TCR_Public/080606.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, June 6, 2008, Vol. 12, No. 134           

                             Headlines

ACCENTIA BIOPHARMA: March 31 Balance Sheet Upside-Down by $72.8 MM
ACE MORTGAGE: Fitch Cuts BBB+ Rating to BB on Class M-3 Certs.
ACTIVANT SOLUTIONS: Moody's Holds Caa1 Rating on $175MM Sr. Notes
AIRGAS INC: Moody's Holds Ba2 Sub. Notes Rating; Outlook Positive
AIRGAS INC: S&P Lifts Subordinated Debt Rating to BB+ from BB-

ALLTEL CORP: Inks $28 Billion Buyout Deal with Verizon Wireless
ALOHA AIRLINES: Yucaipa Might Bid for Claim in Mesa Air Suit
ALON REFINING: S&P Assigns 'B' Corporate Credit Rating
AMBAC ASSURANCE: S&P Cuts Financial Strength Rating to AA from AAA
AMERIQUEST NET: Fitch Cuts BB Rating to C/DR5 on $12.8MM Trusts

ATA AIRLINES: Gets Court OK to Employ Pyramid to Sell Properties
ATA AIRLINES: Panel May Employ Otterbourg Steindler as Counsel
ATA AIRLINES: Panel May Employ FTI Consulting as Financial Advisor
BF SAUL REAL ESTATE: Moody's Holds Unit's C- BFSR; Outlook Neg.
BIOVEST INT'L: March 31 Balance Sheet Upside-Down by $34.2 Million

BLAST ENERGY: Appoints Michael L. Peterson to Board of Directors
BOSTON SCIENTIFIC: Fitch Affirms 'BB+' Issuer Default Rating
BRIAN MARTIN: Case Summary & 20 Largest Unsecured Creditors
BY-WA COMPANY: Case Summary & Nine Largest Unsecured Creditors
CABLEVISION SYSTEMS: S&P Affirms Ratings on Pending Sundance Deal

CARIBE MEDIA: Moody's Affirms B2 Corporate Family Rating
CENTRAL SUN: Posts $5,022,000 Net Loss in 2008 First Quarter
CENVEO CORP: Moody's Affirms Unit's B3 Senior Sub. Bond Rating
CHAMPION ENTERPRISES: Moody's Cuts CFR to B2; Outlook Negative
CHASE MORTGAGE: Fitch Lowers Ratings on 14 Certificate Classes

CHECKSMART FINANCIAL: Moody's Cuts Rating on 2nd Lien Loan to Ca
CITYSCAPE: Fitch Takes Rating Actions on 13 Certificates
CONEXANT SYSTEMS: Expects Above Target Guidance for Third Quarter
CONTINENTAL AIRLINES: To Retire 67 Aircraft and Cut 3,000 Jobs
C&S FINANCE: Case Summary & 32 Largest Unsecured Creditors

CYTOCORE INC: Posts $1,886,000 Net Loss in 2008 First Quarter
DAIMLER CHRYSLER: Fitch Trims Ratings After Rating Cut on Chrysler
DECRANE AEROSPACE: Moody's Junks Corporate Family Rating
DELPHI CORP: Hearing on Appaloosa Trial Adjourned to June 9
DEMAND CONCEPTS: Voluntary Chapter 11 Case Summary

DEN-MARK CONSTRUCTION: May Access DIP Funds from Bank Lenders
DEN-MARK CONSTRUCTION: President May Get Year-End Sales Bonus
DEN-MARK CONSTRUCTION: Administrator Wants a Lienholders' Panel
DG COGEN PARTNERS: 1211658 ALBERTA LTD Schedules June 6 Auction  
DIGITAL GAS: Case Summary & List of 20 Largest Unsecured Creditors

DORADO BECKVILLE: Case Summary & 20 Largest Unsecured Creditors
DRAGON PHARMACEUTICAL: Earns $1.96 Million in 2008 First Quarter
EMPIRE FUNDING: Fitch Holds 'BB' Rating on 1999-1 Class B2 Certs.
FORD MOTOR: Has Ample Liquidity to Fund Turnaround Program
FRONTIER AIRLINES: Teamsters Supports Wage and Benefit Concessions

GAYLE BETTER-PRIMROSE: Case Summary & 11 Largest Unsec. Creditors
GAYLE BETTER-PRIMROSE: Section 341 Meeting Scheduled for June 16
GRAFTECH INT'L: Moody's Upgrades CFR to Ba2; Outlook Stable
GREEKTOWN CASINO: Interim DIP Financing Approved by Gaming Board
GREEKTOWN CASINO: Wants to Hire Conway Mackenzie as Fin'l Advisors

GREEKTOWN CASINO: Wants Schedules-Filing Deadline on June 13
GREY WOLF: Moody's Rates Credit Facilities at Ba1
HARLAND CLARKE: S&P Holds B+ Rating and Revises Outlook to Stable
HOMEBANC CORP: Eckert Seamans Opposes Disclosure Statement
HOOP HOLDINGS: Walt Disney Shutters 98 Outlets After Buyout

HUGHES NETWORK: Moody's Affirms B1 Corporate Family Rating
INDUSTRY MORTGAGE: Fitch Revises Ratings on Two Cert. Classes
INDYMAC MORTGAGE: Fitch Takes Rating Actions on Various Classes
IRON MOUNTAIN: Moody's Assigns B2 to Proposed Note Offering
IXIS NET: Fitch Chips Ratings to 'C/DR6' on Five Note Classes

LAUREATE EDUCATION: Moody's Affirms Caa1 Ratings on Senior Notes
LEAR CORP: S&P's Rating Unmoved by Lower Full-Year 2008 Guidance
LENDER PROCESSING: Moody's Assigns Ba2 Rating on $400MM Sr. Notes
LINENS N' THINGS: Committee Wants to Retain Otterbourg as Counsel
LINENS N' THINGS: Court Approves Morgan Lewis as Special Counsel

LINENS N' THINGS: Court Approves Richards Layton as Counsel
LINENS N' THINGS: Court Approves Gardere as Special Counsel
MANCHESTER INC: Confirmation Hearing on Plan Set for June 12
MBIA INC: S&P Cuts Rating to A- from AA-, Puts Under Neg. Watch
MEDINA IMPORTS: Chapter 11 Filing Halts Seizure of Assets

MEDINA IMPORTS: Case Summary & 10 Largest Unsecured Creditors
MELLON 1ST BUSINESS: Moody's Upgrades BFSR From B+ to A-
MESA AIR: Yucaipa Might Bid for Claim in Aloha Lawsuit
METROPOLITAN MORTGAGE: Fitch Retains Junk Ratings on Three Classes
MICHAELS STORES: Moody's Reviewing Caa1 Ratings for Downgrade

MIRABILIS VENTURES: Chapter 11 Case Under Government Scrutiny
MORGAN STANLEY: Fitch Downgrades Ratings on 37 Certificate Classes
MOVIE GALLERY: Wants to Clarify Timing of Claim Allowances
MOVIE GALLERY: Delays Filing of 2008 Quarterly Financial Results
MRS FIELDS: To Restructure $196MM Debt, Warns of Bankruptcy

NEW YORK RACING: NYOTB Restructuring Plan Puts NYRA on The Red
NORCROSS SAFETY: Moody's Withdraws All Ratings
NORTHWEST AIRLINES: Moody's Cuts Corporate Family Rating to B2
NOVASTAR FINANCIAL: Gets Acceleration Notice, Warns of Bankruptcy
NOVASTAR FINANCIAL: NMI Inks Securities Purchase with Kodiak CDO

OMEGA WALLBEDS: Case Summary & 12 Largest Unsecured Creditors
OMEGA WALLBEDS: Section 341 Meeting Scheduled for June 12
PACIFIC SOUTHWEST: Fitch Affirms 'BB' Rating on Class B-2 Certs.
PALM HARBOR: Posts $124.3 Million Net Loss in Year Ended March 28
PEP BOYS: Moody's Junks Rating on $200MM Senior Sub. Notes

PERFORMANCE TRANS: Gets Court's Authority to Reduce Wages by 15%
PERFORMANCE TRANS: Seeks Court Nod to Exit from NATLD Contract
PERFORMANCE TRANS: Says Motion for Ch. 11 Trustee Should be Denied
PET MEDICAL: Case Summary & 20 Largest Unsecured Creditors
PIERRE FOODS: Default Prompts Moody's to Cut CFR to Caa2

PINNACLE FOODS: Moody's Affirms Caa2 Rating on $199MM Sr. Notes
PLASTECH ENGINEERED: Seeks Court Nod on Revised Bidding Procedures
PLASTECH ENGINEERED: Plastic Mold Wary Over Interest in GM Tooling
PLASTECH ENGINEERED: Seeks OK of Wind Down Funding & Sale Pacts
PLY-GEM INDUSTRIES: Moody's Affirms Caa2 Rating on $360MM Notes

PREMD INC: Wants to Reverse AMEX's Determination to Delist Stocks
PROSPECT MEDICAL: Moody's Cuts 2nd Lien Sr. Debt Rating to Caa3
QUALITY HOME: S&P Junks Rating on Weak Operating Performance
RAFAELLA APPAREL: Poor 3rd Quarter Results Cue S&P to Lower Rating
RAINBOW NATIONAL: Moody's Affirms B2 Senior Sub. Notes Rating

RENAISSANCE HOME: Fitch Chips Ratings to 'BB' on Two Cert. Classes
RESIDENTIAL CAPITAL: S&P Puts 'SD' Rating After Completed Offer
RITE AID: Commences $710MM Debt Offerings and Consent Solicitation
SALEM COMMUNICATIONS: Moody's Cuts CFR to B1; Outlook Negative
SANDRA GRAVES: Voluntary Chapter 11 Case Summary

SCIENTIFIC GAMES: Moody's Rates $200MM Sr. Note Offering Ba3
SEQUA CORP: Moody's Puts (P)Caa2 Ratings on New Unsecured Notes
SEQUA CORP: S&P Holds 'B-' Rating on $500MM Senior Unsecured Notes
SHERMAG INC: Obtains Extension of CCAA Stay Order Until Sept. 8
SOLAR COSMETIC: U.S. Trustee Forms Seven-Member Creditors Panel

SOLAR COSMETIC: Committee Wants Cases Converted to Chapter 7
SOLAR COSMETIC: Committee Taps Jeffrey Bast as Counsel
STALLION OILFIELD: Stirling Acquisition Won't Affect S&P's Ratings
STATE STREET: Moody's Affirms B+ Financial Strength Rating
STEAMERS RAW BAR: Case Summary & 6 Largest Unsecured Creditors

STRATEGY DEV'T: Case Summary & 20 Largest Unsecured Creditors
SUNSHINE VW: Files Voluntary Chapter 11 Case Summary
SUPERIOR OFFSHORE: Section 341(a) Meeting Scheduled for July 1
SUPERIOR OFFSHORE: U.S. Trustee Forms Five-Member Committee
TERRA INDUSTRIES: Improved Earnings Prompt S&P to Lift Ratings

TRIBUNE CO: To Trim Down 500 Pages in Newspapers, Cut Workforce
TRICADIA CDO: S&P Puts Default Ratings After Trustee's Notice
TRONOX WORLDWIDE: Moody's Cuts Corp. Family Rating to B3
UAL CORPORATION: Cuts Fleet and Staff to Survive Economic Slump
WORLDSPACE INC: Holders Forbear $18MM Loan Payment Until June 30

XERIUM TECHNOLOGIES: Amends Terms of $660MM Credit Facility
YANKEE CANDLE: Moody's Holds Caa1 Rating on $200MM Sr. Sub. Notes

* S&P Lowers Ratings on 41 Trances from 10 Cash Flow & Hybrid CDOs

* Pilot Reps Spur U.S. Congress to Bar Bankruptcy Law Abuse

* Allen Matkins Adds Michael Adele as Sr. Counsel in Del Mar Unit
* Alvarez & Marsal Names Xavier Oustalniol as Managing Director
* Loughlin Meghji Expands Practice with Five Sr. Staff Additions
* Ulmer & Berne Forms Practice to Address Subprime Mortgage Crisis
* Bankruptcy Attorney Hank Baer is Finn Dixon's New Partner

* BOOK REVIEW: Trump: The Saga of America's Most Powerful Real
                    Estate Baron

                             *********

ACCENTIA BIOPHARMA: March 31 Balance Sheet Upside-Down by $72.8 MM
------------------------------------------------------------------
Accentia Biopharmaceuticals Inc.'s consolidated balance sheet at
March 31, 2008, showed $29.0 million in total assets,
$97.0 million in total liabilities, $4.7 million in
non-controlling interest in variable interest entities, and
$111,963 in convertible redeemable preferred stock, resulting in a
$72.8 million total stockholders' deficit.

At March 31, 2008, the company's consolidated balance sheet also
showed strained liquidity with $10.1 million in total current
assets available to pay $77.7 million in total current
liabilities.

The company reported a net loss of $8.3 million, on total net
sales of $4.2 million, in the second quarter ended March 31, 2008,
compared with a net loss of $8.0 million, on total net sales of
$4.6 million, in the same period ended March 31, 2007.

The decrease in consolidated net sales for the three months ended
March 31, 2008, reflected a decrease of $600,000 in net sales in
the company's Specialty Pharmaceuticals segment primarily due to
the discontinuance of its Respi-Tann G product line due to FDA
mandate, and product returns, offset by a increase of $200,000
million in net sales of the company's Analytica subsidiary.

                        Six Months Results

Nnet sales for the six months ended March 31, 2008, were
$8.5 million, a decrease of $1.9 million, or 19%, from the six
months ended March 31, 2007.  

The decrease in consolidated net sales for the six months ended
March 31, 2008, reflected a decrease of $2.0 million in net sales
in the Specialty Pharmaceuticals segment primarily due to the
divestiture of the company's Xodol and Histex product lines in
October 2006, the discontinuance of the Respi-Tann G product line
due to FDA mandate, and product returns, offset by an increase of
$100,000 in net sales of the company's Analytica subsidiary.

Net loss for the six months ended March 31, 2008, was
$33.1 million, versus a net loss of $38.7 million in the
comparable period ended March 31, 2007.

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?2d55

                       Going Concern Doubt

Aidman, Piser & Company, P.A., in Tampa, Florida, expressed
substantial doubt about Accential Biopharmaceuticals Inc.'s
ability to continue as a going concern after auditing the
company's consolidated financial statements for the years ended
Sept. 30, 2007, and 2006.  The auditing firm reported that the
company has incurred cumulative net losses of approximately
$164.1 million during the three years ended Sept. 30, 2007,
$57.8 million of which was attributable to their 76% owned
subsidiary, and, as of that date, had a working capital deficiency
of approximately $53.1 million.

The company incurred net losses of $33.1 million, used cash from
operations of approximately $16.1 million during the six months
ended March 31, 2008, and has a working capital deficit of
approximately $67.5 million at March 31, 2008.  Net losses for
Biovest, whose results are consolidated with the company, were
approximately $7.8 million, during the same six month period.

                About Accentia Biopharmaceuticals

Based in Tampa, Florida, Accentia BioPharmaceuticals Inc. (Nasdaq:
ABPI) -- http://www.accentia.net/-- is a vertically integrated   
biopharmaceutical company focused on the development and
commercialization of drug candidates that are in late-stage
clinical development and typically are based on active
pharmaceutical ingredients that have been previously approved by
the FDA for other indications.  The company's lead product
candidate is SinuNase(TM), a novel application and formulation of
a known therapeutic to treat chronic rhinosinusitis.

Additionally, the company has acquired the majority ownership
interest in Biovest International Inc. and a royalty interest in
Biovest's lead drug candidate, BiovaxID(TM) and any other biologic
products developed by Biovest.  The company also has a specialty
pharmaceutical business, which markets products focused on
respiratory disease and an analytical consulting business that
serves customers in the biopharmaceutical industry.


ACE MORTGAGE: Fitch Cuts BBB+ Rating to BB on Class M-3 Certs.
--------------------------------------------------------------
Fitch Ratings has taken rating actions on 15 mortgage pass-through
certificates.  Unless stated otherwise, any bonds that were
previously placed on Rating Watch Negative are removed.

