TCR_Public/080523.mbx          T R O U B L E D   C O M P A N Y   R E P O R T E R

            Friday, May 23, 2008, Vol. 12, No. 122

                             Headlines

AIRTRAN HOLDINGS: President & CEO Fornaro Elected Board Chairman
AIRTRAN HOLDINGS: Board Elects William Usery as Director Emeritus
ALASKA AIR: JPMorgan Analyst Expects Airline Bankruptcies
ALOHA AIRLINES: Ch. 7 Trustee Proposes Recovery Incentive Plan
AMEREN CORP: Moody's Holds Units' Low-B Ratings, Positive Outlook

AMERICAN HOME: Panel Can Hire Hennigan as Conflicts Counsel
AMERICAN HOME: Wells Fargo Wants to Appeal Cash Recovery Denial
AMERICAN HOME: Court Approves Stipulation with Calyon New York
AMR CORP: JPMorgan Analyst Expects Airline Bankruptcies
ARTISTDIRECT INC: March 31 Balance Sheet Upside-Down by $21,000

ASARCO LLC: Conducts Plan Sponsor Selection Under Supervision
ASCALADE COMM: Creditors to Vote on Plan of Arrangement June 17
AVADO BRANDS: Can File Chapter 11 Plan Until August 30
BAG 'N BAGGAGE: KCP Opportunity Fund Named Stalking Horse Bidder
BALL CORP: Fitch Holds 'BB+' Rating on Revolving Credit Facility

BCE INC: NoteHolders Succeed in Opposing Plan of Arrangement
BCE INC: Wants to Reverse Court's Ruling on Planned Privatization
BEAR STEARNS: Advisory Firm Urges Shareholders' OK on JPMorgan Bid
BENICORP INSURANCE: Fitch Withdraws 'Bq' Q-ISF Rating
BIOTIME INC: March 31 Balance Sheet Upside Down by $3.3 Million

BMB MARKETPLACE: Gets Okay to Hire Lyndon Steimel as Counsel
BSML INC: March 29 Balance Sheet Upside-Down by $1,708,000
BUILDING MATERIALS: Moody's Junks Probability of Default Rating
CALPINE CORP: Receives All-Stock Takeover Bid From NRG Energy
CARBON CAPITAL: S&P Retains 'BB' Rating Under Negative CreditWatch

CONTINENTAL AIRLINES: JPMorgan Analyst Sees Airline Bankruptcies
CRICKET COMMUNICATIONS: Moody's Holds Corp. Family Rating at B2
DECRANE AIRCRAFT: Delayed Fin'l Statements Cue Moody's Rtng Review
DOMTAR CORP: S&P Holds 'BB-' Rating and Revises Outlook to Pos.
DORADO BECKVILLE: Wants to Publicly Sell Assets on June 30

DORADO BECKVILLE: Creditors' Panel Taps Jason Searcy as Counsel
E3 BIOFUELS: Creditors Have Until May 27 to File Proofs of Claim
EACO CORPORATION: April 2 Balance Sheet Upside-Down by $938,200
ECHOSTAR DBS: Fitch Assigns 'BB-' Rating on $750MM Notes Offering
EDUCATION RESOURCES: Can Hire Craig & Macauley as Special Counsel

EDUCATION RESOURCES: Panel Taps FTI Consulting as Fin. Advisor
EDUCATION RESOURCES: Can Hire Grant Thornton as Financial Advisor
ENCORE ACQUISITION: Mulls Sale, Merger; Hires Lehman as Advisor
ENERSYS: Moody's Assigns Ba1 Rating on Proposed Credit Facility
ENRON CORP: Court OKs Merger of Certain Affiliates to Save Costs

ENRON CORP: Wants Former Employees to Return Settlement Money
ENRON CORP: Shareholders Re-Assert Fraudulent Conduct Claims
EOS AIRLINES: Court Okays Bid Procedures For Sale of All Assets
FORD MOTOR: Adjusts Production Plan to Lower Industry Volume
FORD MOTOR: Volvo Plans to Cut Jobs at Gothenburg Plant

FRESH DEL MONTE: S&P Holds Ratings and Revises Outlook to Positive
GAP INC: Net Income Increases 40% to $249MM in Quarter Ended May 3
GENERAL MOTORS: Resumes Malibu Production as Workers OK Contract
HCA INC: Fitch Affirms 'B' Issuer Default Rating
HOMETOWN COMMERCIAL: S&P Junks Ratings on Seven Cert. Classes

HUMAN TOUCH: Moody's Lowers Corporate Family Rating to Caa3
IDLEAIRE TECHNOLOGIES: U.S. Trustee Forms Three-Member Committee
IDLEAIRE TECH: Wants 20% Incentive Pay for Key Workers Approved
INTERSTATE BAKERIES: Wants Small Sale Cap Increased by $5 Million
IMPATH INC: To Distribute $29 Million to Class A Holders on June 3

JOANNE'S BED: Closes Sale of Stores to Healthy Back
JETBLUE AIRWAYS: JPMorgan Analyst Expects Airline Bankruptcies
JETBLUE AIRWAYS: Moody's Junks CF Rating on Weak Fin'l Performance
JOHN TOLFREE: S&P Lowers Rating to BB from BBB- on $12.8MM Bonds
KANSAS CITY SOUTHERN: Moody's Lifts Ratings on Good Profitability

KING PHARMACEUTICALS: Moody's Affirms Ba3 Ratings
MADILL EQUIPMENT: May Use Cash Collateral; Mulls Sale of Assets
MAJESTIC STAR: March 31 Balance Sheet Upside-Down by $175 Million
MARCO CANTU: Case Summary & Two Largest Unsecured Creditors
MARK BARROW: Case Summary & Five Largest Unsecured Creditors

MERITAGE HOMES: Stockholders Adopt Changes to 2006 Incentive Plan
MESA AIR: Warns of Bankruptcy if Delta Air Terminates Contract
MIRANT CORP: Completes Share Repurchase Program With JP Morgan
MOHEGAN TRIBAL: Moody's Chips Corp. Family Rating to Ba2 from Ba1
MORRIS PUBLISHING: Revenue Decline Cues S&P to Cut Rating to B-

MOTHERS WORK: S&P Cuts Rating to B- from B on Merchandising Issues
MOVIE GALLERY: Names C.J. Gabriel, Jr. as President and CEO
MOVIE GALLERY: Can Sell MovieBeam Assets to Dar Capital for $2MM
MTM LIFE: Fitch Withdraws 'Bq' Quantitative IFS Rating
NATIONAL INDEPENDENT: A.M. Best Lifts IC Rating to bbb- from bb

NOMURA HOME: Fitch Junks Ratings on Six Classes of NIM Notes
NORTEL NETWORKS: S&P Holds 'B-' Rating; Revises Outlook to Pos.
NORTEL NETWORKS: Moody's Rates Add-On $500MM Debt Issue B3
NORTH AMERICAN TECH: March 30 Balance Sheet Upside-Down by $5.8MM
NORTHWEST AIRLINES: JPMorgan Analyst Expects Airline Bankruptcies

NOVASTAR FINANCIAL: March 31 Balance Sheet Upside-Down by $494MM
O'CHARLEY'S INC: Weak Performance Cues Moody's to Revise Outlook
ONCO PETROLEUM: Gets Default Notice from OSC on Financials Filing
PAPPAS TELECASTING: U.S. Trustee Selects 7-Member Creditors Panel
PASA FUNDING: Trustee's Notice Prompts S&P to Chip Six Rating

PLAINS EXPLORATION: Moody's Rates Sr. Unsecured Note Offering B1
PETCO ANIMAL: Moody's Cuts Rating on $700MM Sr. Sec. Loan to B1
PLASTECH ENGINEERED: Intends to Close Five Plants in Three States
PLASTECH ENGINEERED: Eisenmann Pursues Breach of Contract Suit
PLASTECH ENGINEERED: Court OKs Pact to Return Hyundai Tools to JCI

POLAR MOLECULAR: Ch. 11 Case Junked; Patent Foreclosure Continues
POPE & TALBOT: Court OKs Sale Bidding Procedures for Halsey Assets
POPE & TALBOT: Ch. 7 Trustee Can Continue Debtors' Operations
POPE & TALBOT: Canadian Court Appoints PwC as Interim Receiver
POPE & TALBOT: Ch. 7 Trustee Taps Miller Coffey as Accountant

PRO-FIT HOLDINGS: Files for Chapter 15; Wants Civil Actions Stayed
PRO-FIT HOLDINGS: Chapter 15 Petition Summary
QUAKER FABRIC: Files Disclosure Statement and Chapter 11 Plan
QUAKER FABRIC: Wants Plan Filing Period Extended to June 18
RCS-CHANDLER: Unsecured Creditors Unwilling to Serve on Committee

RESIDENTIAL CAPITAL: Noteholders Tender $8.6 Billion in Old Notes
SABINE PASS: Moody's Cuts Rating on Parent's Liquidity Position
SENTRY SELECT: Unitholders Approve Resolution to Dissolve Fund
SOUTH DAKOTA: A.M. Best Chips FS Rating to B(Fair) from B+(Good)
SPECTRUM BRANDS: $692.5MM Salton Deal Cues Fitch to Hold Ratings

SPECTRUM BRANDS: Salton Deal Cues S&P to Put Ratings Under Watch
STEVEN CARROLL: Voluntary Chapter 11 Case Summary
SYMBION INC: Moody's Rates Unsecured Notes Caa1; Outlook Negative
TIME WARNER: Fitch Holds BB+ Rating on Redeemable Preferred Stock
TRIAD FINANCIAL: S&P Changes B Rating's Outlook to Negative

UAL CORP: JPMorgan Analyst Anticipates Airline Bankruptcies
US AIRWAYS: JPMorgan Analyst Anticipates Airline Bankruptcies
VERENIUM CORP: Posts $23.3 Million Net Loss in 2008 First Quarter
VERTIS INC: March 31 Balance Sheet Upside-Down by $916.0 Million
VOTORANTIM CIMENTOS: S&P's 'BB+' Credit Rating Remains Unchanged

WATERFORD GAMING: Moody's Trims Corp. Family Rating to B1 from Ba3
WCI COMMUNITIES: S&P Cuts Ratings on Possible Liquidity Shortfall
WELLMAN INC: Creditors' Panel Demands Review of Final DIP Order
ZOOM TECHNOLOGIES: Gets Delisting Warning on Bid Price Deficiency

* Fitch Says Despite Receptive Envi. ABCP Paper Market Stays Tough
* Fitch Says Higher Life Expectancy Could Raise Firm's Obligations
* Fitch Puts Certain Notes Across 59 CDOs Under Watch Negative
* S&P Revises the Outlook on Seven of Fund of Funds to Neg.

* NHB Names Charles Lewis as Senior Consultant in Delaware Office

* BOOK REVIEW: Business Wit & Wisdom

                             *********

AIRTRAN HOLDINGS: President & CEO Fornaro Elected Board Chairman
----------------------------------------------------------------
AirTran Airways, a subsidiary of AirTran Holdings, Inc., disclosed
at its annual meeting in Charleston, South Carolina, that Bob
Fornaro, president and CEO of AirTran Airways, will also take on
the role of chairman of the board, effective June 1, 2008.  Mr.
Fornaro will take over the chairmanship from Joe Leonard, who is
retiring from the AirTran board effective May 31, 2008, and served
as Chairman and CEO of AirTran Airways from 1999 to 2007.

Mr. Fornaro joined AirTran Airways in March 1999 as president and
CFO.  He was named chief operating officer and elected to the
board of directors in 2001.  Mr. Fornaro took the helm as
president and chief executive officer in November 2007.

The company's shareholders, including those at the annual meeting,
had re-elected three members -- Peter D'Aloia, Jere A. Drummond
and John F. Fiedler -- to the Board of Directors, the terms of
which will expire in 2011.

"We are extremely pleased that shareholders overwhelmingly agree
with the direction and leadership that these three Board members
have provided to AirTran Airways," Mr. Fornaro said.  "I have the
utmost confidence they will uphold our commitment to provide low
fares, outstanding service and shareholder value."

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

                          *     *     *

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


AIRTRAN HOLDINGS: Board Elects William Usery as Director Emeritus
-----------------------------------------------------------------
AirTran Holdings, Inc., parent company of AirTran Airways,
disclosed at its annual meeting in Charleston, South Carolina,
that board member William J. Usery, Jr., is retiring but being
elected by the board as a Director Emeritus.

"Bill has served on the board for nearly a decade, and his
experience as a director, along with his unique experience in
labor relations and knowledge of our company, are invaluable," Joe
Leonard, chairman of the board, said.  "We feel that he will
continue to be an asset to AirTran as our first Director Emeritus,
and we will tap his expertise on company matters to help guide us
in the future."

The board created the new title of Director Emeritus to allow a
retiring director to continue providing specific and immediate
value to the company on relevant issues.  Retiring board members
can be elected as a Director Emeritus for a one-year term, but
only on a vote of the full board.  The title can be extended if
the board determines that the director still satisfies the
standard of providing specific, immediate and continuing value to
AirTran.  A Director Emeritus will not vote on board matters and
will not receive any fees from the board.

Mr. Usery has served on the AirTran board of directors since 2000.  
He has served as president of Bill Usery Associates, Inc., a
labor-management consulting firm, since 1978.  Previously, Mr.
Usery served in many labor-management positions with the federal
government, including as secretary of labor under President Ford
from 1976 to 1977, as national director of the Federal Mediation
and Conciliation Service from 1973 to 1976, and as assistant
secretary of labor for labor-management relations under President
Nixon from 1969 to 1973.

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

                          *     *     *

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


ALASKA AIR: JPMorgan Analyst Expects Airline Bankruptcies
---------------------------------------------------------
Christopher Hinton at MarketWatch reports that Jamie Baker, an
analyst at J.P. Morgan, on Monday said U.S. airline industry
stands to post a collective $7,200,000,000 in operating losses in
2008.  The results would be wider than an initial forecast of
$4,600,000,000 loss, the analyst said.

According to MarketWatch, Mr. Baker, in his research note, said
though investors, management and analysts may talk about airlines
acting collectively to reduce capacity to firm up revenue, the
reality is that they are more likely to dig in and try to outlast
each other.

MarketWatch relates the JPMorgan analyst noted that capacity cuts
have falled far short of what executives have said are necessary.  
Mr. Baker, MarketWatch says, indicated that another round of
airline bankruptcy -- even among the legacy carriers -- is a
question of when rather than if.

According to the report, Mr. Baker said U.S. Airways has the
highest risk of bankruptcy, followed by Northwest Airlines, United
Air Lines' parent UAL Corp., AMR Corp., JetBlue, Continental
Airlines, AirTran, Delta Air Lines, Alaska Air Lines and Southwest
Airlines.

Mr. Baker, the report adds, said credit card companies could pose
more significant risk to airlines than debt.  He explained the
credit card companies could impose unilateral holdbacks, which
will toll on a carrier's liquidity and cash balances.

                            In the Red

Except for Southwest, the major U.S. Airlines posted net losses
for the period ended March 31, 2008:

                          Net Income for Period Ended
                      -----------------------------------
                      March 31, 2008       March 31, 2007
                      --------------       --------------
   US Airways          ($236,000,000)         $66,000,000
   Northwest         ($4,139,000,000)       ($292,000,000)
   UAL                 ($537,000,000)       ($152,000,000)
   AMR                 ($328,000,000)         $81,000,000
   JetBlue               ($8,000,000)        ($22,000,000)
   Continental          ($80,000,000)         $22,000,000
   AirTran              ($34,813,000)          $2,158,000
   Delta             ($6,261,000,000)        $155,000,000
   Alaska Air           ($24,000,000)         ($3,700,000)
   Southwest             $34,000,000          $93,000,000

                        Balance Sheet at March 31, 2008
                      -----------------------------------
                      Total Assets            Total Debts   
                      ------------            -----------
   US Airways       $8,013,000,000         $6,435,000,000
   Northwest       $21,032,000,000        $17,746,000,000
   UAL             $23,813,000,000        $21,647,000,000
   AMR             $28,766,000,000        $26,277,000,000
   JetBlue          $6,050,000,000         $4,721,000,000
   Continental     $12,542,000,000        $11,071,000,000
   AirTran          $2,198,009,000         $1,783,470,000
   Delta           $26,755,000,000        $22,804,000,000
   Alaska Air       $4,379,800,000         $3,520,600,000
   Southwest       $18,031,000,000        $10,846,000,000

On April 14, Northwest announced an agreement to merge with Delta.

United and US Airways are also in talks for a possible merger.  
Continental was initially eyed as a top merger partner for United.

Small and medium-sized carriers have tumbled one after the other
into bankruptcy.  Aloha Airlines commenced bankruptcy proceedings
in Hawaii in March and later ceased operations.  ATA Airlines Inc.
ceased operations and filed for chapter 11 protection on April 2,
and Skybus Airlines Inc. tumbled into bankruptcy on April 5.  
Frontier Airlines went belly up and filed for chapter 11 on April
14.  EOS Airlines filed a chapter 11 petition on April 26.

                       About Alaska Air Group

Seattle, Wash.-based Alaska Air Group Inc. (NYSE: ALK) --
http://alaskaair.com/-- is a holding company with two principal
subsidiaries, Alaska Airlines Inc. and Horizon Air Industries Inc.  
Alaska Airlines and Horizon Air together serve 89 cities through
an expansive network throughout Alaska, the Lower 48, Canada and
Mexico.

                           *     *     *

As reported in the Troubled Company Reporter on May 16, 2008,
Moody's Investors Service affirmed all debt ratings of Alaska Air
Group and its primary subsidiary Alaska Airlines, Inc. --
corporate family rating of B1.  The outlook has been changed to
negative from stable.  The negative outlook reflects Moody's
expectation that Alaska will record a net loss and negative cash
flow from operations in 2008 due to the impact of materially
higher fuel costs and weakening economic conditions which are
likely to pressure yields.  Although the company has fuel hedges
that are meaningfully more beneficial than competitors, Alaska
will be challenged to generate positive cash flow from operations
if current fuel prices persist, Moody's said.

On May 5, according to the TCR, Standard & Poor's Ratings Services
lowered its ratings on Alaska Air Group Inc. and its major
operating subsidiary, Alaska Airlines Inc., including lowering the
long-term corporate credit ratings on both to 'B+' from 'BB-'.  
The outlook is stable.  The downgrade, S&P explained, is based on
an expected weakening in the company's financial profile in 2008
because of sustained high fuel prices and weaker demand in the
second half of 2008 as a result of the slowing economy.


ALOHA AIRLINES: Ch. 7 Trustee Proposes Recovery Incentive Plan
--------------------------------------------------------------
Dane S. Field, the interim chapter 7 trustee appointed to oversee
the liquidation of the estates of Aloha Airlines, Inc., Aloha
Airgroup, Inc., and Airgroup Acquisition Corp., asks the U.S.
Bankruptcy Court for the District of Hawaii to approve a recovery
incentive carve-out plan.

Aloha's lender, GMAC Commercial Finance LLC, has agreed to the
RICOP so that the Debtors' senior management may continue wind-
down efforts uninterrupted.

Ms. Field relates that GMAC will fund certain sums based on the
recovery achieved from the liquidation of its collateral.  The
amount of the incentive funds will be determined based on the
permanent pay-down of the outstanding GMAC obligations from the
sale of the Debtors' assets from and after May 1, 2008.

GMAC was owed roughly $49,000,000 as of May 1, 2008, the Chapter 7
Trustee relates.

Half of the Incentive Funds, the Chapter 7 Trustee says, will be
paid to Aloha's president, David Banmiller, and the other to
Jeffrey Kessler, its chief financial officer.

Members of the Aloha senior management team, led by Messrs.
Banmiller and Kessler, have been engaged in wind-down efforts.

Ms. Field believes implementation of the RICOP will help her  
efficiently and successfully liquidate as much of the Debtors'
remaining assets as quickly as possible.

As reported by the Troubled Company Reporter, the Court at a
hearing on May 1, authorized the Chapter 7 Trustee to continue to
operate the Debtors' remaining business, including their air cargo
business.  The Court also authorized the Trustee to consummate the
sale of the Debtors' contract services assets to Pacific Air Cargo
LLC.

On May 12, the Court permitted Ms. Field to sell the Debtors' Air
Cargo assets to Saltchuk Resources, Inc.  The sale closed two days
later.

Ms. Field says the Debtors have significant remaining assets that
must be liquidated, including but not limited to, intellectual
property, owned aircraft, engines and parts, and other personal
property, including receivables.

                       About Aloha Airlines

Based in Honolulu, Hawaii, Aloha Airgroup Inc., Aloha Airlines
Inc. -- http://www.alohaairlines.com/-- and its affiliates are  
carriers that fly passengers and freight to Hawaii's five major
airports, as well as to half a dozen destinations in the western
U.S.  They operate a fleet of about 20 aircraft, all Boeing 737s,
including three configured as freighters.

This is the airline's second bankruptcy filing.  Aloha filed for
Chapter 11 protection on Dec. 30, 2004 (Bankr. D. Hawaii Case No.
04-03063), and emerged from Chapter 11 bankruptcy protection in
February 2006.

The company and its affiliates filed again for Chapter 11
protection on March 18, 2008 (Bankr. D. Hawaii Lead Case No. 08-
00337).  Brian G. Rich, Esq., Jordi Guso, Esq., and Paul Steven
Singerman, Esq., at Berger Singerman P.A., and David C. Farmer,
Esq., represent the Debtors in their restructuring efforts.  When
the Debtors filed for protection from their creditors, they listed
estimated assets and debts of $100 million to $500 million.

On April 29, the Bankruptcy Court converted the Debtors' cases
into chapter 7 liquidation proceedings.  The next day, the United
States Trustee appointed Dane S. Field to serve as chapter 7
trustee for the cases.


AMEREN CORP: Moody's Holds Units' Low-B Ratings, Positive Outlook
-----------------------------------------------------------------
Moody's Investors Service downgraded the long-term debt ratings of
Union Electric Company (d/b/a AmerenUE; Issuer Rating to Baa2 from
Baa1). The rating outlook is stable. Moody's placed the ratings of
Ameren Corp. (Ameren) and AmerenEnergy Generating Company
(AmerenGenco) on review for possible downgrade, including Ameren's
Baa2 Issuer Rating and Prime-2 rating for commercial paper and
AmerenGenco's Baa2 senior unsecured rating.

Moody's also placed Union Electric Company's Prime-2 rating for
commercial paper on review for possible downgrade. Moody's
affirmed the ratings of Central Illinois Public Service Company
(d/b/a AmerenCIPS, Ba1 Issuer Rating); CILCORP Inc. (Ba1 Corporate
Family Rating); Central Illinois Light Company's (d/b/a
AmerenCILCO, Ba1 Issuer Rating), and Illinois Power Company (d/b/a
AmerenIP, Ba1 Issuer Rating) and maintained a positive rating
outlook on these four subsidiaries.

"The downgrade of Union Electric Company reflects declining cash
flow coverages; increased operating costs; growing capital
expenditures for environmental compliance, transmission and
delivery system reliability; and higher debt level being incurred
to finance these investments", said Michael G. Haggarty, Vice
President and Senior Credit Officer. Union Electric has
experienced higher fuel, purchased power, and labor costs over the
last several years. As a result, cash flow from operations before
working capital adjustments has fallen from the 30% range as
recently as 2004 to slightly under 20% in 2007 and could decline
further in coming years. The utility's capital expenditures are
projected to increase by 65% in 2008 to $1.03 billion from $625
million in 2007 and are expected to remain at elevated levels for
at least the next several years. As a result, the utility's
financial metrics are more likely to remain at levels more in line
with the middle range of the Baa rating category than the high Baa
range.

The downgrade also reflects the challenging regulatory environment
for electric utilities operating in the state of Missouri, as
Union Electric is one of the relatively few utilities in the
country operating without fuel, purchased power, and environmental
cost recovery mechanisms. The lack of such automatic cost recovery
provisions creates uncertainty regarding the timely recovery of
the higher costs and investments being incurred and leads to
significant regulatory lag. The utility has filed to implement a
fuel and purchased power recovery clause as part of its pending
$251 million rate case, which is not expected to be completed and
implemented until March 2009. The utility requested a similar fuel
adjustment clause in its last rate case and the request was
denied.

"Longer term challenges facing the utility include uncertainties
associated with pending climate control legislation, which could
have a significant effect on this predominantly coal fired
utility, as well as risks associated with the construction of a
potential second unit at its Callaway nuclear power station, which
is under consideration", said Mr. Haggarty.

The review of parent company Ameren's ratings is prompted by the
downgrade of Union Electric, its largest utility subsidiary;
declining consolidated cash flow coverage metrics; and capital
expenditures that are projected to increase substantially to $2.2
billion in 2008 from $1.4 billion in 2007 and remain high going
forward. The review will focus on the parent company's plans to
finance these capital expenditures; the amount of long-term debt
to be issued at the parent, if any; the magnitude of planned
capital contributions to be made to support capital programs at
its subsidiaries; and the likely impact on coverage metrics,
particularly considering the company's relatively high dividend
payout ratio.

The review will also consider Ameren's plans to reduce its
reliance on short-term borrowings under its bank credit
facilities, which have been heavily drawn for much of the last
year; the outcome of pending distribution rate cases at its
Illinois utilities; as well as any progress on the successful
implementation of new power procurement policies and procedures in
Illinois. Moody's does not expect the review to result in more
than a one notch downgrade of Ameren's ratings.

The review of AmerenGenco's ratings is prompted by increased
capital spending for environmental compliance and an anticipated
higher level of debt issuance at the subsidiary to finance this
capital spending over the next several years. It also reflects the
likelihood that controls on carbon emissions will limit the upside
potential of this relatively small, undiversified, predominantly
coal based unregulated merchant generating subsidiary. The review
will focus on the magnitude of environmental compliance and other
capital spending at the subsidiary, the amount of debt financing
that will be necessary to fund these expenditures; the resulting
pressure on the generating company's cash flow coverage metrics
over the long-term; and the liquidity profile and hedging strategy
of the subsidiary going forward. Moody's does not expect the
review to result in more than a one notch downgrade of
AmerenGenco's rating.

The review of Union Electric's Prime-2 rating for commercial paper
is prompted by the review of parent company Ameren's Prime-2
short-term rating and takes into consideration the shared bank
credit facility between the utility and the parent, as well as the
money pool arrangement in place between the two entities, which
allows Union Electric to borrow from Ameren. It also reflects the
close relationship and mutual interdependence between the utility
and the parent company in terms of liquidity and financial
support, as has been most recently demonstrated by a $380 million
capital contribution made by Ameren to Union Electric in 2007 and
a $122 intercompany note payable from Union Electric to Ameren
outstanding at March 31, 2008.

The maintenance of a positive outlook on Ameren's Illinois
utilities reflects the potential for modest upward movement in
their rating in the event there is a supportive outcome of their
pending distribution rate cases, resulting in an improvement in
some of their relatively low cash flow coverage metrics; a
reduction in high short-term debt levels, increasing financial
flexibility; and the successful implementation of new power
procurement policies and procedures in Illinois.

Ratings downgraded and assigned a stable outlook include:

   * Union Electric's senior secured debt, to Baa1 from A3;
     Issuer Rating; to Baa2 from Baa1; subordinated debt, to Baa3
     from Baa2; and preferred stock, to Ba1 from Baa3.

Ratings placed under review for possible downgrade include:

   * Ameren's Baa2 Issuer Rating and Prime-2 short-term rating
     for commercial paper;

   * AmerenGenco's Baa2 senior unsecured long-term debt rating;
     and

   * Union Electric's Prime-2 short-term rating for commercial
     paper.

Ratings affirmed with a positive outlook include:

   * Central Illinois Public Service Company's Baa3 senior
     secured debt, Ba1 Issuer Rating, and Ba3 preferred stock;

   * Illinois Power Company's Baa3 senior secured debt, Ba1
     Issuer Rating, and Ba3 preferred stock;

   * CILCORP, Inc.'s Ba1 Corporate Family Rating;

   * CILCORP's Probability of Default Rating at Ba1.

Ratings affirmed with a positive outlook/LGD assessments revised
include:

   * CILCORP's senior unsecured debt at Ba2 (LGD5, 82%) from Ba2
     (LGD5, 79%);

   * Central Illinois Light Company's senior secured debt at Baa2
     (LGD2, 20%) from Baa2 (LGD2, 15%); and Ba1 Issuer Rating;

   * Central Illinois Light Company's preferred stock at Ba2
     (LGD4, 59%) from Ba2 (LGD4 51%).

Ratings and Loss Given Default assessments for CILCORP and its
subsidiary Central Illinois Light Company have been determined in
accordance with Moody's Loss-Given Default Methodology.

Ameren Corporation is a public utility holding company
headquartered in St. Louis, Missouri. It is the parent company of
Union Electric Company (d/b/a AmerenUE), Central Illinois Public
Service Company (d/b/a AmerenCIPS), CILCORP Inc., Central Illinois
Light Company (d/b/a AmerenCILCO), Illinois Power Company (d/b/a
AmerenIP), and AmerenEnergy Generating Company.


AMERICAN HOME: Panel Can Hire Hennigan as Conflicts Counsel
-----------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware authorized
the Official Committee of Unsecured Creditors of American Home
Mortgage Investment Corp. and its debtor-affiliates to retain
Hennigan, Bennett & Dorman LLP, as special conflicts counsel, in
accordance with the terms of a retainer letter.

James J. McGinley, co-chairman of the Creditors Committee, said
the creditors decided to retain Hennigan Bennett to avoid any
issues with respect to actual or potential conflicts of interest
arising from the fact that Bank of America, N.A., administrative
agent for certain prepetition secured lenders, and certain of its
affiliates are clients of the Creditors Committee's bankruptcy
counsel.

As conflicts counsel, Hennigan Bennett will provide, among other
things, legal services in connection with:

   -- any matter, in which the Creditors Committee may be adverse
      to BofA, including any matter relating to the Debtors' use
      of BofA's cash collateral and the investigation of the
      extent, validity and priority of BofA's asserted security
      interests in the Debtors' assets;

   -- any matter, in which the Creditors Committee may be adverse
      to one of the prepetition secured lenders, JPMorgan Chase
      Bank;

   -- representing the Creditors Committee in other bankruptcy
      and commercial litigation matters; and

   -- providing other advice and representation as may be
      necessary or appropriate in the Chapter 11 cases.

Hennigan Bennett will not provide the Committee substantive legal
advice outside of the insolvency and business litigation areas,
including advice in areas as patent, labor, criminal or real
estate law.  The firm will also not devote attention to, form
professional opinions as to, or advise the Creditors Committee
with respect to its disclosure obligations under federal
securities or other non-bankruptcy laws.

Hennigan Bennett will be paid on its ordinary and customary
hourly rates:

         Attorneys                 $265 to $875
         Financial consultants     $425 to $690
         Paralegals and clerks      $85 to $265

Hennigan Bennett will also be reimbursed of all reasonable costs
and expenses it incurred.  Pursuant to the parties' Retention
Agreement, the Creditors Committee agreed to pay the firm
additional amounts as would constitute a reasonable fee, based
upon factors as the complexity of the problems presented, the
nature and extent of the opposition encountered, the results
accomplished, and the skill exercised in accomplishing those
results.

Joshua D. Morse, an associate of Hennigan Bennett, assured the
Court that the firm and its attorneys are disinterested persons,
who do not hold or represent an interest adverse to the Creditors
Committee, and who do not have any connection with the Debtors,
their creditors, or any other party-in-interest.

The Court also ruled that Hennigan, Bennett & Dorman LLP, as
special conflicts counsel, is authorized to represent the
Official Committee of Unsecured Creditors solely in connection
with these matters:

   (1) any matter, in which the Creditors Committee may be
       adverse to Bank of America, N.A., administrative agent for
       certain prepetition secured lenders, including any matter
       relating to the Debtors' use of BofA's cash collateral and
       the BofA Investigation;

   (2) any matter, in which the Creditors Committee may be
       adverse to JPMorgan Chase Bank, one of the prepetition
       secured lenders; and

   (3) any other bankruptcy or commercial litigation matters, in
       which the Creditors Committee's bankruptcy counsel, Hahn &
       Hessen LLP or Blank Rome LLP, will not be representing the
       committee due to actual or potential conflict of interest
       issues.

                   About American Home

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

American Home Mortgage and seven affiliates filed for chapter 11
protection on Aug. 6, 2007 (Bankr. D. Del. Case Nos. 07-11047
through 07-11054).  James L. Patton, Jr., Esq., Joel A. Waite,
Esq., and Pauline K. Morgan, Esq. at Young, Conaway, Stargatt &
Taylor LLP represent the Debtors. Epiq Bankruptcy Solutions LLC
acts as the Debtors' claims and noticing agent. The Official
Committee of Unsecured Creditors selected Hahn & Hessen LLP as
its counsel.  As of March 31, 2007, American Home Mortgage's
balance sheet showed total assets of $20,553,935,000, total
liabilities of $19,330,191,000.

The U.S. Bankruptcy Court for the District of Delaware extended
the exclusive periods for American Home Mortgage Investors Corp.
and its debtor-affiliates to file a plan of reorganization through
June 2, 2008; and solicit and obtain acceptances for that plan
through July 31, 2008.

(American Home Bankruptcy News, Issue No. 35; Bankruptcy
Creditors' Service, Inc., Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000).


AMERICAN HOME: Wells Fargo Wants to Appeal Cash Recovery Denial
---------------------------------------------------------------
Wells Fargo Bank, National Association, would like to verify
whether the U.S. Bankruptcy Court for the District of Delaware
erred in denying Wells Fargo the ability to recoup $462,049,
which was paid in error from securities held by American Home
Mortgage Investment Corp. in the AHMIT 2007-SD1 transaction.

As reported by the Troubled Company Reporter on May 5, 2008, the
Court denied a request by Wells Fargo Bank, N.A. to lift the
automatic stay to the extent necessary to recover a payment made
in error to, and unjustly retained by, American Home through
recoupment, the imposition of a constructive trust, and the
imposition of an equitable lien against certain securities owned
by AHM Investment.

As reported by the TCR on April 3, 2008, Wells Fargo is the
securities administrator, to a certain indenture dated as of March
13, 2007, along with American Home Mortgage Assets Trust 2007-A &
SD1, as issuing entity, and Deutsche Bank National Trust Company,
as indenture trustee.

On March 26, 2007, Wells Fargo paid in error to AHM Investment
$462,049 on account of the Class IV-M-4 Note held by the Debtor.  
Wells Fargo promptly notified the Debtor of the error and
requested the immediate return of the Payment to the Trust.  The
Debtor, however, has refused to return the Payment.

Todd C. Schiltz, Esq., at WolfBlock LLP, in Wilmington, Delaware,
told Judge Christopher Sontchi that the Payment should never have
been made because no distributions were owing to any holders of
Class IV-M-4 Notes at that time.  He noted that the Debtor knew,
or should have known, that it was very unlikely that any payments
would be distributed to the Debtor on its Class IV-M-
4 Note.

                          Debtors Objected

As reported by the TCR on April 23, the Debtors objected, pointing
out that Wells Fargo seeks relief from the automatic stay to
recover payments made before the bankruptcy filing.  Wells Fargo
sought relief from the automatic stay to assert equitable remedies
of recoupment, constructive trust and equitable lien to recover a
M-4 Note Payment made in March 2007, more than 4 months before the
Petition Date.

The Debtors added that Wells Fargo, prior to filing its lift stay
request, twice violated the automatic stay through impermissible
postpetition set-offs of $269,245 from distributions owed to the
Debtors on wholly separate and distinct securities.

                   About American Home

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

American Home Mortgage and seven affiliates filed for chapter 11
protection on Aug. 6, 2007 (Bankr. D. Del. Case Nos. 07-11047
through 07-11054).  James L. Patton, Jr., Esq., Joel A. Waite,
Esq., and Pauline K. Morgan, Esq. at Young, Conaway, Stargatt &
Taylor LLP represent the Debtors. Epiq Bankruptcy Solutions LLC
acts as the Debtors' claims and noticing agent. The Official
Committee of Unsecured Creditors selected Hahn & Hessen LLP as
its counsel.  As of March 31, 2007, American Home Mortgage's
balance sheet showed total assets of $20,553,935,000, total
liabilities of $19,330,191,000.

The U.S. Bankruptcy Court for the District of Delaware extended
the exclusive periods for American Home Mortgage Investors Corp.
and its debtor-affiliates to file a plan of reorganization through
June 2, 2008; and solicit and obtain acceptances for that plan
through July 31, 2008.

(American Home Bankruptcy News, Issue No. 35; Bankruptcy
Creditors' Service, Inc., Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000).


AMERICAN HOME: Court Approves Stipulation with Calyon New York
--------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware approved
the stipulation between American Home Mortgage Investment Corp.,
its debtor-affiliates, and Calyon New York Branch, settling
certain disputes.  

The Court maintained that Ca1yon's request to compel the Debtors
to return improperly withheld funds, consisting of $14,474,813 in
advanced funds and other mortgage assets, is deemed withdrawn,
with prejudice, except as to, and solely with respect to, the
relief sought related to the $415,752 disputed principal and
interest payments.

The Court also noted that the parties' rights to resolve the
Disputed P&I through the Calyon's request are reserved.

As reported by the Troubled Company Reporter on April 28, 2008,
pursuant to Rule 9019(a) of the Federal Rules of Bankruptcy
Procedure, American Home Investment Corp., the parties asked the
Court to approve their stipulation, which settles, without further
litigation, Calyon's request to obtain certain advanced funds, and
certain other disputes.

Calyon New York Branch sought a declaratory judgment, injunctive
relief and damages, including a demand for an accounting and a
constructive trust, against the Debtors pursuant to the Debtors'
refusal to turnover certain and records and transfer funds on
account of the termination of their mortgage loans repurchase
agreement.

Pursuant to a Repurchase Agreement dated November 21, 2006,
Calyon, as administrative agent, on behalf of various parties,
was requested to purchase and did purchase, from time to time,
certain mortgage loans from the Debtors.  The Debtors agreed to
repurchase the loans on applicable dates at set prices.

Pursuant to the Repurchase Agreement, American Horne Mortgage
Servicing, Inc., as servicer, was responsible for administering
the underlying Mortgage Loans, including, without limitation,
collecting monthly mortgage payments, monitoring past-due
accounts, and reporting on defaulted loans.

On August 1, 2007, Calyon sent the Debtors notices of default,
which, among others, notified of the acceleration all amounts
due, and the termination of the facility.  The Repurchase Price
for the Mortgage Loans $1,178,225,176, plus a "price
differential", interest and costs, including attorney fees.

Pursuant to the Stipulation:

   -- Calyon is provided with a cash recovery of $11,546,262;

   -- the Debtors agree to use reasonable efforts to trace and
      recover a total of $2,017,291 in unpaid funds, which will
      be paid to Calyon, if recovered;

   -- Calyon agrees that, in addition to the right to enforce the
      provisions of the Stipulation, Calyon's only rights and
      claims against the Debtors for the Unpaid Funds are general
      unsecured claims in connection with the Repurchase
      Agreement;

   -- Calyon waives its right to $2,729,164, which will be placed
      into an escrow account maintained by the Debtors and held
      pending further Court order or agreement of the parties
      that may assert an interest in the funds;

   -- Calyon and the Debtors agree to place $415,752 -- the
      disputed principal and interest payments -- in an escrow
      account, and retain all rights and claims to the Disputed
      P&I; and

   -- the Debtors agree to determine by June 2, 2008, whether any
      portion of certain remaining amounts aggregating $334,407
      are due to Calyon.  The Debtors agree to recover any
      portion of the Remaining Amounts, which are due to Calyon,
      if any.

The aggregate amounts referenced in the Stipulation were
calculated based on the identification of specific funds related
to certain mortgage loans that never closed and were funded by
Calyon under the Repurchase Agreement.  While the Parties have
not broken down the specific amounts and identified the related
Mortgage Loans, they have shared the relevant data supporting the
aggregate amounts referenced.

                   About American Home

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

American Home Mortgage and seven affiliates filed for chapter 11
protection on Aug. 6, 2007 (Bankr. D. Del. Case Nos. 07-11047
through 07-11054).  James L. Patton, Jr., Esq., Joel A. Waite,
Esq., and Pauline K. Morgan, Esq. at Young, Conaway, Stargatt &
Taylor LLP represent the Debtors. Epiq Bankruptcy Solutions LLC
acts as the Debtors' claims and noticing agent. The Official
Committee of Unsecured Creditors selected Hahn & Hessen LLP as
its counsel.  As of March 31, 2007, American Home Mortgage's
balance sheet showed total assets of $20,553,935,000, total
liabilities of $19,330,191,000.

The U.S. Bankruptcy Court for the District of Delaware extended
the exclusive periods for American Home Mortgage Investors Corp.
and its debtor-affiliates to file a plan of reorganization through
June 2, 2008; and solicit and obtain acceptances for that plan
through July 31, 2008.

(American Home Bankruptcy News, Issue No. 35; Bankruptcy
Creditors' Service, Inc., Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000).


AMR CORP: JPMorgan Analyst Expects Airline Bankruptcies
--------------------------------------------------------------
Christopher Hinton at MarketWatch reports that Jamie Baker, an
analyst at J.P. Morgan, on Monday said U.S. airline industry
stands to post a collective $7,200,000,000 in operating losses in
2008.  The results would be wider than an initial forecast of
$4,600,000,000 loss, the analyst said.

According to MarketWatch, Mr. Baker, in his research note, said
though investors, management and analysts may talk about airlines
acting collectively to reduce capacity to firm up revenue, the
reality is that they are more likely to dig in and try to outlast
each other.

MarketWatch relates the JPMorgan analyst noted that capacity cuts
have falled far short of what executives have said are necessary.  
Mr. Baker, MarketWatch says, indicated that another round of
airline bankruptcy -- even among the legacy carriers -- is a
question of when rather than if.

According to the report, Mr. Baker said U.S. Airways has the
highest risk of bankruptcy, followed by Northwest Airlines, United
Air Lines' parent UAL Corp., AMR Corp., JetBlue, Continental
Airlines, AirTran, Delta Air Lines, Alaska Air Lines and Southwest
Airlines.

Mr. Baker, the report adds, said credit card companies could pose
more significant risk to airlines than debt.  He explained the
credit card companies could impose unilateral holdbacks, which
will toll on a carrier's liquidity and cash balances.

Bloomberg News on Wednesday reported that analysts at Soleil
Securities Corp. say there's a potential Chapter 11 filing by AMR
by 2009, and UAL some time after that.

                            In the Red

Except for Southwest, the major U.S. Airlines posted net losses
for the period ended March 31, 2008:

                          Net Income for Period Ended
                      -----------------------------------
                      March 31, 2008       March 31, 2007
                      --------------       --------------
   US Airways          ($236,000,000)         $66,000,000
   Northwest         ($4,139,000,000)       ($292,000,000)
   UAL                 ($537,000,000)       ($152,000,000)
   AMR                 ($328,000,000)         $81,000,000
   JetBlue               ($8,000,000)        ($22,000,000)
   Continental          ($80,000,000)         $22,000,000
   AirTran              ($34,813,000)          $2,158,000
   Delta             ($6,261,000,000)        $155,000,000
   Alaska Air           ($24,000,000)         ($3,700,000)
   Southwest             $34,000,000          $93,000,000

                        Balance Sheet at March 31, 2008
                      -----------------------------------
                      Total Assets            Total Debts   
                      ------------            -----------
   US Airways       $8,013,000,000         $6,435,000,000
   Northwest       $21,032,000,000        $17,746,000,000
   UAL             $23,813,000,000        $21,647,000,000
   AMR             $28,766,000,000        $26,277,000,000
   JetBlue          $6,050,000,000         $4,721,000,000
   Continental     $12,542,000,000        $11,071,000,000
   AirTran          $2,198,009,000         $1,783,470,000
   Delta           $26,755,000,000        $22,804,000,000
   Alaska Air       $4,379,800,000         $3,520,600,000
   Southwest       $18,031,000,000        $10,846,000,000

On April 14, Northwest announced an agreement to merge with Delta.

United and US Airways are also in talks for a possible merger.  
Continental was initially eyed as a top merger partner for United.

Small and medium-sized carriers have tumbled one after the other
into bankruptcy.  Aloha Airlines commenced bankruptcy proceedings
in Hawaii in March and later ceased operations.  ATA Airlines Inc.
ceased operations and filed for chapter 11 protection on April 2,
and Skybus Airlines Inc. tumbled into bankruptcy on April 5.  
Frontier Airlines went belly up and filed for chapter 11 on April
14.  EOS Airlines filed a chapter 11 petition on April 26.

                      About JetBlue Airways
      
Based in Forest Hills, New York, JetBlue Airways Corporation
(Nasdaq: JBLU) -- http://www.jetblue.com/-- is a passenger
airline that provides customer service primarily on point-to-point
routes.  As of Dec. 31, 2007, the company served 53 destinations
in 21 states, Puerto Rico, Mexico and the Caribbean.

At Dec. 31, 2007, the company's consolidated balance sheeet showed
$5.598 billion in total assets, $4.562 billion in total
liabilities, and $1.036 billion in total stockholders' equity.

                          *     *     *

As reported in the Troubled Company Reporter on May 21, 2008,
Moody's Investors Service downgraded the corporate family rating
of JetBlue Airways Corporation to Caa1 from B3, well as the
ratings of its outstanding corporate debt instruments and selected
classes of JetBlue's Enhanced Equipment Trust Certificates. The
rating outlook is negative.


ARTISTDIRECT INC: March 31 Balance Sheet Upside-Down by $21,000
---------------------------------------------------------------
ARTISTdirect Inc.'s consolidated balance sheet at March 31, 2008,
showed $47,643,000 in total assets, and $47,664,000 in total
liabilities, resulting in a $21,000 total stockholders' deficit.

At March 31, 2008, the company's consolidated balance sheet also
showed strained liquidity with $12,353,000 in total current assets
available to pay $47,473,000 in total current liabilities.

The company reported a net loss of $4,760,000 for the first
quarter ended March 31, 2008, compared with net income of
$3,535,000 in the same period last year.

The company's net revenue decreased by $1,245,000 or 22.9%, to
$4,201,000 for the three months ended March 31, 2008, as compared
to $5,446,000 for the three months ended March 31, 2007, primarily
as a result of a decrease in MediaDefender revenues.  

MediaDefender's revenue accounted for 68.8% of the company's total
net revenue for the three months ended March 31, 2008, as compared
to 70.5% of the company's total net revenue for the three months
ended March 31, 2007.

Largely as a result of the decline in revenue and the increase in
general and administrative expenses, the company recorded a loss
from operations of $2,725,000 for the three months ended March 31,
2008, from a loss from operations of $915,000 for the three months
ended March 31, 2007.

For the three months ended March 31, 2008 and 2007, the company
recorded income of $65,000 and $1,226,000, respectively, to
reflect the change in warrant liability during such periods.

For the three months ended March 31, 2008 and 2007, the company
recorded income of $171,000 and $5,241,000, respectively, to
reflect the change in derivative liability during such periods.

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?2c5d

           Going Concern Disclaimer/Possible Bankruptcy

Gumbiner Savett Inc. in Santa Monica, Calif., expressed
substantial doubt about Artistdirect 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 is in default under its
senior and subordinated debt agreements.

During 2007 and 2008, the company entered into a series of
forbearance agreements with the investors in the senior notes with
respect to these defaults.

On Feb. 7, 2008, the company retained the services of Salem
Partners LLC to serve as a financial advisor to the company in
connection with the sale, merger, consolidation, reorganization or
other business combination and the restructuring of the material
terms of the company's senior notes and/or subordinated
convertible notes.  

To the extent that the company is unable to complete a sale or
merger or restructure its senior and subordinated debt obligations
in a satisfactory manner or the lenders begin to exercise
additional remedies to enforce their rights, the company said it
will not have sufficient cash resources to maintain its
operations.  In such event, the company may be required to
consider a formal or informal restructuring or reorganization,
including a filing under Chapter 11 of the United States
Bankruptcy Code.

                     About ARTISTdirect Inc.

Headquartered in Santa Monica, California, ARTISTdirect Inc.
(OTC.BB: ARTD) -- http://artistdirect.com/-- is a digital media   
entertainment company that is home to an online music network and,
through its MediaDefender subsidiary, is a provider of anti-piracy
solutions in the Internet-piracy-protection industry.  


ASARCO LLC: Conducts Plan Sponsor Selection Under Supervision
-------------------------------------------------------------
ASARCO LLC and its debtor-affiliates commenced its final step to
select a plan sponsor as part of its goal to successfully emerge
from Chapter 11 protection.

The process is proceeding pursuant to a bidding procedure
supported by the Debtors' creditors and approved by the U.S.
Bankruptcy Court for the Southern District of Texas and under the
close observation of a Court-appointed examiner.

Companies, who previously submitted bids to purchase the Debtors'
operating assets, are meeting today with the Debtors' lawyers and
financial advisors as well as those of their creditors.  The
Debtors intend to select the highest and best bid that would be in
their best interests and its creditors.

"We are convinced that this bidding process will result in the
overall best value for the company, its employees, creditors and
the communities in which we operate," said Joseph F. Lapinsky,
President and Chief Executive Officer of Asarco.

Earlier this year, the Court appointed an examiner at the request
of ASARCO Incorporated, the immediate parent company of Asarco.  
The examiner was appointed by the Court to observe the bidding
process to see that it proceeds according to the Court's order.

                          About ASARCO

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

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

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

ASARCO's affiliates, AR Sacaton LLC, Southern Peru Holdings LLC,
and ASARCO Exploration Company Inc., filed for Chapter 11
protection on Dec. 12, 2006 (Bankr. S.D. Tex. Case No. 06-20774 to
06-20776).

