing paper capacity and 500 million board feet of
wood products from the marketplace.

The Phase 1 announcement also: increased the company's annual
synergy target to $375.0 million from the $250.0 million target
announced at the time of the company's merger; identified
$500.0 million in asset sales through the sale of the Snowflake
(Arizona) newsprint mill as well as non-core assets; suspended the
dividend; and committed to a further review of all aspects of the
business in Eastern Canada in light of inherent competitive
disadvantages.  AbitibiBowater also that the announced closures
were completed early in the first quarter of 2008 and other
commitments are on track to be met or exceeded.

"When the merger closed, we began a strategic review of all
aspects of the new company and committed to take decisive action
to be a stronger, more sustainable organization," said John W.
Weaver, executive chairman.  "We are making good progress and are
beginning to benefit from improving business conditions.  
AbitibiBowater remains focused on continued cost reductions,
improvement of our manufacturing platform and better positioning
the company in the global marketplace."

                          Phase 2 Update

Since November, the company has engaged in discussions with
governments, employees, communities and other stakeholders to
reduce operating costs, enhance the viability of several
operations and improve overall competitiveness.  The company said
that these actions, in addition to increased market prices for
company products, are improving financial results.  AbitibiBowater
expects improved quarter-over-quarter profitability based on
stronger business fundamentals, announced price increases,
operating efficiencies and synergies.  Significant progress has
been made; however, at this time, no paper mill closures or
idlings are being announced beyond the continued indefinite idling
of the Mackenzie (British Columbia) and Donnacona (Quebec) paper
mills.

The company said that cooperative efforts with stakeholders have
enhanced the competitiveness of various company facilities such as
the woodland and sawmill operations in the Lac-Saint-Jean (Quebec)
region.  Collaborative outreach will continue in all of Eastern
Canada in light of market conditions as well as high labor, energy
and fiber costs, further exacerbated by the strong Canadian
dollar.  AbitibiBowater will maintain a flexible approach and may
take further restructuring actions, if required.

"We will continue our collaborative approach with various
stakeholders in an effort to find long-term, sustainable
solutions," stated Mr. Paterson.  "We are confident AbitibiBowater
is taking the right steps to manage our business and set the stage
for meaningful improvement in earnings, efficiencies and overall
growth."

Recognizing the challenges facing the North American newsprint
market, AbitibiBowater says it continues to realize success in
diversifying its sales to international markets, in the more than
90 countries where its products are already sold.  The company
said it is committed to expanding sales in growing markets.  To
further the expansion of the global sales effort, the company will
work with North American governments and other stakeholders to
ensure needed infrastructure improvements at ports supporting
operations.

The company said it will raise the bar in continued cost reduction
efforts and look to increase profitability on some of its paper
machine assets by considering the conversion of newsprint capacity
to coated and other value-added papers over the next several
years. Such conversions would be expected to generate higher
returns.

Management said it expects to complete the first stage of this
review by the third quarter of 2008 and is considering the
possibility of manufacturing a light-weight coated product,
containing recycled content.  The company is confident in its
ability to successfully convert a newsprint machine to a high-
margin product, based in part on the Catawba (South Carolina) mill
success story.

AbitibiBowater also formally announced two new product offerings,
EcoLaser(TM) and Ecopaque(TM).  These uncoated freesheet
substitutes represent innovative solutions for the printing
industry, providing environmental benefits while also reducing
costs for end-users.  "We will continue to support growth and
diversification of our product mix while positioning the company
as the wise choice for environmentally sensitive customers,
offering sustainable solutions to them and their clients," stated
Mr. Weaver.

In addition to removing 500 million board feet of lumber capacity
through Phase I actions, the company said it has further lowered
its high-cost lumber capacity through consolidations, idlings and
various temporary shutdowns at sawmills.  The cumulative effect of
these measures has reduced AbitibiBowater's lumber capacity to
nearly 50% of pre-merger levels, resulting in an avoided cost of
$45 per fbm.  Furthermore, production costs at operating sawmills
have been reduced by 7% in the first quarter of 2008.

The company confirms that it expects to meet the asset sales
target of $500.0 million by the end of 2008, having achieved sales
of approximately $220.0 million to date.  AbitibiBowater is
targeting an additional $250.0 million in asset sales by the end
of 2009.  The company has launched a process for the sale of its
Mokpo, South Korea paper mill, and is moving forward with
additional sales including forest lands, sawmills, hydroelectric
sites and other assets.

In addition, AbitibiBowater reiterates its synergy target of
$375.0 million by the end of 2009.  At the end of the first
quarter, the company had achieved an annual run rate of
approximately $180.0 million in captured synergies.

                 Liquidity and Capital Resources

As of March 31, 2008, the company's total liquidity was comprised
of liquidity from its Abitibi and Bowater subsidiaries.
As disclosed in the company's audited consolidated financial
statements included in its Annual Report on Form 10-K/A for the
year ended Dec. 31, 2007, the company's Abitibi subsidiary was
experiencing a liquidity shortfall and facing significant near-
term liquidity challenges.

As a result of these liquidity issues, the company had concluded
at Dec. 31, 2007, that there was substantial doubt about Abitibi's
ability to continue as a going concern.  As of March 31, 2008,
Abitibi had a total of $346.0 million of long-term debt maturing
in 2008: $196.0 million principal amount of its 6.95% Senior Notes
due April 1, 2008, and $150.0 million principal amount of its
5.25% Senior Notes due June 20, 2008.  Additionally, Abitibi had
revolving bank credit facilities with commitments totalling
$692.0 million maturing in the fourth quarter of 2008.  These
amounts were successfully refinanced on April 1, 2008.

The company said that while its April 1 refinancing has alleviated
the substantial doubt about Abitibi's ability to continue as a
going concern, significant financial uncertainties remain for
Abitibi to overcome including, but not limited to, Abitibi's
ability to repay or to refinance the $350.0 million 364-day term
facility due on March 30, 2009, to service the considerable debt
resulting from the April 1 refinancings and to overcome their
expected ongoing net losses and negative cash flows.

This senior secured term loan is guaranteed by Abitibi and secured
by substantially all of Abitibi's assets.  In order to address the
upcoming March 30, 2009 maturity, Abitibi and AbitibiBowater will
be pursuing refinancing alternatives to renew or replace the
existing 364-day senior secured term loan or entering into a new
bank credit agreement.  

The company has also announced an asset sales program of
approximately $750.0 million for AbitibiBowater, and any sales of
Abitibi's assets would be expected to be used for debt reduction.  
Management said it continues to believe that the liquidity
constraints at Abitibi will not affect the financial condition of
Bowater or AbitibiBowater.

As of April 1, 2008, upon completion of the company's
refinancings, Abitibi had liquidity of $185.0 million, represented
by cash on hand.  As of April 15, 2008, after the sale of the
company's Snowflake, Arizona newsprint facility and the repayment
of certain debt, the company's Abitibi subsidiary had cash on hand
of $277.0 million.  

At March 31, 2008 and Dec. 31, 2007, AbitibiBowater Inc. and its
consolidated subsidiaries had $4.7 billion of fixed rate long-term
debt and $1.2 billion and $1.0 billion, respectively, of short and
long-term variable rate debt.

                          Balance Sheet

At March 31, 2008, the company's consolidated balance sheet showed
$10.3 billion in total assets, $8.7 billion in total liabilities,
and $1.6 billion in total stockholders' equity.

The company's consolidated balance sheet at March 31, 2008, also
showed strained liquidity with $2.3 billion in total current
assets available to pay $2.5 billion in total current liabilities.

Full-text copies of the company's consolidated financial
statements for the quarter ended March 31, 2008, are available for
free at http://researcharchives.com/t/s?2c1b

                       About AbitibiBowater

Headquartered in Montreal, Canada, AbitibiBowater Inc. --
http://www.abitibibowater.com/ -- produces a wide range of  
newsprint, commercial printing papers, market pulp and wood
products.  AbitibiBowater owns or operates 27 pulp and paper
facilities and 34 wood products facilities located in the United
States, Canada, the United Kingdom and South Korea.  
AbitibiBowater is also among the world's largest recyclers of
newspapers and magazines.  AbitibiBowater's shares trade under the
stock symbol ABH on both the New York Stock Exchange and the
Toronto Stock Exchange.

                          *     *     *

As reported in the Troubled Company Reporter on April 16, 2008,
Standard & Poor's Ratings Services assigned recovery ratings to
the senior unsecured debt issues of AbitibiBowater Inc., Abitibi-
Consolidated Inc., and Bowater Inc.  At the same time, S&P lowered
the issue-level rating on these debts to 'CCC+' from 'B-'.


ACA ABS 2003-2: Moody's Slashes A1 Rating on $36MM Notes to C
-------------------------------------------------------------
Moody's Investors Service has downgraded and placed on review for
possible further downgrade the ratings on these notes issued by
ACA ABS 2003-2, Limited.

Class Description: $315,000,000 Class A1-SU Floating Rate Notes,
due December 10 , 2038

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

Class Description: $146,500,000 Class A1-SD Floating Rate Notes,
due December 10, 2038

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

Class Description: $108,000,000 Class A1-J Floating Rate Notes,
due December 10 , 2038

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

Class Description: $51,000,000 Class A2 Floating Rate Notes, due
December 10 , 2038

  -- Prior Rating: Aa1
  -- Current Rating: B3, on review for possible downgrade

Additionally, Moody's downgraded these notes:

Class Description: $36,000,000 Class A3 Floating Rate Notes, due
December 10, 2038

  -- Prior Rating: A1, on review for possible downgrade
  -- Current Rating: C

Class Description: $7,000,000 Class BF Fixed Rate Deferrable
Interest Notes, due December 10 , 2038

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

Class Description: $15,000,000 Class BV Floating Rate Deferrable
Interest Notes, due December 10 , 2038

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

Class Description: $3,000,000 Class C Fixed Rate Notes, due
December 10, 2038

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

According to Moody's, the rating actions reflect increased
deterioration in the credit quality of the Structured Finance
securities.


ACACIA CDO: Moody's Chips Rating on $41MM Notes to B1 from A1
-------------------------------------------------------------
Moody's Investors Service has downgraded and left on review for
possible further downgrade the ratings on these notes issued by
Acacia CDO 12, Ltd.

Class Description: $100,000,000 Class A-2 Second Priority Senior
Secured Floating Rate Notes Due 2047

  -- Prior Rating: Aa2, on review for possible downgrade
  -- Current Rating: Baa1, on review for possible downgrade

Class Description: $41,000,000 Class B Third Priority Senior
Secured Floating Rate Notes Due 2047

  -- Prior Rating: A1, on review for possible downgrade
  -- Current Rating: B1, on review for possible downgrade

Class Description: $14,000,000 Class C Fourth Priority Mezzanine
Secured Floating Rate Deferrable Interest Notes Due 2047

  -- Prior Rating: Baa1, on review for possible downgrade
  -- Current Rating: Caa1, on review for possible downgrade

Class Description: $11,500,000 Class D Fifth Priority Mezzanine
Secured Floating Rate Deferrable Interest Notes 2047

  -- Prior Rating: Ba1, on review for possible downgrade
  -- Current Rating: Caa2, on review for possible downgrade

According to Moody's, the rating actions reflect increased
deterioration in the credit quality of the Structured finance
securities.


ADVANTEX MARKETING: March 31 Balance Sheet Upside-Down by C$1MM
---------------------------------------------------------------
Advantex Marketing International Inc.'s balance sheet at March 31,
2008, showed total assets of C$10.1 million and total liabilities
of C$11.1 million, resulting in a total shareholders' deficit of
C$1.0 million.

The company reported results for the fiscal third quarter and nine
months ended March 31, 2008.
    
For the three months ended March 31, the company incurred net loss
of $390,000 compared with net loss of $359,000.

The net Loss for nine months ended March 31, 2008, is $1.0 million
compared with $1.7 million for the corresponding period of the
previous year.

For the three months ended March 31, 2008, the increase in
interest expense resulted from the new debt financings and the
impact from marginally lower revenues  of $182,000, is a
reflection of the merchant enrolling and activation process.

Based in Ontario, Canada, Advantex Marketing International Inc.
(TSX:ADX) -- http://www.advantex.com/-- is a specialist in the  
marketing services industry, managing white-labeled rewards
accelerator programs for major affinity groups through which their
members earn bonus frequent flyer miles and/or other rewards on
purchases at participating merchants.  Under the umbrella of each
program, Advantex provides merchants with marketing, customer
incentives, and secured future sales through its Advance Purchase
Marketing model.  The company's partners include more than 700
restaurants, online retailers, golf courses, small inns and
resorts, and major organizations, including CIBC, United Airlines,
Delta Airlines, Alaska Airlines, and Lufthansa Airlines.


AIRLIE CDO: Moody's Puts Ba2 Rating Under Review for Possible Cut
-----------------------------------------------------------------
Moody's Investors Service has placed these notes issued by Airlie
CDO I, Ltd. on review for possible downgrade:

Class Description: $306,000,000 Class A Contingent Funding Rate
Notes Due 2014

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

Class Description: $17,000,000 Class B Floating Rate Deferrable
Notes Due 2014

  -- Prior Rating: A2
  -- Current Rating: A2, on review for possible downgrade

Class Description: $19,000,000 Class C Floating Rate Deferrable
Notes Due 2014

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

Class Description: $18,000,000 Class D Floating Rate Deferrable
Notes Due 2014

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

According to Moody's, the rating actions are the result of
deterioration in the credit quality of the transaction's
underlying portfolio and the placement under review for possible
downgrade of the Lehman Brothers ABS Enhanced LIBOR Fund's MR1
market risk rating.


ALESCO FINANCIAL: Updates on Impact of IndyMac's Deferral
---------------------------------------------------------
Alesco Financial Inc., a specialty finance real estate investment
trust, updates its previous announcement concerning the expected
impact to the company of the deferral by IndyMac Bancorp of the
interest payments due on IndyMac's trust preferred securities held
in Alesco's portfolio.

Alesco Financial has completed a review of its eight
collateralized debt obligation, or "CDO," transactions that
include trust preferred securities issued by IndyMac.  Alesco
Financial holds a portion of the equity interests in these eight
CDOs. IndyMac's securities represent an aggregate of 2.43% of the
total pool of collateral in those eight CDOs and approximately
$2.1 million in aggregate interest payments per quarter to the
eight CDOs, of which Alesco Financial's proportionate share is
approximately $1.5 million, or about $0.02 per diluted AFN common
share per quarter.

IndyMac's deferral will trigger the failure of over-
collateralization tests in five of the eight CDOs for a period of
time, of which one is expected to be a partial failure that should
cure in the current period. Once the failure of an over-
collateralization test is triggered in a CDO, Alesco Financial  
will no longer receive current distributions of cash with respect
to its equity interests in the CDO until sufficient cash flow is
paid to senior debt holders in the CDOs to cure the over-
collateralization tests. IndyMac did not disclose how long it
expects to defer its payments.

Alesco Financial expects that, even if IndyMac does not resume
making payment, and assuming no additional deferrals, the four
affected CDOs that are not expected to cure in the current period
will recommence making equity distributions within four to seven
quarters. For the year ended December 31, 2007, and the quarter
ended March 31, 2008, the five CDOs that Alesco Financial expects
will fail over-collateralization tests contributed $32.3 million,
or 38%, and $8.8 million, or 44%, respectively, of Alesco
Financial's adjusted earnings for such periods. Alesco Financial's
adjusted earnings will continue to include this income even though
AFN will not receive corresponding cash distributions until the
over-collateralization tests have been cured.

Currently, Alesco Financial has available unrestricted cash of
approximately $125 million, including cash generated by
previously-disclosed gains on credit default swaps.

James McEntee, President and CEO of Alesco Financial, said, "The
ultimate impact of IndyMac's actions on Alesco Financial will be
determined over time, based upon whether, and when, [IndyMac]
commences payment on its obligations. The actions by [IndyMac] are
indicative of the stress that the banking sector is under at the
current time. As I have stated on recent investor calls, the
stress in this sector is likely to continue to evidence itself in
our portfolio for the foreseeable future. [IndyMac's] announcement
is a negative development; however, we continue to believe in the
health of this sector over the mid- and long term, and we expect
this portfolio to perform reasonably well. The key to Alesco   
Financial participating in any turnaround in the banking sector is
patience. We have worked diligently over the past nine months to
position Alesco Financial's balance sheet in such a way as to
avoid having to take precipitous action; our current liquidity is
critical to being able to weather this storm. This will, however,
take some time. We have the liquidity to be patient, and we have a
management team focused on taking advantage of opportunities as
they arise, as is evidenced most recently by the benefits garnered
from the credit default swaps AFN put in place."

Alesco Financial's available unrestricted cash should be
sufficient to allow Alesco Financial to maintain its first quarter
2008 dividend rate for the remainder of 2008, even after giving
effect to the failure of the over-collateralization tests. The
payment of future dividends is, however, subject to the review and
approval of Alesco Financial's board of directors, and there can
be no assurance that Alesco Financial's board will determine to
maintain the first quarter dividend rate. As discussed on Alesco
Financial's earnings call last week, Alesco Financial is reviewing
a number of strategies for the company, including whether to
continue to maintain its REIT qualification. Any change in
strategy could impact the level of future dividend payments. A
special committee of Alesco Financial's independent directors has
been formed and has hired advisors to consider these alternatives.
Management and the Board are fully committed to maximizing the
realization of value for shareholders, and are actively engaged in
the process of seeking to do so.

                        About Indymac Bancorp

Headquartered in Pasadena, California, IndyMac Bancorp Inc.
(NYSE:IMB) -- http://www.indymacbank.com/-- is the holding    
company for IndyMac Bank FSB, a hybrid thrift/mortgage bank that
originates mortgages in all 50 states of the United States.   
Indymac Bank provides financing for the acquisition, development,
and improvement of single-family homes.  Indymac also provides
financing secured by single-family homes and other banking
products to facilitate consumers' personal financial goals.  The
company facilitates the acquisition, development, and improvement
of single-family homes through the electronic mortgage information
and transaction system platform that automates underwriting, risk-
based pricing and rate locking via the internet at the point of
sale.  Indymac Bank offers mortgage products and services that are
tailored to meet the needs of both consumers and mortgage
professionals.  Indymac operates through two segments: mortgage
banking and thrift.

The Troubled Company Reporter reported on May 15, 2008, that Fitch
Ratings downgraded the long-term Issuer Default Ratings
(IDRs) of Indymac Bancorp Inc. (IMB) and its wholly owned bank
subsidiary Indymac Bank FSB (bank). In addition, Fitch has placed
the affected ratings on Rating Watch Negative. Fitch's action
reflects the company's challenges in returning to profitability
and decision to defer dividend payments on preferred stock issued
by IMB and the bank. Approximately $19.9 billion of debt and
deposits are involved in Fitch's rating action.  Ratings
downgraded and placed on Rating Watch Negative:

   * Indymac Bancorp Inc.

     -- Long-term IDR to 'B-' from 'BB';
     -- Short-term IDR to 'C' from 'B';
     -- Individual to 'D/E' from 'C/D'.

                      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.


BLUE HERON: Moody's Slashes Rating on $1.113BB Notes to 'Baa1'
--------------------------------------------------------------
Moody's Investors Service has downgraded and placed on review for
possible further downgrade the ratings on these notes issued by
Blue Heron Funding VI, Ltd.

Class Description: $1,113, 750,000 Class A-1 Blue Heron Funding VI
Notes, due May 21, 2047

  -- Prior Rating: Aaa
  -- Current Rating: Baa1, on review for possible downgrade

Class Description: $25,000,000 Class A-2 Blue Heron Funding VI
Notes, due May 21, 2047

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

Additionally, Moody's downgraded these notes:

Class Description: Euro $89,936,000 (U.S. $105,000,000) Class B
Blue Heron Funding VI Notes, due May 21, 2047

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

According to Moody's, the rating actions reflect increased
deterioration in the credit quality of the structured finance
securities.


BLUEGREEN CORP: Moody's Rates $20MM Line of Credit Caa1
-------------------------------------------------------
Moody's assigned a Caa1 rating to Bluegreen Corporation's
$20 million senior unsecured line of credit.  Additionally, the
ratings outlook was revised to negative from stable.  
Concurrently, Moody's affirmed the company's B2 Corporate Family
Rating and B2 Probability of Default Rating.

The revision of Bluegreen's ratings outlook to negative from
stable reflects Moody's expectations of lower operating
performance over the intermediate term driven by the general
economic slowdown coupled with the sustained elevated fuel prices.  
With properties that are within driving distances of major
metropolitan areas, the increased gas prices could result in lower
visitation to the company's properties.  Additionally, the credit
markets could hamper the company's ability to raise financing in
order to continue its resort development activity.

The B2 Corporate Family Rating reflects the company's highly
leveraged position, significant dependence on third party
financing, high default rate of customer loan receivables,
exposure to real estate development risk, and significant
competition within the timeshare segment.  The Corporate Family
Rating also considers the drive-to nature of Bluegreen's resort
properties, adequate liquidity and stable operating performance.

Bluegreen has experienced some deterioration in its receivables
portfolio with the average annual default rate for the vacation
ownership interval receivables increasing to 7.9% for the twelve
months ended March 31, 2008.  Additionally, approximately 31% of
the company's receivables portfolio had FICO scores below 620.

These rating was assigned:

  -- Caa1 (LGD5/83%) rating on $20 million Senior Unsecured Line
     of Credit.

These ratings were affirmed:

  -- B2 Corporate Family Rating, and;
  -- B2 Probability of Default Rating.

The ratings outlook was revised to negative from stable.

Headquartered in Boca Raton, Florida, Bluegreen Corporation is a
leading acquirer, developer and marketer of vacation ownership
interests in resorts as well as residential and homesites.  For
the twelve months ended March 31, 2008, the company generated
approximately $684.2 million in revenues.


CANADIAN TRUSTS: Court Delays Approval of ABCP Restructuring Plan
-----------------------------------------------------------------
The Pan-Canadian Investors Committee for Third-Party Structured
ABCP disclosed that the Ontario Superior Court of Justice has
adjourned the request for approval of the Committee's plan
to restructure $32 billion of third-party asset-backed commercial
paper under the Companies Creditors Arrangement Act.
    
In his decision, Justice Colin Campbell found that the Plan
represents a laudable business solution.  He held that the
statement provided in the Plan, insofar as it would bar claims
against third parties for negligence relating to ABCP, may well be
appropriate under the CCAA.
    
However, to the extent the statement could extend to fraud claims,
he adjourned the matter for further submissions as to whether the
Plan can be approved and, in particular, whether there could be a
process within the CCAA to deal with legitimate, specific and
particularized claims of noteholders for fraud, if any, against
various parties in connec
tion with ABCP.
    
Judge Campbell stated that, if the parties can agree on a dispute
resolution process within the ambit of the CCAA to deal with
serious claims of fraud, the Plan can go forward immediately.  He
directed the parties to return to report on the proposals, if any,
for resolving potential claims in fraud by no later than May 30,
2008.
    
The judge also asked that a hardship consideration process to deal
with the special circumstances, including "some elderly
individuals and families holding through corporations their entire
family savings," be considered by the Committee and reported on to
the Court.
    
"We look forward to working with the Monitor and other
stakeholders to see if a process can be developed that meets the
concerns raised by the Court so that the Plan may be sanctioned
and implemented as soon as possible for the benefit of all
noteholders," Purdy Crawford, chair of the Investors Committee,
said.
    
                     About the ABCP Trusts

Apollo Trust, Apsley Trust, Aria Trust, Aurora Trust, Comet Trust,
Devonshire Trust, Encore Trust, Gemini Trust, Ironstone
Trust, MMAI-1 Trust, Newshore Canadian Trust, Opus Trust, Planet
Trust, Rocket Trust, Selkirk Funding Trust, Silverstone Trust,
Slate Trust, Structured Asset Trust, Structured Investment Trust
III, Symphony Trust, Whitehall Trust are entities based in Canada
that issue securities called third-party structured finance asset-
backed commercial paper.  As of Sept. 14, 2007, these 21 Canadian
Trusts had approximately $33 billion of outstanding ABCP.

As reported by the Troubled Company Reporter on March 18, 2008,
Justice Colin Campbell of the Ontario Superior Court of Justice
granted an application filed on March 17 by The Pan-Canadian
Investors Committee for Third-Party Structured ABCP under the
provisions of the Companies' Creditors Arrangement Act.  The
Committee asked the Court to call a meeting of ABCP noteholders to
vote on a plan to restructure 20 trusts affecting $32 billion of
notes.  The trusts were covered by the Montreal Accord, an
agreement entered by international banks and institutional
investors on Aug. 16, 2007 to work out a solution for the ABCP
crisis in Canada.  Justice Campbell appointed Ernst & Young, Inc.,
as the Applicants' monitor, on March 17, 2008.  


CANARGO ENERGY: Posts $1.2 Million Net Loss in 2008 First Quarter
-----------------------------------------------------------------
Canargo Energy Corp. reported a net loss of $1.2 million for the
first quarter ended March 31, 2008, compared with a net loss of
$5.9 million in the same period in 2007.  Results for the three
months ended March 31, 2007, included a net loss, net of taxes and
minority interest, of $1.8 million associated with the
discontinued operations of Tethys Petroleum Limited.

The company recorded operating revenue from continuing operations
of $2.6 million during the three month period ended March 31,
2008, compared with $446,847 for the three month period ended
March 31, 2007.  This increase is attributable to higher sales
volumes and higher average net sales prices achieved from the
Ninotsminda Field in the first quarter of 2008.  Ninotsminda Oil
Company Limited sold 27,078 barrels of oil for the three month
period ended March 31, 2008, compared to 7,508 barrels of oil for
the three month period ended March 31, 2007.

For the three month period ended March 31, 2008, NOC's net share
of the 39,143 barrels (430 barrels per day) of gross oil
production for sale from the Ninotsminda Field in the period
amounted to 25,443 barrels (280 barrels per day).  In the period,
1,635 barrels of oil was sold from storage.  For the three month
period ended March 31, 2007, NOC's net share of the 43,881 barrels
(488 barrels per day) of gross oil production was 30,898 barrels
(343 barrels per day).
    
The operating loss from continuing operations for the three month
period ended March 31, 2008, amounted to $228,001 compared with an
operating loss of $1,954,863 for the three month period ended
March 31, 2007.  The decrease in operating loss is attributable to
increased operating revenues and decreased selling, general and
administration costs partially offset by increased field operating
expenses, direct project costs and increased depreciation,
depletion and amortization in the period.
     
Other expense decreased to $957,086 for the three month period
ended March 31, 2008, from from $2,136,539 for the three month
period ended March 31, 2007.  The decrease in other expense is
primarily a result of lower loan interest payable and amortised
debt discount for the three month period ended March 31, 2008,
compared to the three month period ended March 31, 2007.

The loss from continuing operations of $1,185,087 for the three
month period ended March 31, 2008, compares to a net loss from
continuing operations of $4,091,402 for the three month period
ended March 31, 2007.

                          Balance Sheet

At March 31, 2008, the company's consolidated balance sheet showed
$59.9 million in total assets, $20.7 million in total liabilities,
$2.1 million in temporary equity, and $37.1 million in total
stockholders' equity.

The company's consolidated balance sheet at March 31, 2008, also
showed strained liquidity with $5.9 million in total current asets
available to pay $8.4 million in total current liabilities.

Full-text copies of the company's consolidated financial
statements for the quarter ended March 31, 2008, are available for
free at http://researcharchives.com/t/s?2c1c

                     Going Concern Disclaimer

As reported in the Troubled Company Reporter on March 18, 2008,
L J Soldinger Associates LLC exressed substantial about CanArgo
Energy Corporation's ability to continue as a going concern after
it audited the company's consolidated financial statements for
the year ended Dec. 31, 2007.  

The auditor reported that the company has incurred net
losses since inception and does not have sufficient funds to
execute its business plan or fund operations through the end of
2008.  

In the three month period ended March 31, 2008, and years ended
Dec. 31, 2007, and 2006, the company's revenues from operations
did not cover the costs of its operations.

The company said that its ability to continue as a going concern
is dependent upon raising capital through debt or equity financing
on terms acceptable to the company in the immediate short-term.

If the company is unable to obtain additional funds when these are
required or if the funds cannot be obtained on terms favourable to
the company, it may be required to delay, scale back or eliminate
its exploration, development and completion program or enter into
contractual arran gements with third parties to develop or market
products that thecompany would otherwise seek to develop or market
itself, or even be required to relinquish its interest in its  
properties or in the extreme situation, cease operations
altogether.

                       About CanArgo Energy

CanArgo Energy Corporation (AMEX: CNR) -- http://www.canargo.com/   
-- is an independent oil and gas exploration and production
company with its oil and gas operations currently located in
Georgia.


CASH SYSTEMS: March 31 Balance Sheet Upside-Down by $1.9 Million
----------------------------------------------------------------
Cash Systems Inc.'s consolidated balance sheet at March 31, 2008,
showed $58.2 million in total assets and $60.1 million in total
liabilities, resulting in a $1.9 million total stockholders'
deficit.

At March 31, 2008, the company's consolidated balance sheet also
showed strained liquidity with $41.9 million in total current
assets available to pay $48.0 million in total current
liabilities.

The company posted a net loss of $4.7 million for the first
quarter ended March 31, 2008, compared with a net loss of
$1.4 million in the same period a year ago.

Revenue for the quarter ended March 31, 2008, was $27.1 million
compared to $25.2 million for the same period in 2007.  The
increase in revenue is primarily due to an increase in overall
transaction volume.  
     
Total operating expenses for the three months ended March 31,
2008, were $27.9 million compared to $25.4 million for 2007.

Interest expense increased $38.2 million, or 3.3%, to $1.2 million  
for the three months ended March 31, 2008, when compared to the
same period last year.  

The company also recorded a loss on extinguishment of debt during
the three months ended March 31, 2008, in the amount of $2.6
million representing the difference between the carrying value of
the First Amended and Restated Notes and Warrants and the fair
market value of the Second Amended and Restated Notes and
Warrants.
     
Full-text copies of the company's consolidated financial
statements for the quarter ended March 31, 2008, are available for
free at http://researcharchives.com/t/s?2c23

                     Going Concern Disclaimer

As reported in the Troubled Company Reporter on April 29, 2008,
Virchow, Krause & Company LLP, in Minneapolis, expressed
substantial doubt about Cash Systems 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 company's recurring operating losses,
negative cash flows from operations, negative working capital and
accumulated deficit.  

In addition, the holders of the company's Second Amended and
Restated Notes have the right to require the company to redeem a
portion of such notes on Oc. 10, 2008, in an amount not to exceed
$12.1 million in the aggregate, and will have the right to
accelerate the maturity of the outstanding balance of the Second
Amended and Restated Notes upon an event of default, including
following a delisting of the company's common stock from The
NASDAQ Global Market.

The company anticipates that its existing capital resources will
enable it to continue operations through approximately October
2008, unless prior to that date payments of certain other accrued
expenses are accelerated, the company's common stock is delisted
from The NASDAQ Global Market, and the company's note holders
elect to accelerate the maturity of the outstanding balance of the
Second and Amended and Restated Notes, or unforeseen events or
circumstances arise that negatively affect the company's
liquidity.

Management will need to take immediate steps to reduce operating
expenses, which may include seeking concessions from customers and
vendors in the meantime.  If it fails to raise additional capital
prior to the earlier of October 2008 and the occurrence of any of
these events, the company may be forced to cease operations.

                        About Cash Systems

Based in Las Vegas, Cash Systems Inc. (Nasdaq: CKNN) --
http://www.cashsystemsinc.com/-- is a provider of cash-access and  
related services to the retail and gaming industries.  Cash
Systems' products include its proprietary cash advance systems,
ATMs and check cashing solutions.


CATHOLIC CHURCH: Fairbanks Wants Claims Bar Date Set Dec. 2
-----------------------------------------------------------
The Roman Catholic Diocese of Fairbanks in Alaska, aka Catholic
Bishop of Northern Alaska, asked the U.S. Bankruptcy Court for the
District of Alaska to establish Dec. 2, 2008, as the time within
which proofs of claim against the bankruptcy estate are to be
filed.

The Diocese disclosed that it consulted with the Office of the
United States Trustee for Region 18, and counsel for the Official
Committee of Unsecured Creditors regarding the the appropriate
Bar Date under the circumstances of the case.

With respect to claims concerning executory contracts and
unexpired leases, the Diocese also asked the Court to set a bar
date for those claims as the earlier of:

    (i) 30 days from the date of an order rejecting the executory
        contract or unexpired lease; or

   (ii) 30 days from the date of a plan of reorganization is
        confirmed.

Starting 2002, the Diocese began receiving lawsuits alleging that
acts of abuse had been committed by clergy and others within the
Diocese for which CBNA was liable.  The claims were made by adults
based upon acts that they alleged occurred as many as 30 years
prior to bringing the suit.  By the bankruptcy filing, there were
150 claims pending against the Diocese in the Alaska state court.

While defending the abuse cases, the defense has consumed both
the Diocese's time and money.  In addition, the Diocese's primary
insurer has not participated in a manner that would have allowed
the parties to engage in meaningful settlement negotiations and
resolve the cases.

Consequently, the Diocese filed a Chapter 11 to case deal with:

   -- all the cases and claimants;

   -- any other claims, which have not yet been asserted against
      the Diocese; and

   -- all of the victims in a fair, just and equitable manner,
      considering the Diocese's limited resources.

Susan G. Boswell, Esq., at Quarles & Brady Streich Lang, LLP, in
Tucson, Arizona, contended that for the Diocese to be able to
fairly compensate all victims and other creditors, and to confirm
a plan of reorganization, it is necessary to determine the
universe of potential claimants against the Diocese, which
include:

   -- secured claims of creditors;

   -- unsecured claims of trade creditors, vendors and other
      persons or entities, who provide goods or services to the
      Diocese; and

   -- tort claims, which are unsecured claims of persons, who
      contend they were abused by clergy or other persons
      employed by the Diocese, and who contend that the Diocese
      is liable under various theories.

The Tort Claims consist of claims filed by Tort Claimants, (i)
who have filed suit against the Diocese, (ii) those who have come
forward and informed the Diocese of potential claims, but who
have not filed any legal actions, and (iii) those who have never
come forward and are not presently known to the Diocese.

The Diocese desires to move expeditiously toward a resolution in
the Reorganization Case for the best interests of all creditors
and parties-in-interest, Ms. Boswell asserted.  Accordingly, it is
necessary that the universe of claims be identified as quickly as
possible while at the same time ensuring that broad notice of a
bar date is given.  

To allow maximum recovery for proper claimants, it is important
for the Diocese to have an opportunity to review the claims to
evaluate whether the Diocese is the proper party against which a
claim should be asserted, and the validity of the underlying
claim, she said.

                      Proofs of Claim Form

The Diocese proposed to modify the Official Bankruptcy Form No.
10 to elicit necessary information for the resolution of the Tort
Claims.  The Diocese further proposed that the Claim Form for
other creditors' claims be modified only slightly to clearly
advise claimants that they should only use this claim form if
they are asserting claims other than Tort Claims.

Ms. Boswell said that special circumstances exist because the
information, which will be requested, is critical to a reasonable
evaluation and analysis of the liability of the Diocese for the
alleged Tort Claims.

Each proof of claim form will be designed to ensure claimants
provide necessary information in a way as to allow the Diocese to
determine the nature, extent and validity of the Tort Claims,
while being sensitive to the special issues for the claim
holders.  To facilitate estimation proceedings, which might
occur, and to facilitate negotiations toward a consensual plan,
it is important that the Diocese and others, who are given access
to the Tort Claim Form, know the basic information related to the
Tort Claim as early as possible, Ms. Boswell explains.

                Bar Date and Publication Notices

The Diocese proposed forms of bar date notices for both the Tort
Claimants and the Non-Tort Claimants.  Once the Bar Date Notices
are approved by the Court, the Diocese will send the relevant
proof of claim form to all creditors and others entitled to
receive notice pursuant to Rule 2002(a)(7) of the Federal Rules
of Bankruptcy Procedure.

To ensure that the Diocese has captured the universe of potential
claimants, the Diocese also proposes to provide notice of the Bar
Date through publication of a publication notice.  Since the
Diocese is one of the poorest in the nation, and many potential
creditors may not receive a newspaper, have a computer, or have
other means by which to access the Publication Notice, the
Diocese has attempted to create some unconventional methods to
disseminate Bar Date information, in addition to religious
publications, regional and national newspapers and other Alaska-
based publications.

The Publication Notice will be published three times in each of
these publications:

   * the Fairbanks Daily News Miner;
   * the Anchorage Daily News;
   * the Seattle Times;
   * the Oregonian;
   * the Artic Sounder;
   * the Bristol Bay Times;
   * the Cordova Times;
   * the Dutch Harbor Fisherman;
   * the Seward Phoenix Log;
   * the Tundra Drums;
   * the Delta Discovery;
   * the Nome Nugget; and
   * the Alaska Bush Shopper

Publication Notice will also be published twice in USA Today.  
The Diocese will likewise post the Notices in certain locations
that are located in the extremely remote areas, but may be close
to one of the parishes, including the post offices, universities,
and general stores.  

"[T]he Debtor is exploring publication on one or more of the
Alaska native corporation publications and will supplement the
publication proposal prior to the hearing on this Motion," Ms.
Boswell said.

The Diocese will post the Notices on its Web site, and on parish
bulletins.  It will also make (i) an announcement on its radio
station, KNOM, in both in English, and in Yu'pik, a native
Alaskan language, and (ii) public service announcements on the
Alaska Public Radio Network.

In sum, the Diocese asked the Court to (i) provide that December 2
Bar Date is appropriate under the case's circumstances, (ii)
approve the proposed forms of the proofs of claim and notices,
(iii) order that any creditor, who fails to timely file a proof
of claim pursuant to the Bar Date, will be prohibited from
participating in the Reorganization Case with respect to voting
on a plan of reorganization, distribution under a  plan, or in
any other regard, and (iv) rule that any creditor's claim, which
is untimely filed, will be discharged.

                    About Diocese of Fairbanks

The Roman Catholic Diocese of Fairbanks in Alaska, aka Catholic
Bishop of Northern Alaska, aka Catholic Diocese of Fairbanks, aka
The Diocese of Fairbanks, aka CBNA filed for chapter 11 bankruptcy
on March 1, 2008 (Bankr. D. Alaska Case No. 08-00110).  Susan G.
Boswell, Esq., at Quarles & Brady LLP represents the Debtor in its
restructuring efforts.  Michael R. Mills, Esq., of Dorsey &
Whitney LLP serves as the Debtor's local counsel and Cook,
Schuhmann & Groseclose Inc. as its special counsel.  Judge Donald
MacDonald, IV, of the United States Bankruptcy Court for the
District of Alaska presides over Fairbanks' Chapter 11 case.  The
Debtor's schedules show total assets of $13,316,864 and total
liabilities of $1,838,719.   The church's exclusive plan filing
period expires on June 29, 2008.  (Catholic Church Bankruptcy
News, Issue No. 125; Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000).


CATHOLIC CHURCH: Fairbanks Wants to Hire Future Claims Rep.
-----------------------------------------------------------
Roman Catholic Diocese of Fairbanks in Alaska, aka Catholic Church
in Alaska, asked the U.S. Bankruptcy Court for the District of
Alaska to:

   -- find that future tort claimants are parties-in-interest in
      the reorganization case; and

   -- appoint a future claims representative to represent the
      Future Tort Claimants, who will:

      * make appearances;

      * file pleadings;

      * file a proof of claim on behalf of the Future Tort
        Claimants;

      * participate in negotiating a plan of reorganization;

      * participate in any claims estimation process; and

      * take other actions, or perform other duties as the Court
        may authorize upon request of the Diocese or other party-
        in-interest.

Substantially all of the individuals who alleged that they were
sexually abused by priests and others associated with the Diocese
assert that the incidents occurred in rural villages during the
1950s, 1960s, 1970s or early 1980s, relates Susan G. Boswell,
Esq., at Quarles & Brady Streich Lang, LLP, in Tucson, Arizona.  
She noted that the Catholic Bishop of Northern Alaska is not aware
of any allegations of abuse occurring after the early 1980s.

There is a dispute between the Diocese of Fairbanks and the Tort
Claimants as to the reach and applicability of certain provisions
of Alaska law with respect to sex abuse claims, Ms. Boswell said.  
Among other defenses, the Diocese asserts that the Tort Claims
are time-barred by the two-year statute of limitations for tort
actions.

Section 09.10.065 of the Alaska Statutes eliminated the civil
statute of limitations for sexual abuse claims as to
perpetrators.  However, the Alaska Supreme Court recently made it
clear that Section 09.10.065 did not apply retrospectively.  
Therefore, Ms. Boswell contended, Section 09.10.065 did not have
to reach the issue of whether it applies to non-perpetrators.

Tort Claimants suing other dioceses and archdioceses throughout
the United States attempt to overcome the statute of limitations
by asserting various factual theories that involve recent
discovery of injuries resulting from childhood sexual abuse.  The
Diocese disputed the "discovery" allegations, and the legal
validity of certain tolling theories.  However, to
comprehensively deal with all of the Tort Claims, including
current and future claims, it is necessary to recognize the
possibility of future claims, Ms. Boswell explained.