Ace 1999-LB2
  -- A affirmed at 'AAA';
  -- M1 affirmed at 'AA+';
  -- M2 affirmed at 'A+';
  -- B affirmed at 'BBB-';

Deal Summary
  -- Originators: Long Beach Mortgage
  -- 60+ day Delinquency: 20.85%
  -- Realized Losses to date (% of Original Balance): 4.49%

Ace 2001-HE1
  -- M-1 affirmed at 'AAA';
  -- M-2 affirmed at 'AA';
  -- M-3 downgraded to 'BB' from 'BBB+';

Deal Summary
  -- Originators: People's Choice, New Century, Homestar, Town &
Country
  -- 60+ day Delinquency: 32.46%
  -- Realized Losses to date (% of Original Balance): 1.46%

Ace 2002-HE2
  -- M-1 affirmed at 'AA';
  -- M-2 affirmed at 'BB';
  -- M-3 revised to 'B-/DR2' from B-/DR1';
  -- M-4 revised to 'CCC/DR2' from CCC/DR1';

Deal Summary
  -- Originators: 28.61% Wells Fargo, 26.51% Encore
  -- 60+ day Delinquency: 20.11%
  -- Realized Losses to date (% of Original Balance): 1.98%

Ace 2002-HE3 TOTAL
  -- A-1 affirmed at 'AAA';
  -- M-1 affirmed at 'AA+';
  -- M-2 affirmed at 'BB';
  -- M-3 revised to 'CCC/DR3' from CCC/DR2';

Deal Summary
  -- Originators: 50.41% Wells Fargo, 27.7% Encore
  -- 60+ day Delinquency: 15.52%
  -- Realized Losses to date (% of Original Balance): 1.60%


ACTIVANT SOLUTIONS: Moody's Holds Caa1 Rating on $175MM Sr. Notes
-----------------------------------------------------------------
Moody's Investors Service lowered Activant Solutions Inc.'s
speculative grade liquidity rating to SGL-3 from SGL-2 and revised
the company's outlook to negative from stable. Additionally,
Moody's affirmed the company's long term ratings including its B2
corporate family rating. The change in Activant's liquidity rating
is driven by the company's reduced cushion with respect to its
financial maintenance covenants under its credit facilities. The
negative outlook reflects the covenant concerns as well as
declines in the company's hardlines and lumber software segment.

Liquidity remains relatively strong today but stepdowns in
covenant levels over the next twelve months may add pressure to
reduce costs or seek amendments from current levels. The company
had a $50 million cash position and $20 million of undrawn
capacity remaining on its revolving credit facility as of
March 31, 2008. The company also has a history of positive free
cash flow generation despite high leverage.

Revenues for the hardlines and lumber segment in the quarter ended
March 31, 2008 were 17% lower than levels from the same quarter in
the prior year. Declines have been driven by the slumping housing
and commercial construction sectors. Systems and service sales to
the hardlines and lumber market represented approximately 34% of
Activant's total revenue. Moody's expects the hardlines and lumber
software business to continue to face ongoing challenges
throughout the year.

These ratings were affected:

   Speculative Grade Liquidity Rating to SGL-3 from SGL-2

   Outlook to negative from stable

These ratings were affirmed:

   Corporate Family Rating, B2

   Probability of Default Rating, B2

   $40 million senior secured revolving credit facility due 2011
   -- B1 LGD3 (34%)

   $437 million senior secured term loan due 2013 -- B1 LGD3
   (34%)

   $175 million senior subordinated notes due 2016 -- Caa1,
   LGD5 (88%)

The B2 corporate family rating continues to reflect the company's
high leverage levels, sensitivity to economic downturns (given the
high leverage), and challenges in the hardlines and lumber as well
as automotive vertical markets. At the same time, the rating also
considers Activant's expertise and strong customer following, the
critical nature of the products to the end user's business and the
recurring nature of a large portion of their cash flows.

Activant is a leading provider of enterprise software and systems
to small to medium sized retail and wholesale businesses in the
automotive parts, hardlines and lumber, and wholesale and
distribution business industries in the United States and Canada.
Activant is headquartered in Livermore, CA.


AIRGAS INC: Moody's Holds Ba2 Sub. Notes Rating; Outlook Positive
-----------------------------------------------------------------
Moody's Investors Service affirmed the Ba1 corporate family rating
and the Ba2 subordinated notes rating for Airgas Inc. Moody's also
changed Airgas' outlook to positive from stable given its strong
fourth quarter results and improving financial metrics. Many of
the company's financial metrics have risen toward investment grade
despite spending roughly $1.2 billion on acquisitions over the
past two years. Moody's also noted that Airgas has been able to
maintain a 52% gross margin in spite of the sharp increase in
fuel, gas and energy costs since the start of the year. The
positive outlook also incorporates the belief that Airgas can
continue to perform well despite the weakening of certain sectors
of the US market, including housing and autos. If the company's
financial metrics continue to improve over the near term, Moody's
could raise the company's ratings to investment grade.

Airgas Inc., headquartered in Radnor, PA, is the largest
independent distributor of industrial, medical and specialty gases
and related equipment in North America. Airgas reported sales of
over $4 billion in its fiscal year ending March 31, 2008.


AIRGAS INC: S&P Lifts Subordinated Debt Rating to BB+ from BB-
--------------------------------------------------------------
Standard & Poor's Ratings Services raised its corporate credit
rating on Radnor, Pennsylvania-based Airgas Inc. to 'BBB-' from
'BB+', and its subordinated debt rating to 'BB+' from 'BB-'.
     
Standard & Poor's also assigned a 'BB+' rating to the company's
proposed new issue of $350 million senior subordinated notes due
2018.  Completion of the debt offering will extend the debt
maturity profile and will provide funding to reduce borrowings
under the revolving credit facility.  The outlook is positive.
     
The upgrade reflects prospects for a continuation of strong
earnings as well as for debt leverage policies that support
average cash flow protection measures at or near current levels.
      
"Although periodic spikes in debt to fund acquisitions remain a
risk factor, the company's respectable track record of integrating
acquisitions, stability of cash flow generation, and good business
fundamentals bolster prospects for credit quality metrics," said
Standard & Poor's credit analyst Wesley E. Chinn.
     
The ratings on Airgas incorporate its strong business risk
profile, which reflects, in part, its position as the leading
North American distributor of industrial gases and related
equipment (generating sales of roughly $4 billion); good operating
margins; and stable cash flows.  These strengths are tempered by
ongoing, meaningful acquisition-related outlays, the moderate
cyclicality of the manufacturing and industrial markets the
company serves, and management's financial policies that favor
using debt to help fund acquisitions.  Airgas has the broadest
geographic coverage within the industry, via its U.S. distribution
network encompassing more than 1,100 locations.
     
The positive outlook recognizes the potential that funds from
operations as a percentage of adjusted debt may improve to and be
sustained at the close-to-30% level, which S&P view as appropriate
for a possible higher corporate credit rating of 'BBB'.   
Underpinning this prospect are Airgas' strong business
fundamentals and resilient internal funds generation, which is
benefiting from higher operating profits.  The income rise is due,
in part, to acquisitions, favorable energy and infrastructure
construction markets, and growth in strategic products, which make
up 40% of consolidated revenues, including safety products, bulk
gas, specialty gas, carbon dioxide, and medical gases.
     
Airgas will continue to make acquisitions to strengthen its
position in existing markets, provide new locations, create cross-
selling opportunities of welding supplies and safety equipment to
the acquired customers, and add product lines.  Consequently, an
upgrade, which could occur in the next 12 to 24 months, is
dependent mainly on management's financial policies remaining
supportive of improved credit quality on a sustained basis.


ALLTEL CORP: Inks $28 Billion Buyout Deal with Verizon Wireless
---------------------------------------------------------------
Verizon Wireless Inc. entered into an agreement with Alltel
Corporation and Atlantis Holdings LLC, an affiliate of private
investment firm TPG Capital and GS Capital Partners, to acquire
Alltel Corporation in a cash merger.  The aggregate value of the
transaction is $28.1 billion.

Under the terms of the agreement, Verizon Wireless will acquire
the equity of Alltel for approximately $5.9 billion.  Based on
Alltel's projected net debt at closing of $22.2 billion.

The negotiations came seven months after Alltel was sold to TPG
Capital and a unit of Goldman Sachs Group in a $27.5 billion
leveraged buyout, The Wall Street Journal relates.  The possible
rapid resale is a powerful sign of how the credit crunch is
roiling the business world, WSJ noted.

WSJ related that Verizon was among the companies that considered
buying Alltel in 2007 when the company put itself on sale.  But
Verizon ultimately concluded that the resulting increase in
Alltel's share price made a deal too expensive, WSJ added.

In a press statement, the parties stated that they are targeting
completion of the merger by the end of the year, subject to
obtaining regulatory approvals.

Once this transaction closes, customers of both companies will
have access to an expanded range of products and services,
including a premier lineup of basic and advanced devices and an
expanded IN Network calling community.

Alltel customers will also benefit from advanced services
including over-the-air downloadable music from a three-million-
song library, and a network that is nationwide, for a uniform
coast-to-coast experience.  They will also be able to take
advantage of industry-leading consumer policies, including Test
Drive and Worry Free Guarantee(R).

"This move will create an enhanced platform of network coverage,
spectrum and customer care to better serve the growing needs of
both Alltel and Verizon Wireless customers for reliable basic and
advanced broadband wireless services," Lowell McAdam, Verizon
Wireless president and chief executive officer, said.

Alltel serves more than 13 million customers in markets in 34
states.  This includes 57 rural markets that Verizon Wireless does
not serve.  The transaction puts the Alltel markets and customers
on a path to advanced 4th generation services as Verizon Wireless
deploys LTE technology throughout its network over the next
several years.  Alltel's customers will also reap the benefits of
Verizon Wireless' Open Development initiative, which welcomes
third-party devices and services to use the Verizon Wireless
network.

Verizon Communications, the owner of the majority stake in Verizon
Wireless, expects that the transaction will be immediately
accretive, excluding transaction and integration costs.

WSJ stated that Verizon would likely save about $1 billion in the
first two years through administrative cuts and by eliminating
roaming fees paid to Alltel.

In the statement, Ivan Seidenberg, Verizon chief executive officer
and chairman of the Verizon board, said that "this is a perfect
fit, with Alltel's high-value post-paid customer base, its solid
financials, our common network technology, and significant,
readily attainable synergies.  Verizon Wireless' acquisition of
Alltel clearly provides opportunities for enhanced value for
Verizon shareholders."

Alltel president and chief executive officer Scott Ford will
continue in his current position as head of Alltel until the
merger is completed.

"Both Alltel and Verizon Wireless have long track records of
delivering a high-quality customer experience in the marketplace,"
Mr. Ford said.  "The combination of our two companies will
continue and improve upon that heritage as, together, we can more
quickly deliver an expanded range of innovative products and
services to our customers."

Verizon Wireless expects to realize synergies with a net present
value, after integration costs, of more than $9 billion driven by
reduced capital and operating expense savings.  Synergies are
expected to generate incremental cost savings of $1 billion in the
second year after closing.

WSJ notes that shares of Verizon Communications fell 1% on
Wednesday to $36.98 in 4 p.m. trading on the New York Stock
Exchange.

In the case of Alltel, news of the deal, which was first reported
on CNBC, caused the secondary-market prices of some Alltel bonds
to rise sharply to 99 cents on the dollar, from 89 cents,
according to bond-trading platform MarketAxess, WSJ noted.  WSJ
indicated that prices of the company's leveraged loans also
jumped.

WSJ pointed that the increases indicate that debt investors expect
to benefit significantly from an acquisition by Verizon, which is
much stronger financially and has an investment-grade credit
rating.

Alltel and Verizon Wireless, in a statement, related that both use
a common network technology, which provides advantages of a
seamless transition for Alltel customers, ease in integrating the
two companies' networks, and scale efficiencies in operating the
larger integrated network.

Morgan Stanley acted as financial advisor to Verizon Wireless on
this transaction and is providing bridge financing.  Debevoise &
Plimpton LLP acted as legal advisor to Verizon Wireless.

Citibank, Goldman Sachs and RBS advised the sellers on the
transaction.  Wachtell, Lipton, Rosen & Katz acted as legal
advisor to Alltel, and Cleary Gottlieb Steen & Hamilton LLP and
Ropes & Gray LLP acted as legal advisors to the sellers.

                   About Verizon Wireless Inc.

Headquartered in Bedminster, New Jersey, Verizon Wireless Inc. --
http://www.verizonwireless.com/-- is a wireless communications  
provider.  Verizon Wireless provides service in 49 of the 50 most
populated United States metropolitan areas and 97 of the most
populated 100 United States metropolitan areas.  Verizon Wireless
is owned by Verizon Communications, a provider of wireline voice
and data services with 125 million access line equivalents, and
Vodafone, a wireless telecommunications company.  The company
offers wireless services and pricing packages for both wireless
voice and data communications.  Verizon Wireless offers basic
voice services, well as enhanced services and features, including
caller ID, call waiting, call forwarding, three-way calling, no
answer and busy transfer and basic voice mail and data services.
The company designs its service packages to target young adults,
households, mobile professionals, small to medium-sized businesses
and national accounts.

                 About Alltel Corporation

Headquartered in Little Rock, Arkansas, ALLTEL Corporation
(NYSE:AT) -- http://www.alltel.com/-- operates a wireless   
network, which delivers voice and advanced data services
nationwide to 12 million customers.  

                         *     *     *

Fitch Ratings placed Alltel Corporation's senior unsecured debt
and bank loan debt ratings at 'CCC+' in November 2007.  The
ratings still hold to date with a stable outlook.


ALOHA AIRLINES: Yucaipa Might Bid for Claim in Mesa Air Suit
------------------------------------------------------------
James Wagner, an attorney for Aloha Airlines, Inc.'s Chapter 7
trustee Dane Field, said the likeliest bidder for the legal claim
in the company's 2006 lawsuit against go! parent Mesa Air Group
Inc. would be Yucaipa Cos. LLC, Dave Segal of the Honolulu Star-
Bulletin reports.

Yucaipa Cos. is Aloha's majority shareholder and second secured
creditor behind Aloha's primary lender, GMAC Commercial Finance
LLC.  It is owed $106.7 million.

Mr. Wagner said Mesa also could be a possible bidder, the report
said.

As reported by the Troubled Company Reporter on June 3, 2008, the
Trustee in the bankruptcy of Aloha Airlines is planning to auction
off the legal claim in Aloha's lawsuit againt Mesa Air Group.  

As reported by the TCR on Oct. 19, 2006, Aloha Airlines, and Aloha
Airgroup, Inc., filed a suit in a state Circuit Court alleging
that Mesa Air Group received confidential information as a
potential investor in the company and used it improperly to enter
Hawaii's inter-island market with intent to drive the company out
of business.

The company alleged that Mesa used its proprietary information to
unethically compete in the Hawaii market by offering air fares
that failed to cover Mesa's costs.  

The company had sought damages and injunctive relief to stop Mesa
from competing unfairly, and threatening the jobs of the company's
3,500 employees in Hawaii.

Commenting on the possible auction, Mr. Wagner said "As you can
imagine, there's probably very few bidders for this asset."

A winning bid by Yucaipa would allow it to control the lawsuit,
while a bid by Mesa would be, in essence, an out-of-court
settlement, the Star-Bulletin reports.

The lawsuit had not yet been heard.  In Honolulu District Court
last week, federal Judge David Ezra said the Aloha-Mesa Air
lawsuit had languished so long, he will stick with the same
hearing schedule even if somebody buys the suit from Aloha, TMCnet
reports.  

The trial is scheduled for Oct. 28.

                    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.

                        About Mesa Air

Mesa Air -- http://www.mesa-air.com-- 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.  
Mesa has  5,000 employees overall.

Freedom Airlines currently operates 34 50-seat ERJ-145 and 7 76-
seat CRJ-900 aircraft for Delta Connection.

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.


ALON REFINING: S&P Assigns 'B' Corporate Credit Rating
------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'B' corporate
credit rating to refining company Alon Refining Krotz Springs
Inc., a wholly owned, restricted indirect subsidiary of Alon USA
Energy Inc. (B+/Watch Negative/--).  The outlook is stable.
     
At the same time, S&P assigned ratings to Alon Krotz Springs'
proposed $295 million term loan facility, which includes a
$50 million letter of credit facility.  S&P rate the loan 'B+'
with a recovery rating of '2', indicating S&P's expectation for
substantial (70% to 90%) recovery of principal in the event of a
payment default.  The term loan is non-recourse to the assets of
Alon USA Energy Inc.
     
Pro forma for the proposed financing, Alon Krotz Springs expects
to have approximately $370 million of debt outstanding at the
close of the transaction.
     
"The stable outlook reflects our expectation for rapid debt
repayment over the next two years while Alon Krotz Springs' hedges
are in place," said Standard & Poor's credit analyst Paul Harvey.
     
Proceeds from the term loan will be used to help fund Alon USA's
$475 million acquisition of Valero Energy Corp.'s Krotz Springs
refinery in Krotz Springs, Louisiana.  The purchase price includes
roughly $125 million for working capital.  In addition to the term
loan, funding includes $80 million of preferred equity issued to
Alon Israel Oil Company Ltd. (72% owner of Alon USA; not rated), a
$25 million equity infusion from Alon USA, and $125 million of
borrowings from Alon Krotz Springs' credit facility to fund the
acquisition of working capital.


AMBAC ASSURANCE: S&P Cuts Financial Strength Rating to AA from AAA
------------------------------------------------------------------
Standard & Poor's Rating Services lowered its financial strength
ratings on Ambac Assurance Corp. and MBIA Insurance Corp. to 'AA'
from 'AAA' and placed the ratings on CreditWatch with negative
implications.
     
The ratings on the holding companies, Ambac Financial Group and
MBIA Inc., have also been lowered to 'A' and 'A-' from 'AA' and
'AA-', respectively, and placed on CreditWatch with negative
implications.
     
The rating actions on the companies reflect S&P's belief that
these entities will face diminished public finance and structured
finance new business flow and declining financial flexibility.  In
addition, S&P believe continuing deterioration in key areas of the
U.S. residential mortgage sector and related CDO structures will
place increasing pressure on capital adequacy.  The 'AA' financial
strength ratings of these companies are supported by currently
sound claims paying ability and liquidity levels in our opinion.
     