ASARCO and its debtor affiliates are scheduled to file a plan of
reorganization on June 10, 2008.


ASCALADE COMM: Creditors to Vote on Plan of Arrangement June 17
---------------------------------------------------------------
Ascalade Communications Inc. disclosed that in connection with the
on-going legal proceedings filed by Ascalade and Ascalade
Technologies Inc. in Canada under the Companies' Creditors
Arrangement Act, the companies obtained an order from the Supreme
Court of British Columbia setting the date of June 17, 2008, for a
Meeting of Creditors to consider a plan of compromise or
arrangement.

The Administrative Order sets out the procedure for filing Proofs
of Claim and voting at the Meeting of Creditors.  In addition to
the Administrative Order, the companies filed with the Court their
Plan accompanied by other supporting documentation.
    
Any recovery in the CCAA for creditors and other stakeholders of
the companies, including shareholders, is uncertain and is highly
dependent upon a number of factors, including the recovery from
the sale of the factory, equipment and inventory in the PRC and
the outcome of the Scheme in Hong Kong.

Based in Richmond, British Columbia, Ascalade Communications Inc.
(TSE:ACG) -- http://www.ascalade.com/ -- is an innovative product     
company that designs, develops and manufactures digital wireless
and communication products.  The company deliver products by
offering its partners and customers complete vertical integration,
from product design and development to final production.  The
company's products include digital cordless phones, Voice over
Internet Protocol phones, digital wireless baby monitors and
digital wireless conference phones. Ascalade products have been
distributed in more than 35 countries and under 80 regional
brands.  Ascalade also has facilities in Qingyuan, China, Hong
Kong and a sales office in Hertfordshire, United Kingdom.

On April 29, 2008, Jervis Rodrigues, senior vice-president of
Deloitte & Touche Inc., filed separate petitions for protection
under Chapter 15 of the U.S. Bankruptcy Code on behalf of Ascalade
Communications Inc. and its debtor-affiliate (Bankr. N.D. Ill.
Case Nos. 08-10612 and 08-10616).  Jeffrey G. Close, Esq. at
Chapman and Cutler LLP represents the Petitioner in the Chapter 15
case.  Ascalade's financial condition as of September 2007 showed
total assets of $99,630,000 and total debts of $40,410,000.


AVADO BRANDS: Can File Chapter 11 Plan Until August 30
------------------------------------------------------
The Hon. Mary J. Walrath of the United States Bankruptcy Court for
the District of Delaware further extended the exclusive periods of
Avado Brands Inc. and its debtor affiliates to:

   a) file a Chapter 11 plan until Aug. 30, 2008; and

   b) solicit acceptances of that plan until Oct. 29, 2008.

The Debtors maintain that they need sufficient time to complete
the "363 Sale" process, and properly determine an appropriate exit
plan for these cases.

                        363 Sale Process

On Nov, 2 2007, the Debtors said that they filed with the Court a
request to approve the sale of substantially of their assets to
the highest and best bidders at the auction.  The Court approved
the sale of certain of the Debtors' assets to five different
buyers.

As previously reported in the Troubled Company Reporter, the Court
approved the sale of the Debtors' 61 restaurants to Rita
Acquisition Corp., a company set up by DDJ Capital Management
LLC for the transaction.  The sale will facilitate the termination
of at least $23 million of the Debtors' debt against DDJ Capital.

The Debtors told the Court that the sale process could take at
least a few more months to complete and the disruption to this
process could pose a threat to their ability to successfully sell
their assets.

The Debtors also said that they are currently exploring other
options for bringing these cases to a conclusion, including a
chapter 11 plan of liquidation, a chapter 7 conversion or
structured dismissal.

                         About Avado Brands

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

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

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

Michael Tuchin, Esq., and Stacia A. Neeley, Esq., at Klee, Tuchin,
Bogdanoff & Stern LLP, represent the Debtors.  Donald J.
Detweiler, Esq., at Greenberg Traurig, LLP, is the Debtors' local
counsel.  Kurtzman Carson Consultants LLC acts as the Debtors
claims and noticing agent.  The U.S. Trustee for Region 3 has
appointed creditors to serve on an Official Committee of Unsecured
Creditors to this cases.  Greenberg Traurig LLP represents the
Committee.  In their second filing, the Debtors disclosed
estimated assets and debts between $1 million to $100 million.


BAG 'N BAGGAGE: KCP Opportunity Fund Named Stalking Horse Bidder
----------------------------------------------------------------
KCP Opportunity Fund I, L.P. received court approval from the U.S.
Bankruptcy Court as "stalking horse" bidder for the primary assets
of the distressed retail chain Bag n Baggage Ltd.

KCP Opportunity Fund I did not disclose its offer for the Debtors'
assets.

The Fund intends to maintain Bag'n Baggage as a going concern and
build upon the core competencies of this prominent national brand.

"We look forward to providing new capital to Bag'n Baggage as they
seek to reorganize and focus on growing and expanding their
business," said Andrew H. Moser, Co-Founder and Partner of Kairos
Capital Partners. "We're committed to financing the needs of Bag'n
Baggage and working closely with management, trade vendors and
related constituencies to help foster their business plan."

"This is a tremendous opportunity to impart our expertise in
retailing and a vision for what this category can be going
forward," continues Moser.  "An exceptional team of senior
management and store personnel are already in place and are eager
to see this company reach its true potential."

                 About Kairos Capital Partners

Kairos Capital Partners, LLC, based in Boston and New York City --
http://www.kairoscapitalpartners.com/-- was founded by Andrew H.  
Moser and Lynda Davey in 2007 to provide 'one-stop' investment
capital to retail and consumer products companies.  Investments
are focused primarily in the retail and direct-to-consumer
sectors, including a broad range of distribution channels, as well
as wholesale companies, brands and intellectual property.  With
each portfolio company, Kairos becomes a significant participant
through dynamic partnership with management and owners seeking to
enhance shareholder value with patience and a long-term
perspective.

KCP Opportunity Fund I, L.P. was formed by Kairos Capital Partners
as an opportunistic investment fund structured to provide hybrid,
equity and debt investments in turnaround, distressed and
arbitrage opportunities in the retail and consumer sectors.  The
Fund targets companies that have a fundamentally sound business
model, but may have been overlooked by traditional sources of
private equity or mezzanine capital due to their size, complexity
or circumstances, or are in situations where the Funds value-add
strategy of partnering with direct industry operators is an
important consideration.

                      About Bag'n Baggage

Bag'n Baggage -- http://www.bagnbaggage.com/-- has been the  
nation's leading retailer of travel and business gear for more
than 35 years.  They offer all the top brands in luggage and
travel goods including Tumi, Hartmann, Victorinox, Rimowa and many
more, with an unmatched selection and several exclusive products.  
The company operates 34 stores in upscale malls and lifestyle
centers located in 11 states -- including Texas, Florida,
California, Arizona, Washington, Massachusetts, North Carolina,
Virginia, Pennsylvania, Nevada and Hawaii -- trading under the
names Bagn Baggage, Malm Luggage, Niccolo & Mafeo and Houston
Trunk Factory.

Bag'n Baggage and related entity, 900 Corp., filed for Chapter 11
Bankruptcy protection on May 4, 2008, in the U.S. Bankruptcy Court
for the Northern District of Texas, Dallas Division (Case Nos. 08-
32096 and 08-32097).  The Debtors are represented by Carol E.
Jendrzey, Esq., Lindsey Doherty Graham, Esq., and Mark Edward
Andrews, Esq., at Cox Smith Matthews, Inc., in San Antonio, Texas.

Upon filing for bankruptcy, Bag 'n Baggage, Ltd., reported between
$10 million and $50 million in estimated assets and debts.


BALL CORP: Fitch Holds 'BB+' Rating on Revolving Credit Facility
----------------------------------------------------------------
Fitch Ratings has affirmed Ball Corp.'s Issuer Default Rating at
'BB'. In addition, Fitch has affirmed these ratings for the
company:

  -- Senior secured revolving credit facility at 'BB+';
  -- Senior secured term bank debt at 'BB+';
  -- Senior unsecured notes at 'BB'.

Approximately $2.6 billion of debt is covered by the ratings.  The
Rating Outlook is Stable.

The ratings are supported by the company's leading market
positions, good cash flow generation, diversified product
offering, diverse packaging substrates, stable end markets, and a
favorable defense spending environment.  Ball's renewed focus on
growing its presence in foreign markets is viewed favorably by
Fitch.  Concerns relate to shareholder focused cash deployment,
customer concentration, pressure from raw materials and other cost
inflation, underperformance and related restructuring initiatives
in some businesses, total revenue derived predominantly from one
product, and domestic sales bias.

Fitch's Stable Outlook incorporates expectations of a stable
capital structure, the company's solid cash flow generation
capacity, steady trends in packaging end-markets, and the
company's leading market positions in its product categories.

Ball continues to deliver consistent performance.  Credit metrics
improved slightly in 2007 compared to 2006.  Total leverage fell
to 2.8 times at fiscal-year-end 2007 from 3.1x prior year.  
Although EBITDA margin has contracted modestly over the past few
years, the company has generated good operating and free cash
flow.  Free cash flow to Total Adjusted Debt improved to 10.1% in
FY2007 from 2.4% in 2006 as higher operating cash outpaced an
increase in capital spending leading to free cash flow of
$324 million in 2007 vs. $81 million in 2006.

On a latest-twelve-month basis as of Mar. 30, 2008, leverage moved
up to 3.3x as the company borrowed on its revolver to fund a
larger than usual working capital build, in addition to the
effects of a weaker dollar on foreign denominated debt balances.  
Free cash flow for the LTM period of $231 million also weakened
somewhat compared to the year-end figure.  Nonetheless, Fitch
expects 2008 will be a solid year for Ball with free cash flow of
$250 million or more, while credit metrics should be relatively
stable overall.

Ball is moving aggressively to expand international operations.  
Fitch views this trend favorably as it diversifies the company's
exposure to any given market and provides the opportunity to
capture volume growth in developing markets where packaged food,
beverages and other products are in the growth phase of the
industry cycle.

As Ball is targeting growth opportunities overseas, the company is
strategically addressing slower performance in certain domestic
product lines related to custom and decorative tinplate container
business.  Fitch views both the growth and consolidation as
positive developments for the overall business.  The international
expansion will make Ball more competitive, in Fitch's view, and
helps to diversify the earnings sources away from mature markets,
which has been a modest concern for Fitch.

The capacity reductions also seem reasonable as Fitch has expected
targeted cost initiatives to be ongoing at Ball.  Fitch believes
further asset realignment may be forthcoming in the plastic
packaging segment, depending how pricing negotiations unfold
during 2008.  The capacity decisions do not materially affect the
firm's credit profile as cash outlays are not expected to be
material, although they are expected to boost capital spending
modestly in addition to higher spending on top-line growth
initiatives.

Raw materials and other cost inflation continue to be key concerns
to be monitored going forward.  Contractual pass-through
arrangements typically mitigate raw materials pricing risk for the
company, but substantial increases in input prices can present
challenges.  The recent contract dispute settlement for $70
million with SAB Miller, a key customer, highlights this risk.

After funding growth and rationalization initiatives, Fitch
expects Ball's cash distribution to be focused on shareholders.  
Fitch expects free cash flow to largely offset $300 million of
share repurchases ($125 million of which was already completed in
first quarter 2008).  Capital expenditures were nearly
$310 million in 2007 and could be $350 million or more in 2008.  
Ball made an incremental pension funding payment of $27 million,
net of tax in 2007, and Fitch expects lower cash pension payments
this year as the obligation is now 95% funded.  Cash flows in 2008
will be reduced by higher cash taxes, higher capital expenditures
and the one-time payment of $70 million related to the dispute
over metal pricing mentioned above.  Meaningful debt reduction is
not likely, and Fitch anticipates modest, if any, acquisition
activity.

Liquidity at Mar. 30, 2008 was about $555 million, comprised of
$90 million in cash and $465 million of revolver availability.
Ball's liquidity position is adequate to meet funding
requirements, although the first quarter's working capital usage
of $343 million was somewhat higher than usual, which caused
overall liquidity to decline as the company drew $240 million on
its U.S. revolver.


BCE INC: NoteHolders Succeed in Opposing Plan of Arrangement
------------------------------------------------------------
The Committee comprising certain institutional holders of 1997
Bell Canada debentures have succeeded in suspending a proposed
plan of arrangement under which BCE would have been acquired by a
consortium led by the Ontario Teachers' Pension Plan when the
Quebec Court of Appeal issued its judgment rejecting the plan of
arrangement.

Committee members objected to the proposed plan of arrangement
because they believed it was unfair to debenture holders. The
proposed plan would have forced Bell Canada, the BCE subsidiary in
which committee members hold bonds, to guarantee $34 billion in
loans that the purchaser would have incurred to purchase the
shares of BCE. Committee members believed that Bell would receive
nothing in return for guaranteeing that debt. The proposed plan
had already led to a dramatic decrease in the market value of
the bonds and had led some credit agencies to downgrade the bonds'
status from investment grade to junk bond status.

Committee members also believed that it would have been unfair for
the directors of Bell to have allowed Bell to guarantee the debt
without considering the issue from the perspective of Bell and its
bondholders.

In rejecting the plan of arrangement, the Court of Appeal found
that the BCE board had failed to consider the interests of the
debenture holders as they were bound to do under Canadian law.
Instead, the BCE board acted on the assumption that they had an
overriding duty to shareholders which was wrong in law.

"Our clients are obviously delighted with the result of the
decision" said Markus Koehnen and Max Mendelsohn, Partners with
McMillan Binch Mendelsohn LLP and counsel to the 97 bondholders.
"They are gratified that the Court of Appeal recognized the
unfairness that the proposed plan of arrangement would have
imposed on the unit holders, pension fund beneficiaries, insurers
and others on behalf of whom our clients were contesting the plan
of arrangement. Our clients are pleased that they have been able
to stand up and protect the interests of those who have entrusted
the management of funds into their care."

The Committee was one of two bondholder groups that contested the
proposed plan of arrangement. It is comprised of a "blue chip"
roster of life insurance companies and money managers in the North
American market place such as Addenda Capital Inc., CIBC Global
Asset Management Inc., Franklin Templeton Investments Corp., Her
Majesty the Queen in Right of Alberta, as Represented by the
Minister of Finance, Manulife Financial Corporation, Phillips,
Hager & North Investment Management Ltd., Sun Life
Assurance Company of Canada, TD Asset Management Inc. and The
Wawanesa Life Insurance Company.

                            About BCE

Headquartered in Montreal, Quebec, BCE Inc. (TSX/NYSE: BCE) --
http://www.bce.ca/-- is a communications company, providing             
comprehensive and innovative suite of communication services to
residential and business customers in Canada.  Under the Bell
brand, the company's services include local, long distance and
wireless phone services, high-speed and wireless Internet access,
IP-broadband services, information and communications technology
services (or value-added services) and direct-to-home satellite
and VDSL television services.  Other BCE holdings include Telesat
Canada and an interest in CTVglobemedia.

Bell Canada -- http://www.bell.ca/-- is a wholly owned subsidiary  
of BCE Inc.  Bell offers integrated information and communications
technology services to businesses and governments, and is the
Virtual Chief Information Officer to small and medium businesses.  

                           *     *     *

As reported in the Troubled Company Reporter on Dec. 14, 2007,
Standard & Poor's Ratings Services kept its ratings on BCE Inc.
and its related entities on CreditWatch with negative
implications, pending the completion of the company's leveraged
buyout by a consortium of private equity investors led by Teachers
Private Capital as announced on June 30, 2007.  As a result of the
proposed LBO, S&P expect reported debt to increase to about CDN$37
billion from about CDN$10 billion at Sept. 30, 2007.

As reported in the Troubled Company Reporter on Sept. 26, 2007,
Standard & Poor's Ratings Services lowered its long-term corporate
credit ratings on BCE Inc. and wholly owned subsidiary Bell Canada
to 'BB-' from 'A-'.


BCE INC: Wants to Reverse Court's Ruling on Planned Privatization
-----------------------------------------------------------------
BCE Inc. together with the investor group led by Teachers' Private
Capital, will seek leave to appeal to the Supreme Court of Canada
a decision by the Quebec Court of Appeal denying the company's
plan of arrangement related to the BCE's proposed privatization.

On May 21, 2008, the Quebec Court of Appeal held that directors of
a corporation that is involved in a change of control transaction
must follow a process that considers the interests of
debentureholders including their reasonable expectations, and that
does not focus only on whether the transaction maximizes value for
shareholders.

If the decision stands, it will represent an important statement
on directors duties in change of control transactions and will
have significant implications for directors in balancing various
stakeholder interests.

In connection with a proposed arrangement involving BCE Inc.,
certain BCE debentureholders challenged the plan of arrangement on
a number of grounds, including that the Plan, by failing to
consider the interests of the Debentureholders, was not fair and
reasonable in the circumstances.

On June 29, 2007, BCE entered into an agreement to be purchased by
a group including the Ontario Teachers Pension Plan Board and its
partners Providence Equity Partners Inc., Madison Dearborn
Partners LLC, and Merrill Lynch Global Private Equity in a
leveraged buy-out that would greatly increase BCEs debt.

The increased debt load of BCE would result in a loss of
investment grade status and would cause the value of the
debentures held by the existing Debentureholders to diminish.

In a unanimous judgment, five judges of the Quebec Court of Appeal
held that a final order would not be issued to approve the Plan.

Given the commercial importance of the decision and the
circumstances surrounding the arrangement, hearing this case on an
expedited basis would require the SCC to abridge the normal
timeline governing the leave to appeal process and the hearing of
any appeal.  While there are relatively few cases where this has
been done, the SCC can do so if it wishes.

Much will turn on the SCCs view as to the public importance of
this case and the need to clarify any legal principles enunciated
by the Quebec Court of Appeal.

                     The Court of Appeal's Decision

The Court of Appeal had to rule on four issues: the
Debentureholders standing; the declaratory judgment regarding the
applicability of certain provisions of BCEs trust indentures; the
availability of the oppression remedy; and the approval of the
Plan.

   1) Standing

      The Court of Appeal confirmed the trial judges decision that
      the Debentureholders had standing to oppose the Plan. The
      Court of Appeal also granted standing to all
      Debentureholders with respect to the oppression remedy; the
      trial judge had only granted such standing to the one
      category of Debentureholders.

   2) Declaratory Judgment

      The Court of Appeal upheld the trial judges decision and
      confirmed that a provision in the trust indentures for two
      sets of debentures, those issued in 1976 and 1996, which
      governs when the Trustee's approval is required to proceed
      with a transaction was not triggered by the transaction.  
      The Court of Appeal reviewed authorities defining the terms
      "reorganization" and "reconstruction" and concluded that
      these terms refer to transactions that involve the transfer
      of assets to a separate corporate entity - something that
      was not taking place under the Plan.  Accordingly, the
      Trustee's approval was not required to proceed with the
      transaction.

   3) Oppression Remedy

      The Court of Appeal first noted that the Debentureholders
      reasonable expectations are an important element affecting
      their right to a remedy. These expectations are not limited
      to the legal rights spelled out in their Trust Indentures,
      though they cannot run contrary to the express contractual
      terms. The Court of Appeal also stated that a focus on
      fairness is critical in assessing both the oppression remedy
      and the approval of a plan of arrangement.  The Court noted
      that an oppressive transaction cannot be approved as fair,
      but a transaction that is not oppressive can still be
      considered unfair. The Court of Appeal decided that it only
      needed to deal with the approval of the Plan since if the
      Plan is considered to be fair, it cannot be said to be
      oppressive to the Debentureholders. The Court of Appeal thus
      dismissed the Debentureholders oppression remedy claim on
      the basis that it was moot.

   4) Approval of the Plan

      The Court of Appeal first agreed with the trial judges
      conclusions that the burden to prove that the Plan is fair
      and reasonable rests on BCE, and that the Debentureholders
      are a class of affected security holders even if their legal
      rights are not being altered by the Plan.  It is sufficient
      that the proposed transaction fundamentally alters the
      Debentureholders investment.  The Court of Appeal noted that
      BCE succeeded in showing that the Plan satisfies the
      statutory requirements and that it complies with the interim
      order.

However, the Court of Appeal held that the board of directors
focus on shareholder value maximization to the exclusion of the
interests of the Debentureholders, beyond their contractual legal
rights, was erroneous.   The Court of Appeal referred to the
Supreme Court of Canada's decision in Peoples v. Wise as authority
for this proposition.

The Court held that the board of directors of BCE was required to
consider the interests including the reasonable expectations of
the Debentureholders and that, although the directors had acted in
good faith, they had failed to consider these interests, given
that they did not adequately address whether the transaction could
have been structured so as to attenuate the adverse impact it
would have on the Debentureholders.  The Court noted:

     BCE never attempted to justify the fairness and
     reasonableness of an arrangement that results in a
     significant adverse economic impact on the
     Debentureholders while at the same time it accords
     a substantial premium to the shareholders.

As a result, the directors were not entitled to the deference
otherwise due to them by virtue of the business judgment rule
which normally protects informed, good faith director decision
making from second guessing by the courts.

Finally, the Court of Appeal added that the board of directors
effort to maximize shareholder value could not be considered in
isolation from the interests of the Debentureholders and that the
directors had to assess the relative weight of the
Debentureholders interests with the interests of the shareholders.  
The Court noted that the weight of the interests of the
shareholders is likely higher than that of the Debentureholders in
the event of an LBO.  

However, the Court held that it is up to the board of directors to
make this decision and structure an arrangement that takes into
account and reasonably satisfies the interests of the various
security holders.

All parties involved submitted that the Plan had to be approved as
it is currently crafted or rejected, and that the Court of Appeal
should not envision any amendment of the Plan.  Accordingly, the
Court did not do so and, in effect, denied the approval of the
Plan for failure on the part of BCE to present evidence as to
whether the Plan could have been structured to provide a
satisfactory price for the shares, while avoiding an unacceptable
adverse effect on the Debentureholders.

"If the decision stands," lawyers at Osler, Hoskin & Harcourt LLP
said in an e-mailed update, "it will represent an important
statement on directors duties in change of control transactions
and will have significant implications for directors in balancing
various stakeholder interests."  

In heavy trading Thursday, after the decision by the Quebec Court
of Appeal, shares in BCE tumbled 12%, shaving more than
C$4 billion from the communication company's market
capitalization.  
    
"The judgment overturning the Quebec Superior Court decision
rewrites Canadian law relating to the duty of Canadian boards of
directors to maximize value for shareholders in the context of a
change of control transaction, well as to the entitlements of
bondholders in those circumstances," Martine Turcotte, chief legal
officer of BCE and Bell Canada, said.  

"Both the transaction and the issues of law involved are of public
importance in Canada," Ms. Turcotte added.  "We believe the
Supreme Court of Canada should reverse this decision, and allow
the transaction to proceed."
    
The appeal will require the Supreme Court of Canada to grant leave
to appeal.  BCE will be seeking directions from the Supreme Court
of Canada to expedite the disposition of such application for
leave to appeal, and any appeal.
    
In light of Quebec Court of Appeal decision, the expected timing
for the closing of the transaction will be contingent on the
Supreme Court granting leave to appeal and the timing related to
any such appeal.
    
                            About BCE

Headquartered in Montreal, Quebec, BCE Inc. (TSX/NYSE: BCE) --
http://www.bce.ca/-- is a communications company, providing             
comprehensive and innovative suite of communication services to
residential and business customers in Canada.  Under the Bell
brand, the company's services include local, long distance and
wireless phone services, high-speed and wireless Internet access,
IP-broadband services, information and communications technology
services (or value-added services) and direct-to-home satellite
and VDSL television services.  Other BCE holdings include Telesat
Canada and an interest in CTVglobemedia.

Bell Canada -- http://www.bell.ca/-- is a wholly owned subsidiary    
of BCE Inc.  Bell offers integrated information and communications
technology services to businesses and governments, and is the
Virtual Chief Information Officer to small and medium businesses.  

                           *     *     *

As reported in the Troubled Company Reporter on Dec. 14, 2007,
Standard & Poor's Ratings Services kept its ratings on BCE Inc.
and its related entities on CreditWatch with negative
implications, pending the completion of the company's leveraged
buyout by a consortium of private equity investors led by Teachers
Private Capital as announced on June 30, 2007.  As a result of the
proposed LBO, S&P expect reported debt to increase to about CDN$37
billion from about CDN$10 billion at Sept. 30, 2007.

As reported in the Troubled Company Reporter on Sept. 26, 2007,
Standard & Poor's Ratings Services lowered its long-term corporate
credit ratings on BCE Inc. and wholly owned subsidiary Bell Canada
to 'BB-' from 'A-'.


BEAR STEARNS: Advisory Firm Urges Shareholders' OK on JPMorgan Bid
------------------------------------------------------------------
Shareholder advisory firm Proxy Governance Inc. recommended The
Bear Stearns Companies Inc. shareholders to approve J.P. Morgan
Chase & Co.'s acquisition proposal, yet, berated Bear Stearns
executives who undermined the risks related to its liquidity,
Andrew Edwards of The Wall Street Journal reports.

"Poor oversight of inherent business risks which left the company
with few alternatives as the liquidity crisis escalated, some of
which could credibly be argued to have fueled the crisis itself,"
the firm wrote, according to WSJ.  "While we do not necessarily
believe that management could have foreseen this particular
liquidity crisis, we do believe the risks to which the company
succumbed in the last two weeks of March 2008 are recognizable,
inherent risks of its business segment and its business model, and
management's culpability in failing to plan for those risks is no
less significant for their rarity."

The firm's report also indicated that the proposed transaction
will rescue shareholder value and will ensure success to the
surviving entity, Reuters recounts.

WSJ relates that the executives' notes is expected to get $4.3
million in severance split once the transaction is completed.  The
shareholder vote is scheduled for May 29, 2008.

As reported in the Troubled Company Reporter on March 25, 2008,
JPMorgan and Bear Stearns disclosed an amended merger agreement
regarding JPMorgan Chase's acquisition of Bear Stearns.  Under the
revised terms, each share of Bear Stearns common stock would be
exchanged for 0.21753 shares of JPMorgan Chase common stock -- up
from 0.05473 shares -- reflecting an implied value of
approximately $10 per share of Bear Stearns common stock based on
the closing price of JPMorgan Chase common stock on the New York
Stock Exchange on March 20, 2008.

WSJ has said the amended deal values Bear Stearns at about $1.2
billion.  WSJ, citing data from Sanford C. Bernstein firm, says
the breakup value of Bear Stearns' continuing business could be
roughly $7.7 billion:

     Prime Brokerage            $3.0 billion
     Merchant Banking           $1.3 billion
     Asset Management           $1.3 billion
     High-Net-Worth Brokerage   $1.0 billion
     Servicing                  $0.6 billion
     Energy Assets              $0.5 billion
                                ------------
                                $7.7 billion

The Boards of Directors of both companies have approved the
amended agreement and the purchase agreement.  All of the members
of the Bear Stearns Board of Directors have indicated that they
intend to vote their shares held as of the record date in favor of
the merger.

As previously reported in the TCR, a Federal Reserve System's
$29 billion term financing that facilitated JPMorgan's acquisition
of Bear Stearns was made to bolster the global economy and
financial system, Fed Board Chairman Ben S. Bernanke said at a
hearing before the U.S. Congress Joint Committee on April 2, 2008.

Mr. Bernanke stated that the impact of Bear Stearns downfall would
have fazed investor confidence and would have bring into question
the stance of the thousands of Bear Stearns' counterparties as
well as other financial services firms.  He added that the effects
would have not been limited to the financial system but would have
spread to the American and world economic system, had it not been
for the aid from Federal Reserve and the Treasury Department.

                        About Bear Stearns

New York City-based The Bear Stearns Companies Inc. (NYSE: BSC) --
http://www.bearstearns.com/-- is a leading financial services    
firm serving governments, corporations, institutions and
individuals worldwide. The company's core business lines include
institutional equities, fixed income, investment banking, global
clearing services, asset management, and private client services.
The company has approximately 14,000 employees worldwide.

                           *     *     *

As reported in the Troubled Company Reporter on Dec. 28, 2007,
Fitch Ratings' affirmed its Negative Outlook for The Bear Stearns
Companies Inc. following the announcement of the company's fiscal
year earnings for 2007.

On Nov. 14, 2007, Fitch affirmed Bear Stearns' long-term credit
ratings, along with its subsidiaries. Fitch also downgraded the
short-term rating to 'F1' from 'F1+', and Individual rating to
'B/C' from 'B'.


BENICORP INSURANCE: Fitch Withdraws 'Bq' Q-ISF Rating
-----------------------------------------------------
Fitch Ratings has withdrawn its quantitative insurer financial
strength ratings on three life insurance companies that no longer
meet Fitch's criteria to be eligible to receive a Q-IFS rating.

These ratings are withdrawn by Fitch:

MTM Life Insurance Company (NAIC Code 66222)
--Q-IFS 'Bq'.

Farmers & Traders Life Insurance Company (NAIC Code 63193)
--Q-IFS 'BBBq'.

Benicorp Insurance Company (NAIC Code 69752)
--Q-IFS 'Bq'.


BIOTIME INC: March 31 Balance Sheet Upside Down by $3.3 Million
---------------------------------------------------------------
BioTime, Inc. reported financial results for the first quarter
ended March 31, 2008.

For the three months ended March 31, 2008, BioTime's total
quarterly revenue, including both royalty income and revenue
recognition of deferred license fees, increased 55% to $381,018
versus $245,698 for the same period last year.

BioTime reported a net loss of $476,048, or $0.02 per basic and
diluted share, for the three months ended March 31, 2008, compared
to a net loss of $553,862, or $0.02 per basic and diluted share,
for the three months ended March 31, 2007.

BioTime recognized $308,900 in royalty revenue versus $199,264
during the three months ended March 31, 2007, an increase of 55%.
The growth in royalties is attributable to the increase in sales
of Hextend to both hospitals and the United States Armed Forces.
Hextend is an artificial colloidal solution classified as a plasma
volume expander for supporting oncotic pressure as well as
providing electrolytes to patients suffering from blood loss in
surgery or from trauma. BioTime recognizes royalty revenues in the
quarter in which sales reports are received versus the quarter in
which the sales take place. Therefore, royalty revenue for the
three months ended March 31, 2008 includes royalties on sales of
Hextend during the three months ended December 31, 2007.

Additionally, in April 2008, BioTime received royalties in the
amount of $341,153 from Hospira, Inc., an increase of 108% from
the same period one year ago. This amount is based on the sales of
Hextend made by Hospira, Inc. during the first quarter of 2008,
and will be reflected in BioTime's consolidated financial
statements for the second quarter of 2008. The growth is also
attributable to increased sales both to hospitals and the United
States Armed Forces. Hospira is the exclusive distributor of
Hextend in the United States. CJ CheilJedang Corp. is the
exclusive distributor of Hextend in South Korea.

Michael D. West, Ph.D, BioTime's Chief Executive Officer, noted,
"Our primary pharmaceutical product, Hextend(R), continues to gain
traction among hospitals in the United States and abroad. Further,
knowing that Hextend is assisting medical efforts to save lives,
including the lives of the members of our Armed Forces, is a great
source of pride for our company." Dr. West continued, "BioTime has
recently entered the field of regenerative medicine through our
wholly owned subsidiary Embryome Sciences, Inc., which plans to
develop new medical research products using embryonic stem cell
technology. We believe that stem cell technology will have broad
application in medicine and will likely be one of the leading
technology platforms of the coming decades."

License revenue increased 42.5% to $66,183 during the first
quarter of 2008 versus $46,434 in the same period last year. Most
of this increase consists of license fees received during prior
accounting periods from CJ CheilJedang Corp. and Summit
Pharmaceuticals International Corporation, and are reflected as
deferred revenue on BioTime's balance sheet. BioTime amortizes
those license fees and recognizes them as current revenues over
the expected life of the patents related to the applicable
licenses.

                      Shareholders' Deficit

Cash and cash equivalents totaled $307,471 as of March 31, 2008,
compared with $277,280 as of March 31, 2007. Total shareholder
deficit was $3,349,599 as of March 31, 2008, compared with total
shareholders' deficit of $2,372,548 at March 31, 2007, a 41%
increase. As of March 31, 2008, the Company had lines of credit
for $2,578,600, from which $1,265,519 had been drawn at that date.
The Company drew an additional $575,000 on one of our lines of
credit during April 2008.  As of March 31, 2008, the company had
total assets of $561,728 and total liabilities of $3.8 million.

It is BioTime's intention to raise the additional capital needed
to finance the further development of its products because its
current lines of credit and royalty revenues are not sufficient to
fund anticipated operating expenses beyond November 15, 2008.

                        About BioTime, Inc.

BioTime, headquartered in Alameda, California, develops blood
plasma volume expanders, blood replacement solutions for
hypothermic (low temperature) surgery, organ preservation
solutions, and technology for use in surgery, emergency trauma
treatment and other applications. BioTime's lead product Hextend
is manufactured and distributed in the U.S. by Hospira, Inc. and
in South Korea by CJ CheilJedang Corp. under exclusive licensing
agreements. BioTime has recently entered the field of regenerative
medicine through its wholly owned subsidiary Embryome Sciences,
Inc., through which it plans to develop new medical and research
products using embryonic stem cell technology. Additional
information about BioTime can be found on the web at
www.biotimeinc.com. Hextend(R), PentaLyte(R), HetaCool(R),
EmbryomicsTM, ESpyTM, and EScalateTM are trademarks of BioTime,
Inc.


BMB MARKETPLACE: Gets Okay to Hire Lyndon Steimel as Counsel
------------------------------------------------------------
The United States Bankruptcy Court for the District of Arizona
authorized BMB Marketplace, LLC, to employ the Law Office of
Lyndon B. Steimel to represent it in its Chapter 11 bankruptcy
case.

As counsel, the firm will:

   -- give the Debtor legal advice with respect to the Debtor's
      powers and duties in the continued operation of its
      business and management of its property;

   -- represent the Debtor in the Chapter 11 bankruptcy case,
      including the attendance at all hearings necessary or
      required by the Bankruptcy Code or the Bankruptcy Court;

   -- prepare on behalf of the Debtor the pleadings, motions
      and other documents necessary to effectuate the Debtor's
      responsibilities;

   -- attend all hearings, depositions, creditor examinations,
      and meetings necessary to adequately ensure proper
      representation of the Debtor; and

   -- prepare a Chapter 11 Plan or prepare the documents
      necessary to dismiss the Chapter 11 proceeding.

Mr. Steimel ascertains that his firm is disinterested and has no
connection with the creditors, or any other party-in-interest, or
their attorneys.

The firm will be paid for its services at these standard hourly
rates:

     Partners and Of Counsel
        Lyndon B. Steimel                      $250 per hour
     Paralegals/Legal Assistants                $95 per hour

The Debtor has paid the firm a $6,461 initial retainer from non-
estates assets.  The Debtor has agreed to pay any further sums
necessary to pay accrued fees and costs as approved by the
Bankruptcy Court.

The firm has that Mr. and Mrs. Steven S. Bunch personally
guarantee payment of the firm's fees and costs.  Mr. Bunch serves
as BMB Marketplace's manager.

To contact Lyndon B. Steimel, Esq.:

     Law Office of Lyndon B. Steimel
     14614 N. Kierland Blvd., Suite N-135
     Scottsdale, AZ 85254
     Tel: (480) 367-1188
     Fax: (480) 367-1174 fax
     E-mail: lyndon@steimellaw.com

Based in Scottsdale, Arizona, BMB Marketplace, LLC filed for
Chapter 11 protection on Mar. 21, 2008 (Bankr. D. Ariz. Case No.
08-02945).  The Debtor reported $10,389,852 in total assets, and
$8,471,918 in total debts pursuant to schedules of assets and
liabilities filed with the Bankruptcy Court.


BSML INC: March 29 Balance Sheet Upside-Down by $1,708,000
----------------------------------------------------------
BSML Inc.'s consolidated financial statements at March 29, 2008,
showed $7,654,000 in total assets and $9,362,000 in total
liabilities, resulting in a $1,708,000 total stockholders'
deficit.

At March 29, 2008, the company's consolidaed balance sheet also
showed strained liquidity with $3,642,000 in total current assets
available to pay $8,610,000 in total current liabilities.

The company reported a net loss of $576,000 for the first quarter
ended March 29, 2008, compared with a net loss of $388,000 in the
same period of 2007.

Revenues declined 25.0%, to $5,409,000 in the first quarter of
2008 compared to $7,161,000 in the first quarter of 2007,
primarily as a result of a decline in Whitening revenues.

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?2c60

                     Going Concern Disclaimer

As reported in the Troubled Company Reporter on April 29, 2008,
Stonefield Josephson Inc., in Los Angeles, expressed substantial
doubt about BSML Inc.'s ability to continue as a going concern
after auditing the company's consolidated financial statements for
the year ended Dec. 29, 2007.  

To date, the company has yet to achieve profitability.  The
company has an accumulated deficit of $177,199,000 and working
capital deficiency of $4,968,000 as of March 29, 2008.  The
company's net loss and net cash used by operating activities were
$576,000 and $3,990,000, respectively, for the thirteen weeks
ended March 29, 2008.  

                         About BSML Inc.

Based in Walnut Creek, Calif., BSML Inc. (NasdaqCM: BSML) --
http://www.britesmile.com/-- markets teeth whitening technology
and manages BriteSmile Professional Teeth Whitening Centers.


BUILDING MATERIALS: Moody's Junks Probability of Default Rating
---------------------------------------------------------------
Moody's Investors Service lowered the ratings of Building
Materials Holding Corporation, including its corporate family
rating to B3 from B2, its probability-of-default rating to Caa1
from B3, and its first-lien bank credit facility rating to B3
(LGD-3, 32%) from B2 (LGD-3, 39%). The ratings outlook remains
negative.

The downgrade was prompted by BMHC's declining sales, credit
metrics that are deteriorating more rapidly and by a larger amount
than anticipated, and the expectation that the company may run
into covenant compliance difficulties in the latter half of 2008,
even under the recently amended bank credit facility. Moody's
expectation that weak homebuilding market conditions will continue
throughout 2008 and potentially into 2009, could exert further
pressure on the company's operating performance and credit
profile, with credit availability remaining tight throughout this
period. BMHC's scale, its leading industry position, and its
longer term prospects as one of the nation's largest providers of
residential construction services and building materials continue
to support its B3 rating.

The negative ratings outlook reflects continued weakness in new
home construction, large inventories of unsold homes, declining
home prices and weak consumer confidence. Tightened mortgage
lending practices also weigh heavily on intermediate term
prospects for a recovery in housing demand. The company's ability
to cut costs, reduce capital expenditures, manage working capital
needs, and maintain adequate liquidity until homebuilding industry
fundamentals stabilize partially mitigate downward pressure.

Going forward, BMHC's ratings would be considered for further
downgrade in the event that 1) cash flow were to continue to
weaken, or 2) covenant compliance were to appear increasingly
unlikely.

The outlook could stabilize if the company were able to cut costs,
reduce capital expenditures, manage working capital needs, and
maintain adequate liquidity until homebuilding industry
fundamentals stabilize.

These rating actions were taken:

   * Corporate family rating lowered to B3 from B2;

   * Probability of default rating lowered to Caa1 from B3;

   * First-lien bank credit facility rating lowered to B3
     (LGD-3, 32%) from B2 (LGD-3, 39%).

Headquartered in San Francisco, California, BMHC, is one of the
largest providers of residential construction services and
building materials in the United States. BMHC serves the
homebuilding industry through two subsidiaries: SelectBuild
provides construction services to high-volume production
homebuilders in key growth markets across the country; and BMC
West distributes building materials and manufactures building
components for professional builders and contractors in the
western and southern states.


CALPINE CORP: Receives All-Stock Takeover Bid From NRG Energy
----------------------------------------------------------------
Calpine Corporation said it received a take-over offer from NRG
Energy, Inc., on May 14, 2008.  The offer proposes to purchase all
of Calpine's outstanding capital stock in a non-taxable all stock
transaction.

Details of the offer were made public after Harbinger Capital
Partners, Calpine's largest shareholder owning more than 24% of
the company's outstanding shares, disclosed with the U.S.
Securities and Exchange Commission that Calpine received the
letter from NRG proposing the take-over.  NRG confirmed the offer.

As of May 21, 2008, shares of Calpine common stock are trading at
$21.28 per share, and 421,676,288 shares of the company's common
stock were outstanding.

MarketWatch yesterday valued the bid at $9.56 billion.  The
Associated Press on May 21 valued the bid at $11.3 billion.  
The AP yesterday said NRG's all-stock offer was valued at
$10.8 billion as of Thursday's close.

Calpine shares surge $23.25 in after hours trading on Thursday,
according to information from Yahoo! Finance.

According to a news statement by NRG, the offer proposes a fixed
exchange ratio of 0.534x, which represents $23.0 per Calpine share
based on the May 13, 2008 closing prices.  The offer represents a
16% premium to the May 13 closing price and approximately 20% to
the 30-day trading average for Calpine stock price.

Consolidation of the two companies would generate more than 45,000
megawatts, a $38,000,000,000 enterprise value, a $20,000,000,000
market cap company with four highly coherent regions of at least
8-GW each, NRG said.

The Bloomberg News said NRG, which uses a mix of gas, coal and
nuclear units to fuel its power plants, stands to benefit from
Calpine's natural gas-fueled power generation units if the U.S.
Government regulate emissions of carbon dioxide because gas
pollutes less than coal.

According to the Wall Street Journal, the consolidation of the two
firms "would begin to fulfill predictions of consolidation among
independent power producers, which need to get bigger and more
diverse to protect against regional downturns or price increases
for particular fuels."

"[The consolidation] would be unparalleled. There is nothing like
this in the competitive power generation industry," Mr. Crane
said, according to Bloomberg News. "The combined company would be
the culmination of what we in this industry have aspired to
become," Mr. Crane said in public statements. "We look forward to
working with Calpine to demonstrate the full potential of the
benefits enumerated in our letter for our respective shareholders.
This is, quite simply, the right deal, at the right point in time,
between the right partners."

Calpine said in a press release that its Board of Directors will
continue to review the NRG proposal to determine if it is in the
best interest of Calpine's shareholders. Calpine said in a press
release that its shareholders need not take any action at this
time.

Goldman Sachs & Co., is serving as Calpine's financial advisor.
Skadden, Arps, Slate, Meagher & Flom LLP, serves as its legal
counsel.

The offer, according to the Journal citing people familiar with
the matter, was proposed after William Patterson, chairman of
Calpine's Board of Directors contacted NRG Chief Executive Officer
David Crane to see if he is interested in becoming Calpine's CEO.
Mr. Crane didn't want the job, the Journal said citing people
familiar with the issue.

Calpine emerged from bankruptcy on January 31, 2008. According to
the Associated Press, Calpine is facing a "leadership void" when
Robert May, the company's current chief executive officer
announced immediately after company's emergence from Chapter 11
that he will step down by the end of 2008.

Harbinger, in a letter to the Calpine Board, recommended full
public disclosure of the offer so all shareholders can express
their opinions to the Board. Harbinger added that the Calpine
Board must also put the search for a management team on hold for a
brief period so that it may explore the offer in a comprehensive
manner with all deliberate speed and diligence.

A full-text copy of the letter sent on May 14, 2008, is available
for free at http://ResearchArchives.com/t/s?2c69

                        About NRG Energy

Headquartered in Princeton, New Jersey, NRG Energy Inc. --
http://www.nrgenergy.com/-- engages in the development, ownership  
and operation of non-utility power generation facilities and the
sale of energy, capacity and related products.  The company and 25
of its affiliates filed for Chapter 11 protection on May 14, 2003
(Bankr. S.D.N.Y. Lead Case No.03-12024).  Matthew A. Cantor, Esq.,
and Robbin L. Itkin, Esq., at James H.M. Sprayregen, P.C. in New
York, represent the Debtors in their restructuring efforts.  The
U.S. Trustee for Region 2 appointed creditors to serve on an
Official Committee of Unsecured Creditors.  Evan D. Flaschen,
Esq., Patrick J. Trostle, Esq., and Renee M. Dailey, Esq., at
Bingham McCutchen LLP in Connecticut, represent the Committee.  
When the Debtors filed for protection against their creditors,
they listed total assets of $10,310,000,000 and total debts of
$9,229,000,000.

As reported in the Troubled Company Reporter on Dec. 8, 2003,
NRG Energy, Inc., has successfully completed its Chapter 11
reorganization and has emerged from bankruptcy.  NRG filed its
Chapter 11 petition less than seven months earlier, on May 14,
2003.

The U.S. Bankruptcy Court for the Southern District of New York
confirmed NRG's Plan of Reorganization on November 24 and all
conditions have been met clearing the way for NRG to emerge from
Chapter 11.

                     About Calpine Corporation

Based in San Jose, California, Calpine Corporation (OTC Pink
Sheets: CPNLQ) -- http://www.calpine.com/-- supplies customers
and communities with electricity from clean, efficient, natural
gas-fired and geothermal power plants.  Calpine owns, leases and
operates integrated systems of plants in 21 U.S. states and in
three Canadian provinces.  Its customized products and services
include wholesale and retail electricity, gas turbine components
and services, energy management and a wide range of power plant
engineering, construction and maintenance and operational
services.

The company and its affiliates filed for chapter 11 protection on
Dec. 20, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-60200).  Richard
M. Cieri, Esq., Matthew A. Cantor, Esq., Edward Sassower, Esq.,
and Robert G. Burns, Esq., Kirkland & Ellis LLP represent the
Debtors in their restructuring efforts.  Michael S. Stamer, Esq.,
at Akin Gump Strauss Hauer & Feld LLP, represents the Official
Committee of Unsecured Creditors.  As of Aug. 31, 2007, the
Debtors disclosed total assets of $18,467,000,000, total
liabilities not subject to compromise of $11,207,000,000, total
liabilities subject to compromise of $15,354,000,000 and
stockholders' deficit of $8,102,000,000.

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

On June 20, 2007, the Debtors filed their Chapter 11 Plan and
Disclosure Statement.  On Aug. 27, 2007, the Debtors filed their
Amended Plan and Disclosure Statement.  Calpine filed a Second
Amended Plan on Sept. 19, 2007 and on Sept. 24, 2007, filed a
Third Amended Plan.  On Sept. 25, 2007, the Court approved the
adequacy of the Debtors' Disclosure Statement and entered a
written order on September 26.  On Dec. 19, 2007, the Court
confirmed the Debtors' Plan.  The Amended Plan was deemed
effective as of January 31, 2008.


CARBON CAPITAL: S&P Retains 'BB' Rating Under Negative CreditWatch
------------------------------------------------------------------
Standard & Poor's Ratings Services said its ratings on five
classes from Carbon Capital II Real Estate CDO 2005-1 Ltd. remain
on CreditWatch with negative implications, where they were placed
on March 11, 2008.

The CreditWatch update follows S&P's review of the monthly trustee
report dated April 30, 2008, which no longer classified the
Macklowe EOP Manhattan Portfolio as an impaired asset.  However,
the report did indicate that the status of the East Village asset
had been changed to impaired.
     
The Macklowe EOP Manhattan Portfolio ($17.7 million, 4% of noncash
assets) was previously classified as an impaired asset following
Macklowe Properties' default on approximately $7 billion of
financing on Feb. 9, 2008.  When combined with the impairment of
the Bermuda Dunes asset ($12 million, 3%), the Macklowe EOP
Manhattan Portfolio impairment caused the transaction to fail its
par value coverage tests.  Subsequently, the borrower reached an
agreement to extend the maturity of all of the defaulted Macklowe
Properties debt by one year to facilitate an orderly sale of the
underlying commercial properties and pay off the debt.
     
While the Macklowe EOP Manhattan Portfolio is no longer considered
impaired, the East Village asset ($22.8 million, 5%) was
classified as impaired on the recent monthly trustee report.  The
transaction's two impaired assets (Bermuda Dunes and East Village)
have an aggregate balance of $34.8 million (8%).  While the par
value tests are no longer failing, the previous failures caused
funds to be diverted to pay down the balance of the most senior
class in the transaction by $9.6 million.
     
As part of its analysis to resolve the CreditWatch negative
placements, Standard & Poor's will consider the current credit
characteristics of the assets as well as the transaction's current
liabilities.


             Ratings Remaining on Creditwatch Negative

            Carbon Capital II Real Estate CDO 2005-1 Ltd.
            Collateralized debt obligations series 2005-1

                          Class    Rating                 
                          -----    ------
                          F        BBB+/Watch Neg     
                          G        BBB/Watch Neg      
                          H        BBB-/Watch Neg     
                          I        BB+/Watch Neg      
                          J        BB/Watch Neg   


CONTINENTAL AIRLINES: JPMorgan Analyst Sees Airline Bankruptcies
----------------------------------------------------------------
Christopher Hinton at MarketWatch reports that Jamie Baker, an
analyst at J.P. Morgan, on Monday said U.S. airline industry
stands to post a collective $7,200,000,000 in operating losses in
2008.  The results would be wider than an initial forecast of
$4,600,000,000 loss, the analyst said.

According to MarketWatch, Mr. Baker, in his research note, said
though investors, management and analysts may talk about airlines
acting collectively to reduce capacity to firm up revenue, the
reality is that they are more likely to dig in and try to outlast
each other.

MarketWatch relates the JPMorgan analyst noted that capacity cuts
have falled far short of what executives have said are necessary.  
Mr. Baker, MarketWatch says, indicated that another round of
airline bankruptcy -- even among the legacy carriers -- is a
question of when rather than if.

According to the report, Mr. Baker said U.S. Airways has the
highest risk of bankruptcy, followed by Northwest Airlines, United
Air Lines' parent UAL Corp., AMR Corp., JetBlue, Continental
Airlines, AirTran, Delta Air Lines, Alaska Air Lines and Southwest
Airlines.