Ms. Boswell argued that the appointment of a Future Claims
Representative is (i) appropriate under the circumstances of the
bankruptcy case because future tort claimants may hold "claims,"
as defined by the Bankruptcy Code, and (ii) necessary to enable
the Court to render valid and binding judgments against Future
Tort Claimants by enabling them, through a duly-appointed
fiduciary representative, to participate in the reorganization
process.

"Although CBNA does not believe that the universe of Future Tort
Claimants is significant, they should be represented," Ms.
Boswell told the Court.  She pointed out that the reorganization
case seeks to balance the rights and needs of all prepetition
creditors, including Future Tort Claimants, with the Diocese's
continued ministry and mission, while taking into account its
limited resources.

                    About Diocese of Fairbanks

The Roman Catholic Diocese of Fairbanks in Alaska, aka Catholic
Bishop of Northern Alaska, aka Catholic Diocese of Fairbanks, aka
The Diocese of Fairbanks, aka CBNA filed for chapter 11 bankruptcy
on March 1, 2008 (Bankr. D. Alaska Case No. 08-00110).  Susan G.
Boswell, Esq., at Quarles & Brady LLP represents the Debtor in its
restructuring efforts.  Michael R. Mills, Esq., of Dorsey &
Whitney LLP serves as the Debtor's local counsel and Cook,
Schuhmann & Groseclose Inc. as its special counsel.  Judge Donald
MacDonald, IV, of the United States Bankruptcy Court for the
District of Alaska presides over Fairbanks' Chapter 11 case.  The
Debtor's schedules show total assets of $13,316,864 and total
liabilities of $1,838,719.   The church's exclusive plan filing
period expires on June 29, 2008.  (Catholic Church Bankruptcy
News, Issue No. 125; Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000).


CATHOLIC CHURCH: Fairbanks May File Chapter 11 Plan on July 15
--------------------------------------------------------------
In a 12-page status report filed with the U.S. Bankruptcy Court
for the District of Alaska, the Catholic Bishop of Northern
Alaska disclosed that it is planning to submit a plan of
reorganization on or about July 15, 2008.  The Diocese said it
hopes to work cooperatively with the Official Committee of
Unsecured Creditors, and incorporate its constructive input into
formulating the Plan.

Since the Diocese has until June 29, 2008, to exclusively file
the Plan, it may seek an extension of the exclusivity periods to
file the Plan, and to obtain the Plan's acceptance, said Susan G.
Boswell, Esq., at Quarles & Brady Streich Lang, LLP, in Tucson,
Arizona.

The Diocese is not opposed to combining the hearing on approval
of the Disclosure Statement and confirmation of the Plan, Ms.
Boswell said.  However, given the possible issues in the case and
the varying interests of parties-in-interest, she asserted that
doing so at this time would be neither productive, nor would it
be cost-effective.

The Diocese also believes that a mediation involving the Diocese,
the Creditors Committee, and insurance carriers would be
productive in bringing about a prompt and fair resolution to the
case.  Accordingly, the Diocese asked Judge McDonald to command
the parties to begin mediation as soon as practicable.

According to the report, the Diocese anticipates certain
additional proceedings in the case, which may affect the
formulation of the Plan.  The Diocese said that it may seek
approval of a debtor-in-possession financing to help fund
administrative expenses.  Although DIP financing would affect the
content of any plan, the Diocese does not believe that it will
delay the Plan's formulation.

Ms. Boswell further related that the Creditors Committee may
initiate litigation against the Diocese and the parishes seeking
a judicial determination that the property, which the Diocese
scheduled as held for others, is property of the bankruptcy
estate that the Diocese can and should use to pay the tort
claims.  The Diocese, however, hopes to work constructively with
the Creditors Committee to determine how much will be paid to the
Tort Claimants and from what sources.  She noted that the Diocese
will devote resources to funding the Plan to compensate the Tort
Claimants.

"As with other diocesan reorganization cases, most of the funds
necessary to pay claims will come from insurance proceeds.  CBNA
believes that this is most cost effectively accomplished by
focusing on the insurance assets and determining the extent of
claims against the estate," Ms. Boswell said.

In other diocesan Chapter 11 cases, the issue on what constituted
estate property were hotly litigated, and has delayed the plan  
process, Ms. Boswell pointed out.  She told Judge McDonald to
consider the cases of the Diocese of Spokane and the Archdiocese
of Portland in Oregon, as compared to those of the Diocese of
Tucson and the Diocese of Davenport.  She reminded the Court that
Fairbanks "does not have the assets to sustain these fights and
still have funds to pay Tort Claimants."

The report also said that the Diocese "will strongly resist any
efforts to wrestle away its avoidance powers without its
consent," if ever the Creditors Committee would seek to obtain
control over the Diocese's avoidance actions.

The Diocese informed the Court that the tenant on its Pilgrim
Springs property has breached the lease.  The Diocese believes
that the property is marketable for its geo-thermal potential.

                       Committee Responds

"On April 16, 2008, Pope Benedict XVI addressed . . . bishops in
the United States, to 'bind up the wounds caused by every breach
of trust, to foster healing, to promote reconciliation and to
reach out with loving concern to those so seriously wronged' by
the gravely immoral behavior of the sexual abuse of minors,"
relates David H. Bundy, Esq., in Anchorage, Alaska.  However, Mr.
Bundy notes, the Diocese filed the case status report "more
geared to managing its public relations than following the Pope's
admonition."

If the Diocese's public relations consultants have taught it to
use phrases like "fairly, justly, and equitably compensate the
victims," then, the Diocese should take the next step, and remove
the words "alleged" and "contend" from its pleadings, Mr. Bundy
asserts.  He argues that the Diocese should stop referring to
survivors of childhood sexual abused as "alleged" victims.

Mr. Bundy contended that the Diocese is concerned about avoiding
uncomfortable issues, and making the funding of the Plan the
problem of the Creditors Committee, the Future Claims
Representative, and the insurance carriers.

"The proposal to mediate insurance claims in June when the bar
date will not expire until early December appears to be a not so
subtle effort to avoid the full disclosure of the scope of the
abuse in the Diocese," Mr. Bundy stressed out.  He adds that the
Diocese's promise or threat to dump insurance litigation into a
post-confirmation trust, and walk away, is "tantamount to a
dereliction of duty."

Mr. Bundy informed the Court that the Diocese has not provided any
response to some of the Creditors Committee's document requests,
which include copies of all the Diocese's statutes or laws for
the last 10 years, and all documents relating to the real
property transaction between the Diocese and the Jesuits.

The Creditors Committee does not intend to engage in wasteful
litigation, Mr. Bundy told the Court.  However, the Diocese
appears adamant about filing the Plan before the proposed claims
bar date, and ignore the value of the parishes and preserve all
of its assets.

"Under these circumstances, the Committee will not sit idly by
and allow this Diocese to shirk its fiduciary duties to the
creditors, maneuver around the property issues, and preserve its
assets so that it can 'swiftly' exit [C]hapter 11," Mr. Bundy
said.

                    About Diocese of Fairbanks

The Roman Catholic Diocese of Fairbanks in Alaska, aka Catholic
Bishop of Northern Alaska, aka Catholic Diocese of Fairbanks, aka
The Diocese of Fairbanks, aka CBNA filed for chapter 11 bankruptcy
on March 1, 2008 (Bankr. D. Alaska Case No. 08-00110).  Susan G.
Boswell, Esq., at Quarles & Brady LLP represents the Debtor in its
restructuring efforts.  Michael R. Mills, Esq., of Dorsey &
Whitney LLP serves as the Debtor's local counsel and Cook,
Schuhmann & Groseclose Inc. as its special counsel.  Judge Donald
MacDonald, IV, of the United States Bankruptcy Court for the
District of Alaska presides over Fairbanks' Chapter 11 case.  The
Debtor's schedules show total assets of $13,316,864 and total
liabilities of $1,838,719.   The church's exclusive plan filing
period expires on June 29, 2008.  (Catholic Church Bankruptcy
News, Issue No. 125; Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000).  


CATHOLIC CHURCH: Judge Closes Spokane Diocese's Bankruptcy Case
---------------------------------------------------------------
Judge Patricia C. Williams of the U.S. Bankruptcy Court for the
Eastern District of Washington issued a final decree on May 12,
2008, closing the bankruptcy case of the Diocese of Spokane.

Judge Williams noted that since the bankruptcy estate has been
fully administered, and the deposit required by the Diocese's
Plan Trust has been distributed, the Plan Trustee, Gloria Z.
Nagler, Esq., will be discharged as trustee.

Spokane's Second Amended Joint Plan of Reorganization was
confirmed on April 24, 2007, and was declared effective on
May 31.

                    About The Diocese of Spokane

The Roman Catholic Church of the Diocese of Spokane filed for
chapter 11 protection (Bankr. E.D. Wash. Case No. 04-08822) on
Dec. 6, 2004.  Michael J. Paukert, Esq., at Paine, Hamblen,
Coffin, Brooke & Miller, LLP, represents the Spokane Diocese in
its restructuring efforts.  When the Debtor filed for protection
from its creditors, it listed $11,162,938 in total assets and
$81,364,055 in total debts.

The Diocese of Spokane, the Tort Claimants Committee, the Future
Claims Representative, and the Executive Committee of the
Association of Parishes delivered an Amended Plan of
Reorganization, and a Disclosure Statement describing that Plan to
the Court on Feb. 1, 2007.  The Honorable Patricia C. Williams
approved the disclosure statement on March 8, 2007.  On April 24,
2007, the Court confirmed Spokane's 2nd Amended Joint Plan.  That
plan is effective May 31, 2007.  (Catholic Church Bankruptcy News,
Issue No. 125; Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000)


CATHOLIC CHURCH: Spokane's Plan Trust Has $6 Million Cash Left
--------------------------------------------------------------
The Diocese of Spokane's Plan Trustee, Gloria Z. Nagler, Esq., at
Nagler & Associates in Seattle, Washington, filed with the U.S.
Bankruptcy Court for the Eastern District of Washington semi-
annual financial reports on the remaining assets of the Plan
Trust.

The Plan Trustee disclosed that the Diocese's Settlement Fund had
total assets of $6,391,677 as of Dec. 31, 2007.  Moreover, the
Settlement Fund had $6,347,138 in excess of receipts over
disbursements for the period covering May 8, 2007, through
Dec. 31, 2007.

                    About The Diocese of Spokane

The Roman Catholic Church of the Diocese of Spokane filed for
chapter 11 protection (Bankr. E.D. Wash. Case No. 04-08822) on
Dec. 6, 2004.  Michael J. Paukert, Esq., at Paine, Hamblen,
Coffin, Brooke & Miller, LLP, represents the Spokane Diocese in
its restructuring efforts.  When the Debtor filed for protection
from its creditors, it listed $11,162,938 in total assets and
$81,364,055 in total debts.

The Diocese of Spokane, the Tort Claimants Committee, the Future
Claims Representative, and the Executive Committee of the
Association of Parishes delivered an Amended Plan of
Reorganization, and a Disclosure Statement describing that Plan to
the Court on Feb. 1, 2007.  The Honorable Patricia C. Williams
approved the disclosure statement on March 8, 2007.  On April 24,
2007, the Court confirmed Spokane's 2nd Amended Joint Plan.  That
plan is effective May 31, 2007.  (Catholic Church Bankruptcy News,
Issue No. 125; Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000)


C-BASS CBO: Moody's Junks Ratings on Three Note Classes
-------------------------------------------------------
Moody's Investors Service has downgraded and placed on review for
possible further downgrade the ratings on these notes issued by C-
BASS CBO XV Ltd.

Class Description: $565,800,000 Class A First Priority Senior
Secured Floating Rate Notes Due 2041-1

  -- Prior Rating: A2, on review for possible downgrade
  -- Current Rating: Ba3, on review for possible downgrade

Class Description: $39,100,000 Class B Second Priority Senior
Secured Floating Rate Notes Due 2041

  -- Prior Rating: Baa2, on review for possible downgrade
  -- Current Rating: Caa1, on review for possible downgrade

Class Description: $44,800,000 Class C Third Priority Secured
Floating Rate Deferrable Interest Notes Due 2041

  -- Prior Rating: Ba1, on review for possible downgrade
  -- Current Rating: Caa3, on review for possible downgrade

Additionally, Moody's downgraded these notes:

Class Description: $19,500,000 Class D Fourth Priority Secured
Floating Rate Deferrable Interest Notes Due 2041

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

According to Moody's, the rating actions reflect increased
deterioration in the credit quality of the structured finance
securities.


CELL THERAPEUTICS: March 31 Balance Sheet Upside-Down by $124.1MM
-----------------------------------------------------------------
Cell Therapeutics Inc.'s consolidated balance sheet at March 31,
2008, showed $78.6 million in total assets, $192.8 million in
total liabilities, and $9.9 million in no par value preferred
stock, resulting in a $124.1 million total stockholders' deficit.

At March 31, 2008, the company's consolidated balance sheet also
showed strained liquidity with $27.6 million in total current
assets available to pay $47.9 million in total current
liabilities.

Net loss attributable to common shareholders for the quarter ended
March 31, 2008, which includes a one-time inducement payment of
$16.2 million to convert preferred shares into common shares,
totaled $54.6 million compared to $28.7 million for the comparable
period in 2007.  

The increase in net loss attributable to common shareholders was
also due, in part, to an increase in interest expense and make-
whole interest payments related to the 9% convertible senior notes
and the loss recorded on the exchange of the 5.75% convertible
senior subordinated and subordinated notes in 2008.  This was
offset by a gain on the derivative liability related to
conversions of the 9% convertible senior notes.  The company also
had a foreign exchange loss for the quarter ended March 31, 2008,
compared to a gain for the same period in 2007.

Total revenues for the quarter were $3.4 million compared to
$20,000 for the first quarter of 2007.  Gross product sales of
Zevalin(R) (Ibritumomab Tiuxetan) reached $3.8 million in the
first quarter of 2008.

Total operating expenses increased to $28.4 million for the
quarter ended March 31, 2008, compared to $23.6 million for the
same period in 2007 mainly as a result of increased expenses
related to the creation of commercial infrastructure to support
Zevalin and fees associated with capital structure advisory
services.

The company had approximately $15.3 million in cash and cash
equivalents, securities available-for-sale, and interest
receivable as of March 31, 2008.  This does not include
$6.2 million in restricted cash held in escrow and net proceeds,
before fees and expenses, of approximately $22.9 million from the
issuance on April 30, 2008, of preferred stock, convertible notes,
and warrants.  

The company also expects to receive an additional $5.0 million in
gross proceeds from an additional sale of securities to the
purchaser of the Series E preferred stock and 13.5% convertible
senior notes prior to July 4, 2008, provided adequate shares are
available for issuance of such securities at that time.

"In the second quarter we expect to see the positive financial
impact of our strategy to focus resources on our late-stage
development products and growing Zevalin sales.  With our
commercial team now in place to support Zevalin, we expect
revenues to continue to increase over the next few quarters," said
James A. Bianco, M.D., president and chief executive officer of
CTI.  

"In addition, over the last two quarters, we have been successful
in cleaning up our balance sheet, retiring or exchanging
approximately 74.0% of current debt and preferred securities.  
With the majority of the investments in OPAXIO and pixantrone
behind us we look forward to the review of the Marketing
Authorization Application for OPAXIO and to final results of the
pixantrone pivotal trial."

Full-text copies of the company's consolidated financial
statements for the quarter ended March 31, 2008, are available for
free at http://researcharchives.com/t/s?2c27

                     Going Concern Disclaimer

As reported in the Troubled Company Reporter on Apirl 4, 2008,
Stonefield Josephson Inc. in Los Angeles, Calif., expressed
substantial doubt about Cell Therapeutics Inc.'s ability to
continue as a going concern after auditing company's
financial statements for the year ended Dec. 31, 2007.  

The auditing firm reported that the company has substantial
monetary liabilities in excess of monetary assets as of Dec. 31,
2007, including approximately $19.8 million of convertible
subordinated notes and senior subordinated notes which mature in
June 2008.

The company has incurred losses since inception and expects to
generate losses from operations for at least the next couple of
years primarily due to research and development costs for Zevalin,
OPAXIO (paclitaxel poliglumex), pixantrone, and brostallicin.  

The company said that its $15.3 million in cash and cash
equivalents, securities available-for-sales, as of March 31, 2008,  
even with the $5.0 million additional financing from a second
offering of securities to the purchaser of the Series E preferred
stock and 13.5% convertible senior notes, will not sufficient to
fund the company's planned operations for the next twelve months
as well as repay approximately $10.7 million in principal due on
its convertible subordinated and senior subordinated notes in June
2008.

                     About Cell Therapeutics

Headquartered in Seattle, Cell Therapeutics Inc. --
http://www.CellTherapeutics.com/-- is a biopharmaceutical company  
committed to developing an integrated portfolio of oncology
products aimed at making cancer more treatable.


CHARLES RIVER: Moody's Slices Note Ratings on Three Classes to C
----------------------------------------------------------------
Moody's Investors Service has downgraded and placed on review for
possible further downgrade the ratings on these notes issued by
Charles River CDO I, Ltd.

Class Description: $214,000,000 Class A-1A Floating Rate Notes Due
December 9, 2037

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

Class Description: $15,000,000 Class A-1B Principal Only Notes Due
December 9, 2037

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

Class Description: $20,000,000 Class A-2F Fixed Rate Notes Due
December 9, 2037

  -- Prior Rating: Aa2
  -- Current Rating: B3, on review for possible downgrade

Class Description: $15,000,000 Class A-2V Floating Rate Notes Due
December 9, 2037

  -- Prior Rating: Aa2
  -- Current Rating: B3, on review for possible downgrade

Additionally, Moody's downgraded these notes:

Class Description: $3,000,000 Class B-F Fixed Rate Notes Due
December 9, 2037

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

Class Description: $18,000,000 Class B-V Floating Rate Notes Due
December 9, 2037

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

Class Description: $4,800,000 Class C Fixed Rate Notes Due
December 9, 2037

  -- Prior Rating: Ca
  -- Current Rating: C

According to Moody's, the rating actions reflect increased
deterioration in the credit quality of the structured finance
securities.


CHARMING SHOPPES: Board Member Strandjord to Forego Re-Election
---------------------------------------------------------------
Charming Shoppes Inc. Board Director Jeannine Strandjord will not
stand for re-election at the company's Annual Meeting.

As reported in the Troubled Company Reporter on May 9, 2008, the
company and The Charming Shoppes Full Value Committee reached an
agreement to resolve the proxy contest related to the company's
2008 Annual Meeting of Shareholders.  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.  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.

As previously disclosed, 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.

According to a Securities and Exchange Commission filing, there
were no disagreements between Ms. Strandjord and the company on
any matter relating to the companys operations, policies or
practices that resulted in Ms. Strandjords decision to withdraw
her name for reelection or the timing of her decision.  Ms.
Strandjord will serve as a director until her term expires at the
Annual Meeting and until her successor has been elected and
qualified.

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.


CHARTER COMMS: Gets Nasdaq Compliance Notice on Price Listing
-------------------------------------------------------------
Charter Communications, Inc. received notice from the Nasdaq
Global Select Stock Market that it is compliant with the minimum
price continued listing standard of the Nasdaq Global Select Stock
Market.  The company regained compliance when the companys Class
A common stock closed at or above $1.00 for the 10 consecutive
business days ending May 12, 2008.

On May 12, 2008, Charter reported first quarter earnings for the
three months ended March 31, 2008.  For the quarter, Charter
reported revenue growth of 10.5%, revenue generating unit growth
of 7.1%, and average revenue per basic customer growth of 13.4% on
a pro forma basis versus the comparable period in 2007.

Headquartered in St. Louis, Missouri, Charter Communications Inc.
(Nasdaq: CHTR) -- http://www.charter.com/-- is a broadband   
communications company and the third-largest publicly traded cable
operator in the United States.  Charter provides a full range of
advanced broadband services, including advanced Charter Digital
Cable(R) video entertainment programming, Charter High-Speed(R)
Internet access, and Charter Telephone(R).  Charter Business(TM)
similarly provides broadband communications solutions to business
organizations, such as business-to-business Internet access, data
networking, video and music entertainment services, and business
telephone.  Charter's advertising sales and production services
are sold under the Charter Media(R) brand.

                          *     *     *

As reported in the Troubled Company Reporter on March 14, 2008,
Moody's Investors Service affirmed these ratings for Charter
Communications Inc.: (i) corporate family rating: Caa1; (ii)
probability-of-default rating: Caa2; and (iii) senior unsecured
notes: Ca (LGD5 -- 87%).

                       Possible Bankruptcy

As reported in the Troubled Company Reporter on May 14, 2008, the
company said that if, at any time, additional capital or borrowing
capacity is required beyond amounts internally generated or
available under the company's credit facilities, it would consider
issuing equity, issuing convertible debt or some other securities,
further reducing the company's expenses and capital expenditures,
selling assets, or requesting waivers or amendments with respect
to the company's credit facilities.

If the above strategies were not successful, the company says it
could be forced to restructure its obligations or seek protection
under the bankruptcy laws.


CHASE FUNDING: S&P Junks Rating on Class IB Certificates
--------------------------------------------------------
Standard & Poor's Ratings Services lowered its ratings on four
classes of mortgage loan asset-backed certificates from Chase
Funding Loan Acquisition Trust Series 2001-C2 and Chase Funding
Trust Series 2002-1.  S&P removed two of the lowered ratings from
CreditWatch with negative implications.  In addition, S&P affirmed
its rating on class IIM-2 from Chase Funding Trust Series 2003-1
and removed it from CreditWatch negative.  Concurrently, S&P
affirmed its ratings on 18 classes from these series.
     
The downgrades reflect collateral performance that has eroded
available credit support during recent months.  As of the April
2008 remittance period, cumulative losses were 3.34% for series
2001-C2; for series 2002-1, cumulative losses were 1.19% and 1.90%
for loan groups 1 and 2, respectively.  Serious delinquencies (90-
plus days, foreclosures, and REOs) were $4.83 million for series
2001-C2 and $2.64 million and $3.35 million for loan groups I and
II, respectively, from series 2002-1.  The current
overcollateralization for both deals is below its target.
     
The affirmations reflect stable collateral performance as of the
April 2008 remittance period.  Current and projected credit
support percentages are sufficient to support the ratings at their
current levels.  Serious delinquencies for loan groups 1 and 2
from series 2003-1 are $2.944 million and $5.303 million,
respectively.  O/C for both loan groups from series 2003-1 is
close to the target levels at $1.604 million and $2.344 million,
respectively.
     
Subordination, O/C, and excess spread provide credit support for
these series.  In addition, the IA-5 class from series 2003-1 is
bond-insured by MBIA Insurance Corp. (AAA/Negative/-- financial
strength rating).  The loan pool consists of conventional,
adjustable- and fixed-rate mortgage loans secured by first liens
on one- to four-family residential properties.


       Ratings Lowered and Removed from Creditwatch Negative

        Chase Funding Loan Acquisition Trust Series 2001-C2
              Mortgage loan asset-backed certificates

                                Rating
                                ------
                        Class  To    From
                        -----  --    ----
                        IB     CCC   B/Watch Neg

                 Chase Funding Trust Series 2002-1
              Mortgage loan asset-backed certificates

                                 Rating
                                 ------
                         Class  To    From
                         -----  --    ----
                         IB     BB    BBB-/Watch Neg

                          Rating Lowered

        Chase Funding Loan Acquisition Trust Series 2001-C2
               Mortgage loan asset-backed certificates

                                  Rating
                                  ------
                         Class   To  From
                         -----   --  ----
                         IM-1    A   AA      
                         IM-2    BB  A

       Rating Affirmed and Removed from Creditwatch Negative

                 Chase Funding Trust Series 2003-1
              Mortgage loan asset-backed certificates

                                Ratings
                                -------
                         Class  To   From
                         -----  --   ----
                         IIM-2  BBB  BBB/Watch Neg

                        Ratings Affirmed

        Chase Funding Loan Acquisition Trust Series 2001-C2
               Mortgage loan asset-backed certificates

                           Class  Rating
                           -----  ------
                           IA-4   AAA
                           IA-5   AAA

                        Chase Funding Trust
              Mortgage loan asset-backed certificates

                     Series Class       Rating
                     ------ -----       ------
                     2002-1 IA-5,IA-6   AAA      
                     2002-1 IIA-1,IIA-2 AAA
                     2002-1 IM-1,IIM-1  AA
                     2002-1 IM-2,IIM-2  A                      
                     2002-1 IIB         BBB
                     2003-1 IA-5,IA-6   AAA
                     2003-1 IIA-2       AAA
                     2003-1 IM-1,IIM-1  AA
                     2003-1 IM-2        A
                     2003-1 IB          BBB  


CHRISTAL DISTRIBUTION: Seeks Protection from Creditors Under CCAA
-----------------------------------------------------------------
Christal Films Distribution obtained creditor protection under the
Companies' Creditors Arrangement Act (Canada) from the Quebec
Superior Court.  The issued order seeks to protect Christal Films
Distribution from its creditors and allows the restructuring of
its activities.  The order will be in force for a 30-day period.

In the past months, the company said it undertook many efforts to
reorganize the business, which was confronted by financial
difficulty.  Christal Films Distribution decided that a CCAA
filing is the best alternative in the interests of the company,
its employees, customers, creditors and other stakeholders.

By virtue of the order issued by Justice Robert Mongeon of the
Superior Court of Quebec, Raymond Chabot Inc. is the court
appointed Monitor for the CCAA proceedings and will monitor
Christal Films Distribution's ongoing operations, assist with the
development and filing of a plan of arrangement with its creditors
and other stakeholders, liaise with creditors, customers and other
stakeholders and report to the Court.

            The Difficult Context of Film Distribution

"[The] order is the result of the prevailing challenges facing the
film distribution industry.  Domestic and international markets
are affected by the many changes within the film industry.  Due to
these circumstances, profit margins are becoming more limited,"
says Bertrand Langlois, Vice-President Finance at Christal Films
Distribution.  In this context, Christal Films Distribution
claimed it has taken all the necessary measure in order to find
and propose solutions to all stakeholders.

The CCAA protection stays creditors, suppliers and others from
enforcing any rights against Christal Films Distribution and
Christal Films Distribution will use the opportunity to
restructure its affairs.  Christal Films Distribution will
continue operations in the ordinary course during the CCAA
proceedings.

Christal Films Production Inc., the Debtor said, is not party to
the legal proceedings.

                About Christal Films Distribution

Christal Films Distribution Inc. is a Canadian company focused on
the distribution and broadcast of feature films in all media,
including theatre, DVD and television.  Founded in 2001, Christal
Films Distribution is headquartered in Montreal.


DAVENPORT CDO: Moody's Slices Ratings on Three Classes to Caa3
--------------------------------------------------------------
Moody's Investors Service has downgraded the rating on the
following notes issued by Davenport CDO I, Ltd.:

Class Description: CP Notes

  -- Prior Rating: P-2
  -- Current Rating: NP

Moody's also announced that it has downgraded and left on review
for further possible downgrade the ratings on these notes:

Class Description: Up to $400,000,000 Super Senior A-1 Notes Due
2056

  -- Prior Rating: Baa1, on review for possible downgrade
  -- Current Rating: Caa3

Class Description: Up to $500,000,000 Super Senior A-2 Notes Due
2056

  -- Prior Rating: Baa1, on review for possible downgrade
  -- Current Rating: Caa3

Class Description: Up to $500,000,000 Super Senior A-3 Notes Due
2056

  -- Prior Rating: Baa1, on review for possible downgrade
  -- Current Rating: Caa3

The rating downgrades taken today reflect the increased
deterioration of the credit quality and the loss of over
collateralization of the collateral pool comprised of
collateralized debt obligations.  The Senior Principal Coverage
Test as reported by the Trustee on April 8, 2008, was 66.36% with
the covenant for this test being 103.0%.  The Coverage Test
failure reflects the ongoing deterioration of the underlying
portfolio that includes a number of CDOs that are currently in
event of default.

In addition, the credit deterioration of the underlying portfolio
has increased the likelihood of payment default on the CP Notes
and it has also increased the likelihood that the Put will not be
available if it is required.  These factors result in a level of
risk to the CP notes that is no longer consistent with a Prime
rating.

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


DELPHI CORP: WTC Balks at $750 Million Intercompany Loan Transfer
-----------------------------------------------------------------
Wilmington Trust Company objects to the request of Delphi Corp.
and its debtor-affiliates to authorize Delphi Automotive Systems
Holdings, Inc., to grant Delphi Automotive Systems, LLC,
additional intercompany loans of up to $750 million and to provide
adequate protection to the Pension Benefit Guarantee Corporation
in connection the transfers.

WTC is the indenture trustee for the senior notes and debentures
in the aggregate principal amount of $2 billion issued by the
Debtors.

WTC notes that, under the proposed transactions, DASHI -- a
solvent debtor entity, 87% of which is indirectly owned by Delphi  
-- will make an additional loan of up to $750,000,000 to DAS and  
would adequate protection to the PBGC in connection therewith.

According to Edward M. Fox, Esq., at Kirkpatrick & Lockhart
Preston Gates Ellis LLP, in New York, WTC wants to take discovery
from the Debtors to determine why DASHI and the Delphi believe
the proposed transactions are in the best interest of their
creditors and equity holders.

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

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

The Court approved Delphi's First Amended Joint Disclosure
Statement and related solicitation procedures for the solicitation
of votes on the First Amended Plan on Dec. 20, 2007.  The Court
confirmed the Debtors' First Amended Plan on Jan. 25, 2008.

(Delphi Bankruptcy News, Issue No. 129; Bankruptcy Creditors'
Service Inc., http://bankrupt.com/newsstand/or 215/945-7000)


DORADO BECKVILLE: May Use Cash Collateral on Interim Basis
----------------------------------------------------------
Dorado Beckville Partners LP and Dorado Operating Inc. obtained
permission from the U.S. Bankruptcy Court for the Northern
District of Texas to use their lenders' cash collateral.

Beckville had related that it needed immediate interim
authorization to use revenues associated with Beckville's working
interests in Beckville Wells to pay its ordinary and necessary
operating expenses.  These revenues, Beckville said, constitute
alleged "cash collateral" and its usage is subject to limits
imposed by a budget, and necessary to maintain its business.

              Beckville's Prepetition Credit Facility

Beckville is a borrower under a credit facility dated Aug. 9,
2006, signed with DB Zwirn Special Opportunities Fund LP, as
administrative agent and lender and Drawbridge Special
Opportunities Fund LP, as lender.

Pursuant to the credit agreement, the lenders were obligated to
provide Beckville with a revolving credit facility in an aggregate
amount of $25,000,000 maturing Aug. 9, 2009.  To secure its
obligations, Beckville granted liens and security interests in its
assets to the lenders.

As of the bankruptcy filing, Beckville owes its lenders about
$15,301,650 in unpaid principal and $273,729 in accrued and unpaid
interest.  The value of Beckville's Panola County wells is at
least $10,400,000.  The value of its Rusk County wells is at least
$14,300,000, of which over $9,738,000 is unencumbered.

                  Obligation to Dorado Operating

As of the bankruptcy filing, Beckville owes Dorado Operating an
aggregate amount of $8,500,000 under joint operating agreements.  
Dorado Operating Inc. and Beckville signed various joint operating
agreements, under which the costs of maintaining, operating,
drilling, and completing the Beckville wells are borne by each
working interest owner on a pro-rata basis assessed on a monthly
basis.

To secure payment of these costs, Dorado Operating was granted
security interests and liens in some Beckville property.  These
liens secure Beckville's portion of joint interest billings
attributable to operations on the Beckville Wells.

The DB Zwirn lenders and Dorado Operating have interest claims in
the revenue associated with Beckville's working interest in the
Wells.  In its request to use lenders' cash collateral, Beckville
said that it doesn't have sufficient time to determine validity of
the claims and liens in its assets.

                      About Dorado Beckville

Dallas, Texas-based Dorado Beckville Partners I LP and Dorado
Operating Inc. -- http://www.doradoexploration.com/-- are  
diversified oil and gas exploration and production companies
active in the East Texas Basin, the inland waters of South
Louisiana, and Western Alabama.

Beckville owns 64% to 75% of the working interest in each owned
gas unit.  The properties owned by Beckville are operated by
Dorado Operating, a 99% limited partner of Beckville and a wholly
owned unit of Dorado Exploration Inc.

Beckville and Dorado Operating sought chapter 11 protection on
April 15, 2008 (Bankr. N.D. Texas Case Nos. 08-31796 and 08-
31800).  Judge Barbara J. Houser presides in the case.  Marcus
Alan Helt, Esq., and Richard McCoy Roberson, Esq., at Gardere
Wynne Sewell LLP represent the Debtors in their restructuring
efforts.  When Dorado Beckville filed for bankruptcy, it listed
$10 million to $50 million in assets and debts.


DORADO BECKVILLE: Various Parties Oppose Use of Cash Collateral
---------------------------------------------------------------
In separate filings with the U.S. Bankruptcy Court for the
Northern District of Texas, various parties in the bankruptcy case
of Dorado Beckville Partners LP, filed objections to Beckville's
use of lenders' cash collateral.

A. Holders of Working or Overriding Royalty Interests

Some holders of working interests or overriding royalty interests
in some gas properties operated by Dorado Operating Inc. object to
the Beckville and Dorado Operating Inc.'s motion to use lenders'
cash collateral.

The Debtor is the operator of three wells in Rusk County, Texas,
the Griffith Well, the Crim Well, and the Mims Well.

The holders pointed to the Debtor's claim that its bank accounts
and accounts receivable "are held free and clear of any third
party lienholders or claimants."  The holders added that the
Debtor proposes that the Court should authorize its use of the
cash without any adequate protection to any party so the Debtor
can meet its current requirements.

The holders of working or overriding royalty interests include:

   a. ORI Holders -- some of the Interest Holders received
      assignments of overriding royalty interests in the Wells.  
      Specifically (i) Stephen M. Fremgen; (ii) Saturn Oil & Gas
      LLC; (iii) Evans Royalty Partners; (iv) Winward Resources
      Corporation; (v) Lynne D. Fiske; (vi) Sylvia Cherry; (vii)
      Victoria P. Irwin; (viii) Philip Kreick; and (ix) John D.
      Walters, Jr., together, the "Griffith ORI Holders."  Saturn
      Oil & Gas LLC; (b) Evans Royalty Partners; and (c) Winward
      Resources Corporation, together, the "Crim/Mims ORI
      Holders", received assignments of overriding royalty
      interests in the Crim and Mims Wells.

   b. WIN Holders -- some of the interest holders held the
      working interests in each of the Wells pre-petition and, on
      assigning a portion of those working interests to Dorado
      Beckville, retained a portion of the working interests for
      themselves.  Specifically, (i) PCI Drilling  LP; (ii)
      Petroven Inc.; (iii) Bahlburg Exploration Inc.; (iv) CSC
      Energy Corporation; and (v) Prizm Properties LLC, together,
      the Mims/Crims WIN Holders, retained a portion of the
      working interest in the Mims Well and the Crim Well.
      Similarly, (a) PCI Drilling LP; (b) Walters Family
      Investments LLC; (c) Mercer Resources, LLC; (d) Magnew
      Resources, LLC; (e) and Egret Investments, together, the
      Griffith WIN Holders and, together with the "Mims/Crim WIN
      Holders", retained a portion of the working interest in the
      Griffith Well.

According to the ORI and WIN holders, the Debtor has failed to
make royalty payments due to the ORI, WIN holders from the
prepetition sales of the Wells' production that the Debtor
currently holds.  The interest holders claimed perfected liens
against the cash proceeds of the Wells' production and no act
perfect the liends is required.

In addition, the interest holders' liens extend still further.  
They said that the funds in co-mingled accounts are now subject to
the interest holders' liens, up to the amount owed to them.

The interest holders asserted that for the Debtor to hold or use  
proceeds of the interest holders' share of the Wells' production
would constitute conversion.  Hence, the Court should not
authorize the Debtor to convert the interest holders' cash.

Kirkpatrick & Lockhart Preston Gates Ellis LLP are counsel to the
working interest or overriding royalty interest holders.

B. DB Zwirn

DB Zwirn Special Opportunities Fund LP, administrative agent and
lender, and Special Opportunities Fund LP, lender, with
Petrobridge Investment Management LLC, sole lead arranger and sub-
agent, filed with the Court a response to the Debtor's request to
use cash collateral.

DB Zwirn lenders told the Court that they are aggrieved not only
by the Debtor's unexplained inability to repay its debts but also
by the numerous prepetition failures and unwarranted attacks of
the Debtor.  The lenders demand adequate protection of their
liens, security interests, and other interests in cash collateral
and other properties of the estate.

Pursuant to a credit agreement dated Aug. 9, 2006, DB Zwirn
lenders said they initially agreed to make loans for specified
purposes aggregating $4,141,000, and subsequent loans up to an
additional amount of $20,858,060, or $25,000,000 in possible
maximum amount.  The loans were to be used to fund all or a
portion of Beckville's acquisition and development of oil and gas
properties, among others.

Interest was payable on the last day of each month on the
aggregate principal advanced at 12% per annum, and payable on
demand at 14% upon an event of default.

Among the conditions precedent to the intial commitment was an
entry of Beckville and its affiliate, Dorado Operating, into a
contract operating agreement dated Aug. 9, 2006.

In view of the unsatisfactory performance of the wells, drilling
costs overruns, failure of the Debtor to satisfy precedent
conditions, and the existence of an event of default, on March 7,
2007, DB Zwirn lenders notified the Debtor that the lenders would
not agree further requests for additional subsequent commitment
increases under the credit agreement.

DB Zwirn related that the Debtor continued its drilling program
even after receiving notice from them.  When asked about how this
development activity was being paid for, the Debtor continually
explained it was raising sufficient capital through equity raises.  
Clearly, the lenders asserted, this was not the case, considering
the amount of unpaid vendor claims at the bankruptcy filing date.

DB Zwirn lenders also said that the Debtor rarely and untimely
filed disbursement requests.  In addition, the Debtor on Dec. 13,
2007, launched unjustified litigation in state courts against
them.  Since then, the lenders told the Court that the Debtor has
continued its course to harass them and other lockbox payees and
to attempt to delay solution to the Debtor's financial situation,
enriching equity owners and the management of Beckville.  The
lenders also said that the Debtor committed other egregious acts.  
In January 2008, the Debtor transferred significant assets to an
affiliate -- its primary equity security holders, Dorado
Exploration Inc. -- in a blatant attempt to hinder, delay or
defraud lenders and other creditors.  The lenders alleged that the
Debtor has further continued to defame and spread false
information regarding DB Zwirn and Petrobridge related to an
investigation by the Panola County District Attorney.  According
to the lenders, the Debtor issued public statements saying, "There
is a nationwide and worldwide conspiracy by Petrobridge [and]
Zwirn to defraud their borrowers."

As of the bankruptcy filing, DB Zwirn lenders said that the Debtor
owes them at least $15,752,125, plus fees and other costs, and a
$4,000,000 exit fee, as well as a $25,000 administrative fee to
Petrobridge.

Vinson & Elkins LLP is counsel to DB Zwirn, Drawbridge, and
Petrobridge.

C. Rowoil Inc.

Rowoil Inc., holder of overriding royalty interests in certain
oila and gas properties operated by Dorado Operating Inc., filed a
joinder in objection of certain working or overriding royalty
interest holders to the Debtor's request for authority to use
lenders' cash collateral.

Rowoil disclosed that it owns overriding royalty interest in these
properties believed to be operated by Dorado Operating: (i) Reeves
#1 Gas Unti -- Panola County, Texas; (ii) Reilly Tiller Gas Unti
-- Panola County, Texas; and (iii) M.R. Tiller Gas Unit -- Panola
County, Texas.

Rowoil joins in the ORI Holders' objection, and adopts with
substitution of its name for the term "ORI Holders" or "Interest
Holders."

John E. Leslie, Esq., is counsel to Rowoil.

D. Mechanic and Materials Lien Holders

Holders of mechanic and material liens and parties-in-interest
Baker Hughes Oilfield Operations Inc., Schlumberger Technology
Corporation, Superior Energy Services LLLP, Weatherford
International Inc., Weatherford U.S. LP, Weatherford Artificial
Lift Systems Inc., Precision Energy Services Inc., X-Chem Inc.,
Pinnergy Ltd., Texas CES Inc., Smith International Inc., Arctic
Acquisition Corp. dba Cougar Pressure Control and BJ Services
Company, U.S.A. told the Court that they jointly object to the
Debtor's request to use lenders' cash collateral.

   a. Schlumberger Liens -- Schlumberger has a secured claim of
      $278,432, plus interest and fees, representing unpaid
      amounts due on a trade account.  The claim is secured by
      various mineral interests filed on October 2007.

   b. Baker Hughes Liens -- Baker Hughes, dba Hughes Christensen
      Company, has a secured claim of $227,059, plus interest
      and fees, representing unpaid amounts due on a trade
      account.  The claim is secured by various mineral
      interests.

   c. Superior Lien -- Superior Energy has a secured claim of
      $19,087, plus interest and fees, representing unpaid
      amounts due on a trade account.  The claim in secured by a
      mineral interest.

   d. Weatherford Liens -- Weatherford entities and Precision
      Energy have as of the bankruptcy filing a secured claim of
      $1,800,833, plus interest and fees.

   e. X-Chem Liens -- X-Chem has a secured claim of $77,893,
      plus interest and fees, representing unpaid amounts due on
      a trade account.

   f. Pinnergy Liens -- Pinnergy has a secured claim of $327,813,
      plus interest and fees, representing unpaid amounts due on
      a trade account.

   g. Texas CES Liens -- Texas CES has a secured claim of
      $313,508, plus interest and fees, representing unpaid
      amounts due on a trade account.  The debt is secured by
      various mineral interest liens.

   h. Smith Liens -- Smith International has a secured claim of
      $37,933, plus interest and fees, representing unpaid
      amounts due on a trade account and secured by various
      mineral interest liens.  

   i. Cougar Liens -- Arctic Acquisition, dba Cougar Pressure,
      has a secured claim of $70,452, plus interest and fees
      owed on a trade account and secured by various mineral
      interest liens.