Resolution of the negative CreditWatch will be dependent on
clarification of ultimate potential losses as well as future
business prospects, the outcome of strategic business decisions,
and potential regulatory developments.

Bloomberg News says the bond insurers' ratings downgrade has put
at risk the credit ratings on about A$13 billion -- $12.4 billion
-- of Australian securities guaranteed by MBIA and Ambac.

Bloomberg also relates that Macquarie Group, Australia's biggest
securities firm, is planning to establish a U.S. bond-insurance
company to compete with MBIA and Ambac.  Bloomberg cited a June 5
e-mailed statement from New York State Insurance Department
Superintendent Eric Dinallo.
     

AMERIQUEST NET: Fitch Cuts BB Rating to C/DR5 on $12.8MM Trusts
---------------------------------------------------------------
Fitch Ratings has taken rating actions on the nine Ameriquest Net
Interest Margin Trusts listed below:

Series 2004-RN1:
  -- $2 million class A affirmed at 'AAA'.
     Underlying Transaction: Amqeriquest Mortgage Securities Inc.,      
     Series 2004-R1

Series 2004-RN2:
  -- $9.8 million class A affirmed at 'AAA'.
     Underlying Transactions: Amqeriquest Mortgage Securities
     Inc., Series 2004-R2 & 2004-R3

Series 2004-RN3:
  -- $3.6 million class A affirmed at 'AAA'.
     Underlying Transaction: Amqeriquest Mortgage Securities Inc.,
     series 2004-R4

Series 2004-RN10:
  -- $900,000 class Notes affirmed at 'AAA'.
     Underlying Transaction: Amqeriquest Mortgage Securities Inc.,
     series 2004-R11

Series 2005-RN3:
  -- $13.2 million class A affirmed at 'AAA'.
     Underlying Transaction: Amqeriquest Mortgage Securities Inc.,
     series 2005-R3

Series 2005-RN4:
  -- $7.4 million class A affirmed at 'AAA'.
     Underlying Transaction: Amqeriquest Mortgage Securities Inc.,
     series 2005-R4

Series 2005-RN5:
  -- $69.5 million class A affirmed at 'AAA'.
     Underlying Transaction: Amqeriquest Mortgage Securities Inc.,
     series 2005-R4

Series 2005-RN6:
  -- $9.6 million class B is affirmed at 'BBB-'.
     Underlying transaction: Amqeriquest Mortgage Securities Inc.,
     series 2005-R6

Series 2006-M3:
  -- $12.8 million class N1 downgraded to 'C/DR5' from 'BB'.
     Underlying transaction: Argent Mortgage Securities Inc.,
     series 2006-M3

The classes affirmed at 'AAA' have a financial guarantee provided
by Radian Guaranty Inc. (not rated by Fitch) and backup guarantee
Financial Security Assurance Inc. (IFS rated 'AAA' by Fitch).

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.


ATA AIRLINES: Gets Court OK to Employ Pyramid to Sell Properties
----------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of Indiana has
granted ATA Airlines Inc. authority to employ Pyramid Auction
Services, Inc., as its auctioneer for the purpose of marketing and
auctioning its personal properties.

As reported in the Troubled Company Reporter on May 21, 2008,
ATA Airlines Inc. selected Pyramid Auction because of the former's
extensive experience in analyzing, marketing and liquidating
assets, and familiarity with ATA Airlines and its assets since it
was previously employed by the airlines to conduct auctions of its
property.
  
ATA Airlines Inc. said it is vacating its leased facilities at
various airports around the world, and is shipping its personal  
properties to three centralized locations in Dallas, Chicago and
Indianapolis, to facilitate the sale of those properties.  Pyramid
Auction would conduct an auction in Indianapolis and subsequent
auctions may be held in the two other locations.

In exchange for Pyramid Auction's services, ATA Airlines will be
paid a 4% commission of the net proceeds of any sale.  ATA
Airlines will also reimburse the firm a processing fee of 2.88%
for any purchase made by credit card, and up to $5,200 per auction
for the costs of advertising the auctions.  

In addition, Pyramid Auction will separately charge buyers a 10%
buyer's premium on the gross proceeds of any sale, and will be
indemnified for any loss, casualty or liability in connection
with its employment.

James Pike, president of Pyramid Auction, in Avon, Indianapolis,
assured the Court that his firm does not hold or represent any
interest adverse to ATA Airlines' estate.  He added that the firm
is a "disinterested person" as that phrase is defined in Section
101(14) of the Bankruptcy Code, as modified by Section 1107(b).

                      About ATA Airlines

Headquartered in Indianapolis, Indiana, ATA Airlines, Inc., is a
diversified passenger airline operating in two principal business
lines -- a low cost carrier providing scheduled passenger service
that leverages a code share agreement with Southwest Airlines; and
a charter operator that focused primarily on providing charter
service to the U.S. government and military.  ATA is a wholly
owned subsidiary of New ATA  Acquisition, Inc. -- a wholly owned
subsidiary of New ATA Investment, Inc., which in turn, is a wholly
owned subsidiary of Global Aero Logistics Inc.  ATA Acquisition
also owns another holding company subsidiary, World Air Holdings,
Inc., which it acquired through merger on August 14, 2007.  World
Air Holdings owns and operates two other airlines, North American
Airlines and World Airways.

ATA Airlines and its affiliates filed for chapter 11 protection on
Oct. 26, 2004 (Bankr. S.D. Ind. Case Nos. 04-19866, 04-19868
through 04-19874).  The Honorable Basil H. Lorch III confirmed the
Debtors' plan of reorganization on Jan. 31, 2006.  The Debtors'
emerged from bankruptcy on Feb. 28, 2006.

Global Aero Logistics acquired certain of ATA's operations after
its first bankruptcy.  The remaining ATA affiliates that were not
substantively consolidated in the company's first bankruptcy case
were sold or otherwise liquidated.

ATA Airlines filed for Chapter 22 on April 2 (Bankr. S.D. Ind.
Case No. 08-03675), citing the unexpected cancellation of a key
contract for ATA's military charter business, which made it
impossible for ATA to obtain additional capital to sustain its
operations or restructure the business.  ATA discontinued all
operations subsequent to the bankruptcy filing.  ATA's Chapter 22
bankruptcy petition lists assets and liabilities each in the range
of $100 million to $500 million.

The Debtor is represented in its Chapter 22 case by Haynes and
Boone, LLP, and Baker & Daniels, LLP, as bankruptcy counsel.

The United States Trustee for Region 10 appointed five members to
the Official Committee of Unsecured Creditors.  Otterbourg,
Steindler, Houston & Rosen, P.C., serves as bankruptcy counsel to
the Committee.  FTI Consulting, Inc., acts as the panel's
financial advisors.

(ATA Airlines Bankruptcy News, Issue No. 83; Bankruptcy Creditors'
Services Inc. http://bankrupt.com/newsstand/or 215/945-7000).


ATA AIRLINES: Panel May Employ Otterbourg Steindler as Counsel
--------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of Indiana
has given permission to the Official Committee of Unsecured
Creditors in ATA Airlines Inc. and its debtor-affiliates'
bankruptcy case to retain Otterbourg, Steindler, Houston & Rosen,
P.C., as its counsel effective as of April 21, 2008.

As reported in the Troubled Company Reporter on May 21, 2008,
The Committee told the Court that OSH&R is qualified to serve as
its counsel in view of the firm's extensive experience in, and
knowledge of, business reorganizations, including liquidations and
sales of businesses under Chapter 11.

As lead counsel to the Committee, OSH&R is expected to:

   * assist and advise the Committee in its consultation with the
     Debtor relative to the Chapter 11 cases;

   * attend meetings and negotiate with the representatives of
     the Debtors and other parties-in-interest;

   * assist and advise the Committee in its examination and
     analysis of the conduct of the Debtor's affairs;

   * assist the Committee in the review, analysis and negotiation
     of any plan of reorganization or liquidation, asset
     disposition proposals and disclosure statement accompanying
     any plan that may be filed;

   * assist the Committee in the review and analysis of any   
     financing agreements;

   * take necessary and appropriate action to protect and
     preserve the interests of the Committee, including:

        -- possible prosecution of actions on its behalf;

        -- negotiations in litigation in which the Debtor is, or
           may be, involved; and

        -- review and analysis of claims filed against the
           Debtor;

   * prepare on behalf on the Committee all necessary and related  
     documents in support of positions taken by the Committee;

   * appear before the Bankruptcy Court, the appellate courts and
     the U.S. Trustee, and to protect the interests of the
     Committee; and

   * perform other legal services.

OSH&R will be paid based on its hourly rates:

     Partner or Counsel     $530 - $795
     Associate              $245 - $575
     Paralegal              $175 - $205

The Committee will also reimburse OSH&R of its actual and
necessary expenses incurred in the course of rendering services
to the Committee.

Scott L. Hazan, Esq., a member at OSH&R, assured the Court that
OSH&R does not represent or hold an interest adverse to the
Debtor's estate and is a "disinterested person" within the meaning
of that term in Section 101(14) of the Bankruptcy Code.

                      About ATA Airlines

Headquartered in Indianapolis, Indiana, ATA Airlines, Inc., is a
diversified passenger airline operating in two principal business
lines -- a low cost carrier providing scheduled passenger service
that leverages a code share agreement with Southwest Airlines; and
a charter operator that focused primarily on providing charter
service to the U.S. government and military.  ATA is a wholly
owned subsidiary of New ATA  Acquisition, Inc. -- a wholly owned
subsidiary of New ATA Investment, Inc., which in turn, is a wholly
owned subsidiary of Global Aero Logistics Inc.  ATA Acquisition
also owns another holding company subsidiary, World Air Holdings,
Inc., which it acquired through merger on August 14, 2007.  World
Air Holdings owns and operates two other airlines, North American
Airlines and World Airways.

ATA Airlines and its affiliates filed for chapter 11 protection on
Oct. 26, 2004 (Bankr. S.D. Ind. Case Nos. 04-19866, 04-19868
through 04-19874).  The Honorable Basil H. Lorch III confirmed the
Debtors' plan of reorganization on Jan. 31, 2006.  The Debtors'
emerged from bankruptcy on Feb. 28, 2006.

Global Aero Logistics acquired certain of ATA's operations after
its first bankruptcy.  The remaining ATA affiliates that were not
substantively consolidated in the company's first bankruptcy case
were sold or otherwise liquidated.

ATA Airlines filed for Chapter 22 on April 2 (Bankr. S.D. Ind.
Case No. 08-03675), citing the unexpected cancellation of a key
contract for ATA's military charter business, which made it
impossible for ATA to obtain additional capital to sustain its
operations or restructure the business.  ATA discontinued all
operations subsequent to the bankruptcy filing.  ATA's Chapter 22
bankruptcy petition lists assets and liabilities each in the range
of $100 million to $500 million.

The Debtor is represented in its Chapter 22 case by Haynes and
Boone, LLP, and Baker & Daniels, LLP, as bankruptcy counsel.

The United States Trustee for Region 10 appointed five members to
the Official Committee of Unsecured Creditors.  Otterbourg,
Steindler, Houston & Rosen, P.C., serves as bankruptcy counsel to
the Committee.  FTI Consulting, Inc., acts as the panel's
financial advisors.

(ATA Airlines Bankruptcy News, Issue No. 83; Bankruptcy Creditors'
Services Inc. http://bankrupt.com/newsstand/or 215/945-7000).


ATA AIRLINES: Panel May Employ FTI Consulting as Financial Advisor
------------------------------------------------------------------
The United States Bankruptcy Court for the Southern District of
Indiana has granted the Official Committee of Unsecured Creditors
in ATA Airlines Inc. and its debtor-affiliates' bankrupty case
authority to retain FTI Consulting, Inc., as its financial
advisor, nunc pro tunc to the Debtors' bankruptcy filing.

The Committee told the Court that the services of FTI are deemed
necessary to assess and monitor the efforts of the Debtors and
their professional advisors to maximize the value of their
estates.  

As financial advisor, FTI is expected to provide consulting and
advisory services to the Committee with respect to the Debtor's
Chapter 11 case, including assistance in the review, evaluation
and analysis of:

   * financial disclosures required by the Court, which include
     schedules of assets and liabilities, statements of financial
     affairs and monthly operating reports;

   * the Debtor's short-term cash management procedures;

   * financial information distributed by the Debtor to creditors  
     and others, including, but not limited to, cash flow
     projections and budgets, cash receipts and disbursement,
     asset and liability accounts and proposed related
     transactions;

   * avoidance actions, including fraudulent conveyances and
     preferential transfers; and

   * accounting and tax matters, along with expert witness
     testimony on case-related issues, as required by the
     Committee.

FTI is also expected to attend meetings and assist in discussions
with the Debtor, potential investors, banks, other secured
lenders, the Committee and other official committees, the U.S.
Trustee and other parties-in-interest and professionals.

FTI will be paid based on its hourly rates:

     Senior Managing Directors            $650 - $715
     Directors/Managing Directors         $475 - $620
     Associates/Consultants               $235 - $440
     Administration/Paraprofessionals     $100 - $190

FTI's senior managing director, Michael Eisenband, disclosed that
his firm is not a creditor of the Debtor and does not hold
outstanding debt shares of the Debtor's stock.

According to Mr. Eisenband, FTI has neither provided services to
other parties which are adverse to the rights of the Committee
nor compromised its ability to continue consulting services;
hence, his firm is eligible to represent the Committee under
Section 1103(b) of the Bankruptcy Code.

                      About ATA Airlines

Headquartered in Indianapolis, Indiana, ATA Airlines, Inc., is a
diversified passenger airline operating in two principal business
lines -- a low cost carrier providing scheduled passenger service
that leverages a code share agreement with Southwest Airlines; and
a charter operator that focused primarily on providing charter
service to the U.S. government and military.  ATA is a wholly
owned subsidiary of New ATA  Acquisition, Inc. -- a wholly owned
subsidiary of New ATA Investment, Inc., which in turn, is a wholly
owned subsidiary of Global Aero Logistics Inc.  ATA Acquisition
also owns another holding company subsidiary, World Air Holdings,
Inc., which it acquired through merger on August 14, 2007.  World
Air Holdings owns and operates two other airlines, North American
Airlines and World Airways.

ATA Airlines and its affiliates filed for chapter 11 protection on
Oct. 26, 2004 (Bankr. S.D. Ind. Case Nos. 04-19866, 04-19868
through 04-19874).  The Honorable Basil H. Lorch III confirmed the
Debtors' plan of reorganization on Jan. 31, 2006.  The Debtors'
emerged from bankruptcy on Feb. 28, 2006.

Global Aero Logistics acquired certain of ATA's operations after
its first bankruptcy.  The remaining ATA affiliates that were not
substantively consolidated in the company's first bankruptcy case
were sold or otherwise liquidated.

ATA Airlines filed for Chapter 22 on April 2 (Bankr. S.D. Ind.
Case No. 08-03675), citing the unexpected cancellation of a key
contract for ATA's military charter business, which made it
impossible for ATA to obtain additional capital to sustain its
operations or restructure the business.  ATA discontinued all
operations subsequent to the bankruptcy filing.  ATA's Chapter 22
bankruptcy petition lists assets and liabilities each in the range
of $100 million to $500 million.

The Debtor is represented in its Chapter 22 case by Haynes and
Boone, LLP, and Baker & Daniels, LLP, as bankruptcy counsel.

The United States Trustee for Region 10 appointed five members to
the Official Committee of Unsecured Creditors.  Otterbourg,
Steindler, Houston & Rosen, P.C., serves as bankruptcy counsel to
the Committee.  FTI Consulting, Inc., acts as the panel's
financial advisors.

(ATA Airlines Bankruptcy News, Issue No. 83; Bankruptcy Creditors'
Services Inc. http://bankrupt.com/newsstand/or 215/945-7000).


BF SAUL REAL ESTATE: Moody's Holds Unit's C- BFSR; Outlook Neg.
---------------------------------------------------------------
Moody's Investors Service downgraded the long-term deposit and
debt ratings of Chevy Chase Bank, F. S. B. (Chevy Chase), and the
debt rating of its parent, B. F. Saul Real Estate Investment Trust
(B. F. Saul). Chevy Chase's long-term deposit and issuer ratings
were lowered to Baa2, and the issuer rating of B. F. Saul was
lowered to Ba3. The bank financial strength and short-term deposit
ratings of Chevy Chase were affirmed at C- and Prime-2,
respectively. The negative outlook on both entities was
maintained.

In downgrading the ratings of Chevy Chase, Moody's said it weighed
the deterioration in the company's profitability and asset quality
against the strength of its deposit franchise, good liquidity
profile and adequate capital ratios. Nevertheless, the
deterioration in the company's financial fundamentals was the
overriding factor. Moody's noted that Chevy Chase's profitability
has been adversely affected by reduced mortgage banking earnings,
a direct consequence of the disruption in the non-conforming RMBS
market. Moody's also stated that loan loss provisions made in the
first quarter of 2008 were sharply higher than in prior quarters
due to the significant increase in nonperforming loans in its
residential mortgage loan portfolio.