Mr. Baker, the report adds, said credit card companies could pose
more significant risk to airlines than debt.  He explained the
credit card companies could impose unilateral holdbacks, which
will toll on a carrier's liquidity and cash balances.

                            In the Red

Except for Southwest, the major U.S. Airlines posted net losses
for the period ended March 31, 2008:

                          Net Income for Period Ended
                      -----------------------------------
                      March 31, 2008       March 31, 2007
                      --------------       --------------
   US Airways          ($236,000,000)         $66,000,000
   Northwest         ($4,139,000,000)       ($292,000,000)
   UAL                 ($537,000,000)       ($152,000,000)
   AMR                 ($328,000,000)         $81,000,000
   JetBlue               ($8,000,000)        ($22,000,000)
   Continental          ($80,000,000)         $22,000,000
   AirTran              ($34,813,000)          $2,158,000
   Delta             ($6,261,000,000)        $155,000,000
   Alaska Air           ($24,000,000)         ($3,700,000)
   Southwest             $34,000,000          $93,000,000

                        Balance Sheet at March 31, 2008
                      -----------------------------------
                      Total Assets            Total Debts   
                      ------------            -----------
   US Airways       $8,013,000,000         $6,435,000,000
   Northwest       $21,032,000,000        $17,746,000,000
   UAL             $23,813,000,000        $21,647,000,000
   AMR             $28,766,000,000        $26,277,000,000
   JetBlue          $6,050,000,000         $4,721,000,000
   Continental     $12,542,000,000        $11,071,000,000
   AirTran          $2,198,009,000         $1,783,470,000
   Delta           $26,755,000,000        $22,804,000,000
   Alaska Air       $4,379,800,000         $3,520,600,000
   Southwest       $18,031,000,000        $10,846,000,000

On April 14, Northwest announced an agreement to merge with Delta.

United and US Airways are also in talks for a possible merger.  
Continental was initially eyed as a top merger partner for United.

Small and medium-sized carriers have tumbled one after the other
into bankruptcy.  Aloha Airlines commenced bankruptcy proceedings
in Hawaii in March and later ceased operations.  ATA Airlines Inc.
ceased operations and filed for chapter 11 protection on April 2,
and Skybus Airlines Inc. tumbled into bankruptcy on April 5.  
Frontier Airlines went belly up and filed for chapter 11 on April
14.  EOS Airlines filed a chapter 11 petition on April 26.

                   About Continental Airlines

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

                          *     *     *

The Troubled Company Reporter said May 21, 2008, that Moody's
Investors Service affirmed the B2 Corporate Family Rating of
Continental Airlines, Inc. as well as the ratings of its
outstanding corporate debt instruments and selected classes of
Continental's Enhanced Equipment Trust Certificates.  The
Speculative Grade Liquidity rating was lowered to SGL-3 from SGL-
2. The outlook has been changed to negative from stable.

As reported by the Troubled Company Reporter on April 22, 2008,
Standard & Poor's Ratings Services revised its rating outlook on
Continental Airlines Inc. (B/Negative/B-3) to negative from
stable.  S&P also placed its ratings on selected enhanced
equipment trust certificates that are secured by regional jets on
CreditWatch with negative implications.

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


CRICKET COMMUNICATIONS: Moody's Holds Corp. Family Rating at B2
---------------------------------------------------------------
Moody's Investors Service raised Cricket Communications Inc.'s
speculative grade liquidity rating to SGL-1 from SGL-4 and
affirmed the ratings on the company's senior secured facilities
and the B2 corporate family rating. The upgrade of Cricket's
liquidity rating reflects the delivery of the restated financial
statements at the end of 2007, and the greater clarity on the
company's forward capital spending, aided by the company's absence
from the expensive 700Mhz spectrum auction. In addition, Moody's
upgraded the company's $1.1 billion 9.375% senior unsecured notes
to B3 -- LGD5-75%, in conformity with the Loss Given Default
methodology, and the unsecured debt's relative ranking in the
overall capital structure as the company has been amortizing the
senior secured term loan.

In September 2007, Moody's changed Cricket's outlook to Developing
to reflect the potential that the company's parent (Leap Wireless
International Inc., "Leap") may reach an agreement to merge with
MetroPCS Communications Inc ("PCS"), and the combined companies'
scale may merit a more favorable outlook. While PCS has withdrawn
its offer for Leap, Moody's believes the potential for a merger
continues to exist evidenced in part by Leap's request and its
lenders' approval to amend the timing of when a change of control
provision is triggered (at closing of the event rather than at the
announcement).

Ratings Upgraded:

   * Speculative grade liquidity rating to SGL-1 from SGL-4

   * $1.1 billion 9.375% senior unsecured notes due 2014 to B3,
     LGD5 (75%) from Caa1, LGD5 (77%)

Ratings Affirmed:

   * Corporate family rating at B2

   * Probability of default rating at B2

   * $200 million senior secured revolving credit facility due
     2011 Ba2, LGD2 (19%)

   * $900 million senior secured term loan due 2013 Ba2, LGD2
     (19%)

Cricket had approximately $500 million of cash and equivalents,
about $200 million of unused committed bank lines at the end of
Q1/08, plus the $70 million deposit for the 700MHz auction which
was refunded in early Q2/08.  Moody's believes the resulting $770
million in liquidity to be sufficient to fund expected operating
cash consumption over the next year, which in Moody's view will
include about $630 million in capital expenditures (Moody's
adjusted) to support existing and new markets. Moody's assumed
that the spending will support the company's intention to launch
new markets with up to 20 million new POPs by mid 2009.  Moody's
also believes that the company could reduce the pace of its market
expansion and curtail its rate of cash consumption, if unexpected
liquidity strains were to arise.  Moody's also notes that the
company's absence from the very expensive 700 MHz auction has
bolstered the company's near term liquidity profile.

Cricket's $2.2 billion in debt consists of roughly $1.1 billion in
senior unsecured notes, due 2014 and a $1.1 billion senior secured
bank facility, which consists of a $900 million term loan
ultimately due 2013 and a $200 million revolver due 2011. The term
loan requires only minimal amortization before its maturity date
in 2013, and Moody's does not expect the operating facility to be
drawn before the end of 2009. LCW Wireless Operations LLC, in
which Cricket owns 73%, has its own $40 million term credit
facility, which is subject to various financial and operational
covenants. The facility is non-recourse to Cricket, although
Moody's believes Cricket has the liquidity to provide support, if
needed.

Cricket's term facility is subject only to a senior secured debt
to consolidated EBITDA maintenance test (as defined in the credit
agreement) of 4.5x compared to approximately 2.0x currently, while
the total leverage, interest coverage and the fixed charge
coverage tests only apply to if the revolving credit facility if
drawn. The remaining financial covenants are incurrence based and
not overly restrictive. Finally, Moody's notes that Cricket's bank
facilities are secured either directly or indirectly by
essentially all of the company's assets, which restricts its
ability to obtain cash through asset sales.  Moody's, however,
also recognizes the company has a fairly broad spectrum portfolio
and its assets are divisible by markets, which could potentially
be sold, if needed.

Leap Wireless International, Inc. wholly-owns Cricket
Communications Inc., which is a wireless service provider. Both
companies are headquartered in San Diego, California.


DECRANE AIRCRAFT: Delayed Fin'l Statements Cue Moody's Rtng Review
------------------------------------------------------------------
Moody's Investors Service has placed all the ratings of DeCrane
Aircraft Holdings, Inc. on review for downgrade as a result of the
ongoing delay in the delivery of the company's audited 2007
financial statements.  Moody's expects to conclude the review
after the audited financial statements have been received and
considered.

The ratings that have been placed on review for downgrade:

  -- $30 million guaranteed first lien revolving credit facility
     due 2013 ... B1 LGD2, 26%

  -- $195 million guaranteed first lien term loan due 2013 ... B1
     LGD2, 26%

  -- $150 million guaranteed second lien term loan due 2014 ...
     Caa1 LGD5, 78%

The ratings outlook has be placed on review from stable.

DeCrane Aircraft Holdings, Inc., headquartered in Columbus, OH, is
a leading provider of aircraft cabin interior systems and
components for business, VIP and head-of-state aircraft, and a
provider of aircraft retrofit, interior completion and
refurbishment services.  Its customers include original
manufacturers of business, VIP and head-of-state aircraft, the
U.S. and foreign militaries, and aircraft repair, modification
centers and completion centers.


DOMTAR CORP: S&P Holds 'BB-' Rating and Revises Outlook to Pos.
---------------------------------------------------------------
Standard & Poor's Ratings Services revised the outlook on
Montreal-based Domtar Corp. to positive from stable, reflecting
the company's ongoing debt reduction and successful integration of
Weyerhaeuser Co.'s (BBB/Negative/A-2) fine paper assets.  At the
same time, S&P affirmed the ratings, including the 'BB-' long-term
corporate credit rating, on Domtar.
     
"The ratings reflect Domtar's leading market position in the North
American uncoated free sheet market and good cost profile," said
Standard & Poor's credit analyst Jatinder Mall.  "The ratings are
constrained, however, by declining demand for uncoated free sheet;
volatile prices for commodity paper, pulp, and lumber products;
and a weak lumber business," Mr. Mall added.
     
With 34% of industry capacity, Domtar is the largest manufacturer
of uncoated free sheet in North America.  It has 4.6 million
metric tons of integrated fine paper capacity at 12 pulp and paper
mills.  Most of its paper capacity is located in the U.S.; Domtar
also manufactures and sells pulp and lumber.
     
The company operates in a consolidated UFS industry in which the
top five producers make up about 80% of industry capacity, and
Domtar's large and modern mills provide it with a good cost
profile.  Although demand for UFS has been steadily declining due
to electronic substitution, the industry has become disciplined
and adjusts capacity quickly in response to declines in demand.  
In the past year, the industry has closed about 1.5 million metric
tons of capacity resulting in an improved shipment-to-capacity
ratio of more than 90%.  Given the continuous decline in UFS
demand over time, producers will continue rationalizing capacity.  
While Domtar's lumber business is a cash drain given depressed
lumber prices, S&P expect it to divest of this business if the
right opportunity comes along.  
     
The positive outlook reflects that while S&P expect demand for UFS
to continue to decline, higher UFS prices should offset increasing
input costs and ongoing synergies should lead to improved EBITDA
in 2008 over 2007.  If Domtar can meet its expectation of
sustaining about a 3x leverage in the long term, S&P would upgrade
the company.  In the meantime, S&P would expect management to
continue using excess cash flow to reduce debt further.  Given
the company's current financial risk profile, there would have to
be an accelerated decline in demand leading to a leverage ratio of
more than 4x before S&P downgraded the company.


DORADO BECKVILLE: Wants to Publicly Sell Assets on June 30
----------------------------------------------------------
Dorado Beckville Partners I LP asked the Hon. Barbara Houser of
the U.S. Bankruptcy Court for the Northern District of Texas for
permission to auction its leasehold and related property on
June 30, 2008.

Prior the bankruptcy filing, Beckville told the Court that it was
a party to a purchase and sale agreement dated Dec. 21, 2007, as
amended Feb. 1, 2008, involving all of its assets.  The sale
agreement had an effective date of Dec. 1, 2007, and a purchase
price of $31,500,000.  According to Beckville, funds needed to
close the sale were in escrow when it terminated the sale
agreement on March 28, 2008.

Since April 2, 2008, Beckville said that it identified 280 sales
prospects and, began marketing its assets to 30 prospects
considered as qualified purchasers.  These qualified purchasers
are companies who have been and are active in buying oil and gas
properties in East Texas, Beckville related.

To date, Beckville said that nine interested parties have accessed
an online data room, six visited the physical data room in
Houston, Texas, and another eight are expected to access the data
room when they execute a confidentiality agreement.  Beckville
said it expects to utilize the bankruptcy-sale process to obtain
value for its estate.  Hence, it seeks permission on a proposed
bidding procedure presented to the Court.

                      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 the case.  Marcus Alan
Helt, Esq., and Richard McCoy Roberson, Esq., at Gardere Wynne
Sewell LLP is counsel to Dorado Beckville.  Cox Smith Matthews
Incorporated is counsel to Dorado Operating.  Dorado Beckville's
schedules show total assets of $32,289,155 and total liabilities
of $31,419,576 and Dorado Operating's schedules show total assets
of $831,387 and total liabilities of $13,122,417.


DORADO BECKVILLE: Creditors' Panel Taps Jason Searcy as Counsel
---------------------------------------------------------------
The Official Committee of Unsecured Creditors of Dorado Beckville
Partners I LP and Dorado Operating Inc. asked the U.S. Bankruptcy
Court for the Northern District of Texas for permission to engage
Jason R. Searcy & Associates PC as Committee counsel.

The firm's professionals charge these rates:

   Jason R. Searcy, Esq.   Senior Attorney    $400 per hour
   Amy Bates Ames, Esq.    Junior Attorney    $200 per hour
   Joshua P. Searcy, Esq.  Junior Attorney    $200 per hour
                           Legal Assistants   $90 per hour

The Committee related that the firm has extensive experience in
bankruptcy, corporate reorganization and general debtor or
creditor matters needed to to perform legal services required by
the Committee.

The firm can be reached at:

   Jason R. Searcy & Associates PC
   P. O. Box 3929
   Longview, Texas 75606
   Telephone: (903) 757-3399
   Facsimile: (903) 757-9559

                      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 the case.  Marcus Alan
Helt, Esq., and Richard McCoy Roberson, Esq., at Gardere Wynne
Sewell LLP is counsel to Dorado Beckville.  Cox Smith Matthews
Incorporated is counsel to Dorado Operating.  Dorado Beckville's
schedules show total assets of $32,289,155 and total liabilities
of $31,419,576 and Dorado Operating's schedules show total assets
of $831,387 and total liabilities of $13,122,417.


E3 BIOFUELS: Creditors Have Until May 27 to File Proofs of Claim
----------------------------------------------------------------
Creditors of E3 Bio-Fuels Mead LLC have until May 27 to file their
proofs of claim against the Debtor, Kris Byars of the Bellevue
Leader reports.

Documents submitted to the U.S. Bankruptcy Court for the District
of Kansas indicate that the exlusive period for the Debtor to file
its plan of reorganization had been extended several times,
according to the Bellevue Leader.  An attorney who represents
creditors in the Mead said the deadlines were extended for the
sake of the creditors.

Once the May 27 deadline has passed, the Debtor will be given
another extension of its exclusive period to file a plan of
reorganization, the Bellevue Leader says.

The Bellevue Leader relates that technical problems and bad
economy plagued the plant's start-up.

According to the Troubled Company Reporter on Jan. 16, 2008, Prime
BioSolutions had expressed interest in buying the ethanol plant.

                         About E3 BioFuels

Headquartered in Shawnee, Kansas E3 BioFuels LLC --
http://www.e3biofuels.com/-- produces ethanol and is a subsidiary   
of Earth, Energy & Environment LLC.  It was founded by chief
executive officer Dennis Langley.  E3 BioFuels projects, including
the Genesis plant in Mead, Nebraska, are owned exclusively by E3
BioFuels-Mead LLC, an affiliate.  The Mead plant opened in June,
and was hailed as a model for improving the environment and for
fighting global warming.  It is the first plant to have a "closed-
loop" system, which uses manure from 28,000 head of cattle in a
nearby feedlot to make methane that fueled the plant.  Distillers
grain, a byproduct of ethanol production, was then fed to the
cattle.

E3 BioFuels-Mead LLC and E3 Biofuels Mead Holding LLC filed for
Chapter 11 protection on November 30, 2007 (Bankr. D. Kan. Case
Nos. 07-22733 and 07-22734).  Carl R. Clark, Esq., and Jeffrey A.
Deines, Esq., at Lentz & Clark PA represent the Debtors in their
restructuring efforts.  When the Debtors filed for bankruptcy,
they listed assets and debts between $1 million and $100 million.


EACO CORPORATION: April 2 Balance Sheet Upside-Down by $938,200
---------------------------------------------------------------
EACO Corporation's balance sheets at April 2, 2008, showed
$15,635,100 in total assets and $16,573,300 in total liabilities,
resulting in a $938,200 total stockholders' deficit.

At April 2, 2008, the company's balance sheet also showed strained
liqudity with $462,600 in total current assets available to pay
$2,927,000 in total current liabilities.

The company reported a net loss of $1,058,300, on rental revenue
of $299,000, for the first quarter ended April 2, 2008, compared
with a net loss of $626,900, on rental revenue of $234,200 in the
same period ended March 28, 2007.

Results for the three months ended April 2, 2008, included a loss
from discontinued operations, net of income tax, of $596,200.  
This loss included the final settlement amount related to the
Lurie trial that was completed in December 2007 and the Horn
settlement that was reached in May 2008.  

In August 2005, the company was sued in Miami-Dade County Circuit
Court by a broker who claimed that a commission was payable to him
in connection with the company's sale of substantially all of its
restarurant assets in June 2005.  

On May 9, 2008, the company, Horn Capital Realty and Jonathan
Horn, individually and as president of Horn Capital Realty,
entered into a written settlement agreement whereby the company,
without admitting liability, agreed to pay Horn Capital Realty the
amount of $550,000 and Horn Capital Realty agreed to dismiss the
lawsuit.

On the other hand, during the quarter ended March 28, 2007, the
company recognized a loss of $226,100 related to the sale of
equipment at one of the company's properties.  The sale was the
result of the expiration of the lease at that property.  The
company did not sell any capitalized property in the quarter ended
April 2, 2008.

Full-text copies of the company's financial statements for the
quarter ended April 2, 2008, are available for free at:

               http://researcharchives.com/t/s?2c5b

Headquartered in Anaheim, Calif., EACO Corporation (OTC BB: EACO)
-- http://www.eacocorp.com/-- manages rental properties.

At April 2, 2008, the company owns two restaurant properties, one
located in Orange Park, Fla. and one in Brooksville, Fla.  The
company is obligated for leases of two restaurant locations, one
located in Tampa, Fla. and another located in Deland, Fla.  In
addition, the company owns an income producing real estate
property held for investment in Sylmar, Calif.


ECHOSTAR DBS: Fitch Assigns 'BB-' Rating on $750MM Notes Offering
-----------------------------------------------------------------
Fitch has assigned a 'BB-' rating to EchoStar DBS Corporation's
$750 million offering of 7.75% senior unsecured notes due 2015.  
The notes were placed under the SEC rule 144A.  EDBS is a wholly
owned subsidiary of DISH Network Corporation (DISH, Issuer Default
Rating of 'BB-').  Proceeds from the offering are expected to be
used for general corporate purposes.  The Rating Outlook is
Stable.

Given the DISH's operating profile and credit-protection metrics,
Fitch believes that the company's overall credit profile is strong
within the rating category, providing the company substantial
financial flexibility.  Fitch believes that DISH's leverage can
increase to a range between 3.5x to 3.75x and maintain its current
ratings.  DISH's leverage metric, calculated on a latest 12 month
basis, as of March 31, 2008 was 1.87 times on a consolidated
basis.  Pro forma for the new debt issuance the company's leverage
metric was 2.12x.

The company has approximately $1.9 billion of senior unsecured
debt and capital lease payments scheduled to be repaid during the
next three years including a $1.0 billion maturity in October
2008.  In addition the company's 3% Convertible Senior
Subordinated Notes due 2010 ($500 million principal value)
contains a provision that provides DISH the option to redeem the
notes or may require the company to repurchase the notes at
principal value during July 2008.  Historically, EchoStar has
enjoyed strong access to capital markets and Fitch assumes that
the company will successfully refinance the 2008 maturities.

EchoStar's ratings reflect Fitch's opinion that the effects of
growing competition and a slowing economy will weigh on EchoStar's
operating results during 2008 and 2009 likely leading to lower
gross additions, sluggish ARPU growth rates, higher subscriber
churn rates, and higher subscriber acquisition costs.

Key to EchoStar's continued EBITDA and free cash flow growth is
its ability to control subscriber churn. EchoStar reported
subscriber churn increased to 1.68% (monthly) for the quarter
ended March 31, 2008 reflecting an increase of 22 basis points
relative to the same period last year. and 26 basis points
sequentially.  In addition to increased competition, the higher
churn level is also attributable to higher non pay disconnects due
to economic factors, decreased customer satisfaction resulting
from operational inefficiencies, expiration of promotional
discounts and theft.  

In Fitch's opinion, some of these factors such as higher non pay
disconnects and decreased customer satisfaction, appear to be
longer term fixes and churn may remain elevated for an extended
period of time.  Fitch is concerned that EchoStar will have to
significantly increase its customer retention spending to regain
control over subscriber churn, which will have a negative effect
on EchoStar's EBITDA and free cash flow generation.

DISH, through wholly - owned subsidiary Frontier Wireless, LLC won
168 E Block licenses totaling nearly $712 million.  While DISH has
yet to articulate its wireless strategy, Fitch believes that the
capital costs and execution risk associated with adding a wireless
product to DISH's overall service offering will elevate the near
term business risk attributable to DISH's credit profile.  In
Fitch's opinion the acquisition of wireless spectrum can position
DISH to eventually offer a variety of wireless solutions including
mobile video and possibly video on demand.  Both of these
potential solutions will serve to differentiate DISH's service
offering and will strengthen DISH's competitive position among
other multichannel video distributors.

The Stable Rating Outlook reflects Fitch's belief that subscriber
metrics will improve as the company's high definition offering
matches competitive offerings, as well as the positive EBITDA and
free cash flow prospects, expected over the near term, balanced by
the very competitive operating environment.  Outside of the
existing share repurchase authorization; Fitch views the use of
cash for shareholder-friendly actions as an erosion of financial
flexibility that could result in pressure on the ratings or an
outlook revision.  Additionally, Fitch has concerns related to the
uncertainty surrounding the company's wireless strategy and the
potential cash requirements to launch a wireless service.


EDUCATION RESOURCES: Can Hire Craig & Macauley as Special Counsel
-----------------------------------------------------------------
Judge Henry J. Boroff of the U.S. Bankruptcy Court for the
District of Massachusetts authorized The Education Resources
Institute Inc., on a final basis, to employ Craig and Macauley PC,
as special conflict counsel, effective as of the bankruptcy filing
date.

As reported in the Troubled Company Reporter on April 14, 2008,
Craig and Macauley will represent the Debtor in matters identified
by the Debtor's legal counsel, Goodwin Procter LLP, as potentially
presenting a conflict of interest for Goodwin, and in other
matters the Debtor, in consultation with Goodwin, deems
appropriate.

The Debtor agreed to pay Craig and Macauley in its customary
hourly rates:

   Professional                          Hourly Rate
   ------------                          -----------
   Christopher J. Panos, Shareholder     $450
   Kathleen A. Rahbany, Associate        $240
   All other Shareholders                $340 to $525
   All other Associates                  $175 to $325
   Of Counsel                            $335 to $450
   Paralegal                             $125 to $150

Christopher J. Panos, Esq., shareholder at Craig and Macauley,
assured the Court that his firm does not hold any interest
adverse to the Debtor's and its estate, and is a "disinterested
person" as the term is defined in Section 101(14) of the
Bankruptcy Code.

Mr. Panos disclosed that Craig and Macauley has received $2,172
from the Debtor for legal services performed and expenses
incurred in connection with a potential restructuring.  The firm
also holds a $50,000 retainer, which will be reduced by any
amounts applied to any prepetition fees or expenses incurred.  
Mr. Panos further disclosed that, during the one year before the
Petition Date, Craig and Macauley rendered services and incurred
legal fees and expenses totaling $2,172.

Mr. Panos can be reached at:

     Craig and Macauley Professional Corporation
     Federal Reserve Plaza, 600 Atlantic Avenue
     Boston, Massachusetts 02210-2211
     (Suffolk Co.)
     Tel (617) 367-9500
     Fax (617) 742-1788
         (617) 248-0886

          About The Education Resources Institute Inc.

Headquartered in Boston, Massachussetts, The Education Resources
Institute Inc. -- http://www.teri.org/-- aka Boston Systems    
Resources Inc., Brockton Education Opportunity Center, TERI, TERI
College Access, TERI College Access Centers and TERI Marketing
Services Inc., is a nonprofit organization that promotes
educational opportunities for all through its college access and
loan guarantee activities.  Founded in 1985, TERI is a guarantor
of private or non-government student loans with more than $17
billion in outstanding guarantees.  

The Debtor filed for Chapter 11 petition on April 7, 2008 (Bankr.
D. Mass. Case No.: 08-12540.)  Daniel Glosband, Esq., Gina L.
Martin, Esq. at Goodwin Procter LLP represent the Debtor in its
restructuring efforts.  The Debtor's financial advisor is Grant
Thornton LLP, its Claims Agent is Epiq Bankruptcy Solutions LLC,
its investment Banker is Citigroup Global Markets Inc., its
financial advisor is  FTI Consulting Inc. and its Public Relations
& Public Affairs Advisor  is Rasky Baerlein Strategic
Communications Inc.  Duane Morris LLP is the proposed counsel for
the Official Committee of Unsecured Creditors.  When the Debtor
filed for protection from its creditors, it listed estimated
assets of more that $1 billion and estimated debts of $500,000 to
$1 billion.

(TERI Bankruptcy News, Issue No. 6; Bankruptcy Creditors' Service,
Inc., http://bankrupt.com/newsstand/or 215/945-7000)      


EDUCATION RESOURCES: Panel Taps FTI Consulting as Fin. Advisor
--------------------------------------------------------------
The Official Committee of Unsecured Creditors of The Education
Resources Institute Inc. seeks authority from the U.S. Bankruptcy
Court for the District of Massachusetts to employ FTI Consulting
Inc. as financial advisor nunc pro tunc to the bankruptcy filing
date.

Thomas M. Cambern, chairperson of the Creditors Committee, says
that FTI's services are deemed necessary to enable the Committee
to assess and monitor the efforts of the Debtor and its
professional advisors to maximize the value of its estate and
reorganize successfully.  FTI is well qualified and able to
represent the Committee in a cost-effective, efficient and timely
manner, Mr. Cambern says.

As financial advisor, FTI will:

   a) assist the Committee in the review of financial-related
      disclosures required by the Court, including the Schedule
      of Assets and Liabilities, the Statement of Financial
      Affairs and Monthly Operating Reports;

   b) assist with a review of the Debtor's restricted and
      unrestricted pledge accounts and related cash management
      procedures;

   c) assist with a review of any proposed key employee
      retention and other critical employee benefit programs;

   d) assist and advise the Committee with respect to the
      Debtor's identification of core business assets and the
      disposition of assets or liquidation of unprofitable
      operations;

   e) assist with a review of the Debtor's performance of
      cost and benefit evaluations with respect to the affirmation
      or rejection of various executory contracts and leases;

   f) assist regarding the review of operations and
      identification of areas of potential cost savings,
      including overhead and operating expense reductions and
      efficiency improvements;

   g) assist in the review of financial information distributed
      by the Debtor to creditors and others, including, but not
      limited to, cash flow projections and budgets, cash
      receipts and disbursement analysis, analysis of various
      asset and liability accounts, and analysis of proposed
      transactions for which Court approval is sought;

   (h attend at meetings and assist in discussions with the
      Debtor, potential investors, banks, other secured lenders,
      the Committee and any other official committees organized
      in the Debtor's Chapter 11 proceeding, the U.S. Trustee,
      other parties-in-interest and their professionals;

   i) assist in the review and preparation of information and
      analysis necessary for the confirmation of a plan of
      reorganization in the Debtor's Chapter 11 case;

   j) assist in the evaluation and analysis of avoidance
      actions, including fraudulent conveyances and preferential
      transfers;

   k) provide litigation advisory services with respect to
      accounting and tax matters, along with expert witness
      testimony on case-related issues as required by the
      Committee; and

   l) render other general business consulting or other
      assistance as the Committee or its counsel may deem
      necessary that are consistent with the role of a financial
      advisor and not duplicative of services provided by other
      professionals in the Debtor's bankruptcy case.

FTI will be paid according to its customary hourly rates, subject
to periodic adjustments:

      Senior Managing Directors           $540 to $720
      Managing Directors                  $465 to $550
      Directors                           $380 to $475
      Senior Consultant                   $285 to $360
      Consultant                          $220 to $270
      Project Assistant                    $75 to $185

Samuel E. Star, senior managing director at FTI Consulting,
assures the Court that the firm does not represent any other
entity having an adverse interest in connection with the Debtor's
Chapter 11 case, and thus believes it is eligible to represent
the Committee under Section 1103(b).  

He adds FTI will conduct an ongoing review of its files to ensure
that no conflicts or other disqualifying circumstances exist or
arise.  If any new material facts or relationships are discovered,
FTI will supplement its disclosure to the Court.

Mr. Star says FTI has agreed not to share with any person or firm
the compensation to be paid for professional services rendered in
connection with these cases.  He says FTI is not owed any amounts
with respect to fees and expenses.  

FTI will apply to the Court for allowances of compensation and
reimbursement of expenses of its financial advisory services in
accordance with the applicable provisions on the Bankruptcy Code,
the Bankruptcy Rules, corresponding local rules, orders of this
Court and guidelines established by the United States Trustee.

            About The Education Resources Institute Inc.

Headquartered in Boston, Massachussetts, The Education Resources
Institute Inc. -- http://www.teri.org/-- aka Boston Systems       
Resources Inc., Brockton Education Opportunity Center, TERI, TERI
College Access, TERI College Access Centers and TERI Marketing
Services Inc., is a nonprofit organization that promotes
educational opportunities for all through its college access and
loan guarantee activities.  Founded in 1985, TERI is a guarantor
of private or non-government student loans with more than $17
billion in outstanding guarantees.  

The Debtor filed for Chapter 11 petition on April 7, 2008 (Bankr.
D. Mass. Case No.: 08-12540.)  Daniel Glosband, Esq., Gina L.
Martin, Esq. at Goodwin Procter LLP represent the Debtor in its
restructuring efforts.  The Debtor's Conflicts Counsel is Craig
and Macauley PC, its financial advisor is Grant Thornton LLP, its
Claims Agent is Epiq Bankruptcy Solutions LLC, its investment
Banker is Citigroup Global Markets Inc., and its Public Relations
& Public Affairs Advisor is Rasky Baerlein Strategic
Communications Inc.  When the Debtor filed for protection from its
creditors, it listed estimated assets of more that $1 billion and
estimated debts of $500,000 to $1 billion.

(TERI Bankruptcy News, Issue No. 6; Bankruptcy Creditors' Service,
Inc., http://bankrupt.com/newsstand/or 215/945-7000)      


EDUCATION RESOURCES: Can Hire Grant Thornton as Financial Advisor
-----------------------------------------------------------------
Judge Henry J. Boroff of the U.S. Bankruptcy Court for the
District of Massachusetts authorized The Education Resources
Institute Inc., on a final basis, to employ Grant Thornton Group
LLP as their financial advisors.

As reported in the Troubled Company Reporter on April 14, 2008,
Grant Thornton will:

   (a) assist the Debtor's management in evaluating various
       strategic alternatives;

   (b) analyze the Debtor's financial position, business plans
       and financial projections prepared by management,
       including commenting on assumptions and comparing those
       assumptions to historical Debtor and industry trends;

   (c) assist the Debtor's management in connection with the
       development of financial and operational plans;

   (d) assist the Debtor's management with developing its
       communication plan with employees, government authorities,
       customers, suppliers, statutory committees, stakeholders,
       and other parties-in-interest;

   (e) analyze the Debtor's cash receipts and disbursements
       forecast and assess liquidity;

   (f) consult with Debtor's management regarding valuation of
       the Debtor on a going-concern and liquidation basis;

   (g) assist in developing a bankruptcy exit strategy;

   (h) assist with Debtor's oversight of vendors and agents;

   (i) assist the Debtor's management, in coordination with the
       Debtor's legal counsel, in the preparation of a disclosure
       statement, plan of reorganization and the underlying
       business plans from which the documents are developed;

   (j) assist the Debtor's management, in coordination with
       Debtor's legal counsel, in evaluating competing disclosure
       statements, plans and other strategic proposals made by
       the Committee of Unsecured Creditors, and other parties-
       in-interest, if any;

   (k) consult with Debtor's management regarding the preparation
       of required financial statements, schedules of financial
       affairs, monthly operating reports, and other financial
       disclosures required by the Court; and

   (l) provide testimony regarding financial matters related to,
       including, among other things, feasibility of any proposed
       plan of reorganization, and the evaluation of any
       securities issued in connection with the plan.

The Debtor will pay Grant Thornton according to the firm's
customary hourly rates:

       Professional                       Hourly Rate
       ------------                       -----------
       Partner/Principal/Director         $590 to $645
       Senior Manager                     $470 to $535
       Manager                            $400 to $440
       Consultant/Senior Consultant       $210 to $350
       Paraprofessional                   $75 to $155

Grant Thornton will be compensated in accordance with the
procedures set forth in Sections 330 and 331 of the Bankruptcy
Code and Bankruptcy Rules.  Grant Thornton will receive only (a)
its monthly compensation as specified in the Engagement
Agreement, dated April 1, 2008, and (b) reimbursement of its
expenses, which will not be subject to challenge except under the
standard of review set forth in Section 328(a).

The U.S. Trustee retains all rights to object to Grant Thornton's
interim and final fee applications, including fee reimbursement,
on all grounds, including but not limited to the reasonableness
standard provided for in Section 330.

All requests of Grant Thornton for payment of indemnity pursuant
to the Engagement Agreement will be subject to review by the
Court to ensure that payment of the indemnity conforms to the
terms of the Engagement Agreement and is reasonable based on the
litigation or settlement in respect of which indemnity is sought,
provided.  Grant Thornton will not be indemnified in the case of
its own bad-faith, self-dealing, breach of fiduciary duty, gross
negligence or willful misconduct.  

Grant Thornton will also not be indemnified if the Debtor or a
representative of the estate asserts a claim for, and a court
determines by final order that that claim arose out of Grant
Thornton's own bad faith, self-dealing, breach of fiduciary duty,
gross negligence, or willful misconduct.

In the event that Grant Thornton seeks reimbursement for
attorney's fees from the Debtor pursuant to the Engagement
Agreement, the invoices and supporting time records from the
attorneys will be included in Grant Thornton's own fee
applications, both interim and final, and those invoices and time
records will be subject to the U.S. Trustee's guidelines for
compensation and reimbursement of expenses and the approval of
the Court under the standards of Sections 330 and 331 without
regard to whether that attorney has been retained under Section
327 and without regard to whether that attorney's services
satisfy Section 330(a)(3)(C).

          About The Education Resources Institute Inc.

Headquartered in Boston, Massachussetts, The Education Resources
Institute Inc. -- http://www.teri.org/-- aka Boston Systems    
Resources Inc., Brockton Education Opportunity Center, TERI, TERI
College Access, TERI College Access Centers and TERI Marketing
Services Inc., is a nonprofit organization that promotes
educational opportunities for all through its college access and
loan guarantee activities.  Founded in 1985, TERI is a guarantor
of private or non-government student loans with more than $17
billion in outstanding guarantees.  

The Debtor filed for Chapter 11 petition on April 7, 2008 (Bankr.
D. Mass. Case No.: 08-12540.)  Daniel Glosband, Esq., Gina L.
Martin, Esq. at Goodwin Procter LLP represent the Debtor in its
restructuring efforts.  The Debtor's Conflicts Counsel is Craig
and Macauley PC, its Claims Agent is Epiq Bankruptcy Solutions
LLC, its investment Banker is Citigroup Global Markets Inc., its
financial advisor is  FTI Consulting Inc. and its Public Relations
& Public Affairs Advisor is Rasky Baerlein Strategic
Communications Inc.  Duane Morris LLP is the proposed counsel for
the Official Committee of Unsecured Creditors.  When the Debtor
filed for protection from its creditors, it listed estimated
assets of more that $1 billion and estimated debts of $500,000 to
$1 billion.

(TERI Bankruptcy News, Issue No. 6; Bankruptcy Creditors' Service,
Inc., http://bankrupt.com/newsstand/or 215/945-7000)      


ENCORE ACQUISITION: Mulls Sale, Merger; Hires Lehman as Advisor
---------------------------------------------------------------
The Board of Directors of Encore Acquisition Company authorized
the company's management team to explore a broad range of
strategic alternatives to further enhance shareholder value,
including, but not limited to, a sale or merger of the company.
Lehman Brothers Inc. has been engaged as the company's financial
advisor in this process.

"Since Encore's formation in 1998, the Company has built a high
quality portfolio of stable long-lived, oil-weighted properties
that generate substantial free cash flow from our 231 MMBOE proved
reserve base," Jon S. Brumley, Chief Executive Officer and
President, commented.  

"We have a vast inventory of over 2,500 drilling locations and 35
enhanced oil recovery projects that represent more than 450 MMBOE
of additional upside potential.  Encore has sizeable and scalable
projects in some of the most significant onshore domestic oil and
natural gas plays which include the Bakken Shale play, the
Haynesville Shale play, our West Texas joint venture with
ExxonMobil, our Rocky Mountain CO2 opportunities, and our newest
oil shale play, the Tuscaloosa Marine Shale."

Mr. Brumley went on to state, "It is our belief that Encore's
current share price is not reflective of our record operating
results and our ability to efficiently fund these projects through
our upstream MLP, Encore Energy Partners.  We are determined to
have the value of these opportunities recognized for our
shareholders.  Therefore we have retained Lehman Brothers to
explore strategic alternatives, including a sale of the Company."

There is no assurance that the review of strategic alternatives
will result in Encore changing its current business plan, pursuing
a particular transaction or completing any such transaction.  
Encore does not expect to update the market with any further
information on the process unless and until its Board of Directors
has approved a specific transaction or otherwise deems disclosure
appropriate.

Headquartered in Fort Worth, Texas, Encore Acquisition Company
(NYSE: EAC) -- http://www.encoreacq.com/-- is an independent
energy company engaged in the acquisition, development and
exploitation of North American oil and natural gas reserves.
Organized in 1998, Encore's oil and natural gas reserves are in
four core areas: the Cedar Creek Anticline of Montana and North
Dakota; the Permian Basin of West Texas and Southeastern New
Mexico; the Mid Continent area, which includes the Arkoma and
Anadarko Basins of Oklahoma, the North Louisiana Salt Basin, the
East Texas Basin and the Barnett Shale; and the Rocky Mountains.

                         *     *     *

Moody's Investors Service confirmed Encore Acquisition Co.'s Ba3
corporate family rating, Ba3 probability of default rating, and B1
senior subordinated note rating in June 2007.  The rating still
holds to date.


ENERSYS: Moody's Assigns Ba1 Rating on Proposed Credit Facility
---------------------------------------------------------------
Moody's Investors Service affirmed the corporate family rating of
EnerSys at Ba3 and probability of default at Ba3.  Moody's also
assigned a Ba1 rating to the company's proposed senior secured
credit facility, and a B2 rating to the proposed senior unsecured
convertible notes.  As a result of EnerSys debt being rated, the
Ba3 corporate family rating will now be assigned to EnerSys, the
senior-most entity with rated debt in the corporate structure.  
EnerSys Capital Inc.'s existing rating of Ba2 for its senior
secured bank credit facility was not affected by these rating
actions and will be withdrawn once the new senior secured credit
facility closes.  In a related rating action Moody's changed
EnerSys' outlook to positive reflecting strong operating
performance and solid debt coverage metrics.

EnerSys' Ba3 corporate family rating reflects the company's
leading market position in industrial batteries in addition to its
geographic breadth and customer diversity.  The company's
proprietary thin plate pure lead technology and other proprietary
technology are expected to contribute to the company's continued
growth.  For LTM December 2007, EnerSys' key credit metrics were
as: Debt/EBITDA at 3.5x; EBITA/interest expense near 2.8x; and,
funds from operations/debt of 21% (all ratios adjusted per Moody's
methodology).

Tempering these strengths is the company's dependence on key end
markets including industrial forklifts and telecommunications.
Furthermore, the historical cyclicality of capital spending in its
end markets and the company's current negative free cash flow
constrain the corporate family rating as well.  Free cash
flow/debt was negative 6.1% for the last twelve months through
December 30, 2007.  The negative free cash is driven primarily by
working capital usage, reflecting the company's sales growth.  
Also, the company is exposed to commodity price volatility
especially lead, which comprised approximately 33% of the
company's cost of goods sold for the first nine months of FY07 and
resulted in cost of sales increasing by $147 million during the
same time period.

The positive outlook reflects Moody's expectation that EnerSys'
debt protection measures will continue to improve over the next
twelve to eighteen months as the company benefits from the robust
demand in its end markets.  Additionally, Moody's believes that
the company will improve its internal operating efficiencies and
reduce its working capital spend, which should translate into
robust free cash flow during the company's 2009 fiscal year.  Free
cash flow is expected to be used for debt reduction.  EnerSys'
financial flexibility is also being enhanced as it is diversifying
its funding sources away from an all bank capital structure with a
combination of bank debt and convertible notes.

The ratings for the proposed senior secured credit facility and
senior unsecured convertible notes reflect the overall probability
of default of the company, to which Moody's assigns a PDR of Ba3.  
The Ba1 rating assigned to the $375 million senior secured credit
facility benefits from a priority of payment over the convertible
notes in a liquidation scenario.  The B2 rating assigned to the
proposed $150 million senior unsecured convertible notes reflects
its junior priority of payment relative to the senior secured
credit facility.

These ratings/assessments were affected by this action:

EnerSys:

  -- Corporate family rating at Ba3;
  -- Probability of default rating at Ba3;
  -- $375 million senior secured credit facility assigned at Ba1
     (LGD2, 27%); and,

  -- $150 million senior unsecured convertible notes due 2038
     assigned at B2 (LGD6, 92%).

EnerSys Capital Inc.

  -- $453.2 million senior secured bank credit facility affirmed
     Ba2 LGD2 (21%).

EnerSys is the world's largest manufacturer, marketer and
distributor of industrial batteries and also manufactures related
products such as chargers, power equipment and battery
accessories.  Additionally, it provides related aftermarket and
customer-support services for industrial batteries.  Revenues for
the fiscal year ended March 31, 2008 totaled approximately
$2.0 billion.


ENRON CORP: Court OKs Merger of Certain Affiliates to Save Costs
----------------------------------------------------------------
The Honorable Arthur Gonzales of the U.S. Bankruptcy Court for the
Southern District of New York permitted the reorganized Enron
Debtors to merge certain affiliates, as determined by the
reorganized Debtors with Enron Creditors Recovery Corp., or any
other Reorganized Debtor as appropriate.

Judge Gonzalez authorizes the Reorganized Debtors to take all
actions or enter into agreements necessary to effectuate the
merger.  Distributions to creditors will continue to be made in
accordance with the Plan and all calculations will be maintained
pursuant to the Distribution Model, as if the merger had not
occurred.

As reported in the Troubled Company Reporter on May 6, 2008, the
Debtors explained that the merger of these affiliates, and other
Enron-related entities, with Enron or other Reorganized Debtor as
appropriate, should result in substantial cost savings for the
Reorganized Debtors' estates.  The separate estates are
responsible for various state filing and administrative fees, as
well as related internal costs to monitor and ensure that these
numerous entities are in compliance with laws.  The separate
estates are responsible for payment of taxes, certain statutory
fees and other costs, including tax preparation costs, for each of
the remaining Reorganized Debtor entities.  These fees and costs,
including taxes must continue to be paid for each Reorganized
Debtor until the time as a chapter 11 case for a particular
Reorganized Debtor is closed in accordance with the Plan.

Absent a merger, each of the Chapter 11 estates will continue to
be burdened by expenses and significant estate resources will be
expended to pay these mandatory costs, the Debtors contended.

Before the hearing, National City Bank, as indenture trustee for
certain debentures of Enron North America Corp. and Enron
Transportation Services Company, as well as the Enron trust
originated preferred securities debentures, filed documents with
the Court saying it opposes the merger.

The Bank's counsel, Edward M. Fox, Esq., at Kirkpatrick &
Lockhart Preston Gates Ellis LLP, in New York, asserted that the
Motion did not provide any information on the particular mergers
contemplated by the Reorganized Debtors.  The Motion also failed
to indicate how those mergers might impact National City's
rights, both monetary and non-monetary, under the complex series
of indentures, trust agreements, and other contracts that govern
its relationship with the Reorganized Debtors, he noted.

Absent additional information regarding the specific mergers, Mr.
Fox said, it will be impossible for National City or the Court to
verify whether the relief sought will prejudice the creditors or
to gauge the impact on the practical operation of the complex
series of contractual documents, which serves as the basis for
National City's claims.

                         About Enron Corp.

Based in Houston, Texas, Enron Corporation filed for chapter 11
protection on Dec. 2, 2001 (Bankr. S.D.N.Y. Case No. 01-16033)
following controversy over accounting procedures, which caused
Enron's stock price and credit rating to drop sharply.  Judge
Gonzalez confirmed the Company's Modified Fifth Amended Plan on
July 15, 2004, and numerous appeals followed.  The Debtors'
confirmed chapter 11 Plan took effect on Nov. 17, 2004.

Albert Togut, Esq., at Togut Segal & Segal LLP, Brian S. Rosen,
Esq., Martin Soslan, Esq., Melanie Gray, Esq., Michael P. Kessler,
Esq., Sylvia Ann Mayer, Esq., at Weil, Gotshal & Manges LLP,
Frederick W.H. Carter, Esq., Michael Schatzow, Esq., Robert L.
Wilkins, Esq., at Venable, Baetjer and Howard, LLP, and Mark C.
Ellenberg, Esq., at Cadwalader, Wickersham & Taft, LLP, represent
the Debtors.  Jeffrey K. Milton, Esq., Luc A. Despins, Esq.,
Matthew Scott Barr, Esq., and Paul D. Malek, Esq., at Milbank,
Tweed, Hadley & McCloy LLP represent the Official Committee of
Unsecured Creditors.

The Debtors filed their Chapter Plan and Disclosure Statement on
July 11, 2003.  On Jan. 9, 2004, they filed their fifth Amended
Plan and on the same day the Court approved the adequacy of the
Disclosure Statement.  On July 15, 2004, the Court confirmed the
Debtors' Modified Fifth Amended Plan and that plan was declared
effective on Nov. 17, 2004.


ENRON CORP: Wants Former Employees to Return Settlement Money
-------------------------------------------------------------
Enron Creditors Recovery Corp. sent letters to about 26,000
former Enron employees asking them to return the money they
received as settlement of their lawsuit relating to the Enron
Savings Plan, or, if the money has been invested in a tax-
deferred retirement plan, withdraw the principal and return it to
Enron.

According to Enron, Hewitt Associates miscalculated up to about
$22,000,000, of the settlement payments.  As a result of the
miscalculations, 87% of the former employees were underpaid and
13% were overpaid, The Houston Chronicle reported.

"It's an enormous mistake," the Chronicle said quoting Enron
spokesman Harlan Loeb.  Julie Macdonald, another Enron
spokeswoman, said that Hewitt is no longer providing services to
Enron in relation to the calculation or communication of the
settlement allocations, the the Chronicle added.

Enron said it discovered the miscalculations a year ago and
notified the former employees of the miscalculations in letters,
dated June 15, 2007.  Demand letters, however, were sent to
former employees only on May 6, 2008.   

"[W]e're certainly sympathetic to their plight and the issue, but
as a fiduciary we have a legal obligation to make the request for
the funds," Mr. Loeb said, the Chronicle quoted.  "We had a
fiduciary duty to make the books balance."

                         About Enron Corp.

Based in Houston, Texas, Enron Corporation filed for chapter 11
protection on Dec. 2, 2001 (Bankr. S.D.N.Y. Case No. 01-16033)
following controversy over accounting procedures, which caused
Enron's stock price and credit rating to drop sharply.  Judge
Gonzalez confirmed the Company's Modified Fifth Amended Plan on
July 15, 2004, and numerous appeals followed.  The Debtors'
confirmed chapter 11 Plan took effect on Nov. 17, 2004.

Albert Togut, Esq., at Togut Segal & Segal LLP, Brian S. Rosen,
Esq., Martin Soslan, Esq., Melanie Gray, Esq., Michael P. Kessler,
Esq., Sylvia Ann Mayer, Esq., at Weil, Gotshal & Manges LLP,
Frederick W.H. Carter, Esq., Michael Schatzow, Esq., Robert L.
Wilkins, Esq., at Venable, Baetjer and Howard, LLP, and Mark C.
Ellenberg, Esq., at Cadwalader, Wickersham & Taft, LLP, represent
the Debtors.  Jeffrey K. Milton, Esq., Luc A. Despins, Esq.,
Matthew Scott Barr, Esq., and Paul D. Malek, Esq., at Milbank,
Tweed, Hadley & McCloy LLP represent the Official Committee of
Unsecured Creditors.

The Debtors filed their Chapter Plan and Disclosure Statement on
July 11, 2003.  On Jan. 9, 2004, they filed their fifth Amended
Plan and on the same day the Court approved the adequacy of the
Disclosure Statement.  On July 15, 2004, the Court confirmed the
Debtors' Modified Fifth Amended Plan and that plan was declared
effective on Nov. 17, 2004.


ENRON CORP: Shareholders Re-Assert Fraudulent Conduct Claims
------------------------------------------------------------
More than 1,600,000 Enron shareholders led by the University of
California filed documents with the U.S. District Court for the
Southern District of Texas asserting that Credit Suisse First
Boston, Merrill Lynch & Co., and Barclays Bank Plc, had a duty to
disclose at least the facts concerning their deceptive conduct and
the effects of that conduct on Enron's reported financial results.