The total mechanic and materials lien debt is $3,255,084,
exclusive of interest and fees.

The mechanic and materials lien holders told the Court that they
oppose to the Debtor's use of cash collateral asserting that,
among others, their security is being impaired by draining of the
oil and gas leases upon which their liens are attached.  The lien
holders asserted that the value of their liens diminish daiy as
wells are produced.

Snow Fogel Spence LLP is counsel to Schlumberger, Baker Hughes and
Superior Energy.  Weycer Kaplan Pulaski & Zuber is counsel to
Weatherford entities and Precision Energy.  Barbara Lovingfoss
Mayfield, Esq., is counsel to Pinnergy.  Bonnie B. Reinke, Esq.,
is counsel to X-Chem.  James A. Collura, Jr., Esq., is counsel to
Texas CES.  Dore & Associates Attorneys PC is counsel to Smith
International, Arctic Acquisition and BJ Services.

                 Lien Claims of Other Creditors

The mechanic and materials lien holders mentioned are not the only
creditors that have filed liens.  Review on the real property
records of Rusk County showed that 21 liens in excess of
$2,000,000 have been filed by 14 creditors.

A review on the records of Panola County showed that 47 liens in
the amount of $3,100,000 have been field by 19 creditors.

According to the filing made by the mechanic and materials lien
holders, it is possible that additional liens will be filed.

                  Prepetition Debt Obligations

Beckville had related that it needed immediate interim
authorization to use revenues associated with Beckville's working
interests in Beckville Wells to pay its ordinary and necessary
operating expenses.  These revenues, Beckville said, constitute
alleged "cash collateral" and its usage is subject to limits
imposed by a budget, and necessary to maintain its business.

A. DB Zwirn Lenders

Beckville is a borrower under a $25 million revolving credit
facility dated Aug. 9, 2006, signed with DB Zwirn and Drawbridge.  
As of the bankruptcy filing, Beckville owes its lenders about
$15,301,650 in unpaid principal and $273,729 in accrued and unpaid
interest.  The value of Beckville's Panola County wells is at
least $10,400,000.  The value of its Rusk County wells is at least
$14,300,000, of which over $9,738,000 is unencumbered, the
Debtor's petition showed.

B. Dorado Operating

As of the bankruptcy filing, Beckville owes Dorado Operating Inc.
an aggregate amount of $8,500,000 under joint operating
agreements.  Dorado Operating Inc. and Beckville signed various
joint operating agreements, under which the costs of maintaining,
operating, drilling, and completing the Beckville wells are borne
by each working interest owner on a pro-rata basis assessed on a
monthly basis.

A separate story on Beckville interim authority to use lenders'
cash collateral is in today's Troubled Company Reporter.

                      About Dorado Beckville

Dallas, Texas-based Dorado Beckville Partners I LP and Dorado
Operating Inc. -- http://www.doradoexploration.com/-- are  
diversified oil and gas exploration and production companies
active in the East Texas Basin, the inland waters of South
Louisiana, and Western Alabama.

Beckville owns 64% to 75% of the working interest in each owned
gas unit.  The properties owned by Beckville are operated by
Dorado Operating, a 99% limited partner of Beckville and a wholly
owned unit of Dorado Exploration Inc.

Beckville and Dorado Operating sought chapter 11 protection on
April 15, 2008 (Bankr. N.D. Texas Case Nos. 08-31796 and 08-
31800).  Judge Barbara J. Houser presides in the case.  Marcus
Alan Helt, Esq., and Richard McCoy Roberson, Esq., at Gardere
Wynne Sewell LLP represent the Debtors in their restructuring
efforts.  When Dorado Beckville filed for bankruptcy, it listed
$10 million to $50 million in assets and debts.


DORADO BECKVILLE: U.S. Trustee Forms Four-Member Creditors' Panel
-----------------------------------------------------------------
The United States Trustee for Region 6 appointed four creditors as
members of the Official Committee of Unsecured Creditors of Dorado
Beckville Partners I LP and Dorado Operating Inc.

The members are:

   1. Cathy Page, Chairperson
      Dan Blocker Petroleum Consultant Inc.
      3206 North 4th Street
      Longview, TX 75605
      Tel: (903) 234-2093
      Fax: (903) 738-7780

   2. Steven D. Roe
      Frac Lights & Equipment Inc.
      1729 Corporate Drive, P.O. Box 78509
      Shreveport, LA 71137-8509
      Tel: (318) 222-2844
      Fax: (318) 222-2335

   3. Bill Helms
      Helms Packer Service, Inc.
      P.O. Box 1128
      Tatum, TX 75691
      Tel: (903) 836-2103
      Fax: (903) 836-2105

   4. John V. Calce
      Impact
      3838 Oak Lawn Ave., Suite 1775
      Dallas, TX 75219
      Tel: (214) 572-0638
      Fax: (972) 739-0758

Official creditors' committees have the right to employ legal
and accounting professionals and financial advisors, at the
Debtors' expense.  They may investigate the Debtors' business and
financial affairs.  Importantly, official committees serve as
fiduciaries to the general population of creditors they represent.  
Those committees will also attempt to negotiate the terms of a
consensual Chapter 11 plan -- almost always subject to the terms
of strict confidentiality agreements with the Debtors and other
core parties-in-interest.  If negotiations break down, the
Committee may ask the Bankruptcy Court to replace management with
an independent trustee.  If the Committee concludes reorganization
of the Debtor is impossible, the Committee will urge the
Bankruptcy Court to convert the Chapter 11 cases to a liquidation
proceeding.

                      About Dorado Beckville

Dallas, Texas-based Dorado Beckville Partners I LP and Dorado
Operating Inc. -- http://www.doradoexploration.com/-- are  
diversified oil and gas exploration and production companies
active in the East Texas Basin, the inland waters of South
Louisiana, and Western Alabama.

Beckville owns 64% to 75% of the working interest in each owned
gas unit.  The properties owned by Beckville are operated by
Dorado Operating, a 99% limited partner of Beckville and a wholly
owned unit of Dorado Exploration Inc.

Beckville and Dorado Operating sought chapter 11 protection on
April 15, 2008 (Bankr. N.D. Texas Case Nos. 08-31796 and 08-
31800).  Judge Barbara J. Houser presides in the case.  Marcus
Alan Helt, Esq., and Richard McCoy Roberson, Esq., at Gardere
Wynne Sewell LLP represent the Debtors in their restructuring
efforts.  When Dorado Beckville filed for bankruptcy, it listed
$10 million to $50 million in assets and debts.


DUTCH HILL: Moody's Cuts Ratings, to Undertake Review
-----------------------------------------------------
Moody's Investors Service has downgraded and placed on review for
possible further downgrade the ratings on these notes issued by
Dutch Hill Funding II Ltd.

Class Description: $21,200,000 Class A-2 Second Priority Senior
Secured Floating Rate Notes Due 2046

  -- Prior Rating: Ba3, on review for possible downgrade
  -- Current Rating: B2, on review for possible downgrade

Class Description: U.S. $64,400,000 Class B Third Priority Senior
Secured Floating Rate Notes Due 2052

  -- Prior Rating: B3, on review for possible downgrade
  -- Current Rating: Caa3, on review for possible downgrade

Additionally, Moody's downgraded these notes:

Class Description: $15,200,000 Class D-1 Mezzanine Secured
Floating Rate Deferrable Notes Due 2052

  -- Prior Rating: Ca
  -- Current Rating: C

Class Description: $11,800,000 Class D-2 Mezzanine Secured
Floating Rate Deferrable Notes Due 2052

  -- Prior Rating: Ca
  -- Current Rating: C

Class Description: $11,800,000 Class D-3 Mezzanine Secured
Floating Rate Deferrable Notes Due 2052

  -- Prior Rating: Ca
  -- Current Rating: C

According to Moody's, the rating actions reflect increased
deterioration in the credit quality of the structured finance
securities.


EIRLES TWO: Moody's Slashes A3 Rating on Class Notes to Ba3
-----------------------------------------------------------
Moody's Investors Service has downgraded and left on review for
possible downgrade the ratings on these notes issued by Eirles Two
Limited Series 245:

Class Description: Class B

  -- Prior Rating: A3, on review for possible downgrade
  -- Current Rating: Ba3, on review for possible downgrade

According to Moody's, the rating actions reflect increased
deterioration in the credit quality of the underlying portfolio.

  
E*TRADE ABS: Moody's Chips Note Ratings on Two Classes to Ca
------------------------------------------------------------
Moody's Investors Service has downgraded and placed on review for
possible further downgrade the ratings on these notes issued by
E*TRADE ABS CDO V, Ltd.

Class Description: $201,000,000 Class A-1S Senior Secured Floating
Rate Notes Due 2046

  -- Prior Rating: A1, on review for possible downgrade
  -- Current Rating: Caa1, on review for possible downgrade

Additionally, Moody's downgraded these notes:

Class Description: $30,000,000 Class A-1J Senior Secured Floating
Rate Notes Due 2046

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

Class Description: $25,000,000 Class A-2 Senior Secured Floating
Rate Notes Due 2046

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

Class Description: $16,000,000 Class A-3 Deferrable Secured
Floating Rate Notes Due 2046

  -- Prior Rating: Ca
  -- Current Rating: C

Class Description: $13,000,000 Class B Deferrable Secured Floating
Rate Notes Due 2046

  -- Prior Rating: Ca
  -- Current Rating: C

Class Description: $4,000,000 Class C Deferrable Secured Floating
Rate Notes Due 2046

  -- Prior Rating: Ca
  -- Current Rating: C

According to Moody's, the rating actions reflect increased
deterioration in the credit quality of the Structured Finance
securities.


E*TRADE ABS: Moody's Trims Preference Shares Rating to Ca from Ba1
------------------------------------------------------------------
Moody's Investors Service has downgraded and placed on review for
possible further downgrade the ratings on these notes issued by
E*Trade ABS CDO III, Ltd.

Class Description: $37,750,000 Class A-2 Second Priority Senior
Secured Floating Rate Notes Due 2040

  -- Prior Rating: Aaa
  -- Current Rating: Aa1, on review for possible downgrade

Class Description: $37,900,000 Class B Third Priority Senior
Secured Floating Rate Notes Due 2040

  -- Prior Rating: Aa2
  -- Current Rating: A1, on review for possible downgrade

Class Description: $13,250,000 Class C Fourth Priority Mezzanine
Secured Floating Rate Notes Due 2040

  -- Prior Rating: Baa2
  -- Current Rating: Ba1, on review for possible downgrade

Class Description: $5,000,000 Series II Composite Securities Due
2040

  -- Prior Rating: Ba1
  -- Current Rating: Ba2, on review for possible downgrade

Additionally, Moody's has downgraded these notes

Class Description: Preference Shares

  -- Prior Rating: Ba1
  -- Current Rating: Ca

According to Moody's, the rating actions reflect increased
deterioration in the credit quality of the underlying portfolio.

Moody's Investors Service also withdrew its ratings on the
following classes of notes issued by E*Trade ABS CDO III, Ltd.

Class Description: U.S.$ 14,600,000 Series I 2% Composite
Securities Due 2040

  -- Prior Rating: Baa2
  -- Current Rating: WR

According to Moody's, the ratings were withdrawn because the notes
were exchanged for the underlying note components.


EXUM RIDGE: Moody's Says Ba2 Rating on Notes May be Cut
-------------------------------------------------------
Moody's Investors Service has placed on review for possible
downgrade the ratings on these notes issued by Exum Ridge CBO
2006-4, Ltd.

Class Description: $225,000,000 Class A Contingent Funding Notes
Due 2011

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

Class Description: $12,000,000 Class B Contingent Funding Notes
Due 2011

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

Class Description: $13,500,000 Class C Contingent Funding Notes
Due 2011

  -- Prior Rating: A2
  -- Current Rating: A2, on review for possible downgrade

Class Description: $9,250,000 Class D Floating Rate Deferrable
Notes Due 2011

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

Class Description: $12,500,000 Class E Floating Rate Deferrable
Notes Due 2011

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

According to Moody's, the rating actions are the result of
deterioration in the credit quality of the transaction's
underlying portfolio and the placement under review for possible
downgrade of the Lehman Brothers ABS Enhanced LIBOR Fund's MR1
market risk rating.

Please refer to the press release on the Lehman Brothers ABS
Enhanced LIBOR Fund issued on May 8, 2008.


EXUM RIDGE: Moody's Places Ratings Under Review for Possible Cut
----------------------------------------------------------------
Moody's Investors Service has placed on review for possible
downgrade the ratings on these notes issued by Exum Ridge CBO
2006-2, Ltd.:

Class Description: $225,000,000 Class A Contingent Funding Notes
Due 2011

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

Class Description: $15,000,000 Class B Floating Rate Notes Due
2011

  -- Prior Rating: Aa1
  -- Current Rating: Aa1, on review for possible downgrade

Class Description: $12,000,000 Class C Floating Rate Deferrable
Notes Due 2011

  -- Prior Rating: A2
  -- Current Rating: A2, on review for possible downgrade

Class Description: $12,000,000 Class D Floating Rate Deferrable
Notes Due 2011

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

Class Description: $4,500,000 Class E-1 Floating Rate Deferrable
Notes Due 2011

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

Class Description: $7,500,000 Class E-2 Floating Rate Deferrable
Notes Due 2011

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

According to Moody's, the rating actions are the result of
deterioration in the credit quality of the transaction's
underlying portfolio and the placement under review for possible
downgrade of the Lehman Brothers ABS Enhanced LIBOR Fund's MR1
market risk rating.


EXUM RIDGE: Moody's Puts Ba2 Rating on $12MM Notes Under Review
---------------------------------------------------------------
Moody's Investors Service has placed on review for possible
downgrade the ratings on these notes issued by Exum Ridge CBO
2006-5, Ltd.

Class Description: $225,000,000 Class A Contingent Funding Notes
Due 2011

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

Class Description: $7,000,000 Class B-1 Contingent Funding Notes
Due 2011

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

Class Description: $5,000,000 Class B-2 Floating Rate Notes Due
2011

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

Class Description: $7,000,000 Class C-1 Contingent Funding
Deferrable Notes Due 2011

  -- Prior Rating: A2
  -- Current Rating: A2, on review for possible downgrade

Class Description: $5,000,000 Class C-2 Floating Rate Deferrable
Notes Due 2011

  -- Prior Rating: A2
  -- Current Rating: A2, on review for possible downgrade

Class Description: $12,000,000 Class D Floating Rate Deferrable
Notes Due 2011

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

Class Description: $12,000,000 Class E Floating Rate Deferrable
Notes Due 2011

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

According to Moody's, the rating actions are the result of
deterioration in the credit quality of the transaction's
underlying portfolio and the placement under review for possible
downgrade of the Lehman Brothers ABS Enhanced LIBOR Fund's MR1
market risk rating.


EXUM RIDGE: Moody's Places $13.5MM Ba2 Note Rating Under Review
---------------------------------------------------------------
Moody's Investors Service has placed these notes issued by Exum
Ridge CBO 2007-2, Ltd. on review for possible downgrade:

Class Description: $226,250,000 Class A Contingent Funding Notes
Due 2014

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

Class Description: $16,000,000 Class B Floating Rate Notes Due
2014

  -- Prior Rating: A2
  -- Current Rating: A2, on review for possible downgrade

Class Description: $14,250,000 Class C Floating Rate Deferrable
Notes Due 2014

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

Class Description: $13,500,000 Class D Floating Rate Deferrable
Notes Due 2014

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

According to Moody's, the rating actions are the result of
deterioration in the credit quality of the transaction's
underlying portfolio and the placement under review for possible
downgrade of the Lehman Brothers ABS Enhanced LIBOR Fund's MR1
market risk rating.


EXUM RIDGE: Poor Credit Quality Cues Moody's Rating Reviews
-----------------------------------------------------------
Moody's Investors Service has placed these notes issued by Exum
Ridge 2007-1 on review for possible downgrade:

Class Description: $223,250,000 Class A Contingent Funding Notes
Due 2014

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

Class Description: $16,000,000 Class B Floating Rate Notes Due
2014

  -- Prior Rating: A2
  -- Current Rating: A2, on review for possible downgrade

Class Description: $14,250,000 Class C Floating Rate Deferrable
Notes Due 2014

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

Class Description: $13,500,000 Class D Floating Rate Deferrable
Notes Due 2014

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

According to Moody's, the rating actions are the result of
deterioration in the credit quality of the transaction's
underlying portfolio and the placement under review for possible
downgrade of the Lehman Brothers ABS Enhanced LIBOR Fund's MR1
market risk rating.


EXUM RIDGE: Moody's Puts $12MM Ba1 Notes Rating Under Review
------------------------------------------------------------
Moody's Investors Service has placed on review for possible
downgrade the ratings on these notes issued by Exum Ridge CBO
2006-1, Ltd.:

Class Description: $225,000,000 Class A Contingent Funding Notes
Due 2011

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

Class Description: $15,000,000 Class B Floating Rate Notes Due
2011

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

Class Description: $12,000,000 Class C Floating Rate Deferrable
Notes Due 2011

  -- Prior Rating: A2
  -- Current Rating: A2, on review for possible downgrade

Class Description: $12,000,000 Class D Floating Rate Deferrable
Notes Due 2011

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

Class Description: $12,000,000 Class E Floating Rate Deferrable
Notes Due 2011

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

According to Moody's, the rating actions are the result of
deterioration in the credit quality of the transaction's
underlying portfolio and the placement under review for possible
downgrade of the Lehman Brothers ABS Enhanced LIBOR Fund's MR1
market risk rating.


FORD CREDIT AUTO: S&P Assigns 'BB' Initial Rating on Class D Notes
------------------------------------------------------------------
Standard & Poor's Ratings Services assigned its preliminary
ratings to Ford Credit Auto Owner Trust 2008-C's $5.758 billion
asset-backed notes series 2008-C.
     
The preliminary ratings are based on information as of May 16,
2008.  Subsequent information may result in the assignment of
final ratings that differ from the preliminary ratings.
     
The preliminary ratings reflect:
     -- The characteristics of the pool being securitized;
     -- The credit enhancement in the form of subordination, cash,
        and excess spread that is augmented through the yield
        supplement overcollateralization amount;

     -- The extensive securitization performance history of Ford
        Motor Credit Co. (B/Stable/B-3);

     -- The timely interest and principal payments made under
        stressed cash flow modeling scenarios appropriate to the
        rating categories; and

     -- The transaction's legal structure.
   
   
                   Preliminary Ratings Assigned
               Ford Credit Auto Owner Trust 2008-C
   
   Class  Rating   Type   Interest          Amount   Legal final
                            rate*             **       maturity
   -----  ------   ----   --------          ------   -----------
   A-1    A-1+     Senior Fixed          $1,400,000,000 June 2009
   A-2*** AAA      Senior Fixed/floating $1,720,000,000 Jan. 2011
   A-3*** AAA      Senior Fixed/floating $1,582,000,000 June 2012
   A-4*** AAA      Senior Fixed/floating  $660,600,000  April 2013
   B      A+       Sub    Fixed           $169,300,000  Sept. 2013
   C      BBB+     Sub    Fixed           $112,900,000  Jan. 2014
   D      BB+      Sub    Fixed           $112,900,000  Nov. 2014
   

* The interest rate for each class will be determined on the
  pricing date.

** The actual size of these tranches will be determined on the
   pricing date.

*** Class A-2, A-3, and A-4 will be due either a fixed- or
    floating-rate of interest, or a combination of both.


FRONTIER AIRLINES: "Golden Parachute Deal" Irks Teamsters
---------------------------------------------------------
The Teamsters Union said Frontier Airlines Holdings, Inc.'s
management is demanding a golden parachute even as it demands pay
reductions from employees.

Managers at Frontier (FRNT) want to grant workers little to
nothing if the company fails.  But they want to give themselves
up to six months pay, the Teamster said in a statement.

"We negotiated in good faith with Frontier management even though
they already have the lowest labor costs of all low-cost
carriers," said Matthew Fazakas, president of Teamsters Local
961.  "They continually moved the goal posts for a deal. But we
met every savings demand they made. Now we learn they had a
secret plan to give themselves golden parachutes while workers
get nothing.

"Golden parachutes for management are a deal breaker," Mr. Fazakas
said.

The union said Frontier's bankruptcy has nothing to do with labor
costs. Frontier has among the lowest labor costs in the industry
and the lowest among low-cost carriers. The airline's bankruptcy
resulted from a dispute with its credit card processor.

Nonetheless, Frontier employees agreed to $10.2 million in labor
savings. During negotiations, Teamster employees agreed to a
performance bonus plan for both management and line employees.

"Suddenly, on Tuesday, management sprang on us a new severance
plan that would give them pay up to six months," Mr. Fazakas said.
"We would get nothing.

"We're outraged by this secret plan for a golden parachute,"
Mr. Fazakas said.  "They concealed this plan from us throughout
bargaining.  They want us to have confidence in their plan to
emerge from bankruptcy, but obviously they have no confidence in
it themselves."

Frontier employs about 425 members of the International
Brotherhood of Teamsters as aircraft technicians, ground service
technicians, tool room attendants, material specialists and
aircraft appearance agents.

Founded in 1903, the International Brotherhood of Teamsters
represents 1.4 million hardworking men and women in the United
States, Canada and Puerto Rico.

                            No Comment

Frontier spokesman Steve Snyder said negotiations are still in
progress, and he can't comment on the specifics of the Teamsters'
statement, reports Examiner.com.

                    Reduction in Management Pay

Frontier Airlines, on May 14, 2008, announced cuts in the pay of
management and other work groups.  Sean Menke, Frontier's Chief
Executive Officer, reduced his own salary by 20%.

Sandra Arnoult of ATW Daily News says CEO Sean Menke informed
employees in an internal memo that the pay cuts are needed to
reduce the overall cost structure and attract new financing.

"As a point of necessity, we are going to have to reduce our
labor and benefit expenses very quickly," he said.  Mr. Menke
added that there has been a "positive reception" from potential
investors regarding Frontier's future.

"In addition, the bankruptcy proceedings and the creditors'
meetings have been very smooth and absent of controversy," Mr.
Menke claimed.

On May 1, pay cuts were announced for Frontier's officers, said
ATW.

Published reports note that the cuts are temporary, and the
concessions would last through September 2008.

Frontier, whose management is leading by example, has pledged to
its employees that these painful reductions in their salaries  
some of which were already below market will be reversed if fuel
prices and related costs return to more historical levels.

                   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
through 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.  Epiq Bankruptcy
Solutions serves as the Debtors' notice and claims agent.  The
Official Committee of Unsecured Creditors is represented by Wilmer
Cutler Pickering Hale and Dorr LLP.

At Dec. 31, 2007, Frontier Airlines and its subsidiaries' total
assets was $1,126,748,000 and total debts was $933,176,000.  The
Debtors have until Aug. 8, 2008, to exclusively file a chapter 11
plan.  (Frontier Airlines Bankruptcy News, Issue No. 6; Bankruptcy
Creditors' Service, Inc., http://bankrupt.com/newsstand/or  
215/945-7000)


FRONTIER AIRLINES: Seeks OK on Director & Officer Severance Plan
----------------------------------------------------------------
In the last 90 days, Frontier Airlines Holdings, Inc. lost its
chief financial officer, general counsel and senior director of
corporate communications.

For this reason, the Debtors seek the authority of the U.S.
Bankruptcy Court for the Southern District of New York to
establish and implement, on a postpetition basis, a Director and
Officer Severance Plan for 65 of their current employees.

The covered employees consist of directors, senior directors,
vice-presidents and other executives.

"In marked contrast to similarly situated employees at other
airlines and to the almost 5,000 non-union employees of the
Debtors who are below the director level and whose severance
benefits were assumed in the [Court's order approving the
Debtors' first-day motion to honor prepetition employee wages and
programs], the 65 employees currently at or above the director
level currently have no enforceable severance benefit," Marshall
S. Huebner, Esq., at Davis Polk & Wardwell, in New York, related.  

"These employees can all be fired at will," he said.

Mr. Hubner noted that the Compensation Committee of Frontier's
Board of Directors -- composed exclusively of outside independent
directors -- has unanimously approved the Severance Plan.

The Debtors have worked with the Committee's outside compensation
consultants, Watson Wyatt Worldwide, with respect to the
Severance Plan, Mr. Huebner added.

Moreover, the Debtors have consulted with, and obtained the
support of, the Statutory Committee of Unsecured Creditors
Committee with regards the Severance Plan.

Mr. Huebner said that the benefits under the Severance Plan are:

   -- well below market comparables, even before taking into
      account the Severance Plan's mitigation features;

   -- measurably less generous than Frontier's longstanding
      prepetition severance practices; and

   -- compliant with the strict restrictions of Section 503(c) of
      the Bankruptcy Code.

"Payments under the Severance Plan are capped at $144,1805      
despite the fact that this results in senior executives
having as little as 5 months severance (a fraction of what is
typical).  Moreover, because of the Severance Plan's new
mitigation provisions, even the most senior executive, if
severed, will likely receive substantially less than $144,180,"
Mr. Hubner explained.

                      Severance Plan Terms

Participation in the Severance Plan is limited to regular, full-
time employees of the Debtors who are at the director level or
above:

                                         No. of        Severance
  Group         Description              Participants  Pay
  -----         -----------              ------------  ----------
    A       Frontier president, CEO, all      6        $144,180
            executive vice presidents and              for five to
            senior vice presidents, vice               10 months
            president and general counsel

    B       all other Frontier vice          10        9 months
            presidents and Lynx officers

    C       Frontier and Lynx directors      49        6 months
            and senior directors

The Severance Plan offers benefits including (i) travel
privileges provided by Frontier to similarly situated active
employees; and (ii) assistance with applicable medical, dental
and vision care benefit covered by the Debtors' COBRA Plan.

The Severance Plan is available solely in the event of the
Covered Employee's qualifying termination of employment:

   (a) A Covered Employee will be eligible to receive benefits
       under the Severance Plan only if his or her employment is
       terminated without Cause or following a change in control,
       as defined in the Severance Plan, or for good reason,
       including (i) material reduction in the employee's base
       salary; (ii) material diminution of the employee's
       position, responsibilities or duties; or (iii)
       relocation of the employee's work location more than 50
       miles from its current location;

   (b) A Covered Employee will not be eligible to participate in
       the Severance Plan unless he or she waives all rights
       under any other severance arrangement to which the
       employee may be a party as of the effective date of the
       Severance Plan, including, but not limited to, rights
       under a prepetition offer letter, if applicable.

   (c) Following a qualifying termination event, a Covered
       Employee will receive a severance payment that varies
       according to salary and employment level;

   (d) Cash severance will be paid in installments -- as
       salary continuation rather than as a lump-sum payment;

   (e) All severance will be subject to a mitigation requirement
       in the event the severed employee finds new employment,
       which commences in the ninth week for Group A employees;

   (f) Following a qualifying termination event, a Covered
       Employee may continue any applicable medical, dental
       or vision care benefit covered by COBRA.

   (g) A Covered Employee's receipt of Severance will be subject
       to the Employee's continuing compliance with the Severance
       Plan's confidentiality and non-solicitation provisions;
       and

   (h) To the extent necessary to avoid the imposition of taxes,
       interest and penalties required by Section 409A of the
       Internal Revenue Code, any payment or benefit to which a        
       Covered Employee is eligible under the Severance Plan,
       will be adjusted to comply with Section 409A, while
       maintaining the intent of the Severance Plan.

A full-text copy of the Severance Plan is available for free at:
http://bankrupt.com/misc/FAH_SeverancePlan.pdf

The Debtors believe the cost of the Severance Plan is modest.
In a statement filed with with the Court, Watson Wyatt senior
consultant Nick Bubnovich says that absent mass terminations, the
Severance Plan will likely cost well under $1,500,000 in the
aggregate, for all 65 Covered Employees.  Even assuming mass
terminations, he says, mitigation requirements would likely cause
the actual cost to be between $2,200,000 to $2,700,00, assuming
mitigation of 40-50%.

Mr. Bubnovich believe that the Severance Plan will act as a
necessary reassurance for Frontier's employees and an important
barrier against unwanted attrition.

"[Absent the Severance Plan,] Frontier's stakeholder value will
be negatively impacted by distracted employees who may feel they
have no choice but to consider other options and further
attrition that Frontier's operations cannot afford," Mr.
Bubnovich said.

The Severance Plan's provisions were intended to preserve
liquidity for Frontier, he said.

                   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
through 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.  Epiq Bankruptcy
Solutions serves as the Debtors' notice and claims agent.  The
Official Committee of Unsecured Creditors is represented by Wilmer
Cutler Pickering Hale and Dorr LLP.

At Dec. 31, 2007, Frontier Airlines and its subsidiaries' total
assets was $1,126,748,000 and total debts was $933,176,000.  The
Debtors have until Aug. 8, 2008, to exclusively file a chapter 11
plan.  (Frontier Airlines Bankruptcy News, Issue No. 6; Bankruptcy
Creditors' Service, Inc., http://bankrupt.com/newsstand/or  
215/945-7000)


FX REAL ESTATE: Posts $25 Million Net Loss in 2008 First Quarter
----------------------------------------------------------------
FX Real Estate and Entertainment, Inc. reported a net loss of
$25.0 million, on revenue of $485,000, for the first quarter ended
March 31, 2008, compared with a net loss of $14.7 million, on
revenue of $1.4 million, based on the results of operations of
Metroflag, as predecessor, rather than those of FX Luxury Realty,
for the three months ended March 31, 2008.

Results for the three months ended March 31, 2008, reflected
$485,000 in revenue and $7.2 million in operating expenses.

Included in operating expenses is $2.5 million in license fees,
representing the first quarter guaranteed annual minimum royalty
payments under the license agreements with Elvis Presley
Enterprises and Muhammad Ali Enterprises and $3.6 million in
corporate expenses, including professional fees related to the CKX
Inc. Distribution and the Option Agreement, $900,000 in non-cash
compensation related to the issuance of stock options and $600,000
in shared services charges provided by CKX Inc. and Flag Luxury
Properties LLC pursuant to the shared services agreement.

For the three months ended March 31, 2008, the company had
$14.2 million in net interest expense.

For the three months ended March 31, 2008, the company did not
record a provision for income taxes because the company has
incurred taxable losses since its formation in 2007.  As it has no
history of generating taxable income, the company reduces any
deferred tax assets by a full valuation allowance.

                 Liquidity and Capital Resources

The company disclosed in its Form 10-Q for the quarter ended
March 31, 2008, that its current cash flow and cash on hand of
$10.5 million at March 31, 2008, are not sufficient to fund its  
current operations or to pay obligations scheduled to come due
over the ensuing six months, including the company's
$475.0 million Park Central Loan, which matures on July 6, 2008.

The company generated aggregate gross proceeds of approximately
$98.7 million from the rights offering and from sales under the
related investment agreements, as amended, between the company and
Robert F.X. Sillerman, the company's chairman and chief executive
officer, and The Huff Alternative Fund L.P. and The Huff  
Alternative Parallel Fund L.P.  The company used part of the
proceeds to pay off debt.  The remainder of the proceeds from the
rights offering and the sales under the related investment
agreements will be used to satisfy certain other obligations and
working capital requirements.

                     Going Concern Disclaimer

Ernst & Young LLP, in New York, expressed substantial doubt about
FX Real Estate and Entertainment Inc.'s ability to continue as a
going concern after auditing the company's consolidated balance
sheet as of Dec. 31, 2007, and the related consolidated statement
of operations, stockholders' equity and cash flows for the period
from May 11, 2007 to Dec. 31, 2007.  The auditing firm pointed to
the company's need to secure additional capital in order to pay
obligations as they become due.

The company disclosed in its Form 10-Q for the three months ended
March 31, 2008, that the Metroflag entities have $475.0 million in
loans secured by the Park Central site that become due and payable
on July 6, 2008, subject to the company's conditional right to
extend the maturity date for up to two six (6) month extensions.

The company's ability to extend the loan is, however, subject to
its ability to raise additional cash above and beyond the proceeds
from the rights offering prior to July 6, 2008.  The company said
its ability to refinance the loan and the valuation of the
property could be affected by the ability to effectively execute
the Park Central site redevelopment plan.  The company also has an
obligation to pay license fees in accordance with the license
agreements.  If these payments are not made, the company could
lose its rights under these agreements.

                          Balance Sheet

At March 31, 2008, the company's consolidated balance sheet showed
$652.7 million in total assets, $519.1 million in total
liabilities, and $133.6 million in total stockholders' equity.

The company's consolidated balance sheet at March 31, 2008, also
showed strained liquidity with $93.1 million in total current
assets available to pay $519.1 million in total current
liabiities.

Full-text copies of the company's consolidated financial
statements for the quarter ended March 31, 2008, are available for
free at http://researcharchives.com/t/s?2c14

                       About FX Real Estate

Headquartered in New York, FX Real Estate and Entertainment
(Nasdaq: FXRE) owns 17.72 contiguous acres of land located at the
southeast corner of Las Vegas Boulevard and Harmon Avenue in Las
Vegas, Nevada, known as the Park Central site.  The company  
intends to pursue a hotel, casino, entertainment, retail,
commercial and residential development project on the Park Central
site.  

FXRE also has license agreements with Elvis Presley Enterprises,
Inc., an 85.0% owned subsidiary of CKX Inc., and Muhammad Ali
Enterprises LLC, an 80.0% owned subsidiary of CKX Inc., which
allows it to use the intellectual property and certain other
assets associated with Elvis Presley and Muhammad Ali in the
development of its real estate and other entertainment attraction-
based projects.

In addition to its interest in the Park Central Property, its
plans with respect to a Graceland-based hotel, and its intention
to pursue additional real estate and entertainment-based
developments using the Elvis Presley and Muhammad Ali intellectual
property, the company, through direct and indirect wholly owned
subsidiaries, owns 1,410,363 shares of common stock of Riviera
Holdings Corporation, a company that owns and operates the Riviera
Hotel & Casino in Las Vegas, Nevada and the Blackhawk Casino in
Blackhawk, Colorado.


GAINEY CORP: High Probability of Default Cues Moody's Rating Cut
----------------------------------------------------------------
Moody's Investors Service has downgraded the corporate family
rating of Gainey Corporation to Caa2 from Caa1.  The ratings
outlook remains negative.  In addition to the corporate family
rating downgrade, these rating changes have occurred:

  -- Probability of Default rating: to Caa3 from Caa2

  -- $25 million first lien revolving credit facility and $210
     million term loan: to Caa2 LGD 3, 34% from Caa1 LGD 3, 34%

The downgrades reflect an increased probability of default since
the Feb. 1, 2008 amendment to the company's first lien credit
facility was executed.  In Moody's view Gainey's liquidity profile
remains weak due to stringent conditions that were required under
the February 1, 2008 amendment, while the truckload freight
operating environment remains weak; these factors have contributed
to the higher probability of default.

The Caa2 corporate family rating reflects Gainey's position as a
modestly-sized, asset-heavy truckload operator with an operating
ratio that generates a level of EBIT insufficient to cover
interest.  With annual revenues of about $400 million, Gainey is
about one-third the size of the next larger, rated truckload
company.  Although the flexibility of the owned-asset model,
whereby excess equipment can be sold to reduce debt, helps support
the rating, this attribute does not assure a level of debt
reduction sufficient to outpace earnings declines and to maintain
compliance with financial covenants during cyclical troughs.

The negative outlook reflects anticipated weak near term demand
for trucking services which will continue to pressure Gainey's
operating performance.

Gainey Corporation, headquartered in Grand Rapids, Michigan,
provides truckload transportation services, primarily through its
owned fleet, throughout the continental U.S. and certain provinces
of Canada.


GALLERIA CBO: Moody's Chips Ratings on Three Note Classes to Ca
---------------------------------------------------------------
Moody's Investors Service has downgraded and left on review for
possible further downgrade the ratings on these notes issued by
Galleria CBO V (formerly Beacon Hill III)

Class Description: Class A-1 Senior Secured Floating Rate Term
Notes, due 2037

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

Class Description: Class A-2 Senior Secured Floating Rate
Revolving Notes, due 2037

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

Additionally, Moody's downgraded these notes:

Class Description: Class B Second Priority Floating Rate Term
Notes, due 2037

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

Class Description: Class C-1 Third Priority Floating Rate Term
Notes, due 2037

  -- Prior Rating: B2, on review for possible downgrade
  -- Current Rating: Ca

Class Description: Class C-2 Third Priority Fixed Rate Term Notes,
due 2037

  -- Prior Rating: B2, on review for possible downgrade
  -- Current Rating: Ca

According to Moody's, the rating actions reflect increased
deterioration in the credit quality of the underlying portfolio.


GALLERIA CBO: Moody's Cuts B3 Rating on Two Note Classes to Caa1
----------------------------------------------------------------
Moody's Investors Service has downgraded and left on review for
possible further downgrade the ratings on these notes issued by
Galleria CBO IV (formerly Beacon Hill II)

Class Description: $160,500,000 Class A-1 Senior Secured Floating
Rate Term Notes, Due 2034

  -- Prior Rating: B3, on review for possible downgrade
  -- Current Rating: Caa1 on review for possible downgrade

Class Description: $160,500,00 Class A-2 Senior Secured Floating
Rate Revolving Notes, Due 2034

  -- Prior Rating: B3, on review for possible downgrade
  -- Current Rating: Caa1, on review for possible downgrade

According to Moody's, the rating actions reflect increased
deterioration in the credit quality of the underlying portfolio.


HALCYON SECURITIZED: Moody's Chips $76MM Baa2 Notes Rating to Caa1
------------------------------------------------------------------
Moody's Investors Service has downgraded and left on review for
possible downgrade the ratings on these notes issued by Halcyon
Securitized Products Investors ABS CDO I Ltd.:

Class Description: $236,400,000 Class A-1 Senior Secured Floating
Rate Notes, due 2050

  -- Prior Rating: A1, on review for possible downgrade
  -- Current Rating: Baa3, on review for possible downgrade

Class Description: $76,000,000 Class A-2 Senior Secured Floating
Rate Notes, due 2050

  -- Prior Rating: Baa2, on review for possible downgrade
  -- Current Rating: Caa1, on review for possible downgrade

Additionally, Moody's downgraded these notes:

Class Description: $28,400,000 Class B Senior Secured Floating
Rate Notes, due 2050

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

Class Description: $19,600,000 Class C Senior Secured Deferrable
Interest Floating Rate Notes, due 2050

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

Class Description: $19,600,000 Class D Senior Secured Deferrable
Interest Floating Rate Notes, due 2050

  -- Prior Rating: Caa1, on review for possible downgrade
  -- Current Rating: C

Class Description: $4,000,000 Class E Senior Secured Deferrable
Interest Floating Rate Notes, due 2050

  -- Prior Rating: Ca
  -- Current Rating: C

According to Moody's, the rating actions reflect increased
deterioration in the credit quality of the structured finance
securities.


HAMILTON GARDENS: Moody's Downgrades Ratings on Six Note Classes
----------------------------------------------------------------
Moody's Investors Service has downgraded and left on review for
possible further downgrade the ratings on these notes issued by
Hamilton Gardens CDO Ltd.:

Class Description: Up to $315,000,000 Class A-1 Floating Rate
Variable Funding Notes Due 2046

  -- Prior Rating: Aa3, on review for possible downgrade
  -- Current Rating: Baa3, on review for possible downgrade

Class Description: $54,250,000 Class A-2 Floating Rate Notes Due
2046

  -- Prior Rating: Baa2, on review for possible downgrade
  -- Current Rating: Caa1, on review for possible downgrade

Additionally, Moody's downgraded these notes:

Class Description: $56,500,000 Class B Floating Rate Notes Due
2046

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

Class Description: $25,000,000 Class C Deferrable Floating Rate
Notes Due 2046

  -- Prior Rating: Caa1, on review for possible downgrade
  -- Current Rating: C

Class Description: $27,500,000 Class D Deferrable Floating Rate
Notes Due 2046

  -- Prior Rating: Ca
  -- Current Rating: C

According to Moody's, the rating actions reflect increased
deterioration in the credit quality of the underlying portfolio.


HEALTH SYSTEMS: March 31 Balance Sheet Upside Down by $1.1 Million
------------------------------------------------------------------
Health Systems Solutions, Inc. released financial results for the
first quarter ended March 31, 2008. The Company reported total
revenue of $2.95 million, compared to $1.59 million for the first
quarter of 2007, an increase of $1.36 million, or 86%.

"Our strategic vision is being realized as evidenced by several
new initiatives bearing fruit in the first quarter," stated Stan
Vashovsky, Chairman and Chief Executive Officer of Health Systems
Solutions. "We were successful on several fronts, winning new
business from Philips Healthcare, our largest customer, by
entering into a new agreement to provide software solutions for
their global operations, as well as implementing consulting
services with our newly formed Performance Advisors Group and
generating revenue during the quarter. The success of HSS will be
driven by our ability to meet our clients' needs with innovative
solutions that leverage our unique expertise and entrepreneurial
culture."