Given the absence of market appetite for RMBS paper of the type
originated by Chevy Chase, largely Pay Option ARM-based, and the
scaling back of its mortgage banking business model in response to
this market shift, Moody's believes it is unlikely that mortgage
banking earnings will recover to previous levels in the
foreseeable future. Furthermore, Moody's expects Chevy Chase's
provisions for loan losses to continue at elevated levels in
coming quarters, as the problems in the U.S. housing market
unfold.

Moody's observed that Chevy Chase's profitability has trailed that
of peers for some time, due in large part to a substantially
higher overhead ratio. This limits the company's ability to absorb
unexpected downturns in revenues and/or increased credit costs and
still report adequate profits, the rating agency added. Although
Chevy Chase has taken steps to reduce expenses in its mortgage and
retail banking businesses and back office, Moody's does not expect
the overhead ratio to improve significantly in the near term.

Moody's noted that Chevy Chase's deposit franchise is an important
contributor to net revenue generation and a source of stable
liquidity. The solid base of transaction accounts gives it a
comparatively low weighted-average cost of deposits. Moody's noted
that although Chevy Chase's capital ratios are somewhat below the
median ratios of similarly rated banks, they have been maintained
consistently above the regulatory minimums to be considered a well
capitalized bank.

In downgrading the issuer rating of the parent company, B. F. Saul
to Ba3, Moody's said it continued to maintain a wider than normal
notching differential relative to the bank to reflect the
encumbered nature of the holding company's assets and its high
double leverage. B. F. Saul has issued senior notes that are
secured by the stock of Chevy Chase and are now rated Ba3. Moody's
does not consider this security interest to be the equivalent of a
direct senior or subordinated claim on Chevy Chase.

The continuation of the negative outlook on Chevy Chase and B. F.
Saul reflects Moody's concern about ongoing weakness in Chevy
Chase's profitability and the potential impact stress losses in
the residential mortgage and commercial real estate portfolios
could have on the company's capital adequacy ratios.

The rating agency said that the most likely sources of downward
rating pressure are further sustained deterioration in asset
quality and profitability beyond Moody's expectations, and
declining capital adequacy ratios. Conversely, sustained
improvement in operating efficiency and profitability could create
upward rating pressure.

These rating actions were taken:

Downgrades:

  Issuer: B.F. Saul Real Estate Investment Trust

  * Issuer Rating, Downgraded to Ba3 from Ba2

  * Senior Secured Regular Bond/Debenture, Downgraded to Ba3
    from Ba2

  Issuer: Chevy Chase Bank F.S.B.

  * Issuer Rating, Downgraded to Baa2 from Baa1

  * OSO Senior Unsecured OSO Rating, Downgraded to Baa2 from Baa1

  * Subordinate Regular Bond/Debenture, Downgraded to Baa3 from
    Baa2

  * Senior Unsecured Deposit Rating, Downgraded to Baa2 from Baa1

  Issuer: Chevy Chase Preferred Capital Corporation

  * Preferred Stock Preferred Stock, Downgraded to Ba1 from Baa3

Affirmations:

  Chevy Chase Bank, F. S. B.

  * Bank financial strength rating at C-

  * Short- term bank deposits at Prime-2

  * Short-term other senior obligations at Prime-2

B. F. Saul Real Estate Investment Trust, headquartered in
Bethesda, Maryland, and the holding company of Chevy Chase Bank,
F. S. B., reported consolidated assets of $15.8 billion at the end
of the fiscal year, ended September 2007. Chevy Chase Bank, F. S.
B. reported assets of $15.1 billion as of March 2008.


BIOVEST INT'L: March 31 Balance Sheet Upside-Down by $34.2 Million
------------------------------------------------------------------
Biovest International Inc.'s consolidated balance sheet at
March 31, 2008, showed $6.9 million in total assets, $36.4 million  
in total liabilities, and $4.7 million in non-controlling
interests in variable interest entities, resulting in a
$34.2 million total stockholders' deficit.

At March 31, 2008, the company's consolidated balance sheet also
showed strained liquidity with $3.0 million in total current
assets available to pay $30.3 million in total current
liabilities.

The company reported a net loss of $4.4 million, on total revenue
of $1.6 million, in the second quarter ended March 31, 2008,
compared with a net loss of $5.4 million, on total revenue of
$1.6 million, in the same period ended March 31, 2007.

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?2d5b

                       Going Concern Doubt

Aidman Piser & Company P.A., in Tampa, Florida, expressed
substantial doubt about Biovest International Inc.'s ability to
continue as a going concern after auditing the company's
consolidated financial statements for the years ended Sept. 30,
2007, and 2006.  The auditing firm pointed to the company's
cumulative net losses since inception, cash used in operating
activities, and working capital deficiency.

At March 31, 2008, the company had an accumulated deficit of
approximately $104.8 million and working capital deficit of
approximately $27.3 million.  Approximately $9.7 million of the
company's notes payable are due by June 30, 2008.

                   About Biovest International

Based in Tampa, Florida, Biovest International Inc. (OTC BB: BVTI)
-- http://www.biovest.com/-- is a pioneer in the development of  
advanced individualized immunotherapies for life-threatening
cancers of the blood system.  Biovest is a majority-owned
subsidiary of Accentia Biopharmaceuticals Inc., with its remaining
shares publicly traded.


BLAST ENERGY: Appoints Michael L. Peterson to Board of Directors
----------------------------------------------------------------
Blast Energy Services disclosed the addition of Michael L.
Peterson to its board of directors.  Mr. Peterson brings to the
board a 23-year experience in the investment management and
securities industry.

"We are delighted [Mr.] Peterson has agreed to join the Blast
board of directors," Pat Herbert, chairman of Blast Energy
Services, said.  "His proven financial and investment market
expertise will supplement our talented group of directors and help
define new growth strategies following our successful emergence
from Chapter 11 Bankruptcy in February 2008."

Mr. Peterson has a career in the securities industry in various
capacities, including the last four years as a private investor
and venture capitalist.  He is founder and managing partner of
California-based, Pascal Management.

In 2005, he co-founded and became a managing partner of American
International Partners, a venture investment fund based in Salt
Lake City.  Prior to that he served for four years as a First Vice
President at Merrill Lynch where he helped establish a new private
client services division to work exclusively with high net worth
investors.

For a majority of his career, he was employed by Goldman Sachs &
Co. as a vice president with the responsibility for a team of
professionals that advised and managed over $7 billion in assets.
Mr. Peterson received his MBA at the Marriott School of Management
and a BS from Brigham Young University.

                        Down-hole Solutions

Blast has completed an evaluation of its down-hole lateral
drilling process with new partner Reliance Oil and Gas Inc., whose
personnel have over 40 years of experience in drilling,
exploration and production operations.

As a result, Reliance plans to use a deflection shoe of their
own design, use more rigid tubing for penetration into the
formation, and a different jetting nozzle design.

To this end, Reliance has built the new deflection shoe to
laterally deflect stainless steel tubing into the formation and to
circulate fluid through the shoe while jetting.  They are also
upgrading certain equipment on the jetting rig so that the
improved lateral drilling process can be used on wells operated by
Reliance in Central Texas this summer.

Reliance's personnel have prior experience specifically applying
these down-hole jetting processes, which the company believes will
substantially improve the commercial viability of the Blast
lateral jetting process and allow the company to begin generating
revenues this summer.

                        Satellite Services

Meanwhile, Blast has been working with a group of ex-Cisco
engineers with substantial experience in communications and sensor
networks to develop a unique remote monitoring system for oil and
gas applications.  Since September 2007, these engineers have
carried out extensive testing with the Department of Defense on a
process to improve the monitoring and control of chemical,
biological, radioactive, nuclear and explosive sensor networks.

Blast believes that the software they have developed is ideally
suited to monitoring and controlling temperature, pressure, flow,
corrosion and intrusion sensors in the energy sector.

A server unit has been built to provide monitoring and control of
multiple sensors using standard and proprietary radio protocol
controlled applications that are being used in pipeline and oil
field operations.

Blast expects to have its' demonstration unit completed by the
end of June.  Blast has been discussing this new product with
several energy service and systems integration companies over the
last six months and is currently scheduling demonstration meetings
with them in Houston, Texas.

Blast believes there is a substantial opportunity in the energy
industry to consolidate the remote monitoring and control of
sensor networks and to provide immediate notification to key
personnel by interfacing seamlessly with a customer's existing
communication network.  The company expects its new remote server
application will allow the company to further expand the growth
opportunities of its existing satellite services business.

                        Customer Litigation

On April 7, 2008, Blast signed a $6.4 million settlement agreement
with Hallwood Petroleum LLC and Hallwood Energy LP that is
contingent upon them raising capital through a major financing.
Under the terms of this agreement, Hallwood will pay to the
company $2.0 million in cash and issue $2.75 million in equity
from the pending major financing and Hallwood agreed to
irrevocably forgive approximately $1.65 million in payment
obligations.

In return, the company has agreed to suspend legal proceedings
against Hallwood.  If the settlement is not completely funded by
Sept. 30, 2008, legal proceedings will resume.  The damage model
in this case involves termination damages for two separate rig
contracts.

In the case pending against Quicksilver Resources Inc., the matter
has been transferred from the bankruptcy court to the US District
Court for the Southern District of Texas.  The trial date has
remained unchanged and is scheduled for Sept. 15, 2008.

Blast counsel continues to prepare for trial and gather evidence
in support of our claim through depositions and document
production.  The damage model for this case involves termination
damages for three separate rig contracts, which included
liquidated damage provisions of approximately $10 million each.

                       About Blast Energy

Headquartered in Houston, Blast Energy Services Inc.  --
http://www.blastenergyservices.com/-- provides contract land   
drilling services to the energy industry in the United States and
Africa.  The company also provides satellite services to oil and
gas producers, which enables them to monitor and control well
head, pipeline, and drilling operations through broadband data and
voice services from remote operations where conventional land-
based communication networks do not exist.

Blast Energy Inc.'s consolidated balance sheet at March 31, 2008,
showed $2,841,638 in total assets and $5,847,755 in total
liabilities, resulting in a $3,006,117 total stockholders'
deficit.

The company and its wholly owned subsidiary Eagle Domestic
Drilling Operations LLC, filed for Chapter 11 protection on
Jan. 19, 2007 (Bankr. S.D. Tex. Case No. 07-30424 and 07-30426).

On Feb. 26, 2008, the Court entered an order confirming the
company's Second Amended Plan of Reorganization.  The Plan became
effective, and the Debtors emerged from Chapter 11 bankruptcy, on
Feb. 27, 2008.


BOSTON SCIENTIFIC: Fitch Affirms 'BB+' Issuer Default Rating
------------------------------------------------------------
Fitch Ratings has affirmed the Issuer Default Rating and
outstanding debt ratings on Boston Scientific Corp as:

  -- IDR at 'BB+';
  -- Senior unsecured notes at 'BB+';
  -- Unsecured bank credit facility at 'BB+'.

Fitch has also revised the Rating Outlook to Stable from Negative.

The Outlook revision is supported by the progress BSX is making
towards stabilizing its drug-eluting stent and cardiac rhythm
management businesses, while paying down debt in the process.  
During the last three quarters, leverage has decreased to 3.30
times for latest twelve months, ending March 31, 2008 from 4.24x
LTM ended June 30, 2007, owing to margin improvement and debt
reduction.  Fitch expects BSX's leverage will decline further in
the intermediate-term through increased cash flow growth and debt
reduction.  For BSX to retain a Stable Outlook, continued progress
needs to be made on shoring up the CRM and DES businesses,
combined with continued improvement of cash flow generation and
leverage reduction.

Despite the CRM and DES challenges, BSX's other businesses have
been performing well.  Nevertheless, the dynamics of the DES and
CRM businesses bear close monitoring.  BSX continues address an
FDA warning letter that is delaying the U.S. launch of Taxus
Liberte and other devices.  Liberte is an important product, as it
will help BSX to compete with the recent U.S. launch of a
Medtronic's DES (Endeavor) and the expected U.S. launch of an
Abbott Laboratories' DES (Xience), which BSX will co-market.  
Liberte is currently marketed.

Free Cash Flow for LTM ending March 31, 2008 was $935 million.  
Interest coverage was 4.2x and leverage was 3.3x for LTM ending
March 31, 2008.  BSX has approximately $1.7 billion in cash/short-
term investments and $7.6 billion in debt.  BSX has approximately
$5.4 billion in debt maturing through 2011, with $1.3 billion
maturing in 2010 and $3.8 billion maturing in 2011.  At March 31,
2008, BSX had full availability on its $2 billion revolver,
maturing on April 21, 2011.


BRIAN MARTIN: Case Summary & 20 Largest Unsecured Creditors
-----------------------------------------------------------
Debtor: Brian Kamanuokalani Martin
        aka Brian Keith Kamanuokalani Martin
        aka Brian K. Martin, M.D.
        P.O. B 2072
        Portland, Oregon 97208

Bankruptcy Case No.: 08-32568

Chapter 11 Petition Date: May 30, 2008

Court: District of Oregon

Judge: Randall L. Dunn

Debtors' Counsel: Gary U. Scharff, Esq.
                   (gs@scharfflaw.com)
                  621 S.W. Morrison, Suite #1300
                  Portland, Oregon 97205
                  Tel: (503) 493-4353

Estimated Assets: $1 million to $10 million

Estimated Debts:  $1 million to $10 million

A copy of the Debtor's petition is available for free at:

           http://bankrupt.com/misc/oreb08-32568.pdf


BY-WA COMPANY: Case Summary & Nine Largest Unsecured Creditors
--------------------------------------------------------------
Debtor: BY-WA Company, LLC
        3019 Vail Avenue
        Los Angeles, CA 90040

Bankruptcy Case No.: 08-03248

Chapter 11 Petition Date: June 1, 2008

Court: District of South Carolina (Columbia)

Judge: Helen E. Burris

Debtor's Counsel: Nancy E. Johnso, Esq.
                  Law Office of Nancy E. Johnson, LLC
                  P.O. Box 146
                  Columbia, SC 29202-0146
                  Tel: (803) 343-3424
                  nej@njohnson-bankruptcy.com

Estimated Assets: $1 million to $10 million

Estimated Debts:  $1 million to $10 million

Debtor's list of its Nine Largest Unsecured Creditors:

   Entity                        Nature of Claim   Claim Amount
   ------                        ---------------   ------------
Gungor Ozbeck                                        $1,700,000
CO Spencer Syrett Esq                     Value:     $1,172,000
P.O. Box 7403                     Net Unsecured:       $528,000
Columbia SC 29202

BFHSWY Distribution, LLC                               $625,000
304 Forty Love Point Drive
Chapin SC 29036

Gary Realty Company Inc                                $133,000
2205 Two Notch Road Suite 200
Columbia SC  29204

Carolina Wrecking                                       $30,400

David Byrd                      Indemnification claim        $1

Gary Watts                      Indemnification claim        $1

Richard Brady                   Indemnification claim        $1

Jodie Salley                    Indemnification claim        $1

Carolina First Bank             2nd Mortgage                 $1


CABLEVISION SYSTEMS: S&P Affirms Ratings on Pending Sundance Deal
-----------------------------------------------------------------
Standard & Poor's Ratings Services affirmed all its ratings,
including its 'BB' corporate credit rating, on Bethpage, New York-
based Cablevision Systems Corp., a major cable operator in the New
York City metropolitan area, and its subsidiaries.  The outlook is
negative.  Cablevision had about $11.6 billion of reported
consolidated debt outstanding on March 31, 2008.
     
S&P also affirmed the 'BBB-' issue-level rating on subsidiary
Rainbow National Services LLC's $580 million senior secured
revolving credit facility.  The issue-level rating is two notches
above the corporate credit rating and the recovery rating remains
unchanged at '1', indicating the expectations for very high
(90%-100%) recovery in the event of a payment default.  The rating
affirmation on Rainbow follows the $280 million upsizing of its
revolver.  The additional funds will be used to partially finance
the pending acquisition Sundance Channel.  Rainbow will continue
to have $300 million of availability under the revolver after the
Sundance Channel transaction.
      
"The rating affirmations incorporate not only the impact of the
pending Sundance Channel acquisition," said Standard & Poor's
credit analyst Richard Siderman, "but also the proposed
acquisition of Newsday."  He added that while financing plans for
Newsday are not finalized, "we do not expect the two pending
acquisitions to have a material impact on Cablevision's overall
financial metrics."


CARIBE MEDIA: Moody's Affirms B2 Corporate Family Rating
--------------------------------------------------------
Moody's Investors Service has affirmed Caribe Media, Inc.'s B2
Corporate Family rating while changing the rating outlook to
stable from developing. Details of the rating action are as
follows:

Ratings affirmed:

Caribe Media Inc.

  * Corporate Family rating -- B2

  * Probability of Default rating -- B2

  * $10 million senior secured revolving credit facility due 2012
    -- B1, LGD3, 37%

  * $132 million senior secured term loan due 2013 -- B1, LGD3,
    37%

  * The rating outlook is stable

Moody's does not rate the company's $45 million subordinated notes
due 2014.

The affirmation of the Corporate Family rating largely reflects
operational performance and financial metrics which continue to
meet Moody's expectations.