William S. Lerach, Esq., at Lerach, Coughlin, Stoia, Geller,
Rudman & Robbins LLP, in San Diego, California, on behalf of the
shareholders, said that RBS and Barclays will be "doomed to lose"
if a civil case against them is brought to court, The Edinburgh
Paper reported.  He also said that he is confident that District
Judge Melinda Harmon is going to rule that the shareholders have
presented enough evidence to show that the Banks' conduct was
manipulative, the report added.

Credit Suisse, Merrill Lynch, and Barclays are the remaining bank
defendants in a class action complaint against numerous banks who
were accused to have aided Enron in its fraudulent reporting of
the company's financial health.  The complaint, filed in 2001,  
seek to recover "tens of billions" of dollars from the Banks,
including the Canadian Imperial Bank of Commerce, JP Morgan
Chase, Citigroup, former Enron top executives, and Enron
professionals, as a result of their participation in off-balance
sheet transactions with Enron and deceiving its shareholders.

The shareholders have obtained $2,400,000,000 from CIBC;
$2,200,000,000 from JP Morgan; $2,000,000,000 from Citigroup;
$222,500,000 from Lehman Brothers; $69,000,000 from BofA;
168,000,000 from Enron's outside directors, and $32,000,000 from
Andersen Worldwide.

In January 2008, the U.S. Supreme Court rejected the
shareholders' petition for a review of a Fifth Circuit Court of
Appeals ruling dismissing their claims against the Banks.

                         About Enron Corp.

Based in Houston, Texas, Enron Corporation filed for chapter 11
protection on Dec. 2, 2001 (Bankr. S.D.N.Y. Case No. 01-16033)
following controversy over accounting procedures, which caused
Enron's stock price and credit rating to drop sharply.  Judge
Gonzalez confirmed the Company's Modified Fifth Amended Plan on
July 15, 2004, and numerous appeals followed.  The Debtors'
confirmed chapter 11 Plan took effect on Nov. 17, 2004.

Albert Togut, Esq., at Togut Segal & Segal LLP, Brian S. Rosen,
Esq., Martin Soslan, Esq., Melanie Gray, Esq., Michael P. Kessler,
Esq., Sylvia Ann Mayer, Esq., at Weil, Gotshal & Manges LLP,
Frederick W.H. Carter, Esq., Michael Schatzow, Esq., Robert L.
Wilkins, Esq., at Venable, Baetjer and Howard, LLP, and Mark C.
Ellenberg, Esq., at Cadwalader, Wickersham & Taft, LLP, represent
the Debtors.  Jeffrey K. Milton, Esq., Luc A. Despins, Esq.,
Matthew Scott Barr, Esq., and Paul D. Malek, Esq., at Milbank,
Tweed, Hadley & McCloy LLP represent the Official Committee of
Unsecured Creditors.

The Debtors filed their Chapter Plan and Disclosure Statement on
July 11, 2003.  On Jan. 9, 2004, they filed their fifth Amended
Plan and on the same day the Court approved the adequacy of the
Disclosure Statement.  On July 15, 2004, the Court confirmed the
Debtors' Modified Fifth Amended Plan and that plan was declared
effective on Nov. 17, 2004.


EOS AIRLINES: Court Okays Bid Procedures For Sale of All Assets
---------------------------------------------------------------
The Hon. Adlai S. Hardin, Jr., of the United States Bankruptcy
Court for the Southern District of New York approved proposed
bidding procedures for the sale of substantially all assets of EOS
Airlines Inc. free and clear of interests, subject to better and
higher offers.

The deadline for submission of bids for any of the assets of
the Debtor will be on May 30, 2008.  The Debtor will conduct an
auction on or before June 9, 2008, at 10:00 a.m., followed by a
sale hearing on June 13, 2008, at 11:00 a.m.  

As reported by the Troubled Company Reporter on May 22, through
the auction and sale process, the Debtor hopes to sell either its
business to a party interested in restarting EOS as a going
concern or all of the Debtor's most valuable assets to one or more
purchasers.

The Debtor has separately sought Court authority to sell all
assets valued at less than $225,000 on an expedited basis.

              Creditors Object to Proposed Auction

Several airlines, including Delta Air Lines, Inc. and Compania
Mexicana de Aviacion S.A., object to EOS Airlines' proposal to
auction off assets, The Wall Street Journal reports.

In court papers, Mexicana accused the airline of using the auction
"to buy time in the faint hope of a last-minute rescue," the WSJ
report stated.  Mexicana leased EOS three aircraft in 2007. It is
owed $2.4 million by EOS, according to WSJ. As reported by the
Troubled Company Reporter on May 1, 2008, when EOS filed for
bankruptcy, the company disclosed $697,293 in debt to Mexicana.

EOS disclosed it owed Delta Air $363,692. Delta said some of the
assets EOS wants to put up on the auction block aren't its own,
according to the report.

The report stated that EOS is seeking to sell leases to its fleet
of custom-configured Boeing 757-200 aircraft, customer lists,
facilities and federal licenses to operate the airline.

The motion, containing details of the procedures and the schedule
leading up to the auction can be found at

                http://www.kccllc.net/eosairlines/

Bidding procedures can also be obtained by contacting Robert
Hershan of Alvarez & Marsal at rhershan@alvarezandmarsal.com. Eos
is seeking Court approval to retain Alvarez & Marsal as its
financial advisor.  Menzies Corporate Restructuring is acting as
joint administrators in the United Kingdom and Squire Sanders &
Dempsey LLP is serving as bankruptcy counsel.

All court filings and other information can be found at

                http://www.eosairlines.com/and at  

                http://www.kccllc.net/eosairlines

                        About EOS Airlines

Based in Purchase, New York, EOS Airlines, Inc. --
http://www.eosairlines.com/-- is a transatlantic airline. The  
company filed for Chapter 11 protection April 26, 2008 (Bankr.
S.D.N.Y. Case No.08-22581).  Stephen D. Lerner, Esq., at Squire
Sanders & Dempsey, LLP, represents the Debtor in its restructuring
efforts.  The Debtor selected Kurztman Carson Consultants LLC as
claims agent.  The U.S. Trustee for Region 2 appointed creditors
to serve on an Official Committee of Unsecured Creditors.  Joseph
M. Vann, Esq., and Robert A. Boghosian, Esq., at Cohen Tauber
Spievack & Wagner P.C. in New York, represent the Committee in
this case.  When the Debtor filed for protection against it
creditors, it listed total assets of $70,233,455 and total debts
of $34,858,485.


FORD MOTOR: Adjusts Production Plan to Lower Industry Volume
------------------------------------------------------------
Ford Motor Company is making adjustments to its production plan
and revising downward its near-term North American Automotive
profit outlook, while planning further manufacturing capacity
realignments, additional cost reductions and changes to its
product mix to respond to the rapidly changing business
environment in the U.S.

The company said it is increasing 2008 North American production
of the hot-selling Ford Focus, Fusion, Edge and Escape, Mercury
Milan and Mariner, as well as the Lincoln MKZ and Lincoln MKX. At
the same time, Ford is reducing 2008 production of large trucks
and SUVs, as gas prices soar and customers move more quickly to
smaller and more fuel-efficient cars and crossovers.

"We are continuing to make great progress on our plan," Ford
President and CEO Alan Mulally said.  "We are profitable and
growing outside of North America, and our transformation plan in
North America is working.  The challenge affecting the entire
industry is the accelerating shift in consumer demand away from
large trucks and SUVs to smaller cars and crossovers -- combined
with a steep rise in commodity prices and the weak U.S. economy."

Ford said it now plans to produce 690,000 vehicles in North
America during the second quarter, a further reduction of 20,000
units from previously announced planned production levels and a
decline of 15% from the second quarter of 2007.  The company plans
to produce between 510,000 and 540,000 units in the third quarter,
down 15 to 20% from the same period last year. Fourth-quarter
production is expected to be between 590,000 and 630,000 units,
down 2% to 8% from year-ago levels.

The second-half production plan includes higher car and crossover
production compared with a year ago and will be achieved through
overtime and added shifts at Ford's smaller car and crossover
assembly plants.  Large truck and SUV production in the second
half will be lower than a year ago, with reductions achieved
through a combination of additional downtime, shift reductions and
line-speed actions.

The lower overall production, dramatic model mix shifts and
substantially higher commodity costs are forcing a change in
Ford's near-term financial outlook, the company said.

"Rapidly rising commodity prices -- particularly steel prices --
and higher gasoline prices that are accelerating consumers' shift
away from large trucks and SUVs together are having a tremendous
impact on our sales, our manufacturing operations and our
profitability as we look to 2009," Mark Fields, Ford's President
of The Americas, said.

"Unless there is a fairly rapid turnaround in U.S. business
conditions, which we are not anticipating, it now looks like it
will take longer than expected to achieve our North American
Automotive profitability goal," Mr. Mulally said.  "Overall, we
expect to be about break-even companywide in 2009 -- with
continued strong results in Europe and South America."

Given the external challenges, Ford said it is more critical than
ever to continue executing its transformation plan, which
includes:

   -- aggressively restructuring to operate profitably at the
      current demand and changing model mix;

   -- accelerating the development of new products that customers
      want and value;

   -- financing the plan and improving the balance sheet; and

   -- working together effectively as one team, leveraging Ford's
      global assets.

"The most important thing we can do right now is to continue to
take decisive action implementing our plan to respond to the
rapidly changing business environment," Mr. Mulally said.

Ford remains on track to reduce by $5 billion its annual North
American Automotive operating costs by the end of 2008 -- at
constant volume, mix, and exchange and excluding special items --
compared with 2005.  However, further cost reductions and
recognition of anticipated retiree health care savings from Ford's
recent UAW labor agreement will be needed to offset higher
commodity costs.  Ford previously had anticipated that ongoing
retiree health care savings in 2008 would allow it to exceed the
$5 billion target.

In addition, the company said it is planning further manufacturing
capacity realignments, as it accelerates the introduction of more
fuel-efficient small cars and crossovers.

Cash outflows associated with operating losses and employee
separations now are projected to be between $14 billion and $16
billion for 2007 to 2009.  This is a deterioration compared with
previous guidance but remains better than the original $17 billion
outflow projection.  Ford's Automotive net liquidity remains
substantial.  Total liquidity -- including available
credit lines, the majority of which are in place through Dec. 15,
2011 -- was $40.6 billion as of March 31.  Ford said it will
continue to evaluate overall liquidity and alternatives to further
improve its balance sheet.

Ford now expects 2008 U.S. industry volume, including medium and
heavy trucks, to be between 15 million and 15.4 million units.  
Ford, Lincoln and Mercury U.S. market share is expected to be
approximately 14% this year -- supported by the introduction of
several new products.

"We are making great progress on the acceleration of new products,
and our initial quality is among the best in the business," Mr.
Fields said.  "The new Focus, Edge and Escape have had significant
sales growth this year, and the pace of our product introductions
accelerates even further this summer."

Production of the Ford Flex crossover and Lincoln MKS sedan is
under way and soon will begin for the new generation of the F-150.  
Ford also just introduced the 2009 Ford Escape and Mercury Mariner
small utility vehicles.  They have new 4- and 6-cylinder engines
with 11% and 20% more horsepower, respectively, and 5% better fuel
economy, thanks to new engine technology, aerodynamic improvements
and new six-speed transmissions.  In fact, Ford now offers more
vehicles with fuel-saving six-speeds than any other automaker.

New versions of the Ford Fusion, Mercury Milan and Lincoln MKZ
mid-size cars also debut later this year, as do all-new hybrid
versions of the Fusion and Milan.

By the end of this year, 70% of all Ford, Lincoln and Mercury
products by volume in North America will be new or significantly
upgraded compared with 2006 models.  By the end of 2010, 100% of
the product lineup will be new, including the next-generation
Mustang in 2009, new fuel-saving EcoBoost engines in 2009, a new
European-engineered Transit Connect in 2009 and all-new Ford
Fiesta small car in 2010 -- as well as several other vehicles not
yet announced.

As an example of working together and leveraging its global
assets, Ford said that it is accelerating even further the North
American introduction of many of the small cars and crossovers
that the company profitably sells today in Europe and South
America.

"We remain absolutely committed to creating an exciting, viable
Ford going forward -- and to transforming Ford into a lean global
enterprise delivering profitable growth over the long term," Mr.
Mulally said.  "We continue to make progress on every element of
our plan, and we are taking steps in the near term to ensure our
long-term success."

                         About Ford Motor

Headquartered in Dearborn, Michigan, Ford Motor Co. (NYSE: F) --
http://www.ford.com/-- manufactures or distributes automobiles in
200 markets across six continents.  With about 260,000 employees
and about 100 plants worldwide, the company's core and affiliated
automotive brands include Ford, Jaguar, Land Rover, Lincoln,
Mercury, Volvo, Aston Martin, and Mazda.  The company provides
financial services through Ford Motor Credit Company.

The company has operations in Japan in the Asia Pacific region.
In Europe, the company maintains a presence in Sweden, and the
United Kingdom.  The company also distributes its brands in
various Latin American regions, including Argentina and Brazil.

                          *     *     *

As reported in the Troubled Company Reporter on March 28, 2008,
Standard & Poor's Ratings Services said that the ratings and
outlook on Ford Motor Co. and Ford Motor Credit Co. (both rated
B/Stable/B-3) were not affected by Ford's announcement of an
agreement to sell its Jaguar and Land Rover units to Tata Motors
Ltd. (BB+/Watch Neg/--) for $2.3 billion (before $600 million of
pension contributions by Ford for Jaguar-Land Rover).

As reported in the Troubled Company Reporter on Feb. 15, 2008,
Fitch Ratings affirmed the Issuer Default Ratings of Ford Motor
Company and Ford Motor Credit Company at 'B', and maintained the
Rating Outlook at Negative.

As reported in the Troubled Company Reporter on Nov. 19, 2007,
Moody's Investors Service affirmed the long-term ratings of Ford
Motor Company (B3 Corporate Family Rating, Ba3 senior secured,
Caa1 senior unsecured, and B3 probability of default), but changed
the rating outlook to Stable from Negative and raised the
company's Speculative Grade Liquidity rating to SGL-1 from SGL-3.
Moody's also affirmed Ford Motor Credit Company's B1 senior
unsecured rating, and changed the outlook to Stable from Negative.
These rating actions follow Ford's announcement of the details of
the newly ratified four-year labor agreement with the United Auto
Workers.


FORD MOTOR: Volvo Plans to Cut Jobs at Gothenburg Plant
-------------------------------------------------------
Volvo Cars, a unit of Ford Motor Co., intends to cut jobs as
well as eliminate the night shift in its plant located in
Gothenburg, Sweden, Reuters reports citing Olle Axelson, head of
public affairs at Volvo.  Reuters adds that the move will enable
Volvo to "contend" with "market conditions."

The Wall Street Journal had reported that Ford was "cutting
production" of its Volvo brand in an effort to lower costs and
losses.

Around 700 employees are currently on the night shift, Reuters
relates.

Headquartered in Dearborn, Michigan, Ford Motor Co. (NYSE: F) --
http://www.ford.com/-- manufactures or distributes automobiles in
200 markets across six continents.  With about 260,000 employees
and about 100 plants worldwide, the company's core and affiliated
automotive brands include Ford, Jaguar, Land Rover, Lincoln,
Mercury, Volvo, Aston Martin, and Mazda.  The company provides
financial services through Ford Motor Credit Company.

The company has operations in Japan in the Asia Pacific region.
In Europe, the company maintains a presence in Sweden, and the
United Kingdom.  The company also distributes its brands in
various Latin American regions, including Argentina and Brazil.

                          *     *     *

As reported in the Troubled Company Reporter on March 28, 2008,
Standard & Poor's Ratings Services said that the ratings and
outlook on Ford Motor Co. and Ford Motor Credit Co. (both rated
B/Stable/B-3) were not affected by Ford's announcement of an
agreement to sell its Jaguar and Land Rover units to Tata Motors
Ltd. (BB+/Watch Neg/--) for $2.3 billion (before $600 million of
pension contributions by Ford for Jaguar-Land Rover).

As reported in the Troubled Company Reporter on Feb. 15, 2008,
Fitch Ratings affirmed the Issuer Default Ratings of Ford Motor
Company and Ford Motor Credit Company at 'B', and maintained the
Rating Outlook at Negative.

As reported in the Troubled Company Reporter on Nov. 19, 2007,
Moody's Investors Service affirmed the long-term ratings of Ford
Motor Company (B3 Corporate Family Rating, Ba3 senior secured,
Caa1 senior unsecured, and B3 probability of default), but changed
the rating outlook to Stable from Negative and raised the
company's Speculative Grade Liquidity rating to SGL-1 from SGL-3.
Moody's also affirmed Ford Motor Credit Company's B1 senior
unsecured rating, and changed the outlook to Stable from Negative.
These rating actions follow Ford's announcement of the details of
the newly ratified four-year labor agreement with the United Auto
Workers.


FRESH DEL MONTE: S&P Holds Ratings and Revises Outlook to Positive
------------------------------------------------------------------
Standard & Poor's Ratings Services revised its outlook on Cayman
Islands-based Fresh Del Monte Produce Inc. to positive from
stable.  Existing ratings on the company, including the 'BB-'
corporate credit rating, were affirmed.  About $197 million total
debt was outstanding at March 28, 2008.
      
"The outlook revision reflects the company's positive operating
momentum despite a challenging cost environment," said Standard &
Poor's credit analyst Alison Sullivan.  Fresh Del Monte has
sustained strong credit measures through EBITDA growth and debt
repayment.  For the 12 months ended March 28, 2008, lease- and
pension-adjusted funds from operations to debt was very strong at
more than 86%, compared with a little more than 8% in the prior-
year period and a three-year average of 38%.  Adjusted total debt
to EBITDA was about 1.2x for the 12 months ended March 28, 2008,
an improvement from 4.1x in the prior-year period and a three-year
average of 2.9x.  An upgrade would be dependent upon sustained
improvement in operating performance and successful resolution of
the ongoing European Commission antitrust investigation.
     
The ratings on Fresh Del Monte reflect its participation in the
highly variable, commodity-oriented fresh fruit and vegetable
industry, which is affected by uncontrollable factors such as
global supply, world trade policies, political risk, currency
swings, weather, and disease.  Mitigating these concerns are the
company's leading positions in the production, marketing, and
distribution of fresh produce.
     
Fresh Del Monte is the No. 1 marketer of fresh pineapples
worldwide, and the No. 3 marketer of bananas worldwide.  However,
product concentration remains a rating concern, because of the
high sales and earnings concentration from bananas and pineapples,
respectively, and intense competition in those markets.
     
S&P assume Fresh Del Monte will maintain credit measures that are
stronger than its rating to compensate for inherent volatility in
the produce industry.  The rating could be reviewed for an upgrade
if operating performance remains stable, financial policy remains
prudent, and the company sustains a rolling three-year average
leverage of about 2.5x, and rolling three-year average FFO to
total debt of 30%-35%.  

An upgrade would not be considered until the EC investigation has
been successfully resolved in a manner in which credit measures
would not weaken outside these parameters.  The outlook could be
revised to stable if there is a sizable settlement or fine arising
from this investigation, and/or credit metrics deteriorate outside
of these ranges.  One such scenario could include a 150-basis-
point EBITDA margin decline and low-to mid-single-digit revenue
growth coupled with debt levels that exceed 2006 levels, which
would result in about 3x leverage and about 25% FFO to total debt.


GAP INC: Net Income Increases 40% to $249MM in Quarter Ended May 3
------------------------------------------------------------------
Gap Inc.'s net earnings increased 40% to $249 million for the
quarter ended May 3, 2008, compared with $178 million for the
first quarter last year.

Earnings from continuing operations for the first quarter of 2008
were $249 million compared with $205 million last year which
represents an increase of 21%.  Earnings from continuing
operations exclude the loss from the discontinued operation of
Forth & Towne.

"We are pleased with our first quarter results, as we delivered
solid earnings growth in a difficult environment," Glenn Murphy,
chairman and chief executive officer of Gap Inc., said.  "Looking
ahead, we are focused on bringing compelling product and shopping
experiences to our customers while managing costs tightly.  We
believe this approach is proving even more prudent given the
current economic conditions."

The company ended the first quarter with $1.8 billion in cash and
investments.  For the first quarter, free cash flow, defined as
net cash provided by operating activities less purchases of
property and equipment, was an inflow of $62 million.  The company
reaffirmed that for the full year it expects to generate about
$900 million in free cash flow.

On a year over year basis, the company reported that inventory per
square foot was down 17% at the end of the first quarter.  Looking
toward the second quarter of 2008, the company expects inventory
per square foot to be down in the mid teens compared with the
second quarter of 2007.

First quarter capital expenditures were $114 million.  The company
continues to expect capital spending of about $500 million in
fiscal year 2008.

During the first quarter of fiscal year 2008, the company opened
33 store locations and closed 23 store locations.  This compares
with 41 openings and 20 closings for the first quarter of the
prior year, including one store closure related to Forth & Towne.

The company ended the quarter with 3,177 store locations and net
square footage increased less than half a percentage point from
the end of fiscal year 2007.

The company increased its guidance for store closures in fiscal
year 2008 by 15 store locations, driven primarily by Gap brand.
The company now expects to open about 115 store locations and to
close about 115 store locations.  The company does not expect any
net square footage growth in fiscal year 2008.

At May 3, 2008, the company's balance sheet showed total assets of
$7.6 billion, total liabilities of $3.3 billion and total
stockholders' equity of $4.3 billion.

                         About Gap Inc.

Headquartered in San Francisco, California, Gap Inc. (NYSE: GPS)
-- http://www.gapinc.com/-- is an international specialty  
retailer offering clothing, accessories and personal care products
for men, women, children and babies under the Gap, Banana
Republic, Old Navy, Forth & Towne and Piperlime brand names.  Gap
Inc. operates more than 3,100 stores in the United States, the
United Kingdom, Canada, France, Ireland and Japan.  In addition,
Gap Inc. is expanding its international presence with franchise
agreements for Gap and Banana Republic in Southeast Asia and the
Middle East.

                          *     *     *

Moody's Investor Service placed Gap Inc.'s corporate family,
senior unsecured debt and probability of default ratings at 'Ba1'
in February 2007.  The ratings still hold to date with a stable
outlook.


GENERAL MOTORS: Resumes Malibu Production as Workers OK Contract
----------------------------------------------------------------
All production shifts will return to work at General Motors
Corp.'s assembly factory in Fairfax, Kansas, following the
approval of new labor contract by the plant's United Auto Workers
Local 31 union members, according to the union local's Web site.  
Roughly 88% of skilled trades workers and 85% of production
workers voted for the new pact.

As reported in the Troubled Company Reporter on May 8, 2008, more
than a thousand union workers in GM's assembly plant walked off
the their jobs at 9 a.m. on May 5, 2008, after talks on a new
labor deal failed.  The automaker and the UAW were in discussions
aimed at continuing plant production of Chevy Malibus and
resolving plant-specific issues such as work rules, seniority, job
selection and the use of outside contractors.  The impasse, UAW
representatives insist, is on the automaker's oversight in
awarding jobs at the facility based on seniority.  The sticking
point supplements the national contract GM hourly employees
ratified late last year.

WSJ relates that others involved in the labor talks said that the
protests were related to a nearly three-month strike against key
GM supplier American Axle & Manufacturing Holdings Inc.

The agreement between GM and the UAW will end the 18-day old
protest and will allow GM to resume production of its in-demand
Chevrolet Malibu, according to John D. Stoll of The Wall Street
Journal.

Under the new labor pact, 120 new entry-level positions at the
plant will be created beginning September and 30 skilled trade
jobs will be created or retained, David Twiddy of The Associated
Press writes.

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

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

                          *     *     *

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


HCA INC: Fitch Affirms 'B' Issuer Default Rating
------------------------------------------------
Fitch Ratings has affirmed HCA Inc.'s ratings as:

  -- Issuer Default Rating at 'B';
  -- Secured bank credit facility at 'BB/RR1';
  -- Senior unsecured notes at 'CCC+/RR6'.

In addition, Fitch has upgraded these rating due to improved
recovery prospects:

  -- Second lien notes to 'B+/RR3' from 'B/RR4'.

Total rated debt at March 31, 2008 was approximately
$27.5 billion.  The Outlook is Stable.

HCA's ratings reflect the company's significant leverage and
challenging industry environment, partially offset by its
improving credit statistics.  Although the company has reduced its
debt outstanding by almost $1 billion since its leveraged buy-out
in 2006, its financial flexibility remains constrained by
significant debt levels and negative free cash flow.  

In addition, HCA, along with the for-profit industry in general,
is experiencing increasing competition and elevated levels of bad
debt expense and uncompensated care.  Fitch expects these factors
to remain key credit concerns for the near future.  Although
leverage remains high, the recovery prospects for the second lien
notes improved as a result of reduced debt levels and improved
EBITDA expectations in a distressed scenario.

HCA's leverage and debt levels increased substantially as a result
of its 2006 LBO.  As a result of the transaction, total debt
increased to more than $28.4 billion at the end of 2006, but has
since declined to approximately $27.5 billion at March 31, 2008.  
Leverage increased from approximately 2.8 times prior to the
transaction to approximately 6.1x for the latest 12 months ended
March 31, 2008.  Going forward, Fitch expects slight leverage
improvement as a result of modest debt reduction and EBITDA
expansion, barring any major event, such as significant asset
divestitures, an initial public offering, or similar transaction,
which could have a more significant effect on the credit.

Liquidity at March 31, 2008, was provided by the company's senior
secured revolver ($1.897 billion available) and cash on hand
(approximately $471 million).  Free cash flow for the LTM ended
March 31, 2008, was a negative $147 million.  Fitch expects free
cash flow to remain negative to slightly positive over the next
couple of years, limiting HCA's ability to organically reduce
debt.

During the first quarter, HCA completed a tender offer to
repurchase $500 million of its outstanding unsecured notes
comprising approximately $200 million of the 8.75% notes due 2010,
$202.5 million of the 7.875% notes due 2011, and $97.5 million of
the 6.95% notes due 2012.  HCA funded the purchase via revolver
borrowings, resulting in no net reduction in debt but a reduction
in interest expense and an extension of HCA's maturity profile.  
Fitch believes HCA has a manageable debt maturity schedule with
the majority of debt expiring 2012 or later.


HOMETOWN COMMERCIAL: S&P Junks Ratings on Seven Cert. Classes
-------------------------------------------------------------
Standard & Poor's Ratings Services lowered its ratings on 17
classes of commercial mortgage pass-through certificates from
Hometown Commercial Trust's series 2006-1 and 2007-1.  
Concurrently, S&P affirmed its ratings on the remaining 10 classes
from these transactions.

The downgrades reflect the unfavorable performance of the
collateral pools and the anticipated credit support erosion upon
the eventual resolution of the specially serviced assets in each
of the aforementioned series.
     
The affirmed ratings reflect credit enhancement levels that
provide adequate support through various stress scenarios.
     
Details on the two trusts are:

     -- The collateral pool for series 2006-1 consisted of 42
        loans with an aggregate trust balance of $130.5 million as
        report, compared with 45 loans totaling $149.2 million at
        issuance.  The master of the May 12, 2008, remittance
        servicer, Midland Loan Services Inc., reported financial
        information for 89% of the loans.  The servicer-provided
        information comprised full-year 2007 data (76%), interim
        2007 data (8%), and full-year 2006 data (5%).  Using this
        information, Standard & Poor's calculated a weighted
        average debt service coverage of 1.01x, down from 1.23x at
        issuance.

Seven loans totaling $32.5 million (24.9%), including four of the
top 10 exposures, are with the special servicer, also Midland Loan
Services Inc.  One of the specially serviced assets is 90-plus-
days delinquent (1.1%), one is 60-plus-days delinquent (3.4%),
three are in their grace periods (18.3%), and one is real estate
owned (REO) (0.9%).  There are no other reported delinquencies.  
The master servicer, Midland, reported a watchlist of 18 loans
($49.2 million, 38%), including four of the top 10 exposures.  
Twelve loans ($39.0 million, 29.9%) have reported DSCs below 1.1x.
Series 2006-1 has not experienced any losses to date.

     -- The collateral pool for series 2007-1 consisted of 49
        loans with an aggregate trust balance of $142.5 million as
        of the May 12, 2008, remittance report, compared with 51
        loans totaling $147.5 million at issuance.  Midland
        reported financial information for 65% of the loans.  The
        servicer-provided information comprised full-year 2007
        data (57%), interim 2007 data (4%), and full-year 2006
        data (4%).  Using this information, Standard & Poor's
        calculated a weighted average DSC of 1.39x, up from 1.24x
        at issuance.

Four loans totaling $16.8 million (11.8%), including one of the
top 10 exposures, are with the special servicer.  One of the
specially serviced assets is 30-plus-days delinquent (5.6%), two
are in their grace periods (3.8%), and one is current (2.4%).  
Midland reported a watchlist of 13 loans ($43.0 million, 30%),
including three of the top 10 exposures.  The two other reported
delinquencies are also on the servicer's watchlist, and both are
30-plus-days delinquent (7.2%).  Five loans ($17.7 million, 12.4%)
have reported DSCs below 1.1x.  Series 2007-1 has not experienced
any losses to date.
Standard & Poor's stressed the credit-impaired loans, including
the specially serviced and watchlist loans, as part of its
analysis.  The resultant credit enhancement levels support the
lowered and affirmed ratings.
       

                         Ratings Lowered

                  Hometown Commercial Trust 2006-1
           Commercial mortgage-backed notes series 2006-1

                         Rating
                         ------
             Class    To       From   Credit enhancement
             -----    --       ----   ------------------
             F        BBB-     BBB          7.29%
             G        BB       BBB-         5.86%
             H        B+       BB+          5.00%
             J        B        BB           4.57%
             K        B-       BB-          4.00%
             L        CCC+     B+           3.72%
             M        CCC      B            3.29%
             N        CCC-     B-           2.86%

                  Hometown Commercial Trust 2007-1
       Commercial mortgage pass-through notes series 2007-1

                        Rating
                        ------
            Class    To       From   Credit enhancement
            -----    --       ----    ----------------
            D        BBB      BBB+          7.51%
            E        BBB-     BBB           6.47%
            F        BB-      BBB-          5.18%
            G        B        BB+           4.40%
            H        B-       BB            4.01%
            J        CCC+     BB-           3.49%
            K        CCC      B+            3.24%
            L        CCC-     B             2.85%
            M        CCC-     B-            2.33%

                         Ratings Affirmed
     
                  Hometown Commercial Trust 2006-1
           Commercial mortgage-backed notes series 2006-1
   
                Class   Rating   Credit enhancement
                -----   ------   ------------------
                A       AAA            18.01%
                B       AA             15.43%
                C       AA-            14.15%
                D       A              11.72%
                E       BBB+            8.43%
                X       AAA              N/A

                  Hometown Commercial Trust 2007-1
        Commercial mortgage pass-through notes series 2007-1
   
                 Class   Rating   Credit enhancement
                 -----   ------   ------------------
                 A       AAA            15.79%
                 B       AA             13.46%
                 C       A              10.23%
                 X       AAA              N/A


                       N/A -- Not applicable.


HUMAN TOUCH: Moody's Lowers Corporate Family Rating to Caa3
-----------------------------------------------------------
Moody's Investors Service downgraded Human Touch LLC's corporate
family rating (CFR) to Caa3 from Caa1, its probability of default
rating (PDR) to Caa2 from Caa1, and the rating on its senior
unsecured notes to Caa3 from Caa2. The SGL-4 Speculative Grade
Liquidity rating was affirmed. This concludes the review for
possible downgrade that began on February 26, 2008.

The downgrade of Human Touch's PDR to Caa2 reflects the increased
probability of default over the next twelve months. This is due to
its very weak liquidity stemming from the upcoming expiration of
its revolving credit facility in March 2009, and its limited
amount of unrestricted cash. The downgrade also reflects continued
revenue and profitability declines stemming from reduced revenue
with key customers and general declines in consumer discretionary
spending.

The CFR was lowered to Caa3, one notch below the PDR, to reflect
Moody's view that recovery in a default scenario would likely be
at below-average levels due to the very weak earnings in a tough
economic environment, coupled with the highly discretionary nature
of Human Touch's products.

Due to the company's deteriorating financial condition, Moody's
used a fundamental distressed EBITDA valuation approach (5 times
multiple) to estimate loss-given-default rather than a mean
family-level LGD estimate. Based on this approach, the company's
recovery estimate decreased to 35% from 50%. The higher loss
estimate resulted in the PDR deviating from the CFR by one notch.

As a result of weak performance, Human Touch's leverage
(debt/EBITDA, calculated using Moody's standard analytic
adjustments) has increased to over 12.5 times and EBITA/interest
has fallen below 1.0 time.

The negative outlook reflects concerns that the company's
liquidity profile may further erode if it is unable to maintain
positive cash flow, extend the expiration of its revolving credit
facility and/or sell other assets for cash. Ratings could be
further lowered if it unable to address these concerns over the
next several months.

Ratings lowered:

   * Corporate Family Rating to Caa3 from Caa1

   * Probability of Default Rating to Caa2 from Caa1

   * Senior unsecured notes to Caa3 (LGD 5, 79%) from Caa2
     (LGD 4, 63%)

Ratings affirmed:

   * Speculative grade liquidity rating at SGL-4

Human Touch LLC, (operating subsidiary of Interactive Health,
Inc.) located in Long Beach, CA, is a producer and marketer of
robotic massage chairs, zero-gravity chairs and massage products.
Sales for the LTM period ended March 31, 2008 were $85 million.


IDLEAIRE TECHNOLOGIES: U.S. Trustee Forms Three-Member Committee
----------------------------------------------------------------
Roberta A. DeAngelis, the United States Trustee for Region 3,
appointed three creditors to serve on an Official Committee of
Unsecured Creditors for the Chapter 11 proceeding of IdleAire
Technologies Corporation.

The creditors committee members are:

   1) Wells Fargo Bank, NA
      as Indenture Trustee and Collateral Agent
      Attn: James R. Lewis
      45 Broadway, 14th Floor
      New York, New York 10006
      Tel: (212) 515-5258
      Fax: (866) 524-4681

   2) PB Constructors, Inc.
      c/o Parsons Brinckerhoff, Inc.
      Attn: William Roman,
      One Penn Plaza
      New York, New York 10119
      Tel: (212) 465-5045
      Fax: (212) 465-5343

   3) LodgeNet Interactive Corporation
      Attn: James G. Naro
      3900 W. Innovation Street
      Sioux Falls, South Dakota 57107
      Tel: (605) 988-1000
      Fax: (605) 988-1323

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 IdleAire Technologies

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.  IdleAire has 131 locations
in 34 states and 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.


IDLEAIRE TECH: Wants 20% Incentive Pay for Key Workers Approved
---------------------------------------------------------------
IdleAire Technologies Corp. asked the U.S. Bankruptcy Court for
the District of Delaware to approve its proposed incentive plan
for key employees and to continue existing employee severance
plan.

                    Line Workers Severance Plan

According to the Debtor, it employs about 1,200 line workers.  
About 80% of the line workers is located at 130 truck stops
throughout 30 states at which IdleAire has installed its equipment
to service a total of 8,493 parking spaces.  The rest of the line
workers are located at four leased locations in Knoxville,
Tennessee.

During its formation in 2000, the Debtor related that it
instituted an employee severance plan under which terminated line
workers (other than for cause) were entitled to: (i) one week's
pay for each year of service up to three week's pay, and (ii)
accrued vacation pay, plus unpaid wages accrued as of the
termination date.

The Debtor indicated that uncertainties makes it a difficult task
to ensure the retention of line workers.  It added that without
the line workers, the Debtor would be unable to operate or
maintain its sites or manage the back-office operations that
support those sites.

The Debtor said it fears that the lack of line workers could
reduce the price it may receive for its assets through a proposed
competitive bidding.

Hence, the Debtor wants the Court to maintain the severance plan
through the last day on which the purchaser of the assets is
permitted to determine which line workers to retain.

IdleAire made it clear that it does not want to pay line workers
additional retention-based compensation, but only to ensure them
that loyal workers will get what has been promised upon hiring.

The Debtor revealed that payments on account of the severance plan
will not exceed $300,000.

               Management Employees Incentive Plan

In addition to the severance plan for line workers, the Debtor
sought the Court's authority to adopt a performance-based
management sale incentive program conditioned upon the successful
sale closing of the Debtor's business.  The incentive plan will
cover 22 principal employees involved in the proposed sale.

The Debtor said it believes management employees require
additional incentives to close the sale, given the hard work and
dedication they have displayed regarding the sale.

Pursuant to the proposed incentive plan, upon the earlier of: (i)
the involuntary termination of the management employee, other than
for cause, and (ii) the closing of a going concern sale of the
Debtor's business, each of the management employee who fulfilled
his or her obligations through the closing or termination will be
entitled to get a one-time incentive payment of 20% of annual
salary.

Total payments under the incentive plan will not exceed $505,000
in the aggregate, which is about 5% of the estimated cash purchase
price from the proposed sale.

Payments under the incentive plan will be in lieu of other
performance bonus, severance pay, or retention compensation for
management employees.

                       Plan to Sell Assets

The Debtor acknowledged that it lacks sufficient funding to
continue operations beyond a short period of time.  As a result,
the Debtor said that it has been actively marketing its business.  
The Debtor presently intends to sell its assets pursuant to
Section 363 of the Bankruptcy Code for $10 million, plus
assumption of debts.

As reported by the Troubled Company Reporter on May 21, 2008,
IdleAire might possibly have identified a buyer for its assets
before it filed for bankruptcy.

When the Debtor filed for bankruptcy, it reserved a corporate name
"IdleAire Acquisition LLC" with the Delaware Division of
Corporations that meant buyers may have been set to buy the
company.

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

                   About IdleAire Technologies

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.  IdleAire has 131 locations
in 34 states and 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.


INTERSTATE BAKERIES: Wants Small Sale Cap Increased by $5 Million
-----------------------------------------------------------------
Interstate Bakeries Corp. and its debtor-affiliates seek authority
from the U.S. Bankruptcy Court for the Western District of
Missouri to increase the De Minimis Asset Sale Cap to an aggregate
amount of $15,000,000 in net proceeds.

The Court has authorized the Debtors to sell their de minimis
assets in an aggregate amount not to exceed $10 million.

The Debtors have identified additional de minimis assets,
including multiple parcels of real property, which they wish to
sell pursuant to the Court-approved De Minimis Asset Sale
Procedures.  However, the Debtors discovered that the De Minimis
Asset Sale Cap is not enough to consummate the sales.

J. Eric Ivester, Esq., at Skadden Arps Slate Meagher & Flom LLP,
in Chicago, Illinois, relates that as of May 15, 2008, the
Debtors have sold their De Minimis Assets in an aggregate amount
exceeding $9 million in net proceeds.

According to Mr. Ivester, increasing the De Minimis Asset Sale  
will allow the Debtors to more efficiently and economically
dispose of certain unnecessary, underperforming or non-core
De Minimis Assets.  Consequently, a Cap increase is the most
cost-effective means to maximize the value realized for the
Assets, reduce expenses, and increase the Debtors' liquidity, he
asserts.

The De Minimis Assets are subject to the liens of the Debtors'
debtor-in-possession lenders, pursuant to the terms of the Court-
approved Second Amended and Restated Revolving Credit Agreement,
dated as of May 9, 2008.  Accordingly, all proceeds of De Minimis
Asset Sales would be utilized consistent with the provisions of
the Second Amended DIP Credit Agreement, Mr. Ivester notes.

The Debtors' request is without prejudice to their rights to
request authority for an increase in limit should circumstances
later warrant.

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

The company and eight of its subsidiaries and affiliates filed for
chapter 11 protection on Sept. 22, 2004 (Bankr. W.D. Mo. Case No.
04 45814).  J. Eric Ivester, Esq., and Samuel S. Ory, Esq., at
Skadden, Arps, Slate, Meagher & Flom LLP represent the Debtors in
their restructuring efforts.  When the Debtors filed for
protection from their creditors, they listed $1,626,425,000 in
total assets and $1,321,713,000 (excluding the $100,000,000 issue
of 6% senior subordinated convertible notes due Aug. 15, 2014) in
total debts.  The Debtors' filed their Chapter 11 Plan and
Disclosure Statement on Nov. 5, 2007.  Their exclusive period to
file a chapter 11 plan expired on November 8.  On Jan. 25, 2008,
the Debtors filed their First Amended Plan and Disclosure
Statement.  On Jan. 30, 2008, the Debtors received Court approval
of the First Amended Disclosure Statement.

IBC confirmed that it has not received any qualifying alternative
proposals for funding its plan of reorganization in accordance
with the Court-approved alternative proposal procedures.  As a
result, no auction was held on Jan. 22, 2008, as would have been
required under those procedures.  The deadline for submission of
alternative proposals was Jan. 15, 2008.

(Interstate Bakeries Bankruptcy News, Issue No. 98; Bankruptcy
Creditors' Service Inc., http://bankrupt.com/newsstand/or              
215/945-7000).


IMPATH INC: To Distribute $29 Million to Class A Holders on June 3
------------------------------------------------------------------
The post dissolution trustee of Impath Inc. and subsidiaries
received $22,694,896 in federal income tax refunds and $5,492,544
in accrued interest from the United States Internal Revenue
Service, Bankruptcy Data reports.  The tax refunds covers the
years from 1999 through 2005, the report adds.

Holders of Impath Bankruptcy Liquidating Trust Class A Beneficial
Interests will receive a total of $29,054,154.57, or equal to
$1.73 per unit, Bankruptcy Data relates.

Holders of the class A units as of May 23, 2008, are entitled to
the distribution set for June 3, 2008, according to the report.

The trustee expects another distribution to holders following the
full collection of the state and local income tax refunds,
Bankruptcy Data says.

As reported in the Troubled Company Reporter on Jan. 28, 2008,
the trustee disclosed that the Internal Revenue Service Office in
New York City had recommended approval to the Joint Committee On
Taxation, the Committee of the Congress that must approve all
refunds over $2 million of a refund to Impath Inc. and
subsidiaries covering the calendar years 1995 through 2005 in the
amount of $22,650,486, plus interest.

                        About Impath Inc.

Headquartered in New York, New York, Impath Inc., together with  
its subsidiaries, is in the business of improving outcomes for  
cancer patients by providing patient-specific diagnostic and  
prognostic services to pathologists and oncologists, providing  
products and services to biotechnology and pharmaceutical  
companies, and licensing software to hospitals, laboratories, and
academic medical centers.

The company and its affiliates filed for chapter 11 protection on
Sept. 28, 2003 (Bankr. S.D.N.Y. Case No. 03-16113).  George A.
Davis, Esq., at Weil, Gotshal & Manges LLP represents the Debtors
in their restructuring efforts.  When the company filed for
protection from its creditors, it listed $192,883,742 in total
assets and $127,335,423 in total debts.  On March 22, 2005, the
Court confirmed the Debtors' Third Amended Joint Plan of
Liquidation.


JOANNE'S BED: Closes Sale of Stores to Healthy Back
---------------------------------------------------
The Healthy Back Store has completed its acquisition of JoAnne's
Bed & Back Stores Inc.'s stores, Jeff Clabaugh of the Washington
Business Journal reports.

As reported in the Troubled Company Reporter on April 11, 2008,
the Debtor entered into a deal to sell substantially all of its
assets to Healthy Back, subject to better offers.  In order to
effect that transaction, the Debtor filed for Chapter 11
bankruptcy protection on April 2 with the U.S. Bankruptcy Court
for the District of Maryland.

The Debtor related that its collapse was due to "a dramatic drop
in sales levels," which was attributed to the softening economy,
weak consumer confidence, the housing slowdown and changing buying
habits.

Pursuant to the acquisition, Healthy Back will:

   -- operate nine of JoAnne's Bed and Back retail locations;
   -- close four JoAnne's stores in Washington, D.C.; and
   -- close three other undisclosed retail locations.

Healthy Back promised to take in as many employees of the Debtor
as it can, according to the Washington Journal.

Based in Beltsville, Maryland, JoAnne's Bed & Back Stores Inc.
sells specialty mattresses, adjustable beds and massage chairs.  
It operated 18 stores in Maryland, Virginia, and Washington.  The
company filed for Chapter 11 protection on April 2, 2008 (Bankr.
D. Md. Case No. 08-14606).  Michael J. Lichtenstein, Esq., at
Shulman Rogers Gandal Pordy & Ecker P.A., represents the Debtor in
its restructuring efforts.  When the Debtor filed for protection
from its creditors, it listed estimated assets and debts of $1
million to $10 million.


JETBLUE AIRWAYS: JPMorgan Analyst Expects Airline Bankruptcies
--------------------------------------------------------------
Christopher Hinton at MarketWatch reports that Jamie Baker, an
analyst at J.P. Morgan, on Monday said U.S. airline industry
stands to post a collective $7,200,000,000 in operating losses in
2008.  The results would be wider than an initial forecast of
$4,600,000,000 loss, the analyst said.

According to MarketWatch, Mr. Baker, in his research note, said
though investors, management and analysts may talk about airlines
acting collectively to reduce capacity to firm up revenue, the
reality is that they are more likely to dig in and try to outlast
each other.

MarketWatch relates the JPMorgan analyst noted that capacity cuts
have falled far short of what executives have said are necessary.  
Mr. Baker, MarketWatch says, indicated that another round of
airline bankruptcy -- even among the legacy carriers -- is a
question of when rather than if.

According to the report, Mr. Baker said U.S. Airways has the
highest risk of bankruptcy, followed by Northwest Airlines, United
Air Lines' parent UAL Corp., AMR Corp., JetBlue, Continental
Airlines, AirTran, Delta Air Lines, Alaska Air Lines and Southwest
Airlines.

Mr. Baker, the report adds, said credit card companies could pose
more significant risk to airlines than debt.  He explained the
credit card companies could impose unilateral holdbacks, which
will toll on a carrier's liquidity and cash balances.

                            In the Red

Except for Southwest, the major U.S. Airlines posted net losses
for the period ended March 31, 2008:

                          Net Income for Period Ended
                      -----------------------------------
                      March 31, 2008       March 31, 2007
                      --------------       --------------
   US Airways          ($236,000,000)         $66,000,000
   Northwest         ($4,139,000,000)       ($292,000,000)
   UAL                 ($537,000,000)       ($152,000,000)
   AMR                 ($328,000,000)         $81,000,000
   JetBlue               ($8,000,000)        ($22,000,000)
   Continental          ($80,000,000)         $22,000,000
   AirTran              ($34,813,000)          $2,158,000
   Delta             ($6,261,000,000)        $155,000,000
   Alaska Air           ($24,000,000)         ($3,700,000)
   Southwest             $34,000,000          $93,000,000

                        Balance Sheet at March 31, 2008
                      -----------------------------------
                      Total Assets            Total Debts   
                      ------------            -----------
   US Airways       $8,013,000,000         $6,435,000,000
   Northwest       $21,032,000,000        $17,746,000,000
   UAL             $23,813,000,000        $21,647,000,000
   AMR             $28,766,000,000        $26,277,000,000
   JetBlue          $6,050,000,000         $4,721,000,000
   Continental     $12,542,000,000        $11,071,000,000
   AirTran          $2,198,009,000         $1,783,470,000
   Delta           $26,755,000,000        $22,804,000,000
   Alaska Air       $4,379,800,000         $3,520,600,000
   Southwest       $18,031,000,000        $10,846,000,000

On April 14, Northwest announced an agreement to merge with Delta.

United and US Airways are also in talks for a possible merger.  
Continental was initially eyed as a top merger partner for United.

Small and medium-sized carriers have tumbled one after the other
into bankruptcy.  Aloha Airlines commenced bankruptcy proceedings
in Hawaii in March and later ceased operations.  ATA Airlines Inc.
ceased operations and filed for chapter 11 protection on April 2,
and Skybus Airlines Inc. tumbled into bankruptcy on April 5.  
Frontier Airlines went belly up and filed for chapter 11 on April
14.  EOS Airlines filed a chapter 11 petition on April 26.

                      About JetBlue Airways
      
Based in Forest Hills, New York, JetBlue Airways Corporation
(Nasdaq: JBLU) -- http://www.jetblue.com/-- is a passenger
airline that provides customer service primarily on point-to-point
routes.  As of Dec. 31, 2007, the company served 53 destinations
in 21 states, Puerto Rico, Mexico and the Caribbean.

At Dec. 31, 2007, the company's consolidated balance sheeet showed
$5.598 billion in total assets, $4.562 billion in total
liabilities, and $1.036 billion in total stockholders' equity.

                          *     *     *

As reported in the Troubled Company Reporter on May 21, 2008,
Moody's Investors Service downgraded the corporate family rating
of JetBlue Airways Corporation to Caa1 from B3, well as the
ratings of its outstanding corporate debt instruments and selected
classes of JetBlue's Enhanced Equipment Trust Certificates. The
rating outlook is negative.


JETBLUE AIRWAYS: Moody's Junks CF Rating on Weak Fin'l Performance
------------------------------------------------------------------
Moody's Investors Service downgraded the Corporate Family Rating
of JetBlue Airways Corporation to Caa1 from B3, as well as the
ratings of its outstanding corporate debt instruments and selected
classes of JetBlue's Enhanced Equipment Trust Certificates.  The
rating outlook is negative.

The rating downgrade reflect the weakening financial performance
of JetBlue, which despite its historic low cost business model has
reported successive quarterly net losses and deteriorating
financial metrics.  The prospects for weakening operating profits,
driven in part by elevated fuel costs, are likely to erode the
company's liquidity profile at a time when JetBlue faces sizeable
calls on cash for scheduled aircraft deliveries as well as
upcoming debt maturities.

Although the company's efforts to slow capacity growth, are viewed
favorably in the current challenging operating environment,
profitability has declined and the company recorded a net loss for
the 4th quarter of 2007 and the 1st quarter of 2008.  The company
has a fuel hedging program that is more extensive than that of
some other airlines, yet profitability has still been adversely
impacted by high fuel costs.  