               First Quarter 2008 Financial Results

Revenues were $2.95 million for the quarter ended March 31, 2008,
compared to $1.59 million for the same period of 2007, an increase
of $1.36 million, or 86%. The increase in revenue is primarily the
result of the addition of our Technology Solutions and Consulting
groups that generated $1.77 million, or 60%, of revenue.

Gross profit was $977,000 for the quarter ended March 31, 2008,
compared to $360,000 for the same period of 2007, an increase of
$617,000 or 171%. For the quarter ended March 31, 2008, gross
margin was 33%, up from 23%, or 10 percentage points, for the
first quarter of 2007. The increase in gross margin is the result
of an increase in sales of higher-margin Technology Solutions
services and a reduction in software amortization costs.

Research and development costs decreased $74,000, or 21%, to
$284,000 for the first quarter 2008 compared to the same period in
2007. The decrease in development costs was primarily attributable
to reductions in labor, consulting costs and related overhead
expenses.

Selling expenses were $332,000 for the quarter ended March 31,
2008, compared to $525,000 in the first quarter 2007, a decrease
of $194,000, or 37%. The decrease in selling expenses was
primarily attributable to reductions in the sales force while
leveraging other personnel to concentrate on acquiring larger
customers.

General and administrative expenses were $1.22 million for the
quarter ended March 31, 2008, compared with $440,000 for the same
period of 2007, an increase of $780,000, or 178%. The increase in
general and administrative expenses was primarily attributable to
increased wages and other benefits related to the new management
and administrative support staff.

Health Systems Solutions reported a net loss applicable to common
shareholders of $979,000, or $0.13 per basic and diluted share,
for the three months ended March 31, 2008 compared with a net loss
applicable to common shareholders of $1.20million, or $0.19 per
basic and diluted share, for the same period of 2007. The
improvement in net loss of $224,000, or 19%, is the result of
increased sales offset by investments in personnel and other
infrastructure-related expenses and no deemed dividend recorded
during the quarter.

"As we execute our strategic growth plan throughout the rest of
2008, we will focus on containing expenses, increasing margins and
building the infrastructure to support a much larger company," Mr.
Vashovsky concluded. "We've sacrificed short-term margins to re-
invest cost savings in laying a foundation that can support
sustained growth for the future. We are pleased with our top-line
growth, but remain focused on our ultimate goal of generating
high-margin, sustainable profitability."

As of March 31, 2008, the company had total current assets of
$1.4 million and total current liabilities of $3.3 million.  The
company had total assets of $2.2 million and total liabilities of
$3.4, resulting in total stockholders' equity deficiency of
$1,195,657.

               About Health Systems Solutions, Inc.

HSS (OTCBB: HSSO) is a technology and services company dedicated
to bringing innovation to the health care industry. Our objective
is to leverage current and next-generation technologies to offer
value-added products and services which will generate improved
clinical, operational and financial outcomes for our clients. The
HSS portfolio of products and services extends across many
segments of health care including home health care, medical
staffing, acute and post-acute facilities, and
telehealth/telemedicine, grouped into three segments: technology
solutions, software and consulting.


HELIX BIOMEDIX: March 31 Balance Sheet Upside Down by $833,173
--------------------------------------------------------------
Helix BioMedix, Inc., a developer of bioactive peptides, released
financial results for the first quarter ended March 31, 2008.

For the first quarter of 2008, the company reported record revenue
of approximately $240,000, compared to revenue of approximately
$58,000 in the same period one year ago. Net loss for the first
quarter of 2008 was approximately $1,275,000, or $(0.05) per
share, compared to a net loss of approximately $812,000, or
($0.03) per share, in the same period one year ago. The increase
in the net loss was primarily attributable to approximately
$316,000 of interest expense and discount accretion associated
with a convertible debt financing in the amount of $3 million
which closed on February 14, 2008. Also included in the net loss
was approximately $141,000 of changes in fair value of derivative
instruments and $30,000 of unrealized loss on marketable
securities.

As of March 31, 2008, the company's cash and cash equivalents was
$3,165,000 compared to $462,000 as of December 31, 2007. The
increase in cash was associated with the $3 million convertible
debt financing. Current and non-current marketable securities were
$170,000 as of March 31, 2008 compared to $700,000 as of December
31, 2007.

As of March 31, the company had $4,165,270 in total assets and
$4,998,443 in total liabilities, resulting in total stockholders'
deficit of $833,173.

"Our revenue for the first quarter more than doubled the revenue
we recorded in the fourth quarter of 2007 and serves as evidence
of the progress we have made in our efforts to commercialize our
innovative bioactive peptides," stated R. Stephen Beatty,
President and Chief Executive Officer of Helix BioMedix. "During
the quarter, we continued to execute on our business goals and
objectives, including the February close of a $3 million funding
agreement that provides us with the necessary capital to support
our operations throughout the remainder of the year. In addition,
we also expanded our intellectual property portfolio through the
recently announced issuance of a patent covering more than eighty
of our proprietary peptides for use in cosmetic and skin care
applications."

Mr. Beatty continued, "We have also made significant progress on
our 2008 strategic initiatives. First, our anti-aging product line
remains on schedule for launch in the second half of 2008. Our
plan calls for the initial rollout of three to four products this
year, followed by the release of eight to nine additional products
in 2009. We also continue to make progress with our strategic
partner, DermaVentures. DermaVentures' P.A.C. Perfect product line
is currently shipping to customers and sales are expected to
continue to increase throughout the remainder of the year.

"Next, as evidenced by our results in the first quarter, we have
begun to generate significantly more revenue from our licensing
partnerships. There are currently more than twenty-five products
available in the market containing our peptides, and we expect
that number to continue to grow throughout 2008."

Mr. Beatty concluded, "Finally, we are continuing our efforts to
secure the funding required to move our lipohexapeptide program
into clinical trials and have had a number of productive
discussions with both industry and financial partners. As we have
stated in the past, we believe that the clinical program
represents a significant long-term opportunity for the company and
our shareholders. As such, we are intently focused on initiating
clinical development of our acne program before the end of the
year."

                    About Helix BioMedix, Inc.

Helix BioMedix, Inc. (OTCBB: HXBM) --
http://www.helixbiomedix.com/-- is a biopharmaceutical company  
with an extensive library of diverse bioactive peptides and
patents covering six distinct classes and hundreds of thousands of
peptide sequences.  Applications for Helix BioMedix peptides
include anti-aging cosmeceutical skin care and acne treatment as
well as other topical anti-infective pharmaceuticals and wound
healing applications.


HOME EQUITY: S&P Lowers Ratings on 98 Certificate Classes
---------------------------------------------------------
Standard & Poor's Ratings Services lowered its ratings on 98
classes of certificates issued by 18 Home Equity Asset Trust
transactions.  S&P placed one of the lowered ratings on
CreditWatch with negative implications.  At the same time, S&P
affirmed 108 ratings and placed 21 additional ratings on
CreditWatch with negative implications.
     
The downgraded transactions have sizable loan amounts that are
severely delinquent.  As of the April 2008 remittance report, the
severe delinquencies were as(series: severe delinquency amount, %
of current pool balance):

     -- 2003-8: $6.932 million, 14.76%;
     -- 2004-1: $18.778 million, 21.43%;
     -- 2004-2: $15.919 million, 19.17%;
     -- 2004-3: $16.351 million, 23.09%;
     -- 2004-4: $34.310 million, 23.89%;
     -- 2004-5: $31.614 million, 26.30%;
     -- 2004-6: $32.755 million, 26.83%;
     -- 2004-7: $40.683 million, 21.34%;
     -- 2004-8: $44.561 million, 29.31%;
     -- 2005-1: $59.278 million, 32.46%;
     -- 2005-2: $68.241 million, 27.35%;
     -- 2005-3: $71.711 million, 35.42%;
     -- 2005-4: $95.325 million, 30.87%;
     -- 2005-5: $103.956 million, 32.21%;
     -- 2005-6: $83.304 million, 27.87%;
     -- 2005-7: $135.618 million, 35.12%;
     -- 2005-8: $220.528 million, 35.14%; and
     -- 2005-9: $140.885 million, 35.32%.

Furthermore, realized losses for the transactions have been
accelerating over the past year, exceeding available excess
interest and reducing overcollateralization for each transaction.  
Average losses are as follows (series: three-, six-, 12-month
average realized losses {mil.}):

     -- 2003-8: $0.263, $0.282, $0.219;
     -- 2004-1: $0.731, $0.594, $0.521;
     -- 2004-2: $0.681, $0.613, $0.572;
     -- 2004-3: $0.578, $0.529, $0.447;
     -- 2004-4: $0.937, $0.853, $0.809;
     -- 2004-5: $1.040, $0.854, $0.824;
     -- 2004-6: $0.841, $0.712, $0.712;
     -- 2004-7: $1.649, $1.166, $1.134;
     -- 2004-8: $1.273, $1.087, $0.945;
     -- 2005-1: $2.050, $1.569, $1.284;
     -- 2005-2: $1.734, $1.587, $1.193;
     -- 2005-3: $1.718, $1.324, $1.075;
     -- 2005-4: $2.917, $2.595, $2.010;
     -- 2005-5: $3.464, $2.639, $2.049;
     -- 2005-6: $2.301, $1.923, $1.367;
     -- 2005-7: $4.203, $3.307, $2.177;
     -- 2005-8: $5.451, $4.331, $3.002; and
     -- 2005-9: $2.563, $2.253, $1.494.

In addition, class B-5 from series 2005-7 realized a principal
loss of $457,110.99 during the April 2008 remittance period.
     
Series 2004-5, 2004-6, and 2004-8 have started to step down over
the past several months, with 41-44 months of seasoning.  This
reduction in credit support, combined with accelerating losses and
increasing severe delinquent loan amounts, indicate that credit
support will continue to deteriorate going forward.  The
CreditWatch placements from these transactions reflect the
possibility for deterioration of the subordination that provides
support for these classes due to the deals' stepping down.  The
classes stand to lose between $5.1 million and $24.6 million in
subordination over the next several months.  Standard & Poor's
will continue to closely monitor the performance of these classes.

If credit support for these classes is adequate to support the
current ratings, S&P will affirm the ratings and remove them from
CreditWatch.  Conversely, if credit support continues to
deteriorate to a point at which it is insufficient to maintain the
current ratings, S&P will take further negative rating actions.
     
S&P placed its ratings on 17 classes from series 2005-5, 2005-6,
2005-7, 2005-8, and 2005-9 on CreditWatch negative.  While these
classes currently lack what S&P believe to be a sufficient amount
of credit enhancement relative to projected losses, S&P will not
take further rating actions until it have completed additional
analysis on the affected classes.  S&P expect to compare the date
of projected defaults with the date of payment in full and
evaluate the relationships between projected credit support and
projected losses throughout the remaining life of the
certificates.
     
Subordination, O/C, and excess interest cash flow provide credit
support for these transactions.  The collateral consists of 30-
year, fixed- and adjustable-rate, first- and second-lien subprime
mortgage loans secured by one- to four-family residential
properties.


                         Ratings Lowered

                     Home Equity Asset Trust

                                            Rating
                                            ------
        Transaction         Class      To             From
        -----------         -----      --             ----
        2003-8              M-3        BBB+           A-
        2003-8              B-1        BB             BBB+
        2003-8              B-2        B              BBB
        2003-8              B-3        CCC            B
        2004-1              M-2        BBB            A+
        2004-1              M-3        BB             A
        2004-1              B-1        B              BB
        2004-1              B-2        CCC            B
        2004-1              B-3        CC             CCC
        2004-2              M-2        A-             A
        2004-2              M-3        BB             A
        2004-2              B-1        B              A-
        2004-2              B-2        CCC            BBB+
        2004-2              B-3        CC             BBB-
        2004-3              M-3        BB             A
        2004-3              B-1        B              A-
        2004-3              B-2        CCC            BBB+
        2004-3              B-3        CC             BBB
        2004-4              M-5        BBB            A
        2004-4              M-6        BB             A
        2004-4              B-1        B              A-
        2004-4              B-2        CCC            BBB+
        2004-4              B-3        CCC            BBB
        2004-5              M-6        B+             A
        2004-5              B-1        B-             A-
        2004-5              B-2        CCC            BBB+
        2004-5              B-3        CC             BBB-
        2004-6              M-6        BB             A
        2004-6              B-1        B              A-
        2004-6              B-2        B-             BBB+
        2004-6              B-3        CCC            BBB
        2004-6              B-4        CCC            BBB-
        2004-7              M-6        BBB-           A
        2004-7              B-1        BB             A-
        2004-7              B-2        B              BBB+
        2004-7              B-3        CCC            BBB
        2004-7              B-4        CC             BBB-
        2004-8              B-1        B              A-
        2004-8              B-2        CCC            BBB+
        2004-8              B-3        CCC            BBB
        2004-8              B-4        CC             BBB-
        2005-1              M-7        BB             A-
        2005-1              B-1        CCC            BBB+
        2005-1              B-2        CCC            BB+
        2005-1              B-3        CC             B
        2005-2              B-2        B              BBB
        2005-2              B-3        CCC            BBB-
        2005-2              B-4        CCC            BB
        2005-3              M-6        BBB            A-
        2005-3              B-1        B              BBB+
        2005-3              B-2        CCC            BBB
        2005-3              B-3        CCC            BB
        2005-3              B-4        CC             B
        2005-4              M-5        A              A+
        2005-4              M-6        BB             A
        2005-4              M-7        B              A-
        2005-4              B-1        CCC            BBB+
        2005-4              B-2        CCC            BBB
        2005-4              B-3        CC             BBB-
        2005-5              M-5        B              A+
        2005-5              M-6        CCC            A
        2005-5              M-7        CCC            BBB
        2005-5              B-1        CCC            BB
        2005-5              B-2        CCC            B
        2005-5              B-3        CC             B
        2005-6              M-6        B              A+
        2005-6              M-7        B-             A
        2005-6              M-8        CCC            A-
        2005-6              B-1        CCC            BBB+
        2005-6              B-2        CCC            BB
        2005-6              B-3        CC             B
        2005-6              B-4        CC             CCC
        2005-7              M-5        CCC            A+
        2005-7              M-6        CCC            A
        2005-7              M-7        CCC            A-
        2005-7              B-1        CCC            BBB+
        2005-7              B-2        CC             BBB
        2005-7              B-3        CC             BB
        2005-7              B-4        CC             B
        2005-7              B-5        D              CCC
        2005-8              M-5        CCC            A+
        2005-8              M-6        CCC            A+
        2005-8              M-7        CCC            A-
        2005-8              M-8        CCC            A-
        2005-8              B-1        CCC            BB
        2005-8              B-2        CC             BB
        2005-8              B-3        CC             B
        2005-8              B-4        CC             B
        2005-8              B-5        CC             CCC
        2005-9              M-6        CCC            A+
        2005-9              M-7        CCC            A
        2005-9              M-8        CCC            A
        2005-9              B-1        CCC            A-
        2005-9              B-2        CC             BB
        2005-9              B-3        CC             B
        2005-9              B-4        CC             CCC
        2005-9              B-5        CC             CCC

         Rating Lowered and Placed on Creditwatch Negative

                      Home Equity Asset Trust

                                            Rating
                                            ------
        Transaction         Class      To             From
        -----------         -----      --             ----
        2004-5              M-5        BBB-/Watch Neg A

               Ratings Placed on Creditwatch Negative

                      Home Equity Asset Trust

                                             Rating
                                             ------
         Transaction         Class      To             From
         -----------         -----      --             ----
         2004-5              M-4        A+/Watch Neg   A+
         2004-6              M-5        A+/Watch Neg   A+
         2004-8              M-5        A+/Watch Neg   A+
         2004-8              M-6        A/Watch Neg    A
         2005-5              M-3        AA/Watch Neg   AA
         2005-5              M-4        AA-/Watch Neg  AA-
         2005-6              M-4        AA/Watch Neg   AA
         2005-6              M-5        AA-/Watch Neg  AA-
         2005-7              M-1        AA+/Watch Neg  AA+
         2005-7              M-2        AA/Watch Neg   AA
         2005-7              M-3        AA/Watch Neg   AA
         2005-7              M-4        AA-/Watch Neg  AA-
         2005-8              M-1        AA+/Watch Neg  AA+
         2005-8              M-2        AA+/Watch Neg  AA+
         2005-8              M-3        AA/Watch Neg   AA
         2005-8              M-4        AA/Watch Neg   AA
         2005-9              M-1        AA+/Watch Neg  AA+
         2005-9              M-2        AA+/Watch Neg  AA+
         2005-9              M-3        AA/Watch Neg   AA
         2005-9              M-4        AA/Watch Neg   AA
         2005-9              M-5        AA/Watch Neg   AA

                          Ratings Affirmed

                      Home Equity Asset Trust

               Transaction         Class      Rating
               -----------         -----      ------
               2003-8              M-1        AA
               2003-8              M-2        A
               2004-1              M-1        AA
               2004-2              M-1        AA
               2004-3              M-1        AA
               2004-3              M-2        A
               2004-4              A-1        AAA
               2004-4              A-IO-1     AAA
               2004-4              A-IO-2     AAA
               2004-4              M-1        AA+
               2004-4              M-2        AA
               2004-4              M-3        AA-
               2004-4              M-4        A+
               2004-5              A-1        AAA
               2004-5              A-3        AAA
               2004-5              A-IO-1     AAA
               2004-5              A-IO-2     AAA
               2004-5              M-1        AA+
               2004-5              M-2        AA
               2004-5              M-3        AA-
               2004-6              A-1        AAA
               2004-6              A-IO-1     AAA
               2004-6              A-IO-2     AAA
               2004-6              M-1        AA+
               2004-6              M-2        AA+
               2004-6              M-3        AA
               2004-6              M-4        AA-
               2004-7              A-1        AAA
               2004-7              A-2        AAA
               2004-7              A-3        AAA
               2004-7              A-5        AAA
               2004-7              M-1        AA+
               2004-7              M-2        AA+
               2004-7              M-3        AA
               2004-7              M-4        AA-
               2004-7              M-5        A+
               2004-8              A-IO-1     AAA
               2004-8              A-IO-2     AAA
               2004-8              M-1        AA+
               2004-8              M-2        AA
               2004-8              M-3        AA
               2004-8              M-4        AA-
               2005-1              A-1        AAA
               2005-1              A-2        AAA
               2005-1              M-1        AA+
               2005-1              M-2        AA
               2005-1              M-3        AA
               2005-1              M-4        AA-
               2005-1              M-5        A+
               2005-1              M-6        A
               2005-2              1-A-1      AAA
               2005-2              2-A-2      AAA
               2005-2              2-A-3      AAA
               2005-2              M-1        AA+
               2005-2              M-2        AA
               2005-2              M-3        AA-
               2005-2              M-4        A+
               2005-2              M-5        A
               2005-2              M-6        A-
               2005-2              B-1        BBB+
               2005-3              1-A-1      AAA
               2005-3              I-A-2      AAA
               2005-3              2-A-2      AAA
               2005-3              2-A-3      AAA
               2005-3              M-1        AA+
               2005-3              M-2        AA
               2005-3              M-3        AA-
               2005-3              M-4        A+
               2005-3              M-5        A
               2005-4              1-A-1      AAA
               2005-4              1-A-2      AAA
               2005-4              2-A-2      AAA
               2005-4              2-A-3      AAA
               2005-4              P          AAA
               2005-4              M-1        AA+
               2005-4              M-2        AA
               2005-4              M-3        AA
               2005-4              M-4        AA-
               2005-5              1-A-1      AAA
               2005-5              1-A-2      AAA
               2005-5              2-A-2      AAA
               2005-5              2-A-3      AAA
               2005-5              P          AAA
               2005-5              M-1        AA+
               2005-5              M-2        AA
               2005-6              1-A-1      AAA
               2005-6              1-A-2      AAA
               2005-6              2-A-2      AAA
               2005-6              2-A-3      AAA
               2005-6              P          AAA
               2005-6              M-1        AA+
               2005-6              M-2        AA+
               2005-6              M-3        AA
               2005-7              1-A-1      AAA
               2005-7              2-A-2      AAA
               2005-7              2-A-3      AAA
               2005-7              2-A-4      AAA
               2005-7              P          AAA
               2005-8              1-A-1      AAA
               2005-8              2-A-2      AAA
               2005-8              2-A-3      AAA
               2005-8              2-A-4      AAA
               2005-8              P          AAA
               2005-9              1-A-1      AAA
               2005-9              2-A-2      AAA
               2005-9              2-A-3      AAA
               2005-9              2-A-4      AAA
               2005-9              P          AAA


HOME INTERIORS: U.S. Trustee Selects Seven-Member Creditor's Panel
------------------------------------------------------------------
William T. Neary, the U.S. Trustee of Region 6, appointed seven
creditors to serve on an Official Committee of Unsecured Creditors
for the Chapter 11 bankruptcy cases of Home Interiors Gifts Inc.
and its debtor-affiliates.

The Creditors Committee members are:

   1) Meredith Corp.
      Attn: Michael Cook
      1716 Locust Street
      Des Moines, IA 50309
      Tel: 212) 499-2100

   2) Gaylord Hotels, Inc.
      Attn: Scott Lynn
      One Gaylord Drive
      The Wendell Building
      Nashville, TN 37214
      Tel: (614) 316-6180

   3) Fresh Produce All Media
      dba Rethink All Media
      Attn: David Singer
      2717 McKinney Avenue
      Dallas, TX 75204
      Tel: (214) 720-6095

   4) Direct Export Co., Inc.
      Attn: Reilly Tucker
      925 22nd Street, Suite 116
      Plano, TX 75074
      Tel: (972) 881-0055

   5) Kranson Industries, Inc.
      dba Tricorbraun
      Attn: Mike Weber
      10333 Old Olive Street
      St. Louis, MO 63141
      Tel: (314) 983-2020

   6) Staff Force, Inc.
      Attn: Russell Potocki
      15915 Katy Fwy, #160
      Houston, TX 77094
      Tel: (713) 554-3272

   7) Green Bay Packaging, Inc.
      Attn: Joel Barton
      1700 N. Webster Court
      Green Bay, WI 54302
      Tel: (920) 433-5116

Official creditors' committees have the right to employ legal
and accounting professionals and financial advisors, at the
Debtors' expense.  They may investigate the Debtors' business and
financial affairs.  Importantly, official committees serve as
fiduciaries to the general population of creditors they represent.  
Those committees will also attempt to negotiate the terms of a
consensual Chapter 11 plan -- almost always subject to the terms
of strict confidentiality agreements with the Debtors and other
core parties-in-interest.  If negotiations break down, the
Committee may ask the Bankruptcy Court to replace management with
an independent trustee.  If the Committee concludes reorganization
of the Debtor is impossible, the Committee will urge the
Bankruptcy Court to convert the Chapter 11 cases to a liquidation
proceeding.

                      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 Debtor selected Kurtzman Carson Consultants as
claims agent.  When the Debtors file for protection against their
creditors, they listed assets and debts between $100 million and
$500 million.


HOVNANIAN ENTERPRISES: S&P Rates Proposed $600MM Sr. Notes 'B+'
---------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'B+' issuer rating
and a '1' recovery rating to Hovnanian Enterprises Inc.'s proposed
$600 million senior secured notes due 2013.  The note rating is
two notches above the corporate credit rating on Hovnanian (B-
/Negative/--).  The '1' recovery rating indicates that lenders can
expect a very high recovery (90%-100%) in the event of payment
default.
     
The ratings are based on preliminary terms and conditions. If the
financing is completed as planned, S&P will affirm its 'B-'
corporate credit rating on Hovnanian.  However, the high level of
priority debt that would result from this transaction would
diminish the recovery prospects for the senior unsecured notes;
therefore, S&P would lower its rating on the company's
$1.5 billion senior unsecured notes to 'CCC+' from 'B-' and revise
the recovery rating to '5' (indicating a 10%-30% recovery) from
'4' (30%-50%).  The rating on the company's $400 million senior
subordinated debt would be unchanged at 'CCC' with a recovery
rating of '6' if the financing for the senior secured note
offering is completed.  The outlook on Hovnanian would remain
negative.
     
Proceeds from the notes will be used to repay the outstanding
balance under Hovnanian's existing secured credit facility, which
totals roughly $325 million, and for general corporate purposes.  
As part of this proposed financing, Hovnanian would amend its
revolving credit facility and decrease the commitment from
$900 million to $300 million, and it would receive less-
restrictive covenants.  The credit facility would be secured by a
first lien on nearly all of the company's assets, and the new
senior secured notes would be secured by a second lien on the same
assets.
     
The potential rating actions upon the completion of what S&P
expect to be a costly debt issue acknowledge that, despite the
more highly leveraged company and greater interest burden that
will result, the proposed transactions would also enhance the
company's currently weak liquidity position; moreover, the looser
bank covenants would provide greater flexibility as the company
maneuvers through the difficult housing market conditions, which
will remain challenging well into 2009.   
     
S&P would consider lowering the corporate credit rating if the
senior secured financing does not occur as planned, given
Hovnanian's tight liquidity and its expectation that worsening
housing conditions could hurt the company's ability to generate
cash and drive greater impairments.  This, in turn, could reduce
the existing credit facility's size and availability.
     

Rating Assigned

Hovnanian Enterprises Inc./ K. Hovnanian Enterprises Inc.
                                             Rating
                                             ------
$600 million senior secured notes due 2013   B+ (Recovery rtg: 1)


HOVNANIAN ENTERPRISES: Moody's Rates $600MM Sr. Secured Notes Ba3
-----------------------------------------------------------------
Moody's Investors Service assigned a rating of Ba3 to the proposed
new $600 million, five-year, senior secured notes of K. Hovnanian
Enterprises, Inc.  At the same time, Moody's affirmed the
company's existing ratings, including the corporate family rating
of B3, senior unsecured notes rating of Caa1, senior subordinated
debt rating of Caa2, and preferred stock rating of Caa3.  The
speculative grade liquidity assessment was raised to SGL-2, from
SGL-3.  The ratings outlook remains negative.

The ratings reflect Hovnanian's ongoing losses, high debt
leverage, elevated inventory levels, and cash flow generation that
only recently turned positive.  Support for the company's   --
Current Ratings is provided by the boost to the company's
liquidity and covenant compliance flexibility as a result of its
recent equity offering and this new note offering, large revenue
base (albeit rapidly declining), and widespread geographic,
product, and price point diversification.

The negative outlook reflects Moody's expectation that the very
weak macro environment -- both for the general economy and
especially for the homebuilding industry -- will pressure
Hovnanian's credit metrics as 2008 and 2009 unfold, with any
material improvement unlikely to occur before early in the next
decade.

Going forward, the ratings could be lowered if: 1) Moody's were to
expect cash flow generation on a trailing 12-month basis to again
turn negative in 2008 or 2009; (2) Moody's were to project the
company to violate the only remaining covenant in its revised bank
covenant package; 3) debt leverage increases to above 75%; or 4)
liquidity were to tighten considerably.  The ratings and/or
outlook could stabilize if the company were to 1) generate
significant amounts of positive cash flow and use the cash flow to
reduce debt and/or augment liquidity; 2) reduce debt leverage to
60%; and 3) rebuild its interest coverage protection.

These rating actions were taken:

  -- Rating of Ba3 assigned to the proposed new $600 million
     senior secured notes due 2013

  -- Corporate family rating affirmed at B3;

  -- Probability of default rating affirmed at B3;

  -- Senior unsecured notes ratings affirmed at Caa1 with an
     (LGD-4, 64%) vs. (LGD-4, 63%);

  -- Senior subordinated notes ratings affirmed at Caa2
     (LGD-6, 94%);

  -- Preferred stock rating affirmed at Caa3 (LGD-6, 97%).

  -- Speculative grade liquidity assessment raised to SGL-2,
     from SGL-3.

The substantial upnotching of the rating on the new notes reflect
their second lien status and well secured priority position in the
capital structure.

All of K. Hovnanian Enterprise's debt is guaranteed by its parent
company, Hovnanian Enterprises, Inc., and its restricted operating
subsidiaries.

Established in 1959 and headquartered in Red Bank, New Jersey,
Hovnanian Enterprises, Inc. designs, constructs and markets
single-family detached homes and attached condominium apartments
and townhouses.  Homebuilding revenues and consolidated net income
(before preferred dividends) for fiscal 2007 were $4.7 billion and
-$627 million, respectively.


HSPI DIVERSIFIED: Moody's Junks Ratings on Several Note Classes
---------------------------------------------------------------
Moody's Investors Service downgraded the ratings of 10 classes of
notes issued by HSPI Diversified CDO Fund II, Ltd., and left on
review for possible downgrade the ratings of two of these classes
of notes.  The notes affected by the rating action are as:

Class Description: $26,500,000 Class S Senior Secured Floating
Rate Notes due July 2015

  -- Prior Rating: Aa3, on review for possible downgrade
  -- Current Rating: Caa1, on review for possible downgrade

Class Description: $350,000,000 Class A-1 Senior Secured Floating
Rate Notes due July 2052

  -- Prior Rating: Baa1, on review for possible downgrade
  -- Current Rating: Caa1, on review for possible downgrade

Class Description: $105,000,000 Class A-2 Senior Secured Floating
Rate Notes due July 2052

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

Class Description: $63,000,000 Class A-3 Senior Secured Floating
Rate Notes due July 2052

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

Class Description: $85,000,000 Class A-4 Senior Secured Floating
Rate Notes due July 2052

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

Class Description: $26,000,000 Class B-1 Senior Subordinate
Secured Floating Rate Notes due July 2052

  -- Prior Rating: Caa1, on review for possible downgrade
  -- Current Rating: C

Class Description: $35,000,000 Class B-2 Senior Subordinate
Secured Floating Rate Notes due July 2052

  -- Prior Rating: Caa2, on review for possible downgrade
  -- Current Rating: C

Class Description: $5,000,000 Class C Senior Subordinate Secured
Floating Rate Notes due July 2052

  -- Prior Rating: Ca
  -- Current Rating: C

Class Description: $6,000,000 Class D Subordinate Secured Floating
Rate Notes due July 2052

  -- Prior Rating: Ca
  -- Current Rating: C

Class Description: $7,500,000 Composite Obligations due July 2052

  -- Prior Rating: Ca
  -- 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 May 1, 2008, of an event of default caused by a
failure of the Class A-3 Par Value Ratio to be greater than or
equal to 90.0 per cent, as described in Section 5.1(g) of the
Indenture dated June 14, 2007.

HSPI Diversified CDO Fund II, 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, holders of 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 downgrades taken today reflect the
increased expected loss associated with each tranche.  Losses are
attributed to diminished credit quality on the underlying
portfolio.  The severity of losses of certain tranches may be
different, however, depending on the timing and choice of remedy
to be pursued following the default event.  Because of this
uncertainty, the ratings assigned to Class S Notes and Class A1
Notes remain on review for possible further action.


HUDSON FUNDING: Moody's Junks Ratings on Five Note Classes
----------------------------------------------------------
Moody's Investors Service has downgraded ratings of six classes of
notes issued by Hudson High Grade Funding 2006-1, Ltd. and left on
review for possible further downgrade ratings of one of these
classes of notes.  The notes affected by today's rating action are
as:

Class Description: $1,275,000,000 Class A-1 Floating Rate Notes
Due 2042

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

Class Description: $123,750,000 Class A-2 Floating Rate Notes Due
2042

  -- Prior Rating: A2, on review for possible downgrade
  -- Current Rating: Ca

Class Description: $60,750,000 Class B Floating Rate Notes Due
2042

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

Class Description: $20,250,000 Class C Deferrable Floating Rate
Notes Due 2042

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

Class Description: $12,750,000 Class D Deferrable Floating Rate
Notes Due 2042

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

Class Description: $7,500,000 Income Notes Due 2042

  -- Prior Rating: B3, on review for possible downgrade
  -- 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 May 5, 2008 of an event of default caused by a
failure of the Class A/B Overcollateralization Ratio to equal or
exceed 93%, as required under Section 5.1(d) of the Indenture
dated Nov. 1, 2006.

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

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

Hudson High Grade Funding 2006-1, Ltd. is a collateralized debt
obligation backed primarily by a portfolio of structured finance
securities.


ICEWEB INC: March 31 Balance Sheet Upside Down by $2.2 Million
--------------------------------------------------------------
IceWEB, Inc. released its financial results for the second fiscal
quarter, ended March 31, 2008.

John R. Signorello, Chairman and Chief Executive Officer of
IceWEB, Inc., stated, "As evidenced by a very strong start to our
third fiscal quarter -- having achieved more than $2.3 million in
sales in the month of April alone, the anticipated challenges we
faced during the first half of this year with the integration of
our INLINE acquisition appear to be giving way to positive, even
robust, growth. What's more, we are very pleased that our decision
to invest in the acquisition and in-house development of our own
proprietary line of storage offerings and branded on-demand
application services is having measurable impact on our blended
gross profit margin, which continues to steadily climb."

Mr. Signorello further noted, "Managing the demand for our
solutions by federal agencies and enterprise companies is proving
to be our most pressing challenge at this time. Consequently,
IceWEB's management team must now concentrate on perpetuating the
sales momentum we've worked so hard to generate, while also
strengthening our financial footing through debt refinancing."

Financial highlights for the six months ended March 31, 2008
compared to the six months ended March 31, 2007:

   * Revenues decreased 4% to $8.1 million from $8.5 million.  

   * Sales of storage, network and security solutions to the
     Company's government and enterprise customers declined 11%
     to $7.4 million from $8.4 million.  

   * IceWEB's on-demand software sales increased 212% to $194,000
     from $62,000.  

   * Gross margin on sales rose 31% to 15.2% from 11.6%.  

   * Due primarily to costs stemming from non-cash compensation
     expense and the acquisition of INLINE Corporation on
     December 31, 2007 and its subsequent integration into
     IceWEB's business platform, total operating expenses were up
     113%, rising to $3.2 million from $1.5 million.  

   * Research and development expenses increased to $86,000 from
     $0 due to R&D activities related to the Company's
     proprietary INLINE storage products.  

   * Salaries, benefits and taxes increased to $2.0 million from
     $561,000, which included non-cash incentive compensation of
     $538,000 for the six months ended March 31, 2008, versus a
     credit for non-cash incentive stock option expense of $
     296,000 for the year-ago period, representing a net increase
     of $834,000 in non-cash expense. Base salary expense for the
     six month period ended March 31, 2008 totaled $1,150,000 as
     compared to $683,000 for the same three months in the prior
     year. $245,000 of this $467,000 increase in salaries is
     directly related to the acquisition of INLINE, and includes
     one-time bonuses to INLINE employees of $89,000.  

   * Marketing and selling costs were $89,000, a 48% decrease
     from $171,000. The decline was attributable to a decrease in
     web marketing, advertising and print advertising during the
     six months ended March 31, 2008.  

   * Net loss increased to $2.2 million, or $0.10 loss per basic
     and diluted share, compared to net income of $17,000, or
     $0.00 per basic and diluted share.  

Financial highlights for the three months ended March 31, 2008
compared to the three months ended March 31, 2007:

   * Revenues declined 34% to $3.9 million from $5.9 million.
     Excluding a single, extraordinarily large sale totaling $1.9
     million which occurred in the second fiscal quarter of 2007,
     revenues remained relatively flat on a comparable quarter
     over quarter basis.  

   * Network, storage and security solution sales totaled $3.5
     million, reflecting a 40% decrease from $5.8 million.  

   * Sales of IceWEB's on-demand application services rose 198%
     to $108,000 from $36,000.  

   * IceWEB's INLINE storage solutions sales were $292,000, which
     compared to $0 due to the fact that IceWEB did not acquire
     INLINE until the end of 2007.  

   * Gross margin on sales increased 38% to 16.4% from 11.8%. On
     a subsequent quarter-over-quarter basis, gross margins rose
     16% when compared to 14.2% reported for the first quarter of
     fiscal 2008.  

   * Total operating expenses rose 243% to $2.0 million from
     $591,000, due largely to the acquisition and integration of
     INLINE, which occurred on December 31, 2007, and non-cash
     compensation expense.  

   * Net loss increased to $2.2 million, or $0.10 loss per basic
     and diluted share, compared to net income of $17,000, or
     $0.00 per basic and diluted share.  

   * EBIDTA for the quarter totaled $(1.3) million. Excluding
     costs related to the acquisition of inline, non-cash
     compensation expense, and other one-time charges, the loss
     for the quarter was $(656,000).

As of March 31, 2008, the Company had $2.7 million in cash and
accounts receivables; $465,000 in inventory and a working capital
deficit of $3,861,000, which was due primarily to approximately
$3.0 million being expended for the acquisition of INLINE
Corporation. Total shareholders' deficit was $2.2 million.

                        About IceWEB Inc.

Headquartered in Herndon, Virginia, IceWeb Inc. (OTC: IWEB) --
http://www.iceweb.com/-- is a diversified technology company.      
The company is a provider of hosted web-based collaboration
solutions that enable organizations to establish Internet,
Intranet, and email/collaboration services with little or no
up-front capital investment.  The company also provides
consulting services to larger enterprise and government customers
including network infrastructure, enterprise email/collaboration,
and Internet/Intranet portal implementation and support services.
The company also markets an array of information technology
services and third party computer network hardware and software to
large enterprise and government clients.

                        Going Concern Doubt

Sherb & Co. LLP, in Boca Raton, Florida, expressed substantial
doubt about Ice Web Inc.'s ability to continue as a going concern
after auditing the company's consolidated financial statements for
the year ended Sept. 30, 2007 and 2006.  The auditing firm pointed
to the company's net losses for the years ended Sept. 30, 2007,
2006 and 2005.  

At Dec. 31, 2007, the company has a working capital deficit of
$3,608,868 and an accumulated deficit of $14,331,873.  As of March
31, 2008, the Company had a working capital deficit of $3,861,000
while total shareholders' deficit was $2.2 million.


IDLEAIRE TECHNOLOGIES: Locations Expected to Remain Open
--------------------------------------------------------
IdleAire locations are operating and serving customers and are
expected to continue to do so, the company said Friday.

Company officials clarified that IdleAire Technologies
Corporation has filed for Chapter 11 reorganization, not for
Chapter 7 liquidation, noting there was nothing in the company's
petition to the court indicating any plans for cessation of
services.

IdleAire has secured a $25 million debtor-in-possession credit
facility to provide funding for the company as it works through
the Chapter 11 reorganization process. The Chapter 11 process will
allow the company the opportunity to restructure its debt and
emerge under new ownership on a more financially solid foundation.

"A Chapter 11 filing is an unfortunate action," said company
officials, "but it is necessary to restructure our debt and
recapitalize the company to continue to serve professional long-
haul drivers and trucking fleets across the country. We expect
operations will continue as we go through this process and we
expect to end up financially stronger than ever."

IdleAire has 131 locations in 34 states. Last year, nearly 200,000
individual long-haul drivers made 1.5 million visits to IdleAire
sites, conserving over 15 million gallons of fuel and eliminating
over 360 million pounds of diesel emissions, mostly carbon
dioxide.

IdleAire Advanced Travel Center Electrification(R) (ATE) provides
in-cab heating and air conditioning, electrical outlets and a
range of communications and entertainment options to long-haul
drivers at travel centers around the nation.

                          About IdleAire

Knoxville, Tennessee-based IdleAire Technologies Corp. --
http://www.idleaire.com/-- is a privately held corporation   
founded in June 2000.  It manufactures and services an advanced
travel center electrification system providing heating,
ventilation & air conditioning, Internet and other services to
truck drivers parked at rest stops.  The company delivers its
services to long-haul drivers through its patented Advanced Travel
Center Electrification(R) system, or ATE system, comprised of an
in-cab service module connected to an external heating,
ventilation and air conditioning unit, or HVAC unit, mounted on a
truss structure above parking spaces.  It employs about 1,200
people.

The company filed chapter 11 petition on May 12, 2008 (Bankr. D.
Del. Case No. 08-10960).  Judge Kevin Gross presides over the
case.  Elihu Ezekiel Allinson, III, Esq., William A. Hazeltine,
Esq., and William David Sullivan, Esq., at Sullivan Hazeltine
Allinson, LLC represent the Debtor in its restructuring efforts.  
As of Dec. 31, 2007, the Debtor had total assets of $210,879,000
and total debts of $303,616,000.


INMAN SQUARE: Moody's Junks Ratings on Four Note Classes
--------------------------------------------------------
Moody's Investors Service has downgraded and placed on review for
possible further downgrade the ratings on these notes issued by
Inman Square Funding II, Ltd.

Class Description: Class I Senior Secured Floating Rate Notes

  -- Prior Rating: Aaa
  -- Current Rating: Baa1, on review for possible downgrade

Class Description: Class II Senior Secured Floating Rate Notes

  -- Prior Rating: Aa2
  -- Current Rating: Ba3, on review for possible downgrade

Class Description: Class III Mezzanine Secured Fixed Rate Notes

  -- Prior Rating: A2
  -- Current Rating: Caa2, on review for possible downgrade

Class Description: Class III Mezzanine Secured Floating Rate Notes

  -- Prior Rating: A2
  -- Current Rating: Caa2, on review for possible downgrade

Additionally, Moody's downgraded these notes:

Class Description: Class IV Mezanine Secured Floating Rate Notes

  -- Prior Rating: Baa2
  -- Current Rating: C

Class Description: Class V Mezzanine Secured Floating Rate Notes

  -- Prior Rating: Ba1
  -- Current Rating: C

According to Moody's, the rating actions reflect increased
deterioration in the credit quality of the underlying portfolio.