The change in the rating outlook to stable from developing
incorporates Moody's view that Local Insight Media's ownership
interest in Caribe will remain separate and distinct from its
other yellow page publishing businesses and that no additional
debt issuances are being contemplated, nor are they expected,
either directly by the company or indirectly through its parent.
The prior developing outlook had expressed Moody's concern that
Caribe's owners would re-organize Local Insight Media's corporate
structure in a manner that would increase the level of debt which
Caribe would directly or indirectly need to support.

The B2 Corporate Family rating reflects Caribe's small size
(around US$100 million in sales) and its relatively high debt
burden and leverage (debt-to-EBITDA of around 5.3 times,
calculated in accordance with Moody's standard adjustments). In
addition, the rating incorporates the company's dependence upon
spending on yellow page advertising in the Puerto Rico market, and
the maturity of its business. Ratings are supported by the
dominant market position held by the company's publications in
Puerto Rico and the Dominican Republic, and significant free cash
flow generation, which management expects will be used to decrease
debt and reduce leverage to under five times on a debt-to-EBITDA
basis by the end of 2008.

The stable outlook is supported by the long-term publishing rights
agreement with Puerto Rico Telephone Company, which expires in
2019 (with 15 automatic renewal terms of 5 years each).

While lenders receive a pledge of the stock of Caribe and an
assignment of contractual payments under the publishing rights
agreement with Puerto Rico Telephone Company, they do not benefit
from a security interest in the assets or stock of Axesa (which is
a joint venture 60% owned by Caribe and 40% owned by Truvo USA).

Moody's also noted that Axesa has identified deficient internal
controls for the periods prior to Caribe Media, Inc.'s acquisition
of Axesa, which resulted in restatements for periods prior to
Caribe Media, Inc.'s ownership. In addition, the company
implemented accounting changes due to purchase accounting during
the nine month period ended December 31, 2006, resulting in a net
loss for the period of $14 million vs. a previously reported
profit of $4 million. According to management, this restatement
had no effect on previously reported revenues, EBITDA or operating
cash flow.

Caribe Media, Inc., based in Puerto Rico, owns directory
publishing operating subsidiaries in two Caribbean nations. In
Puerto Rico, Caribe owns 60% of Axesa Servicios de Informacion S.
en C. and Axesa Servicios de Informacion Inc., and in the
Dominican Republic Caribe owns 100% of Caribe Servicios de
Informacion Dominicana S.A.


CENTRAL SUN: Posts $5,022,000 Net Loss in 2008 First Quarter
------------------------------------------------------------
Central Sun Mining Inc. reported a net loss of $5,022,000, on
sales of $12,310,000, in the first quarter ended March 31, 2008,
compared with a net loss of $1,173,000, on sales of $20,297,000,
in the same period ended March 31, 2007.

The operating results for the first quarter of 2008 reflect only
the Limon Mine compared to the Bellavista, Orosi and Limon mines  
in the first quarter of 2007.  The Orosi Mill Project development
costs have been charged to income as these are prior to the
receipt of a positive feasibility study.

Gold sales decreased 57% to 13,524 ounces in the first quarter of  
2008 compared to 31,134 ounces in the first quarter of 2007.

Gold production decreased 69% to 9,844 ounces in the first quarter
of 2008 compared to 31,801 ounces in the first quarter of 2007.

Income from mining operations increased 439% to $4,075,000 in the
first quarter of 2008 compared to $756,000 in the first quarter of
2007.

Cash operating costs per ounce of gold sold increased to $502 per
ounce in the first quarter of 2008 compared to $470 per ounce in
the first quarter of 2007.

Cash used in operations totalled $3,344,000 in the first quarter
of 2008 compared to $5,394,000 generated in the first quarter of  
2007.

Cash on hand totalled $12,188,000 as at March 31, 2008, compared
to $16,762,000 as at Dec. 31, 2007.

                            Limon Mine

Sales from the Limon Mine increased by $6,741,000 in the first
quarter of 2008 compared to 2007.  The increase in sales revenue
was mainly attributed to an increase of 5,011 ounces sold, of
which 3,890 ounces were in inventory at Dec. 31, 2007.

                            Orosi Mine

The company suspended operations at the Orosi Mine on March 31,
2007.  Since that time, only residual gold ounces were being
recovered from the heap leach pads.  Production ceased completely
in the fourth quarter of 2007.

During 2008, there were no sales, cost of sales, royalties and
production taxes, or depreciation and depletion expenses at the
site.

                         Bellavista Mine

On July 25, 2007, Central Sun suspended all mining activities at
the Bellavista Mine due to ground movements.  Residual gold ounces
were recovered from the heap leach until the end of August 2007.
The decline in gold produced and the resulting reduction in sales
and expenses in the first quarter of 2008 compared to the first
quarter of 2007 are directly related to mining activities ceasing
on July 25, 2007.

                    Expenses and Other Income

General and administrative expenses decreased by $75,000 or 5%
over the same period in the previous year.  

The Orosi Mine - Mill Project incurred expenditures of $4,216,000
during the first quarter of 2008 on consulting, engineering and
project support costs.  Non-recoverable intangible costs relating
to this project were expensed until May 1, 2008, when a
feasibility study with a positive outcome was completed.

Care and maintenance costs of $1,091,000 incurred at the Orosi
Mine were incurred to maintain a proper state of upkeep while
mining operations were suspended.  These costs primarily relate to
the maintenance of a basic administrative function as well as
expenditures on electricity, property holding costs, and
caretaking activities.  Also included in care and maintenance were
costs of $123,000 not directly related to reclamation activities
at the Bellavista Mine.

Stock-based compensation expense increased by $766,000 or 209%
over the same period in the previous fiscal year.  

In the first quarter of 2008, exploration expenses increased by
$644,000 or 154% over the same period in the previous fiscal year.
The costs incurred in 2008 relate to work being performed at the
Limon and Orosi mines and the Mestiza gold property and is part of
the company's planned exploration work.

Other expenses increased by $431,000 or 170% over the same period
in the previous fiscal year.  In 2008, major components of this
balance included $251,000 in foreign exchange losses and $110,000
in legal fee accruals.  These balances were offset by interest and
other miscellaneous income of $193,000.  In 2007, the components
included a $131,000 gain from sale of marketable securities,
foreign exchange gains of $61,000, and $235,000 in interest and
other miscellaneous income.  These balances were offset by
$174,000 in interest and finance fees.

                          Balance Sheet

At March 31, 2008, the company's consolidated balance sheet showed  
$68,844,000 in total assets, $20,065,000 in total liabilities, and
$48,779,000 in total stockholders' equity.

                       Going Concern Doubt

Management of Central Sun Mining Inc. believes there exists
substantial doubt about the company's ability to continue as a
going concern.

As at March 31, 2008, the company had used $3,344,000 in operating
cash flows, reported a net loss of $5,022,000 and had an  
accumulated deficit of $87,501,000.  The company says it may not
have sufficient cash to fully fund ongoing 2008 capital
expenditures, exploration activities and complete the development
of the Orosi Mine - mill project and therefore will require
additional funding which, if not raised, would result in the
curtailment of activities and project delays.  

                        About Central Sun

Headquartered in Toronto, Ontario, Central Sun Mining Inc. (TSX:
CSM)(TSX: CSM.WT)(AMEX: SMC)-- http://www.centralsun.ca/-- is a  
gold producer with mining and exploration activities focused in
Nicaragua.  The company operates the Limon Mine and is in the
process of converting the Orosi Mine (formerly the Libertad Mine)
to a conventional milling operation. Both properties are located
in Nicaragua.  

The Bellavista Mine in Costa Rica is currently being reclaimed.  
The company also has an option to acquire the Mestiza exploration
property in Nicaragua.  Central Sun's growth strategy is focused
on optimizing current operations, expanding mineral resources and
reserves at existing mines, and looking for merger and acquisition
opportunities in the Americas.

In early 2007, the company commenced a major project to convert
the heap-leach process at the Orosi Mine to a conventional milling
operation (Mill Project).  

Mining activities at the company's Bellavista Mine ceased during
the third quarter of 2007.  Since that time, reclamation
activities have begun and it is not expected that mining
activities will resume.


CENVEO CORP: Moody's Affirms Unit's B3 Senior Sub. Bond Rating
--------------------------------------------------------------
Moody's Investors Service assigned a B2 rating to Cenveo
Corporation's proposed $175 million issuance of senior unsecured
notes, while affirming its B1 Corporate Family and Probability of
Default ratings. The rating outlook remains negative.

Rating assigned:

  Cenveo Corporation

  * Proposed $175 million senior unsecured notes -- B2, LGD4, 68%

Ratings affirmed:

  * Corporate Family Rating -- B1

  * Probability of Default Rating -- B1

  * Senior Secured Bank Credit Facility -- Ba2, LGD2, 29%

  * Senior Subordinated Bonds -- B3, LGD5, 87%

  Cadmus Communications Corporation

  * Senior Subordinated Bonds -- B3, LGD5, 87%

The rating outlook remains negative.

The B1 corporate family rating incorporates Cenveo's high debt
burden and leverage, continuing acquisition related risks and the
company's vulnerability to commercial print and envelope
manufacturing. However, the company's scale as the fourth largest
US printing company, its successful track record of cost
reduction, recent free cash flow generation, adequate liquidity
and an improved business profile pro forma for recent acquisitions
support the rating.

The negative outlook largely reflects the impact of industry
overcapacity and competitive pressure on Cenveo's business and the
likelihood that the company will continue to experience single
digit organic declines in sales, due in part to eleven plant
closures in 2007 and because of recent declines in sales of
customized envelope products related to a drop-off in direct mail
spending by financial institutions.

Moody's notes that proceeds of the proposed offering will be
largely used to remarket $175 million of senior unsecured debt
which was put in place in connection with the August 2007
acquisition of Commercial Envelope.

Headquartered in Stamford, Connecticut, Cenveo Corporation
provides low cost solutions within its core business of commercial
printing and packaging, envelope, form and label manufacturing,
and publisher services, offering services from design through
fulfillment. Pro forma for acquisitions, Cenveo's annual revenue
is approximately $2.3 billion.


CHAMPION ENTERPRISES: Moody's Cuts CFR to B2; Outlook Negative
--------------------------------------------------------------
Moody's Investors Service downgraded Champion Enterprises'
corporate family rating to B2 from B1 reflecting the company's
deteriorating credit metrics and continued weakness in the
company's core U.S. operations. The ratings outlook remains
negative.

These ratings/assessments were affected at Champion Enterprises,
Inc.:

* Corporate Family Rating, downgraded to B2 from B1;

* Probability of default, downgraded to B2 from B1;

* $6.7 million 7.625% senior notes, due 2009, upgraded to Ba3
   (LGD2, 28%) from B1 (LGD4, 56%);

* Speculative Grade Liquidity Rating, affirmed at SGL-4.

These ratings have been withdrawn:

* $400 million multiple seniority shelf registration.

These ratings/assessments were affected at Champion Home Builders
Co.:

* $200 million ($56 million outstanding) senior secured term
   loan facility, due 2012, upgraded to Ba3 (LGD2, 28%) from B1
   (LGD4, 56%);

* $40 million senior secured revolving credit facility, due
   2010, upgraded to Ba3 (LGD2, 28%) from B1 (LGD4, 56%);

* $60 million senior secured synthetic letter-of-credit back-up
   facility, due 2012, upgraded to Ba3 (LGD2, 28%) from B1
   (LGD4, 56%).

The company's first lien facilities and senior notes were upgraded
to reflect their relative size compared to the company's capital
structure and due to their anticipated recovery in the event of
default. The junior debt is large relative to the senior debt
outstanding and is in a "first loss position" in a default
scenario.

The downgrade of Champion's corporate family rating to B2 reflects
the performance at the company's core U.S. operations, weak
overall profitability, and limited cushion under the financial
covenants governing the company's first lien facilities. The
company's debt to EBITDA and EBITDA to interest expense for the
period ended March 29, 2008 were approximately 7.1 times and 2.6
times, respectively (adjusted per Moody's standard analytical
adjustments). Moody's anticipates these metrics to remain under
pressure throughout 2008 and well into 2009 as industry conditions
are not seen to improve significantly in the next twelve months.
In terms of covenant compliance, 2008 will be a difficult year for
Champion according to Moody's projections.

The negative ratings outlook reflects the continued deterioration
in the general homebuilding industry including modular homes, and
weakness in the HUD-code (manufactured housing) segment. The
negative outlook also reflects concern regarding the margin
pressure caused by the relative size of the company's corporate
overhead versus its declining operating income (before corporate
overhead).

Relative to traditional "stick built" homes, modular homes are
less expensive to build and go up quicker, as a result small
builders may increasingly consider modular homes as these require
less working capital and allow for more homes to be built with the
same amount of capital.

While traditional homebuilders' cash flow generation is expected
to improve as the slowdown unfolds due to reduction in inventory
levels, the amount of cash flow that Champion can generate from
decreasing inventories is minimal as the company's inventories
days on hand is substantially lower when compared to the
traditional homebuilders. However, Champion has been able to
generate ample cash flow from operations ("CFO") and free cash
flow ("FCF") for the trailing twelve months ended March 29, 2008.
CFO to debt and FCF to debt were 12.4% and 8.6% for the LTM period
ended March 29, 2008 (adjusted per Moody's standard analytical
adjustments). For FYE 2008, Moody's projects the company's free
cash flow generation should be positive.

Headquartered in Troy, MI, Champion Enterprises, Inc. is a leader
in factory-built construction, operates 31 manufacturing
facilities in North America and the United Kingdom. Revenues for
the trailing twelve month period ended March 29, 2008 were $1.3
billion.


CHASE MORTGAGE: Fitch Lowers Ratings on 14 Certificate Classes
--------------------------------------------------------------
Fitch Ratings has taken rating actions on Chase mortgage pass-
through certificates.  Unless stated otherwise, any bonds that
were previously placed on Rating Watch Negative are removed from
Rating Watch Negative.

Chase 2001-C2 Group 1
  -- IA 4 downgraded to 'A+' from 'AAA';
  -- IA 5 affirmed at 'AAA';
  -- IM 1 downgraded to 'BBB-' from 'A+';
  -- IM 2 downgraded to 'B+' from 'BB+';
  -- IB downgraded to 'C/DR5' from 'B';

Deal Summary
  -- Originators: Chase Manhattan Mortgage
  -- 60+ day Delinquency: 13.24%
  -- Realized Losses to date (% of Original Balance): 3.34%

Chase 2001-4 Group 1
  -- IA5 affirmed at 'AAA';
  -- IA6 affirmed at 'AAA';
  -- IM1 downgraded to 'A' from 'AA';
  -- IM2 downgraded to 'BBB' from 'A';
  -- IB downgraded to 'B' from 'BBB';

Deal Summary
  -- Originators: Chase Manhattan Mortgage
  -- 60+ day Delinquency: 9.46%
  -- Realized Losses to date (% of Original Balance): 2.05%

Chase 2001-4 Group 2
  -- IIA1 affirmed at 'AAA';
  -- IIM1 downgraded to 'BBB-' from 'A+';
  -- IIM2 downgraded to 'BB' from 'BBB+';

Deal Summary
  -- Originators: Chase Manhattan Mortgage
  -- 60+ day Delinquency: 33.16%
  -- Realized Losses to date (% of Original Balance): 2.38%

Chase 2002-3 Group 1
  -- 1A-5 affirmed at 'AAA';
  -- 1A-6 affirmed at 'AAA';
  -- 1M-1 affirmed at 'AA';
  -- 1M-2 affirmed at 'A';
  -- 1B affirmed at 'BBB';

Deal Summary
  -- Originators: Chase Manhattan Mortgage
  -- 60+ day Delinquency: 5.58%
  -- Realized Losses to date (% of Original Balance): 1.52%

Chase 2002-3 Group 2
  -- IIA-1 affirmed at 'AAA';
  -- IIM-1 downgraded to 'A' from 'AA+';
  -- IIM-2 downgraded to 'BBB' from 'A+';

Deal Summary
  -- Originators: Chase Manhattan Mortgage
  -- 60+ day Delinquency: 22.39%
  -- Realized Losses to date (% of Original Balance): 1.89%

Chase Funding Trust 2002-4 Group 1
  -- IA-5 affirmed at 'AAA';
  -- IA-6 affirmed at 'AAA';
  -- IM-1 affirmed at 'AA+';
  -- IM-2 affirmed at 'A+';
  -- IB affirmed at 'BBB+';

Deal Summary
  -- Originators: Chase Manhattan Mortgage
  -- 60+ day Delinquency: 5.15%
  -- Realized Losses to date (% of Original Balance): 1.12%

Chase Funding Trust 2002-4 Group 2
  -- IIA-1 affirmed at 'AAA';
  -- IIM-1 downgraded to 'A+' from 'AA+';
  -- IIM-2 downgraded to 'BBB' from 'A+';
  -- IIB downgraded to 'BBB-' from 'A-';

Deal Summary
  -- Originators: Chase Manhattan Mortgage
  -- 60+ day Delinquency: 15.86%
  -- Realized Losses to date (% of Original Balance): 1.75%


CHECKSMART FINANCIAL: Moody's Cuts Rating on 2nd Lien Loan to Ca
----------------------------------------------------------------
Moody's Investors Service downgraded the ratings of Checksmart
Financial Company and left the ratings under review for possible
downgrade.