Moody's notes that JetBlue's unit costs, which have historically
been meaningfully lower than other airlines, have risen.  This in
part relates to the company's slower growth rate, the increased
complexity of operating a larger network with multiple aircraft
types, and the loss of maintenance holidays on some of JetBlue's
older A320 aircraft.  JetBlue has several planned initiatives to
increase ancillary revenues to improve performance, including
incremental fees for preferred seating assignments and baggage
check fees.

The company is also constraining further capacity growth and has
made plans to sell surplus aircraft.  While these actions may be
helpful, the company's ability to restore adequate levels of
profitability and cash flow generation will be challenged in the
current high fuel cost environment.  Debt to EBITDA of 7.5x and
EBIT to interest expense of 1.1x for the 12 months to March 31,
2008 (both using Moody's standard adjustments) weakened from the
prior year and in light of potential for negative free cash flow
are no longer consistent with a rating in the B range.

JetBlue's liquidity is currently adequate, but in light of cash
needs for scheduled aircraft deliveries and debt maturities could
weaken over the course of the coming year.  The company received
an infusion of approximately $300 million earlier in 2008 through
an equity investment made by Deutsche Lufthansa AG in the company.  
However, the company has a portion of its funds (approximately
$313 million at March 31, 2008) invested in auction rate
securities which it may not be able to readily monetize in the
current credit market environment.  Excluding these securities,
the company's available liquidity is approximately $840 million.

The company faces approximately $620 million in planned capital
expenditures, including $150 million in non-aircraft spending, for
the remainder of 2008.  JetBlue has received committed financing
for all 2008 aircraft deliveries. It also faces approximately
$430 million in near term debt requirements.  The company does not
have a committed bank credit facility available for cash drawings,
and thus is not subject to compliance with any specific financial
covenants.  However, the company's credit card processing banks
have the right to increase the credit card holdback under certain
circumstances, which would increase JetBlue's cash requirements.  
A material portion of JetBlue's assets are encumbered.

The rating actions on the EETCs consider the rating downgrade of
the underlying Corporate Family rating of JetBlue, the continuing
availability of liquidity facilities to meet interest payments for
18 months in the event of a JetBlue default, and the asset values
of specific aircraft which secure the various EETCs.  The junior
classes of any EETC are generally more vulnerable to uncertainty
in recovery as they hold a first loss position.  Yet because of
continued favorable valuation trends for A320 aircraft, Moody's
has not changed its view of relative recovery for JetBlue's EETCs
and the principal driver of the EETC rating changes is the
downgrade of JetBlue's corporate family rating.  The ratings on
the senior tranches of the Series 2004-1 and 2004-2 Pass Through
Certificates reflect that they are supported by policies issued by
a Aaa rated monoline insurance company.

The negative outlook reflects the continued business pressures
facing JetBlue, primarily due to the impact of higher fuel costs
and a weak domestic demand environment.  Despite continued strong
yield performance, competitive pressures are likely to challenge
JetBlue's efforts to implement fare increases and fuel surcharges
to offset the increase in fuel costs.  Consequently, unless fuel
costs decline, earnings are likely to deteriorate meaningfully and
the company would likely sustain negative cash flow from
operations that would erode its liquidity.

JetBlue's rating could be lowered further if it is unable to stem
operating losses, if cash and short term investments falls below
$500 million, the company is unable to generate positive cash flow
from operations, or if the risk of credit card processors imposing
meaningful incremental holdback requirements increases.

JetBlue's rating outlook could be stabilized with sustained
increases to revenues or reduced non-fuel costs, or if a material
decline in fuel costs increases cash from operations and requires
less meaningful draws on cash reserves or incremental borrowing to
satisfy maturing debt and capital spending requirements.

Downgrades:

Issuer: JetBlue Airways Corp.

  -- Probability of Default Rating, Downgraded to Caa1 from B3
  -- Corporate Family Rating, Downgraded to Caa1 from B3
  -- Senior Secured Enhanced Equipment Trust, Downgraded to B2
     from B1

  -- Senior Unsecured Conv./Exch. Bond/Debenture, Downgraded to
     Caa3 from Caa2

Issuer: New York City Industrial Development Agcy, NY

  -- Senior Unsecured Revenue Bonds, Downgraded to Caa3 from Caa2

JetBlue Airways Corp., based in Forest Hills, New York, operates a
low-cost, point-to-point airline from a hub in New York.


JOHN TOLFREE: S&P Lowers Rating to BB from BBB- on $12.8MM Bonds
----------------------------------------------------------------
Standard & Poor's Rating Services lowered its standard long-term
rating to 'BB' from 'BBB-' on the $12.8 million series 1999 bonds
issued by John Tolfree Health System Corp., Michigan for West
Branch Regional Medical Center.  The downgrade reflects
increasingly weak operating results that are well below historical
levels, during a period of positive general credit trends.
     
Additional factors contributing to the downgrade are persistent
operating losses that have worsened through fiscal 2008 contrary
to previously stated goals to reach the breakeven mark, producing
thin coverage of 1.1x; decreasing liquidity, though it remains
adequate for the lower rating with cash on hand of 77 days through
March 31, 2008, and possibly slightly weaker upon finalization of
the fiscal 2008 audit, as the current calculation for the fiscal
2008 period does not include bad debts expense; and flat
admissions and weak revenue growth.
     
"The stable outlook reflects the trend of continued operating
losses despite earlier expectations for operational improvement
based on physician recruitment and cost controls," said Standard &
Poor's credit analyst Charlene Butterfield.  "We expect that
management will increase revenue through volume growth and
improved reimbursement, while curbing costs to minimize operating
losses and we expect that liquidity will remain at or near current
levels upon greater operational cash flows," said Charlene
Butterfield.
     
West Branch has some flexibility to resolve its operating
pressures while maintaining the current 'BB' rating and stable
outlook.  However, should the balance sheet deteriorate further
and operating losses increase within the next two years, a
negative outlook or rating change may be warranted.
     
Factors precluding a lower rating at this time are a sound market
position as sole community provider, characterized by market share
of 53% in fiscal 2008; increasing outpatient volumes, particularly
emergency room visits; and recently implemented cost controls that
management expects to help diminish operating losses in fiscal
2009.
     
Additional credit concerns remain regarding the small admissions
base, an ongoing need for additional medical staff, and a
concentrated payer mix, with roughly 76% of revenue derived from
governmental payers, limiting the rate of revenue growth.


KANSAS CITY SOUTHERN: Moody's Lifts Ratings on Good Profitability
-----------------------------------------------------------------
Moody's Investors Service raised the corporate family ratings of
Kansas City Southern and Kansas City Southern de Mexico S.A. de
C.V., formerly TFM, S.A. de C.V., to B1 from B2.  At the same
time, Moody's has raised the ratings for KCS' subsidiary Kansas
City Southern Railroad's senior notes to B2 from B3, and has
raised the ratings of KCSM's senior notes to B1 from B2.  The
ratings of KCSR's senior secured credit facilities have been
affirmed at Ba2.  The rating outlook remains stable for all
issuers.

"KCS' debt ratings were upgraded primarily in recognition of the
company's demonstrated ability to improve profitability and
service metrics, while managing strong sales growth", according to
David Berge, Vice President at Moody's Investors Service.  Moody's
expects that KCS' domestic and Mexican operations will continue to
grow and improve over the near term, allowing credit metrics to
improve to levels appropriate for B1 rated companies through 2008,
although debt will likely increase coincidental with a heavy
equipment purchase schedule.

KCSM and KCSR's operating performance have improved substantially
over recent years, as company management has undertaken successful
programs to upgrade locomotives and improve the railway networks'
fluidity.  As a result, the company has experienced impressive
improvement in operating ratios (profitability) while growing its
revenue base, resulting in lower leverage and higher interest
coverage despite increased debt levels.

However, KSC operates under considerably higher financial leverage
when compared to other railroad competitors, with credit metrics
of EBIT to Interest and Funds From Operations to debt that remain
consistent with a speculative grade rating.  KCSM is highly
sensitive to conditions in the Mexican economy and to Mexican
regulation.  Nonetheless, the company operates a geographically
attractive concession in northeast Mexico with good growth
prospects, and has shown strong recent improvement in operating
performance.  KCSM has significant ongoing capital spending
requirements, particularly for locomotives and line expansion,
which will likely increase debt and slow further improvements in
credit metrics.  KCSR's north to south oriented railroad in the
central US, provides a good connections to Mexico and an
alternative to other large railroads to avoid the highly congested
rail yards.

Neither KCSR nor KCSM guarantees the other's debt, nor are the
obligations of KCSR and KCSM cross defaulted to each other.

The Ba2 rating of KCSR's senior secured credit facilities, two
notches above the corporate family rating, reflects the
substantial level of unsecured debt and other liabilities that are
junior in priority to the secured class of debt, per Moody's Loss
Given Default methodology.  Recently, the proportion of senior
secured debt has grown in the company's debt structure, mostly
relating to increased equipment financing, and Moody's believes
this trend will continue gradually over the near term.  This
implies a moderation of expected recovery that this class of debt
might achieve in the event of default.  As such, the senior
secured debt no longer merits a three notch ratings lift per the
LGD methodology, and KCSR's senior secured facilities were not
upgraded along with the rest of the debt in the group.

The ratings on KCSR's senior unsecured notes were raised to B2
from B3, still one notch below the corporate family rating,
reflecting the junior priority of this class of debt to
approximately $437 million of senior secured debt obligations.

KCSM's senior notes have been upgraded to B1 from B2, the same as
the corporate family rating, as the senior unsecured obligations
of KCSM comprise a substantial majority of that company's debt
structure.

The stable outlook reflects Moody's expectations that the
company's sales growth will remain strong through 2008, despite
weakness in the U.S. economy in general, and that the strong
pricing environment will hold up through this period so that
yields continue to improve.  Moody's expects the company's
operating ratio to remain at or below 80% for the near term.  
Also, although debt is expected to increase over this period,
credit metrics are expected to improve somewhat as the result of
improved operating profitability and growth.

The rating could be raised following consistently strong free cash
flow at both KCSR and KCSM, with a sustainable Operating Ratio
below 80% and debt to EBITDA below 3.8 times at KCSR and KCSM.  
The ratings could be pressured down following any unexpected shock
to the rail system in either the U.S. or in Mexico, or loss of
fluidity determined by a significant decline in velocity to below
20 mph.  Deterioration of credit metrics to levels such as debt to
EBITDA of greater than 5 times or EBIT to interest coverage of
less than 1.8 times would also warrant a lower rating.

Upgrades:

Issuer: Kansas City Southern

  -- Probability of Default Rating, Upgraded to B1 from B2
  -- Corporate Family Rating, Upgraded to B1 from B2
  -- Senior Unsecured Shelf, Upgraded to (P)B2 (LGD5, 73%) from
     (P)B3

  -- Senior Subordinated Shelf, Upgraded to (P)B3 (LGD6, 97%) from
     (P)Caa1

  -- Preferred Stock Preferred Stock, Upgraded to B3 (LGD6, 99%)
     from Caa1

Issuer: Kansas City Southern Railway Company (The)

  -- Senior Unsecured Regular Bond/Debenture, Upgraded to B2
     (LGD5, 73%) from B3

  -- Senior Unsecured Shelf, Upgraded to (P)B2 (LGD5, 73%) from
     (P)B3

  -- Senior Subordinated Shelf, Upgraded to (P)B3 (LGD6, 97%) from
     (P)Caa1

Issuer: Kansas City Southern de Mexico, S.A. de C.V.

  -- Corporate Family Rating, Upgraded to B1 from B2
  -- Senior Unsecured Regular Bond/Debenture, Upgraded to B1 from
     B2

Affirmed:

Issuer: Kansas City Southern Railway Company (The)

  -- Senior Secured Bank Credit Facility, at Ba2 (LGD2, 23%)

Kansas City Southern de Mexico, S.A. de C.V. owns the concession
to operate Mexico's northeast railway.  The Kansas City Southern
Railway Company operates a Class I railroad in the south central
U.S. Both Kansas City Southern de Mexico, S.A. de C.V. and The
Kansas City Southern Railway are owned by Kansas City Southern.


KING PHARMACEUTICALS: Moody's Affirms Ba3 Ratings
-------------------------------------------------
Moody's Investors Service assigned a speculative grade liquidity
rating of SGL-1 to King Pharmaceuticals, Inc. At the same time,
Moody's affirmed King's existing ratings including the Ba3
Corporate Family Rating. The outlook for King's ratings remains
stable.

The SGL-1 rating reflects King's strong liquidity profile,
characterized by good cash balances, strong internal cash flow
generation, access to a $475 million 5-year revolver, which was
undrawn at March 31, 2008, no short-term debt maturities, and
ample cushion under financial covenants. These strengths are
partially offset by the company's investment in debt securities,
where auction rate failures have temporarily impaired value and
have reduced the liquidity associated with these funds.

King's Ba3 rating is primarily driven by slowing revenue growth
rates, increased competitive threats, high product concentration
risk, and relatively high exposure to patent challenges, partially
offset by the company's solid pipeline of products, strong balance
sheet metrics, and consistent internal cash flow generation. The
Ba3 rating is also supported by the company's very strong
liquidity profile and a litigation profile consistent with the
company's rating.

The rating outlook is currently stable. Moody's does not foresee
upward rating pressure in the near-term due to the uncertainty
following the recent loss of Altace exclusivity. Over the longer-
term, the approval of King's pipeline products or the acquisition
of new late-stage products could place upward pressure on the
ratings.

Conversely, King's ratings could face downward pressure if the
company pursues any large, debt financed initiatives that
deteriorate credit metrics materially. Under such a scenario,
Moody's would consider benefits of the acquisition including
diversity and cost synergies, offset by the effect on financial
leverage.

Ratings assigned:

   * Speculative grade liquidity rating of SGL-1

Ratings affirmed:

   * Ba3 Corporate Family Rating

   * Ba3 Probability of Default Rating

   * Ba3 (LGD4, 52%) senior secured revolving credit facility of
     $475 million due 2012

Moody's does not rate King's $400 million senior unsecured
convertible notes due 2026.

King Pharmaceuticals, Inc. (King), headquartered in Bristol,
Tennessee, is a vertically integrated pharmaceutical company that
develops, manufactures, markets and sells branded pharmaceutical
products. The company targets specialty-driven pharmaceutical
markets, with a focus on neuroscience, hospital and acute care
medicines. During 2007, King reported total revenues of
approximately $2.1 billion.


MADILL EQUIPMENT: May Use Cash Collateral; Mulls Sale of Assets
---------------------------------------------------------------
The Hon. Paul Snyder of the U.S. Bankruptcy Court for the District
of Washington gave Madill Equipment Canada permission to use
senior lenders' cash collateral under chapter 15 bankruptcy, Terry
Brennan of The Deal reports.  The cash collateral secures the
Debtor's C$48.7 million obligation to senior creditors, The Deal
says, citing court filings.  According to the report, creditors
General Electric Capital Corp., GE Canada Finance Holding Co. and
Bank of Montreal consented to the Debtor's use of their cash
collateral.  The Debtor has been in default since November 2006.

Debtor's counsel, Ragan L. Powers, Esq., at Davis Wright Tremaine
LLP, said that his client wants to dispose of assets under chapter
15, The Deal relates.  The assets to be sold include inventory
amounting to $25.2 million -- $18.5 million in Canada and $6.7
million in the U.S., the report adds.

A court document disclosed that the Debtor has "no reasonable
prospect" of repaying its creditors and is missing payments to
trade creditors, The Deal reveals.

                About Madill Equipment Manufactures

Madill Equipment Manufactures -- http://www.madillequipment.com/  
-- sells, and services logging equipment such as yarders, feller
bunchers, and loaders.  Madill produces heavy equipment
exclusively for the logging industry.  The company's forestry
equipment has been synonymous with rugged reliability in the
Pacific Northwest's coastal and interior logging industry since
the early 1950's.  The company's technologically advanced line of
yarders, loaders, feller bunchers and harvester/processors, are
engineered and manufactured at its 100,000 square foot facility in
Nanaimo, British Columbia, and its 38,000 square foot plant in
Kalama, Washington.  Madill uses outside vendors to sell its goods
in logging regions in New Zealand, Australia, Russia and
Saskatchewan and Ontario.

RSM Richter Inc. was appointed as receiver by the Supreme Court of
British Columbia on April 1, 2008.  On the same date, on behalf of
the Debtor and seven-affiliates, RSM Richter filed chapter 15
petition with the U.S. Bankruptcy Court for the Western District
of Washington.  Prior to the bankruptcy filing, the Debtors were
in default on their senior and junior debts.  Ragan Powers, Esq.,
at David Wright Tremaine LLP represents the Debtor in the U.S.
Bankruptcy Court.  The Debtor listed assets of $10 million to
$50 million and debts of $100 million to $500 million when it
filed for chapter 15.


MAJESTIC STAR: March 31 Balance Sheet Upside-Down by $175 Million
-----------------------------------------------------------------
Majestic Star Casino LLC's consolidated balance sheet at March 31,
2008, showed $502.2 million in total assets and $677.3 million in
total liabilities, resulting in a $175.1 million total members'  
deficit.

At March 31, 2008, the company's consolidated balance sheet also
showed strained liquidity with $42.1 million in total current
assets available to pay $65.5 million in total current
liabilities.

The company reported a net loss of $7.4 million for the first
quarter ended March 31, 2008, compared with a net loss of
$4.7 million in the same period last year.

For 2008, consolidated net operating revenues were $89.0 million
compared to $91.5 million for 2007, a decrease of $2.5 million, or
2.8%.  

For 2008 compared to 2007, consolidated casino revenues, which
comprised 88.6% of consolidated gross revenues, decreased
$5.8 million, or 6.1%, to $89.4 million.  Promotional allowances
were $11.8 million compared to $13.9 million, a decrease of
$2.1 million, or 14.9%.  

Operating expenses were unchanged at $81.1 million.  Operating
income was $7.9 million, a decrease of $2.5 million, or 24.4%,
compared to $10.4 million for the prior year.  

Interest expense, net of interest income was $15.2 million
compared to $15.1 million in 2007.

                 Liquidity and Capital Resources

The company has significant debt outstanding at March 31, 2008,
including $52.3 million drawn on the company's Senior Secured
Credit Facility ($27.7 million available to draw), $300.0 million
of Senior Secured Notes, $200.0 million of Senior Notes and
$200,000 of capital leases and other debt.

The company had unrestricted cash and cash equivalents of
$28.5 million at March 31, 2008.  In the first quarter of 2008,
the company spent $6.5 million on capital expenditures primarily
continuing the Fitzgeralds Black Hawk expansion.

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?2c58

                       About Majestic Star

Headquartered in Las Vegas, Nevada, Majestic Star Casino LLC --
http://www.majesticstar.com/-- and its separate and distinct  
subsidiary limited liability companies and one corporation own and
operate two riverboat gaming facilities and a dockside pavilion
known as the Buffington Harbor complex located in Gary, Ind., and
two Fitzgeralds brand casino-hotels located in Tunica County,
Miss. and Black Hawk, Colo. (casino only).  

                          *     *     *

As reported in the Troubled Company Reporter on May 1, 2008,
Moody's Investors Service placed the ratings of Majestic Star
Casino LLC on review for possible downgrade.

Ratings placed on review for possible downgrade include Majestic
Star Casino LLC's $300 million senior secured notes due 2010
currently rated at 'B2', and its $200 million senior secured notes
due 2011 currently rated at 'Caa1'.


MARCO CANTU: Case Summary & Two Largest Unsecured Creditors
-----------------------------------------------------------
Debtors: Marco A. Cantu and Roxanne Cantu
         3106 Lakeshore Drive
         Edinburg, TX 78539

Bankruptcy Case No.: 08-70260

Type of Business: The Debtors own Mar-Rox, Inc., which owns and
                  operates a motel.  Mar-Rox filed for chapter 11
                  on May 6, 2008 (Bankr. S.D. Tex. Case No.
                  08-70261)(J. Schmidt).

Chapter 11 Petition Date: May 6, 2008

Court: Southern District of Texas (McAllen)

Judge: Richard S. Schmidt

Debtors' Counsel: Oscar Luis Cantu, Jr., Esq.
                  Law Offices of Oscar Cantu
                  3740 Colony Drive, Suite 208
                  San Antonio, TX 78230
                  Tel: (210) 507-3573
                  Fax: (210) 447-2545

Estimated Assets: $10 million to $50 million

Estimated Debts:  $10 million to $50 million

Debtor's Two Largest Unsecured Creditors:

   Entity                        Nature of Claim   Claim Amount
   ------                        ---------------   ------------
Guerra & Moore                   Civil Litigation      $161,000
4201 N. McColl
McAllen, TX 78504

Romero, Gonzalez & Benavides     Civil Litigation       $96,000
612 Nolana 520
McAllen, TX 78504


MARK BARROW: Case Summary & Five Largest Unsecured Creditors
------------------------------------------------------------
Debtors: Mark Stevens Barrow and Jana Suzanne Barrow
         P.O. Box 63
         Pebble Beach, CA 93953

Bankruptcy Case No.: 08-52378

Chapter 11 Petition Date: May 9, 2008

Court: Northern District of California (San Jose)

Judge: Roger L. Efremsky

Debtor's Counsel: Scott J. Sagaria, Esq.
                  Sagaria Law, PC
                  333 W San Carlos Street, #1625
                  San Jose, CA 95110
                  Tel: (408) 279-2288
                  Fax: (408) 279-2299

Estimated Assets: $1 million to $10 million

Estimated Debts:  $1 million to $10 million

Debtor's Five Largest Unsecured Creditors:

   Entity                             Claim Amount
   ------                             ------------
Texas Capital Bank                        $124,000
2100 McKinney
Dallas, TX 75201

Central Meadows Partnership                $72,500
Attn: Bob Brooks
2424 Bee's Cave Road
Austin, TX 78705

American Express                           $40,000
World Financial Center
2005 Vesey Street
New York, NY 10285

PG&E                                        $2,300
One Market, Spears Tower
San Francisco, CA 94105

Cal-Am Water                                  $500
9610 Blue Larkspun Lane
Monterey, CA 93940


MERITAGE HOMES: Stockholders Adopt Changes to 2006 Incentive Plan
-----------------------------------------------------------------
At the annual meeting of stockholders of Meritage Homes
Corporation, the company's stockholders adopted certain proposed
amendments to the company's 2006 Stock Incentive Plan.  The
amendments were approved by the company's Board of Directors on
Jan. 16, 2008, subject to receipt of the approval of the company's
stockholders.  As a result of the amendments:

   * The number of shares of common stock reserved for issuance
     under the Plan was increased from 700,000 shares of common
     stock (excluding shares of common stock remaining available
     for grant that were rolled into the Plan from the company's
     former stock option plan) to 1,600,000 shares of common
     stock; and

   * The maximum number of shares of common stock with respect to
     one or more awards that can be granted to any one person was
     changed from an aggregate of 100,000 shares of common stock   
     per year to 250,000 shares of common stock per year.

A full-text copy of the Amendments to the 2006 Stock Incentive
Plan is available for free at http://ResearchArchives.com/t/s?2c61

Additionally, the company's definitive proxy statement for the
2008 annual meeting of stockholders, which was filed with the
Securities and Exchange Commission on April 1, 2008, inadvertently
stated that during the 2007 fiscal year, director Gerald W.
Haddock did not attend one Executive Compensation Committee
meeting and that he was member of the Audit Committee instead of
director Richard Burke, who did not attend two Audit Committee
meetings.  Mr. Haddock attended all the committee meetings of
which he was a member.

                      About Meritage Homes

Headquartered in Scottsdale, Ariz., Meritage Homes Corporation
(NYSE: MTH) -- http://www.meritagehomes.com/-- builds primarily    
single-family homes across the southern and western United States
under the Meritage, Monterey and Legacy brands.  Meritage has
active communities in Houston, Dallas/Ft. Worth, Austin, San
Antonio, Phoenix/Scottsdale, Tucson, Las Vegas, the California
East Bay/Central Valley and Inland Empire, Denver and Orlando.  
Meritage Homes is the 12th largest homebuilder in 2006, Builder
Magazine says.  Meritage had 10,487 U.S. home closings generating
$3,461,000 in revenues, according to data compiled by Builder.

Meritage Homes has reported four consecutive quarterly net losses
beginning in the second quarter ended June 30, 2007.  At March 31,
2008, the company's consolidated balance sheet showed $1.6 billion
in total assets, $894.8 million in total liabilities, and $686.8
million in total stockholders' equity.

                            *     *     *

As reported in the Troubled Company Reporter on May 21, 2008,
in a post at Seeking Alpha, Scott Weitz, the Chief Market
Strategist for Courtroom Traders, a Wall Street investment
newsletter, identified homebuilders that he thinks are close to
bankruptcy.  Tarragon Corp., WCI Communities, Inc., and Meritage
Homes Corp. are publicly traded residential builders in the U.S.
that are "most likely to file Chapter 11 sooner rather than
later," according to him.

Mr. Weitz considered Meritage Homes as the farthest from the brink
of Chapter 11 among the three.  But he said, it is "in the fast
lane headed in that direction."

"They have no diversification of business activities outside of
residential development, and the regions they operate in are among
the hardest hit by the Real Estate fall out," according to him.

As reported in the TCR on Jan. 21, 2008, Moody's lowered the
ratings of Meritage Homes Corporation, including its corporate
family rating to B1 from Ba3, and its senior unsecured notes
rating to B1 from Ba3.  The ratings outlook is negative.


MESA AIR: Warns of Bankruptcy if Delta Air Terminates Contract
--------------------------------------------------------------
Mesa Air Group warned that it may have to seek protection under
applicable U.S. reorganization laws if Delta Air Lines, Inc.  
successfully terminated their Connection Agreement.

In the past few weeks the Company announced the resolution of its
litigation with Hawaiian Airlines, an agreement to return certain
aircraft to Raytheon Aircraft Company, shareholder approval of its
proposal to issue shares of common stock to 2023 noteholders who
may elect to put their notes to the Company in June 2008, and
agreements with certain noteholders to defer their put right until
January 2009.

Notwithstanding such corporate events, the Company believes that
if the Company's litigation with Delta Air Lines, Inc. does not
result in a favorable ruling for the Company, such outcome would
have a material adverse effect on the Company's operations.

         Purported Termination of Material Contract

April 1, 2008, the Company announced that on March 28, 2008, Delta
had notified the Company of its intent to terminate the Delta
Connection Agreement among Delta, the Company, and its wholly-
owned subsidiary, Freedom Airlines, Inc., dated as of May 3, 2005.
The Connection Agreement includes, among other arrangements, the
Company's agreement to operate 34 model ERJ-145 regional jets
leased by the Company utilizing Delta's name. In fiscal 2007, the
Connection Agreement accounted for approximately 20% of the
Company's 2007 total revenues. Delta seeks to terminate the
Connection Agreement as a result of Freedom's alleged failure to
maintain a specified completion rate with respect to its ERJ-145
Delta Connection flights during three months of the six-month
period ended February 2008. The Company vehemently denies there is
any basis for terminating the Connection Agreement and is
vigorously defending its rights thereunder.

On April 7, 2008, the Company filed a lawsuit against Delta
alleging breach of the Connection Agreement and seeking specific
performance by Delta of its obligations thereunder. On May 9,
2008, the Company filed a motion for a preliminary injunction in
the U.S. District Court for the Northern District of Georgia
against Delta to prevent its wrongful termination of the Delta
Connection Agreement. The hearing for this matter is scheduled to
commence on May 27 and end on May 29, 2008. The Company
anticipates a ruling to be issued by the Court upon completion of
such proceedings.

If Delta is successful in terminating the Connection Agreement,
the Company believes it will be unable to redeploy the 34 ERJ-145
aircraft in a timely manner, or at the lease rates the Company
receives under the Connection Agreement in the event of any
redeployment of such aircraft. In addition to losing approximately
$20 million per month in revenue (or approximately $960 million
over the next four years), the Company estimates that leasing
costs, labor and other costs totaling approximately $250 to
$300 million over the next four years would be incurred by the
Company.

As a result, the Company's cash flows from operations and its
available working capital would be insufficient to meet these cash
requirements, including its obligations under the Lease
Agreements, which will result in defaults thereunder. In the
absence of obtaining additional capital through equity or debt
financings, asset sales, consensual restructuring of debt and
lease terms and/or similar measures, the Company will be unable to
remedy such defaults and will experience additional defaults in
the future. Any such defaults would then trigger other defaults
under other existing agreements, which would be material to the
operational cash flows of the Company.

The Lease Agreements are subject to termination in the event of
default, and the Company's obligations under such leases may be
accelerated in the event of a continuing default. In such event,
the Company's financial condition would require that the Company
seek protection under applicable U.S. reorganization laws in order
to avoid or delay actions by its lessors, creditors and code-share
partners, which could materially adversely affect the Company's
ability to continue as a going concern.

                          About Mesa Air

Mesa currently operates 182 aircraft with over 1,000 daily system
departures to 157 cities, 42 states, the District of Columbia,
Canada, the Bahamas and Mexico. Mesa operates as Delta Connection,
US Airways Express and United Express under contractual agreements
with Delta Air Lines, US Airways and United Airlines, and
independently as Mesa Airlines and go!.  In June 2006 Mesa
launched inter-island Hawaiian service as go!  This operation
links Honolulu to the neighbor island airports of Hilo, Kahului,
Kona and Lihue.  The Company, founded by Larry and Janie Risley in
New Mexico in 1982, has approximately 5,000 employees and was
awarded Regional Airline of the Year by Air Transport World
magazine in 1992 and 2005. Mesa is a member of the Regional
Airline Association and Regional Aviation Partners.

On May 14, 2008, Air Midwest, Inc., a wholly owned subsidiary of
Mesa Air, unveiled plans to discontinue all operations by June 30
including its current scheduled services, citing record-high fuel
prices, insufficient demand and a difficult operating environment
as the main factors in its decision.


MIRANT CORP: Completes Share Repurchase Program With JP Morgan
--------------------------------------------------------------
Mirant Corporation announced the completion of an accelerated
share repurchase program with JP Morgan that it announced on
November 9, 2007.  The ASR program is a component of Mirant's
plan to return $4.6 billion of cash to its stockholders.

Under the terms of the ASR agreement, Mirant delivered
$1.0 billion to JP Morgan in return for 26,659,557 shares, based
upon the closing price of the common stock on November 9, 2007 of
$37.51 per share.  The number of shares purchased by Mirant under
the ASR agreement was subject to an adjustment based on the
weighted average price of Mirant common stock during the term of
the agreement minus a set discount.

JP Morgan will deliver an additional 682,387 shares of common
stock to Mirant resulting in a total of 27,341,944 shares
purchased under the ASR program for an average price of $36.57 per
share.

Mirant previously announced it will return a total of $4.6
billion to its stockholders.  The program consists of the ASR
program plus open market purchases of $3.6 billion.

"We are pleased with the final result of the accelerated share
repurchase program," said Edward R. Muller, chairman and chief
executive officer.  "We are continuing to return cash through
open market purchases which we think are an efficient method for
returning the remaining cash to stockholders, but as we go forward
we will continue to evaluate the efficiencies of all methods for
returning the cash to stockholders."

                          About Mirant

Headquartered in Atlanta, Georgia, Mirant Corporation (NYSE:
MIR) -- http://www.mirant.com/-- is an energy company that
produces and sells electricity in North America, the Caribbean,
and the Philippines.  Mirant's investments in the Caribbean
include three integrated utilities and assets in Jamaica, Grand
Bahama, Trinidad and Tobago and Curacao.  Mirant owns or leases
more than 18,000 megawatts of electric generating capacity
globally.

Mirant Corporation filed for chapter 11 protection on July 14,
2003 (Bankr. N.D. Tex. 03-46590), and emerged under the terms of
a confirmed Second Amended Plan on Jan. 3, 2006.  thomas E.
Lauria, Esq., at White & Case LLP, represented the Debtors in
their successful restructuring.  When the Debtors filed for
protection from their creditors, they listed US$20,574,000,000
in assets and US$11,401,000,000 in debts.  The Debtors emerged
from bankruptcy on Jan. 3, 2006.  On March 7, 2007, the Court
entered a final decree closing 46 Mirant cases.

Mirant NY-Gen LLC, Mirant Bowline LLC, Mirant Lovett LLC, Mirant
New York Inc., and Hudson Valley Gas Corporation, were not
included.  On Feb. 15, 2007, Mirant NY-Gen filed its Chapter 11
Plan of Reorganization and on Feb. 22 filed a Disclosure
Statement explaining that Plan.  The Court approved the adequacy
of Mirant NY-Gen's Disclosure Statement on March 22, 2007, and
confirmed the Amended Plan on May 7, 2007.  Mirant NY-Gen
emerged from chapter 11 on May 7, 2007.

On July 13, 2007, Mirant Lovett filed its Chapter 11 Plan of
Reorganization.  The Court confirmed Mirant Lovett's Plan on
Sept. 19, 2007.  Mirant Lovett emerged from bankruptcy on
Oct. 2, 2007.

(Mirant Bankruptcy News, Issue No. 138; Bankruptcy Creditors'
Service Inc., http://bankrupt.com/newsstand/or 215/945-7000)

                        *     *     *

As reported in the Troubled Company Reporter on Dec. 26, 2007,
Moody's Investors Service upgraded the ratings of Mirant
Corporation (Mirant: Corporate Family Rating to B1 from B2) and
its subsidiaries Mirant Mid-Atlantic, LLC (MIRMA: pass through
trust certificates to Ba1 from Ba2), Mirant North America, LLC
(MNA: senior unsecured to B1 from B2 and senior secured to Ba2
from Ba3) and Mirant Americas Generation, LLC (MAG: senior
unsecured to B3 from Caa1).  Additionally, Mirant's Speculative
Grade Liquidity (SGL) rating was revised to SGL-1 from SGL-2.
The rating outlook is stable for Mirant, MNA, MAG, and MIRMA.


MOHEGAN TRIBAL: Moody's Chips Corp. Family Rating to Ba2 from Ba1
-----------------------------------------------------------------
Moody's Investors Service lowered Mohegan Tribal Gaming
Authority's ratings based on the expectation that the company will
not meet the leverage target necessary to maintain its previous
ratings.  This rating action concludes the formal review process
that was initiated on Feb. 11, 2008.  A stable rating outlook was
assigned.

Ratings affected:

  -- Corporate family rating to Ba2 from Ba1
  -- Probability of default rating to Ba2 from Ba1
  -- Senior notes lowered to Ba1 (LGD-3, 33%) from Baa3
     (LGD-3, 33%)

  -- Senior subordinated notes lowered to Ba3 (LGD-5, 82%) from
     Ba2 (LGD-5, 82%)

MTGA's lower-than-expected operating results caused by a slowing
economy and increased competition in the Northeast US, along with
the continuation of a significant amount of debt-financed
development activity, will make it unlikely that the company will
be able to reduce debt/EBITDA to at or near 4.0 times over the
foreseeable future.  Debt/EBITDA is currently at about 4.7 times,
and expected to peak at well above 6 times immediately prior to
the completion of its Project Horizon expansion, the final phase
of which is scheduled to open in the second half of 2010.

MTGA's stable outlook continue to acknowledge the favorable
demographics and growth prospects of its primary and secondary
market area as well as the good risk reward profile of its current
development activities.  It also reflects our longer term
expectation that the company will eventually reduce leverage to a
level more appropriate for the current rating.

MTGA owns and operates a gaming and entertainment complex located
near Uncasville, Connecticut, known as Mohegan Sun, and a gaming
and entertainment facility offering slot machines and harness
racing in Plains Township, Pennsylvania, known as Mohegan Sun at
Pocono Downs.  MTGA reported net revenues of $1.6 billion for the
latest 12-month period ended March 31, 2008.


MORRIS PUBLISHING: Revenue Decline Cues S&P to Cut Rating to B-
---------------------------------------------------------------
Standard & Poor's Ratings Services lowered its ratings on Augusta,
Georgia-based Morris Publishing Group LLC.  S&P lowered the
corporate credit rating to 'B-' from 'B', and the rating outlook
is negative.
     
"The downgrade reflects continued significant declines in revenue
and EBITDA in Morris' newspaper business segment," said Standard &
Poor's credit analyst Liz Fairbanks, "and the likelihood for
further declines over the intermediate term."  The downgrade also
reflects a shortening in the time horizon for a potential
violation of the bank facility's financial maintenance covenants.  

As a result of the pace of EBITDA declines in the first quarter,
the covenant cushion at March 2008 has narrowed further from
December 2007, and S&P are concerned that the company could face a
potential covenant violation as early as the September 2008
quarter.  The total leverage covenant is currently 6.5x and
tightens one turn to 5.5x on Dec. 31, 2008.  To comply with these
covenants, the company will have to significantly improve EBITDA
generation or find a mechanism to meaningfully reduce debt,
possibly through the sale of assets.

"We are concerned about the company's ability to reduce leverage
in the near term," said Ms. Fairbanks, "given that industry trends
indicate that advertising revenues have continued to fall in 2008
despite more favorable comparisons."


MOTHERS WORK: S&P Cuts Rating to B- from B on Merchandising Issues
------------------------------------------------------------------
Standard & Poor's Ratings Services lowered its corporate credit
rating on Philadelphia-based Mothers Work Inc. to 'B-' from 'B'.  
At the same time, S&P lowered the rating on the $90 million senior
secured term loan to 'B' from 'B+'.  The outlook is negative.
     
"The downgrade reflects ongoing merchandising issues, increased
competitive pressures, concerns regarding covenant compliance, and
overall weak performance," said Standard & Poor's credit analyst
David Kuntz.


MOVIE GALLERY: Names C.J. Gabriel, Jr. as President and CEO
-----------------------------------------------------------
Movie Gallery Inc., on May 20, 2008, appointed C.J. Gabriel, Jr.,
as President and Chief Executive Officer of the company.  Mr.
Gabriel will succeed Joe Malugen, chairman, president, chief
Executive Officer and founder of Movie Gallery.

"Gabe is a highly-experienced and proven executive with the right
qualities -- inspirational leadership, strategic insight and
operational discipline -- to lead Movie Gallery forward," said
Mr. Malugen.  "Gabe knows what it takes to run a successful
retail business and understands what actions can be taken in
today's rapidly evolving video rental industry.

Movie Gallery is emerging from bankruptcy with a talented new
leader committed to meeting the needs of our customers, employees
and other stakeholders.  I am confident in Gabe's ability to
return the Company to profitability."

"This is a tremendous opportunity and it will be an honor for me
to lead this Company's outstanding partners and associates," said
Mr. Gabriel.  "I believe that the primary function of a leader is
to inspire hope and enthusiasm throughout the organization and I
look forward to working closely with the Company's talented
managers and employees.  I plan to foster a winning culture
across our nearly 3,300 retail locations through a strong focus
on achieving outstanding results.  I am fully committed to
enhancing store operations, improving operating metrics, further
reducing debt and better integrating this great Company's brands
and businesses.  While there is a lot of work ahead, I am excited
about all that can be achieved and energized by the tremendous
potential I see at Movie Gallery."

Mr. Gabriel brings to the company over 25 years of experience as
a senior executive in the consumer products and retail
industries.  He most recently served as executive vice president
of Marketing, Merchandising and Supply Chain Management at
Albertsons, Inc., a $50 billion retailer.  In this role, Mr.
Gabriel defined the vision, mission and operating goals of
Albertsons' "Demand Chain" functions and developed and
implemented strategic and operational business plans that
restructured the organization.  The plans implemented under Mr.
Gabriel's leadership were industry leading in scope and
significance, helped Albertsons realize millions in operating
savings and positioned Albertsons to compete effectively in its
industry.

Prior to Albertsons, Mr. Gabriel served as chairman, president
and chief executive officer of Newgistics, Inc.  He also served
as CEO & Division President of Corporate Express.  Previously,
during his eleven year career at Pepsi Cola North America, he
held a number of positions including National Director Selling &
Delivery Operations at Pepsi Cola North America.  At Pepsi, Mr.
Gabriel accelerated revenue growth and reduced operating costs to
enhance profitability.  He began his career at American Hospital
Supply Corporation.

Mr. Gabriel served as a U.S. Army Officer in the 101st Airborne
Division and was a distinguished honor graduate from U.S. Army
Ranger Training.  Mr. Gabriel earned his Bachelor of Sciences
degree in Human Resource Management from the University of
Scranton in Pennsylvania.

                       About Movie Gallery

Based in Dothan, Alabama, Movie Gallery Inc. --
http://www.moviegallery.com/-- is a home entertainment specialty
retailer.  The company owns and operates 4,600 retail stores that
rent and sell DVDs, videocassettes and video games.

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

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

The Court confirmed the Debtors' Second Amended Chapter 11 Plan of
Reorganization on April 9, 2008.  (Movie Gallery Bankruptcy News
Issue No. 28; Bankruptcy Creditors' Service Inc.;
http://bankrupt.com/newsstand/or 215/945-7000)


MOVIE GALLERY: Can Sell MovieBeam Assets to Dar Capital for $2MM
----------------------------------------------------------------
The Honorable Douglas O. Tice of the U.S. Bankruptcy Court for the
Eastern District of Virginia approved a purchase agreement between
Movie Gallery Inc. affiliate M.G. Digital LLC and Dar Capital,
regarding the sale of the Debtors' MovieBeam franchise.

Pursuant to the terms of a purchase agreement, M.G. Digital will
sell, among other things, tangible assets and all of M.G.
Digital's ownership rights to and interest in the intellectual
property used solely in connection with the MovieBeam service, to
Dar Capital for $2,250,000.  Dar Capital has deposited $250,000
with an escrow agent.

A full-text copy of the Purchase Agreement is available for free
at http://researcharchives.com/t/s?2c20

Judge Tice authorized the Debtors to sell MovieBeam's assets
outside the ordinary course of business, pursuant to a purchase
agreement.  The Court also authorized the Debtors to sell the
Purchased Assets to Dar Capital Limited, free and clear of all
liens, claims, interests and encumbrances.  The Liens attaching to
the proceeds of the sale or transfer will be with the same
validity, extent and priority as immediately prior to the Sale.

Furthermore, the Court entitled Dar Capital to the protections
afforded to "good-faith" purchasers.

Judge Tice said that in the absence of a written agreement with
Dotcast, Inc., Dar Capital is not authorized to use any Dotcast
intellectual property, pursuant to the Dotcast Settlement
Agreement.  

Dar Capital will notify Dotcast of any sale or transfer of
certain items, including dNTSC modulators and receiverships, the
Court ruled.

In light of the Agreement, Dotcast, Inc. informed the Court and
parties-in-interest that it  has withdrawn its objection to the
Debtors' request.

                       About Movie Gallery

Based in Dothan, Alabama, Movie Gallery Inc. --
http://www.moviegallery.com/-- is a home entertainment specialty
retailer.  The company owns and operates 4,600 retail stores that
rent and sell DVDs, videocassettes and video games.

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

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

The Court confirmed the Debtors' Second Amended Chapter 11 Plan of
Reorganization on April 9, 2008.  (Movie Gallery Bankruptcy News
Issue No. 28; Bankruptcy Creditors' Service Inc.;
http://bankrupt.com/newsstand/or 215/945-7000)


MTM LIFE: Fitch Withdraws 'Bq' Quantitative IFS Rating
------------------------------------------------------
Fitch Ratings has withdrawn its quantitative insurer financial
strength ratings on three life insurance companies that no longer
meet Fitch's criteria to be eligible to receive a Q-IFS rating.

These ratings are withdrawn by Fitch:

MTM Life Insurance Company (NAIC Code 66222)
--Q-IFS 'Bq'.

Farmers & Traders Life Insurance Company (NAIC Code 63193)
--Q-IFS 'BBBq'.

Benicorp Insurance Company (NAIC Code 69752)
--Q-IFS 'Bq'.


NATIONAL INDEPENDENT: A.M. Best Lifts IC Rating to bbb- from bb
---------------------------------------------------------------
A.M. Best Co. has upgraded the financial strength rating to
B+(Good) from B(Fair) and issuer credit rating to "bbb-" from "bb"
for National Independent Truckers Insurance Company, A RRG.  The
outlook for both ratings is stable.

The ratings reflect NITIC's improved capitalization, decreased
operational leverage measures, strong management team with
expertise in this niche market and its strict underwriting and
risk management guidelines.  Partially offsetting these positive
rating factors is the company's limited business profile.  An
additional offsetting factor is NITIC's financial leverage
position with a significant portion of the company's surplus in
the form of a letter of credit.

Additional rating factors are NITIC's fundamental business
strategies, which include providing stable insurance coverage
coupled with quality service for its members.  These fundamentals
are evidenced by high member retention and member loyalty.  Each
member makes an annual capital contribution based on the number of
vehicles (power units) insured.

NITIC has very strict loss control and underwriting guidelines in
place.  The company uses a scheduled driver program and visually
inspects each vehicle prior to issuing a policy.  Extensive
interviews are conducted with the drivers and motor vehicle
records are reviewed prior to accepting new members.

A.M. Best remains the leading rating agency of captive insurers
rating a wide variety of more than 200 captives in the United
States and throughout the world.


NOMURA HOME: Fitch Junks Ratings on Six Classes of NIM Notes
------------------------------------------------------------
Fitch Ratings has taken rating actions on 2 Nomura Home Equity
Loan Net Interest Margin notes:

Nomura Home Equity Loan NIM 2006-FM2
  -- $7.7 million Class N-1 downgraded to 'C/DR6' from 'BBB';
  -- $9.7 million Class N-2 downgraded to 'C/DR6' from 'B' and
     removed from Rating Watch Negative;

  -- $6.4 million Class N-3 revised to 'C/DR6' from 'C/DR5';
     (underlying Transaction: Nomura Home Equity Loan Trust
     2006-FM2)

Nomura Home Equity Loan NIM 2006-HE3
  -- $10.5 million Class N-1 downgraded to 'C/DR6' from 'BBB';
  -- $4.3 million Class N-2 downgraded to 'C/DR6' from 'B';
  -- $2.6 million Class N-3 downgraded to 'C/DR6' from 'B';
     (Underlying Transaction: Nomura Home Equity Loan Trust
     2006-HE3).

The rating actions reflect actual pay-down performance of the NIM
securities to date compared to initial projections, as well as,
changes that Fitch previously made to its subprime loss
forecasting assumptions for the underlying transactions.

  -- 'Fitch Places $139B U.S. Subprime RMBS On Watch Negative on
      Worsening Mortgage Performance' (Feb. 1, 2008);

  -- 'U.S. Subprime RMBS/HEL Upgrade/Downgrade Criteria'
      (June 12, 2007);

  -- 'Downgrade Criteria for Recent Vintage U.S. Subprime RMBS'
      (August 8, 2007)

  -- 'U.S. Rating Criteria for Net Interest Margin
      Securitizations: Updated' (February 6, 2007).


NORTEL NETWORKS: S&P Holds 'B-' Rating; Revises Outlook to Pos.
---------------------------------------------------------------
Standard & Poor's Ratings Services revised its outlook on Toronto-
based telecommunications equipment provider Nortel Networks Ltd.
to positive from stable.  At the same time, S&P affirmed the
ratings, including the 'B-' long-term corporate credit rating, on
the company.  The ratings on NNL are based on the consolidation
with parent Nortel Networks Corp.  At March 31, Nortel had about
US$4.6 billion of debt outstanding.
     
At the same time, S&P assigned a 'B-' bank loan rating to NNL's
proposed US$500 million 10.75% senior unsecured notes due 2016.  
The notes are being issued as an add-on to the existing
US$450 million 10.75% senior unsecured notes due 2016, issued July
2006.  S&P also assigned a recovery rating of '4' to the notes,
indicating the expectation for average (30%-50%) recovery in the
event of payment default.  Nortel will use the net proceeds from
the new debt issuance, together with cash balances, to repay
Nortel Network Corp.'s US$675 million 4.25% convertible notes
maturing Sept. 1.

"The revised outlook primarily reflects the steady improvement in
profitability in the past several quarters despite difficult
market conditions," said Standard & Poor's credit analyst Madhav
Hari.  "We expect this operating momentum to continue in the near
term, mostly driven by the net benefit derived from the company's
fiscal 2008 and previous years' business transformation
initiatives," Mr. Hari added.
     
Nortel's exposure to legacy offerings remains significant and will
likely pressure near-term revenue growth; however, the company's
portfolio of growth products and services has shown good traction
in recent quarters thereby mitigating the risk of large revenue
losses.  Furthermore, cash balances of more than US$3.2 billion
have remained stable and should allow the company to execute its
turnaround strategy in addition to providing healthy credit
support.
     
The positive outlook is based on Nortel's steady improvement in
its profitability metrics and stabilized revenue erosion within
its core operations despite difficult market conditions.  Healthy
liquidity should allow the company to execute its turnaround
strategy while additionally providing near-term credit support.  
Consideration for a ratings upgrade will depend on the company's
ability to meet 2008 guidance with respect to revenues and
profitability (operating margins of about 6.7%), while maintaining
cash balances in excess of US$3 billion.  S&P could revise the
outlook to stable (or even to negative) should its liquidity
position weaken materially or the company fail to demonstrate
additional operating margin improvement possibly owing to a
meaningful deterioration of its revenues.


NORTEL NETWORKS: Moody's Rates Add-On $500MM Debt Issue B3
----------------------------------------------------------
Moody's Investors Service (Moody's) assigned a B3 rating to Nortel
Networks Limited (NNL), US$500 million year senior unsecured "add-
on" note issue (reference security is the company's existing $450
million 10.75% note issue due July 2016). NLL is Nortel Network
Corporation's (Nortel) principal direct operating subsidiary.