JACOBS ENTERTAINMENT: S&P Revises Outlook to Negative From Stable
-----------------------------------------------------------------
Standard & Poor's Ratings Services revised its outlook on Jacobs
Entertainment Inc. to negative from stable.  Ratings on the
company, including the 'B' corporate credit rating, were affirmed.
     
"The outlook revision reflects weak operating results in the first
quarter and an expectation that negative trends will continue in
the near term, leading to an increase in leverage and credit
measures that are no longer in line with the current rating,"
explained Standard & Poor's credit analyst Ariel Silverberg.  
"Given the company's EBITDA concentration in its Colorado
properties and recent market trends (the Black Hawk/Central City
market was down 9.5% in the first quarter of 2008), we expect
EBITDA to continue to decline at a rate at least in the low- to
mid-single digits, resulting in leverage rising to the mid- to
high-6x area."
     
The rating on Jacobs reflects the company's high debt levels,
active growth strategy, and second-tier casinos.  The company's
gaming operations, which include casinos, truck plazas, off-track
wagering facilities, and a racetrack, are organized into four
regions (Colorado, Nevada, Louisiana, and Virginia) and are
categorized as: The Lodge Casino and the Gilpin Casino, both
located in Black Hawk, Colorado; Gold Dust West Reno, Gold Dust
West Carson City, and Gold Dust West Elko, located in Nevada; 18
truck plaza gaming facilities in Louisiana (plus a revenue share
agreement related to an additional truck plaza); and a horse
racing track and nine satellite wagering facilities, located in
Virginia.  The majority of Jacob's revenue and EBITDA stem from
the Colorado casinos and truck plaza operations.
     
Jacobs' credit measures are relatively weak for the rating, and
expected continued declines in operating trends will likely cause
further deterioration in credit measures.  At March 31, 2008,
adjusted debt to EBITDA was 6.1x.


JUPITER HIGH-GRADE: Moody's Junks Rating on $1.29BB Senior Notes
----------------------------------------------------------------
Moody's Investors Service has downgraded the ratings of four
classes of notes issued by Jupiter High-Grade CDO V, Ltd., and
left on review for possible further downgrade the rating of one of
these classes of notes as:

Class Description: $1,290,000,000 Class A-1 Senior Secured
Floating Rate Notes Due March 2052

  -- Prior Rating: A1, on review for possible downgrade
  -- Current Rating: Caa2, on review for possible downgrade

Class Description: $105,500,000 Class A-2 Senior Secured Floating
Rate Notes Due March 2052

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

Class Description: $60,000,000 Class B Senior Secured Floating
Rate Notes Due March 2052

  -- Prior Rating: Caa1, on review for possible downgrade
  -- Current Rating: Ca

4) $20,000,000 Class C Secured Floating Rate Deferrable Notes Due
March 2052

  -- Prior Rating: Ca
  -- Current Rating: C

Jupiter High-Grade CDO V, Ltd. is a collateralized debt obligation
backed primarily by a portfolio of structured finance securities.  
On Nov. 2, 2007 the transaction experienced an event of default
caused by a failure of the Class A Overcollateralization Ratio to
be greater than or equal to the required amount pursuant Section
5.01(i) of the Indenture dated March 28, 2007.  That event of
default is continuing.

The rating actions taken today reflect continuing deterioration in
the credit quality of the underlying portfolio and the increased
expected loss associated with the transaction.  Losses are
attributed to diminished credit quality on the underlying
portfolio.

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 and the Notes.  
The severity of losses may depend on the timing and choice of
remedy to be pursued following the default event.  Because of this
uncertainty, the rating of the Class A-1 Notes issued by Jupiter
High-Grade CDO V Ltd. is on review for possible further action.


KITTY HAWK: Plan Confirmation Hearing Scheduled for June 24
-----------------------------------------------------------

The Hon. Russell Nelms of the United States Bankruptcy Court for
the Northern District of Texas will convene a hearing on June 24,
2008, at 9:30 a.m., to consider confirmation of the Amended Joint
Chapter 11 Plan of Liquidation dated May 14, 2008, of Kitty Hawk
Inc. and its debtor-affiliates.  Objections, if any, are due June
23, 2008.

A full-text copy of the Amended Joint Chapter 11 Plan of
Liquidation is available for free at:

             http://ResearchArchives.com/t/s?2c1e

                       About Kitty Hawk

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

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


KITTY HAWK: Judge Nelms Approves Disclosure Statement
-----------------------------------------------------
The Hon. Russell Nelms of the United States Bankruptcy Court
for the Northern District of Texas, Forth Worth Division, approved
the adequacy of the Amended Disclosure Statement dated May 14,
2008, describing the Amended Joint Chapter 11 Plan of Liquidation
filed by Kitty Hawk Inc. and its debtor-affiliates.

                      Overview of the Plan

The Plan contemplates the liquidation of the Debtors' remaining
assets and distribution of the proceeds to all valid claim
holders, according to the Disclosure Statement.  All distributions
will be made by the disbursing agent.

As of March 18, 2008, the Debtors recorded approximately
$55,122,451 in claims, consisting of $1,674,692 in secured claims,
$5,794,921 in priority claims and a $47,652,838 in general
unsecured claims.  At least 593 claims have been filed against the
Debtors as of May 1, 2008.

On April 28, 2008, the Debtors reached an agreement with Air Line
Pilots Association (ALPA) that provides, on a net basis, for the
payment of $870,000 in the aggregate to ALPA, which represent a
recovery of approximately 6.9% of all claims asserted by ALPA.

The Debtors have yielded at least $5.96 million for the sale of
various equipment an property.

                Treatment of Claims and Interests

                   Type of                         Estimated
    Class          Claims             Treatment    Recovery
    -----          ------             ---------    ---------
    unclassified   administrative                    100%
                   claims

      1            priority non-tax   unimpaired     100%
                   claims

      2            secured claims     unimpaired     100%

      3            ALPA claims        impaired       6.9%

      4            general unsecured  impaired       3.3%-10.3%
                   claims

      5            intercompany       impaired       0%
                   claims

      6            equity interest    impaired       0%
                   in the Kitty Hawk
                   Inc.

      7            equity interest    impaired       0%
                   in the subsidiary
                   Debtors

A full-text copy of the Amended Disclosure Statement is available
for free at:

             http://ResearchArchives.com/t/s?2c1d

A full-text copy of the Amended Joint Chapter 11 Plan of
Liquidation is available for free at:

             http://ResearchArchives.com/t/s?2c1e

                       About Kitty Hawk

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

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


KLEROS PREFERRED: Poor Credit Quality Cues Moody's Rating Cuts
--------------------------------------------------------------
Moody's Investors Service downgraded and placed on review for
possible further downgrade the ratings on these notes issued by
Kleros Preferred Funding II, Ltd.:

Class Description: $250,000 Class A-1V First Priority Senior
Secured Voting Floating Rate Notes Due December 2042

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

Class Description: $869,750,000 Class A-1NV First Priority Senior
Secured Non-Voting Floating Rate Notes Due December 2042

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

Class Description: $60,000,000 Class A-2 Second Priority Senior
Secured Floating Rate Notes Due December 2042

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

Class Description: $34,000,000 Class B Third Priority Senior
Secured Floating Rate Notes Due December 2042

  -- Prior Rating: Aa2
  -- Current Rating: Ba2, on review for possible downgrade

Class Description: $8,000,000 Class C Fourth Priority Senior
Secured Floating Rate Notes Due December 2042

  -- Prior Rating: Aa3
  -- Current Rating: B1, on review for possible downgrade

Additionally, Moody's downgraded these notes:

Class Description: $9,650,000 Class D Fifth Priority Mezzanine
Secured Deferrable Floating Rate Notes Due December 2042

  -- Prior Rating: A2, on review for possible downgrade
  -- Current Rating: Ca

Class Description: $11,000,000 Class E Sixth Priority Mezzanine
Secured Deferrable Floating Rate Notes Due December 2042

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

According to Moody's, the rating actions reflect increased
deterioration in the credit quality of the structured finance
securities.


KRONOS ADVANCED: Posts $2.3MM Loss for 9 Months Ended March 31
--------------------------------------------------------------
Kronos Advanced Technologies, Inc. disclosed financial results and
provided a business update for the nine months ended March 31.

                         Financial Results

Kronos recorded a net loss for each of the nine months ended March
31, 2008 and March 31, 2007 of $2,339,000 and $2,501,000,
respectively. The decrease in the net loss for the nine months
ended March 31, 2008 compared with the comparable period of 2007
was principally the result of $3,134,000 increase in gross profit
to $3,197,000, partially offset by a $1,696,000 in accretion of
note discount, a $1,039,000 increase in operating costs to
$3,341,000, and a $237,000 increase in interest expense to
$499,000.

Revenues for the nine months ended March 31, 2008 were $3,598,000
compared to $156,000 for the comparable period of 2007. Revenues
for the quarter ended March 31, 2008 consisted of revenues from
the company's agreements with Tessera, a national retailer, a
global consumer products company and its Russian medical products
partner. Selling, General and Administrative expenses for the
quarter ended March 31, 2008 increased $1,039,000 from the
corresponding period of 2007 to $3,341,000.

The increase was principally the result of a $614,000 increase in
compensation and benefits, primarily as a result of an increase in
the expense of amortizing stock options that vested during the
2008 period, and a $288,000 increase in professional services as a
result of a new consulting arrangement and legal expenses.  
Interest expense for the quarter ended March 31, 2008 was $499,000
compared with $262,000 for the corresponding period of the prior
year. The increase in interest expense was principally the
interest on promissory notes payable to AirWorks, Hilltop, Sands
and Critical Capital.

Kronos' total assets at March 31, 2008 were $5,060,000 compared
with $2,111,000 at June 30, 2007. Total assets at March 31, 2008
and June 30, 2007 were comprised primarily of $3,579,000 and
$364,000, respectively, of cash and $1,450,000 and $1,723,000,
respectively, of patents/intellectual property. The Company had a
working capital surplus of $927,000 at March 31, 2008 and a
working capital deficit of $1,208,000 at June 30, 2007.

Kronos historically has had working capital deficits.  The Report
of Independent Registered Public Accounting Firm for the year
ended June 30, 2007, includes an explanatory paragraph to their
audit opinion stating that our recurring losses from operations
and working capital deficiency raise doubt about the company's
ability to continue as a going concern.  Management has taken
these steps with respect to its operating and financial
requirements, which it believes are sufficient to provide the
Company with the ability to continue in existence:

   (1) Tessera

       In March 2008, Kronos executed an Intellectual Property
       Transfer and License Agreement with Tessera Technologies,
       Inc. for the transfer and license of certain intellectual
       property rights related to Kronos proprietary technologies
       to Tessera.  Kronos received $3.5 million from Tessera in
       exchange for the transfer of select Kronos patents
       covering micro-cooling applications and for an exclusive
       license to the Kronos technology for ionic micro-cooling
       of integrated circuit devices or discrete electrical
       components. Kronos retained the rights to use these
       patents for all applications outside of the field of
       micro-cooling. Tessera further has the right to acquire
       additional Kronos IP relating to micro-cooling
       applications for four quarterly payments of $0.5 million
       each beginning in July 1, 2008.

   (2) Washington Technology Center

       In June 2007, the Washington Technology Center awarded the
       Company, in conjunction with the University of Washington
       and Intel Corporation, continued funding for a research
       and development project based on a novel cooling system
       for microelectronics and computer chips. This Phase III
       award follows the Company's Phase 1 and Phase II awards in
       December 2005 and June 2006, respectively.

Funding may be available but Kronos has not determined if this
funding will be sufficient because the lenders, at their sole
discretion, control the timing of and whether the funding will
occur and Tessera has, at their sole discretion, the option to
acquire additional Kronos IP.

Subsequent to the end of the quarter, the Company repaid $859,000
plus all of the interest and fees ($59,487) owed on the Critical
Capital and Sands Brothers Note and made a partial principal
payment of $628,000 on the AirWorks and Hilltop Notes.

Net cash provided in operating activities for the period ending
March 31, 2008 was $1,011,000 compared with $1,560,000 net cash
used in operating activities in the comparable period in 2007.

                         Business Update

Micro-Cooling License: During the quarter ended March 31, 2008,
Kronos executed the sale and licensing of certain intellectual
property (IP) rights related to Kronos proprietary technologies to
Tessera Technologies, Inc., a leading provider of miniaturization
technologies for the electronics industry. Kronos received a one-
time $3.5 million payment from Tessera in exchange for the
transfer of select Kronos patents covering micro-cooling
applications and an exclusive license to the Kronos technology for
ionic micro-cooling of integrated circuit devices or discrete
electrical components. Kronos retains the rights to use these
patents for applications outside of the field of micro-cooling.
Tessera has the further right to acquire additional Kronos IP
relating to micro-cooling applications, and the two companies have
the option to continue to jointly develop new technologies in this
field.

Consumer Standalone Air Purification Products: During the nine
months of fiscal 2008, Kronos executed a Letter of Intent for the
development, manufacture and sale of air purification devices,
based upon Kronos' proprietary air movement and purification
technology, with a leading national retailer. Under the terms of
the Letter of Intent, the retailer has paid Kronos a portion of
the development cost toward the new products and will contribute
resources to assist in the product development process.  

The intent of the parties is for Kronos to lead and manage all
development, production and manufacturing activities for the
Kronos air purifier and for the retailer to actively market the
Kronos air purifier through their distribution channels. In
December 2007, Kronos completed the design and developed an Alpha
Prototype for the customer. In January 2008, the parties initiated
negotiations of a definitive Product Development and Purchase
Agreement. In February 2008, the retailer filed for bankruptcy,
which could negatively impact the Company's ability to finalize a
definitive agreement and receive additional funds from the
retailer. During the nine months ended March 31, 2008, Kronos
received $250,000 in product development fees.

Consumer Kitchen Range Hood Products: In addition, during the nine
months of 2008, Kronos continued its development of a silent
kitchen range hood application based on its proprietary
technology. In October 2007, under the terms of a development
agreement, Kronos shipped additional range hood prototypes to a
global consumer products customer for testing and evaluation.
During the nine months ended March 31, 2008, Kronos earned
$34,000 in product development fees.

Medical Air Purification Products: During the first nine months of
2008, Kronos earned $45,000 in revenue from licensing fees from
its license agreement with EOL, Kronos' medical partner for
manufacturing and distributing Kronos air purifiers in Russia and
other Commonwealth of Independent States.

Details of the Company's results can be found in its quarterly
report on Form 10-QSB filed with the SEC on May 15, 2008, at

           http://researcharchives.com/t/s?2c19

            or at http://www.kronosati.com/

                      About Kronos Advanced

Located in Belmont, Mass. Kronos Advanced Technologies Inc. (OTC
Bulletin Board: KNOS -- http://www.kronosati.com/-- through its  
wholly owned subsidiary, Kronos Air Technologies Inc., has
developed a new, proprietary air movement and purification system
that utilizes high voltage electronics and electrodes to silently
move and clean air without any moving parts.  Kronos is
commercializing its technology for standalone and embedded
products across multiple residential, commercial, industrial and
military markets.  The company's business strategy includes a
combination of building internal capabilities, establishing
strategic alliances and structuring licensing arrangements.


LA PALOMA: S&P Puts Ratings Under Neg. Watch After Merger Notice
----------------------------------------------------------------
Standard & Poor's Ratings Services placed its ratings on La Paloma
Generating Co. LLC, including the 'B+' on the senior secured first
lien, and 'CCC+' on the senior secured second lien, on CreditWatch
with negative implications.
     
"The CreditWatch listing follows the merger announcement by La
Paloma's majority owner, Complete Energy Holdings, LLC, with GSC
Acquisition Company," said Standard & Poor's credit analyst
Terrence Marshall.  "The proposed deal is expected to close late
in the third quarter of 2008, and is subject to GSC acquisition
Company's shareholder and regulatory approval."  
     
La Paloma's immediate parent is La Paloma Acquisition Co, LLC,
which is jointly owned by CEH/La Paloma Holding Company, LLC (60%)
and third-party investors (40%).
     
Following the transaction, there is the possibility that the
third-party investors will exercise tag-along rights and that
Acquisition Co will be rolled into CEH/La Paloma Holding Company,
LLC.  In such a scenario, Complete Energy would become the sole
parent company of La Paloma, and the independent director at
Acquisition Co could be removed.  This situation could potentially
weaken the structure and would constrain the rating at La Paloma
to that of Complete Energy.
     
Standard & Poor's will consider the CreditWatch resolved following
the successful close of the transaction and will determine whether
the structure has remained intact or if Complete Energy's implied
rating is not a constraint to that of La Paloma.  Alternatively,
the CreditWatch could be resolved if the transaction does not move
forward.


LAM RESEARCH: S&P Lifts Corporate Credit Rating to BB from BB-
--------------------------------------------------------------
Standard & Poor's Ratings Services raised its corporate credit
rating on Fremont, California-based Lam Research Corp. to 'BB'
from 'BB-'.  At the same time, S&P removed the rating from
CreditWatch, where it had been placed with positive implications
on April 11, 2008.  The outlook is stable.
     
The rating action follows Lam's strong performance during the
upside of the most recent semiconductor cycle; its more variable
cost structure, which should enable it to perform better in the
current downturn than it has in prior cycles; and its moderate
leverage.
     
"The rating on Lam reflects the company's narrow business focus
and high customer and product concentration in the volatile
semiconductor capital equipment industry," said Standard & Poor's
credit analyst Joseph Spence.  "This is offset partially by the
company's leadership position in its main niche, good liquidity,
and low debt leverage."
     
Lam is a global developer, manufacturer, and marketer of wafer
etch, patterning, and cleaning tools used to manufacture memory,
logic, and microelectromechanical systems.


LENNAR CORP: Weak Profitability Cues S&P to Chip Rating to BB
-------------------------------------------------------------
Standard & Poor's Ratings Services lowered its corporate credit
and senior unsecured debt ratings on Lennar Corp. to 'BB' from
'BB+'.  The outlook remains negative.  This downgrade affects
approximately $2.2 billion of senior unsecured notes.
      
"The downgrade reflects Lennar's very weak profitability so far in
this housing downturn, along with our expectation that the company
will face ongoing earnings pressure due to worsening operating
conditions, particularly in its important California and Florida
markets," said Standard & Poor's credit analyst James Fielding.  
"Lower home prices and a slower sales pace in many communities
have contributed to very high impairments and other noncash
charges, which have materially reduced shareholders' equity."
     
While Lennar's debt-to-capital ratios have risen, they remain in
line with those of its peers when adjusted to reflect the
company's considerable exposure to off-balance-sheet joint
ventures.  Additionally, the company has successfully converted
inventory to cash, and its currently very solid liquidity position
remains a primary support to the current ratings.
     
The negative outlook assumes that operating conditions in many of
Lennar's key housing markets will continue to deteriorate and
acknowledges limited clarity with regard to the timing of a
cyclical trough.  Lennar has maintained financial flexibility
through the downturn, and we would revise the outlook to stable if
the company can preserve solid cash balances and demonstrate the
ability to operate profitably at sharply lower production
levels.  Conversely, S&P would lower the rating if the company's
current liquidity position were to erode as a consequence of
deteriorating market conditions or substantial off-balance-sheet
capital calls.


LEXINGTON CAPITAL: Moody's Chips Ba2 Ratings on Two Classes to Ca
-----------------------------------------------------------------
Moody's Investors Service has downgraded and placed on review for
possible further downgrade the ratings on these notes issued by
Lexington Capital Funding III Ltd.

Class Description: $480,000,000 Class A-1 First Priority Senior
Floating Rate Notes Due April 2047

  -- Prior Rating: Baa1, on review for possible downgrade
  -- Current Rating: Caa1, on review for possible downgrade

Additionally, Moody's downgraded these notes:

Class Description: $240,000,000 Class A-2 Second Priority Senior
Floating Rate Notes Due April 2047

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

Class Description: $160,500,000 Class A-3 Third Priority Senior
Floating Rate Notes Due April 2047

  -- Prior Rating: B2, on review for possible downgrade
  -- Current Rating: Ca

Class Description: $70,725,000 Class B Fourth Priority Senior
Floating Rate Notes Due April 2047

  -- Prior Rating: Caa1, on review for possible downgrade
  -- Current Rating: Ca

Class Description: $50,200,000 Class C Fifth Priority Senior
Floating Rate Notes Due April 2047

  -- Prior Rating: Caa2, on review for possible downgrade
  -- Current Rating: Ca

According to Moody's, the rating actions reflect increased
deterioration in the credit quality of the underlying portfolio.


LIBERTAS PREFERRED: Moody's Trims Ratings on Seven Classes to Ca
----------------------------------------------------------------
Moody's Investors Service has downgraded and left on review for
possible downgrade the ratings on these notes issued by Libertas
Preferred Funding IV, Ltd.:

Class Description: $200,000,000 Class A-1 First Priority Senior
Secured Floating Rate Notes Due 2047

  -- Prior Rating: Baa1, on review for possible downgrade
  -- Current Rating: B3, on review for possible downgrade

Additionally, Moody's downgraded these notes:

Class Description: $100,000,000 Class A-2 Second Priority Senior
Secured Floating Rate Notes Due 2047

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

Class Description: $50,000,000 Class A-3 Third Priority Senior
Secured Floating Rate Notes Due 2047

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

Class Description: $27,500,000 Class A-4 Fourth Priority Senior
Secured Floating Rate Notes Due 2047

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

Class Description: $34,000,000 Class B Fifth Priority Senior
Secured Floating Rate Notes Due 2047

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

Class Description: $33,500,000 Class C Sixth Priority Mezzanine
Secured Deferrable Floating Rate Notes Due 2047

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

Class Description: $22,500,000 Class D Seventh Priority Mezzanine
Secured Deferrable Floating Rate Notes Due 2047

  -- Prior Rating: Caa1, on review for possible downgrade
  -- Current Rating: Ca

Class Description: $13,500,000 Class E Eighth Priority Mezzanine
Secured Deferrable Floating Rate Notes Due 2047

  -- Prior Rating: Caa2, on review for possible downgrade
  -- Current Rating: Ca

According to Moody's, the rating actions reflect increased
deterioration in the credit quality of the structured finance
securities.


LIBERTAS PREFERRED: Moody's Pares Ratings on Two Classes to Caa2
----------------------------------------------------------------
Moody's Investors Service has downgraded and placed on review for
possible further downgrade the ratings on these notes issued by
Libertas Preferred Funding II, Ltd.

Class Description: $6,000,000 Class X Senior Secured Floating Rate
Notes Due 2012

  -- Prior Rating: Aa3, on review for possible downgrade
  -- Current Rating: Caa2, on review for possible downgrade

Class Description: $325,000,000 Class A-1 Senior Secured Floating
Rate Notes Due 2047

  -- Prior Rating: Baa3, on review for possible downgrade
  -- Current Rating: Caa2, on review for possible downgrade

Additionally, Moody's downgraded these notes:

Class Description: $73,000,000 Class A-2 Senior Secured Floating
Rate Notes Due 2047

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

Class Description: $23,000,000 Class B Senior Secured Floating
Rate Notes Due 2047

  -- Prior Rating: B2, on review for possible downgrade
  -- Current Rating: Ca

Class Description: $29,500,000 Class C Mezzanine Secured Floating
Rate Notes Due 2047

  -- Prior Rating: Caa2, on review for possible downgrade
  -- Current Rating: Ca

Class Description: $13,500,000 Class D Mezzanine Secured Floating
Rate Notes Due 2047

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

According to Moody's, the rating actions reflect increased
deterioration in the credit quality of the structured finance
securities.


LONGPORT FUNDING: Moody's Cuts $13MM Notes Rating to B2 from Baa2
-----------------------------------------------------------------
Moody's Investors Service downgraded and left on review for
possible downgrade the ratings on these notes issued by Longport
Funding II, Ltd.:

Class Description: $35,000,000 Class A1J Senior Secured Floating
Rate Notes due 2040

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

Class Description: $30,000,000 Class A2 Senior Secured Floating
Rate Notes due 2040

  -- Prior Rating: Aa2
  -- Current Rating: A1, on review for possible downgrade

Class Description: $13,000,000 Class A3 Secured Deferrable
Interest Floating Rate Notes due 2040

  -- Prior Rating: A2
  -- Current Rating: Baa3, on review for possible downgrade

Class Description: $14,000,000 Class B Secured Deferrable Interest
Floating Rate Notes due 2040

  -- Prior Rating: Baa2
  -- Current Rating: B2, on review for possible downgrade

According to Moody's, the rating actions reflect increased
deterioration in the credit quality of the underlying portfolio.


LOUISIANA RIVERBOAT: Files Schedules of Assets and Liabilities
--------------------------------------------------------------
Louisiana Riverboat Gaming Partnership and its affiliates
delivered to the United States Bankruptcy Court for the Western
District of Louisiana their schedules of assets and liabilities
disclosing:

   Name of Schedule                   Assets      Liabilities
   ----------------                -----------    -----------
   A. Real Property                         $0
   B. Personal Property            250,357,475
   C. Property Claimed
      as Exempt
   D. Creditors Holding                          $215,617,932
      Secured Claims
   E. Creditors Holding                                   498
      Unsecured Priority
      Claims
   F. Creditors Holding                             4,932,696
      Unsecured Nonpriority
      Claims
                                   -----------    -----------
      TOTAL                       $250,357,475   $220,551,127

Headquartered in Bossier City, Louisiana, Louisiana Riverboat
Gaming Partnership, which does business as Diamond Jacks Casino &
Resort, and its debtor-affiliates -- http://www.islecorp.com/--   
operate casinos and hotels.  The company and five of its
affiliates filed for Chapter 11 protection on March 11, 2008
(Bankr. W.D. La. Lead Case No.08-10824).  Tristan E. Manthey, Esq.
and William H. Patrick, III, Esq., at Heller Draper Hayden Patrick
and Horn, represent the Debtors.


MONTROSE HARBOR: Moody's Chips Ratings on Five Note Classes to 'C'
------------------------------------------------------------------
Moody's Investors Service downgraded the ratings of six classes of
notes issued by Montrose Harbor CDO I, Ltd., and left on review
for possible further downgrade rating of one of these classes of
notes as:

Class Description: $342,500,000 Class A-1 First Priority Senior
Secured Floating Rate Notes Due 2051

  -- Prior Rating: A1, on review for possible downgrade
  -- Current Rating: B3, on review for possible downgrade

Class Description: $52,500,000 Class A-2 Second Priority Senior
Secured Floating Rate Notes Due 2051

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

Class Description: $35,000,000 Class B-1 Third Priority Secured
Floating Rate Notes Due 2051

  -- Prior Rating: Caa1, on review for possible downgrade
  -- Current Rating: C

Class Description: $13,750,000 Class B-2 Fourth Priority Secured
Floating Rate Notes Due 2051

  -- Prior Rating: Ca
  -- Current Rating: C

Class Description: $14,500,000 Class C Fifth Priority Mezzanine
Deferrable Secured Floating Rate Notes Due 2051

  -- Prior Rating: Ca
  -- Current Rating: C

Class Description: $21,250,000 Class D Sixth Priority Mezzanine
Deferrable Secured Floating Rate Notes Due 2051

  -- Prior Rating: Ca
  -- Current Rating: C

Montrose Harbor CDO I, Ltd. is a collateralized debt obligation
backed primarily by a portfolio of structured finance securities.  
On Nov. 29, 2007 the transaction experienced an event of default
caused by a failure of the Net Outstanding Portfolio Collateral
Balance to be greater than or equal to the required amount set
forth in Section 5.1(i) of the Indenture dated July 31, 2006.  
That event of default is continuing.  Also, Moody's has received
notice from the Trustee that it has been directed by a majority of
the controlling class to declare the principal of and accrued and
unpaid interest on the Notes to be immediately due and payable.

The rating actions taken today reflect continuing deterioration in
the credit quality of the underlying portfolio and the increased
expected loss associated with the transaction.  Losses are
attributed to diminished credit quality on the underlying
portfolio.

As provided in Article V of the Indenture during the occurrence
and continuance of an Event of Default, the Controlling Class may
be entitled to direct the Trustee to take particular actions with
respect to the Collateral.  The severity of losses may depend on
the timing and choice of remedy to be pursued by the Controlling
Class.  Because of this uncertainty, the rating of Class A-1 Notes
issued by Montrose Harbor CDO I, Ltd. is on review for possible
further action.


MRS. FIELDS: March 29 Balance Sheet Upside-Down by $100 Million
---------------------------------------------------------------
Mrs. Fields Famous Brands LLC's consolidated balance sheet at
March 29, 2008, showed $147.2 million in total assets and
$247.2 million in total liabilities, resulting in a $100.0 million
total member's deficit.

The company reported net income of $6.1 million on total revenues
of $15.1 million for the first quarter ended March 29, 2008,
compared with a net loss of $2.7 million on total revenues of
$13.8 million in the same period ended March 31, 2007.

Results for the first quarter of 2008 includes income from
discontinued operations of $10.5 million, an increase of
$8.0 million from $2.5 million for the 13 weeks ended March 31,
2007.  This increase was primarily due to the gain related to the
sale of GAC of $10.4 million partially offset by a reduction in
contribution of the GAC/Pretzel reportable operating segment.

Loss from continuing operations was $2.4 million for the 13 weeks
ended March 29, 2008, an increase of $1.0 million or 74.0% from
$1.4 million for the 13 weeks ended March 31, 2007.  The increase
in loss from continuing operations was primarily due to:

  -- decreased contribution from the company's business units of
     $600,000;

  -- increased general and administrative expenses of $400,000;
     and

  -- gain on sale of land held for sale of $100,000 that occurred
     in 2007.

The foregoing increases in loss from continuing operations were
partially offset by increased amortization and other operating
expenses of $100,000.

                       Recent Developments

On Jan. 29, 2008, the company and its wholly-owned subsidiaries,
GACCF LLC and GAMAN LLC, formerly Great American Cookie Company
Franchising LLC and Great American Manufacturing LLC, completed
the sale of substantially all of the assets of GAC to a wholly-
owned subsidiary of NexCen Brands Inc. pursuant to an asset
purchase agreement for $93.6 million.  

The purchase price consisted of $89.0 million in cash and
1,099,290 shares of NexCen Brands common stock valued at $4.23 per
share.  The net cash proceeds from the sale of GAC is considered
restricted cash and is reflected as restricted cash in the
company's consolidated financial statements.  

                 Liquidity and Capital Resources

At March 29, 2008, the company had $3.2 million of cash on hand,
excluding $96.7 million of restricted cash.  

The company is highly leveraged.  At March 29, 2008, and Dec. 29,
2007, the company had $195.7 million of long-term debt.

The company disclosed in its Form 10-Q for the three months ended
March 29, 2008, that it may be unable to make its scheduled semi-
annual interest payments on its 9 percent Senior Secured Notes and
11 1/2 percent Senior Secured Notes.  The aggregate amount of each
semi-annual payment is $10.25 million and the next payment is due
in September 2008.

Management and its major shareholder have engaged Blackstone
Advisory Services to assist in reviewing the company's strategic
alternatives for raising additional equity capital and
restructuring its Senior Secured Notes.   

Full-text copies of the company's consolidated financial
statements for the quarter ended March 29, 2008, are available for
free at http://researcharchives.com/t/s?2c13

                     Going Concern Disclaimer

As reported in the Troubled Company Reporter on April 18, 2008,
KPMG LLP, in Salt Lake City, expressed substantial doubt about  
Mrs. Fields Famous Brands LLC's ability to continue as a going
concern after auditing the company's consolidated financial
statements for the year ended Dec. 29, 2007.  The auditing firm
pointed to the company's recurring net losses, negative cash flows
from, and net member's deficit at Dec. 29, 2007.

                        About Mrs. Fields  

Mrs. Fields Famous Brands LLC -- http://www.mrsfields.com/--   
is a well established franchisor in the premium snack food
industry, featuring Mrs. Fields(R) and TCBY(R) as the company's
core brands.  As of March 29, 2008, the company's franchise
systems operated through a network of 1,278 retail concept
locations throughout the United States and in 21 foreign
countries.


MSGI SECURITY: March 31 Balance Upside Down by $2 Million
---------------------------------------------------------
MSGI Security Solutions Inc. (OTCBB: MSGI) reported financial
results for the third fiscal quarter ended March 31, 2008.

Revenue for the three months ended March 31, 2008 was $4,025,600.
Revenue for the previous fiscal year quarter was inconsequential
at $100,000.

For the three months ended March 31, 2008, loss from operations
was $1,191,205 as compared to loss from operations of $1,079,589
for the same quarter in 2007. The $111,616 increase in loss of
operations was primarily related to increases in certain
infrastructure costs and equity based compensation charges, offset
in part by the gross profit earned on the sales in the current
quarter.

During the three month period ended March 31, 2008, the Company
recognized approximately $2.1 million in non-cash expenses
resulting from the accretion of certain debt discounts, the
amortization of deferred expenses related to the debt, SFAS 123(R)
expenses for stock options and stock compensation accruals and the
fair value of certain put options issued in the Series H
Convertible Preferred Stock issuance transaction.

The Company reported a net loss applicable to common stockholders
of $2,797,272 million for the third fiscal quarter. The current
quarter net loss compares to a net loss of $1,955,911 for the
third fiscal quarter 2007.

Cash and equivalents as of March 31, 2008 were $2.3 million
including $1.5 million in restricted cash. Accounts receivable
totaled $4.1 million at March 31, 2008.

As of March 31, 2008, the company had $10.1 million total assets
and $12.1 million total liabilities, resulting in a stockholders'
deficit of $2 million.

The Company's commitment to invest $2.5 million in Current
Technology Corporation (CRTCF:OB) appears on its balance sheet as
$1.5 million representing the amount paid as of March 31, 2008. As
of the date of May 15, 2008, the company's significant minority
interest in Current Technology is now worth $15 million based upon
its quoted market price.

To supplement MSGI's consolidated financial statements presented
in accordance with GAAP, MSGI is providing certain non-GAAP
measures of financial performance. These non-GAAP measures include
non-GAAP net loss and non-GAAP loss per share. MSGI's reference to
these non-GAAP measures should be considered in addition to
results prepared under current accounting standards, but are not a
substitute for, nor superior to, GAAP results. These non-GAAP
measures are included to enhance investors' overall understanding
of MSGI's current financial performance. Specifically, the Company
believes the non-GAAP measures provide useful information to
management and to investors by isolating certain expenses, gains
and losses that may not be indicative of its core operating
results and business outlook.

SELECT NON-GAAP RECONCILIATION  
For the Three Months Ended March 31,  

                                             2008          2007
                                             ----          ----
Net Loss                             ($2,797,272)  ($1,955,911)  
Adjustments:     
   Non-cash Stock-based expenses-Apro     326,619             -  
   Non-cash Stock-based compensation      123,203       140,208  
   Non-cash Depreciation & amortization   161,328        83,129  
   Non-cash expense for put options     1,150,000             -  
   Non-cash expense for shares issued     536,421             -  
   Non-cash interest expenses             109,038       576,792  
Total adjustments                      2,406,609       800,129  
Non-GAAP adjusted loss                 ($390,663)  ($1,155,782)  

Jeremy Barbera, Chairman and CEO commented, "Last month, MSGI
announced that it had executed a $40 million contract with a Korea
based technology partner to manufacture and supply the military
with proprietary touch screen systems. The initial $40 million
order is expected to be completed this year and is part of a five-
year contract. We are hopeful that the new line of military
products and services will increase in volume and scope with
successful reports of live use in the battlefield. This is our
second material multi-year contract, as we are currently executing
and making deliveries upon the requirements of last year's $15
million sub-contracting agreement with Apro Media Corp.

"Earlier this year MSGI announced an expansion of our mission
critical wireless product offerings by taking a significant $2.5
million minority investment in Current Technology Corporation
(OTCBB: CRTCF). Current Technology subsequently acquired a 51%
stake in Celevoke, Inc., developers of a proprietary GPS asset-
tracking platform hosting a variety of marquee clients including
General Electric, Travelers Group, CrimeStopper, News Corp.,
Tracell and many others. In recent weeks Current Technology has
themselves announced initiatives in Latin-American markets where
the use of GPS technology has become mandated by law, as well as
significant domestic client victories with the risk control unit
of Travelers Group, and the Federal Credit Union of 20th Century
Fox.

"As part of our strategic investment, Current Technology has
agreed to outsource 25% of its GPS asset-tracking business to MSGI
for a period of three years. Our investment of $2.5 million in
Current Technology is now worth $15 million as of [May 15, 2008].

"Our strategic objective is to utilize innovative, patented mobile
technology to provide protection and risk mitigation for valuable
assets, critical infrastructure and high-ranking government
executives. This network of wireless applications will eventually
expand to form an unprecedented global security platform, which we
call LSAD: Land-Sea-Air-Defense."

                       About MSGI Security
  
MSGI Security Solutions Inc. (Other OTC: MSGI) --
http://www.msgisecurity.com/-- provides of proprietary security    
products and services to commercial and governmental organizations
worldwide.  MSGI is developing a combination of innovative
emerging businesses that leverage information and technology with
a focus on encryption technologies for actionable surveillance and
intelligence monitoring.  The company is headquartered in New York
City where it serves the needs of counter-terrorism, public
safety, and law enforcement in the United States, Europe, the
Middle East and Asia.

As reported in the Troubled Company Reporter on Oct. 18, 2007,
Amper, Politziner & Mattia, P.C., in Edison, N.J., expressed
substantial doubt about MSGI Security Solutions Inc.'s ability to
continue as a going concern after auditing the company's
consolidated financial statements for the year ended June 30,
2007.  The auditing firm stated that the company has suffered
recurring losses and negative cash flows from operations.


NEPTUNE CDO: Moody's Lowers Ratings, to Undertake Review
--------------------------------------------------------
Moody's Investors Service has placed on review for possible
downgrade the ratings on these notes issued by Neptune CDO II,
Ltd.

Class Description: $198,000,000 Class A-1 Senior Secured Floating
Rate Notes Due 2045

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

Moody's also downgraded and left on review for possible further
downgrade the ratings on these notes:

Class Description: $52,000,000 Class A-2 Senior Secured Floating
Rate Notes Due 2045

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

Class Description: $18,000,000 Class B Senior Secured Floating
Rate Notes Due 2045

  -- Prior Rating: Aa2
  -- Current Rating: Ba2, on review for possible downgrade

Class Description: $6,000,000 Class C Secured Floating Rate
Deferrable Notes Due 2045

  -- Prior Rating: A2
  -- Current Rating: Caa2, on review for possible downgrade

Additionally, Moody's downgraded these notes:

Class Description: $12,000,000 Class D Secured Floating Rate
Deferrable Notes Due 2045

  -- Prior Rating: Baa2
  -- Current Rating: Ca

According to Moody's, the rating actions reflect increased
deterioration in the credit quality of the underlying portfolio.


NEPTUNE CDO: Moody's Cuts Rating on $7.5MM Class A-2L Notes to Ba2
------------------------------------------------------------------
Moody's Investors Service downgraded and placed on review for
possible further downgrade the ratings on these notes issued by
Neptune CDO 2004-1 Ltd.:

Class Description: $264,000,000 Class A-1LA Floating Rate Notes
Due January 2040

  -- Prior Rating: Aaa
  -- Current Rating: Aa1, on review for possible downgrade

Class Description: $51,000,000 Class A-1LB Floating Rate Notes Due
January 2040

  -- Prior Rating: Aaa
  -- Current Rating: Aa3, on review for possible downgrade

Class Description: $45,000,000 Class A-2L Floating Rate Notes Due
January 2040

  -- Prior Rating: Aa2
  -- Current Rating: Baa1, on review for possible downgrade

Class Description: $7,500,000 Class A-3L Floating Rate Notes Due
January 2040

  -- Prior Rating: A2
  -- Current Rating: Ba2, on review for possible downgrade

Class Description: $20,000,000 Class B-1L Floating Rate Notes Due
January 2040

  -- Prior Rating: Baa2
  -- Current Rating: Caa1, on review for possible downgrade

According to Moody's, the rating actions reflect increased
deterioration in the credit quality of the underlying portfolio.


NEPTUNE CDO: Moody's Lowers Ratings on Five Note Classes to Ca
--------------------------------------------------------------
Moody's Investors Service has downgraded the ratings of eight
classes of notes issued by Neptune CDO V, Ltd. as:

Class Description: $190,000,000 Class A-1LA-1 Floating Rate Notes
Due January 2045

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

Class Description: $35,000,000 Class A-1LA-2 Floating Rate Notes
Due January 2045

  -- Prior Rating: Caa1, on review for possible downgrade
  -- Current Rating: Ca

Class Description: $25,000,000 Class A-1LB Floating Rate Notes Due
January 2045

  -- Prior Rating: Caa2, on review for possible downgrade
  -- Current Rating: Ca

Class Description: $41,000,000 Class A-2L Floating Rate Notes Due
January 2045

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

Class Description: $9,000,000 Class A-4L Floating Rate Notes Due
January 2045

  -- Prior Rating: Ca
  -- Current Rating: C

Class Description: $10,000,000 Class A-5L Floating Rate Notes Due
January 2045

  -- Prior Rating: Ca
  -- Current Rating: C

Class Description: $10,000,000 Class B-1L Floating Rate Notes Due
January 2045

  -- Prior Rating: Ca
  -- Current Rating: C

Class Description: $10,000,000 Class X Floating Rate Notes Due
July 2014

  -- Prior Rating: A1, on review for possible downgrade
  -- Current Rating: Ca

Neptune CDO V, Ltd. is a collateralized debt obligation backed
primarily by a portfolio of structured finance securities.  On
Nov. 2, 2007, the transaction experienced an event of default
caused by a failure of the Senior Class A Overcollateralization
Ratio to exceed the required level set forth in Section 5.1(f) of
the Indenture dated June 7, 2007.  That event of default is
continuing.