The rating action reflects legislation recently passed by the Ohio
state legislature related to the payday lending industry. The
legislation substantially alters the payday lending business in
Ohio by capping the annual interest rate, lowering the maximum
amount of a loan, extending the minimum life of a loan, capping
the number of loans a consumer could obtain per year, and
mandating that consumers who take more than three payday loans in
a period of 90 days attend a financial literacy program. The
legislation was signed into law by the Governor of Ohio on
June 2, 2008.

Approximately 100 of Checksmart's 258 stores are located in the
state of Ohio, the company's home state. Therefore, in Moody's
opinion, the legislation will have a material negative effect on
Checksmart's revenues, earnings, cash flow, and financial
condition, including its ability to service the debt taken on in
the company's 2006 leveraged buyout transaction.

CheckSmart, as part of a coalition of payday loan companies, has
engaged former U.S. Solicitor General Theodore Olson to examine
the possibility of a judicial challenge to the constitutionality
of the legislation. Checksmart is also considering alternative
products authorized by Ohio law.

The Ca rating on the second lien term loan takes into account its
structurally subordinated status to the first lien secured debt.
Given the small proportion of tangible assets in Checksmart's
asset structure, asset coverage for the first lien secured debt in
a default scenario would likely be modest, and virtually non-
existent for the second lien debt holder given their structurally
subordinated position.

During the continuing review, Moody's will evaluate the company's
business and financial prospects as it pursues these initiatives.
However, in Moody's opinion, there is substantial uncertainty
surrounding the ultimate success of such actions.

These ratings were downgraded:

* Corporate Family Rating -- to Caa2 from B3

* Senior Secured First Lien Revolving Credit Facility -- to Caa2
   from B3

* Senior Secured First Lien Term Loan -- to Caa2 from B3

* Senior Secured Second Lien Term Loan -- to Ca from Caa2

Based in Dublin, Ohio, Checksmart is a provider of payday loans
and offers check cashing services and other financial products.
The company operates 258 stores in eleven states.


CITYSCAPE: Fitch Takes Rating Actions on 13 Certificates
--------------------------------------------------------
Fitch Ratings has taken rating actions on 13 mortgage pass-through
certificates.  Unless stated otherwise, any bonds that were
previously placed on Rating Watch Negative are removed.

Cityscape HEL 1997-B Group 1
  -- A-7 affirmed at 'AAA';
  -- M1F downgraded to 'A' from 'AA';
  -- M2F downgraded to 'BB+' from 'BBB';
  -- B1F downgraded to 'B+' from 'BB"

Deal Summary
  -- Originators: CityScape
  -- 60+ day Delinquency: 37.67%
  -- Realized Losses to date (% of Original Balance): 8.92%

Cityscape HEL 1997-B Group 2
  -- M2A affirmed at 'AA';
  -- B1A remains at 'CCC/DR2'

Deal Summary
  -- Originators: CityScape
  -- 60+ day Delinquency: 51.16%
  -- Realized Losses to date (% of Original Balance): 9.36%

Cityscape HEL 1997-C Group 1
  -- A-4 affirmed at 'AAA';
  -- M1F downgraded to 'A-'from 'AA';
  -- M2F downgraded to 'BB' from 'BBB';
  -- B1F remains at 'C/DR6'

Deal Summary
  -- Originators: CityScape
  -- 60+ day Delinquency: 22.03%
  -- Realized Losses to date (% of Original Balance): 10.16%

Cityscape HEL 1997-C Group 2
  -- M1A affirmed at 'AA';
  -- M2A affirmed at 'A';
  -- B1A affirmed at 'BB';

Deal Summary
  -- Originators: CityScape
  -- 60+ day Delinquency: 26.52%
  -- Realized Losses to date (% of Original Balance): 4.43%


CONEXANT SYSTEMS: Expects Above Target Guidance for Third Quarter
-----------------------------------------------------------------
Conexant Systems, Inc. expects financial results for the third
quarter of fiscal 2008 to be at the high end of the guidance range
established entering the quarter.  The company also provided
guidance for the fourth fiscal quarter based on the expected
performance of its two continuing businesses, which consist of
Imaging and PC Media and Broadband Access.  On April 29, 2008,
Conexant disclosed a definitive agreement to sell its Broadband
Media Processing product lines to NXP Semiconductors for up to
$145 million.  That transaction is expected to close within
approximately 45 days.

In addition, the company plans to execute a reverse stock split at
a split ratio of 1-for-10, effective after the close of trading on
June 27, 2008.

              Third Quarter Fiscal 2008 Expectations

Entering the third quarter of fiscal 2008, the company expected
revenues to be in a range between $167 million and $171 million,
core gross margins to be between 44.5% and 45.5% of revenues, core
operating expenses to be in a range between $72 million and
$74 million, and core operating income to be in a range between
breakeven and $5 million.  Including the effects of the reverse
stock split, the company anticipated a core net loss of between
$0.17 and $0.06 per share.

The company now expects to deliver performance at the high end of
the ranges provided for revenues and core gross margins, and at
the low end of the range on core operating expenses.

              Fourth Quarter Fiscal 2008 Expectations

For the September-ending fourth fiscal quarter, excluding results
from its Broadband Media Processing product lines, Conexant
expects revenues to be in a range between $115 million and
$120 million, core gross margins to be between 49.5% and 50.5% of
revenues, and core operating expenses to be between $45 million
and $47 million.  As a result, and including the effects of the
reverse stock split, the company anticipates core operating income
of $12 million to $14 million, and core net income of $0.08 to
$0.12 per share.

"Over the past three quarters, the Conexant team has done an
outstanding job of reducing operating expenses," Scott Mercer,
Conexant's chief executive officer, said.  "As part of our
strategic restructuring, we also exited several unprofitable
product segments.  When we complete the sale of our Broadband
Media Processing assets, we will be a new company with a
dramatically improved cost structure, higher gross margins, and
lower operating expenses, which is reflected in our expectations
for the fourth fiscal quarter."

                         The New Conexant

The new Conexant will consist of two business units delivering
semiconductor solutions for a total available market that is
greater than $3 billion today and expected to grow over the next
three years.  The Imaging and PC Media team will be focused on
providing products targeted at high-volume, high-growth
applications that include imaging, audio, PC video, and video
surveillance.  The Broadband Access team will continue to deliver
DSL products for client-side and central-office applications, and
for higher-speed, next-generation technologies that include VDSL2
and passive optical networking.

The company holds a top-three leadership position in each of the
major segments it addresses.

"We are focused on strengthening our market-leading positions by
accelerating investments in the areas that offer the best
opportunities for profitable growth in the future," Mr. Mercer
said.  "For the next fiscal year, we expect to deliver moderate
revenue growth.  We also anticipate that we will maintain core
gross margins of approximately 50% of revenues and deliver
additional savings in core operating expenses, which should enable
us to generate cash consistently on an operating basis."

                  Conexant's Reverse Stock Split

In February 2008, Conexant shareholders approved a proposal giving
the company's board of directors the authority to effect a reverse
stock split.  In May, the board approved a reverse stock split at
a 1-for-10 split ratio that will take effect on Friday, June 27,
2008 after the close of trading on the NASDAQ Stock Market.  At
that time, shareholders will be entitled to receive one new share
for each 10 shares held, and cash consideration for any resulting
fractional shares.  All Conexant common stock, stock options, and
restricted stock will be proportionally adjusted to reflect the
reverse split.

The reverse stock split will increase the per-share trading price
of the company's common stock, which is intended to make the stock
more attractive to a broader range of investors and satisfy
NASDAQ's "minimum-bid" listing requirement.

                          About Conexant

Headquartered in Newport Beach, California, Conexant Systems,
Inc. (NASDAQ: CNXT) -- http://www.conexant.com/-- has a  
comprehensive portfolio of innovative semiconductor solutions
includes products for Internet connectivity, digital imaging,
and media processing applications.  Conexant is a fabless
semiconductor company that recorded revenues of US$809 million
in fiscal year 2007.

Outside the United States, the company has subsidiaries in
Northern Ireland, China, Barbados, Korea, Mauritius, Hong Kong,
France, Germany, the United Kingdom, Iceland, India, Israel,
Japan, Netherlands, Singapore and Israel.

                      *     *     *

Conexant currently carries Standard & Poor's Ratings Services'
B- rating with a negative outlook.

Moody's Investor Service placed Conexant Systems Inc.'s long term
corporate family and probability of default ratings at 'Caa1' in
October 2006.  The ratings still hold to date with a stable
outlook.


CONTINENTAL AIRLINES: To Retire 67 Aircraft and Cut 3,000 Jobs
--------------------------------------------------------------
Continental Airlines Inc. disclosed, in a letter and employee
bulletin, significant reductions in flying and staffing that are
necessary for the company to further adjust to today's extremely
high cost of fuel.  These actions are among many steps Continental
is taking to respond to record-high fuel prices as the industry
faces its worst crisis since 9/11.

The price of Gulf Coast jet fuel closed on June 4 at $151.26 --
about 75% higher than what it was a year ago.  At that price and
at its current capacity, its fuel expense this year would be
$2.3 billion more than it was last year.  That increase alone
amounts to about $50,000 per employee.

These record fuel costs have fundamentally shifted the economics
of Continental's business.  At these fuel prices, a large number
of its flights are losing money, and Continental needs to react to
this changed marketplace.

                         Network Changes

Starting in September, at the conclusion of the peak summer
season, Continental will reduce its flights, with fourth quarter
domestic mainline departures to be down 16% year-over-year.  This
will result in a reduction of domestic mainline capacity
(available seat miles, or ASMs) by 11% in the fourth quarter,
compared to the same period last year.

By the end of next week, Continental will provide details on
specific flights and destinations that are subject to reduction or
elimination.  

                          Co-worker Impact

As a result of the capacity reductions, Continental will need
fewer co-workers worldwide to support the reduced flight schedule.  
About 3,000 positions, including management positions, will be
eliminated through voluntary and involuntary separations, with the
majority expected to be through voluntary programs.

The company will offer voluntary programs in an effort to reduce
the number of co-workers who will be furloughed or involuntarily
terminated due to the capacity cuts.

The reductions will take effect after the peak summer season,
except for management and clerical reductions, which will begin
sooner.

In recognition of the crisis and its effect on their co-workers,
Larry Kellner, chairman and chief executive officer, and Jeff
Smisek, president, have declined their salaries for the remainder
of the year and have declined any payment under the annual
incentive program for 2008.

                          Fleet Changes

Continental will reduce the size of its fleet by removing the
least efficient aircraft from its network.  To accomplish this,
Continental is accelerating the retirement of its Boeing 737-300
and 737-500 fleets.  In the first six months of 2008, Continental
removed six older aircraft from service.  Continental will retire
an additional 67 Boeing 737-300 and 737-500 aircraft, with 37 of
these additional retirements occurring in 2008 and 30 in 2009.  
Given the need for prompt capacity reductions in today's
environment, 27 of the 67 aircraft will be removed in September.  
By the end of 2009, all 737-300 aircraft will be retired from
Continental's fleet.

Continental will continue to take delivery of new, fuel-efficient
NextGen Boeing 737-800s and 737-900ERs.  Overall fuel efficiency
will improve measurably as Continental takes delivery of 16 of
these aircraft in the second half of 2008 and 18 in 2009 and
accelerates the retirement of the older, less fuel-efficient
aircraft as mentioned previously.

By the end of the second quarter of 2008, Continental will operate
375 mainline aircraft.  Taking into account both the accelerated
retirements and scheduled deliveries, Continental's fleet count
will shrink to 356 aircraft in September 2008 and 344 aircraft at
the end of 2009.

                        Letter To Employees

A letter from Messrs. Smisek and Kellner stated that the company
has always said that the its employees deserve open, honest and
direct communication and that the letter and the attached employee
bulletin and Q&A are part of that commitment.

According to the executives, the airline industry is in a crisis
and its business model doesn't work with the current price of fuel
and the existing level of capacity in the marketplace.  The
company needs to make changes in response.

While there have been several successful fare increases, those
increases haven't been sufficient to cover the rising cost of
fuel.  As fares increase, fewer customers will fly.  As fewer
customers fly, the airline will need to reduce its capacity to
match the reduced demand.  As Continental reduces its capacity, it
will need fewer employees to operate the airline.  Although these
changes will be painful, the company must adapt to the reality of
today's market to successfully navigate these difficult times.

The letter said that the situation for all airlines is serious,
and the actions the company is disclosing are necessary to secure
its future.  Continental regrets the loss of jobs caused by this
crisis, and it will do its best to minimize furloughs and
involuntary terminations.

These actions, the letter relates, will help Continental survive
this crisis.  The airline is committed to keep employees informed
as the industry evolves and adapts to these unprecedented
challenges.  It is important that Continental will keep its focus
on working together during these difficult times.

Continental does not anticipate any further comment until after it
has had the opportunity to meet with employees during the next
week.

                   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.


C&S FINANCE: Case Summary & 32 Largest Unsecured Creditors
----------------------------------------------------------
Debtor: C&S Finance Orlando, Inc.
        6363 East Colonial Drive
        Orlando, FL 32807

Bankruptcy Case No.: 08-04640

Debtor-affiliate filing separate Chapter 11 petition:

      Entity                                   Case No.
      ------                                   --------
      C&S Orlando, Inc.                        08-04643

Type of Business: The Debtors are car dealers.

Chapter 11 Petition Date: June 4, 2008

Court: Middle District of Florida (Orlando)

Judge: Arthur B. Briskman

Debtors' Counsel: Ryan E. Davis, Esq.
                  (rdavis@whww.com)
                  Winderweedle Haines Ward & Woodman P.A.
                  P.O. Box 1391
                  Orlando, FL 32802
                  Tel: (407) 423-4246
                  Fax: (407) 423-7014

Estimated Assets: $10 million to $50 million

Estimated Debts:  $10 million to $50 million

A. C&S Finance Orlando, Inc.'s list of its 12 largest
   unsecured creditors:

   Entity                          Nature of Claim   Claim Amount
   ------                          ---------------   ------------
Byrider Franchising                Trade Debt             $59,500
12802 Himalton Crossing Boulevard
Carmel, IN 46032

American Express                   Trade Debt             $58,405
P.O. Box 360001
Fort Lauderdale, FL 33336-0001

Davis Keller & Wiggins             Trade Debt              $7,338
12025 Craigshire, Suite 130
St. Louis, MO 63146

Killgore Pearlman Stamp            Attorney                $3,493

Office Source                      Trade Debt              $1,889

AutoLock Specialist                Trade Debt                $785

Wells Fargo                        Trade Debt                $725

Integrity Management Solutions     Trade Debt                $375

Vengroff Williams & Association    Trade Debt                $124

The Tow Pro                        Trade Debt                 $55

Collateral Recovery, LLC           Trade Debt                  $0

Westfield Insurance                Insurance                   $0

B. C&S Orlando, Inc.'s list of its 20 largest unsecured creditors:

   Entity                          Nature of Claim   Claim Amount
   ------                          ---------------   ------------
Byrider Franchising                Trade Debt            $126,153
12802 Himalton Crossing Boulevard
Carmel, IN 46032

Genuine Parts Co.                  Trade Debt             $46,287
P.O. Box 409043
Atlanta, GA 30384-9043

JD Byrider Advertising             Trade Debt             $18,000
12802 Hamilton Crossing Boulevard
Carmel, IN 46032

Davis Keller & Wiggins LLC         Trade Debt              $5,543

Remanufactured Transmission        Trade Debt              $2,853

JD Byrider Legal Defense           Trade Debt              $2,500

Killgore Pearlman Stamp et al.     Attorney Fees           $1,616

Vavoline                           Trade Debt              $1,561

Carquest Auto Parts                Trade Debt              $1,514

Courtesy Chevrolet                 Trade Debt              $1,482

Nydia Brito Cleaning               Trade Debt              $1,459

Kimelle's Trucking Inc.            Trade Debt              $1,443

Marshall Auto                      Trade Debt              $1,155
Painting & Collision

East Orlando Kia                   Trade Debt              $1,126

Keystone                           Trade Debt              $1,126

LKQ                                Trade Debt                $802

Unifirst Corporation               Trade Debt                $781

Firestone                          Trade Debt                $708

Greenway Chrysler                  Trade Debt                $679

Who's Calling                      Trade Debt                $619


CYTOCORE INC: Posts $1,886,000 Net Loss in 2008 First Quarter
-------------------------------------------------------------
Cytocore Inc. reported a net loss of $1,886,000, on net sales of
$46,000, in the first quarter ended March 31, 2008, compared with
a net loss of $2,460,000, on net sales of $22,000, in the same
period last year.

At March 31, 2008, the company's consolidated balance sheet showed
$7,496,000 in total assets, $2,959,000 in total liabilities, and
$4,537,000 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?2d5c

                     Going Concern Doubt

LJ Soldinger Associates LLC, in Dear Park, Illinois, expressed
substantial doubt about Cytocore Inc.'s ability to continue as a
going concern after auditing the company's consolidated financial
statements for the year ended Dec. 31, 2007.  The auditing firm
pointed to the company's recurring losses from operations and
resulting dependence upon access to additional external financing.