The note issue benefits from a system of guarantees that causes it
to be ranked equally with Nortel's existing outstanding senior
unsecured debts. Since the proceeds will be used to repay a
portion of the US$675 million residual of an existing convertible
note issue due September, 2008, the transaction is neutral to
Nortel's credit profile.

With there being no ratings' impact, the company's B3 corporate
family rating (CFR) was affirmed along with ratings for existing
debt securities, albeit, changes in the company's liability
structure caused a very minor change to the related loss given
default assessments while also causing preferred stock of
subsidiary Nortel Networks Limited to be upgraded to Caa1 from
Caa3 (see debt listing below). The primary rating influence
continues to stem from uncertainty relating to the magnitude and
long term sustainability of the company's cash flow stream.

For much of the recent past, Nortel has been involved in a
protracted asset portfolio and operational restructuring as it
looks to solidify its position in the very crowded
telecommunications infrastructure market. With reported gains
continually being reinvested in new initiatives and additional
restructuring programs, it is unclear whether the business model
can be stabilized and what level of cash flow will prevail if it
does. In the interim, the company's sizeable cash position manages
downside ratings risk and allows the rating to be positioned at
the B3 level while also allowing the outlook to be stable. This
cash position also allows liquidity to be assessed as good, and an
SGL-2 speculative grade liquidity rating has been maintained.

Assignments:

  Issuer: Nortel Networks Limited

     * Senior Unsecured Regular Bond/Debenture, Assigned B3
       (LGD4, 66)

Upgrades:

  Issuer: Nortel Networks Capital Corporation

     * Senior Unsecured Regular Bond/Debenture, unchanged at B3
       with LGD assessment changed to LGD4, 66% from LGD4, 67%

  Issuer: Nortel Networks Corporation

     * Senior Unsecured Conv./Exch. Bond/Debenture, unchanged at
       B3 with LGD assessment changed to LGD4, 66% from LGD4, 67%

  Issuer: Nortel Networks Limited

     * Senior Secured Regular Bond/Debenture, unchanged at B3
       with LGD assessment changed to LGD4, 66% from LGD4, 67%

     * Senior Unsecured Regular Bond/Debenture, unchanged at B3
       with LGD assessment changed to LGD4, 66% from LGD4, 67%

     * Preferred Stock Preferred Stock, Upgraded to Caa1
       from Caa3

The company's solid liquidity position is quite important to the
B3 CFR as it enhances near term default risk and facilitates use
of a B2 probability of default rate (PDR). In the event of a
default, a 35% recovery (i.e. a 65% loss given default (LGD))
assumption has been used. With the CFR being an expression of
expected loss (EL), and a function of the relationship between the
PDR and the LGD, the EL (i.e. the CFR) is assessed as B3.
Therefore, were liquidity to deteriorate and, as a consequence,
were near term default risk to increase, the CFR would likely be
downgraded.


For additional commentary, please refer to the associated Credit
Opinion (available on Moodys.com within a day of this press
release) and LGD Assessment Report (also to be made available on
Moodys.com).


Headquartered in Toronto, Ontario, Canada, Nortel Networks
Corporation (Nortel) designs and supplies telecommunications
networking hardware and software to a variety of business and
governmental customers around the globe. 2007 sales were nearly
$11 billion.


NORTH AMERICAN TECH: March 30 Balance Sheet Upside-Down by $5.8MM
-----------------------------------------------------------------
North American Technologies Group Inc.'s consolidated balance
sheet at March 30, 2008, showed $18.6 million in total assets and
$24.4 million in total liabilities, resulting in a $5.8 million
total stockholders' deficit.

At March 30, 2008, the company's consolidated balance sheet also
showed strained liquidity with $8.5 million in total current
assets available to pay $9.9 million in total current liabilities.

The company reported net income of $173,481 for the second quarter
ended March 30, 2008, compared with a net loss of $4.7 million in
the same period ended April 1, 2007.

Net sales for the three months ended March 30, 2008, and April 1,
2007, were $9.3 million and $5.4 million, respectively, and
related solely to the sale of crossties.  The increase in net
sales primarily reflects a 30.0% increase in the number of ties
sold and a 32.0% increase in the average sales price of ties sold
during the three month period ended March 30, 2008, compared to
the three month period ended April 1, 2007.

The shift to net income in the current quarter is primarily due to
the increase in net sales, a decrease in loss on conversion of
debt to equity of $1.7 million, a decrease in interest expense of
$31,640, and a decrease of $119,884 in depreciation and
amortization expense offset by an increase in selling, general and
administrative expenses of $741,701.

Full-text copies of the company's consolidated financial
statements for the quarter ended March 30, 2008, are available for
free at http://researcharchives.com/t/s?2c5a

                       Going Concern Doubt

KBA Group LLP, in Dallas, expressed substantial doubt about
North American Technologies Group Inc.'s ability to continue as a
going concern after auditing the company's consolidated financial
statements for the year ended Sept. 30, 2007.  The auditing firm
cited that the company has suffered recurring losses from  
operations, has used significant cash flows in operating  
activities and has liabilities significantly in excess of assets.

                       About North American
                      
North American Technologies Group Inc. (OTC BB: NATK) --
http://www.natk.com/-- is principally engaged in the    
manufacturing and marketing of engineered composite railroad
crossties through its 100% owned subsidiary TieTek LLC.  The
company's composite railroad crosstie is a direct substitute for
wood crossties, but with a longer expected life and with several
environmental advantages.  


NORTHWEST AIRLINES: JPMorgan Analyst Expects Airline Bankruptcies
-----------------------------------------------------------------
Christopher Hinton at MarketWatch reports that Jamie Baker, an
analyst at J.P. Morgan, on Monday said U.S. airline industry
stands to post a collective $7,200,000,000 in operating losses in
2008.  The results would be wider than an initial forecast of
$4,600,000,000 loss, the analyst said.

According to MarketWatch, Mr. Baker, in his research note, said
though investors, management and analysts may talk about airlines
acting collectively to reduce capacity to firm up revenue, the
reality is that they are more likely to dig in and try to outlast
each other.

MarketWatch relates the JPMorgan analyst noted that capacity cuts
have falled far short of what executives have said are necessary.  
Mr. Baker, MarketWatch says, indicated that another round of
airline bankruptcy -- even among the legacy carriers -- is a
question of when rather than if.

According to the report, Mr. Baker said U.S. Airways has the
highest risk of bankruptcy, followed by Northwest Airlines, United
Air Lines' parent UAL Corp., AMR Corp., JetBlue, Continental
Airlines, AirTran, Delta Air Lines, Alaska Air Lines and Southwest
Airlines.

Mr. Baker, the report adds, said credit card companies could pose
more significant risk to airlines than debt.  He explained the
credit card companies could impose unilateral holdbacks, which
will toll on a carrier's liquidity and cash balances.

                            In the Red

Except for Southwest, the major U.S. Airlines posted net losses
for the period ended March 31, 2008:

                          Net Income for Period Ended
                      -----------------------------------
                      March 31, 2008       March 31, 2007
                      --------------       --------------
   US Airways          ($236,000,000)         $66,000,000
   Northwest         ($4,139,000,000)       ($292,000,000)
   UAL                 ($537,000,000)       ($152,000,000)
   AMR                 ($328,000,000)         $81,000,000
   JetBlue               ($8,000,000)        ($22,000,000)
   Continental          ($80,000,000)         $22,000,000
   AirTran              ($34,813,000)          $2,158,000
   Delta             ($6,261,000,000)        $155,000,000
   Alaska Air           ($24,000,000)         ($3,700,000)
   Southwest             $34,000,000          $93,000,000

                        Balance Sheet at March 31, 2008
                      -----------------------------------
                      Total Assets            Total Debts   
                      ------------            -----------
   US Airways       $8,013,000,000         $6,435,000,000
   Northwest       $21,032,000,000        $17,746,000,000
   UAL             $23,813,000,000        $21,647,000,000
   AMR             $28,766,000,000        $26,277,000,000
   JetBlue          $6,050,000,000         $4,721,000,000
   Continental     $12,542,000,000        $11,071,000,000
   AirTran          $2,198,009,000         $1,783,470,000
   Delta           $26,755,000,000        $22,804,000,000
   Alaska Air       $4,379,800,000         $3,520,600,000
   Southwest       $18,031,000,000        $10,846,000,000

On April 14, Northwest announced an agreement to merge with Delta.

United and US Airways are also in talks for a possible merger.  
Continental was initially eyed as a top merger partner for United.

Small and medium-sized carriers have tumbled one after the other
into bankruptcy.  Aloha Airlines commenced bankruptcy proceedings
in Hawaii in March and later ceased operations.  ATA Airlines Inc.
ceased operations and filed for chapter 11 protection on April 2,
and Skybus Airlines Inc. tumbled into bankruptcy on April 5.  
Frontier Airlines went belly up and filed for chapter 11 on April
14.  EOS Airlines filed a chapter 11 petition on April 26.

                     About Northwest Airlines

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

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

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

                          *     *     *

As reported in the Troubled Company Reporter on April 17, 2008,
Moody's Investors Service placed the debt ratings of Delta Air
Lines, Inc. ("Delta", corporate family at B2) and Northwest
Airlines Corporation ("Northwest", corporate family rating at B1)
on review for possible downgrade.  The review was prompted by the
announcement that the two airlines have agreed to combine in an
all-stock transaction with a combined enterprise value of
approximately $18 billion.

Fitch Ratings has affirmed the debt ratings of Delta Air Lines,
Inc. following the announcement that Delta has agreed to merge
with Northwest Airlines Corp., subject to approval by the two
airlines' shareholders and the U.S. Department of Justice.  
Delta's ratings were affirmed as: Issuer Default Rating at 'B';
First-lien senior secured credit facilities at 'BB/RR1'; Second-
lien secured credit facility (Term Loan B) at 'B/RR4'.

The issue ratings apply to $2.5 billion of committed credit
facilities.  The Rating Outlook for Delta has been revised to
Negative from Stable.

Standard & Poor's Ratings Services placed its ratings, including
the 'B+' long-term corporate credit rating, on Northwest Airlines
Corp. on CreditWatch with negative implications, following
announcement of a merger agreement with Delta Air Lines Inc.
(B/Watch Pos/--).  The CreditWatch listing affects enhanced
equipment trust certificates with various ratings, excepting those
that are insured by a bond insurer.  S&P's listing of Northwest
ratings on CreditWatch with negative implications and those of
Delta on CreditWatch with positive implications implies that S&P
foresee a corporate credit rating of either 'B' or 'B+' for the
combined entity.


NOVASTAR FINANCIAL: March 31 Balance Sheet Upside-Down by $494MM
----------------------------------------------------------------
Novastar Financial Inc.'s consolidated balance sheet at March 31,
2008, showed $2.7 billion in total assets, $3.2 billion in total
liabilities, and $494.5 million in total stockholders' deficit.

The company posted a net loss of $282.7 million for the first
quarter ended March 31, 2008, versus net income of $46.0 million
in the comparable period of 2007.

Novastar reported a net interest loss after provision for credit
losses of $214.1 million for the three months ended March 31,
2008, as compared to net interest income after provision for
credit losses of $14.0 million for the same period in 2007.  T

The main reason behind this significant decline was an increase in
the provision for credit losses as a result of the continued
credit deterioration of the company's mortgage loans - held-in-
portfolio and an increase in the anticipated severity of the
credit losses.

The principal balance of loans delinquent greater than 60 days
increased by 48.0%, or approximately $206.0 million from Dec. 31,
2007.  Significant factors contributing to the increase in over
60-day delinquencies were:

  -- Continued decline in home prices;

  -- Continued weakness in the economy;

  -- Tighter underwriting standards within the mortgage industry
     making it difficult for borrowers to refinance; and

  -- As a result of the sale of the company's mortgage servicing
     rights, it no longer possesses the ability to identify and
     address potential or actual delinquencies and defaults.

The company incurred a significant loss from continuing operations
of $277.3 million during the three months ended March 31, 2008, as
compared to income from continuing operations of $91.6 million for
the same period in 2007.  The following factors contributed to the
current year loss:

  -- The company incurred income tax expense of $650,000 for the
     three months ended March 31, 2008, as compared to earning a
     benefit of $115.4 million for the same period of 2007.  

  -- An increase in the provision for credit losses for the
     company's mortgage loans held-in-portfolio of $229.4 million.

  -- A net loss due to fair value adjustments of $12.7 million
     related to the company's trading securities and the asset-
     backed bonds issued in the company's CDO transaction.  The
     trading securities had a negative fair value adjustment of
     approximately $51.6 million while the CDO asset-backed bonds
     had a positive fair value adjustment of $38.9 million.  These
     adjustments were a result of significant spread widening in
     the subprime mortgage market for these types of asset-backed
     securities.

  -- Slower prepayment speeds contributed to an increase in
     impairments in the company's mortgage securities available-
     for-sale portfolio of $19.4 million from 2007.

The company incurred a loss from discontinued operations of
$5.4 million during the three months ended March 31, 2008, as
compared to $45.6 million for the same period in 2007.  The 2008
loss is much lower than 2007 because the shutdown of the company's  
mortgage lending and loan servicing operations in 2007 was
substantially completed by the end of 2007.  The current period
loss was primarily driven by the additional lower of cost or
market adjustment on the company's mortgage loans - held-for-sale
to their estimated fair value and residual operating costs.

The company had $12.5 million in unrestricted cash and cash
equivalents at March 31, 2008, which was a decrease of
$12.9 million from Dec. 31, 2007.

                       Possible Bankruptcy

The company's wholly owned subsidiary NovaStar Mortgage Inc. has
outstanding junior subordinated debentures related to the
outstanding trust preferred securities of NovaStar Capital Trust I
and NovaStar Capital Trust II.  The company has guaranteed
NovaStar Mortgage's obligations under these debentures, including
NovaStar Mortgage's obligations to make periodic interest payments
thereon.

To preserve short-term liquidity flexibility, NovaStar Mortgage
did not make a quarterly interest payment of $1.3 million due on
March 30, 2008, and did not make a quarterly interest payment of
$400,000 on April 30, 2008.  The trustees and security holders of
NovaStar Capital Trust I and NovaStar Capital Trust II have agreed
not to exercise any remedies as a result of these payment failures
until May 30, 2008.

The company intends to negotiate with the applicable parties to
restructure the terms of the debentures and to make the deferred
payments required on or before May 30, 2008.  

In the event that the company is unable to restructure the terms
of the debentures or fail to timely pay the deferred or any
subsequent interest owed on the notes, or otherwise breach any of
its obligations relating to the debentures or trust preferred
securities and fail to remedy the default within the applicable
cure period, if any, the trustees or security holders may seek an
acceleration of the obligations under the indentures.  

The company said that the foregoing would have a material adverse
effect on the company's financial condition and liquidity and
would be likely to cause it to seek the protection of applicable
bankruptcy laws.

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?2c53

                     Going Concern Disclaimer

As reported in the Troubled Company Reporter on April 4, 2008,
Deloitte & Touche LLP, in Kansas City, Missouri, expressed
substantial doubt about Novastar Financial 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 pointed to the company's deficit in
shareholders' equity, the disruption in the credit markets and
related liquidity issues, the sale of its loan servicing
operations and the decision to cease all of its mortgage lending
operations.

                        About NovaStar

Headquartered in Kansas City, Missouri, NovaStar Financial Inc.
(NYSE: NFI) -- http://www.novastarmortgage.com/ -- prior to   
significant changes in its business during 2007 and the first
quarter of 2008, the company originated, purchased, securitized,
sold, invested in and serviced residential nonconforming mortgage
loans and mortgage backed securities.  

The company retained, through its mortgage securities investment
portfolio, significant interests in the nonconforming loans it
originated and purchased, and through its servicing platform,
serviced all of the loans in which it retained interests.  

During 2007 and early 2008, the company discontinued its mortgage
lending operations and sold its  mortgage servicing rights which
subsequently resulted in the abandonment of its servicing
operations.

Historically, the company had elected to be taxed as a REIT under
the Code.  During 2007, the company announced that it would not be
able to pay a dividend on its common stock with respect to its  
2006 taxable income, and as a result, its status as a REIT
terminated retroactive to Jan. 1, 2006.


O'CHARLEY'S INC: Weak Performance Cues Moody's to Revise Outlook
----------------------------------------------------------------
Moody's Investors Services today revised the rating outlook of
O'Charley's Inc.'s (O'Charley's) to negative from stable.
Concurrently, Moody's affirmed O'Charley's Corporate Family Rating
of Ba3, Probability of Default rating of Ba3, senior secured
facilities rating of Baa3 and senior subordinated notes at B1.

The change of outlook to negative reflects the company's continued
weak operating performance such as declining revenues and eroding
margins which previously exhibited signs of acceleration in the
recent past. The resulting weakening of cash flow and credit
metrics put downward pressure on the ratings. In particular, the
change in the outlook to negative reflects continued tightening of
EBITA coverage of interest expense and Moody's expectation of
approximately breakeven free cash flow during the near term.
O'Charley's ratings could be downgraded if the company failed to
stabilize and improve its credit metrics in the next 6-12 months,
either due to continuous sub-par performance or a pursuit of more
aggressive financial policy, or a combination of the two. The
affirmation of the Ba3 Corporate Family Rating incorporates
Moody's expectation that the company will maintain adequate
liquidity in the next twelve months.

The Ba3 Corporate Family Rating continues to reflect the company's
relatively modest leverage, its significant real estate ownership
and adequate liquidity position. The rating is constrained by the
company's relatively small scale and limited geographic
diversification as well as its lack of brand strength as a
regional casual dining chain. The rating also incorporates
O'Charley's weak operating performance, which primarily driven by
its weak same store sales as guest traffic across all its three
concepts continued to decline, and margin pressure arising from
higher input cost. Moreover, Moody's views O'Charley's marginal
return on assets as undermining the benefit of the company's
capital expenditure program, which has been a primary driver of
weak free cash flow.

"Despite the recent cut back in its capital expenditure for 2008,
we don't expect the company would generate meaningful free cash
flow in the coming year," stated Moody's analyst, John Zhao,
"although O'Charley's has for now avoided a proxy contest by
reaching a settlement with an activist shareholder, its ratings
could be downgraded if the company were to incur sizable debt to
fund its shareholder friendly initiatives thus depress its already
weak credit metrics."

These ratings are affected:

   * Corporate Family Rating -- Ba3, affirmed

   * Probability of Default Rating -- Ba3, affirmed

   * $125 senior secured revolving credit facility -- Baa3
     (LGD2, 13%), affirmed

   * $125 senior subordinated notes due 2013 -- B1(LGD5, 77%),
     affirmed

Rating outlook -- revised to Negative

O'Charley's, Inc., headquartered in Nashville Tennessee, is an
owner, operator, and franchisor of casual dining concepts that
include O'Charley's, Ninety-Nine Restaurant & Pub, and Stoney
River Legendary Steaks. For the twelve months ending December 31,
2007, the company reported revenues of approximately $978 million.


ONCO PETROLEUM: Gets Default Notice from OSC on Financials Filing
-----------------------------------------------------------------
Onco Petroleum Inc. received a notice of default from the Ontario
Securities Commission indicating a violation of the commission's  
financial statement filing requirement for the year ended Dec. 31,
2007, which were due to the CNQ by April 29, 2008, or 120 days
after the fiscal year end.

The default occurred as the company's auditors, KPMG, required the
audit work to be completed out of its Calgary office, which was
audited by the Montreal office of KPMG.  This change over to the
Calgary KPMG office caused some mutual timing delays in the audit
field work.

The annual financial statements will be completed & signed off by
KPMG by May 30, 2008.  The commission may impose an Issuer Cease
Trade Order on June 30, 2008, or 2 months after the April 30,
2008, if the default is not remedied by that time.

Onco intends to satisfy the provisions of the Alternate
Information Guidelines so long as it remains in default of the
Financial Statement Filing Requirement.

As a result of the default, Onco will likely be in default of the
Financial Statement Filing Requirement of the first quarter
financial statements for the period ended March 31, 2008, which
are due to the CNQ by May 15, 2008, or 45 days after the period
end.

                    About Onco Petroleum Inc.
   
Headquartered in Ontario, Canada, Onco Petroleum Inc.
(CNQ:ONCO)(FRANKFURT:3HX) is an energy company involved in the
exploration, development and production of oil and gas deposits
and related projects in southern Ontario and Michigan.


PAPPAS TELECASTING: U.S. Trustee Selects 7-Member Creditors Panel
-----------------------------------------------------------------
Roberta A. DeAngelis, the U.S. Trustee for Region 3, appointed
seven creditors to serve on an Official Committee of Unsecured
Creditors for the Chapter 11 bankruptcy proceedings of Pappas
Telecasting Incorporated and its debtor-affiliates.

The creditors committee members are:

   1) Carsey-Warner Distribution, LLC
      Attn: Bret Sarnoff
      12001 Ventura Place, 6th Floor,
      Studio City, California
      Tel: (818) 299-9625
      Fax: (818) 299-9644

   2) Fox Broadcasting Company
      Attn: Inae Joe
      10201 W. Pico Boulevard
      Building 100, Room 2470
      Tel: (310) 369-4092
      Fax: (310) 369-4117

   3) Gannaway Web Holdings, LLC
      Attn: George Fearon
      747 Third Avenue
      New York, New York 10017
      Tel: (212) 931-1263
      Fax: (212) 931-1299

   4) Harrington, Righter & Parsons, L.L.C.
      Attn: Robert J. Drury
      1 Dag Hammarskjold Plaza
      New York, New York 10017
      Tel: (212) 372-4328
      Fax: (212) 486-0811

   5) King World Productions, Inc.
      Attn: Jonathan Birkhahn
      1700 Broadway
      New York, New York 10019
      Tel: (212) 315-4000
      Fax: (212) 586-7351

   6) Telerep, L.L.C.
      Attn: James J. Monahan
      1 Dag Hammarskjold Plaza
      New York, New York 10017
      Tel: (212) 372-4359
      Fax: (212) 486-0811

   7) Warner Brothers
      Attn: Wayne M. Smith
      4000 Warner Boulevard, B156 R5158
      Burbank, California 91522
      Tel: (818) 954-6007
      Fax: (818) 954-5434

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 Pappas Telecasting

Fresno, California-based Pappas Telecasting, Inc., aka KMPH, aka
KMPH-TV, and aka KMPH Fox 26, -- http://www.pappastv.com/-- and    
its affiliates are broadcasting companies.  Founded in 1971, their
stations reach over 15% of all U.S. households and over 32% of
Hispanic households.  Pappas and 21 affiliates filed chapter 11
petition on May 10, 2008 (Bankr. D. Del. Case No. 08-10915 through
08-10936).  Laura Davis Jones, Esq., at Pachulski Stang Ziehl &
Jones, LLP represents the Debtors in their restructuring efforts.  
The Debtors listed $100 million to $500 million in assets and
debts when they filed for bankruptcy.


PASA FUNDING: Trustee's Notice Prompts S&P to Chip Six Rating
-------------------------------------------------------------
Standard & Poor's Ratings Services lowered its ratings on six
classes from PASA Funding 2007 Ltd., a collateralized debt
obligation of asset-backed securities transaction collateralized
predominantly by senior tranches of residential mortgage-backed
securities and other structured finance transactions.  Three of
the tranche ratings remain on CreditWatch negative following the
downgrades.
     
The rating actions follow notice from the trustee that the
controlling noteholders for the transaction have elected to
liquidate the portfolio assets.  The rating actions reflect the
likelihood of substantial losses to the noteholders if the
transaction proceeds to liquidate, based on S&P's view of the
current market value of the underlying collateral.


                         Rating Actions

                                        Rating
                                        ------
   Transaction           Class    To              From
   -----------           -----    --              ----
PASA Funding 2007 Ltd.   A-1A     CCC/Watch Neg   BB/B/Watch Neg
PASA Funding 2007 Ltd.   A-1B     CCC/Watch Neg   BB/Watch Neg
PASA Funding 2007 Ltd.   CP       CCC//Watch Neg  BB/B/Watch Neg
PASA Funding 2007 Ltd.   A-2      CC              CCC-/Watch Neg
PASA Funding 2007 Ltd.   B        CC              CCC-/Watch Neg
PASA Funding 2007 Ltd.   X        CC              CCC-/Watch Neg

                     Other Outstanding Ratings

         Transaction               Class           Rating
         -----------               -----           ------
         PASA Funding 2007 Ltd.    C               CC
         PASA Funding 2007 Ltd.    D               CC

PLAINS EXPLORATION: Moody's Rates Sr. Unsecured Note Offering B1
----------------------------------------------------------------
Moody's Investors Service assigned a B1 rating (LGD 4; 69%) to
Plains Exploration and Production's (PXP) $400 million offering of
ten year senior unsecured notes. Moody's also affirmed PXP's Ba3
corporate family rating, Ba3 Probability of Default Rating, B1
senior unsecured note ratings, but changed the LGD statistics for
the existing notes from LGD 5; 73% to LGD 4; 69%. Note proceeds
will be used to repay borrowings under PXP's $1.9 billion secured
borrowing base facility. The facility has an accordion feature to
$2.3 billion under PXP's $2.4 billion borrowing base (pro-forma
for the note offering).

The rating outlook remains stable. While positive momentum is
evident, the stable outlook reflects the potential for significant
stock buybacks or leveraging acquisitions. A positive outlook or
ratings action is likely by, or before, first quarter 2009 if
favorable production, total cost (drillbit reserve replacement
costs based on extensions and discoveries in particular), cash
flow coverage of sustaining capital spending, and leverage trends
continue.

The ratings are supported by seasoned management; solid scale for
a Ba3 rating, with a Ba production scale profile and a Baa reserve
scale profile; a durable 13 year reserve life on proven developed
(PD) reserve life; a more bondholder friendly asset profile after
PXP's major portfolio transformation in recent years that included
multiple acquisitions and divestitures of proportionately large
scale; substantially reduced leverage; and strong production
trends. PXP reduced leverage very substantially with divestitures
since acquiring Pogo last year and production has been on a sound
positive trend over the last five quarters. Visible substantial
production growth is mounting this year from PXP's first two deep
horizon discovery wells in the Flatrock area in the shallow waters
of the Gulf of Mexico (GOM).

In effect, PXP's durable (though high operating cost) oil
properties in the Los Angeles and San Joaquin Basins onshore
California and, secondarily its Santa Maria Basin properties
offshore California, support (i) high risk high impact exploration
and development drilling to ultra deep geological horizons beneath
the shallow waters of the GOM Shelf and in ultra deep water
regions of the outer GOM and (ii) the substantial front end and
ongoing costs of drilling and developing PXP's early stage
Piceance and Wind River unconventional resource plays in the Rocky
Mountains. Further support comes from PXP's productive smaller
Permian Basin, Mid-continent, and South Texas properties.

The ratings are restrained by the unlikelihood of further leverage
reductions, given PXP's shareholder buyback program; the inherent
potential for leveraging acquisitions; by full leverage for the
ratings; a very high 49% component of proven undeveloped reserves
(PUD), and our expectation that organic reserve replacement costs
will rise further as the firm funds drilling and development on
its high proportion of PUD reserves. With approximately $700
million of buyback room under its existing buyback program, PXP
intends to repurchase stock with cash flow proceeds remaining
after capital spending.

Since year-end 2006, PXP has executed $4.8 billion in
acquisitions, principally a private acquisition of Rocky Mountain
properties in first quarter 2007 $975 million and a fourth quarter
2007 corporate acquisition of Pogo Producing for $3.5 billion, and
a $300 million acquisition of South Texas properties in second
quarter 2008. This was principally funded with after tax net
proceeds remaining from $1.550 billion in fourth quarter 2006
asset divestitures, $2 billion in PXP equity exchanged for Pogo
shares, and net proceeds from $1.7 billion in divestitures so far
this year. After settling underwater hedges for roughly $193
million, conducting $298 million in stock buybacks in 2006 and
over $300 million so far this year, and capital spending in excess
of cash flow, the shortfall was funded with debt.

Pro-forma for 2008 divestitures to date and for the South Texas
property acquisition, first quarter 2008 production approximates
90,200 barrels of oil-equivalent (boe) per day (approximately 33.0
million boe per year), up largely due to acquisitions from 22.6
million boe (mmboe) produced in 2006; pro-forma year-end 2007 PD
reserves approximate 312 mmboe, up from 182 mmboe at year-end
2006; and pro-forma 2007 total proven reserve approximate 600
mmboe, up from 352 mmboe at year-end 2006.

Under Moody's current metric ranges for its exploration and
production rating methodology, leverage on PD reserves reflects a
B rating profile but leverage on total reserves, fully loaded for
FAS 69 capex, reflects a Caa profile, cash flow leverage after
sustaining capex is in the B range, and leverage on production is
in the B range.

While PXP posted strong drillbit reserve replacement rates and
costs in 2007, this was aided by very major positive reserve
revisions in its California oil properties due to high oil prices,
major positive revisions to its Piceance reserves on higher prices
due to reduced price differentials on Rocky Mountain natural gas
prices relative to benchmark prices, and positive Piceance
revisions due to drilling and production results after acquiring
the properties from Laramie. Without those revisions, drillbit
reserve replacement costs have been very high. A positive outlook
awaits demonstration of clearly strong underlying drillbit finding
and development results.

Plains Exploration & Production Company is headquartered in
Houston, Texas.


PETCO ANIMAL: Moody's Cuts Rating on $700MM Sr. Sec. Loan to B1
---------------------------------------------------------------  
Moody's Investors Service changed the outlook for PETCO Animal
Supplies Stores, Inc. (PETCO) to negative from stable. In
addition, Moody's downgraded PETCO's $700 million senior secured
term loan to B1 from Ba3 due to a modest shift over time in the
company's liability structure.

The change in outlook reflects the company's weaker than expected
operating performance and debt protection metrics that are
relatively weak for the current rating. The outlook also
incorporates our expectation that weak economic conditions and
increased competition will continue to pressure operating
performance and margins over the intermediate term.

Ratings affirmed are:

   * Corporate family rating at B2;
   * Probability-of-default rating at B2;

Ratings downgraded are;

   * $700 million senior secured term loan, due October 26, 2013,
     downgraded to B1 (LGD 3, 36%) from Ba3 (LGD 3, 32%)

The outlook was changed to negative from stable

The B2 corporate family rating incorporates PETCO's relatively
weak operating performance and high debt levels that have resulted
in weak debt protection metrics with debt to EBITDA of about 6.7
times and EBIT coverage of interest of under 1.0 time for the
fiscal year ending February 2, 2008. However, the ratings are
supported by PETCO's market position as the second largest
specialty retailer in the pet food and supplies sector as well as
good liquidity.

The downgrade of the $700 million term loan to B1 from Ba3
reflects a modest shift in the levels of certain liabilities.
These include a higher assumed level of priority trade payables
which are senior to the term loan, as well as a lower level of
expected senior subordinated debt that reduces the amount of
support for more senior claims. Both of these changes create loss
given default estimates for the term loan which are modestly
higher, but sufficient to cause a downgrade in the rating.

PETCO Animal Supplies (PETCO), headquartered in San Diego,
California, is a specialty retailer of premium supplies, food, and
services for household pets. The company currently operates about
900 stores in 49 states. Revenue for the fiscal year ending
February 2, 2008 was about $2.4 billion.


PLASTECH ENGINEERED: Intends to Close Five Plants in Three States
-----------------------------------------------------------------
According to various reports, Plastech Engineered Products Inc.
and its debtor-affiliates will be closing five plants in Ohio,
Indiana and Tennessee, as early as June 30.

A report by The Detroit Free Press disclosed that Plastech sent a
memo to employees that it is closing, beginning July 13, plants
in Romulus, Moraine and Byesville, in Ohio; and Elwood, in
Indiana, as part of plans to exit the exterior parts business.

The Debtors' facility at Byesville is set for sale by June 30,
according to unofficial sources of Daily-Jeff.com.  The workers'
union at the plant was notified of the sale deadline, said the
report.

The shutdown of Plastech's injection-molding plant in Elwood will  
cause 286 employees to lose their jobs, according to reports.
According to Chicago Tribune, a letter Plastech released Thursday
said the plant would close on July 13 or within 14 days after
that date.

Plastech is also set to close its Kenton, Tennessee plant by
June 30, or at another date, says Kenton plant manager James
Arnold, according to a report by NWTN Today.  "June 30 is not the
magic date.  It just means that, by law, we have to give 60 days'
notice.  We have not received approval from any of our customers
to move their product elsewhere.  The longer it takes for
customer approval, the longer it would take to shut the plant
down," Mr. Arnold disclosed.  The Kenton plant, which employs
about 200 people, manufactures plastic interior trim for major
customers including Nissan, Chrysler, General Motors and J.C.
Inc.

                    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.  (Plastech Bankruptcy News, Issue No. 21; Bankruptcy
Creditors' Service, Inc., http://bankrupt.com/newsstand/      
or 215/945-7000)


PLASTECH ENGINEERED: Eisenmann Pursues Breach of Contract Suit
--------------------------------------------------------------
Eisenmann Corporation asks the U.S. Bankruptcy Court for the
Eastern District of Michigan to allow a breach of contract lawsuit
it filed against Plastech Engineered Products Inc. and its debtor-
affiliates.

On May 15, 2003, Eisenmann Corp. and LDM Technologies, Inc.,
entered into a written contract pursuant to which Eisenmann agreed
to sell equipment designed to enhance the existing paint systems
at LDM's Byesville, Ohio plant.

LDM paints various auto parts including the bumpers of sports
utility vehicles for General Motors Corporation, Ford Motor
Company, and Toyota Motor Corporation. Eisenmann supplied surface
finishing systems, material flow automation, environmental
technology, and ceramics firing technology.  

In February 2004, the Debtors purchased LDM, pursuant to which
LDM became a wholly owned subsidiary of the Debtors.

"Eisenmann performed all of the work required of it, including
extras, which ultimately enhanced the value of Plastech's
Byesville, Ohio plant," Mimi D. Kalish, Esq., at Stillman Law
Office, in West Bloomfield, Michigan, relates.  

The Debtors refused to pay the amounts due Eisenmann, for which
Eisenmann filed Case No. 05 C 2400 for breach of contract,
interference with economic advantage and promissory estoppel, in
the District Court for the Northern District of Illinois, Eastern
Division.  Eisenmann asserted damages aggregating $3,500,000.

The Debtors filed a counterclaim for breach of contract asserting
damages from defective work aggregating $75,000.  However, LDM
has claimed damages between $5,300,000 and $8,700,000.

During the Chapter 11 cases, the Debtors have represented to the
court in the Illinois Litigation that they will continue
prosecution of their counterclaim.

In this light, pursuant to 28 U.S.C. Section 1334(c)(1),
Eisenmann asks the Bankruptcy Court to abstain from hearing the
Illinois Litigation, and to modify the automatic stay so that a
judgment be entered in the Illinois Litigation.

Section 1334(c)(1) provides that a bankruptcy judge may abstain
"in the interest of justice, or comity with state courts or out
of respect for state law."  Ms. Kalish says 10 out of 12 factors
for determining the appropriateness of permissive abstention
weigh in favor of abstention.  She adds that abstention would
permit the adjudication of a claim based upon pure state law
before a court that is more familiar with the issues.  Once the
amount of Eisenmann's claim against the estate is resolved in the
Illinois Litigation, the Bankruptcy Court could decide on issues
relating to the distribution to Eisenmann by virtue of its
adjudicated claim, Ms. Kalish says.

                    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.  (Plastech Bankruptcy News, Issue No. 21; Bankruptcy
Creditors' Service, Inc., http://bankrupt.com/newsstand/      
or 215/945-7000)


PLASTECH ENGINEERED: Court OKs Pact to Return Hyundai Tools to JCI
------------------------------------------------------------------
The Honorable Phillip J. Shefferly of the U.S. Bankruptcy Court
for the Eastern District of Michigan approved a stipulation
between Plastech Engineered Products Inc. and its debtor-
affiliate, Johnson Controls Inc., that allows JCI to repossess its
Hyundai tooling equipment from the Debtors.

Hyundai Motor America contracted with Johnson Controls, Inc., to
produce certain component parts for its NF/CM programs.  As part
of the contract, Hyundai placed in the possession of JCI the
tooling necessary to produce the Hyundai Component Parts for the
CM program and required JCI to fabricate the tooling necessary
for the NF program.  The contract provides that the ownership on
the Toolings remains with Hyundai.

JCI subcontracted with the Debtors to produce some of Hyundai
Component Parts that JCI was required to supply to Hyundai.  JCI
delivered to and placed in the possession of the Debtors certain
of the necessary Hyundai Tooling for the production of the JCI
Component Parts.  Disputes have arisen between the Debtors and
JCI involving alleged claims that the Debtors have asserted
against JCI in relation to the Hyundai NF/CM programs.  

The Debtors claimed that JCI is indebted to the Debtors for claims
relating to these disputes:

     * NF/CM Component Inventory  

       This relates to a debit taken by JCI in July, 2007
       following payment to the Debtors for the transfer of
       inventory from the Debtors' plant in McCalla, Alabama to
       Montgomery, Alabama.  The Debtors claim that JCI owes
       $713,403 for the inventory transfer.  JCI asserts that the
       Debtors transferred less inventory than was originally
       paid for by JCI and JCI debited the difference between the
       amount paid and the value of the inventory actually
       transferred.

     * NF Mold Assembly Retro -- McCalla

       This relates to the Debtors' request for a retroactive
       payment due to pricing in 2006.  The Debtors claim that
       JCI owes $156,361.  JCI disputes that the retroactive
       payment is owed because the Debtors released JCI of any
       obligation to make the retroactive under the Financial
       Accommodation Agreement executed on February 12, 2007.  

     * NF Painted Console Assembly

       This relates to the Debtors' request for a retroactive
       payment due to component target pricing.  The Debtors
       claim that JCI owes $472,174.  JCI disputes that payment
       is owed because the Debtors released JCI of any obligation
       to make the retroactive payment under the Financial
       Accommodation Agreement executed on February 12, 2007.

     * NF/CM Phase I Obsolescence -- McCalla, and NF Phase I
       Obsolescence -- Franklin

       This relates to the Debtors' claim that they are entitled
       to payment for unused materials resulting from JCI's re-
       sourcing.  The Debtors claim that JCI owes $169,026.  JCI
       disputes that the unused materials were rendered obsolete
       due to re-sourcing, but rather, that the Debtors purchased
       excess materials not at the direction of JCI for which JCI
       is not obligated to pay the Debtors.

     * CM Tool Repairs

       This relates to the Debtors' claim that it made certain   
       repairs to CM Tooling that cost $54,214.  JCI disputes
       the claim because prior to the Debtors making the repairs,
       JCI informed the Debtors that the repairs should not be
       made due to Hyundai's de-sourcing of the CM program.

     * NF/CM Scrap Variance -- above 2%

       This relates to the Debtors' request for payment relating   
       to scrap rates going forward from April 1, 2007.  The      
       Debtors claim that JCI owes $189,694, which JCI disputes.

In order to resolve these disputes, the parties stipulated that:

   (a) JCI will pay to the Debtors $111,620.

   (b) The Debtors release JCI from all actions, causes of
       action, and obligations relating to the NF/CM Program
       Related Claims provided that the Debtors do not release
       the JCI Released Parties from any and all claims of any of
       the Debtors for increased resin prices in connection with
       the Hyundai NF/CM programs, which claims, notwithstanding
       the release, are expressly preserved.  

   (c) JCI is granted relief from the automatic stay provisions
       of Section 362 of the Bankruptcy Code so that JCI may take
       possession of the Hyundai Tooling.

                    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.  (Plastech Bankruptcy News, Issue No. 21; Bankruptcy
Creditors' Service, Inc., http://bankrupt.com/newsstand/      
or 215/945-7000)


POLAR MOLECULAR: Ch. 11 Case Junked; Patent Foreclosure Continues
-----------------------------------------------------------------
The Hon. Elizabeth Brown of the U.S. Bankruptcy Court for the
District of Colorado dismissed the chapter 11 case of Polar
Molecular Holding Corp. on May 19, 2008, The Deal's Jamie Mason
reports.

A. Petroleum Enhancer's Case Dismissal Motion

As reported in the Troubled Company Reporter on Feb. 21, 2008,
secured creditor Petroleum Enhancer LLC has asked the Court to
dismiss the chapter 11 case of the Debtor, saying that the
bankruptcy petition was filed the day before a foreclosure date.  
Therefore, the chapter 11 filing was in bad faith.

The secured creditor also said that Polar Molecular showed "no
progress toward reorganization in over four months," The Deal
relates.

The case dismissal will allow Petroleum Enhancer to proceed with
the foreclosure on the Debtor's patents worth $400 million, the
report says, citing Petroleum's counsel, John Young, Esq., at
Block Markus & Williams LLC.

B. Polar Molecular's Response

The Debtor had contested Petroleum Enhancer's case dismissal
motion saying the creditor has "unclean hands" and pointing to
some directors who transferred to Petroleum Enhancers even while
they are currently members of Polar Molecular's board, The Deal
says.  The Debtor had said that a certain director engaged
Affiliated Investments in sale talks involving the Debtor's
defaulted notes to incite Petroleum Enhancer to foreclose on the
patents, The Deal says.

The Deal reports, based on court documents, that Petroleum
Enhancer offered $2 million in exchange for the $1.1 million
defaulted notes due to the value of the patents at risk.

C. U.S. Trustee Supports Dismissal of Case

In addition, U.S. Trustee Charles McVay moved the Court to dismiss
the case saying: (i) the Debtor's counsel, Paul Quinn of Quinn &
Coles PC backed out on May 9, 2008, and (ii) the Debtor missed
trustee payments, The Deal quotes court documents as stating.

                       About Polar Molecular

Headquartered in Denver, Polar Molecular Corp. develops and sells
fuel additives.  The company also sells marketing rights to others
to sell the same fuel additives.  

The company, faced with unpaid debts, filed for chapter 11 on
Feb. 2, 1993, (Bankr. D. Mass.) and emerged in 1994.

The company again filed for Chapter 11 protection on Jan. 11, 2008
(Bank. D. Colo. Case No. 08-10346).  D. Bruce Coles, Esq., at
Quinn & Coles, represents the Debtor in its restructuring efforts.  
The Debtor reported $400,001,522 in total assets, including
$400,000,000 in patents and other intellectual properties, and
$5,123,574 in total debts, in its schedules of assets and
liabilities filed with the Court.


POPE & TALBOT: Court OKs Sale Bidding Procedures for Halsey Assets
------------------------------------------------------------------
The United States Bankruptcy Court for the District of Delaware
approved in its entirety, the proposed Bidding Procedures for the
Halsey Assets Sale of Pope & Talbot Inc. and its debtor-
affiliates.

The proceedings relate to:

   i) the submission, consideration, qualification and acceptance
      of Qualified Bids submitted to the Debtors;

  ii) the Auction; and

iii) the identification and determination of the Successful Bid
      and the Back-up Bid will be governed by and conducted in
      accordance with the Bidding Procedures.  

The failure of the Bid Procedures Order to include specific
or reference to any particular provision, section or article of
the Bidding Procedures will not diminish or impair the
effectiveness of the Bidding Procedures, the Court held.

The Debtors will conduct an auction for the Halsey Assets on
June 3, 2008, or at a later time as the Debtors will notify all
Qualifying Bidders and parties-in-interest.

Judge Christopher Sontchi will convene a hearing to approve the
proposed sale of the Halsey Assets to Ableco Finance LLC, the
Stalking Horse Bidder, on June 9, 2008.  Any objections to the
proposed Approval Order must comply with the objection
requirements and must be served on the Notice Parties no later
than 4:00 p.m., on June 5, 2008.  

At the Sale Hearing, the Debtors may seek entry of an order
authorizing and approving:

   i) in the event one Qualified Bid is received, the sale
      contemplated by the Qualified Bid to the Qualifying Bidder;
      or

  ii) in the event the Auction is held, the transaction
      contemplated by the Successful Bid.

The Sale Hearing may be adjourned from time to time without
further notice to creditors other than by an announcement in
Court.

Nothing in the Bid Procedures Order will constitute a waiver of
the rights of any secured creditor to object to any proposed sale
by the Debtors.   

             Assumption and Assignment of Contracts

The Debtors are authorized to serve the Cure Cost Notice on the
assumption and assignment of the Assigned Contracts regarding the
proposed sale of the Halsey Assets, no later than May 23, 2008,
containing (i) the Debtors' determination of the Cure Cost to
each Assigned Contract; (ii) the procedure governing the filing
and serving of objections to the proposed Cure Costs; and (iii)
the procedures governing the resolution of the Cure Costs
disputes.

A party that failed to object to an assignment and assumption of
a contract on or before June 5, 2008, will be forever barred from
objecting to the cure cost.  In the event the Debtors and the
Objecting Party cannot resolve the cure cost dispute within two
days prior to the closing of the Sale, the Debtors will segregate
cash in the amount equal to the aggregate amount of all disputed
cure costs.

The Debtors is permitted to delete any Assigned Contract from the
Cure Cost Notice as otherwise required pursuant to the
transaction contemplated by the Successful Bid.

                    Additional Provisions

No provision of the Bid Procedures Order will be deemed to
constitute the consent of the Secured Lenders to any bid, and
will not impair the ability of the Secured Lenders to act as
Qualifying Bidders in accordance with the terms of the Bidding
Procedures.

George Miller, the Interim Chapter 7 Trustee of the Debtors'
estates, is not subject to any stay in the implementation,
enforcement or realization of the relief granted in the Halsey
Asset Bid Procedures Order.  Mr. Miller may, in his discretion,
take any action and perform any act authorized under the Bid
Procedures Order.

                      About Pope & Talbot

Based in Portland, Oregon, Pope & Talbot Inc. (Other OTC:
PTBT.PK) -- http://www.poptal.com/-- is a pulp and wood products
business.  Pope & Talbot was founded in 1849 and produces market
pulp and softwood lumber at mills in the US and Canada.  Markets
for the company's products include the US, Europe, Canada, South
America and the Pacific Rim.

The company and its U.S. and Canadian subsidiaries applied for
protection under the Companies' Creditors Arrangement Act of
Canada on Oct. 28, 2007.  The Debtors' CCAA Stay expired
on Jan. 16, 2008.

The company and 14 of its debtor-affiliates filed for Chapter 11
protection on Nov. 19, 2007 (Bankr. D. Del. Lead Case No. 07-
11738).  Shearman & Sterling LLP is the Debtor's bankruptcy
counsel, while Laura Davis Jones, Esq. at Pachulski, Stang, Ziehl
& Jones L.L.P. represents the Debtors as bankruptcy co-counsel.
The Official Committee of Unsecured Creditors selected Fried,
Frank, Harris, Shriver & Jacobson LLP as its bankruptcy counsel.
When the Debtors filed for bankruptcy, they listed total assets of
$681,960,000 and total debts of $601,090,000.

Pope & Talbot Pulp Sales Europe, LLC, a subsidiary, on Nov. 21,
2007, filed an application for relief under Belgian bankruptcy
laws in the commercial court in Brussels.  If the Belgian court
grants Pope & Talbot Europe's application, it is expected it will
be liquidated through the bankruptcy proceeding.

(Pope & Talbot Bankruptcy News, Issue No. 21; Bankruptcy
Creditors' Service Inc., http://bankrupt.com/newsstand/or
215/945-7000).

                            *    *    *

The Court extended the time within which the Debtors have the
exclusive right to file a Chapter 11 plan, through and including
June 2, 2008, as reported in the Troubled Company Reporter on
March 17, 2008.


POPE & TALBOT: Ch. 7 Trustee Can Continue Debtors' Operations
-------------------------------------------------------------
George L. Miller, the Interim Trustee for the Chapter 7
proceedings of Pope & Talbot Inc. and its debtor-affiliates,
obtained the permission of the United States Bankruptcy Court for
the District of Delaware to continue the limited operation of the
Debtors' businesses, through and including June 30, 2008.  

John T. Carroll, III, Esq., at Cozen O'Connor, in Wilmington,
Delaware, proposed counsel for Mr. Miller, relates that Section
721 of the Bankruptcy Code provides that a court may authorize
the trustee to operate the business of the debtor for a limited
period, if the operation is in the best interest of the estate
and consistent with the orderly liquidation of the estate.  

As previously reported, the U.S. Debtors have determined that the
value of their estates will best be preserved through an orderly
sale of the Halsey Assets, including the Halsey Pulp Mill located
near Halsey, Oregon.  The Debtors maintain that the Halsey Assets
are their primary assets in the United States.  

Mr. Miller will continue the limited operation of the Debtors'
businesses, while he attempts to market and sell some of the
Debtors' related Halsey Assets, the Court held.  In connection
with the limited ongoing operations, the Debtors will continue to
perform under their obligations in the ordinary course of
business, including payment to their employees.

Mr. Miller's continued operations of the Debtors' businesses is
in the best interest of their estates because it ensures an
orderly and safe shut-down of the Debtors' property, including
their machinery and equipment, Mr.  Carroll stated.  "The
maintenance and preservation of the Debtors' property is
necessary to maximize the value of the Debtors' estates," he
said.

Roberta DeAngelis, the U.S. Trustee for Region 3, did not pose
any objection to Mr. Miller's request.

           Can Use Debtors' Cash Management System

The Bankruptcy Court previously authorized the Debtors to continue
using their existing Cash Management System to minimize any
disruption to their operations.  The Debtors relate that their
businesses operate in two countries, and the existing limited
operation of their businesses necessitate a significant number of
transactions.  

Notwithstanding the sale of certain of the Debtors' limited
operations, there remains good cause to maintain the status quo
as to all of the relief granted by the Cash Management Order,
despite the conversion of the Debtors' Chapter 11 cases to a
Chapter 7 liquidation proceeding, Mr. Miller asserts.    