The rating actions taken today reflect continuing deterioration in
the credit quality of the underlying portfolio and the increased
expected loss associated with the transaction.  Losses are
attributed to diminished credit quality on the underlying
portfolio.


NEPTUNE CDO: Moody's Lowers Rating on $270MM Notes to Ba3 from Aa1
------------------------------------------------------------------
Moody's Investors Service downgraded and placed on review for
possible further downgrade the ratings on these notes issued by
Neptune CDO III, Ltd.:

Class Description: $270,000,000 Class A-1 Floating Rate Senior
Secured Notes Due 2046

  -- Prior Rating: Aa1, on review for possible downgrade
  -- Current Rating: Ba3, on review for possible downgrade

Class Description: $42,000,000 Class A-2 Floating Rate Senior
Secured Notes Due 2046

  -- Prior Rating: A2, on review for possible downgrade
  -- Current Rating: Caa2, on review for possible downgrade

Class Description: $36,000,000 Class A-3 Floating Rate Senior
Secured Notes Due 2046

  -- Prior Rating: Baa2, on review for possible downgrade
  -- Current Rating: Caa3, on review for possible downgrade

Additionally, Moody's downgraded these notes:

Class Description: $14,000,000 Class B Floating Rate Subordinate
Secured Deferrable Notes Due 2046

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

Class Description: $19,000,000 Class C Floating Rate Junior
Subordinate Secured Deferrable Notes due 2046

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

According to Moody's, the rating actions reflect increased
deterioration in the credit quality of the underlying portfolio.


NETWOLVES CORP: Posts $60,000 Net Loss in 3rd Quarter Fiscal 2008
-----------------------------------------------------------------
NetWolves Corporation, a telecommunications and Internet managed
services provider, announced its financial and operating results
for the third quarter ended March 31st, 2008.

"Achieving net income from operations for our fiscal third quarter
reflects our commitment to turn the company around and gives us
momentum going into our confirmation hearing, which is scheduled
for June, 2008," said Scott Foote, Chief Executive Officer and
President.

The Company reported third quarter revenue of approximately
$4.0 million, which represents a decrease of $0.2 million or 6%
percent from the comparable quarter ended March 31st, 2007. The
Company reported a net loss of approximately $0.06 million
compared to a net loss of approximately $0.6 million during the
same period in the prior year. Net losses attributable to common
shareholders were approximately $0.3 million, or a net loss of
$0.01 per share, as compared to net losses attributable to common
shareholders of approximately $0.8 million or a net loss of $0.02
per share during the same period in the prior year.

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.

The Troubled Company Reporter reported on May 9, 2008, that 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.  A full-text copy of the Second Amended
Joint Disclosure Statement is available for free at
http://bankrupt.com/misc/Netwolves


NORANDA ALUMINUM: March 31 Balance Sheet Upside Down by $133.1MM
----------------------------------------------------------------
Noranda Aluminum Holding Corporation released its financial
results for the first quarter of 2008.

Highlights for the first quarter ended March 31, 2008, include:

   * Revenues of $300.3 million, operating income of $41.4
     million, net income of $17.2 million

   * Adjusted EBITDA of $84.7 million

   * Generated $78.6 million in Cash from Operating Activities
     for the quarter

   * Achieved the fourth consecutive quarter of record production
     at New Madrid smelter

   * Increased aluminum hedges to 50% of forecasted shipments
     through 2012

   * Appointed Layle K. (Kip) Smith as President and CEO of the
     Company

   * Filed an SEC Registration Statement on Form S-4 on
     January 31, 2008, as amended on May 9, 2008, related to an
     exchange offer (the "Exchange Offer") for up to $510,000
     aggregate principal amount of Senior Floating Rate Notes due
     2015 and up to $220,000 aggregate principal amount of Senior
     Floating Rate Notes due 2014 that are registered under the
     Securities Act of 1933, as amended, for an equal principal
     amount of its outstanding Senior Floating Rate Notes due
     2015 and Senior Floating Rate Notes due 2014

Highlights subsequent to the first quarter ended March 31, 2008,
include:

   * Appointed Kyle Lorentzen as Chief Operating Officer of the
     Company effective May 5, 2008

   * Filed a Registration Statement on Form S-1 relating to the
     initial public offering of shares of common stock by Noranda
     Aluminum Holding Corporation with the Securities and
     Exchange Commission on May 8, 2008

   * Launched the Exchange Offer on May 13, 2008

                      First Quarter Results

First quarter 2008 sales were $300.3 million compared to $344.6
million reported for the first quarter of 2007. Sales in the
company's upstream business were approximately 15% lower, at
$159.3 million, from the $186.4 million reported last year. This
decrease primarily was due to a 6.9% decrease in the average
Midwest Transaction aluminum price from $1.31 per pound to $1.22
per pound, as well as an 8.2% decrease in third party shipments.

The lower third party shipments in the upstream business resulted
from the decision to ship higher volumes of the company's sow
product to its downstream business during the quarter, reducing
the cost of purchases of aluminum from external suppliers. Sales
in the company's downstream business decreased from $158.2 million
for the three months ended March 31, 2007, to $141.0 million for
the same period in 2008, primarily as a result of a decrease in
the underlying Midwest Transaction price for aluminum and lower
shipments.

Operating income for the first quarter of 2008 was $41.4 million
compared to $60.7 million reported for the first quarter of 2007,
a decrease of $19.3 million. This decrease mainly was the result
of lower aluminum prices, higher natural gas costs, and lower
downstream shipments compared with the first quarter of 2007. Cost
of sales for the three months ended March 31, 2008, decreased
12.0% to $242.6 million from the $275.6 million reported for the
same period last year. This reduction was impacted primarily by
the lower cost of third party aluminum purchases for the
downstream business.

Increased depreciation, related to purchase accounting adjustments
resulting from the acquisition of the Company by affiliates of
Apollo Management, L.P. in May 2007, reduced operating income by
$5.0 million compared with the first quarter of 2007. Selling,
general and administrative expenses for the first quarter of 2008
were $16.3 million compared to $8.3 million reported for the same
period in 2007. The increase was a result of increased Sarbanes-
Oxley implementation activities, consulting, audit and other
administrative costs, including activities related to the filings
of the Registration Statements on Form S-4 and S-1.

Net income reported for the first quarter of 2008 was $17.2
million compared to the $29.8 million reported for the first
quarter in 2007. This decrease is the result of the net effect of
the items described above and increased interest expense,
partially offset by lower income taxes, and a gain on derivative
instruments and hedging activities. Interest expense increased
$21.1 million to $24.2 million for the three months ended
March 31, 2008, compared to $3.1 million for the same three months
in 2007.

The increase primarily was the result of the indebtedness incurred
as a result of the acquisition by affiliates of Apollo Management,
L.P. in May 2007. Income taxes decreased from $28.5 million for
the first quarter of 2007 to $8.7 million for the first quarter of
2008. The decrease in the provision for income taxes resulted in
an effective tax rate for continuing operations decreasing to
33.5% in the first quarter of 2008 from 48.9% in the first quarter
of 2007.

The previous year's higher first quarter effective tax rate
primarily was related to a permanent difference in income from the
cancellation of debt related to the divestiture of a subsidiary.
The Company reported a gain of $5.6 million in the three months
ended March 31, 2008, compared to a loss of $1.4 million in the
three months ended March 31, 2007, on derivative instruments and
hedging activities. This gain primarily was related to changes in
the fair value of a portion of the company's fixed-price aluminum
swaps, and its interest rate swaps.

Adjusted EBITDA totaled $84.7 million for the first quarter of
2008 compared to $92.5 million reported for the same period last
year. The reduction mainly was due to lower aluminum prices and
higher natural gas costs, partially offset by record smelter
production and lower power costs. Compared with the fourth quarter
of 2007, Adjusted EBITDA increased by approximately $22 million
mainly due to improved aluminum prices and higher smelter
production.

Net cash provided by operating activities totaled $78.6 million in
the three months ended March 31, 2008, compared to $43.3 million
in the three months ended March 31, 2007. Working capital
decreased by $20.3 million in the first quarter of 2008 versus a
$7.2 million decrease in the first quarter of 2007.

During the quarter, the Company entered into additional forward
aluminum swaps. Including the most recent hedges, the Company has
hedged approximately 50% of forecasted production through 2012 at
prices which are attractive compared with the Company's expected
cost of producing primary aluminum.

The Company's $250.0 million revolving credit facility remained
undrawn at March 31, 2008, with cash-on-hand of $148.2 million,
compared with $75.6 million at December 31, 2007. Total debt at
the end of the first quarter of 2008 was $1,151.7 million. The
Company's net debt to Adjusted EBITDA ratio at March 31, 2008, was
0.91x, 2.61x, and 3.33x at the Senior Secured Level, Senior Debt,
and the Holdco level (as defined in the credit documents and
indentures covering the note), respectively.

Kip Smith, the Company's President and CEO, stated, "I am pleased
to report that we continue to make significant progress related to
productivity and safety performance. Of specific note is the first
quarter production record at New Madrid, which represents the
fourth consecutive quarterly record for this smelter."

Effective May 5, 2008, Mr. Kyle Lorentzen, was named Chief
Operating Officer of the Company. Mr. Lorentzen most recently
served as Vice President of Corporate Development with Berry
Plastics Corporation (BPC). Prior to his tenure in that role, Kyle
served as Vice President of Strategic Development for Covalence
Specialty Materials, which merged with BPC under the common
control of Apollo Management, L.P.

Before working for Covalence, Mr. Lorentzen served as Vice
President of Finance for Hexion's Epoxy and Phenolics Division. He
came to Hexion from Borden Chemical, where he was Director of
Finance, when the two companies merged under the common control of
Apollo Management, L.P. to form Hexion. Other assignments include
various financial, strategic and business roles for Hampshire
Chemical and W.R. Grace. Mr. Lorentzen holds a BA in Economics
from Wake Forest University and an MBA from the University of
Massachusetts.

"I am delighted that Kyle has joined our Company. Kyle is an
experienced professional with a diverse background and he is a
significant addition to our management team," said Kip Smith,
President and CEO of Noranda.

                        Balance Sheet

As of March 31, 2008, the company had total assets of $1.7 billion
and total liabilities of $1.8 billion, resulting in total
shareholders' deficiency of $133.1 million.

                     About Noranda Aluminum

Noranda Aluminum Holding Corp. -- http://www.norandaaluminum.com/   
-- is a North American integrated producer of value-added primary
aluminum products as well as high quality rolled aluminum coils.  
The company has two businesses, the primary metals business, or
upstream business, which produces approximately 250,000 metric
tons of primary aluminum annually, and the rolling mills, or
downstream business, which is one of the largest foil producers in
North America and a major producer of light gauge sheet products.  
Noranda is a private company owned by affiliates of Apollo
Management LP.


ORAGENICS INC: Has Until October 27 to Comply with AMEX Criteria
----------------------------------------------------------------
Oragenics Inc. received notice from the American Stock Exchange  
advising the company that it does not meet certain of the listing
standards as set forth in part 10 of the AMEX Company Guide.  AMEX
granted an extension to the company until Oct. 27, 2008, to regain
compliance with Section 1003(a)(i).

The biopharmaceutical development company disclosed in its
Securities and Exchange Commission filings that it has been out of
compliance with certain AMEX listing requirements.  

In a letter to the company, AMEX stated that the company was not
in compliance with Section 1003(a)(ii) of the AMEX Company Guide
because the company had stockholders' equity of less than
$4 million, losses from continuing operations and net losses in
three of its four most recent fiscal years.

AMEX also noted that the company had received an unqualified audit
report for the year ended Dec. 31, 2007, that contained an
explanatory paragraph as to the company's ability to continue as a
going concern.

As a listed biopharmaceutical development company, its revenues
are limited until its products are commercialized, a time-
consuming process that requires extensive research and development
expenditures as well as selected clinical trials that are mandated
by various regulatory requirements both in the U.S. and around tha
world.

In various SEC filings, the company disclosed and continues to
make disclosures that it has submitted a plan of compliance, dated
May 24, 2007, to AMEX with respect to its noncompliance with
Section 1003(a)(i) of the AMEX Company Guide and such Plan was
subsequently approved by AMEX.

The company intends to submit a supplement to this plan to AMEX
within the 30 days permitted by AMEX that will outline Oragenics'
strategy to bring itself into compliance with Sections 1003(a)(i)
and (ii) by the October 27, 2008 deadline.

If the company's plan to regain compliance is accepted by the
AMEX, it is anticipated that the company will be able to continue
its listing for the remainder of the extension period, during
which time it will be subject to periodic review to determine
progress consistent with the plan.

"Management is taking all reasonable steps as expeditiously as
possible to commercialize our products," Rick Welch, chairman of
Oragenics, said.  "Furthermore, we are vigorously pursuing
financing arrangements to bolster the financial strength of our
company, so that can gain full compliance with AMEX regulations."

"With the recent appointment of our four new directors who bring a
very significant depth of biotechnology, pharmaceutical and
clinical experience to our company, we are confident that we will
be able to increase the visibility of our deep pipeline of
potential products, in order to accelerate the commercialization
of our products, each of which is targeted to very large market
opportunities,"  Mr. Welch continued.  "We believe that all of our
potential products are based on remarkable and extraordinary
science."

With the company's appointment of Stanley B. Stein as president
and CEO, Oragenics intends to leverage his extensive healthcare
background, which includes work in biotechnology, pharmaceuticals
and healthcare services.

Mr. Stein's investment banking experience spans over 25 years.  He
is guiding the company to take advantage of various strategic,
financial and business opportunities now available to it with the
goals of sustaining anticipated operations and maximizing
shareholder value.

                        About Oragenics Inc.

Headquartered in Alachua, Florida, Oragenics Inc. (AMEX: ONI) --
http://www.oragenics.com/-- dba ONI BioPharma Inc., operates as  
an early-stage biotechnology company in the United States.  It
focuses on developing technologies associated with oral health,
broad spectrum antibiotics, and other general health benefits.  
The company was founded in 1996.

                     Going Concern Disclaimer

As reported in the Troubled Company Reporter on April 3, 2008,
Kirkland Russ Murphy & Tapp, PA, expressed substantial doubt about
the Oragenics Inc.'s ability to continue as a going concern
after auditing the company's financial statements for the year
ended Dec. 31, 2007.  The auditing firm pointed to the company's
recurring operating losses, negative operating cash flows and
accumulated deficit.

The company's operating activities used cash of $531,881 for the
three months ended March 31, 2008.


ORCHID STRUCTURED: Moody's Chips A3 Rating on $15MM Notes to Ca
---------------------------------------------------------------
Moody's Investors Service has downgraded and left on review for
possible further downgrade the ratings on these notes issued by
Orchid Structured Finance CDO II, LTD:

Class Description: $204,000,000 Class A-1 Floating Rate Senior
Secured Notes Due 2043

  -- Prior Rating: Aaa
  -- Current Rating: Aa1, on review for possible downgrade

Class Description: $40,000,000 Class A-2 Floating Rate Senior
Secured Notes Due 2043

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

Class Description: $26,000,000 Class A-3 Floating Rate Senior
Secured Notes Due 2043

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

Additionally, Moody's downgraded these notes:

Class Description: $15,000,000 Class B Floating Rate Deferrable
Subordinated Secured Notes Due 2043

  -- Prior Rating: A3
  -- Current Rating: Ca

According to Moody's, the rating actions reflect increased
deterioration in the credit quality of the underlying portfolio.


ORIGEN FINANCIAL: Posts $25 Million Net Loss in 2008 First Quarter
------------------------------------------------------------------
Origen Financial Inc. posted a net loss of $25.0 million for the
first quarter ended March 31, 2008, compared with net income of
$1.7 million for the quarter ended March 31, 2007.  No dividend
was declared by Origen's Board of Directors for the first quarter.

                      Highlights for Quarter

Loan origination volume decreased 47.0% to $41.4 million versus a
year ago.

Loans processed for third parties totaled $29.8 million for the
quarter as compared to $22.8 million for the year ago quarter, an
increase of 31.0%.

Total revenue increased 16.0% to $29.9 million versus
$25.7 million for the prior year quarter.

Non-performing loans as a percent of average outstanding loan
principal balances increased to 0.6% at March 31, 2008, from 0.5%  
a year ago.

Origen's loan warehouse facility with Citigroup Global Markets
Realty Corporation was paid off with proceeds from the sale of
un-securitized loans.

                        Financial Summary

Interest income was $24.0 million for the first quarter 2008, an
increase of 15.0%, primarily due to an 18.0% increase over the
same period a year ago in average interest earning assets.

Non-interest income, excluding a loss on the sale of loans,
associated hedge costs and a lower of cost or market adjustment on
loans held for sale, increased 20.0% over the prior year's first
quarter to $5.9 million.

Interest expense for the first quarter 2008 increased by 28.0% to
$16.5 million from $12.9 million from last year's first quarter as
a result of increased borrowings relating to the funding of
securitized loans and borrowings to meet liquidity needs.

The provision for credit losses was $3.0 million for the first
quarter 2008 compared with $1.8 million for the same quarter 2007.
The increase was primarily the result of a 20.0% growth in the
loan portfolio.  Loan charge-offs for the 2008 quarter, at
$2.4 million, were $300,000 less than charge-offs for the year ago
quarter.

First quarter 2008 non-interest expenses of $9.3 million were
virtually unchanged from the year ago quarter, but included
approximately $700,000 of extraordinary legal and professional
fees.

A loss on the sale of un-securitized loans and the costs to
terminate related hedge positions reduced non-interest income by
$25.5 million, as un-securitized loans funded on our loan
warehouse facility were liquidated to pay off that facility.

                      Portfolio Performance

At March 31, 2008, loans more than 60 days delinquent were 1.0% of
the owned loan portfolio compared to 0.9% at Dec. 31, 2007.  The
increase was due solely to the sale of approximately
$176.0 million of performing loans during the first quarter 2008.
Ronald A. Klein, Origen's chief executive officer, stated, "As
previously disclosed, due to worsening conditions in the credit
markets and the lack of a profitable securitization exit we were
forced to sell our un-securitized loan portfolio at a substantial
loss and cease originating loans for our owned portfolio.  

"This sale does not reflect on the credit performance or long term
realizable value of Origen's loan portfolio as our credit
performance continues to be outstanding.  Our delinquent loan
dollars declined from year end 2007 to first quarter end 2008.  We
saw a further reduction in delinquency during April.  Absent the
loan sale we would have been profitable for the first quarter
2008."

Mr. Klein further stated, "Subsequent to quarter end we obtained a
new credit facility to pay off our supplemental advance facility
and announced an agreement to sell our loan servicing rights to
Green Tree Servicing LLC.  We will continue to manage our
$1.0 billion securitized loan portfolio and other assets to
preserve shareholder value, as part of a plan to be presented to
our shareholders at the 2008 annual meeting."

                Sale of Servicing Platform Assets
    
On April 30, 2008, the company entered into an agreement for the
sale of its servicing platform assets to Green Tree Servicing LLC,
a privately held financial services organization headquartered in
St. Paul, Minnesota, which services the nation's largest portfolio
of manufactured housing secured consumer loans and installment
contracts, and is a leading servicer of residential mortgage loans
and other consumer loan products.

The agreement provides for a purchase price for the acquired
assets primarily based on 2.04% of the unpaid principal balance of
the company's servicing portfolio that is transferred to Green
Tree, calculated as of the closing date.  As of March 31, 2008,
the unpaid principal balance of the company's entire servicing
portfolio was approximately $1.6 billion.  In addition, at the
closing Green Tree will pay the company 84.2% of the amount of
certain servicing advances the company has made but for which it
has not been reimbursed as of the closing.

Proceeds from the planned sale will be used to fully pay off the
$15.0 million loan obtained on Sept. 11, 2007, and partially pay
off the $46.0 million secured financing.  As part of the sale
transaction, Green Tree will assume the lease of the company's
Fort Worth, Texas, servicing facility.
     
Completion of the sale is conditioned on approval by the company's
stockholders, consents by third parties, including trustees of
securitization trusts and rating agencies, and customary closing
conditions for transactions of this type.  

                          Balance Sheet

At March 31, 2008, the company's consolidated balance sheet showed
$1.1 billion in total assets, $976.0 million in total liabilities,
and $109.4 million in total stockholders' equity.

Full-text copies of the company's consolidated financial
statements for the quarter ended March 31, 2008, are available for
free at http://researcharchives.com/t/s?2c18

                     Going Concern Disclaimer

As reported in the Troubled Company Reporter on March 28, 2008,
Grant Thornton LLP expressed substantial doubt about Origen
Financial Inc.'s ability to continue as a going concern after
auditing the company's consolidated financial statements for the
year ended Dec. 31, 2007., and 2006.  The auditing firm pointed to
the deteriorating credit and mortgage securitization markets and
the expiration of the supplemental advance facility on
June 13, 2008.

On April 8, 2008, the company completed a $46.0 million secured
financing transaction.  The proceeds from this transaction were
used to pay off the company's supplemental advance facility and
the facility was terminated on April 8, 2008.  

                      About Origen Financial

Based in Southfield, Mich., Origen Financial Inc. (Nasdaq: ORGN)
-- http://www.origenfinancial.com/-- is an internally managed and   
internally advised company that has elected to be taxed as a real
estate investment trust.  Origen has significant operations in
Ft. Worth, Texas.


PEBBLE CREEK: Moody's Puts Ba2 Rating on Review for Possible Cut
----------------------------------------------------------------
Moody's Investors Service placed on review for possible downgrade
the ratings on these notes issued by Pebble Creek LCDO 2007-3,
Ltd.:

Class Description: $65,500,000 Class B Contingent Funding Notes
Due 2014

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

Class Description: $12,000,000 Class C Floating Rate Notes Due
2014

  -- Prior Rating: A2
  -- Current Rating: A2, on review for possible downgrade

Class Description: $12,000,000 Class D Floating Rate Deferrable
Notes Due 2014

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

Class Description: $8,000,000 Class E Floating Rate Deferrable
Notes due 2014

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

According to Moody's, the rating actions are the result of the
placement under review for possible downgrade of the Lehman
Brothers ABS Enhanced LIBOR Fund's MR1 market risk rating.


PEBBLE CREEK: Moody's Puts $20.75MM Ba2 Notes Rating Under Review
-----------------------------------------------------------------
Moody's Investors Service placed on review for possible downgrade
the ratings on these notes issued by Pebble Creek LCDO 2007-2,
Ltd.:

Class Description: $124,750,000 Class B Contingent Funding Notes
Due 2014

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

Class Description: $20,500,000 Class C Floating Rate Notes Due
2014

  -- Prior Rating: A2
  -- Current Rating: A2, on review for possible downgrade

Class Description: $22,500,000 Class D Floating Rate Deferrable
Notes Due 2014

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

Class Description: $20,750,000 Class E Floating Rate Deferrable
Notes Due 2014

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

According to Moody's, the rating actions are the result of the
placement under review for possible downgrade of the Lehman
Brothers ABS Enhanced LIBOR Fund's MR1 market risk rating.  


PHOENIX FOOTWEAR: Posts $280,000 Net Loss in 2008 First Quarter
---------------------------------------------------------------
Phoenix Footwear Group Inc. reported a net loss of $280,000 on net
sales of $22.0 million for the first quarter ended March 29, 2008,
compared with net income of $414,000 on net sales of $21.3 million
in the same period last year.  Results for the first quarter of
fiscal 2007 included net income from discontinued operations of
$1.4 million, absent in 2008.

Consolidated gross profit for the first quarter of fiscal 2008
decreased to $7.9 million compared to $8.3 million for the
comparable prior year period.  Gross margin decreased to 36.0%
compared to 39.0% in the prior year period.  The decrease in  
gross margin was primarily due to an increase in sales incentives
and allowances.  Additionally, royalty fees increased as a percent
of sales due to minimum royalties associated with the Tommy Bahama
Footwear brand and due to an increase in sales mix of licensed
products in the accessories segment.

                     Going Concern Disclaimer

As reported in Troubled Company Reporter on April 29, 2008,
Grant Thornton LLP, in Irvine, Calif., expressed substantial doubt
about Phoenix Footwear Group Inc.'s ability to continue as a going
concern after auditing the company's consolidated financial
statements for the year ended Dec. 29, 2007.

The auditing firm reported that the company incurred a net loss
from continuing operations of $16,593,000 for the year ended
Dec. 29, 2007, and the company is not in compliance with financial
covenants under its current credit agreement as of Dec. 29, 2007.

The company has not requested a waiver for the respective defaults
and is in the process of replacing the existing facility with a
new lender.  If the company is not successful in refinancing the
existing facility through a new bank it will seek to refinance its
debt on new terms with its existing bank.  The company disclosed
that presently it has insufficient cash to pay its bank debt in
full.

                          Balance Sheet

At March 29, 2008, the company's consolidated balance sheet showed
$56.6 million in total assets, $25.6 million in total liabilities,
and $31.0 million in total stockholders' equity.

Full-text copies of the company's consolidated financial
statements for the quarter ended March 31, 2008, are available for
free at http://researcharchives.com/t/s?2c15

                      About Phoenix Footwear

Headquartered in Carlsbad, California, Phoenix Footwear Group,
Inc. (AMEX: PXG) -- http://www.phoenixfootwear.com/-- designs,   
develops and markets a diversified selection of men's and women's
dress and casual footwear, belts, and other accessories.  The
company's moderate-to-premium priced brands include the Tommy
Bahama Footwear(R), Trotters(R), SoftWalk(R), Strol(R), H.S.
Trask(R), and Altama(R) footwear lines, and Chambers Belts(R).


PINE MOUNTAIN: Moody's to Review Ratings for Possible Downgrade
---------------------------------------------------------------
Moody's Investors Service downgraded and placed on review for
possible further downgrade the ratings on these notes issued by
Pine Mountain CDO Ltd.:

Class Description: $240,600,000 Class A-1 Floating Rate Notes due
November 16, 2045

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

Class Description: $34,600,000 Class A-2 Floating Rate Notes due
November 16, 2045

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

Class Description: $44,000,000 Class A-3 Floating Rate Notes due
November 16, 2045

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

Class Description: $28,000,000 Class B Floating Rate Notes due
November 16, 2045

  -- Prior Rating: Aa2
  -- Current Rating: B1, on review for possible downgrade

Class Description: $12,000,000 Class C Deferrable Interest
Floating Rate Notes due November 16, 2045

  -- Prior Rating: A2
  -- Current Rating: Caa2, on review for possible downgrade

Additionally, Moody's downgraded these notes:

Class Description: $22,100,000 Class D Deferrable Interest
Floating Rate Notes due Nov. 16, 2045

  -- Prior Rating: Baa2
  -- Current Rating: Ca

According to Moody's, the rating actions reflect increased
deterioration in the credit quality of the underlying portfolio.


PINE MOUNTAIN: Moody's Downgrades Ratings on Three Notes to C
-------------------------------------------------------------
Moody's Investors Service has downgraded and left on review for
possible downgrade the ratings on these notes issued by Pine
Mountain CDO II Ltd.:

Class Description: $392,750,000 Class A Floating Rate Notes Due
November 30, 2046

  -- Prior Rating: Baa3, on review for possible downgrade
  -- Current Rating: Caa2, on review for possible downgrade

Additionally, Moody's downgraded these notes:

Class Description: $37,500,000 Class B Floating Rate Notes Due
November 30, 2046

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

Class Description: $23,500,000 Class C Deferrable Interest
Floating Rate Notes Due November 30, 2046

  -- Prior Rating: Caa2, on review for possible downgrade
  -- Current Rating: C

Class Description: $23,000,000 Class D Deferrable Interest
Floating Rate Notes Due November 30, 2046

  -- Prior Rating: Ca
  -- Current Rating: C

Class Description: $6,250,000 Class E Deferrable Interest Floating
Rate Notes Due November 30, 2046

  -- Prior Rating: Ca
  -- Current Rating: C

According to Moody's, the rating actions reflect increased
deterioration in the credit quality of the structured finance
securities.


PLASTECH ENGINEERED: Will Close Elwood Plant on July 13
-------------------------------------------------------
Plastech Engineered Products Inc. and its debtor-affiliates
decided to shut down its plant located at Elwood, Illinois, the
Chicabo Tribune reports.

The Debtors, in a letter released last week, disclosed that they
will close the plant on July 13, or within 14 days after.  The
shutdown will put the jobs of 286 workers on the line, the Tribune
relates.

The employees and the city's economic officials have learned about
the closure only recently.

                    About Plastech Engineered

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

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

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

An Official Committee of Unsecured Creditors has been appointed in
the Debtors' cases.

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


PQ CORP: Moody's Rates Corp. Family B2, Outlook Stable
------------------------------------------------------
Moody's Investors Service assigned a B2 corporate family rating to
PQ Corporation and assigned a B2 rating to its first lien
revolving credit facility, a B2 rating to its first lien term loan
and a B3 rating to its second lien credit facility.  The rated
debt has financed the July 2007 acquisition of PQ by funds
associated with The Carlyle Group and will finance PQ's
acquisition of the Ineos Silicas business.  The ratings outlook is
stable.  The ratings are summarized below.

Ratings assigned:

PQ Corporation

  -- Corporate family rating: B2
  -- Probability of default rating: B2
  -- $200mm First lien revolving credit facility due 2013: B2
     (LGD3, 46%)

  -- $1,105mm First lien term loan due 2014: B2 (LGD3, 46%)
  -- $460mm Second lien term loan due 2015: B3 (LGD4, 64%)

On July 30, 2007, PQ was purchased by Carlyle Partners IV, LP, a
private investment fund affiliated with The Carlyle Group, from
CCMP Capital Advisors, LLC.  PQ is in the process of acquiring the
Ineos Silicas business in a transaction expected to close in the
second quarter of 2008.  The rated debt provides financing for
both transactions, with the Ineos Silicas acquisition being
primarily financed with a second draw under the existing first
lien term loan.

The B2 corporate family rating reflects PQ's elevated leverage, a
revenue base that is expected to be less than initial debt levels,
integration risk associated with a new acquisition and initially
weak credit metrics.  The ratings are supported by the company's
stable inorganic chemicals, catalysts and engineered glass
materials businesses with leading market positions and a history
of steady revenue growth.  Earnings stability is provided by the
company's diverse end markets, a large customer base and
geographically diverse operations.  PQ has high margins for its
credit rating category and is expected to maintain or improve
same, despite a rising raw material pricing environment.

The stable outlook reflects the expectation that PQ will generate
sufficient cash flow to meet its debt service obligations and de-
lever.  Moody's expects PQ's strong market positions, established
customer relationships and ability to maintain its margins will
support free cash flow generation.  The rating currently has
limited upside in the near-term given the significant amount of
leverage the firm has taken on.  The rating could come under
downward pressure if the company fails to maintain its margins,
generate free cash flow as expected to support repayment of debt,
and successfully integrate the Ineos Silicas business, including
realization of synergies.

PQ Corporation, headquartered in Malvern, Pennsylvania, is a
leading provider of inorganic specialty chemicals, including
sodium silicate, silicate derivatives, catalysts and engineered
glass materials.  PQ Corporation's sales revenues for the year
ended Dec. 31, 2007, were $775 million.


PREMD INC: March 31 Balance Sheet Upside-Down by C$5 Million
------------------------------------------------------------
PreMD Inc.'s balance sheet at March 31, 2008, showed total assets
of C$3 million and total liabilities of C$8 million, resulting in
a total shareholders' deficiency C$5 million.

The consolidated net loss for the three months ended March 31,
2008 was $1.6 million compared with a loss of C$1.5 million for
the quarter ended March 31, 2007.

As at March 31, 2008, PreMD had cash, cash equivalents and short-
term investments totaling C$1.3 million compared to C$1.1 million
as at Dec. 31, 2007.  

To date, the company has financed its activities through product
sales, license revenues, the issuance of shares and convertible
debentures and the recovery of provincial ITCs.

On March 12, 2008, the company issued, by way of private
placement, C$1,435,294 senior unsecured debentures maturing on
Sept. 12, 2009, and 5,072,395 common share purchase warrants for
gross proceeds of approximately C$1,220,000.

Each common share purchase warrant expires in March 2013 and
entitles the holder to acquire on common share at a price of
C$0.2759 per share.

               Paul Davis is Named to the Board

PreMD is also appointing Paul Davis as a new member of the board
of directors.  Mr. Davis has held senior executive positions in
both public and private companies and in investment banking, and
has served on several boards of directors.

Mr. Davis began his career at Davies, Ward & Beck, a predecessor
to Davies Ward Phillips & Vineberg LLP, and was also the chief
operating officer and a director of MedcomSoft Inc. and executive
vice president and director, Investment Banking of Octagon Capital
Canada Corporation.  

Mr. Davis will be replacing Ron Henriksen, who is not standing for
re-election to PreMD's board of directors at our upcoming annual
meeting.

"We look forward to working with Paul Davis as a new addition to
our board of directors," Dr. Norton said.  "We also thank
Mr. Henriksen for his valuable contributions during his years of
service to PreMD and wish him success in his future endeavors."

                         About PreMD Inc.
  
Headquartered in Ontario, Canada, PreMD Inc. (TSX: PMD; Amex: PME)
-- http://www.premdinc.com/-- is a predictive medicine company  
focused on improving health outcomes with non or minimally-
invasive tools for the early detection of life-threatening
diseases, particularly cardiovascular disease and cancer.  The
company's products are designed to identify those patients at risk
for disease.  With early detection, cardiovascular disease and
cancer can be effectively treated, or perhaps, prevented
altogether.  PreMD is developing accurate and cost-effective tests
designed for use at the point of care, in the doctor's office, at
the pharmacy, for insurance testing and as a home use test.


                      Going Concern Doubt

Ernst & Young LLP expressed substantial doubt about PreMD Inc.'s
ability to continue as a going concern after auditing PreMD Inc.'s
financial results for the year ended Dec. 31, 2007.  The auditors
pointed to the company's loss of C$6.3 million and shareholders'
deficiency of C$4,419,890.  The auditors also related that the
company has experienced significant operating losses and cash
outflows from operations since its inception.  The company has
operating and liquidity concerns due to its significant net losses
and negative cash flows from operations.


PROGRESSIVE GAMING: Posts $8.4 Million Net Loss in 2008 1st Qtr.
----------------------------------------------------------------
Progressive Gaming International Corporation reported last week  
results for the first quarter period ended March 31, 2008.

The company posted a net loss of $8.4 million for the first
quarter ended March 31, 2008, compared with a net loss of
$8.7 million in the same period last year.

For the quarter ended March 31, 2008, the company recorded charges
totaling $1.4 million, representing additional provisions for
doubtful receivables of the former slot and table games operations
(which were disposed of during the second half of 2007),
additional accruals for table-games related royalties, and legal
fees.  For the quarter ended March 31, 2007, the company recorded
operating losses of $1.3 million associated with the company's  
slot and table games segment prior to disposal.

Systems revenues for the quarter ended March 31, 2008, were
$15.2 million, representing growth of $507,000, or 3.0%, over the
first quarter of 2007.  The improvement in systems revenues was
due primarily to increased demand for the company's table
management systems, partially offset by lower sales of electronic
hardware and intellectual property license revenues.

Gross profit increased to $7.3 million, or 48.2% of revenues,
during the first quarter of 2008, from $7.0 million, or 47.9% of
revenues, for the first quarter of 2007.

Selling, general and administrative expenses increased
$1.1 million to $8.7 million during the three months ended
March 31, 2008, compared to the same period in 2007.  

Research & Development expensesincreased by $700,000 to
$3.2 million compared to $2.5 million for the same period in 2007.  

Depreciation and amortization expense for the first quarter of
2008 was $1.9 million compared to $1.7 million during the first
quarter of 2007.  

Interest expense primarily includes interest costs and
amortization of debt issuance costs from the company's 11.875%
Senior Secured Notes due 2008 and the company's former senior
secured term credit facility.  Net interest expense for the first
quarter of 2008 was $964,000, representing a decrease of 65.0% or
$1.8 million compared to the same period in 2007.  

The decrease is attributable primarily to a decrease of
$18.6 million in outstanding borrowings under the company's former
credit facility and a $15.0 million decrease in principal
outstanding on the company's Senior Secured Notes due 2008,
compared to March 31, 2007 balances.  In addition, interest income
increased year over year by approximately $200,000 as a result of
higher cash balances held in interest-bearing accounts.

For the quarter ended March 31, 2008, the company recognized a tax
benefit of $508,000 related to its foreign operations.  For the
quarter ended March 31, 2007, the company did not recognize a tax
benefit or provision due to the company's net operating loss
position.

Progressive Gaming also announced that it intends to retire the
remaining portion of its 11.875% Senior Secured Notes due in
August 2008 with proceeds from an expected strategic technology
investment and new bank credit facility (both of which the company
intends to finalize shortly).  

Commenting on the results, Progressive Gaming International
Corporation president and chief executive officer, Russel
McMeekin, stated, "Our 2008 first quarter systems installation
growth is consistent with our expectations in what is historically
our seasonally slowest period.  We remain on plan, and expect to
achieve, our full year revenue, systems installations and gross
margins targets.

"Since positioning the company in 2007 to focus exclusively on the
high-margin revenue opportunities associated with our slot and
table management systems offerings, we have significantly and
consistently increased the penetration of these products in key
markets such as Europe, Asia and Canada.  Additionally, we have
recently expanded into Latin America where we currently have
$3.0 million of backlog in contracts year-to-date with significant
future potential in this rapidly growing region.

                          Balance Sheet

At March 31, 2008, the company's consolidated balance sheet showed
$125.2 million in total assets, $61.4 million in total
liabilities, and $63.8 million in total stockholders' equity.

The company's consolidated balance sheet at March 31, 2008, also
showed strained liquidity with $42.5 million in total current
assets available to pay $53.2 million in total stockholders'
equity.

Full-text copies of the company's consolidated financial
statements for the quarter ended March 31, 2008, are available for
free at http://researcharchives.com/t/s?2c28

                     Going Concern Disclaimer

As reported in the Troubled Company Reporter on March 28, 2008,
Ernst & Young, in Las Vegas, expressed substantial doubt about
Progressive Gaming International Corp.'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 reported that the company has experienced
recurring operating losses, has an accumulated deficit and
negative working capital.  In addition, the company's senior
secured notes are due in August 2008 and are classified as current
as of Dec. 31, 2007, and the company currently does not have
sufficient cash to completely redeem the outstanding senior
secured notes.

The company said it intends to refinance its $30.0 million Senior
Secured Notes through a strategic technology investment together
with a bank facility.  The company said that these transactions
are expected to be completed on or before July 31, 2008.   

                     About Progressive Gaming

Headquartered in Las Vegas, Progressive Gaming International
Corporation (Nasdaq: PGIC) -- http://www.progressivegaming.net/--  
is a supplier of integrated casino and jackpot management system
solutions for the gaming industry worldwide.  Products include
multiple forms of regulated wagering solutions in wired, wireless
and mobile formats.


PROPEX INC: Court Extends Plan-Filing Deadline Until August 21
--------------------------------------------------------------
The Honorable John C. Cook of the U.S. Bankruptcy Court for the
Eastern District of Tennessee extends the time by which Propex
Inc. and its debtor-affiliates have:

   (a) the exclusive right to propose a plan of reorganization
       through Aug. 21, 2008; and

   (b) the exclusive right to solicit acceptances for that plan
       through Oct. 20, 2008.

The Debtors originally sought an extension of their Exclusive
Plan Filing Period through October 2008, and an extension of
their Exclusive Solicitation Period through December 2008.

The Debtors had told the Court that they have made considerable
progress in laying the foundational groundwork necessary for their
reorganization.  However, they need more time to formulate a
consensual plan of reorganization.

The Court will hold a hearing on Aug. 20, 2008, to consider a
request for further extension of the Exclusive Periods, if
requested by the Debtors.

Headquartered in Chattanooga, Tennessee, Propex Inc. --
http://www.propexinc.com/-- produces geosynthetic, concrete,
furnishing, and industrial fabrics and fiber.  It is produces
primary and secondary carpet backing.  Propex operates in North
America, Europe, and Brazil.

The company and its debtor-affiliates filed for Chapter 11
protection on Jan. 18, 2008 (Bankr. E.D. Tenn. Case No. 08-10249).
The Debtors selected Edward L. Ripley, Esq., Henry J. Kaim,
Esq., and Mark W. Wege, Esq. at King & Spalding, in Houston,
Texas, to represent them.  As of Sept. 30, 2007, the Debtors'
balance sheet showed total assets of $585,700,000 and total debts
of $527,400,000.  

(Propex Bankruptcy News, Issue No. 11; Bankruptcy Creditors'
Service Inc., http://bankrupt.com/newsstand/or 215/945-7000)  


PSIVIDA LIMITED: Posts $5.5 MM Net Loss in 3rd Qtr. Ended March 31
------------------------------------------------------------------
pSivida Limited posted a net loss of $5.5 million for the third
quarter ended March 31, 2008, compared with a net loss of
$12.2 million in the same period ended March 31, 2007.