                      About Cytocore Inc.

Headquartered in Chicago, Illinois, CytoCore Inc. (OTC BB: CYOE)
-- http://www.cytocoreinc.com/-- develops cost-effective, highly  
accurate screening systems for early detection of gynecological
cancers and sexually transmitted diseases.  Designed for easy
deployment at a laboratory or at the point-of-care, the CytoCore
suite of sample collection technologies assists in the detection
of cervical, endometrial, and other cancers, as well as the human
Papilloma virus.


DAIMLER CHRYSLER: Fitch Trims Ratings After Rating Cut on Chrysler
------------------------------------------------------------------
Fitch Ratings has downgraded Daimler Chrysler Financial Services
America LLC Issuer Default Rating to 'B+' from 'BB-'.  
Approximately $6 billion of debt is affected by this action.  The
Rating Outlook is Negative.

This action follows Fitch's downgrade of Chrysler LLC on May 7,
2008, whereby Chrysler LLC's IDR was downgraded to 'B'.  Fitch's
criteria generally permit a one-notch differential in the IDR for
a captive finance company.  The downgrade of Chrysler mainly
reflected decline in unit volumes and revenues resulting from weak
economic conditions, modest share losses and certain strategic
initiatives.  In Fitch's view, DCFS' recent operating performance
has been within Fitch's expectations since it was spun off from
Daimler A.G. in July 2007.  Nonetheless, Fitch believes DCFS'
future operating performance will trend lower due to
aforementioned issues with Chrysler and the weaker environment for
consumer credit.

The Negative Rating Outlook reflects the more challenging
environment for automotive lenders in the U.S.  Industry
delinquencies and losses are increasing as a result of weaker
economic conditions coupled with industry dynamics such as lower
used car prices.

Fitch has assigned recovery ratings to DCFS' secured credit
facilities.  The 'RR1' assigned to the first lien facility
reflects a high expectation of full recovery based on the
available collateral.  The 'RR3' assigned to the second lien
facility reflects an above-average recovery.

Fitch downgraded these with a Negative Outlook:

  -- Long-term IDR to 'B+' from 'BB-';
  -- Secured first lien to 'BB+/RR1' from 'BBB-';
  -- Secured second lien to 'BB-/RR3' from 'BB'.

In addition Fitch affirmed this:

  -- Short-term IDR at 'B'.


DECRANE AEROSPACE: Moody's Junks Corporate Family Rating
--------------------------------------------------------
Moody's Investors Service has downgraded the corporate family and
probability of default rating of DeCrane Aerospace, Inc. to Caa1
from B3. The outlook is stable. This rating action concludes the
ratings review that began on May 19, 2008.

The downgrades reflect weaker than expected 2007 earnings from
significant one-time fourth quarter 2007 expense items. The
expense items include a one-time cumulative accounting correction
related to DeCrane's PATS Aircraft Completions ("PATS") business
line and a one-time expense associated with exiting a significant
portion of its PATS business line. The potential for bank facility
covenant breaches will remain high over 2008, largely due to the
impact of the one-time fourth quarter expense items on the
calculation of last twelve month EBITDA. In the fourth quarter of
2007 and the first quarter 2008, the company cured financial ratio
covenant violations with $17.5 million in parent equity
contributions. Also contributing to the downgrade is the
likelihood that the company's 2008 margins and free cash flow
level will be somewhat lower than what had previously been
expected.

The outlook is stable despite the heightened potential for
covenant breaches, due to some credit positives. DeCrane's core
Cabin business lines are performing well, reflecting the currently
strong market for business jets. Moody's estimates that the
company has cash on hand of approximately $15 million and has no
borrowings under the company's $30 million revolving credit
facility. Cash on hand and earnings should be sufficient to fund
anticipated working capital and capital spending needs throughout
2008, while near term debt amortizations are just $2.2 million.
Therefore, were the potential for covenant breaches in 2008 to
decline, due to a credit facility amendment that loosens upcoming
covenant ratio test levels, additional equity contributions, or
material debt reductions, upward pressure on the ratings or
outlook could develop.  Conversely, were the potential for near
term covenant breaches to increase, the ratings or outlook could
be negatively pressured.

In addition to the corporate family and probability of default
downgrades, the following ratings that were placed under review
for downgrade on May 19th have been changed:

  * $30 million 1st lien revolving credit facility due 2013. . .
    to B2 LGD 2, 29% from B1 LGD 2, 26%

  * $195 million 1st lien term loan due 2013. . . to B2 LGD 2,
    29% from B1 LGD 2, 26%

  * $150 million 2nd lien term loan due 2014. . . to Caa2 LGD 5,
    82% from Caa1 LGD 5, 78%

DeCrane Aerospace, Inc., headquartered in Columbus, OH, is a
leading provider of aircraft cabin interior systems and components
(including cabin interior furnishings, veneer, cabin management
systems, seating and composite 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. In April 2007 the
company changed its name to DeCrane Aerospace, Inc., from DeCrane
Aircraft Holdings, Inc.


DELPHI CORP: Hearing on Appaloosa Trial Adjourned to June 9
-----------------------------------------------------------
Edward A. Fridman, Esq., at Friedman Kaplan Seiler & Adelman LLP,
in New York, informs parties-in-interest that the hearing on
Delphi Corp. and its debtor-affiliates' request for an expedited
trial and discovery schedule on their lawsuits against Appaloosa
Management, L.P., et al., which was scheduled for June 4, 2008,
has been adjourned to June 9.  Jacob W. Buchdahl, Esq., at Susman
Godfrey LLP, in New York, also said that the hearing for the trial
schedule for the separate lawsuit against UBS Securities LLC has
been moved to June 9.

Delphi targeted an August 9 trial for its $2,550,000,000 lawsuits
against nine parties who have backed out of an agreement to
provide equity financing in Delphi, but the defendants opposed the
schedule.  The Hon. Robert Drain of the U.S. Bankruptcy Court for
the District of New York at the May 29 hearing agreed that the
schedule proposed by Delphi was "too ambitious" and asked the
parties to set a mutually acceptable schedule.

In the lawsuits, Delphi wants to compel the Plan Investors to
honor their equity financing commitment:

                                                      Commitment
   Defendants                                             Amount
   ----------                                         ----------
   Appaloosa Management L.P.
   A-D Acquisition Holdings, LLC                  $1,076,394,180

   Harbinger Del-Auto Investment Company, Ltd.
   Harbinger Capital Partners Master Fund I         $397,225,891

   Pardus DPH Holding LLC
   Pardus Special Opportunities Master Fund L.P.    $342,655,959
   
   Merrill Lynch, Pierce, Fenner & Smith Inc.       $166,866,749

   Goldman Sachs & Co.                              $166,866,749

   UBS Securities LLC                               $166,866,749

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

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

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

(Delphi Bankruptcy News, Issue No. 132; Bankruptcy Creditors'
Service Inc., http://bankrupt.com/newsstand/or 215/945-7000)  


DEMAND CONCEPTS: Voluntary Chapter 11 Case Summary
--------------------------------------------------
Debtor: Demand Concepts, Inc.
        dba 525 Meadow Creek, Inc.
        3131 Turtle Creek Blvd.
        Suite 1028
        Dallas, TX 75219

Bankruptcy Case No.: 08-32704

Chapter 11 Petition Date: June 2, 2008

Court: Northern District of Texas (Dallas)

Debtors' Counsel: Reedy Macque Spigner, Jr., Esq.
                  Spigner & Gallerson
                  555 Republic Drive, Ste. 101
                  Plano, TX 75074
                  Tel: (972) 881-0581
                  Fax: (972) 424-1309
                  E-mail: rspigner@webh.com

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

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

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


DEN-MARK CONSTRUCTION: May Access DIP Funds from Bank Lenders
-------------------------------------------------------------
The U.S. Bankruptcy Court for the Eastern District of North
Carolina gave Den-Mark Construction Inc. authority to access
various bank lenders' debtor-in-possession facilities.  The order
relates solely to Den-Mark Construction.

In addition, the Court ordered the Debtor to provide monthly
statements to the banks regarding the construction progress on the
homes and lots securing the loans.  The bank lenders were granted
first priority liens on the lots securing their loans to the
Debtor.

A. Four Oaks Bank

The Debtor and Four Oaks Bank were parties to several construction
loans under which Four Oaks Bank advanced funds to the Debtor for
the construction of homes.  These lots had been pre-approved for
construction financing by Four Oaks Bank prior to the Debtor's
bankruptcy filing: Lot 1 Brighton Ridge, Lot 3 Brighton Ridge,
Lot 5 Brighton Ridge, Lot 26 Brighton Ridge, Lot 80 Winston Ridge,
Lot 79 Winston Ridge, Lot 16 Winston Ridge, Lot 15 Winston Ridge,
Lot 14 Winston Ridge, and Lot 10 Winston Ridge.

The Debtor wished to continue its relationship with Four Oaks Bank
in order to complete the construction of the homes on the same
terms.  Any additional advances made by Four Oaks Bank will be
secured by the existing collateral.

B. Capital Bank

The Debtor and Capital Bank were parties to several construction
loans regarding construction of some homes.  Three lots had been
pre-approved for construction financing by Capital Bank prior to
the Debtor's bankruptcy filing: Lot 67 Glen Oaks, Lot 80 Ironwood,
and Lot 22 Legacy.  These lots secure the Debtor's loan owed to
Capital Bank.

The Debtor wished to continues their relationship with Capital
Bank.  The Court ordered that the Debtor can continue construction
and prepare the homes for sale at a higher price than if the
Debtor attempted to sell them in its current condition.  The
Debtor has told the Court that without financing from Capital
Bank, they will be unable to continue the construction and may be
forced to sell the assets in its current condition which would be
at a lower value.  The Debtor has added that they weren't able to
obtain unsecured credit allowable under the U.S. Bankruptcy Code.

C. First Horizon Bank

The Debtor and First Horizon Bank entered into several loan
agreements to fund the construction of various homes.  Currently,
there are three homes under construction, known as: Lot 88 Rivers
Edge, Lot 92 Ironwood, and Lot 97 Ironwood.  The lots secure First
Horizon Bank's loan.

The Debtor had said it couldn't get unsecured financing to
continue construction of the homes and it may be forced to sell
the unfinished homes at significantly lower prices.  Hence, the
need to access First Horizon Bank's DIP fund.

D. Regions Bank

The Debtor owns several real property in North Carolina, including
the Portofino subdivision in Johnston County.  The Debtor executed
a promissory note dated May 16, 2005 with Regions Bank to finance
the construction of certain lots, including lots 12, 63, and 64 in
Portofino.  The note is secured by a first priority deed of trust
on the lots.  The principal amount owed to Regions Bank as of
April 24, 2008, was not less than $3,960,684, plus interests and
costs.

In its request to use Regions Bank's DIP fund, the Debtor told the
Court that it needed Regions Bank to continue to provide financing
for the construction of the homes in lots 63 and 64.

As of May 22, 2008, these entities have filed mechanic liens on
the lots:

   a. Stock Building Supply Inc. in the amount of $33,908 on
      lot 63 and $25,988 on lot 64;

   b. Nash Brick Co. in the amount of $2,350 on lot 63; and
      $2,310 on lot 64;

   c. Casey Servicing in the amount of $4,150 on lot 63; and
      $5,200 on lot 64.

The Debtor disclosed that other creditors may be owed funds for
their services on the lots but have not yet perfected their
mechanic liens as of May 22.

Per the Debtor's schedules filed on May 9, 2008, the Debtor listed
the value of lot 63 at $300,000 and lot 64 at $230,000.

E. TierOne Bank

Under several construction loan agreements, TierOne Bank advanced
to the Debtor funds for the construction of some homes.  These two
lots had been pre-approved for construction financing by TierOne
Bank: Lot 1 Durham and Lot 2 Durham.  The lots secure the
construction loan the Debtor owes to TierOne Bank.

F. Union Bank

The Debtor entered into three construction loan agreements with
Union Bank, pursuant to which Union Bank provided funds for the
construction of some homes in three lots known as lots 150 (loan
no. 1020), 151 (loan no. 1147), and 152 (loan no. 1155) in
Huntstone subdivision.  These lots secure the construction loan.

Loan no. 1020 made by Union Bank to the Debtor dated March 25,
2008, has a principal sum of $35,396.  Loan no. 1147 dated March
25, 2008, has a principal sum of $35,720.  Loan no. 1155 dated
March 25, 2008, has a principal sum of $36,367.

                Entities Respond to DIP Fund Motion

On May 27, 2008, Nikole B. Mariencheck on behalf of Cawthorne,
Moss & Panciera PC and Joseph E. Propst on behalf of Rugworks LLC,
and filed separate responses relating to Den-Mark Construction's
motion to obtain postpetition financing from various bank lenders.  

On May 23, 2008, Nan E. Hannah on behalf of Stock Building Supply
Inc. filed a response relating to the Debtor's request to access
postpetition financing from various banks.

                    About Den-Mark Construction

Youngsville, North Carolina-based Den-Mark Construction Inc.
constructs single-family houses.  It filed its chapter 11 petition
on April 24, 2008 (Bankr. E.D.N.C. Case No. 08-02764) together
with three debtor-affiliates, Den-Mark Homes SC, Inc. (08-02766);
Marcus Edwards Development, LLC (08-02768); and M&D Development,
LLC (08-02769).  Judge Randy D. Doub presides over the case.  
Trawick H. Stubbs, Jr., Esq., at Stubbs & Perdue, P.A. represents
the Debtors in their restructuring efforts.  The Debtors'
schedules showed total assets of $44,810,901 and total liabilities
of $34,537,937.


DEN-MARK CONSTRUCTION: President May Get Year-End Sales Bonus
-------------------------------------------------------------
The U.S. Bankruptcy Court for the Eastern District of North
Carolina issued an order, as amended, approving compensation and
employment of David Dennis Cyrus as president of Den-Mark
Construction Inc.

In addition to being Den-Mark Construction's president, Mr. Cyrus
also serves as the vice president of Den-Mark Homes SC Inc.,
member of Marcus Edwards Development LLC and M&D Development LLC.  
Mr. Cyrus owns 50% of the Debtors' stock.

Mr. Cyrus had sought Court approval for employment by the Debtors
and for combined compensation of $15,000 bi-weekly.  In addition
to his salary, Mr. Cyrus has been provided with the use of a
company vehicle, fuel and repairs for that vehicle, reimbursement
for health insurance up to $400 monthly, and receives a 401(k)
matching contribution of up to 4%.

In its amended order, the Court ruled that Mr. Cyrus:

   -- be paid at the rate of $9,230 bi-weekly,

   -- be provided with the use of a company vehicle, fuel and
      repairs for that vehicle,

   -- be reimbursed for health insurance up to $400 monthly.

The Court further ruled that the Debtors continue the 401(k)
matching contribution of up to 4%, and that the compensation and
benefits be paid from the filing date of the bankruptcy petition,
April 24, 2008, the compensation to be subordinated to any unpaid
administrative expenses of the estate.

Any apportionment of Mr. Cyrus's compensation between the Debtors
will be determined at a later hearing.

The Court also ruled that if the Debtors' gross sales exceed
$35,000,000 in 2008, Mr. Cyrus wil receive a year end sales bonus
in the amount equal to 1/2% of the gross sales in excess of
$35,000,000.

Mr. Cyrus has worked for the Debtor since its inception in October
1989.  Since 1989, Mr. Cyrus and Mark Dowdy have been the only
officers and shareholders of the Debtors.  Mr. Cyrus was paid a
total of $388,945 in 2007 by the Debtor and has been paid the same
salary for 2006.

                    About Den-Mark Construction

Youngsville, North Carolina-based Den-Mark Construction Inc.
constructs single-family houses.  It filed its chapter 11 petition
on April 24, 2008 (Bankr. E.D.N.C. Case No. 08-02764) together
with three debtor-affiliates, Den-Mark Homes SC, Inc. (08-02766);
Marcus Edwards Development, LLC (08-02768); and M&D Development,
LLC (08-02769).  Judge Randy D. Doub presides over the case.  
Trawick H. Stubbs, Jr., Esq., at Stubbs & Perdue, P.A. represents
the Debtors in their restructuring efforts.  The Debtors'
schedules showed total assets of $44,810,901 and total liabilities
of $34,537,937.


DEN-MARK CONSTRUCTION: Administrator Wants a Lienholders' Panel
---------------------------------------------------------------
Marjorie K. Lynch, Bankruptcy Administrator, told the U.S.
Bankruptcy Court for the Eastern District of North Carolina a
committee to be called Official Committee of North Carolina 44A
Lienholders be appointed in the bankruptcy cases of Den-Mark
Construction Inc. and its debtor-affiliate, Marcus Edwards
Development LLC.

The Administrator also sought authority to recommend which
creditors should be appointed to the committee and submit this
recommendation to the Court.  The Administrator further wants her  
recommendation to be served on interested creditors and wants to
request a hearing on that sole issue, among others.

Most of the operation of the two Debtors are focused in Franklin,
Wake and Granville Counties, the Administrator related.  In
principle, the Administrator said that Marcus Edwards is the
development entity and is supposed to assemble large tracts of
land, obtain necessary regulatory permits and prepare the lots for
construction.  Marcus Edwards then sells the lots to a contractor,
often, Den-Mark Construction, which then constructs the homes on
the lots and sells them.  The Administrator believes that the lots
were not always conveyed to Den-Mark Construction before
construction was completed.