To alter the Debtors' cash management system would significantly
disrupt their limited operations, John T. Carroll, III, Esq., at
Cozen O'Connor, in Wilmington, Delaware, proposed counsel for Mr.
Miller, argued.  Moreover, Mr. Carroll stated, it would distract
the newly-appointed Chapter 7 Trustee while he is attempting to
confer with PricewaterhouseCoopers Inc., the  Canadian Court-
appointed Receiver, regarding (i) the coordinated operation and
winding down of the U.S. Debtors and the CCAA Applicants, and
(ii) maximizing the value of the estates by marketing and selling
the Debtors' Halsey Pulp Mill.

Accordingly, Mr. Miller sought and obtained the Court's authority
to continue the Debtors' existing Cash Management system through
June 30, 2008.

               Can Maintain Debtors' Bank Accounts

The Court authorizes Mr. Miller to make transfers on behalf of
the Debtors' estates via wire transfers and make deposits to,
among others, the Debtors' employees for wages and related
payments.

Mr. Miller obtained the Court's permission to maintain the
Debtors' existing bank accounts through June 30, 2008.  

Requiring Mr. Miller to close the Debtors' existing bank accounts
would significantly disrupt the Debtors' limited operations, and
distract Mr. Miller while he is attempting to confer with
PricewaterhouseCoopers Inc., the  Canadian Court-appointed
Receiver, regarding the coordinated operation and winding down of
the U.S. Debtors and the Applicants and maximizing the value of
the estates by marketing and selling the Debtors' Halsey Pulp
Mill, John T. Carroll, III, Esq., at Cozen O'Connor, in
Wilmington, Delaware, proposed counsel for Mr. Miller, said.

                      About Pope & Talbot

Based in Portland, Oregon, Pope & Talbot Inc. (Other OTC:
PTBT.PK) -- http://www.poptal.com/-- is a pulp and wood products
business.  Pope & Talbot was founded in 1849 and produces market
pulp and softwood lumber at mills in the US and Canada.  Markets
for the company's products include the US, Europe, Canada, South
America and the Pacific Rim.

The company and its U.S. and Canadian subsidiaries applied for
protection under the Companies' Creditors Arrangement Act of
Canada on Oct. 28, 2007.  The Debtors' CCAA Stay expired
on Jan. 16, 2008.

The company and fourteen of its debtor-affiliates filed for
Chapter 11 protection on Nov. 19, 2007 (Bankr. D. Del. Lead Case
No. 07-11738).  Shearman & Sterling LLP is the Debtor's bankruptcy
counsel, while Laura Davis Jones, Esq. at Pachulski, Stang, Ziehl
& Jones L.L.P. represents the Debtors as bankruptcy co-counsel.
The Official Committee of Unsecured Creditors selected Fried,
Frank, Harris, Shriver & Jacobson LLP as its bankruptcy counsel.
When the Debtors filed for bankruptcy, they listed total assets of
$681,960,000 and total debts of $601,090,000.

Pope & Talbot Pulp Sales Europe, LLC, a subsidiary, on Nov. 21,
2007, filed an application for relief under Belgian bankruptcy
laws in the commercial court in Brussels.  If the Belgian court
grants Pope & Talbot Europe's application, it is expected it will
be liquidated through the bankruptcy proceeding.

(Pope & Talbot Bankruptcy News, Issue No. 21; Bankruptcy
Creditors' Service Inc., http://bankrupt.com/newsstand/or
215/945-7000).

                          *    *    *

The Court extended the time within which the Debtors have the
exclusive right to file a Chapter 11 plan, through and including
June 2, 2008, as reported in the Troubled Company Reporter on
March 17, 2008.


POPE & TALBOT: Canadian Court Appoints PwC as Interim Receiver
--------------------------------------------------------------
The British Columbia Supreme Court appointed
PricewaterhouseCoopers Inc. as Interim Receiver and Receiver
without security of certain assets of Pope & Talbot Ltd. and its
subsidiaries under the Companies' Creditors Arrangement Act,
pursuant to Section 47(1) of the Bankruptcy and Insolvency Act,
RS.C. 1985, c. B-3.

The Receiver is not authorized, the Canadian Court clarified, to
take possession or control of either the Mackenzie or Harmac pulp
mills before obtaining:

   (i) an indemnity agreement and release from the British
       Columbia Ministry of Environment; and

  (ii) agreements from the employees at the applicable pulp mills
       and the applicable unions in respect of the terms of
       employment of the employees.

The Canadian Court empowered the Receiver to take the necessary
steps to ensure an orderly and safe shut-down of the machinery
and equipment constituting any part of the Applicants' remaining
property, including its maintenance and preservation, provided
that the steps are primarily for the purposes of making it
available for, and maximizing the proceeds of, sale.  

The Receiver is not authorized to make any expenditure for the
maintenance and preservation of the Applicants' Remaining
Property in excess of C$2,000,000, without the consent of the
Applicants' DIP Lenders or further Court order.

All funds, monies, checks, instruments and other forms of payment
received or collected by the Receiver from the sale or
disposition of all or any of the Applicants' Property will be
deposited into one or more accounts to be opened by the Receiver.

A full-text copy of the Receivership Order is available for free
at http://bankrupt.com/misc/POPE_ReceivershipOrder.pdf

As reported in the Troubled Company Reporter on May 14, 2008, as
Receiver, PwC will:

   (1) take possession and control of the Applicants' property
       under the CCAA proceedings -- on terms satisfactory to the
       Receiver -- and any and all proceeds, receipts and
       disbursements arising out of or from the Property;

   (2) receive, preserve, protect and maintain control of the
       Property, including, but not limited to, changing of locks
       and security codes, relocating of Property to safeguard
       it, engaging of independent security personnel, the taking
       of physical inventories and placement of insurance
       coverage as may be necessary or desirable;

   (3) receive and collect all monies and accounts now owed or
       hereafter owing to the Applicants, and to exercise all
       remedies of the Applicants in collecting the monies,
       including, without limitation, to enforce any security
       held by any of the Applicants;

   (4) settle, extend or compromise any indebtedness owing to or
       by any of the Applicants;

   (5) execute, assign, issue and endorse documents of whatever
       nature in respect of any of the Property, whether in the
       Receiver's name or in the name and on behalf of any of the
       Applicants;

   (6) market any or all the Property, including advertising and
       soliciting offers in respect of the Property, and
       negotiating the terms and conditions of sale as the
       Receiver in its discretion may deem appropriate;

   (7) sell, convey, transfer, lease, assign or otherwise dispose
       of the Property or any part or parts out of the ordinary
       course of business:

       * without the approval of the Canadian Court in respect of
         any transaction not exceeding $1,500,000, provided that
         the aggregate consideration for all the transactions
         does not exceed $10,000,000; and

       * with the approval of the Canadian Court in respect of
         any transaction in which the purchase price or the
         aggregate purchase price exceeds $1,5,000,000;

   (8) enter into agreements with any trustee in bankruptcy
       appointed in respect of any of the Petitioners, whether in
       Canada or the United Sates, including, without limitation,
       the ability to enter into occupation agreements for any
       real property owned or leased by any of the Applicants in
       Canada or the United States; and

   (9) exercise any shareholder, partnership, joint venture or
       other rights which any of the Applicants may have.

The Receiver will not be authorized to take possession or control
of either the Mackenzie or Harmac pulp mills before obtaining (i)
an indemnity agreement and release from the British Columbia
Ministry of Environment, and (ii) agreements from the employees
at the applicable pulp mills and the applicable unions in respect
of the terms of employment of the employees.

PwC also proposes that the Receiver will not take possession or
control of any of the Property that is located in the United
States, until the Receiver has:

   (a) entered into an agreement with any Chapter 11 Trustee;

   (b) obtained a Chapter 15 recognition of the receivership
       proceedings as "foreign main" proceedings granting the
       Receiver the authority to realize on any Property in the
       U.S.; and

   (c) in the case of the Halsey pulp mill, entered into
       agreements with the mill's employees and any appropriate
       governmental bodies.

Mike Vermette of PwC has confirmed to The Vancouver Sun that he
will be administering the business of Pope & Talbot as interim
receiver.  "We will try to sell the remaining mills, and see if
we can fund a buyer in short order," the newspaper quoted Mr.
Vermette.  

Mr. Vermette added that the MacKenzie and Harmac mills will be
shut down until a buyer can be found, The Vancouver Sun relates.

As Receiver, PwC contemplates terminating the employment of all
persons employed by the Applicants in Canada.  However, the
Receiver will be authorized to engage the former employees of the
Applicants -- on a term and task basis -- who have entered into
letter agreements with the Receiver and, in the case of union
employees, in respect of whom the applicable union has entered
into an agreement with the Receiver.  The Receiver will not make
any payments or contribution to any pension plan maintained or
formerly maintained by any of the Petitioners.

A full-text copy of PwC's Receivership Request is available for
free at http://ResearchArchives.com/t/s?2bd8

                      About Pope & Talbot

Based in Portland, Oregon, Pope & Talbot Inc. (Other OTC:
PTBT.PK) -- http://www.poptal.com/-- is a pulp and wood products
business.  Pope & Talbot was founded in 1849 and produces market
pulp and softwood lumber at mills in the US and Canada.  Markets
for the company's products include the US, Europe, Canada, South
America and the Pacific Rim.

The company and its U.S. and Canadian subsidiaries applied for
protection under the Companies' Creditors Arrangement Act of
Canada on Oct. 28, 2007.  The Debtors' CCAA Stay expired
on Jan. 16, 2008.

The company and fourteen of its debtor-affiliates filed for
Chapter 11 protection on Nov. 19, 2007 (Bankr. D. Del. Lead Case
No. 07-11738).  Shearman & Sterling LLP is the Debtor's bankruptcy
counsel, while Laura Davis Jones, Esq. at Pachulski, Stang, Ziehl
& Jones L.L.P. represents the Debtors as bankruptcy co-counsel.
The Official Committee of Unsecured Creditors selected Fried,
Frank, Harris, Shriver & Jacobson LLP as its bankruptcy counsel.
When the Debtors filed for bankruptcy, they listed total assets of
$681,960,000 and total debts of $601,090,000.

Pope & Talbot Pulp Sales Europe, LLC, a subsidiary, on Nov. 21,
2007, filed an application for relief under Belgian bankruptcy
laws in the commercial court in Brussels.  If the Belgian court
grants Pope & Talbot Europe's application, it is expected it will
be liquidated through the bankruptcy proceeding.

(Pope & Talbot Bankruptcy News, Issue No. 21; Bankruptcy
Creditors' Service Inc., http://bankrupt.com/newsstand/or
215/945-7000).

                            *    *    *

The Court extended the time within which the Debtors have the
exclusive right to file a Chapter 11 plan, through and including
June 2, 2008, as reported in the Troubled Company Reporter on
March 17, 2008.


POPE & TALBOT: Ch. 7 Trustee Taps Miller Coffey as Accountant
-------------------------------------------------------------
George L. Miller, the Interim Trustee for the Chapter 7
proceedings of Pope & Talbot Inc. and its debtor-affiliates, seeks
the authority of the United States Bankruptcy Court for the
District of Delaware to retain Miller Coffey Tate LLP, as
accountant, nunc pro tunc May 16, 2008.

As the Chapter 7 Trustee's accountants, Miller Coffey will:

   * assist in reporting to the U.S. Trustee regarding the
     financial status of the Debtors;

   * assist the Chapter 7 Trustee in pursuing causes of action
     for the benefit of the Debtors' estates;

   * attend meetings and Court hearings with the Chapter 7
     Trustee as required;

   * prepare and file necessary tax returns;

   * assist the Chapter 7 Trustee in identifying and securing the
     assets and records of the estate and provide forensic and
     valuation services concerning the Debtors' estate, if
     required;

   * assist with preparation of budgets and related items;

   * interact and analyze cross-border issues and transactions
     with the Canadian Receiver;

   * prepare information requested by the secured lenders; and

   * provide all other accounting services as may be required by
     Mr. Miller when necessary.

Upon the Court's approval, Miller Coffey will be directed to
commence work on certain issues requiring immediate attention,
including, but not limited to:

   * meetings with the Debtors' representatives at their place of
     business in Portland, Oregon;

   * review of the Debtors' financial data; and

   * the preparation of budgets and reviewing and analyzing
     operations in connection with the Chapter 7 Trustee's
     limited operations of the Debtors' businesses.  

The Chapter 7 Trustee, George L. Miller, is a partner at Miller
Coffey.  

The Miller Coffey professionals contemplated to provide services
to the Debtors will be paid according to their hourly rates:

   Professional                            Hourly Rate
   ------------                            -----------
   Partners & Principals                   $300 to $490
   Managers                                $235 to $295
   Senior Accountants                      $170 to $230
   Staff Accountants/Paraprofessionals     $90 to $165

Mr. Miller maintains that Miller Coffey is a "disinterested
person" as the term is defined under Section 101(14) of the
Bankruptcy Code.

                      About Pope & Talbot

Based in Portland, Oregon, Pope & Talbot Inc. (Other OTC:
PTBT.PK) -- http://www.poptal.com/-- is a pulp and wood products
business.  Pope & Talbot was founded in 1849 and produces market
pulp and softwood lumber at mills in the US and Canada.  Markets
for the company's products include the US, Europe, Canada, South
America and the Pacific Rim.

The company and its U.S. and Canadian subsidiaries applied for
protection under the Companies' Creditors Arrangement Act of
Canada on Oct. 28, 2007.  The Debtors' CCAA Stay expired
on Jan. 16, 2008.

The company and fourteen of its debtor-affiliates filed for
Chapter 11 protection on Nov. 19, 2007 (Bankr. D. Del. Lead Case
No. 07-11738).  Shearman & Sterling LLP is the Debtor's bankruptcy
counsel, while Laura Davis Jones, Esq. at Pachulski, Stang, Ziehl
& Jones L.L.P. represents the Debtors as bankruptcy co-counsel.
The Official Committee of Unsecured Creditors selected Fried,
Frank, Harris, Shriver & Jacobson LLP as its bankruptcy counsel.
When the Debtors filed for bankruptcy, they listed total assets of
$681,960,000 and total debts of $601,090,000.

Pope & Talbot Pulp Sales Europe, LLC, a subsidiary, on Nov. 21,
2007, filed an application for relief under Belgian bankruptcy
laws in the commercial court in Brussels.  If the Belgian court
grants Pope & Talbot Europe's application, it is expected it will
be liquidated through the bankruptcy proceeding.

(Pope & Talbot Bankruptcy News, Issue No. 21; Bankruptcy
Creditors' Service Inc., http://bankrupt.com/newsstand/or
215/945-7000).

                          *    *    *

The Court extended the time within which the Debtors have the
exclusive right to file a Chapter 11 plan, through and including
June 2, 2008, as reported in the Troubled Company Reporter on
March 17, 2008.


PRO-FIT HOLDINGS: Files for Chapter 15; Wants Civil Actions Stayed
------------------------------------------------------------------
Pro-Fit Holdings, Ltd., Pro-Fit International, Ltd. and Genesis
Bradford, Ltd. filed separate Chapter 15 petitions with the United
States Bankruptcy Court for the Central District of California on
May 21, 2008.

Pro-fit and its affiliates are currently under insolvency
proceedings before the U.K. High Court.  Under the English
Insolvency Act of 1986, the U.K. Court appointed J.N.R. Pitts and
M.E.G. Saville as joint administrators of the Debtors on April 4
and 7, 2008, respectively.

The Debtors are also parties to three federal civil actions before
the bankruptcy court.  Those actions are: Libra Securities, LLC v.
Pro-Fit International, Ltd., et al., No. 2:07-cv-02520-SVW-JWJ;
Tag-It Pacific, Inc. v. Pro-Fit Holdings, Ltd., No. 2:04-cv-02694-
AHM-RC; and Tag-It Pacific Inc. v. Pro-Fit Holdings, Ltd., et al.,
No. 2:07-cv-01484-AHM-RC.  In the Libra Securities action, a
hearing on a summary judgment motion by Libra Securities was set
for May 19, 2008.

With the filing of the petitions, the administrators are seeking
provisional relief in order to stay all the civil actions against
the Debtors.  

Chapter 15 of the United States Bankruptcy Code codifies a
comprehensive framework through which representatives in corporate
insolvency proceedings outside the U.S. can obtain access to the
United States courts.

Effective October 17, 2005, Chapter 15 replaces Bankruptcy Code
Section 304. Chapter 15 is much broader and more detailed than
Section 304.

Chapter 15 is based on the Model Law on Cross-Border Insolvency
promulgated by the United Nations Commission for International
Trade Law. Legislation based on the UNCITRAL Model Law on Cross-
Border Insolvency has also been adopted in Eritrea, Japan (2000),
Mexico (2000), Poland, Romania (2003), South Africa (2000), and
within Serbia and Montenegro, Montenegro (2002).

Headquartered in Leeds, U.K., Pro-Fit Holdings, Ltd.--
http://www.pro-fit-int.com/--manufactures automotive and apparel  
trimmings.  Joel K. Belway, Esq. represented the Debtors'
administrators in their restructuring efforts.  When it filed for
Chapter 15 bankruptcy, the Debtor listed its estimated assets and
debts both to be between $100,000 to $500,000.


PRO-FIT HOLDINGS: Chapter 15 Petition Summary
---------------------------------------------
Chapter 15 Petitioner: J.N.R. Pitts
                       M.E.G. Saville

Lead Chapter 15 Debtor: Pro-Fit Holdings, Ltd.
                        Unit 36 Albion Mills, Albion Road
                        Greengates, Bradford, BD10 9TF
                        Tel: 01274-610590  
                        Attn: Begbies Traynor
                        Glendevon House, Hawthorn Park, Coal Road
                        Leeds, UK LS14 1PQ

Chapter 15 Case No.: 08-17049

Debtor-affiliate filing separate a Chapter 15 petition:

        Entity                                     Case No.
        ------                                     --------
        Pro-Fit International, Ltd.                08-17049
        Genesis Bradford, Ltd.                     08-17054

Type of Business: The Debtors make automotive and apparel
                  trimmings.  See http://www.pro-fit-int.com/

Chapter 15 Petition Date: May 21, 2008

Court: Central District Of California (Los Angeles)

Judge: Samuel L. Bufford

Chapter 15 Petitioner's Counsel: Joel K. Belway, Esq.
                                 235 Montgomery St. Ste. 668
                                 San Francisco, CA 94104
                                 Tel: (415) 788-1702
                                 Fax: (415) 788-1517
                                 Email: belwaypc@pacbell.net

                            Estimated Assets       Estimated Debts
                            ----------------       ---------------
Pro-Fit Holdings                 $100,000 to           $100,000 to
                                    $500,000              $500,000

Pro-Fit International, Ltd.      $100,000 to         $1 million to
                                    $500,000           $10 million

Genesis Bradford, Ltd.           $100,000 to           $100,000 to
                                    $500,000              $500,000


QUAKER FABRIC: Files Disclosure Statement and Chapter 11 Plan
-------------------------------------------------------------
Quaker Fabric Corporation, its debtor-affiliates, and the Official
Committee of Unsecured Creditors, as co-proponent, delivered to
the United States Bankruptcy Court for the District of Delaware a
proposed Disclosure Statement dated May 21, 2008, explaining a
Joint Chapter 11 Plan of Liquidation.

                     Overview of the Plan

The Plan contemplates the liquidation of assets of the Debtors
for the benefit of their creditors and the appointment of a
liquidating agent.

The Debtors remind the Court that they have sold some or all
assets to certain purchasers including:

   -- Gordon Brother Group LLC acquired substantially all of the
      Debtors' assets for $27 million;

   -- Atlantis Charter School bought 66 acres of undeveloped land  
      (Bleachery Pond Property)located in Fall River,
      Massachusetts for $2.6 million; and

   -- E & E Co. Ltd. got the Tupelo Lee Industrial Park in Verona,
      Mississippi for at $175,000.

The proceeds of the sale were used to pay indebtedness owed to
lenders headed by Bank of America N.A. under a revolving credit
agreement entered into by the Debtors and bank in 2006.

                     Liquidation of Assets

The Debtors estimate they will have at least $452,000 in cash and
a book value of $4.3 million in uncollected accounts receivable by
the plan's effective date.

A liquidating agent will reduce non-cash assets of the Debtors
to cash to make distributions and consummate the plan.  The
liquidating trustee is expected to sell, assign, transfer and, to
the possible extent, dispose of the Debtors' respective assets at
public auction after the plan's effective date.

RAS Management Advisors LLC will serve as liquidating agent for
the Debtors.

                Equity of Non-Debtor Subsidiaries

The Debtors conducted certain foreign operations through their
non-debtor subsidiaries comprised of (i) Quaker Fabric Mexico S.A.
de C.V., (ii) Quaker Textil do Brasil Ltda., and Quaker Textile
Corporation.  As of the Debtors' bankruptcy filing, the operations  
and affairs of each of the non-debtor subsidiaries have been
liquidated.  The Debtors have received at least $1.1 million as
dividend from one of their non-debtor subsidiaries.

                      Initial Distribution

On the plan's effective date, the liquidating agent, on behalf
of the Debtors, will pay in cash in full all (i) administrative
expense claims, (ii) priority tax claims, and (iii) secured
claims.  Holders of unsecured claims will receive their pro rata
share of available cash, if any.

                Treatment of Claims and Interests

               Types of                    Estimated    Estimated
Class         Claims          Treatment   Amount       Recovery
-----         --------        ---------   ----------   ---------
unclassified  administrative              $1,000,000      100%
               claims

unclassified  priority tax                $200,000        100%   
               claims
               
   1           priority        unimpaired  $155,386        100%
               claims

   2           secured         unimpaired  $0              N/A
               claims

   3           unsecured       impaired    $25,000,000     0%-10%
               claims
               
   4           equity          impaired    Not Estimated   0%
               interest

A full-text copy of the Proposed Disclosure Statement is available
for free at http://ResearchArchives.com/t/s?2c5e

A full-text copy of the Proposed Chapter 11 Plan of Liquidation is
available for free at http://ResearchArchives.com/t/s?2c5f

                     About Quaker Fabric

Based in Fall River, Mass., Quaker Fabric Corp. (NASDAQ: QFAB)
-- http://www.quakerfabric.com/-- designs, manufactures, and
markets woven upholstery fabrics primarily for residential
furniture manufacturers and jobbers.  It also develops and
manufactures specialty yarns, including chenille, taslan, and spun
products for use in the production of its fabrics, as well as for
sale to distributors of craft yarns, and manufacturers of
homefurnishings and other products.  The company is one of the
largest producers of Jacquard upholstery fabrics.

Quaker Fabric sells its products through sales representatives
andindependent commissioned sales agents in the United States,
Canada, Mexico, and internationally.

The company and its affiliate, Quaker Fabric Corporation of Fall
River, filed for chapter 11 protection on Aug. 16, 2007 (Bankr. D.
Del. Case No. 07-11146).  John D. Sigel, Esq. at Wilmer Cutler
Pickering Hale and Dorr LLP and Joel A. Waite, Esq. at Young
Conaway Stargatt & Taylor LLP are co-counsels to the Debtors.  
Epiq Bankruptcy Solutions is the Debtors' claims agent.  The
Official Committee of Unsecured Creditors has selected Shumaker,
Loop & Kendrick, LLP, as its bankruptcy counsel and Benesch,
Friedlander, Coplan & Aronoff, LLP, as co-counsel.

The Debtors' schedules reflect total assets of $41,375,191 and
total liabilities of $54,435,354.


QUAKER FABRIC: Wants Plan Filing Period Extended to June 18
-----------------------------------------------------------
Quaker Fabric Corporation and its debtor-affiliates ask the United
States Bankruptcy Court for the District of Delaware to further
extend the exclusive periods to:

   i) file a Chapter 11 plan until June 18, 2008, and

  ii) solicit acceptances of that plan until Aug. 18, 2008.

Joseph M. Barry, Esq., at Young, Conaway, Stargatt & Taylor,
LLP, in Wilmington, Delaware, say the Debtors together with the
Official Committee of Unsecured Creditors is working out the final
issues of a proposed joint Chapter 11 liquidating plan.  The
extension of the exclusive plan filing period, which expired on
May 19, 2008, proves to short to allow both parties to craft and
document a plan, Mr. Barry asserts.

For the benefit of their creditors, the Debtors need more time to
put the last touches of the proposed plan and resolve a few
remaining issues in these cases, Mr. Barry says.

A hearing is set for June 13, 2008, at 2:00 p.m., to consider the
Debtors' request.  Objections, if any, are due June 6, 2008, at
4:00 p.m.

                      About Quaker Fabric

Based in Fall River, Mass., Quaker Fabric Corp. (NASDAQ: QFAB)
-- http://www.quakerfabric.com/-- designs, manufactures, and
markets woven upholstery fabrics primarily for residential
furniture manufacturers and jobbers.  It also develops and
manufactures specialty yarns, including chenille, taslan, and spun
products for use in the production of its fabrics, as well as for
sale to distributors of craft yarns, and manufacturers of
homefurnishings and other products.  The company is one of the
largest producers of Jacquard upholstery fabrics.

Quaker Fabric sells its products through sales representatives
andindependent commissioned sales agents in the United States,
Canada, Mexico, and internationally.

The company and its affiliate, Quaker Fabric Corporation of Fall
River, filed for chapter 11 protection on Aug. 16, 2007 (Bankr. D.
Del. Case No. 07-11146).  John D. Sigel, Esq. at Wilmer Cutler
Pickering Hale and Dorr LLP and Joel A. Waite, Esq. at Young
Conaway Stargatt & Taylor LLP are co-counsels to the Debtors.  
Epiq Bankruptcy Solutions is the Debtors' claims agent.  The
Official Committee of Unsecured Creditors has selected Shumaker,
Loop & Kendrick, LLP, as its bankruptcy counsel and Benesch,
Friedlander, Coplan & Aronoff, LLP, as co-counsel.

The Debtors' schedules reflect total assets of $41,375,191 and
total liabilities of $54,435,354.


RCS-CHANDLER: Unsecured Creditors Unwilling to Serve on Committee
-----------------------------------------------------------------
Ilene Lashinsky, the United States Trustee for Region 14, said she
cannot form an official committee of unsecured creditors to serve
in the bankruptcy case of RCS-Chandler LLC, Carolyn Okomo of The
Deal says.

The U.S. Trustee told the U.S. Bankruptcy Court for the District
of Arizona that creditors holding about $1.5 million unsecured
claims against the Debtor must engage and pay for their own
counsel and professionals, The Deal relates.

The U.S. Trustee added that no unsecured creditor stepped in for
the appointment, according to the report.

The Deal relates that among the Debtor's largest unsecured
creditors are DMJMH+N Inc., which is owed $851,472; Gould Evans
Associates LLC, which is owed $606,717; QuaesTel Inc., which is
owed $79,240; and Spark Design LLC, which is owed $125,000.

The Debtor's secured creditors are Point Center Financial Inc.,  
which is owed $25.4 million, and affiliate Chandler RCS Hotel
Associates, which is owed $957,881, The Deal adds.

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.

As reported in the Troubled Company Reporter, the U.S. Trustee
will convene a meeting of creditors of RCS-Chandler at 4:30 p.m.,
on May 27, 2008.

                       About RCS-Chandler

Headquartered in Phoenix, Arizona, RCS-Chandler LLC, owned by
Jeff Cline, constructs and develops hotels.  The company filed for
Chapter 11 protection on April 11, 2008 (Bankr. D. Ariz. Case
No.08-04021).  Michael R. Walker, Esq., at Schian Walker P.L.C.
represents the Debtor in its restructuring efforts.  When the
Debtor filed for protection against its creditors, it listed
assets and debts between $50 million and $100 million.  The Deal
reported that the Debtor had $40 million in assets and $61.6
million in debts.

Prior to the bankruptcy filing, owner Jeffrey Cline had been
marketing RCS-Chandler, The Deal quotes McClatchy-Tribune Regional
News as reporting.


RESIDENTIAL CAPITAL: Noteholders Tender $8.6 Billion in Old Notes
-------------------------------------------------------------
Residential Capital, LLC, released the interim results of its
private exchange offers and cash tender offers for U.S. dollar
equivalent $14.0 billion in aggregate principal amount of its
outstanding debt.

As of 5:00 p.m., New York City time, on Wednesday, May 21, 2008,
approximately $2.6 billion aggregate principal amount (or 80%) of
old notes that mature in 2008-2009 had been validly tendered and
approximately U.S. dollar equivalent $6.0 billion aggregate
principal amount (or 63%) of old notes that mature in 2010-2015
had been validly tendered.

As of the early delivery time, the outstanding principal amount of
each series of old notes and the principal amount of old notes of
each series tendered in the offers (including as a percentage
of the outstanding principal amount).

                             Outstanding
                              Principal    Principal Amount
   Title of Old Notes          Amount         Tendered
   ------------------        -----------   ----------------
   Old 2008-2009 Notes
   Floating Rate Notes
    due 2008                $398,848,000    $287,171,000    72.0%
   8.125% Notes due 2008    $684,014,000    $521,045,000    76.2%
   Floating Rate Notes
    due April 2009          $714,000,000    $651,422,000    91.2%
   Floating Rate Notes
    due May 2009            $949,000,000    $816,505,000    86.0%
   Floating Rate
    Subordinated Notes
    due 2009                $576,961,000    $371,513,000    64.4%
                          --------------  --------------
   Total                  $3,322,823,000  $2,647,656,000    79.7%

   Old 2010-2015 Notes
   8.375% Notes due 2010  $2,154,500,000    $901,597,000    41.8%
   Floating Rate Notes
    due 2010              EUR542,800,000  EUR181,815,000    33.5%
   8.000% Notes due 2011  $1,243,500,000  $1,025,694,000    82.5%
   7.125% Notes due 2012  EUR550,000,000  EUR438,702,000    79.8%
   8.500% Notes due 2012    $928,500,000    $833,527,000    89.8%
   8.500% Notes due 2013  $1,604,500,000    $724,667,000    45.2%
   8.375% Notes due 2013  GBP348,920,000  GBP307,839,000    88.2%
   9.875% Notes due 2014  GBP363,000,000  GBP297,730,000    82.0%
   8.875% Notes due 2015    $486,500,000    $335,025,000    68.9%
                          --------------  --------------
   Total U.S. Dollar
      Equivalent          $9,537,274,896  $5,987,350,936    62.8%

In addition, approximately $853.4 million aggregate principal
amount of Floating Rate Notes due June 9, 2008 were tendered
for cash as of the early delivery time.

As previously announced, ResCap has received requisite consents as
described in the informational documents relating to the offers
and has entered into supplemental indentures adopting the proposed
amendments to the indentures under which the old notes were
issued. The amendments to the old notes release the subsidiary
guarantees of ResCap's obligations under the old notes and
eliminate certain of the restrictive covenants and events
of default in the indentures. Accordingly, claims with respect to
all new notes issued in the exchange offers will be effectively
senior to claims with respect to unexchanged old notes to the
extent of the value of all assets of the subsidiary guarantors as
well as the collateral securing the new notes. Based upon tenders
to date and subject to consummation of the offers, approximately
$5.7 billion aggregate principal amount of new notes would be
issued in exchange for old notes.

The offers will expire at 11:59 p.m., New York City time, on
June 3, 2008, unless extended by ResCap with respect to any or all
series of old notes. Old notes tendered pursuant to the offers may
no longer be withdrawn. The early delivery time (as defined in the
informational documents relating to the offers) has passed. Old
notes tendered after the early delivery time are not entitled to
the early delivery payment described in the informational
documents relating to the offers.

The offers are subject to significant conditions that are further
described in the informational documents. In particular, the
offers are conditioned on ResCap entering into a new first lien
senior secured credit facility, providing for at least $3.5
billion of commitments on terms acceptable to ResCap. As a result
of these conditions, ResCap may not be required to exchange or
purchase any of the old notes tendered.

The new notes will not be registered under the Securities Act of
1933, as amended (the "Securities Act"), or any other applicable
securities laws and, unless so registered, the new notes may not
be offered, sold, pledged or otherwise transferred within the
United States or to or for the account of any U.S. person, except
pursuant to an exemption from the registration requirements
thereof. Accordingly, the new notes are being offered and
issued only (i) in the United States to "qualified institutional
buyers" (as defined in Rule 144A under the Securities Act), or
QIBs, and (ii) outside the United States to non-U.S. persons (as
defined in Regulation S under the Securities Act) who are
"qualified investors" within the meaning of Article 2.1(e) of the
Prospectus Directive as adopted within each relevant member state
of the European Economic Area, in a private transaction in
reliance upon an exemption from the registration requirements of
the Securities Act. ResCap will enter into a registration
rights agreement pursuant to which, under certain circumstances,
it will agree to file an exchange offer registration statement or
a shelf registration statement with respect to the new notes.

The complete terms and conditions of the offers are set forth in
ResCap's Offering Memorandum and Consent Solicitation Statement
dated May 5, 2008, as supplemented on May 14, 2008 (the "offering
memorandum"), and the related letter of transmittal and consent.

Documents relating to the offers will only be distributed to
noteholders who complete and return a letter of eligibility
confirming that they are within the category of eligible investors
for this private offer. Noteholders who desire a copy of the
eligibility letter should contact Global Bondholder Service
Corporation, the information agent for the offers, at (866) 470-
3800 (U.S. Toll-free) or (212) 925-1630 (Collect).

                     About Residential Capital

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

                           *     *     *

As reported in the Troubled Company Reporter on May 6, 2008,
Moody's Investors Service downgraded to Ca, from Caa1, its ratings
on the senior debt of Residential Capital, LLC subject to the bond
exchange announced by ResCap on May 2, 2008.  The rating of
ResCap's approximately $1.2 billion of bonds maturing on June 9,
2008 was affirmed at Caa1.  All ratings remain under review for
downgrade.

Standard & Poor's Ratings Services lowered selected ratings on
Residential Capital LLC, including lowering the long-term
corporate credit rating to 'CC' from 'CCC+', following the
company's launch of an exchange offer for unsecured bonds that
S&P interpret as a distressed debt exchange.  The ratings remain
on CreditWatch with negative implications, where they were placed
April 24, 2008.

Fitch Ratings downgraded Residential Capital LLC's Issuer
Default Rating to 'C' from 'BB-' following the company's debt
exchange offer announcement.  ResCap remains on Rating Watch
Negative pending execution of the debt exchange offer.  Upon
completion of the exchange, Fitch will downgrade ResCap's IDR to
'D' indicating a default has occurred in accordance with Fitch's
criteria on distressed debt exchanges.


SABINE PASS: Moody's Cuts Rating on Parent's Liquidity Position
---------------------------------------------------------------
Moody's Investors Service downgraded Sabine Pass LNG, LP's senior
secured notes due 2013 and 2016 to B2 from Ba3.  The rating
outlook is negative.

"The downgrade takes into account Moody's expectation that
Sabine's parent, Cheniere Energy Inc., will likely face a stressed
liquidity position starting in 2009 unless Cheniere is able to
generate sizeable cash flow through execution of a strategic
transaction or through a major shift in the global LNG business",
said Clifford Kim, Analyst at Moody's.  He also added, "Cheniere's
90.6% ownership position in Sabine and extensive contractual
arrangements serve to link Cheniere's and Sabine's credit
quality".

In Moody's view, Cheniere is likely to face significant pressure
on its liquidity position by early 2009 since Cheniere's LNG
marketing activities are anticipated to generate substantially
lower than expected cash flows.  Moody's expects continued high
international demand for LNG, growth in US regasification capacity
and construction delays in natural gas liquefaction will lead to
limited prospects for Cheniere's merchant LNG marketing business
over the next several years.

Additionally, Cheniere's constrained access to capital markets
further contributes to its dwindling liquidity position.  While
Cheniere's recently executed $95 million credit facility provides
incremental cash, the credit facility's high cost and short
eighteen-month tenor provide only marginal credit support.

Moody's expects Cheniere will utilize a substantial portion of its
unrestricted cash to pay for capital expenditures, debt service,
and corporate overhead in 2008.  Cheniere had unrestricted cash
totaling approximately $142 million at March 31, 2008 and
$297 million at Dec. 31, 2007.

Moody's observes that Sabine represents most of Cheniere's
consolidated cash flows and operating assets.  Additionally,
Sabine has extensive contractual arrangements with Cheniere and
its affiliates including the terminal use and operations and
maintenance agreements.  These factors serve as strong incentives
to bring Sabine into a possible bankruptcy of Cheniere in order
for Cheniere to better control its estate.  That being said,
Moody's also recognizes certain legal ring fencing provisions at
Sabine including an independent director and separateness
requirements.  These ring fencing provisions constitute layers of
protection that could insulate Sabine from a potential Cheniere
bankruptcy; however, Moody's does not consider these provisions
sufficient to fully insulate Sabine and Cheniere's credit quality
will continue to have implications to Sabine's rating.

The negative outlook will consider Cheniere's ability to improve
its liquidity position and cash flow within the next six months.  
Sabine's rating could come under additional negative pressure if
Cheniere utilizes its unrestricted cash faster than expected or is
unable to improve it's liquidity position during this period to
meet expected cash uses in 2009 and onward.

Additionally, Moody's will continue to evaluate implications of
Cheniere's financial situation on Sabine's operational performance
and Sabine's ability to complete Phase 2 construction, which is
scheduled to be finished toward the middle of 2009.

A rating upgrade is unlikely; however, a positive credit event
could include an improvement in Cheniere's liquidity such that
Cheniere is able to comfortably meet all its obligations over the
next several years without significant reliance on merchant LNG
related cash flows or external sources of cash.  Additionally,
Sabine's rating could stabilize or improve if Sabine is able to
replace Cheniere with a creditworthy third party both in terms of
ownership and contractual arrangements.

Sabine Pass LNG L.P. was formed in 2004 to construct, own and
operate a liquefied natural gas receiving terminal with an
aggregate regasification capacity of 4 Bcf/d.  Sabine has signed
three 20-year Terminal Use Agreements for 100% of its
regasification capacity on a "take or pay" basis.  Sabine is
90.6%, indirectly-owned by Cheniere Energy, Inc (not rated).

  
SENTRY SELECT: Unitholders Approve Resolution to Dissolve Fund
--------------------------------------------------------------
C.A. Bancorp Inc., as manager of the Sentry Select Total Strategy
Fund, disclosed that the unitholders of the fund did not approve
the proposed amendments to the fund's trust agreement by the
required two-thirds majority but did approve a resolution
authorizing the termination of the fund.

The special meeting of Total Strategy unitholders was held on
May 20, 2008.  

As required by the fund's trust agreement, the manager will
provide at least 90 days written notice to the fund's Trustee of
the termination date of the fund.  The manager intends to send
this termination notice forthwith.  The Trustee is obligated to
send to the fund's unitholders written notice of the commencement
of the winding-up of the fund and the termination date at least
30 days prior to the termination date.

The manager and the Trustee intend to instruct Sentry Select
Capital Corp., as investment manager, to sell and convert to cash,
to the extent possible and in an orderly manner, the property of
the fund in an attempt to complete the conversion to cash
immediately prior to the termination date.

The manager believes that at least 70% of the fund's assets are
reasonably liquid in nature and intends to complete the
liquidation of this portion of the fund's assets prior to the
termination date.

In addition, the manager intends to begin the process of
liquidating the less liquid portion of the fund's assets including
the fund's private portfolio of investments.  The manager expects
that the process of liquidating the private portfolio will extend
beyond the termination date.

The manager may, in its discretion, upon not less than 30 days
prior written notice to unitholders, extend the termination date
by a maximum of 180 days if the manager would be unable to convert
all of the assets of the fund to cash and the manager determines
that it would be in the best interest of unitholders to do so.

The manager intends to provide unitholders with a further update
on the status of the liquidation of the fund's assets and
termination of the fund by mid-June 2008.

                      About C.A. Bancorp Inc.

C.A. Bancorp (TSX:BKP) is a publicly traded Canadian merchant bank
and alternative asset manager that provides investors with access
to a range of private equity and other alternative asset class
investment opportunities.  C.A. Bancorp is focused on investments
in small- and middle-capitalization public and private companies,
with emphasis on the industrials, real estate, infrastructure and
financial services sectors.

             About Sentry Select Total Strategy Fund

Sentry Select Total Strategy Fund's units trade on the TSX under
the symbol: TSF.UN.  The fund's units closed at a market price of
$8.41 per unit on May 20, 2008, which represents a 19% discount to
the recently reported net asset value per unit as of May 15, 2008.


SOUTH DAKOTA: A.M. Best Chips FS Rating to B(Fair) from B+(Good)
----------------------------------------------------------------
A.M. Best Co. has downgraded the financial strength rating to
B(Fair) from B+(Good) and issuer credit rating to "bb+" from
"bbb-"of South Dakota State Medical Holding Co., Inc dba
DAKOTACARE.  The outlook for both ratings is stable.

The ratings of DAKOTACARE reflect decreased capitalization and
declining group membership.  The offsetting rating factors are
good underwriting performance, new lines of business growth and
strong network throughout South Dakota.

DAKOTACARE has experienced a sharp increase in revenue from the
Medicare Advantage Specialty Needs business, which is expected to
significantly reduce the level of risk-based capitalization.  In
addition, the profitability of the Medicare Advantage business is
lower compared to traditional DAKOTACARE operations, which may
further challenge capital growth.  In addition, the competitive
pressure and willingness of other carriers to sacrifice
profitability for growth led to DAKOTACARE's commercial membership
losses for the last three years; however, the company expects the
growth in individual product to offset the losses in group
enrollment.

DAKOTACARE has posted underwriting gains in commercial lines of
business for the last five years.  The company remains committed
to rationale pricing and stable profit margins.  Furthermore,
DAKOTACARE significantly expanded the reach of its third party
administrator operations, leading to greater revenue
diversification and growth.


SPECTRUM BRANDS: $692.5MM Salton Deal Cues Fitch to Hold Ratings
----------------------------------------------------------------
Following the announcement that Spectrum Brands has signed a
definitive agreement with Salton, Inc. for the sale of its Global
Pet Business for approximately $692.5 million in cash and an
aggregate principal amount of Spectrum's subordinated debt
securities equal to $222.5 million, Fitch affirms Spectrum Brands,
Inc. ratings as:

  -- Issuer Default Rating at 'CCC';
  -- $1 billion term loan B at 'B/RR1';
  -- $225 million ABL at 'B/RR1';
  -- EUR350 million term loan at 'B/RR1';
  -- $700 million 7.4% senior sub note at 'CCC-/RR5';
  -- $2.9 million 8.5% senior sub note at 'CCC-/RR5';
  -- $347 million 11.25% variable rate toggle senior sub note at
     'CCC-/RR5'

The Rating Outlook is Negative.

The ratings reflect SPC's high leverage and thin coverage metrics
on a pro-forma basis despite the significant decline in debt
levels expected upon the transaction close.  On a pro-forma last
12-month basis adjusting for the Lawn & Garden segment which is
now being recorded as part of continuing operations, leverage
would improve modestly to 8.4 times from approximately 8.9x at
March 31, 2008 and interest coverage on an EBITDA basis will
remain basically flat at 1.25x.  Overall, the change in credit
metrics shows marginal improvement.  Further, Pet represents
approximately a third of EBITDA before corporate overhead and is a
steady year-round performer which improves the company's earnings
quality.  

While the remaining businesses have offsetting seasonality, the
company's business profile is not as strong with the sale of the
Pet segment, in Fitch's view.  The rating takes into account
Spectrum's adequate liquidity, more financial flexibility within
its indenture covenants, and an expectation that operations in the
remaining businesses will be sustained.

The Negative Outlook encompasses the deterioration in financial
and credit protection measures since 2005, a modest increase in
business risk with this transaction, and the potential that other
actions may take place as the company executes its plans to
improve its capital structure, which may include other asset
sales.  Fitch will be reviewing Spectrum's performance over the
summer and holiday season to gain a better understanding of the
company's profitability and cash flow going forward.

Spectrum is a global branded consumer products company with
operations in seven product categories: consumer batteries; lawn
and garden; pet supplies; electric shaving and grooming; household
insect control; electric personal care products; and portable
lighting.


SPECTRUM BRANDS: Salton Deal Cues S&P to Put Ratings Under Watch
----------------------------------------------------------------
Standard & Poor's Ratings Services placed its ratings on Atlanta-
based Spectrum Brands Inc., including the 'CCC+' long-term
corporate credit rating, on CreditWatch with positive
implications.  The CreditWatch status indicates that S&P could
either raise or affirm the ratings following the completion of its
review.  Approximately $2.6 billion of debt was outstanding as of
March 30, 2008.
      
"The rating action follows the company's announcement that it has
signed a definitive agreement with Salton Inc. and its wholly
owned subsidiary, Applica Pet Products LLC, to sell Spectrum's
global pet business for $915 million in total or a 10x EBITDA
multiple," said Standard & Poor's credit analyst Patrick Jeffrey.  
S&P expect the transaction to improve the company's leverage to
about 8x from the mid-8x area and enhance financial flexibility.  
In addition, the company has demonstrated operating and liquidity
improvement over the past several quarters.  However, the sale of
Spectrum's pet business will result in a less diversified business
portfolio.  Spectrum Brands is a leading global branded consumer
products company with brands that include Rayovac and Remington.
     
Standard & Poor's will meet with management to discuss the impact
of this transaction on the company's business profile, capital
structure, and liquidity.  S&P are unlikely to raise the corporate
credit rating more than one notch as a result of this review.


STEVEN CARROLL: Voluntary Chapter 11 Case Summary
-------------------------------------------------
Debtor: Steven W. Carroll
        3459 Hill Forest Trail
        Acworth, GA 30101

Bankruptcy Case No.: 08-68657

Chapter 11 Petition Date: May 6, 2008

Court: Northern District of Georgia (Atlanta)

Judge: Mary Grace Diehl

Debtor's Counsel: Edward F. Danowitz, Jr., Esq.
                  Danowitz & Associates, PC
                  300 Galleria Parkway, NW, Suite 960
                  Atlanta, GA 30339
                  Tel: (770) 933-0960

Total Assets: $10 million to $50 million

Total Debts:  $1 million to $10 million

The Debtor did not file a list of his 20 largest unsecured
creditors.


SYMBION INC: Moody's Rates Unsecured Notes Caa1; Outlook Negative
-----------------------------------------------------------------
Moody's Investors Service assigned a Caa1 rating to Symbion Inc.'s  
offering of approximately $180 million of senior unsecured PIK
toggle notes. The proceeds of the senior unsecured notes are
expected to be used to refinance the $175 million bridge loan
facility that was put in place in conjunction with the acquisition
of the company by Crestview Partners, L.P. on August 23, 2007.
Moody's also changed the rating outlook to negative from stable
and affirmed the company's existing ratings, including the B2
Corporate Family Rating and Probability of Default Rating and the
Ba3 rating on Symbion's senior secured credit facility.
Concurrently, Moody's downgraded the company's Speculative Grade
Liquidity Rating to SGL-3 from SGL-2.

The change in the rating outlook reflects the reduction in the
pace of expected improvement in the credit metrics of the company.
Recent challenges in the form of weak volume trends and out-of-
network issues with payors in a number of the company's key
markets have prevented the company from meeting expected levels of
revenue and EBITDA growth. Moody's anticipates that these issues
could continue into 2008 resulting in increased pressure on
profitability and limiting improvements in key metrics, such as
interest coverage, adjusted leverage and cash flow coverage of
debt. Moody's also expects that the company will continue to elect
the PIK option on the new notes in order to fund investments in
development and acquisitions in excess of operating cash flow.
Therefore, Moody's does not expect the company to repay a
meaningful amount of debt in the near term.

The downgrade of Symbion's Speculative Grade Liquidity Rating to
SGL-3 from SGL-2 reflects the weakening of the company's liquidity
position, characterized by the deterioration of headroom in the
compliance with the financial covenant included in the credit
agreement. Moody's believes the covenant requirement could limit
availability to undrawn amounts of the revolver over the next four
quarters. Moody's also anticipates that the company could invest
in excess of available cash flow over the next year.

The affirmation of the B2 Corporate Family Rating reflects our
expectation that as one of the larger operators of ambulatory
surgery centers, the company is well positioned to benefit from
the continued movement of services to the outpatient setting.
Further, despite recent challenges, the ratings consider the
company's attractive margin and cash flow characteristics.

Ratings assigned:

   * $179.84 million senior unsecured PIK toggle notes due 2015,
     Caa1 (LGD5, 84%)

Ratings affirmed/LGD assessments revised:

   * $100 million senior secured revolving credit facility, to
     Ba3 (LGD3, 30%) from Ba3 (LGD2, 29%)

   * $125 million senior secured term loan A, to Ba3 (LGD3, 30%)
     from Ba3 (LGD2, 29%)

   * $125 million senior secured term loan B, to Ba3 (LGD3, 30%)
     from Ba3 (LGD2, 29%)

   * Corporate Family Rating, B2

   * Probability of Default Rating B2

Ratings downgraded:

   * Speculative Grade Liquidity Rating, to SGL-3 from SGL-2

The ratings outlook was changed to negative from stable.

Symbion, headquartered in Nashville, Tennessee, owns and operates
a network of short-stay surgical facilities providing non-
emergency surgical procedures in various specialties, including
orthopedics, pain management, gastroenterology and ophthalmology.
As of March 31, 2008, Symbion owned and operated 56 ambulatory
surgery centers and three surgical hospitals. The company also
managed eight additional surgery centers and two physician
networks. For the twelve months ended March 31, 2008, the company
recognized revenues of approximately $306 million.