Revenue increased by $173,000, or 47.0%, to $542,000 for the three
months ended March 31, 2008, from $369,000 for the three months
ended March 31, 2007.  The increase was primarily attributable to
$426,000 of revenue recognized in connection with the amended
collaboration agreement with Alimera consummated on March 14,
2008, partially offset by a $220,000 decrease in royalty income
payable to the company by Bausch & Lomb on its sales of Retisert.

Research and development decreased by approximately $1.5 million,
or 30.0%, to approximately $3.6 million for the three months ended
March 31, 2008, from approximately $5.2 million for the three
months ended March 31, 2007.  

Selling, general and administrative costs increased by
approximately $1.5 million, or 72.0%, to approximately
$3.5 million for the three months ended March 31, 2008, from
approximately $2.1 million for the three months ended March 31,
2007.  

This increase was primarily attributable to an increase of
approximately $1.0 million in legal fees, primarily related to (a)
the company's proposal to reincorporate in the United States and
(b) collaboration agreements; and an increase of approximately
$275,000 in share-based payments expense, primarily due to the
effect of prior year period forfeitures.

Change in fair value of derivative represented income of
approximately $1.2 million for the three months ended March 31,
2008, compared to expense of approximately $6.7 million for the
three months ended March 31, 2007.

For the three months ended March 31, 2008, the change in fair
value of derivative was related to warrants issued in financing
transactions denominated in Australian dollars and resulted in
income of approximately $1.2 million primarily due to a decrease
in the market price of the company's ordinary shares during that
period.  

For the three months ended March 31, 2007, the change in fair
value of derivative consisted of approximately $4.5 million of
expense related to the embedded conversion features of the
company's convertible notes, which were redeemed in full prior to
June 30, 2007; and approximately $2.2 million of expense related
to warrants issued in financing transactions denominated in
Australian dollars.  

Interest income increased by approximately $59,000, or 95.0%, to
$121,000 for the three months ended March 31, 2008, from $62,000
for the three months ended March 31, 2007.  This increase was
attributable to (i) interest earned on cash equivalent balances
resulting from the July 2007 share issue and (ii) interest accrued
on the $1.5 million note receivable due April 2008 in connection
with the April 2007 sale of the company's former subsidiary, AION
Diagnostics Limited, to GEM Global Yield Fund, the principal and
interest of which has not been paid and is overdue.  

Interest and finance costs were $206,000 for the three months
ended March 31, 2008, compared to approximately $2.0 million for
the three months ended March 31, 2007.

The decrease in interest and finance costs of approximately
$1.8 million was primarily attributable to the absence in the
current period of (i) approximately $370,000 of interest expense
and approximately $1.3 million of amortization of debt discount
and issue costs in connection with convertible notes which were
subsequently redeemed prior to June 30, 2007, and (ii)
approximately $147,000 of registration rights delay penalties.

Deferred income tax benefit decreased to $15,000 for the three
months ended March 31, 2008, from $3.5 million for the three
months ended March 31, 2007.  The primary reason for the smaller
benefit in the current period is that since June 30, 2007,
valuation allowances have been required to offset essentially all
net operating loss carryforwards created during the current
period, which was not the case for the earlier period.  

                          Balance Sheet

At March 31, 2008, the company's consolidated balance sheet showed
$115.9 million in total assets, $26.7 million in total  
liabilities, and $89.2 million in total stockholders' equity.

Full-text copies of the company's consolidated financial
statements for the quarter ended March 31, 2008, are available for
free at http://researcharchives.com/t/s?2c1a

                     Going Concern Disclaimer

Deloitte Touche Tohmatsu, in Perth Australia, expressed
substantial doubt about pSsivida Limited's ability to continue as
a going concern after auditing the company's consolidated
financial statements for the year ended June 30, 2007.  The
auditing firm ponted to the company's recurring losses from
operations and negative cash flows from operations.

In its report on Form 10-Q for the three months ended Dec. 31,
2007, the company disclosed that it had limited sources of ongoing
revenues and that it would need to raise additional cash through
(a) non-dilutive collaboration development partnerships or (b)
sales of equity or debt capital in future periods.

As a result, however, of cash consideration received by the
company pursuant to the March 14, 2008 amendment of its license
and collaboration agreement with Alimera Sciences Inc., the
company currently believes that its cash and cash equivalents at
March 31, 2008, together with expected payments and funding of
research and development in connection with the company's
agreements with Alimera and Pfizer Inc., will be sufficient to
fund the company's operations under its current operating plan
through at least June 30, 2010.  Accordingly, the company does not
believe that it will be required to raise additional cash within
the next year to continue as a going concern.

                        About pSivida Ltd.

pSivida Limited (Nasdaq: PSDV) (ASE: PSD) (Frankfurt: PSI) --
http://www.psivida.com/-- is a global drug delivery company  
committed to the biomedical sector and the development of drug
delivery products.  

Retisert(R) is FDA approved for the treatment of uveitis.  
Vitrasert(R) is FDA approved for the treatment of AIDS-related CMV
Retinitis.  Bausch & Lomb owns the trademarks Vitrasert(R) and
Retisert(R).  pSivida has licensed the technologies underlying
both of these products to Bausch & Lomb.  The technology
underlying Medidur(TM) for diabetic macular edema is licensed to
Alimera Sciences and is in Phase III clinical trials.  pSivida has
a worldwide collaborative research and license agreement with
Pfizer Inc. for other ophthalmic applications of the Medidur(TM)
technology (excluding FA).

pSivida's intellectual property portfolio consists of 64 patent
families, 113 granted patents, including patents accepted for
issuance, and over 280 patent applications.  pSivida conducts its
operations from Boston in the United States, Malvern in the United
Kingdom and Perth in Australia.


PYXIS ABS: Moody's Junks Ratings on Four Classes of Notes
---------------------------------------------------------
Moody's Investors Service has downgraded and left on review for
possible downgrade the ratings on these notes issued by Pyxis ABS
CDO 2006-1 Ltd.:

Class Description: $900,000,000 Senior Swap Agreement

  -- Prior Rating: Baa2, on review for possible downgrade
  -- Current Rating: Caa2, on review for possible downgrade

Additionally, Moody's downgraded these notes:

Class Description: $180,000,000 Class A-1 Senior Secured Floating
Rate Variable Funding Notes, due 2046

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

Class Description: $113,500,000 Class A-2 Senior Secured Floating
Rate Notes due 2046

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

Class Description: $93,500,000 Class B Secured Floating Rate Notes
due 2046

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

According to Moody's, the rating actions reflect increased
deterioration in the credit quality of the structured finance
securities.


QUEBECOR WORLD: Wants Schedules Filing Period Extended to July 18
-----------------------------------------------------------------
Quebecor World Inc. and its debtor-affiliates asked the U.S.
Bankruptcy Court for the Southern District of New York to extend
until July 18, 2008, their deadline to file their schedules of
assets and liabilities, schedules of current income and
expenditures, schedules of executory contracts and unexpired
leases, and statements of financial affairs.

Michael J. Canning, Esq., at Arnold & Porter LLP, in New York,
tells the Court that the Debtors will still not be in a position
to file the Schedules and Statements by June 4, 2008, given the
size of their Chapter 11 cases, and the volume of material that
must be compiled and reviewed by their limited staff.

Mr. Canning informs the Court that the Debtors' records reflect
as many as 22,000 parties potentially holding claims or otherwise
will be identified on their Schedules and Statements.  It is an
extensive undertaking to gather all of information related to
each creditor and the nature of its claim, and to make the
requisite judgments regarding how to properly schedule each
potential claim, Mr. Canning says.

                      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 July 25, 2008.  (Quebecor World Bankruptcy
News, Issue No. 16; 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.


RADIAN GROUP: Amendment to Credit Agreement Now Effective
---------------------------------------------------------
Radian Group Inc. (NYSE: RDN) said last week that it has satisfied
all outstanding closing conditions of the first amendment to its
revolving credit facility. The amendment permanently eliminates
the ratings covenant included in the original facility and
provides Radian with greater flexibility with respect to the
minimum net worth that it must maintain.

In return, Radian agreed to certain other conditions and
covenants, including to secure the facility and reduce the
commitment size from $400 million to $250 million, with further
reductions to $150 million to take place if certain repayment
events occur. The bank group remains unchanged with Key Bank
continuing to serve as agent.

As reported by the Troubled company Reporter on April 11, 2008,
Radian Group Inc. entered into a waiver agreement with its lenders
under its credit facility.  The agreement provides for a
suspension of the ratings covenant included in such credit
facility.  The waiver was also intended to provide sufficient time
to discuss the terms of a definitive amendment to the facility.  

                      About Radian Group

Headquartered in Philadelphia, Pennsylvania, Radian Group Inc.
(NYSE:RDN) -- http://www.radian.biz/-- is a credit risk    
management company.  Radian develops innovative financial
solutions by applying its core mortgage credit risk expertise and
structured finance capabilities to the credit enhancement needs of
the capital markets, through credit insurance products.  The
company also provides credit enhancement for public finance and
other corporate and consumer assets on both a direct and
reinsurance basis and holds strategic interests in credit-based
consumer asset businesses.  The company has operations in New York
and London.


REALOGY CORP: S&P Foresees Positive Results, Likely to Hold Rating
------------------------------------------------------------------
Standard & Poor's Ratings Services said that its rating and
outlook for Realogy Corp. (B/Negative/--) would not be immediately
affected by the expectation that the company's senior secured
credit facility leverage covenant cushion would narrow further in
the June 2008 quarter.  This is because S&P believes that Realogy
will produce positive cash flow generation the second half of 2008
and significantly reduce its revolver borrowings during the
period, thereby likely avoiding violating the covenant for the
remainder of the year.
     
The most important current component of Realogy's liquidity
profile continues to be its $750 million senior secured revolver.  
On May 12, 2008, borrowings under the revolver were $340 million,
mostly due to its usage for payment of $239 million in interest
expense on the company's notes and its senior secured credit
facility. Senior secured leverage (as measured by Realogy's bank
facility) was 4.2x at March 2008, and S&P estimate the measure
is trending toward the low-5x area for the June 2008 quarter,
compared with the 5.6x covenant.  The covenant steps down to 5.35x
on Sept. 30, 2008.
     
Still, operating trends are troubling.  In the March 2008 quarter,
the pace of declines in transaction sides was down 25% in the
company's franchise group, and prices were down 7%.  Transaction
sides were down 27% in the company's owned brokerage business, and
prices were down 1%.  However, Realogy has only modest term loan
amortization, no meaningful maturities until 2013, and has
indicated that it intends to exercise its option in October 2008
to elect to pay interest in kind (at a premium) on its $550
million senior unsecured PIK toggle notes due 2014.  

S&P's  negative outlook at the current 'B' rating reflects its
concern that in the event a recovery in the U.S. residential real
estate market is not achieved before early 2009, Realogy may face
EBITDA declines that exceed the low-teens percentage area and
experience a meaningfully reduced cushion in its senior secured
leverage covenant.  In the event the industry is not solidly
tracking toward recovery by the beginning of the September 2008
quarter, the rating could be lowered.
     
In the event Realogy exercises its right to cure any potential
covenant related default through the contribution of equity by its
owner (Apollo Management L.P.) to the company in an amount
sufficient to cure the breach, this would be consistent with at
least a one-notch downgrade since it would speak to the company's
inability to independently support its capital structure.  The
cure is only available in three of any four consecutive quarters.


SCOTTISH RE: S&P Puts Default Stock Rating on Dividend Non-Payment
------------------------------------------------------------------
Standard & Poor's Ratings Services revised its preferred stock
rating on Scottish Re Group Ltd.'s $125 million noncumulative
perpetual preferred stock issue to 'D' from 'CCC-'.  The rating
had been on CreditWatch with negative implications.
      
"The rating action reflects the company's discretionary decision
to not declare or pay dividends on the April 15, 2008, dividend
date because of its financial conditions," explained Standard &
Poor's credit analyst Robert A. Hafner.  The company does not
expect to declare or pay dividends on the July 2008 dividend date
and also cautioned that under the terms of the issue, it might be
precluded from declaring or paying dividends on the Oct. 15, 2008,
dividend date.


SENTINEL MANAGEMENT: Founder to Pay $10.7MM to Settle Fraud Case
---------------------------------------------------------------
Sentinel Management Group Inc. and its former executives agreed to
resolve a $350 million fraud case filed by Sentinel's case
trustee, Frederick Grede, The Wall Street Journal's Marie
Beaudette relates.

The Troubled Company Reporter said on April 3, 2008, that Mr.
Grede sought authority from the U.S. Bankruptcy Court for the
Northern District of Illinois to further extend the time within
which the former executives may answer the charge filed by Mr.
Grede since both parties have almost reached a settlement payment
for a litigation dispute.

As reported in the TCR on Oct. 16, 2007, Mr. Grede filed the suit
against founders and executives of Sentinel, including founder
Philip Bloom and son Eric, as well as former trader Charles
Mosley.  Among the charges raised by the Trustee are breach of
fiduciary duty, knowing participation in breach of fiduciary duty,
and unjust enrichment.

According to the Trustee's complaint, Sentinel's insiders
perpetrated a long-term and massive fraud against the Debtor and
its customers through a pattern of criminal conduct.  The
defendants, among other things, improperly transferred at least
$20 million through "bogus" fees, bonuses, dividends, account
withdrawals, salaries and false payments.

In February 2008, the TCR said that the Hon. John H. Squires gave
Mr. Bloom more time to settle allegations of fraud against him.  
Mr. Bloom had earlier requested the Court to dismiss a lawsuit
against him for alleged preferential and fraudulent transfers and
damages.  In an effort to avoid unnecessarily expending time and
resources, Mr. Bloom and the Chapter 11 Trustee that filed the
lawsuit both agreed to temporarily suspend further litigation and
instead focus efforts on potential settlement.

Based on WSJ's report, the Blooms agreed to pay $10.7 million,
representing "all the assets of the settling defendants," as shown
in court documents.

The Court is set to consider approval of the settlement agreement
between the parties on June 9, 2008, WSJ says.

Proceeds of the settlement will be distributed to Sentinel's
creditors under a liquidation plan filed by Mr. Grede.  The TCR
reported on May 16, 2008, that administrative claims, the Bank of
New York's claims and other tax claims will get 100% recovery;
holders of $1.2 billion customer claims will get between 35% to
71% recovery; and holders of $10 million unsecured claims will get
pro-rata distribution.

                     About Sentinel Management

Based in Northbrook, Illinois, Sentinel Management Group Inc. --
http://www.sentinelmgi.com/-- is a full service firm offering a
variety of security solutions. The company filed a voluntary
chapter 11 petition on Aug. 17, 2007 (Bankr. N.D. Ill. Case No.
07-14987).  Ronald Barliant, Esq., Randall Klein, Esq., and
Kathryn A. Pamenter, Esq., at Goldberg, Kohn, Bell & Black
Rosenbloom & Moritz, Ltd. represent the Debtor.  Quinn, Emanuel
Urquhart Oliver & Hedges, LLP, represent the Official Committee
of Unsecured Creditors.  DLA Piper US LLP represents as the
Committee's co-counsel.  When the Debtor sought bankruptcy
protection, it listed assets and debts of more than $100 million.

On Aug. 28, 2007, the Court approved Frederick Grede as the
Debtor's Chapter 11 Trustee.  Mr. Grede selected Catherine L.
Steege, Esq., Christine L. Childers, Esq., and Vincent E. Lazar,
Esq., at Jenner & Block LLP as his counsels.

As reported in the Troubled Company Reporter on Dec. 19, 2007,
the Court extended, until June 13, 2008, the Debtor's exclusive
periods to file a Chapter 11 plan of reorganization and disclosure
statement.


SGS HY: Poor Credit Quality Cues Moody's Rating Reviews
-------------------------------------------------------
Moody's Investors Service has placed on review for possible
downgrade the ratings on these notes issued by SGS HY Credit Fund
I (Exum Ridge CBO 2006-3), Ltd.:

Class Description: $225,000,000 Class A Contingent Funding Notes
Due 2011

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

Class Description: $650,000 Class X Floating Rate Notes Due 2011

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

Class Description: $12,000,000 Class B Contingent Funding Notes
Due 2011

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

Class Description: $9,000,000 Class C Floating Rate Deferrable
Notes Due 2011

  -- Prior Rating: A2
  -- Current Rating: A2, on review for possible downgrade

Class Description: $15,000,000 Class D Floating Rate Deferrable
Notes Due 2011

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

Class Description: $3,000,000 Class E-1 Floating Rate Deferrable
Notes Due 2011

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

Class Description: $9,000,000 Class E-2 Floating Rate Deferrable
Notes Due 2011

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

According to Moody's, the rating actions are the result of
deterioration in the credit quality of the transaction's
underlying portfolio and the placement under review for possible
downgrade of the Lehman Brothers ABS Enhanced LIBOR Fund's MR1
market risk rating.


SHERWOOD FUNDING: Moody's Lowers Ratings on Three Notes to B1
-------------------------------------------------------------
Moody's Investors Service has downgraded and left on review for
possible downgrade the ratings on these notes issued by Sherwood
Funding CDO, Ltd.:

Class Description: $357,500,000 A-1 Senior Secured Floating Rate
Notes Due 2039-1

  -- Prior Rating: Aaa
  -- Current Rating: Aa1, on review for possible downgrade

Class Description: $82,500,000 A-2 Senior Secured Floating Rate
Notes Due 2039-2

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

Class Description: $40,500,000 B-1 Senior Secured Floating Rate
Notes Due 2039-3

  -- Prior Rating: Aa2
  -- Current Rating: B1, on review for possible downgrade

Class Description: $3,500,000 B-2 Senior Secured Fixed Rate Notes
Due 2039-4

  -- Prior Rating: Aa2
  -- Current Rating: B1, on review for possible downgrade

Class Description: $8,000,000 Class 1 Combination Notes Due 2039

  -- Prior Rating: Baa2
  -- Current Rating: B1, on review for possible downgrade

Additionally, Moody's downgraded these notes:

Class Description: $20,000,000 Class 2 Combination Notes Due 2039

  -- Prior Rating: Baa2
  -- Current Rating: Ca

Class Description: $13,750,000 C Senior Secured Deferrable
Floating Rate Notes Due 2039-5

  -- Prior Rating: A2
  -- Current Rating: Ca

Class Description: $28,875,000 D Senior Secured Deferrable
Floating Rate Notes Due 2039-6

  -- Prior Rating: Baa2
  -- Current Rating: C

Class Description: $23,375,000 Preferred Shares

  -- Prior Rating: Ba3
  -- Current Rating: C

According to Moody's, the rating actions reflect increased
deterioration in the credit quality of the underlying portfolio.


SIGNALIFE INC: Receives Second Amex Deficiency Letter
-----------------------------------------------------
Signalife Inc. received a second deficiency letter from the
American Stock Exchange on May 14, 2008.

On January 7, 2008, Signalife received a deficiency letter from
the American Stock Exchange pursuant to which it advised that
Signalife would need to comply with AMEX's $6 million
stockholders' equity threshold required for continued listing
under AMEX Rule 1003(a)(iii). This notification was triggered by
the decline of Signalife's market capitalization to less than $50
million, which previously exempted Signalife from meeting the
minimum stockholders' equity requirement.

In response to the letter, Signalife submitted to AMEX for its
review and acceptance a plan to bring the company into compliance
with the aforesaid stockholders' equity requirement. On March 20,
2008, AMEX notified Signalife that it accepted the company's plan
of compliance and granted the company an extension until May 7,
2009 to regain compliance with the aforesaid stockholders' equity
requirement. On May 14, 2008, Signalife received a second
deficiency letter from the American Stock Exchange pursuant to
which it advised that Signalife would also need to comply with
AMEX's $4 million stockholders' equity threshold required for
continued listing under AMEX Rule 1003(a)(ii).

In that letter, AMEX advised Signalife that should it desire to do
so, the company could supplement its pending plan of compliance to
address this new deficiency. Signalife believes that its pending
plan of compliance will have equal applicability to the new
deficiency cited, and has notified AMEX that it will be
supplementing its pending plan of compliance to address this new
issue. No guarantee can be given that AMEX will accept the plan as
supplemented or that Signalife will be able to so increase its
stockholders' equity to the $4 million threshold within the period
stipulated by AMEX, either of which would lead to a delisting of
Signalife's common shares from the AMEX market.



            Lee B. Ehrlichman Appointed to Board

Signalife appointed Mr. Lee B. Ehrlichman to the company's board
of directors on May 10, 2008.  Mr. Ehrlichman was also appointed
as the company's Director of Operations.  

Mr. Ehrlichman, who pioneered outpatient realtime cardiac
telemetry technology and call center monitoring as CEO and
President of Cardiac Telecom Corporation, will oversee all company
operations as the company's Operations Director, a consulting
position, including monitoring all production activities and
ensuring timely deliveries of product, and overseeing regulatory
and research & development activities.

As Operations Director, Mr. Ehrlichman is expected to operate
out of the company's Los Angeles offices and laboratory facilities
on a full-time basis. Mr. Ehrlichman, who has extensive experience
in product marketing and sales, will also take a lead role in
company sales, both in the remote cardiac monitoring market as
well as traditional ECG markets.  Mr. Ehrlichman commenced
consulting for the company on May 5, 2008, and it is anticipated
that Mr. Ehrlichman will transition to a senior executive level
position after a trial period.

Mr. Ehrlichman has extensive experience not only as a chief
executive officer and a sales and marketing executive, but also in
the cardiac business in which Signalife competes. From August 1995
until July 2007, Mr. Ehrlichman was Chairman, Chief Executive
Officer and President of Cardiac Telecom Corporation, a pioneer of
outpatient real-time cardiac telemetry technology and call center
monitoring.

In that capacity, Mr. Ehrlichman oversaw both the development and
commercialization of ECG devices and the heart monitoring
business, growing revenues by 500%; developing and executing FDA
strategy, including leading clinical trials and obtaining FDA
510(k) clearance in minimal time; leading the rollout of product
into the marketplace with successful patient applications to
physicians on a nationwide basis (AFib, post-CABG, Drug Titration,
Syncope, and Pediatrics); overseeing product manufacturing
functions; and negotiating with Medicare and other insurers (at
medical director level) to write specific reimbursement policies
for Cardiac Telecom's a new technology, which led to reimbursement
and cash flow.

Prior to that position, Mr. Ehrlichman was Chairman, Chief
Executive Officer and President of Tartan, Inc., a defense
industry-oriented embedded systems software tools company, from
January 1990 to June 1995. While at Tartan, Mr. Ehrlichman
reversed ten years of consecutive losses into profitability in his
first year; grew company revenues from $1.5 million to
$10 million while self funding diversification into new markets;
created a highly effective management team which consistently met
or exceeded company goals by recruiting several senior level
executives in Sales, Marketing and Engineering (many of these
executives are now successful CEOs of technology companies);
diversified into embedded Digital Signal Processor markets
(military and commercial), which resulted in revenue increases of
more than 300% over the first three years; and developed
profitable business relationships with top semiconductor
manufacturers at senior levels.

Earlier in his career, Mr. Ehrlichman was also Vice President of
Sales of Alsys, Inc. for five years, and held various progressive
positions in sales, sales management, marketing and marketing
management, including Marketing Manager of the Japanese Business
Development Group, of Data General Corporation for seven years.

                         About Signalife

Signalife, Inc. (Amex: SGN) -- http://www.signalife.com/-- is a  
life sciences company focused on the monitoring, detection and
prevention of disease through continuous biomedical signal
monitoring. Signalife uses its patented signal technology to
design and develop medical devices, therapies and/or technologies
that simplify and reduce the costs of cardiovascular disease.  
Signalife, Inc. is traded on the American Stock Exchange under the
symbol SGN.


SIX FLAGS: S&P Puts Ratings Under Neg. Watch on Note Buyout News
----------------------------------------------------------------
Standard & Poor's Ratings Services placed its 'CCC+' corporate
credit rating and 'CCC-' senior unsecured rating on Six Flags Inc.
on CreditWatch with negative implications.
      
"The CreditWatch placement is based on the company's announcement
that it has offered to purchase the majority of its three senior
note issues at a discount of their par value," explained Standard
& Poor's credit analyst Hal Diamond.
     
Standard & Poor's also lowered its preferred stock rating on Six
Flags to 'D' from 'CC' because the company did not pay its May 15,
2008 dividend.  
     
S&P also affirmed the 'CCC+' corporate credit rating on Six Flags
Theme Parks Inc. and the 'B' bank loan rating on the company's
$1.125 billion in secured financing.  The recovery rating remains
'1', indicating S&P's expectation of very high (90%-100%) recovery
in the event of a payment default.
     
At the same time, Standard & Poor's assigned ratings to Six Flags
Operations Inc.'s 400 million 12.25% senior notes due 2016.  The
notes are rated 'CCC', and a '5' recovery rating was assigned,
reflecting expectations of modest (10%-30%) recovery for unsecured
lenders in a payment default.
     
Six Flags' subsidiary, Six Flags Operations Inc, intends to issue
up to $400 million of the 12.25% senior notes in the exchange.   
The transaction would extend debt maturities and reduce near-term
refinancing risk, primarily for its $280 million senior notes due
Feb. 1, 2010.  The transaction, while slightly reducing debt
leverage, would not materially alter interest expense.
     
Should the tender transaction be completed as planned, S&P would
lower the corporate credit rating on Six Flags Inc. to 'SD'
(selective default) and the issue-level ratings on the exchanged
senior notes to 'D', and remove the ratings from CreditWatch.  
Standard & Poor's would consider the completion of the exchange to
be tantamount to a default, because the total value of the
proposed notes from the exchange offer will be less than the par
value of the existing notes.  While a payment default will not
have occurred under the legal provision of the notes, Standard &
Poor's considers a default to have occurred when a payment related
to an obligation is not made in accordance with the original terms
(even with investor agreement) and when the nonpayment is a
function of the borrower being under financial stress.
     
Following a successful completion of the exchange offer, S&P could
raise the corporate credit rating on Six Flags Inc. to 'CCC+' from
'SD' and the rating on its senior note issues to 'CCC-' from 'D'.
This would reflect the company's thin liquidity, high debt
leverage, and negative discretionary cash flow, despite the easing
of near-term refinancing pressures.
     
S&P will monitor the progress of the tender offer in order to
resolve the CreditWatch listing.


SKYBOX CDO: Moody's Chips Ratings on Credit Quality Deterioration
-----------------------------------------------------------------
Moody's Investors Service has downgraded and left on review for
possible downgrade the ratings on these notes issued by Skybox
CDO, Ltd.:

Class Description: Super Senior Swap

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

Class Description: $38,000,000 Class A Senior Secured Floating
Rate Notes Due 2040

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

Class Description: $61,000,000 Class B Senior Secured Floating
Rate Notes Due 2040

  -- Prior Rating: Aa2
  -- Current Rating: B2, on review for possible downgrade

Class Description: $54,000,000 Class C Senior Secured Deferrable
Floating Rate Notes Due 2040

  -- Prior Rating: A3
  -- Current Rating: B3, on review for possible downgrade

Class Description: $5,000,000 Class D Senior Secured Deferrable
Floating Rate Notes due 2040

  -- Prior Rating: Baa3
  -- Current Rating: Caa2, on review for possible downgrade

According to Moody's, the rating actions reflect increased
deterioration in the credit quality of the structured finance
securities.


SOUTH COAST: Moody's Junks Aa3 Swap Rating, to Undertake Review
---------------------------------------------------------------
Moody's Investors Service has downgraded and left on review for
further possible downgrade the ratings on these notes issued by
South Coast Funding IX Ltd.:

Class Description: Super Senior Swap

  -- Prior Rating: Aa3, on review for possible downgrade
  -- Current Rating: Caa1, on review for possible downgrade

Additionally, Moody's downgraded these notes:

Class Description: $250,000,000 Class A-1B First Priority Senior
Secured Floating Rate Notes Due 2047

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

Class Description: $47,000,000 Class A-2 Second Priority Senior
Secured Floating Rate Notes Due 2047

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

Class Description: $37,500,000 Class B Third Priority Senior
Secured Floating Rate Notes Due 2047

  -- Prior Rating: Caa2, on review for possible downgrade
  -- Current Rating: Ca

Class Description: $24,000,000 Class D Fifth Priority Mezzanine
Secured Floating Rate Deferrable Notes Due 2047

  -- Prior Rating: Ca
  -- Current Rating: C

Class Description: $11,500,000 Class E Sixth Priority Mezzanine
Secured Floating Rate Deferrable Notes Due 2047

  -- Prior Rating: Ca
  -- Current Rating: C

Class Description: $7,500,000 Class F Seventh Priority Mezzanine
Secured Floating Rate Deferrable Notes Due 2047

  -- Prior Rating: Ca
  -- Current Rating: C

According to Moody's, the rating actions reflect increased
deterioration in the credit quality of the structured finance
securities.


SPACEHAB INC: Posts $834,000 Net Loss in Fiscal 2007 Third Quarter
------------------------------------------------------------------
SPACEHAB Incorporated posted a third quarter fiscal 2008 net loss
of $834,000, on revenue of $6.6 million compared with a third
quarter fiscal 2007 net loss of $1.2 million, on revenue of
$12.2 million.

During the quarter, the company's Astrotech Space Operations
subsidiary won three fully funded task orders under the NASA
Vandenberg Air Force Base (VAFB) indefinite delivery, indefinite
quantity contract, awarded in June 2007.  The company is providing
facilities and payload processing services, from its VAFB
location, in support of NASA's Ocean Surface Topography
Mission/Jason-2, Interstellar Boundary Explorer (IBEX) spacecraft,
and the Orbiting Carbon Observatory mission, all scheduled for
launch in 2008.

                       Nine Months Results

SPACEHAB's net loss for the nine months ended March 31, 2007, was
$34.5 million, on revenue of $19.5 million, which included
$30.2 million of non-cash debt conversion expense upon
consummation of the exchange of its Convertible Subordinated
Notes, Senior Convertible Notes, and Series B convertible
preferred stock into shares of common and preferred stock,
compared to a net loss of $3.1 million, on revenue of
$39.9 million for first nine months of the prior fiscal year.

In October 2007, SPACEHAB successfully exchanged $7.4 million of
its 8.0% convertible notes due October 2007, $46.1 million of its
5.5% convertible notes due October 2010 and its 1.3 million shares
of Series B convertible preferred stock for 32.6 million shares of
common stock and 61,550 shares of new Series C convertible
preferred stock.  In November 2007, the company converted the
Series C convertible preferred stock into 89.9 million shares of
common stock and affected a 1 for 10 reverse split.  On Oct. 15,
2007, SPACEHAB redeemed the outstanding $2.9 million of its 8.0%
convertible notes for cash at par.

SPACEHAB also recognized $350,000 of alternative minimum tax
expense for the three months and nine months ended March 31, 2008.
Under U.S. tax rules, the bond exchange transaction completed in
November 2007 resulted in taxable income.  Although this income
was offset by the company's net operating loss, alternative
minimum tax was applicable to the transaction.  SPACEHAB's
operating loss going forward will be restricted under the IRS
guidelines resulting from the exchange transaction.

Additionally, during the nine-month period of fiscal year 2008,
the company completed performance on its last scheduled space
shuttle module mission, STS-118.  As a result, the company's
revenues were significantly below the first nine months for fiscal
year 2007.

                            Liquidity

Net cash used in operating activities was $8.7 million during the
nine months ended March 31, 2008, compared with net cash provided
by operating activities of $8.0 million during the same period in
fiscal 2006.  The significant difference in cash flow primarily
reflects the company's net loss which increased to $34.5 million
during the nine months ended March 31, 2008, as compared to the
net loss of $3.1 million for the nine months ended March 31, 2007.

On March 31, 2008, SPACEHAB's cash and short-term investments were
approximately $8.5 million, including restricted cash of
$6.5 million.  Restricted cash reflects payments in advance of
milestones achieved on a contract to upgrade customer-specific
pre-launch facilities at the company's VAFB location.

In February 2008, Astrotech, a wholly owned subsidiary of
SPACEHAB, entered into a $6.0 million financing facility,
consisting of a $4.0 million term loan and a $2.0 million
revolving credit facility, with Green Bank, N.A.  The new
financing facility is part of the company's ongoing financial
restructuring strategy providing capital as SPACEHAB pursues its
new business opportunities as well as improving overall liquidity.

At March 31, 2008, total debt outstanding was $10.8 million, as
compared with $63.3 million at June 30, 2007.

                   Update of Ongoing Operations

With the conclusion of SPACEHAB's last module mission during the
nine month period, SPACEHAB says it has experienced a material
decrease in its revenue.  However, the company continues to focus
its efforts on improving overall liquidity through identifying and
pursuing new business opportunities, within the areas of SPACEHAB
core competencies, as well as significantly reducing operating
expenses.

These core competencies are being maintained, re-engineered, and
expanded through SPACEHAB's primary businesses, Astrotech Space
Operations, SPACEHAB Engineering Services, and SPACETECH.

Astrotech has a long-term contract with United Launch Alliance
(ULA), a joint venture company of Lockheed Martin and Boeing, to
provide facilities and spacecraft processing services for Atlas V
payloads through 2006, with contract options through 2010.
Subsequent to quarter end, ULA executed a one-year option
extension, valued at $3.1 million, through calendar year 2008.

SPACEHAB Engineering Services continues providing specialized
services and products to NASA, and other government customers,
including configuration and data management services within NASA's
Program Integration and Control contract for the International
Space Station.

SPACETECH, the company's space technology transfer and commercial
business development subsidiary, has recently reported
developments in the areas of microgravity processing - through a
partnership with Space Florida and two space shuttle missions
carrying a proprietary infectious disease model - and its AirWard
Container, currently the only product positioned to go to market
that successfully meets the new Federal Aviation Administration
CFR 49 regulation regarding thermal and impact resistance
requirements.

                          Balance Sheet

At March 31, 2008, the company's consolidated balance sheet showed
$64.2 million in total assets, $28.6 million in total liabilities,
and $35.6 million in total stockholders' equity.

Full-text copies of the company's consolidated financial
statements for the quarter ended March 31, 2008, are available for
free at http://researcharchives.com/t/s?2c16

                   About SPACEHAB Incorporated

Headquartered in Webster, Texas, SPACEHAB Inc. (Nasdaq: SPAB) --
http://www.spacehab.com/-- offers space access and payload  
integration services, production of valuable commercial products
in space, spacecraft pre-launch processing facilities and
services, development and extension of space-based products to the
consumer market, and program and engineering support ranging from
development and manufacturing of flight hardware to large scale
government project management.

                       Going Concern Doubt

PMB Helin Donovan LLP in Houston, Texas, expressed substantial
doubt about Spacehab Inc.'s ability to continue as a going
concern after auditing the company's consolidated financial
statements for the year ended June 30, 2007.  The auditing firm
reported that the company has sustained recurring losses and
negative cash flow from operations.  


STANDARD PACIFIC: Losses Cue S&P to Junk Subordinated Debt Rating
-----------------------------------------------------------------
Standard & Poor's Ratings Services lowered its corporate credit
and senior unsecured debt ratings on Standard Pacific Corp. to
'B-' from 'B+'.  At the same time, S&P lowered the subordinated
debt rating to 'CCC' from 'B-' and placed all ratings on the
company on CreditWatch with negative implications.  These actions
affect approximately $1.3 billion of unsecured notes.
      
"The downgrades acknowledge losses from homebuilding operations,
large impairment charges that continue to erode shareholder equity
and drive up leverage ratios, and constrained borrowing capacity,"
said Standard & Poor's credit analyst James Fielding.  "The
CreditWatch placements further reflect financial covenant issues
that are still unresolved, as well as uncertainty regarding
Standard Pacific's financial strategy and the future direction of
this undercapitalized company."
     
Although Standard Pacific has successfully weathered previous
housing cycles and recent cash flow from operations has been
positive, the severity and duration of the current downturn raises
the likelihood that Standard Pacific will need additional capital
to manage through this cycle.  The ratings will remain on
CreditWatch until we gain more clarity about the company's
financing strategies and its credit facility negotiations are
resolved.


TIRECRAFT GROUP: Gets Court's Nod on Pneus Unimax's Buyout Offer
----------------------------------------------------------------
Pneus Unimax Ltee's offer to acquire all of the assets of
Tirecraft Group Inc. has obtained the approval of the Court of
Queen's Bench of Alberta.

Pneus Unimax made the offer through its subsidiary 4456084 Canada
Inc.  Subject to certain conditions, the closing of this
transaction is planned to occur on May 30, 2008.

"In line with our intention to expand the UNIPNEU banner to
Ontario, the acquisition of Tirecraft's assets constitutes a
strategic decision that complements our vision of growth," said
Rene Gelinas, Pneus Unimax president and CEO, said.  "The
potential acquisition of Tirecraft is excellent news since by
doing so we will penetrate the out-of-Quebec market by acquiring
an integrated organization operating in all major cities across
Canada."
    
According to Mr. Gelinas, Pneus Unimax's expertise in distribution
was a major consideration in the offer to buy and will prove very
useful.  

"In our industry, success lies not only on wise technological
choices and qualified human resources, but also on sound business
practices," he concluded.  "These very practices and our proven
process based on our solid management culture are precisely what
we will be bringing to Tirecraft."
    
Pneus Unimax has also confirmed its intention to maintain
Tirecraft's existing business model, along with the Tirecraft and
President banners, the Remington network, and the Canadian Treads
plants.

                      About Pneus Unimax Ltee

Located in Boucherville, Quebec, Pneus Unimax Ltee is a tire
distribution network with 86 independent dealers-shareholders
operating under the UNIPNEU banner at 135 retail, wholesale, and
commercial sales outlets in Quebec and the Maritimes.   The
company was created in 1979.

                     About Tirecraft Group Inc.

Based in Sherwood Park, Alberta, Tirecraft Group Inc. operates
under the Tirecraft and President banners comprising
330 affiliated dealers.  The tire retailer has 48 corporate
stores, the Remington network of 22 tire distribution warehouses
and four Canadian Treads retreading plants for medium trucks.
Approximately 800 employees work at its facilities across Canada.

Faced with financial difficulties, on April 15, 2008, Tirecraft
sought protection under the Companies' Creditors Arrangement Act.


TRAILER BRIDGE: March 31 Balance Sheet Upside Down by $329,034
--------------------------------------------------------------
Trailer Bridge, Inc. reported unaudited financial results for the
first quarter ended March 31, 2008.  Southbound container volume
increased 15.1% and total revenue increased 13.3%.  Those results
were mitigated by the new service startup, continuing fuel price
increases and other items.

The first quarter was summarized by southbound vessel utilization
of 72.4%, revenue of $30.4 million, an operating ratio of 97.7%,
operating income of $692,000 and a net loss of $1.8 million.
Startup of the Company's new service is estimated to have
incrementally reduced net income by $1.6 million during the first
quarter. Net fuel cost increased by $1.0 million. These and other
items totaling $0.9 million are recapped in detail below.

John D. McCown, Chairman and CEO, said, "We were very pleased to
deliver strong top-line growth driven by a 15.1% increase in
southbound container volume and 14.1% rise in related revenue,
especially in a soft Puerto Rico freight market. Our core
business, our ongoing twice weekly Puerto Rico services, continued
to be profitable. Apart from some other items shown below, we were
pushed into a loss due to increased fuel costs and investment in
the new Dominican Republic/Puerto Rico service. However, March and
April results as well as current trends in our new service are
encouraging. Fuel increases continued to rise and outpaced fuel
surcharge increases. To mitigate this loss we filed various
additional fuel surcharges last week that are scheduled to go into
effect June 1. We believe that our customers understand and will
accept the surcharges."

Total revenue for the three months ended March 31, 2008 was $30.4
million, an increase of 13.3% compared to the $26.8 million
reported in the first quarter of 2007. The Company's deployed
vessel capacity utilization during the first quarter was 72.4%
southbound and 21.6% northbound, compared to 80.3% and 24.6%,
respectively, during the first quarter of 2007. The decrease in
utilization was largely related to the introduction of the fifth
vessel in the Company's new service, which increased capacity by
22.1% southbound compared to the year earlier quarter.

Trailer Bridge reported operating income of $692,000 in the first
quarter of 2008, compared with operating income of $3.8 million in
the first quarter of 2007. The Company reported a net loss of $1.8
million, or $0.15 per share, for the first quarter of 2008
compared to net income of $1.3 million, or $0.11 per share, in the
year earlier period.

Mr. McCown continued, "Trailer Bridge's board and management are
focused on delivering the exceptional actual results we
demonstrated in the recent past. For the twelve months ended June
2007, the last twelve month period prior to commencement of the
new service and consistently increasing fuel prices, Trailer
Bridge achieved an operating ratio of 82.9% and earnings of $10.0
million. We remain confident in our proven system and in our
ability to meet the challenges of a new startup and the reality of
rising fuel costs, a challenge all carriers must meet."

                        Financial Position

At March 31, 2008, the Company had cash balances of $2.1 million
and working capital of $4.6 million. The Company is in compliance
with its covenants and has the full amount available on its $10
million revolving credit facility.  The company had total assets   
of $121,373,229 and total liabilities of 121,702,263, resulting in
total stockholders' deficit of $329,034.

        Summary of Significant Changes in Operating Results

A table listing the main components in the difference in operating
results for the first quarter ended March 31, 2008 compared to the
year earlier quarter is shown below. The table also includes items
that occurred in the first quarter that the company is not
typically experiencing in most quarters and are presented as
additional information that may be useful.