TIME WARNER: Fitch Holds BB+ Rating on Redeemable Preferred Stock
-----------------------------------------------------------------
Fitch Ratings has affirmed the 'BBB' Issuer Default Rating
assigned to Time Warner Cable, Inc. and its indirect wholly owned
subsidiary Time Warner Entertainment Co., L.P. Fitch has also
affirmed the individual issuer ratings of TWC and its subsidiaries
as outlined below.  The Rating Outlook is Stable.  Approximately
$13.5 billion of debt and preferred equity outstanding as of March
31, 2008 is affected.

Fitch's action follows Time Warner, Inc.'s announcement that the
company intends to distribute TWX's remaining ownership interest
in TWC to TWX shareholders in a tax- efficient spin-off, split-off
or a combination of both, as discussed in a separate press release
('Fitch Affirms Time Warner's IDR at 'BBB' on Cable Split; Outlook
Stable').

In conjunction with TWC's separation from TWX, TWC is expected to
pay its shareholders a $10.85 billion special dividend.  The
closing of the separation transaction is subject to, among other
things, receipt of regulatory approvals and a tax opinion from the
IRS.  The separation transaction along with the payment of the
special dividend is expected to occur during fourth quarter-2008.

TWC expects to fund the special dividend with the proceeds from a
$1.9 billion draw from its existing revolver and a new one year
(with a one year extension upon TWC's request) $9 billion bridge
loan.  Fitch expects the bridge loan will be refinanced with the
net proceeds from senior unsecured debt offerings during the
course of 2008 and 2009.  In the event that TWC is unable to
refinance the bridge facility with permanent financing, TWX has
committed to provide TWC a senior unsecured supplemental loan
facility of up to $3.5 billion for two years for the repayment of
the bridge.  The supplemental loan facility, if utilized, along
with the bridge loan will rank pari passu with TWC's existing
senior unsecured debt.  The bridge facility and the supplemental
loan facility are expected to contain the same financial covenants
that exist within TWC's $6 billion revolving credit facility,
principally the 5.0 times maximum leverage covenant.

With the announcement, Fitch will rate TWC on a stand-alone basis.
After considering the additional debt TWC expects to incur to fund
the special dividend, TWC's credit protection metrics will be
relatively weak within the rating category when the separation
transaction closes later in 2008.  TWC's leverage metric as of the
end of the first quarter was 2.3x; however, Fitch anticipates
TWC's leverage will increase to approximately 3.75x by year-end
2008.  Fitch expects that TWC will use a substantial amount of its
free cash flow generation to reduce leverage to a level more
reflective of the current rating.  Fitch believes that TWC is
positioned to generate material amounts of free cash flow during
the ratings horizon and that by YE 2009, TWC's leverage metric
will improve to within the company's longer term target of
approximately 3.25x.

Overall, Fitch's ratings for TWC reflect:

  -- Its size as the second-largest cable multiple systems
     operator (fourth-largest multi- channel video program
     distributor) in the United States;

  -- Strong subscriber clustering profile; and
  -- The company's growing revenue diversity owing to the success
     of TWC's 'Triple Play' service offering.

Within the context of escalating competitive pressures, the
ratings incorporate Fitch's expectation that the company will
continue to generate solid operating metrics, sustainable EBITDA
and free cash flow growth over Fitch's rating horizon.  The
expected turnaround of TWC's Los Angeles and Dallas cable systems
will contribute to the company's solid operating performance.  
>From Fitch's perspective, TWC's scale and system clustering
provide the company with competitive advantages in terms of
driving higher operating efficiencies through its cable plant,
taking cost out of customer premise equipment, lowering
programming costs, and positioning TWC to develop and enhance its
product offerings that can differentiate the company's offering
from competition.

Rating concerns center on:

  -- TWC's ability to maintain its relative competitive position
     given the changing competitive and economic environment;

  -- Growing retail revenues beyond its core 'Triple Play' service
     offering;

  -- Expanding into the commercial services market;

  -- Efficiently managing its cable plant bandwidth to maximize
     desirable high-definition content; and

  -- Continuing to balance investing in its business with
     improving its overall credit profile.

During 1Q'08, TWC's free cash flow generation increased 19% to
approximately $340 million.  TWC expects 2008 free cash flow to
grow 40% relative to 2007 results.  TWC's liquidity position is
supported by expected free cash flow generation as well as
available borrowings from the company's $6 billion revolver.  
After considering the funding for the special dividend, Fitch
anticipates that TWC will have in excess of $2 billion of capacity
under its revolver as of YE 2008, increasing thereafter.  The
company has approximately $600 million of debt scheduled to mature
during 2008.  Fitch expects TWC to retire the scheduled maturity
with free cash flow and proceeds from its revolver.  Once the
$9 billion bridge loan is refinanced, the company's refinancing
risk is minimal as the next material maturity is 2011 when the
term loan matures.

The Stable Outlook reflects Fitch's expectation that the company's
credit protection metrics will strengthen following the closing of
the separation transaction, and that TWC's financial policy will
continue to reflect a 'BBB' rating.  Additionally, the Stable
Outlook also incorporates Fitch's expectation that TWC's operating
profile will not materially decline during the near term in the
face of competition and slowing economic conditions.

Fitch has affirmed these ratings:

Time Warner Cable, Inc.
  -- IDR at 'BBB';
  -- Senior unsecured debt at 'BBB';
  -- Short Term at 'F2'.

Time Warner Entertainment, LP
  -- IDR at 'BBB';
  -- Senior unsecured debt at 'BBB'.

Time Warner NY Cable, LLC
  -- Mandatory redeemable preferred stock at 'BB+'.


TRIAD FINANCIAL: S&P Changes B Rating's Outlook to Negative
-----------------------------------------------------------
Standard & Poor's Ratings Services changed the outlook on its 'B'
long-term counterparty credit rating on Triad Financial Corp. to
negative from stable.
      
"The outlook change reflects the company's weak earnings and
difficulty in obtaining stable, long-term funding for new
automobile receivables," said Standard & Poor's credit analyst
Jeffrey Zaun.
     
The recent amendment to the company's warehouse lending agreement
with Citigroup Inc. will eliminate Triad's ability to fund new
originations from that facility after June 30, 2008.  The company
has not attempted to borrow under its remaining $500 million
warehouse facility with Barclays Bank.  If that long-term
financing is unavailable, or if its terms and pricing undercut
the interest margin Triad can earn on loans, the company could
stop originating new loans after June 30, 2008.
     
S&P's rating on Triad is driven by the firm's concentration in the
cyclical auto market, its significant leverage, and the high
credit-risk profile of its subprime lending business.  Offsetting
factors include its market position and geographic diversity.  The
current funding difficulties occurred against the backdrop of
efforts by the company to turn around asset quality and earnings
metrics that had weakened in 2007.  The turnaround efforts, which
centered on tightened lending standards, drove improved asset
quality and a return to profitability during first-quarter 2008.  
The shrinking portfolio and positive cash flow from operations
have also buttressed the company's liquidity.  Management's
response to funding difficulties has been prudent.  Even if the
firm stops new originations, we believe that its cash flow from
operations and the cash available from its residual facilities
will preclude severe funding pressure through 2008.
     
S&P could downgrade Triad if asset quality deteriorates (in excess
of seasonal patterns), if the firm is unable to obtain a new
residual facility, or if profits from the firm's shrinking
portfolio call into question its ability to service its debt or
pay off its senior notes due in 2013.
     
S&P could revise the outlook to stable under two scenarios.  
First, if Triad can obtain stable funding for its new
originations, S&P would revise the outlook to stable.  In this
case, S&P would expect management to grow the business as economic
conditions permit.  Second, even if funding difficulties persist
S&P could revise the outlook to stable if management can sustain
recent improvements in asset quality and maintain profitability
through 2008.


UAL CORP: JPMorgan Analyst Anticipates Airline Bankruptcies
-----------------------------------------------------------
Christopher Hinton at MarketWatch reports that Jamie Baker, an
analyst at J.P. Morgan, on Monday said U.S. airline industry
stands to post a collective $7,200,000,000 in operating losses in
2008.  The results would be wider than an initial forecast of
$4,600,000,000 loss, the analyst said.

According to MarketWatch, Mr. Baker, in his research note, said
though investors, management and analysts may talk about airlines
acting collectively to reduce capacity to firm up revenue, the
reality is that they are more likely to dig in and try to outlast
each other.

MarketWatch relates the JPMorgan analyst noted that capacity cuts
have falled far short of what executives have said are necessary.  
Mr. Baker, MarketWatch says, indicated that another round of
airline bankruptcy -- even among the legacy carriers -- is a
question of when rather than if.

According to the report, Mr. Baker said U.S. Airways has the
highest risk of bankruptcy, followed by Northwest Airlines, United
Air Lines' parent UAL Corp., AMR Corp., JetBlue, Continental
Airlines, AirTran, Delta Air Lines, Alaska Air Lines and Southwest
Airlines.

Mr. Baker, the report adds, said credit card companies could pose
more significant risk to airlines than debt.  He explained the
credit card companies could impose unilateral holdbacks, which
will toll on a carrier's liquidity and cash balances.

Bloomberg News on Wednesday reported that analysts at Soleil
Securities Corp. say there's a potential Chapter 11 filing by AMR
by 2009, and UAL some time after that.

                            In the Red

Except for Southwest, the major U.S. Airlines posted net losses
for the period ended March 31, 2008:

                          Net Income for Period Ended
                      -----------------------------------
                      March 31, 2008       March 31, 2007
                      --------------       --------------
   US Airways          ($236,000,000)         $66,000,000
   Northwest         ($4,139,000,000)       ($292,000,000)
   UAL                 ($537,000,000)       ($152,000,000)
   AMR                 ($328,000,000)         $81,000,000
   JetBlue               ($8,000,000)        ($22,000,000)
   Continental          ($80,000,000)         $22,000,000
   AirTran              ($34,813,000)          $2,158,000
   Delta             ($6,261,000,000)        $155,000,000
   Alaska Air           ($24,000,000)         ($3,700,000)
   Southwest             $34,000,000          $93,000,000

                        Balance Sheet at March 31, 2008
                      -----------------------------------
                      Total Assets            Total Debts   
                      ------------            -----------
   US Airways       $8,013,000,000         $6,435,000,000
   Northwest       $21,032,000,000        $17,746,000,000
   UAL             $23,813,000,000        $21,647,000,000
   AMR             $28,766,000,000        $26,277,000,000
   JetBlue          $6,050,000,000         $4,721,000,000
   Continental     $12,542,000,000        $11,071,000,000
   AirTran          $2,198,009,000         $1,783,470,000
   Delta           $26,755,000,000        $22,804,000,000
   Alaska Air       $4,379,800,000         $3,520,600,000
   Southwest       $18,031,000,000        $10,846,000,000

On April 14, Northwest announced an agreement to merge with Delta.

United and US Airways are also in talks for a possible merger.  
Continental was initially eyed as a top merger partner for United.

Small and medium-sized carriers have tumbled one after the other
into bankruptcy.  Aloha Airlines commenced bankruptcy proceedings
in Hawaii in March and later ceased operations.  ATA Airlines Inc.
ceased operations and filed for chapter 11 protection on April 2,
and Skybus Airlines Inc. tumbled into bankruptcy on April 5.  
Frontier Airlines went belly up and filed for chapter 11 on April
14.  EOS Airlines filed a chapter 11 petition on April 26.

                          About UAL Corp.

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

The company filed for chapter 11 protection on Dec. 9, 2002
(Bankr. N.D. Ill. Case No. 02-48191).  James H.M. Sprayregen,
Esq., Marc Kieselstein, Esq., David R. Seligman, Esq., and
Steven R. Kotarba, Esq., at Kirkland & Ellis, represented the
Debtors in their restructuring efforts.  Fruman Jacobson, Esq.,
at Sonnenschein Nath & Rosenthal LLP represented the Official
Committee of Unsecured Creditors before the Committee was
dissolved when the Debtors emerged from bankruptcy.

Judge Eugene R. Wedoff confirmed the Debtors' Second Amended
Plan on Jan. 20, 2006.  The company emerged from bankruptcy
protection on Feb. 1, 2006.

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


US AIRWAYS: JPMorgan Analyst Anticipates Airline Bankruptcies
-------------------------------------------------------------
Christopher Hinton at MarketWatch reports that Jamie Baker, an
analyst at J.P. Morgan, on Monday said U.S. airline industry
stands to post a collective $7,200,000,000 in operating losses in
2008.  The results would be wider than an initial forecast of
$4,600,000,000 loss, the analyst said.

According to MarketWatch, Mr. Baker, in his research note, said
though investors, management and analysts may talk about airlines
acting collectively to reduce capacity to firm up revenue, the
reality is that they are more likely to dig in and try to outlast
each other.

MarketWatch relates the JPMorgan analyst noted that capacity cuts
have falled far short of what executives have said are necessary.  
Mr. Baker, MarketWatch says, indicated that another round of
airline bankruptcy -- even among the legacy carriers -- is a
question of when rather than if.

According to the report, Mr. Baker said U.S. Airways has the
highest risk of bankruptcy, followed by Northwest Airlines, United
Air Lines' parent UAL Corp., AMR Corp., JetBlue, Continental
Airlines, AirTran, Delta Air Lines, Alaska Air Lines and Southwest
Airlines.

Mr. Baker, the report adds, said credit card companies could pose
more significant risk to airlines than debt.  He explained the
credit card companies could impose unilateral holdbacks, which
will toll on a carrier's liquidity and cash balances.

                            In the Red

Except for Southwest, the major U.S. Airlines posted net losses
for the period ended March 31, 2008:

                          Net Income for Period Ended
                      -----------------------------------
                      March 31, 2008       March 31, 2007
                      --------------       --------------
   US Airways          ($236,000,000)         $66,000,000
   Northwest         ($4,139,000,000)       ($292,000,000)
   UAL                 ($537,000,000)       ($152,000,000)
   AMR                 ($328,000,000)         $81,000,000
   JetBlue               ($8,000,000)        ($22,000,000)
   Continental          ($80,000,000)         $22,000,000
   AirTran              ($34,813,000)          $2,158,000
   Delta             ($6,261,000,000)        $155,000,000
   Alaska Air           ($24,000,000)         ($3,700,000)
   Southwest             $34,000,000          $93,000,000

                        Balance Sheet at March 31, 2008
                      -----------------------------------
                      Total Assets            Total Debts   
                      ------------            -----------
   US Airways       $8,013,000,000         $6,435,000,000
   Northwest       $21,032,000,000        $17,746,000,000
   UAL             $23,813,000,000        $21,647,000,000
   AMR             $28,766,000,000        $26,277,000,000
   JetBlue          $6,050,000,000         $4,721,000,000
   Continental     $12,542,000,000        $11,071,000,000
   AirTran          $2,198,009,000         $1,783,470,000
   Delta           $26,755,000,000        $22,804,000,000
   Alaska Air       $4,379,800,000         $3,520,600,000
   Southwest       $18,031,000,000        $10,846,000,000

On April 14, Northwest announced an agreement to merge with Delta.

United and US Airways are also in talks for a possible merger.  
Continental was initially eyed as a top merger partner for United.

Small and medium-sized carriers have tumbled one after the other
into bankruptcy.  Aloha Airlines commenced bankruptcy proceedings
in Hawaii in March and later ceased operations.  ATA Airlines Inc.
ceased operations and filed for chapter 11 protection on April 2,
and Skybus Airlines Inc. tumbled into bankruptcy on April 5.  
Frontier Airlines went belly up and filed for chapter 11 on April
14.  EOS Airlines filed a chapter 11 petition on April 26.


VERENIUM CORP: Posts $23.3 Million Net Loss in 2008 First Quarter
-----------------------------------------------------------------
Verenium Corporation reported a net loss of $23.3 million in the
first quarter ended March 31, 2008, compared with a net loss of
$10.3 million in the corresponding period in 2007.

Revenues increased 35.0%, or $3.9 million, to $15.2 million for
the three months ended March 31, 2008, from $11.3 million for the
three months ended March 31, 2007, attributed primarily to an
increase in product revenue, partially offset by a decrease in
collaborative and grant revenue.  The company said its revenue mix
has shifted to a larger percentage of product revenue, consistent
with its strategy to grow product sales and de-emphasize
collaborations that are not core to the company's strategic market
focus.

Product revenue represented 73.0% of total revenues for the three
months ended March 31, 2008, as compared to 47.0% for the three
months ended March 31, 2007.

Collaborative revenue decreased 27.0% to $3.5 million from
$4.7 million and accounted for 23.0% and 42.0% of total revenue
for the three months ended March 31, 2008, and 2007.  

Grant revenue decreased 54.0%, or $662,000, to $559,000 for the
three months ended March 31, 2008, as compared to $1.2 million for
the three months ended March 31, 2007.  

Product gross profit totaled $3.3 million, or 30.0% of product
revenue, for the three months ended March 31, 2008, compared to
$460,000, or 9.0% of product revenue, for the three months ended
March 31, 2007.  

Research and development expenses increased $3.2 million, or
28.0%, to $14.8 million for the three months ended March 31, 2008,
from $11.6 million the three months ended March 31, 2007.  This
increase was primarily due to incremental payroll and related
expenses for biofuels technology development and engineering
activities as a result of the company's merger with Celunol in
June 2007.

Selling, general and administrative expenses increased
$4.4 million, or 83.0%, to $9.6 million for the three months ended
March 31, 2008, from $5.2 million for the three months ended
March 31, 2007.  This increase is largely due to incremental
personnel and overhead costs resulting from the merger,
incremental litigation expenses and, to a lesser extent, increased
personnel costs and professional services costs.

Non-cash, stock-based compensation expense included in operating
expenses, for the first quarter of 2008 was $3.5 million compared
to $1.1 million for the first quarter of 2007.  The increase in
stock-based compensation is related primarily to additional
options granted during 2007 in connection with the Celunol merger,
together with equity awards to several senior-level hires since
that time.

Loss from operations for the first quarter of 2008 was
$17.2 million, compared to $10.6 millionfor the first quarter last
year.  The increase in loss from operations was attributable
primarily to incremental operating expenses related to the
inclusion of Celunol's business from the June 2007 merger, offset
in part by the increase in product revenue and related gross
profit.

                 Liquidity and Capital Resources

As of March 31, 2008, the company had cash, cash equivalents, and
short-term investments of approximately $60.0 million.  

Historically, the company has funded its capital equipment
purchases through available cash, capital leases and equipment
financing line of credit agreements.  Since the company announced
its merger with Celunol in February 2007, it has issued
$172.5 million of convertible debt to fund its cellulosic ethanol
pilot and demonstration-scale facilities and other working capital
requirements.

The company's total consolidated long-term debt as of April 1,
2008, which includes the 2007 Notes, the 2008 Notes and debt under
its secured credit facility with Comerica Bank, was approximately
$174.6 million and represented approximately 68.0%% of its total
capitalization as of that date.

                          Balance Sheet

At March 31, 2008, the company's consolidated balance sheet showed
$296.5 million in total assets, $203.4 million in total
liabilities, and $93.1 milion 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?2c59

                Going Concern/Possible Bankruptcy

As reported in the Troubled Company Reporter on April 1, 2008,
Ernst & Young LLP, in San diego, expressed substantial doubt about
Verenium Corporation'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 and accumulated deficit of
$437.1 million at Dec. 31, 2007.

Based on the company's operating plan, its existing working
capital is not sufficient to meet the cash requirements to fund
the company's planned operating expenses, capital expenditures,
and working capital requirements through Dec. 31, 2008, without
additional sources of cash or the deferral, reduction or
elimination of significant planned expenditures.

The company's plan to address the expected shortfall of working
capital is to generate additional financing through a combination
of corporate partnerships and collaborations, federal and state
grant funding, incremental product sales, selling or financing
assets, and, if necessary and available, the sale of equity or
debt securities.  If the company is unsuccessful in raising
additional capital from any of these sources, it will defer,
reduce, or eliminate certain planned expenditures.

The company said it will continue to consider other financing
alternatives including but not limited to, a divesture of all or
part of its business.  If the company cannot obtain sufficient
additional financing in the short-term, it may be forced to
restructure or significantly curtail its operations, file for
bankruptcy or cease operations. ut additional sources of cash.

                       About Verenium Corp.

Based in Cambridge, Mass., Verenium Corporation  (Nasdaq: VRNM)
-- http://www.verenium.com/-- is engaged in the development and  
commercialization of next-generation cellulosic ethanol, an
environmentally-friendly and renewable transportation fuel, as
well as high-performance specialty enzymes for applications within
the alternative fuels, specialty industrial processes, and animal
nutrition and health markets.  


VERTIS INC: March 31 Balance Sheet Upside-Down by $916.0 Million
----------------------------------------------------------------
Vertis Inc. reported on Wednesday financial results for the three
months ended March 31, 2008.

Vertis Inc.'s consolidated balance sheet at March 31, 2008, showed
$499.6 million in total assets and $1.4 billion in total
liabilities, resulting in a $916.0 million total stockholders'
deficit.

At March 31, 2008, the company's consolidated balance sheet also
showed strained liquidity with $152.3 million in total current
assets available to pay $395.0 million in total current
liabilities.

Net loss during the first quarter of 2008 was $41.0 million
compared to a $25.2 million net loss in the first quarter of 2007.  
Increases in restructuring costs of $6.8 million and fees
associated with the financial restructuring of the company of
$4.3 million were primary drivers of the increased loss over the
prior year.  Expected volume declines in Advertising Inserts
partially offset by improved pricing, which includes product,
customer and equipment mix combined with the impact of reduced
revenue in Direct Mail segment to contribute to the loss.  

Revenue for the first quarter of 2008 was $303.7 million versus
$330.7 million in the first quarter of 2007, a decline of 8.2%.  
Revenue in the Advertising Inserts segment was lower as expected
due to reduced volume and the impact of lower paper costs on
prices paid by customers.  The overall product mix in the segment
was favorable for the quarter, which helped to offset some of the
volume decline.  Revenue in the Direct Mail segment was lower by
3.0% for the quarter but at slightly higher average pricing due to
product mix.

EBITDA in the first quarter of 2008 declined to $7.1 million from
$21.3 million for the same period in 2007.  This decrease relates
primarily to the increases in restructuring related costs of
$11.1 million.  Adjusted EBITDA was $19.8 million in the first
quarter of 2008, a decline of $4.8 million, or 19.0%, from
Adjusted EBITDA of $24.6 million in 2007.  This decline was
primarily due to reduced volume, offset by improved pricing.

                        Cash and Liquidity

The company ended the quarter with $994,000 in cash and debt of
$1.2 billion.  In addition, the off-balance sheet accounts
receivable facility stood at $106.3 million.  The company ended
the quarter with $26.6 million available under its $250.0 million
senior credit facility.  At March 31, 2008, the last 12-month
Adjusted EBITDA calculated for covenant purposes was
$127.1 million or $2.1 million above the minimum requirement.

                       Management Comments

Mike DuBose, chairman and chief executive officer commented, "Our
financial results are consistent with our expectations as the
company builds momentum from the operational turnaround plan we
put in place last year.  Although the environment remains
difficult our initiatives are advancing positively and overall we
continue to see significant progress including improvements in
operational efficiency, quality, management processes and customer
service."

"As we enter the next phase of our turnaround which is focused on
improving our capital structure, we are very comfortable with the
strong foundation that has been established over the past year,"
DuBose said.

                 Debt Exchange/Bankruptcy Option

The company's management has engaged in discussions with holders
of the company's 9 3/4% senior secured second lien notes, 10 7/8%
senior notes and 13 1/2% senior subordinated notes on the terms of
a debt exchange.

As an option, the debt exchange may be accomplished on a
negotiated basis with the company's lenders through a pre-packaged
or pre-arranged bankruptcy restructuring plan.  The company
currently has no plans for asset sales other than excess real
estate or in the normal course of business, nor does it foresee
any potential discontinued operations.

                     Forebearance Agreements

As part of the company's strategy 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 these notes, the company had a thirty-day
grace period in which to make the April 1, 2008, interest payment
before it would be an event of default.

The company entered into forbearance agreements dated April 3,
2008, with the lenders under the senior credit facility and the
purchasers under the accounts receivable facility (the Parties)
whereby the Parties agreed to forbear from exercising their right
to not make any additional advances, purchase receivables or incur
any additional letter of credit obligations under the credit
facility and A/R facility until the earliest to occur of:

   (i) May 27, 2008,

  (ii) the company's failure to satisfy certain borrowing
       availability conditions under the credit agreement or

(iii) the occurrence of an event of default under the credit
       facility or A/R facility, the acceleration of the
       obligations under the Second Lien Notes, or the
       commencement of a bankruptcy proceeding as described in the
       forbearance agreements.  

The Parties also agreed to forbear during the forbearance period
from exercising certain of their other rights and remedies against
the company that may exist as a result of the company's failure to
make the interest payment on the Second Lien Notes.

Additionally, pursuant to a forbearance agreement (the Second Lien
Forbearance Agreement) dated April 30, 2008, and amended as of
May 20, 2008, holders of more than 75.0% 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 any of
the following events:  

   (i) the failure of 67.0% of the note holders to have executed a
       restructuring and lock-up agreement on or before May 27,
       2008,

  (ii) the termination of the restructuring and lock-up agreement
       in accordance with its terms,

(iii) the occurrence of a forbearance termination event under the
       forbearance agreements dated April 3, 2008, as may be    
       amended and

  (iv) the occurrence of a default as described in the Second Lien
       Forbearance Agreement (the Second Lien Forbearance Period).   

The holders of the Second Lien Notes that are parties to the
Second Lien Forbearance Agreement also agreed that during the
Second Lien Forbearance Period they will not sell, pledge or
otherwise transfer any Second Lien Notes unless the transferee
agrees to be bound by the Second Lien Forbearance Agreement.

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?2c5c

                     Going Concern Disclaimer

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.

                        About Vertis Inc.

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.   

                          *     *     *

As reported in the Troubled Company Reporter on May 5, 2008,
Moody's Investors Service revised Vertis Inc.'s Probability
of Default rating to Ca/LD from Ca, while affirming its Ca
Corporate Family rating, following the company's April 30
announcement that its second lien noteholders agreed to forbear
from exercising their rights and remedies under the indenture
governing the second lien notes.  The rating outlook is stable.


VOTORANTIM CIMENTOS: S&P's 'BB+' Credit Rating Remains Unchanged
----------------------------------------------------------------
Standard & Poor's Ratings Services said its bank loan and recovery
ratings on Votorantim Cimentos North America Inc.'s C$575 million
credit facilities are unchanged.  The 'BBB' bank loan rating (two
notches above the 'BB+' long-term corporate credit rating), with a
'1' recovery rating, reflects S&P's expectation that secured
lenders would receive a very high (90%-100%) recovery in the event
of a payment default.
     
The credit facilities include a US$150 million revolver and a
US$425 million senior secured facility, both due in 2011.  The
company is to pay the term facility in 20 consecutive quarterly
installments over the life of the loan.  Along with VCNA, the
borrowers are St. Mary's Cement Inc., St. Mary's Cement Inc.
(Canada), St. Mary's Cement Inc. (US), VCNA Nova Scotia ULC,
VCNA Partnership, VCNA US Enterprises Inc., VCNA Prestige Gunite
Holdings Inc., VCNA Prestige Materials Holdings Inc., and VCNA
Prairie Illinois Inc.  The obligations are guaranteed by VCNA and
each existing and subsequent restricted subsidiary of VCNA.  These
subsidiaries account for about 100% of consolidated EBITDA and
assets.
     
The long-term corporate credit rating on VCNA is 'BB+'.  The
outlook is stable.

Ratings List

Votorantim Cimentos North America Inc.
Corporate credit rating             BB+/Stable/--
Senior secured debt                 BBB
US$150 million revolver             BBB (Recovery rating: 1)
US$425 million term loan A          BBB (Recovery rating: 1)


WATERFORD GAMING: Moody's Trims Corp. Family Rating to B1 from Ba3
------------------------------------------------------------------
Moody's Investors Service downgraded Waterford Gaming LLC's
corporate family rating to B1 from Ba3.  Additionally, the
probability of default rating was downgraded to Ba3 from Ba2 and
the rating on the senior unsecured notes due 2014, issued by
Waterford and Waterford Gaming Finance Corp, was lowered to B1
from Ba3.  The outlook is stable.  The action, which concludes the
review process initiated on February 11, 2008, is based on Mohegan
Tribal Gaming Authority's current operating challenges and
expected increase in leverage due to continuous debt-financed
development activity, as well as the risk of lower cash
distributions to Waterford.

Waterford derives substantially all of its revenues from its
partnership interest in Trading Cove Associates, which itself
receives a revenue-based relinquishment fee equal to 5% of the
gross revenues of the Mohegan Sun casino owned by MTGA.  The
rating downgrade considers a number of qualitative risk factors
including MTGA's potentially weaker revenues for the existing
portion of the Mohegan Sun casino operations submitted to the
relinquishment fee payments, Waterford's indirect and unsecured
access to cash flows, MTGA's ability to block all or part of the
relinquishment payments in the event of a payment or nonpayment
default, as well as the uncertainties with regards to the
quantification and recovery rate of relinquishment payment claims
in the event of MTGA's bankruptcy, reorganization or liquidation.  
As a result, Waterford's corporate family rating is one notch
lower than MTGA's senior subordinated notes rating.

The rating outlook is stable, reflecting Moody's expectation that
Waterford will maintain solid leverage and interest coverage
ratios, and adequate liquidity, partly offsetting the
aforementioned structural risk factors.

Ratings downgraded:

  -- Corporate family rating to B1
  -- Probability of default rating to Ba3
  -- Rating on Senior Unsecured Notes due 2014 to B1
     (unchanged LGD 4/65%)

Waterford is a special purpose company formed solely for the
purpose of holding its 50% partnership interest, as a general
partner, in TCA, a Connecticut general partnership and the manager
(until January 1, 2000) and developer of the Mohegan Sun casino
located in Uncasville, Connecticut.  The Mohegan Sun casino is
owned and operated by the Mohegan Tribal Gaming Authority.


WCI COMMUNITIES: S&P Cuts Ratings on Possible Liquidity Shortfall
-----------------------------------------------------------------
Standard & Poor's Ratings Services lowered its corporate credit
rating on WCI Communities Inc. to 'CC' from 'CCC'.  Concurrently,
S&P lowered its ratings on $650 million of subordinated notes to
'C' from 'CC'.  The outlook remains negative.
     
The downgrades acknowledge that WCI is unlikely to have sufficient
liquidity to repay $125 million of 4% contingent convertible
senior subordinated notes due 2023 should noteholders exercise
their option to redeem the notes on the Aug. 5, 2008, put date.  
If WCI is unable to satisfy its obligations under the terms of the
convertible notes, the noteholders would have the right to
accelerate the maturity of these notes, which could in turn
trigger the acceleration of substantially all of the company's
debt.
     
Bonita Springs, Florida-based WCI is a midsize regional
homebuilder offering luxury high-rise and single-family homes to
affluent and active adult homebuyers, primarily in Florida (82% of
closings).  WCI reported an $84 million net loss for its first
fiscal quarter (ended March 31, 2008) on a 67% drop in
homebuilding revenues.  Closings were down sharply, and WCI
reversed $55 million of revenues previously recognized under the
percentage-of -completion method of accounting because 52 tower
unit contracts were cancelled.
     
WCI's leverage is high (84% of capital), and its financial
flexibility is limited.  This undercapitalized company held just
$49 million of cash on March 31, 2008, and had $62 million of
availability on a borrowing-base-governed secured revolver.  The
company's borrowing capacity may be further constrained if
appraisals, which are under way, indicate that the market value of
borrowing-base collateral is lower than the stated book value.  
The company's contract backlog is now just $203 million, and
future proceeds from the closing of tower units are earmarked for
construction loans and can't be used for other purposes, such as
the repayment of the convertible subordinated notes.
     
In a recent call with investors, WCI's management acknowledged
that the company has retained an advisor to assist in the possible
restructuring of the convertible notes.  S&P would lower its
rating on the convertible notes to 'D' if noteholders were to
receive less than full and timely payment in an exchange offer,
and S&P would lower the corporate credit rating to 'SD', for
selective default.  S&P would lower the corporate credit rating to
'D' if the company fails to make required payments on other
recourse obligations.
  

Ratings Lowered; Outlook Remains Negative
    
WCI Communities Inc.               Rating
                                   ------
                          To                    From
                          --                    ----
Corporate credit         CC/Negative/--        CCC/Negative/--
Senior subordinated      C                     CC


WELLMAN INC: Creditors' Panel Demands Review of Final DIP Order
---------------------------------------------------------------
The Official Committee of Unsecured Creditors of Wellman Inc. and
its debtor-affiliates filed an appeal, asking the U.S. District
Court for the Southern District of New York to review whether or
not the Bankruptcy Court erred in its final order approving the
DIP financing, by granting adequate protection to the lenders
under the First and Second Lien Senior Credit Agreements.

As previously reported, the Creditors Committee sought, but failed
to convince the U.S. Bankruptcy Court for the Southern District of
New York, to deny final approval of the proposed $225 million in
DIP financing of the Debtors.

The Creditors Committee argued that the DIP Facility does not
provide true benefit to the unsecured creditors because it grants
the secured lenders under the First and Second Lien Senior Credit
Agreements dated Feb. 10, 2004:

   (i) new liens on the prepetition and postpetition property
       of the Debtors' estates, in which those same secured
       lenders did not enjoy perfected prepetition liens; and

  (ii) new liens as adequate protection even though those
       secured lenders lack any legal entitlement to adequate
       protection.

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.


ZOOM TECHNOLOGIES: Gets Delisting Warning on Bid Price Deficiency
-----------------------------------------------------------------
Zoom Technologies Inc. received a NASDAQ staff determination
letter, stating that the company had failed to comply with the
$1 minimum bid price requirement for continued listing set forth
in Marketplace Rule 4310(c)(4) and that its common stock is
therefore subject to delisting from the NASDAQ Capital Market.

Zoom has been granted an appeal of this determination at a hearing
before a NASDAQ Listing Qualifications Panel scheduled for
July 10, 2008.  NASDAQ stayed the delisting of Zoom's securities
until the outcome of the hearing, and the delisting status will be
determined typically within 30 days after the hearing.

Zoom's plan to regain compliance with the NASDAQ continued listing
requirements includes a reverse stock split.  Authorization for
Zoom's board of directors to approve this reverse stock split has
been proposed to Zoom stockholders in the Proxy Statement which
was filed with the SEC on April 28, 2008, in connection with the
annual meeting of Zoom stockholders to be held on June 26, 2008.

Zoom realtes that the NASDAQ Listing Qualifications Panels have
generally viewed a reverse stock split as the only definitive plan
acceptable to resolve a bid price deficiency.  Zoom's common stock
will continue to trade on the NASDAQ Capital Market pending the
outcome of the hearing.

                    About Zoom Technologies Inc.

Headquartered in Boston, Massachusetts, Zoom Technologies Inc.
(NASDAQ:ZOOM) -- http://www.zoomtel.com/-- designs, produces,  
markets, sells, and supports broadband and dial-up modems, voice
over Internet protocol products and services, Bluetooth wireless
products, and other communication-related products.  The majority
of the company's products facilitate communication of data through
the Internet.   The company's European sales and support center is
in the United Kingdom.


* Fitch Says Despite Receptive Envi. ABCP Paper Market Stays Tough
------------------------------------------------------------------
Navigating the U.S. asset-backed commercial paper market continues
to prove difficult, although recent developments indicate a more
receptive environment for issuers as investors re-examine the ABCP
landscape, according to Fitch Ratings in the latest edition of the
'ABCP Paper Trail'.

Market participants remained saddled with many of the same issues
plaguing the ABCP market since last summer, which contributed to a
further 11% slide in U.S. ABCP outstandings ($722 billion) from
year-end 2007.  From a credit perspective, however, several
positive trends are emerging in the ABCP market, according to
Managing Director and group head Michael Dean.

'Over the past several months, many of the surviving ABCP conduit
administrators have taken proactive measures to both improve the
credit quality of their portfolios and to enhance the structural
protections afforded investors,' said Dean.  'Some of the actions
taken include cleansing portfolios of troubled exposures and
eliminating certain asset classes altogether, along with
tightening covenants and triggers with sellers.'

Despite continued troubles such as an uncertain U.S. economy and
heightened concerns surrounding recessionary fears, Fitch does not
anticipate that these macro issues will directly affect the
ratings of traditional multiseller ABCP conduits.  However,
'global bank rating pressures could translate into ABCP sponsor,
liquidity provider, and counterparty rating action that could
affect ABCP ratings,' said Dean.


* Fitch Says Higher Life Expectancy Could Raise Firm's Obligations
------------------------------------------------------------------
Fitch Ratings has said in a special report that if current
improvements in life expectancy continue, significant increases in
the amount companies are required to pay to settle their defined
benefit pension scheme obligations are likely.  However, because
regulatory regimes differ by country, the effect of such
developments on reported pension deficits and on the short-to-
medium-term cash cost of pensions will vary greatly.

"If life expectancy improvements continue at the rate seen in
recent years, current estimates of pension liability are likely to
fall far short of what is needed to satisfy company obligations,"
says Alex Griffiths, Senior Director in Fitch's European Corporate
Group.  "However, the impact over the short-to-medium-term will
vary greatly between countries with different regulatory regimes.
Of the countries reviewed, companies with pensions in the UK are
most likely to see their contributions rise due to stricter
mortality assumptions.  This reflects real regulatory pressure in
this area and a relatively wide divergence in assumptions used."

The UK is unusual in allowing companies significant choice in
determining the mortality assumptions to use for both accounting
and regulatory purposes.  This, combined with better disclosure of
mortality assumptions than in other jurisdictions, has led to
increased scrutiny of these assumptions by industry commentators
and The Pensions Regulator.  As a result, many companies have
tightened their mortality assumptions, and Fitch expects this
trend to continue.  The effects of assuming increased longevity
can materially increase a company's reported pension deficit and
the amount it will have to contribute to the scheme in the short-
to-medium-term.

In the US and Germany, two other economies where significant
defined benefit liabilities are common, mortality assumptions are
either laid down by law or are based on a single industry standard
set of tables.  In neither of these jurisdictions is there any
evidence of moves to tighten mortality assumptions, suggesting
little need for increased contributions in the medium-term.

Fitch recognises that the pace at which mortality improvements
will continue into the future is far from certain, but equally
recognises that improvements above those assumed remain a
significant risk to scheme funding.  This is especially the case
when the regulatory climate in a territory may prompt companies to
account for such potential increases before they have happened,
leading to higher cash outflows in the short-to-medium-term.

Fitch will therefore scrutinise mortality assumptions used for
companies with UK schemes particularly closely.  It will increase
the risk weighting in its analysis for companies with mortality
assumptions that are less conservative than average, and
potentially increase the cash contributions it expects to be made
to pension schemes in the medium-term in its forecasts.  This
could place downward pressure on some ratings, though it is
unlikely it will in itself lead directly to downgrades.


* Fitch Puts Certain Notes Across 59 CDOs Under Watch Negative
--------------------------------------------------------------
Fitch Ratings has placed certain notes issued across 59
collateralized debt obligations on Rating Watch Negative.  The
rating actions relate to CDOs backed all or in part by trust
preferred securities or subordinated debt primarily issued by
banks, with particular focus on those transactions with underlying
defaulted or deferring collateral.

Further supporting Fitch's rating analysis, certain transactions
also have exposure to deferring, defaulted or underperforming
TruPS or subordinated debt issued by insurance companies, real
estate investment trusts, homebuilders or financial institutions
specializing in residential mortgage lending.  The rating actions
primarily affect junior classes of notes rated in the 'BB', 'BBB'
and 'A' categories.  No securities rated 'AAA' affected by this
rating action and only 5.4% of securities rated in the 'AA'
category affected by this rating action.

As detailed in its May 2 special report ('Emerging Credit Concerns
Facing U.S. Bank TruPS CDOs'), Fitch revised its ratings and asset
performance Outlook with respect to U.S. bank TruPS CDOs to
Negative from Stable, citing a significant increase in observed
TruPS defaults and deferrals as well as overall deterioration in
the credit quality of banks underlying TruPS CDOs.  Since the
publication of the report, Fitch has been notified of five
additional bank TruPS deferrals, with $468.8 million in aggregate
TruPS financed through TruPS CDOs.  Observed deferrals continue to
be driven by factors similar to those outlined in Fitch's special
report - namely residential construction loan exposure,
residential mortgage production and lack of a core deposit
franchise.

Taking into account these additional deferrals, the aggregate
amount of bank TruPS defaults and deferrals observed by Fitch
since September 2007 is $1.1 billion.  This is in comparison to
$268.5 million of bank TruPS deferrals observed by Fitch over the
seven years prior to September 2007.  Fitch believes further bank
default and deferral activity is likely, as banks face liquidity
pressures and potential deterioration of residential construction
loan portfolios over the near term, as well as broader based
economic pressures over the intermediate term.  Many large banks
are having success raising additional capital, and Fitch is aware
of certain banks which have issued TruPS through CDOs that are
pursuing similar capital raising efforts.  That said, the timing
will likely be slower and the success rate will likely be lower
for such banks than what has been observed with respect to large,
publicly traded banks.

In identifying transactions and individual classes of notes to be
placed on Rating Watch Negative, observed default and deferral
activity was evaluated in the context of transactions-specific
characteristics such as available credit enhancement, prepayments
and credit risk sales observed to date, obligor concentration,
cash flow redirection mechanisms, and other structural
enhancements.  Consistent with the expectations outlined in
Fitch's special report, the rating actions are largely focused on
classes rated in the 'A' category or below.  The instances of
securities rated in the 'AA' category being placed on Rating Watch
Negative are limited to those transactions with outsized obligor
concentration or other high risk exposure such as TruPS or
subordinated debt issued by REITs, homebuilders or financial
institutions specializing in residential mortgage lending.

In focusing on deferrals as well as defaults, Fitch recognizes
that the ability to defer payments for up to five years is core
feature of TruPS.  Nonetheless, Fitch views deferrals as indicator
of increased risk of default and recognizes there may also be
certain terms and conditions of the TruPS financing which, if
breached, result in a technical default prior to the conclusion of
the five-year deferral period.  These may include failure by such
entity to provide on-going financial statements, the regulatory
seizure of such entity, or the filing for bankruptcy protection by
the holding company of such entity, among others.  As a result of
the occurrence of such technical defaults, $59 million of TruPS
previously classified as deferring are now deemed by Fitch to be
in default.

Fitch's TruPS CDO rating criteria assumes a level of deferral and
default activity as a function of the rating assigned to a given
liability, and is designed to address the repayment of the notes
pursuant to their stated terms.  In taking these rating actions,
Fitch's primary concern is not of an imminent risk of principal
loss to rated noteholders, but rather, an adverse change in the
credit risk profile of the notes, particularly in light of current
pressures facing U.S. banks, and the significant remaining risk
horizons of the transactions (ranging from 22-to-30 years, absent
collateral prepayments).  As evidenced by Fitch's rating actions,
these concerns are more pronounced with respect to junior classes
of notes.

Fitch is in the process of updating its analysis of the credit
quality of performing bank collateral underlying TruPS CDOs, based
on the release of fourth-quarter 2007 and 1Q'08 financial
statements.  This analysis is expected to result in additional
default probability adjustments for certain banks.  Upon the
conclusion of this collateral analysis, transactions not included
as part of this rating action commentary may be exposed to
negative rating actions including placement on Rating Watch
Negative or downgrade.  Additional classes of transactions
included as part of this rating action commentary may also be
exposed to negative rating actions including placement on Rating
Watch Negative or downgrade.

Fitch does not expect to resolve the status of transactions placed
on Rating Watch Negative until its bank-specific credit analysis
is completed.  With respect to defaulted or deferring collateral,
Fitch will seek to undertake an issuer-specific analysis in order
to determine the likelihood of resumption of payment and the
potential recovery prospects in the event of default.  Given that
Fitch's analysis of performing and non-performing bank collateral
remains ongoing, the magnitude of potential rating changes on bank
TruPS CDOs cannot yet be quantified.


* S&P Revises the Outlook on Seven of Fund of Funds to Neg.
-----------------------------------------------------------
Standard & Poor's Ratings Services revised the outlook on seven of
its fund of funds to negative from stable, based on the shrinking
size of the Canadian income fund sector.  At the same time,
Standard & Poor's revised the outlook on Sentry Select Diversified
Income Trust to stable from positive.  Standard & Poor's also
affirmed the Canadian stability ratings on the funds, including
the 'SR-3' stability rating on Sentry Select and the 'SR-1'
stability ratings on the other trusts.  Brompton Stable Income
Fund remains on StabilityWatch with negative implications, where
it was placed April 18, 2008, following the fund's announcement of
the proposed merger of Brompton Stable Income Fund into the
Brompton VIP Income Fund (unrated).
     
The funds on negative outlook are Citadel S-1 Income Trust Fund;
Citadel Stable S-1 Income Fund; diversiTrust Stable Income Fund;
MACCs Sustainable Yield Trust; Select 50 S-1 Income Trust; Select
50 S-1 Income Trust II; and Series S-1 Income Fund.

Stability ratings on fund of funds do not address the extent of
capital recovery expected at the trust's termination, the
potential fluctuations in the unit price, current or prospective
yield, or tax.
     
This rating action affects seven 'SR-1' rated funds.  "In all
cases, the underlying portfolios of income fund investments
continue to perform in a manner that reflects the highest level of
stability in their distributable cash generation," said Standard &
Poor's stability analyst Ronald Charbon.  These funds have well-
diversified portfolios of income fund securities that support a
low variability level in the portfolio's cash generation under
various scenarios of distribution changes for each underlying
security.  "As a result, the concern is not so much distribution
variability from existing underlying portfolios, but rather the
trusts' sustainability given the shrinking universe of listed
income funds," Mr. Charbon added.  As the listed universe reduces,
the fund of funds' ability to maintain a well-diversified
portfolio of income fund securities will become more difficult.
     
S&P could lower any of the stability ratings if a fund of fund
says it intends not to maintain an investment strategy
commensurate with the assigned stability rating, or if the
underlying portfolio of invested securities materially deviates
from acceptable rating parameters.

A stability rating is not a credit rating but reflects Standard &
Poor's current opinion on the prospective relative stability of
distributable cash flow generation on a scale running from 'SR-1'
to 'SR-7'.  A stability rating is an opinion and is not a
verifiable statement of fact.  Stability ratings are based on
information provided to Standard & Poor's by an issuer or its
agents and Standard & Poor's relies on the issuer, its accountant,
counsel and other experts for the accuracy, completeness and
timeliness of the information submitted to it in connection with a
stability rating.  Standard & Poor's does not perform an audit in
connection with a stability rating and undertakes no duty of due
diligence or independent verification of any information used in
the rating process.  

Standard & Poor's does not and cannot guarantee the accuracy,
completeness or timeliness of the information relied on in
connection with a stability rating or the results obtained from
the use of such information.  Standard & Poor's may raise, lower,
suspend, place on StabilityWatch or withdraw a stability rating at
any time, in Standard & Poor's sole discretion.  A stability
rating is not a "market" rating nor a recommendation to buy, hold,
or sell any security.


* NHB Names Charles Lewis as Senior Consultant in Delaware Office
-----------------------------------------------------------------
NachmanHaysBrownstein, Inc. has appointed Charles Lewis, Esq. as a
senior consultant in its Wilmington, Delaware office.

Mr. Lewis has over 15 years of management experience in various
industries.  His previous responsibilities have included profit
and loss management, strategic planning, budget and forecast
development.  His experience extends to the distribution,
construction, industrial service and food service industries.

Mr. Lewis supports NHB's Creditor Services Group in its bankruptcy
and insolvency business segment, and provides experience in client
research and acquisition as well as support to the various facets
of bankruptcy work.  He also provides financial statement analysis
as it relates to the cash flow of various organizations.

Prior to joining NHB, Mr. Lewis served as the Controller for QSL-
Plus/CONAM, Inc., a multi-state, industrial inspection company
specializing in non-destructive testing, and more recently, as the
Controller for Pro-Tech Floors LLC, a commercial flooring
contractor.  He was also responsible for the operational
restructuring of these organizations to meet a high rate of growth
as well as evaluating infrastructural and personnel needs, and was
responsible for the successful implementation of improved policy
and procedures, with an emphasis on improving collections and
financing ability.

Mr. Lewis' prior bankruptcy and insolvency experience was obtained
at Parente Randolph where he was an Accounting Specialist.

                   About NachmanHaysBrownstein

Based in Philadelphia, NachmanHaysBrownstein Inc. --
http://www.nhbteam.com/-- is one of the country's leading
turnaround and crisis management firms, having been included among
the "Outstanding Turnaround Firms" in Turnarounds & Workouts for
the past twelve consecutive years.  NHB demonstrates leadership in
corporate renewal by creating value and preserving capital through
turnaround and crisis management, financial advisory, investment
banking and fiduciary services to financially challenged companies
throughout America, as well as through their investors, lenders
and trade creditors.  NHB focuses on producing lasting performance
improvement and maximizing the business' value to stakeholders by
providing the leadership and credibility required to reconcile the
client's objectives, economic reality and available alternatives
to establish an achievable goal.


* BOOK REVIEW: Business Wit & Wisdom
------------------------------------
Author:     Richard S. Zera
Publisher:  Beard Books
Paperback:  316 pages
List Price: US$34.95

Order your personal copy at
http://www.amazon.com/exec/obidos/ASIN/1587982560/internetbankrupt

This book Business Wit & Wisdom, written by Richard S. Zera
houses a masterful collection of sayings, anecdotes, and quotes
to amuse.

Thought provoking ideas and expressions can be found on every
page, along with stories and quips to prompt a smile or a hearty
chuckle.

Conveniently grouped by subject, this gold mine can be easily
panned by speakers for relevant nuggets, and readers can just
enjoy the thoughts and meanings prompted by so many of the
entries of this wonderful treasure chest.

                             *********

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 ***