      New Service Loss Effect                  $  1,602,219   
  Net Fuel Cost Increase Effect                  $  998,694   
  Dry-docking of TBC Vessel                      $  298,226   
  More Unearned Revenue Re Schedule Delay        $  281,592   
  More Fuel by Bigger Temporary Substitute Tug   $  168,360   
  Strategic Alternatives Professional Fees       $  167,259   
  Other, net                                    $  (368,205)  
  Net Changes in Operating Results             $  3,148,145   

                         Conference Call

Trailer Bridge discussed its first quarter results in a conference
call held on May 15.  The webcast will be archived and accessible
for approximately 30 days at:

            http://researcharchives.com/t/s?2c0b

Trailer Bridge (NASDAQ Global Market: TRBR) --
http://www.trailerbridge.com/-- provides integrated trucking and  
marine freight service to and from all points in the lower 48
states and Puerto Rico and Dominican Republic, bringing
efficiency, service, security and environmental and safety
benefits to domestic cargo in that traffic lane. This total
transportation system utilizes its own trucks, drivers, trailers,
containers and U.S. flag vessels to link the mainland with Puerto
Rico via marine facilities in Jacksonville, San Juan and Puerto
Plata.

The Troubled Company Reporter reported on April 14, 2008, that
Standard & Poor's Ratings Services affirmed its 'B-' long-term
corporate credit rating on Trailer Bridge Inc.  At the same time,
S&P affirmed the 'B-' senior secured debt rating, the same as the
corporate credit rating, while leaving the recovery rating
unchanged at '3', indicating expectations of a meaningful (50%-
70%) recovery in the event of a payment default.  The rating
outlook remains stable.


TRIBUNE LIMITED: Moody's Cuts Rating on $80MM Notes to B1 from Aaa
------------------------------------------------------------------
Moody's Investors Service has downgraded and left on review for
possible downgrade the ratings on these notes issued by Tribune
Limited Series 48:

Class Description: $80,000,000 Floating Rate Credit Linked Secured
Notes due 2050

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

According to Moody's, the rating actions reflect increased
deterioration in the credit quality of the underlying portfolio.


TROPICANA ENTERTAINMENT: Section 341(a) Meeting Set for June 13
---------------------------------------------------------------
Roberta A. DeAngelis, Acting U.S. Trustee for Region 3, will
convene a meeting of creditors in the Chapter 11 cases of
Tropicana Entertainment LLC, and its 33 debtor affiliates, at
1:30 p.m., on June 13, 2008, at Room 2112, 2nd Floor, J. Caleb
Boggs Federal Building, at 844 King Street, in Wilmington,
Delaware.

This is the first meeting of creditors required under Section
341(a) of the Bankruptcy Code in the Debtors' bankruptcy cases.

The Sec. 341(a) meeting offers the creditors a one-time
opportunity to examine the Debtors' representative under
oath about the Debtors' financial affairs and operations that
would be of interest to the general body of creditors.

The Debtors' representative, as specified in Rule 9001(5) of the
Federal Rules of Bankruptcy Procedure, is required to appear at
the meeting of creditors for the purpose of being examined under
oath.  Attendance by creditors at the meeting is welcomed, but
not required.

At the meeting, the creditors may examine the Debtors'
representative and transact other business, as may properly come
before a meeting.  The meeting may be continued or adjourned from
time to time by notice at the meeting, without further written
notice to the creditors.

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


TROPICANA ENT: U.S. Trustee Picks Seven-Member Creditors Panel
--------------------------------------------------------------
The U.S. Trustee for Region 3 has appointed seven members to the
Official Committee of Unsecured Creditors of the Chapter 11 cases
of Tropicana Entertainment LLC, and its 33 debtor affiliates:

   (1) International Union, UAW
       Attn: Niraj R. Ganatra
       8000 East Jefferson Avenue
       Detroit, MI 48214
       Tel (313) 926-5216
       Fax (313) 926-5240

   (2) Fixture Dimensions Inc.
       Attn: Dale P. Schaffeld
       4355 Salzman Road
       Middletown, OH 45044
       Tel (513) 539-3300
       Fax (513) 539-3306

   (3) International Gaming Technology
       Attn: Geht K. Culver
       9295 Prototype Drive
       Reno, NV 89521
       Tel (775) 448-0130
       Fax (775) 448-0401

   (4) Park Cattle Co.
       Attn: Craig Sullivan
       1300 Buckeye Road
       Minden, NV 89423
       Tel (775) 782-2144
       Fax (775) 782-4158

   (5) Wilmington Trust Company
       Attn: Patrick J. Healy, vice president
       Rodney Square North
       1100 North Market Street
       Wilmington, DE 19890
       Tel (302) 636-6391
       Fax (302) 636-4149

   (6) U.S. Foodservice Inc.
       Attn: Claudia G. Regen
       9755 Patuxent Woods Drive
       Columbia, MD 21046
       Tel (443) 259-2099
       Fax (410) 910-3159

   (7) Mutual Shares Fund
       c/o Franklin Mutual Advisers
       Attn: Matthew J. Ferko
       101 JFK Parkway
       Short Hills, NJ 07078
       Tel (973) 912-2059
       Fax (973) 921-8656

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


VERTICAL VIRGO: Moody's Junks Ratings on Three Classes of Notes
---------------------------------------------------------------
Moody's Investors Service has downgraded and placed on review for
possible further downgrade the ratings on these notes issued by
Vertical Virgo 2006-1, Ltd.:

Class Description: $1,266,000,000 Class A1S Variable Funding
Senior Secured Floating Rate Notes Due 2046

  -- Prior Rating: Baa2, on review for possible downgrade
  -- Current Rating: Ba3, on review for possible downgrade

Class Description: $255,000,000 Class A1J Senior Secured Floating
Rate Notes Due 2046

  -- Prior Rating: Ba2, on review for possible downgrade
  -- Current Rating: Caa1, on review for possible downgrade

Class Description: $177,000,000 Class A2 Senior Secured Floating
Rate Notes Due 2046

  -- Prior Rating: Ba3, on review for possible downgrade
  -- Current Rating: Caa1, on review for possible downgrade

Additionally, Moody's downgraded these notes:

Class Description: $80,000,000 Class A3 Secured Deferrable
Interest Floating Rate Notes Due 2046

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

Class Description: $17,500,000 Class B1 Mezzanine Secured
Deferrable Interest Floating Rate Notes Due 2046

  -- Prior Rating: Caa1, on review for possible downgrade
  -- Current Rating: Ca

Class Description: $74,500,000 Class B2 Mezzanine Secured
Deferrable Interest Floating Rate Notes Due 2046

  -- Prior Rating: Caa2, on review for possible downgrade
  -- Current Rating: Ca

According to Moody's, the rating actions reflect increased
deterioration in the credit quality of the structured finance
securities.


VERTIS INC: Noteholders Agree to Changes in Forbearance Agreement
-----------------------------------------------------------------
Vertis Inc. disclosed that the holders of an aggregate of 80% of
the outstanding principal amount of its Second Lien Notes agreed
to an amendment to a forbearance agreement between them and the
company.  Under the Forbearance Agreement as amended by the First
Amendment, the holders agreed to forbear from exercising their
rights and remedies under the indenture governing the Second Lien
Notes and from directing the trustee under the indenture from
exercising any rights and remedies on the holders behalf until
the occurrence of these events:

   (i) the failure of a specified percentage of certain note
       holders having executed a restructuring and lock-up
       agreement on or before May 20, 2008,

  (ii) the termination of the Restructuring Agreement in
       accordance with its terms,

(iii) the occurrence of certain events under the forbearance
       agreement dated April 3, 2008 between the company and the
       lenders under the companys four-year revolving credit
       agreement, as may be amended,

  (iv) the occurrence of certain events under the forbearance
       agreement dated as of April 2, 2008 by and among Vertis
       Receivables II, LLC, Webcraft, LLC, Webcraft Chemicals,
       LLC, Enteron Group, LLC, Vertis Mailing, LLC, the company
       and General Electric Capital Corporation, as may be amended
       and

   (v) the occurrence of certain other events described in the
       Forbearance Agreement as amended by the First Amendment.

All other terms of the Forbearance Agreement remain unchanged by
the First Amendment.

As reported in the Troubled Company Reporter on May 6, 2008, as
part of the strategy of Vertis to preserve and enhance its near-
term liquidity, on April 1, 2008, the company elected to forego
making a $17.1 million interest payment on its 9-3/4% Senior
Secured Second Lien Notes.  Under the terms of the indenture
governing the Second Lien Notes, the company had a thirty-day
grace period in which to make this interest payment before it
would be an event of default.

Pursuant to a forbearance agreement dated April 30, 2008, the
holders of an aggregate of 77% of the outstanding principal amount
of the Second Lien Notes agreed to forbear from exercising their
rights and remedies under the indenture governing the Second Lien
Notes and from directing the trustee under the indenture from
exercising any such rights and remedies on the holders behalf
until the occurrence of certain events.

Headquartered in Baltimore, Vertis Inc., doing business as Vertis
Communications -- http://www.vertisinc.com/-- is a provider of      
print advertising and direct marketing solutions to America's
leading retail and consumer services companies.  

At Dec. 31, 2007, the company's consolidated balance sheet showed
$528.2 million in total assets and $1.403 billion in total
liabilities, resulting in a $875.1 million total stockholders'
deficit.  

                          *     *     *

As reported in the Troubled Company Reporter on April 4, 2008,
Deloitte & Touche LLP, in Baltimore, Maryland, expressed
substantial doubt about Vertis Inc.'s ability to continue as a
going concern after auditing the company's consolidated financial
statements for the years ended Dec. 31, 2007, and 2006.  The
auditing firm said that the company has incurred recurring net
losses and is experiencing difficulty in generating sufficient
cash flow to meet its obligations and sustain its operations.

As reported in the Troubled Company Reporter on April 3, 2008,
Standard & Poor's Ratings Services revised its CreditWatch
implications for its 'CC' corporate credit rating on Vertis Inc.   
to negative from developing following the company's announcement
that it had engaged a financial advisor to assist in a possible
debt exchange offering.

At the same time, Standard & Poor's lowered its ratings on
Vertis's $350 million senior secured second-lien notes and
$350 million senior unsecured notes to 'C' from 'CCC'.  The notes
remain on CreditWatch with negative implications, where they were
originally placed on April 4, 2007.


VICTORY MEMORIAL: Files Disclosure Statement and Chapter 11 Plan
----------------------------------------------------------------
Victory Memorial Hospital and its debtor-affiliates delivered to
the United States Bankruptcy Court for the Eastern District of New
York Disclosure Statement dated May 15, 2008, explaining their
Chapter 11 Plan of Reorganization.

                       Overview of the Plan

The Plan contemplates the liquidation of substantial assets of the
Debtors and the payment in full of all allowed secured claims and
allowed unsecured priority claims.

On the Plan's effective date, the Debtors will assign all account
receivable valued at $9.5 million to the liquidating trust.  The
proceeds of the accounts receivables will be available for the
liquidating trust for distribution under the
Plan.                             

The Plan enables the Debtors to pursue avoidance and other actions
in an aggregate amount of at least $14 million.  Accordingly, the
Debtors will assign to the liquidating trust the exclusive right
to commence and to continue the prosecution of all pending
avoidance and other actions.

                            Asset Sale

The Debtors agree to sell the main campus and acquired business,
which consists of their skilled nursing facility and long-term
home health program, to Dervaal LLC for $44.9 million.  The
proceeds of the sale will be used to pay the allowed Dormitory
Authority of the State of New York (DASNY) Bond claim at closing
of the sale, which is expected to occur by Sept. 30, 2008.  The
remaining balance of the proceeds will be transferred to the
liquidating trust.

The Debtors are presently marketing their ancillary real estate to
the highest bidder, which is expected to net between $5 million to
$8 million.  An auction is scheduled to take place on June 27,
2008.

                          HEAL IV Award

New York Department of Health has committed to provide $25 million
HEAL IV Award to the Debtors to finance their closure pursuant
to the Berger Recommendations that require the closure of the
Debtors' acute-care facility by June 30, 2008, and the
continuation of their skilled nursing, ambulatory, and home
health care programs.

                Treatment of Claims and Interests

                  Type of                          Estimated
   Class          Claims           Treatment       Amount
   -----          -------          ---------       ---------
   unclassified   administrative                   $12,000,000  
                  claims

     1            secured tax      unimpaired      $0

     2            DASNY Bond       unimpaired      $19,776,000
                  claims

     3            secured lender   unimpaired      $14,105,000
                  claims

     4            other secured    unimpaired      $5,800,000
                  claims

     5            unsecured        unimpaired      $200,000
                  priority claims

     6            unsecured        impaired        $49,696,000
                  nonpriority
                  claims

     7            subordinated     impaired        $0
                  claims

A full-text copy of the Disclosure Statement is available for free
at http://ResearchArchives.com/t/s?2c24

A full-text copy of the Chapter 11 Plan of Reorganization is
available for free at http://ResearchArchives.com/t/s?2c25

                    About Victory Memorial

Based in Brooklyn, New York, Victory Memorial Hospital is a
non-profit, full service acute care voluntary hospital with
approximately 241 beds and a skilled nursing unit with 150 beds.
Victory Hospital provides a full range of medical services with a
focus on community care and a program of community outreach to the
Brooklyn community.  Victory Ambulance Services, Inc. a for-profit
subsidiary, provides Victory Hospital with ambulance services.
Victory Pharmacy, Inc., a for-profit subsidiary, does not have
any employees or assets.

The company and its two-subsidiaries filed for chapter 11
protection on Nov. 15, 2006 (Bankr. S.D.N.Y. Case Nos. 06-44387
through 06-44389).  Timothy W. Walsh, Esq., and Jeremy R. Johnson,
Esq., at DLA Piper US LLP, represent the Debtors.  Craig E.
Freeman, Esq., and Martin G Bunin, Esq., at Alston & Bird LLP,
represent the Official Committee of Unsecured Creditors.  When the
Debtors filed for protection from their creditors, they listed
assets and debts between $1 million and $100 million.


WELLMAN INC: Receives Additional Extension for Bidding Protocol
---------------------------------------------------------------
Wellman, Inc. said that the lenders providing its debtor-in-
possession financing have granted an additional one-week extension  
by which the company may have its bidding procedures approved by
the Bankruptcy Court.  The new deadline is June 5, 2008.

The Company, in consultation with its stakeholders, is continuing
to evaluate offers and restructuring alternatives, including a
plan of reorganization, in an effort to maximize the value of
Wellman's business on a going concern basis. In order to allow the
company to maximize value for all of its stakeholders, the DIP
lenders have agreed to provide Wellman additional time to continue
discussions with interested parties. This does not extend the
deadline to complete the sale.

As reported in the Troubled Company Reporter on April 11, 2008,
the Court approved the $225,000,000 of DIP Financing from a group
of lenders; Deutsche Bank Securities Inc., as lead arranger and
bookrunner; Deutsche Bank Trust Company Americas, as
administrative agent; JPMorgan Chase Bank, N.A., as syndication
agent; and General Electric Capital Corp., LaSalle Business
Credit, LLC, and Wachovia Finance Corp., as co-documentation
agents.  The Credit Agreement dated Feb. 26, 2008, required the
Debtors to:

   (i) obtain within 90 days after the Petition Date an order
       from the Bankruptcy Court (a) approving bidding
       procedures, (b) scheduling bidding deadline, auction date
       and sale hearing date, and (c) establishing procedures
       under Sections 364 and 365 of the Bankruptcy Code for the
       Wellman Sale and the assignment and assumption of certain
       contracts related thereto;

  (ii) obtain an order approving the Wellman Sale by July 31,
       2008; and

(iii) close the sale within 15 days of the later of (i) the
       entry of the Sale Order, and, if a stay of the order is
       pending, the date the order becomes final and
       non-appealable, if during the time of the stay, a bond has
       been issued.

Early last week, the deadline to obtain Court-approval of the
bidding procedures was initially extended from May 22 to May 29.

Headquartered in Fort Mill, South Carolina, Wellman Inc. ([OTC]:
WMANQ.OB) -- 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.


WHX CORP: March 31 Balance Sheet Upside Down by $74.8 Million
-------------------------------------------------------------
WHX Corporation released financial results for the first quarter
of 2008, reporting a net loss of $6.2 million, on sales of $177.3
million for the three months ending March 31, 2008, compared to a
net loss of $8.5 million on sales of $117.8 million for the same
period in 2007.

Of the total first quarter's sales increase, $51.0 million was
attributable to the acquisition of Bairnco Corporation in April of
2007. Basic and diluted net loss per common share was $0.62 for
the first quarter of 2008, compared with basic and diluted net
loss per common share of $0.85 in the same period of 2007.

The Company generated Consolidated EBITDA of $10.1 million in
2008, up from $2.3 million in 2007.  The Company defines EBITDA as
net income before the effects of realized and unrealized losses on
derivatives, interest expense, taxes, other income or expense,
depreciation and amortization and pension credit.

"We are reasonably pleased with our results for the 2008 first
quarter. Excluding our Bairnco acquisition and despite difficult
economic conditions in several of our North American markets, WHX
generated operating income and EBITDA well ahead of the comparable
2007 quarter," said Glen Kassan, Vice Chairman and Chief Executive
Officer of WHX. "I'm confident that the work that we have done in
2007 and into 2008, including the Bairnco acquisition and
strengthening our senior management team, has positioned the
Company for growth in 2008 and beyond."

As of March 31, 2008, the company had $461.2 million in total
assets and $536 million in total liabilities, resulting in
stockholders' deficit of $74.8 million.


                  First Quarter Operating Results

Precious Metal Segment:

Precious Metal Segment sales in the quarter increased by $7.9
million to $45.7 million. The increase resulted primarily from
higher precious metal prices, increased market share and new
product sales. The Precious Metal Segment contributed $2.4 million
to WHX's total operating income in the first quarter of 2008,
compared to an operating loss for the segment of $0.3 million in
the first quarter of 2007. The 2007 operating results for this
segment included losses of $1.2 million from operating facilities
that have subsequently been sold.

Tubing Segment:

Tubing Segment sales increased by $0.3 million to $29.6 million.
Strong growth in the petrochemical and shipbuilding markets
serviced by the Stainless Steel Tubing Group were offset by
weakness in the domestic and foreign refrigeration and
transportation markets serviced by the Specialty Tubing Group. The
Tubing Segment contributed $1.3 million to WHX's operating income
of in the first quarter of 2008, compared to an operating loss of
$0.9 million in the same period of 2007. The improvement in
operating income was principally due to improved operating
efficiencies within the North American specialty tubing
facilities.

Engineered Materials Segment:

Engineered Materials Segment sales increased by $0.3 million to
$51.0 million as weakness in the new home construction market
continued to impact the sector. The Engineered Materials Segment
contributed $1.3 million to WHX's operating income in the first
quarter of 2008, compared to $2.1 million in the same period of
2007. Factors resulting in lower operating income included
aforementioned weakness in the domestic housing market and an
increase in volume of lower margin private label products.

Bairnco Segments:

Bairnco Corporation was acquired by WHX in April 2007. The three
Bairnco Segments (Arlon Electronic Materials (EM), Arlon Coated
Materials (CM), and Kasco) generated $51.0 million of net sales in
the first quarter of 2008, which contributed $16.1 million to
WHX's gross profit and increased the Company's consolidated gross
profit percentage by 3.4%. Arlon EM, Arlon CM, and Kasco
contributed $1.2 million, ($1.1 million), and $0.8 million,
respectively, to the Company's operating profit in the first
quarter. Included in operating income within the Arlon EM segment
is $0.4 million of amortization expense related to intangibles
recorded as part of the purchase price of the WHX acquisition of
Bairnco. Also included in operating income are expenses of $0.6
million related to move costs to consolidate the two Arlon CM
plants into one plant. In addition to the direct move costs, the
results of the quarter were negatively impacted by operating
inefficiencies during the move. Management expects that the
consolidation of the plants will result in future cost savings and
operating efficiencies. Bairnco maintains strong positions in its
three business segments and following its acquisition by WHX is
executing plans to improve sales, plant level operations and
profit margins while reducing working capital.

                        Other Developments

On October 18, 2007, WHX filed a registration statement on Form S-
1 with the Securities and Exchange Commission (the "SEC") for a
rights offering to its existing stockholders. WHX filed amendments
to the S-1 registration on 11/30/07, 12/21/07 and 4/14/08. The
purpose of this rights offering is to raise equity capital in a
cost-effective manner that gives all of our stockholders the
opportunity to participate. The net proceeds will be used to (i)
make partial payments to certain senior lenders, to certain
wholly-owned subsidiaries of WHX and/or to contribute to the
working capital of such subsidiaries, (ii) redeem preferred stock
which is held by Steel Partners, and was issued by a wholly-owned
subsidiary of WHX, (iii) purchase shares of common stock of CoSine
Communications, Inc. from Steel Partners, (iv) repay WHX
indebtedness to Steel Partners, and (v) repay indebtedness of
wholly-owned subsidiaries of WHX to Steel Partners. The proposed
rights offering, if fully subscribed could provide WHX with gross
proceeds of $200 million. While a registration statement relating
to these securities has been filed with the SEC, it has not yet
become effective.

                         About WHX Corp.

Based in White Plains, New York, WHX Corporation (Pink Sheets:
WXCP) -- http://www.whxcorp.com/-- is a holding company that    
invests in and manages a group of businesses on a decentralized
basis.  Apart from owning Handy & Harman, WHX acquired in
April 2007 Bairnco Corporation, which is a diversified
multinational company that operates business units in three
reportable segments: Arlon electronic materials, Arlon coated
materials and Kasco replacement products and services.

Handy & Harman is a diversified manufacturer and the "parent" of a
family of materials engineering and specialty manufacturing
companies.  Its products include electronic components, specialty
fasteners, engineered materials, stainless steel tubing, specialty
tubing and fabricated precious metals, brazing soldering fluxes
and alloys of precious and non-precious metals.  Handy & Harman's
strategic business units encompass three reportable segments:
precious metal, tubing and engineered materials.


WORLD HEART: Appeal on Continued Listing in Nasdaq Denied
---------------------------------------------------------
World Heart Corporation received a NASDAQ Staff Determination
Letter stating that the company's requests for continued listing
on The NASDAQ Capital Market has been denied.  

The NASDAQ noted that the company did not provide a definitive
plan evidencing its ability to achieve near term compliance with
the continued listing requirements or sustain such compliance over
an extended period of time, as required by Marketplace Rule
4310(c)(4) and Marketplace Rule 4310(c)(3), which requires the
company to have a minimum of $2.5 million in stockholders' equity
or $35 million 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.

Accordingly, unless the company requests an appeal of this
determination, trading of the company's common stock will be
suspended at the opening of business on May 21, 2008, and a Form
25-NSE will be filed with the Securities and Exchange Commission,
which will remove the company's securities from listing and
registration on The NASDAQ Stock Market.

The company may appeal Staff's determination to a NASDAQ Listing
Qualifications Panel, pursuant to the procedures set forth in the
NASDAQ Marketplace Rule 4800 Series.  A hearing request will stay
the suspension of the company's securities and the filing of the
Form 25-NSE pending the Panel's decision.  The request for a
hearing, which may either be an oral hearing or a hearing based
solely on written submissions, must be received by the Hearings
Department no later than 4:00 P.M. Eastern Time, today, May 19,
2008.  If the company appeals, the company must also address its
failure to comply with the $1 million minimum market value
requirement for its publicly held shares, as required by
Marketplace Rule 4310(c)(7) for continued listing on the NASDAQ
Capital Market.  As of May 9, 2008, the MVPHS of the company
totaled $857,242.

If the company does not appeal Staff's determination to the Panel,
the company's securities will not be immediately eligible to trade
on the OTC Bulletin Board or in the "Pink Sheets".  The securities
may become eligible if a market maker makes application to
register in and quote the security in accordance with SEC Rule
15c2-11, and such application is cleared.  Only a market maker,
not the company, may file a Form 211.

Headquartered in Oakland, California, World Heart Corporation
(NASDAQ: WHRT, TSX: WHT) -- http://www.worldheart.com/--      
develops mechanical circulatory support systems with broad-based
next-generation technologies.  The company has additional
facilities in Salt Lake City, Utah and Herkenbosch, Netherlands.

                          Going Concern

As reported in the Troubled Company Reporter on April 4, 2008,
Burr, Pilger & Mayer LLP raised substantial doubt about the
ability of World Heart 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 corporation's
recurring losses.


X-RITE INC: Names Dave Rawden as Interim Chief Financial Officer
----------------------------------------------------------------
Lynn J. Lyall, who had served in X-Rite Inc.'s Chief Financial
Officer position since March of 2008, has left the company for
personal reasons.  X-Rite has named Dave Rawden as interim CFO and
does not anticipate any disruptions in ongoing talks with lenders
or investors.

Mr. Rawden has held a number of CFO positions in middle market
public companies including Exopack Holding and Allied Holdings.  
In addition, Mr. Rawden has had several experiences successfully
managing through situations where refinancing and capital
structure changes were appropriate.  Mr. Rawden is a CPA and holds
a Bachelor of Science Degree in Accounting from Michigan State
University.  It is expected that Mr. Rawden will remain engaged
until a permanent CFO is hired.  The company will also expand the
role of Brad Freiburger, Vice President and Controller.  Mr.
Freburger will expand his current responsibilities to include
planning and analysis.

"It's crucial for all of our constituencies to understand that I
have led and continue to lead all ongoing discussions with our
lenders with the assistance of our financial partner, RBC Capital.  
This change will likely have a positive impact on our current
situation given Daves experience," stated Thomas J. Vacchiano,
Jr., Chief Executive Officer.  "Further, Lynn's resignation is in
no way associated with any new issues related to our financial
condition or recapitalization efforts.  The fit between our needs
and Lynns interests just proved to be a poor match.  Dave's
skills will be a great asset to the Company at this time, and I
look forward to working with him as we work through addressing our
lender agreements and capital structure needs.  I have every
confidence in the abilities of our financial team to meet our day-
to-day financial management responsibilities."

Tom Vacchiano concluded, "We continue to work diligently with our
lenders to address our recent covenant defaults and believe that
we will have sufficient cash flow to operate our business and make
our scheduled interest payments. We are encouraged by our work
with RBC to date and our ongoing discussions with lenders and
investors to address our capital needs going forward."

Headquartered in Grand Rapids, Michigan, X-Rite (Nasdaq: XRIT) --
http://www.xrite.com/-- is the world's largest provider of color-
measurement solutions, offering hardware, software, color
standards and services for the verification and communication of
color data.  The company serves a range of industries, including
imaging and media, industrial color and appearance, retail color
matching, and medical.  X-Rite serves customers in more than 100
countries from its offices in Europe, Asia and the Americas.

                          *     *     *

As reported in the Troubled Company Reporter on May 15, 2008,
Moody's Investors Service lowered X-Rite, Inc.'s corporate family
rating to Caa1 from B2.  Moody's also lowered the rating on the
company's first lien senior secured credit facilities to B3 from
B1 and the rating on the second lien term loan to Caa3 from Caa1.  
All ratings remain under review for possible downgrade.  As part
of this action, Moody's also affirmed the company's SGL-4
speculative grade liquidity rating.


* S&P Sees Looming Problems on Pension Benefits for Retired Worker
------------------------------------------------------------------
State and local governments, already feeling the fallout from the
housing meltdown and the economic slowdown, have another big
problem looming: how to pay the pensions and health care benefits
for their retired workers.  Standard & Poor's Rating Services
estimates that just for postemployment benefits, largely composed
of health insurance, U.S. states are already on the hook for at
least $400 billion--the estimated total future costs for retiree
health and other nonpension benefits.  Add in pension costs and
the figure likely will exceed $1 trillion. "These liabilities will
span many years and most governments will effectively manage their
obligations," says Standard & Poor's public finance credit analyst
Robin Prunty.  "But we can also expect to see budget and balance
sheet stress for those that do not actively manage their costs."
     
In "How Will State And Local Governments Handle Their Retirement
Benefit Liabilities?," published on Standard & Poor's
RatingsDirect on May 16, Ms. Prunty points out the crunch for
those states and local governments that don't adequately prepare
for this coming cost--which is tied to the growth in medical costs
and the rising number of retirees--will not be immediate.  "Three
to five years down the road," she says, "credit quality for these
issuers could be pressured, especially if they are not adequately
funded."  Few jurisdictions have set aside meaningful amounts to
cover nonpension retirement benefits.  And while pension funds
have traditionally been funded to a much greater degree, the
returns they earn are subject to the performance of the assets in
which those funds have been invested. Volatile markets, such as
the world has seen recently, can play havoc with a government's
expected returns.
     
The adequacy of government funding for postemployment benefits is
in the spotlight now as a result of a recent Government Accounting
Standards Board mandate that states and local governments publicly
disclose those liabilities.  While Standard & Poor's considers a
government's postemployment liabilities akin to debt--there are
often legal or contractual guarantees attached to these
obligations--S&P generally treat them differently in its public
finance analyses because payments may not be regular and fixed, as
with a bond.  But these obligations do exist, and jurisdictions
across the U.S. are becoming increasingly aware of the cost of
paying their retired employees and concerned about how they can
prudently do so.


* S&P Says Mng't Sectors Remained Among the More Stable Industry
----------------------------------------------------------------
In a quarter that saw the downfall of Bear Stearns and
unprecedented movements by the Federal Reserve to prevent systemic
risk by providing substantial liquidity to the market, the global
asset management sector remained among the more stable sectors in
the financial services industry, according to a report released  
by Standard & Poor's Ratings Services titled, "Global Asset
Managers' Long-Term Growth Prospects Are Sound, Despite Short-Term
Earnings Pressure."
     
Nevertheless, persistent stress in global credit markets in first-
quarter 2008 has heightened pressure on the earnings of the asset
managers we rate.
      
"We continue to believe that the asset manager sector is well
poised to benefit from long-term growth, particularly given the
current, near unprecedented market environment that, we believe,
will result in fundamental changes in investment behavior," said
Standard & Poor's credit analyst Diane Hinton.  "Changing
demographics, ongoing pension reform in many countries, and
an acceleration in the shift to defined contribution from defined
benefit plans will also continue to underpin long-term growth
prospects thanks to new product innovation," added Ms. Hinton.


* BDO Seidman Identifies Risk Factors at 100 Largest Retailers
--------------------------------------------------------------
Research released by BDO Seidman, LLP, a leading professional
services firm, identifies strong competition (90%) and general
economic conditions (83%) as the most common risk factors among
the 100 largest public U.S. retailers. An increasing concern, as
compared to 2007, was the risk associated with international
suppliers, reflecting unease over recent product safety issues
with China (79% and the 3rd highest risk). Furthermore, while
still ranked high on the list, only 70 percent (as compared 84% in
2007) of retailers cited concerns regarding impediments to further
U.S. expansion, which may indicate that expansion plans have
stalled with retailers focusing on reducing costs in a
recessionary environment. Also ranking high is labor risk (62%)
and the implementation of technology systems (54%), both of which
had a higher frequency percentage this year over last year's
results (56% and 50%, respectively).

These are just a few of the findings in The 2008 BDO Seidman
RiskFactor Report for Retail Businesses. The report examined the
risk factors listed in the most recent SEC filings of the largest
100 publicly traded U.S. retailers; the factors were analyzed and
ranked by order of frequency cited.

"As advisors to consumer product and retail businesses, we created
the BDO Seidman RiskFactor Report for Retail Businesses to serve
as an annual benchmark of the changing concerns of the major
public retailers, said Doug Hart, a Partner in BDO Seidman's
Retail and Consumer Product practice. "Ultimately, the research
shows increased worry over the state of the economy. Concern over
the economic malaise is not only cited explicitly as a risk
factor, but also in the diminished concern over expansion plans,
marketing initiatives, loss of key management and dependency on
consumer trends. This reinforces the fact that many retailers are
hunkering down for a difficult environment rather than focusing on
growth."

The following is the list of the Top 20 Risk Factors of the 100
Largest U.S. Retailers:
                                                        2007  Rank
                                                             ----
   1. Competition and Consolidation in Retail Sector       90%  1  
   2. General Economic Conditions                          83%  2  
   3. U.S. and Foreign Supplier/Vendor Concerns            79%  4  
   4. Impediments to Further U.S. Expansion                70%  3  
   5. Labor (health coverage, union concerns, staffing     62%  5  
   6. Implementation of IT Systems                         54%  7  
   7. Changes to Federal, State or Local Regulation        52%  6  
   8. Terrorism and Geopolitical Events                    51%  10  
   9. Legal Proceedings (current/pending/future litigation)46%  15  
  10. Indebtedness                                         45%  9  
  11. Dependency on Consumer Trends                        45%  8  
  12. Seasonal Flux in Sales                               44%  12  
  13. Loss of Key Management/New Management                44%  11  
  14. Pending Mergers & Acquisitions                       42%  13  
  15. Privacy Concerns Related to Security Breach          40%  18  
  16. Insurance/Product Liability                          37%  20  
  17. Changes to Accounting Standards/Regulations          36%  16  
  18. International Operations (political/economic/etc.)   32%  17  
  19. Balancing Inventory                                  22%  19  
  20. Foreign Exchange Rates                               19% Not
                                                            Ranked  

Further findings in the 2008 BDO Seidman RiskFactor Report for
Retail Businesses:

   * Economic Factors Plague Retail. Of the 82 percent of
     retailers that cited general economic concerns as a risk in
     2008, energy and oil was highlighted most frequently (75%),
     followed by interest rates (55%), employment trends (53%),
     credit availability (43%), inflation 37%) and the housing
     market (23%). In 2007, many of the retailers did not include
     specific economic factors, indicating that these issues were
     not nearly as pronounced as they are today. Last year, of
     the 86 percent of the retailers that cited general economic
     concerns as a risk, energy and oil was the leader (57%),
     followed by interest rates (44%), employment trends (42%),
     inflation (38%), credit availability (24%) and the housing
     market (1%).

   * Geopolitical Fallout. Half (51%) of the top 100 retailers
     declared that terrorism and geopolitical events are viewed
     as risks, as compared to 44 percent in 2007. This increase
     is likely related to the confluence of the U.S. being more
     reliant on emerging economies for raw materials
     (commodities, oil and natural gas) and the U.S.'s
     increasingly strained relationship with many of these
     nations.

   * Protecting Privacy. As retailers continue to store consumer
     data to further focus their targeted marketing efforts, they
     are becoming increasingly wary to rising risk in the area of
     privacy. Some well publicized security breaches in 2007
     (such as TJX) have driven this point home, as 40 percent of
     the retailers cited consumer data security breach as a risk
     factor, up from 26 percent last year. Further, within that
     factor, some companies listed employee and corporate
     information leaks as a growing issue.

   * Regulatory Reflux. Half (52%) of the top 100 retailers
     declared that changes in federal, state and local
     regulations may impact their bottom line. Some reports
     specifically cited the new FIN 48 accounting rules that
     require businesses to report any uncertain tax positions in
     their financial statements. Also, a third (36%) of the
     retailers stated that accounting standards presented risk,
     up from 32 percent last year. This is likely due to
     increased concerns over IFRS, GAAP and other compliance
     regulations.

   * Foreign Exchange Rates Debut. While only 18 percent of
     retailers ranked foreign exchange rates as a concern, last
     year currency risk was not included in the top 20 risk
     factors at all. Clearly, the lower value of the U.S. dollar
     has spurred an increased concern among retailers who
     purchase inventory from foreign suppliers. Most noted was
     the Euro-U.S. dollar exchange rate, which has squeezed
     margins for retailers with European suppliers. Further, as
     emerging nations experience inflation in production costs,
     they have difficulty not passing it along to their US retail
     customers. Finally, since most US retailers don't have many
     foreign retail stores, they do not experience the currency
     exchange benefits that some other US multinationals are
     seeing.

BDO Seidman, LLP has been a valued business advisor to retail and
consumer product companies for almost 100 years. The firm works
with a wide variety of retail clients, ranging from multinational
Fortune 500 corporations to more entrepreneurial businesses, on a
myriad of accounting, tax and other financial issues.

                     About BDO Seidman, LLP

BDO Seidman, LLP is a national professional services firm
providing assurance, tax, financial advisory and consulting
services to a wide range of publicly traded and privately held
companies. Guided by core values including, competence, honesty
and integrity, professionalism, dedication, responsibility and
accountability for almost 100 years, we have provided quality
service and leadership through the active involvement of our most
experienced and committed professionals. BDO Seidman serves
clients through 35 offices and more than 300 independent alliance
firm locations nationwide. As a Member Firm of BDO International,
BDO Seidman, LLP serves multi-national clients by leveraging a
global network of resources comprised of 621 Member Firm offices
in 110 countries. BDO International is a worldwide network of
public accounting firms, called BDO Member Firms, serving
international clients. Each BDO Member Firm is an independent
legal entity in its own country.


* Large Companies with Insolvent Balance Sheets
-----------------------------------------------

                               Total
                               Shareholders    Total     Working
                               Equity          Assets    Capital     
  Company              Ticker  ($MM)           ($MM)      ($MM)
  -------              ------  ------------    ------    -------
Absolute Software       ABT          (3)          83       30
AFC Enterprises         AFCE        (40)         155      (20)
APP Pharmaceutic        APPX        (80)       1,077      214
Ariad Pham              ARIA         (8)         101       65
Bare Escentuals         BARE       (104)         224       84
Blount Intl             BLT         (54)         412      129
CableVision System      CVC      (5,097)       9,141     (607)
Carrols Restaurant      TAST        (13)         463      (29)
Centennial Comm         CYCL     (1,063)       1,343       14
Centerplate-IDS         CVP         (18)         332      (20)
Cheniere Energy         CQP        (228)       1,905      146
Cheniere Energy         LNG         (16)       2,962      428
Choice Hotels           CHH        (157)         328      (42)
Cincinnati Bell         CBB        (668)       2,020        0
Claymont Stell          PLTE        (40)         158       80
Compass Minerals        CMP          (5)         820      201
Corel Corp.             CRE         (14)         266      (15)
Crown Media HL          CRWN       (684)         676        4
CV Therapheutics        CVTX       (185)         259      177
Cyberonics              CYBX        (15)         136      (15)
Deltek Inc              PROJ        (86)         166      (28)
Denny's Corp            DENN       (179)         381       74
Domino's Pizza          DPZ      (1,450)         473       51
Dun & Bradstreet        DNB        (437)       1,659     (192)
Einstein Noah Re        BACL        (34)         149        4
Extendicare Real        EXE-U       (32)       1,440      (15)
Gencorp Inc.            GY          (52)         995       77
General Motors          GM      (35,480)     148,883   (9,720)
Healthsouth Corp.       HLS      (1,070)       2,051     (331)
Human Genome Sci        HGSI        (12)         949       47
ICO Global C-New        ICOG       (131)         602      101
IDEARC Inc              IAR      (8,600)       1,667      205
IMAX Corp               IMAX        (85)         208       (8)
IMAX Corp               IMX         (85)         208       (8)
Incyte Corp             INCY       (160)         276      228
Indevus Pharma          IDEV        (86)         199       40
Intermune Inc           ITMN        (31)         262      209
IPCS Inc                IPCS        (40)         547       76
Knology Inc             KNOL        (35)         619        7
Koppers Holdings        KOP         (14)         669      189
Life Sciences Re        LSR         (29)         502        1
Linear Tech Corp        LLTC       (564)       1,410      912
Lodgenet Interac        LNET        (48)         694        8
Maxxam Inc              MXM        (242)         544      120
Mediacom Comm-A         MCCC       (253)       3,615     (268)
Moody's Corp            MCO        (784)       1,715     (360)
National Cinemed        NCMI       (572)         464       67
Navistar Intl           NAVZ     (1,699)      10,786      164
New Flyer Indust        NFI-U       (23)         907       44
Nexstar Broadcasting    NXST        (89)         709      (11)
NPS Pharm Inc           NPSP       (188)         231      107
Primedia Inc            PRM        (129)         282        6
Protection One          PONE        (23)         673        6
Radnet Inc              RDNT        (53)         434       41
Redwood Trust           RWT        (718)       9,938      N.A.
Regal Entertai-A        RGC        (119)       2,635       (2)
Riviera Holdings        RIV         (48)         218       14
RSC Holdings Inc        RRR         (44)       3,460     (128)
Rural Cellular-A        RCCC       (590)       1,350      110
Sally Beauty Hol        SBH        (745)       1,440      414
Sealy Corp.             ZZ         (113)       1,025       22
Solutia Inc             SOA      (1,449)       2,638     (293)
Sonic Corp              SONC       (102)         765      (27)
Spectrum Brands         SPC        (141)       3,265      828
St John Knits Inc       SJKI        (52)         213       80
Station Casinos         STN        (291)       3,932      (50)
Stelco Inc              STE         (64)       2,657      693
Theravance              THRX        (66)         162      101
UST Inc                 UST        (292)       1,487      446
Valence Tech            VLNC        (61)          20        8
Voyager Learning        VLCY        (53)         917     (637)
Warner Music Gro        WMG         (47)       4,599     (764)
Weight Watchers         WTW        (926)       1,046     (172)
WR Grace & Co.          GRA        (316)       3,869   (1,057)
XM Satellite-A          XMSR       (925)       1,609     (403)
ZIX Corp                ZIXI          0           19       (1)

                             *********

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, 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 ***