The Administrator disclosed that the prices of the houses being
constructed in the subdivisions range from $175,000 to $1,000,000,
with the majority in the $250,000 to $400,000 range.

According to the Administrator, the Debtors sought bankruptcy
protection after Sun Trust and other banks declined further
extensions of credit needed to complete construction in the
Debtors' developments.  As a result, many homes were incomplete as
of the bankruptcy filing.

The Court has, however, approved several postpetition requests
that Den-Mark Construction made.  This is reported in today's
Troubled Company Reporter.

The Administrator added that there are subcontractors and vendors
who performed work or provided materials for the construction of
the homes and were owed money at the time the cases were filed.

The mechanics and materials lienholders are essential participants
in the process of reorganizing the Debtors, the Administrator
asserted.  Hence, the appointment of a committee will help to
streamline negotiations between lienholders and the Debtors.

                   Committee of Lienholders for
                M&D and Den-Mark Homes Not Needed

The Administrator said she believes there are few, if any, lien
creditors of the South Carolina Debtors -- M&D Development LLC and
Den-Mark Homes SC Inc. -- and the appointment of a similar
committee in those cases is not necessary.

The Administrator said she intends to organize general unsecured
creditors committees for the South Carolina Debtors if there is
sufficient interest.

                    About Den-Mark Construction

Youngsville, North Carolina-based Den-Mark Construction Inc.
constructs single-family houses.  It filed its chapter 11 petition
on April 24, 2008 (Bankr. E.D.N.C. Case No. 08-02764) together
with three debtor-affiliates, Den-Mark Homes SC, Inc. (08-02766);
Marcus Edwards Development, LLC (08-02768); and M&D Development,
LLC (08-02769).  Judge Randy D. Doub presides over the case.  
Trawick H. Stubbs, Jr., Esq., at Stubbs & Perdue, P.A. represents
the Debtors in their restructuring efforts.  The Debtors'
schedules showed total assets of $44,810,901 and total liabilities
of $34,537,937.


DG COGEN PARTNERS: 1211658 ALBERTA LTD Schedules June 6 Auction  
---------------------------------------------------------------
1211658 ALBERTA, LTD. will be holding a public auction of the
personal property of DG Cogen Partners LLC, including all
equipment, redundant equipment and related parts, inventory, and
general intangibles, on an AS IS, WHERE IS, WITH ALL FAULTS, on
Friday, June 6, 2008, at 11:00 a.m., at the Law Officer of :

     Wolf Rifkin, Shapiro, Shulman & Rabkin, LLP
     11400 W. Olympic Boulevard
     Ninth Floor, Los Angeles, Calif.

The minimum bid price at the public auction sale is $1,200,000 in
cash payable at the time of sale.

For further information, 1211658 ALBERTA, LTD may be reached at
Tel No. (780) 975-9688.          

                   About Dh Cogen Partners LLC

Based in Torrance, Calif., DG Cogen Partners LLC is engaged in
business services.


DIGITAL GAS: Case Summary & List of 20 Largest Unsecured Creditors
------------------------------------------------------------------
Debtor: Donna Marie Ball-Thomas
        aka Donna Symonds
        dba Donna Ball Thomas Construction
        P.O. Box 6029
        Cleveland, TN 37320

Bankruptcy Case No.: 08-12459

Chapter 11 Petition Date: May 22, 2008

Court: Eastern District of Tennessee (Chattanooga)

Judge: John C. Cook

Debtor's Counsel: Thomas E. Ray, Esq.
                  Samples, Jennings, Ray & Clem
                  130 Jordan Drive
                  Chattanooga, TN 37421
                  Phone: (423) 892-2006
                  E-mail: tn10@ecfcbis.com

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

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

A list of the Debtor's 20 largest unsecured creditors is available
for free at http://bankrupt.com/misc/ted08-12459.pdf


DORADO BECKVILLE: Case Summary & 20 Largest Unsecured Creditors
---------------------------------------------------------------
Lead Debtor: Dorado Beckville Partners I, L.P.
             5950 Berkshire Lane, Suite 1650
             Dallas, TX 75225

Bankruptcy Case No.: 08-31796

Debtor-affiliate filing a separate Chapter 11 petition on May 19,
2008:

        Entity                                     Case No.
        ------                                     --------
        Dorado Exploration, Inc.                   08-32392

Debtor-affiliate filing separate Chapter 11 petitions:

        Entity                                     Case No.
        ------                                     --------
        Dorado Operating, Inc.                     08-31800

Type of Business:  The Debtors are diversified oil and gas
                   exploration and production companies active in
                   the East Texas Basin, the inland waters of
                   South Louisiana, and Western Alabama.  See
                   http://www.doradoexploration.com/

Chapter 11 Petition Date: April 15, 2008

Court: Northern District of Texas (Dallas)

Judge: Barbara J. Houser

Debtors' Counsel: Marcus Alan Helt, Esq.
                     (mhelt@gardere.com)
                  Richard McCoy Roberson, Esq.
                     (rroberson@gardere.com)
                  Gardere Wynne Sewell, LLP
                  1601 Elm Street, Suite 3000
                  Dallas, TX 75201
                  Tel: (214) 999-4526
                  Fax: (214) 999-3526
                  Web site: http://www.gardere.com/

Dorado Beckville Partners I, LP's Financial Condition:

Estimated Assets: $10 million to $50 million

Estimated Debts:  $10 million to $50 million

A. Dorado Beckville Partners I, L.P. did not file a list of its
   largest unsecured creditors.

B. Dorado Operating, Inc.'s 20 Largest Unsecured Creditors:

   Entity                      Nature of Claim       Claim Amount
   ------                      ---------------       ------------
Weatherford                    trade debt            $1,780,921
P.O. Box 200098
Houston, TX 77216
Attn: William G. Lowere,
   (Bill.Lowerre@weatherfod.com)
Corporate Counsel
Weatherford
515 Post Oak Blvd.
Houston, TX 77027
Tel: (713) 693-4105
Fax: (713) 693-4480
http://www.weatherfod.com/

Martin Lake Construction, Inc. trade debt            $1,034,278
P.O. Drawer H.
Carthage, TX 75633
Attn: Charles "Brick"
Dickerson, Dickerson Law
Offices
325 West Sabine Street, Ste. 4
Carthage, TX 75633
Tel: (903) 693-8212
Fax: (903) 693-7961

Rauh's Frac Service, Ltd.      trade debt            $438,724
P.O. Box 1753
Kilgore, TX 75663
Attn: Elizabeth Aten
   (elamberson@crouchfirm.com)
Lamberson, Crouch & Ramey
1445 Ross Ave., Ste. 3600
Dallas, TX 75202
Tel: (214) 922-7100
Fax: (214) 922-7101
http://www.crouchfirm.com


Nabor's Well Service           trade debt            $349,517
   (jesparza@gjtbs.com)
515 W. Greens Rd., Ste. 1000
Houston, TX 77067
Attn: Jacob Esparza
Galloway, Johnson, Tompkins,
Burr & Smith
1301 Mckinney, Ste. 1400
Houston, TX 77010
Tel: (713) 599-0700
Fax: (719) 599-0777
http://www.gjtbs.com/

Pinnergy                       trade debt            $328,889
111 Congress Ave., Ste. 202
Austin, TX 78701
Attn: Mark A. Mayfield
Clark, Thomas & Winters, P.C.
P.O. Box 1148
Austin, TX 78767
Tel: (512) 472-8800
Fax: (512) 474-1129

Schlumberger Technology        trade debt            $278,432
Corp.
P.O. Box 201193
Houston, TX 77216
Attn: Neil J. Orleans
Goins, Underkoffer, Crawford
& Langdon, L.L.P.
1201 Elm Street, Suite 4800
Dallas, TX 758270
Tel: (214) 969-5454
Fax: (214) 969-5902
   (neilo@gucl.com)
http://www.gucl.com

Texas CES, Inc. dba Bell       trade debt            $262,807
Supply
P.O. Box 201644
Dallas, TX 75320
Attn: James A. Collura, Jr.
Coats Rose
3 East Greenway Plaza,
Ste. 2000
Houston, TX 77046
Tel: (713) 651-0111
Fax: (713) 651-0220

Baker Hughes                   trade debt            $227,059

LATX Operations                trade debt            $203,135

Dan Blocker Petroleum          trade debt            $189,348

JW Williams                    trade debt            $163,205

Offshore Energy Services, Inc. trade debt            $159,534

MI SWACO                       trade debt            $144,800

J-W Wireline Co.               trade debt            $135,738

United Fuel & Energy           trade debt            $131,724

OST Fluid Services             trade debt            $128,109

Core Lab                       trade debt            $120,444

Smith International            trade debt            $105,718

Sabine Mud Logging, Inc.       trade debt            $105,302

C.C. Forbes                    trade debt            $102,635

C. Dorado Exploration, Inc. did not file a list of unsecured
creditors.


DRAGON PHARMACEUTICAL: Earns $1.96 Million in 2008 First Quarter
----------------------------------------------------------------
Dragon Pharmaceutical Inc. reported net income of $1.96 million in
the first quarter ended March 31, 2008, compared to net income of
$850,000 for the same period of 2007.

"Our record financial results in the first quarter demonstrate our
solid execution of our business strategy and ongoing focus on
operational excellence," said Mr. Yanlin Han, Dragon's chairman
and chief executive officer.  

"During the quarter, our purchasing prices of agricultural and
petrochemical materials all increased, while our unit production
costs actually declined due to our continuous efforts in
optimizing our manufacturing process and innovative technology
platform.  We believe our strategy of providing high quality
antibiotic products at lower prices, uniquely positions Dragon
Pharma to compete in China and other emerging markets."

Total revenues increased 112% to $35.87 million from
$16.90 million for the same period of 2007.  The company said
record results were driven by strong market demand and solid
execution of its business strategy as the company achieved
substantial growth in revenues and gross profits for all its
products.

Gross profit was $6.17 million, a 65% increase from $3.75 million
from the first quarter of 2007.  Overall gross profit margins were
17% in the first quarter of 2008 compared to 22% in the
corresponding period of 2007.  The overall gross margin slightly
declined due to an increase in sales contribution of formulation
drugs and the introduction of Cefalexin in January 2008.  

Sales of Cefalexin, launched in January 2008 into the Chinese
market, reached $4.27 million, accounting for 12% of the total
sales in the first quarter of 2008.

                          Balance Sheet

At March 31, 2008, the company's consolidated balance sheet showed
$130.31 million in total assets, $79.44 million in total
liabilities, and $50.87 million in total stockholders' equity.

The company's consolidated balance sheet at March 31, 2008, also
showed strained liquidity with $46.54 million in total current
assets available to pay $66.48 million in total current
liabilities.

Full-text copies of the company's consolidated financial
statements for the quarter ended March 31, 2008, are available for
free at http://researcharchives.com/t/s?2d60

                       Going Concern Doubt

Ernst & Young LLP, in Vancouver, Canada, expressed substantial
doubt about Dragon Pharmaceutical 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 recurring working capital
deficiency.

The company has a working capital deficiency of $19.94 million as
at March 31, 2008.

                   About Dragon Pharmaceutical

Based in Vancouver, Canada Dragon Pharmaceutical Inc. (TSX: DDD)
(OTC BB: DRUG)(BBSE: DRP) -- http://www.dragonpharma.com/-- is a  
manufacturer and distributor of a broad line of antibiotic  
products including 7-ACA, a key intermediate to produce
cephalosporin antibiotics, clavulanic acid, and formulated
cephalosporin antibiotic drugs.  Dragon is the third largest 7-ACA
producer and the first manufacturer and market leader of
clavulanic acid products in China.


EMPIRE FUNDING: Fitch Holds 'BB' Rating on 1999-1 Class B2 Certs.
-----------------------------------------------------------------
Fitch Ratings has taken rating actions on Empire Funding mortgage
pass-through certificates. Unless stated otherwise, any bonds that
were previously placed on Rating Watch Negative are now removed.

Empire Funding 1997-2
  -- Class A-5 affirmed at 'AAA';
  -- Class M-1 affirmed at 'AA';

Deal Summary
  -- Originators:
  -- 60+ day Delinquency: 3.72%
  -- Realized Losses to date (% of Original Balance): 15.01%

Empire Funding 1997-3
  -- Class A-7 affirmed at 'AAA';
  -- Class M-1 affirmed at 'AA';

Deal Summary
  -- Originators:
  -- 60+ day Delinquency: 2.39%
  -- Realized Losses to date (% of Original Balance): 16.64%

Empire Funding 1997-4
  -- Class A-5 affirmed at 'AAA';
  -- Class M-1 affirmed at 'AA';

Deal Summary
  -- Originators:
  -- 60+ day Delinquency: 3.68%
  -- Realized Losses to date (% of Original Balance): 18.01%

Empire Funding 1997-5
  -- Class A-4 affirmed at 'AAA';
  -- Class A-4IO affirmed at 'AAA';
  -- Class M-1 affirmed at 'AA';
  -- Class M-2 affirmed at 'A';

Deal Summary
  -- Originators:
  -- 60+ day Delinquency: 6.54%
  -- Realized Losses to date (% of Original Balance): 17.89%


Empire Funding 1998-1
  -- Class A-5 affirmed at 'AAA';
  -- Class M-1 affirmed at 'AA';
  -- Class M-2 affirmed at 'A';

Deal Summary
  -- Originators:
  -- 60+ day Delinquency: 3.15%
  -- Realized Losses to date (% of Original Balance): 15.43%

Empire Funding 1998-2
  -- Class A-5 affirmed at 'AAA';
  -- Class M1 affirmed at 'AA';
  -- Class M2 affirmed at 'A';
  -- Class B1 affirmed at 'BBB';

Deal Summary
  -- Originators:
  -- 60+ day Delinquency: 33.99%
  -- Realized Losses to date (% of Original Balance): 15.22%

Empire Funding 1999-1
  -- Class A-5 affirmed at 'AAA';
  -- Class M1 affirmed at 'AA';
  -- Class M2 affirmed at 'A';
  -- Class B1 affirmed at 'BBB';
  -- Class B2 affirmed at 'BB ';

Deal Summary
  -- Originators:
  -- 60+ day Delinquency: 2.71%
  -- Realized Losses to date (% of Original Balance): 14.04%

Additional details are available in the following research,
available at 'www.fitchratings.com':

  -- 'Downgrade Criteria for Recent Vintage U.S. Subprime RMBS'
     (Aug. 8, 2007)


FORD MOTOR: Has Ample Liquidity to Fund Turnaround Program
----------------------------------------------------------
The remark of Ford Motor Company Chief Executive Officer Alan
Mullaly that company has enough cash to cope with another round of
losses next year, was confirmed by Ford's president for the
Americas Mark Fields when he was interviewed at the launch of the
Ford Flex plant production in Oakville, Ontario.  Mr. Fields
stated that Ford has ample liquidity to help fund the turnaround
program announced in 2006.

John McCrank of Reuters relates that Mr. Fields reacted to the
question on the adequacy of a $23 billion borrowing program for
the company's revised restructuring plan.

Greg Bensinger of Bloomberg News writes that unlike General Motors
Corp., which is planning to focus production of small cars, Mr.
Mullaly said Ford will retain its trucks yet balance its products
with small, medium and large cars.

As disclosed in the Troubled Company Reporter on May 23, 2008,
Ford 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 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," Mr. Fields said.

Reuters, citing Mr. Fields, adds that Ford's approach changes as
customer demand changes so forecasts are uncertain as the market
does a quick turnabout.  He added, to elucidate his point, that in
2005, trucks and SUVs were in demand.  Approximately 70% of the
products Ford sold were trucks and SUVs, while 30% made up of
crossovers and cars.  In April, it was 62% cars and crossovers and
38% trucks and SUVs.

As reported in the TCR on last week, Ford may terminate salaried
workers in the U.S. instead of offering them compensation packages
to shave off expenses amid the decline of truck sales and the
increase of gasoline prices.  According to Bill Koenig of
Bloomberg News, Ford CEO Alan Mulally announced in a memo that by
August 1, the reductions must be completed.  The automaker might
reduce as much as 12% or 2,000 of its U.S. salaried workforce.

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.


FRONTIER AIRLINES: Teamsters Supports Wage and Benefit Concessions
------------------------------------------------------------------
The International Brotherhood of Teamsters Union voted in support
of temporary wage and benefit concessions requested by Frontier
Airlines Inc.  The Teamsters represent about 430 people at
Frontier including mechanics and related workers, tool room
employees, aircraft appearance agents and material specialists.

"This outcome clearly represents the incredible support and
confidence level that our employees have in Frontier," Chris
Collins, Frontier chief operating officer, said.  "These employees
are the individuals who ensure that we are operating a safe and
reliable airline everyday.  I not only want to thank them but I
would also like to thank the Teamsters for their support
throughout this process."

"We are pleased that our members have supported the short term
concessions to contribute to the long term success of Frontier,"
Matthew Fazakas, president and principal office of Teamsters Local
961, said.  "We believe that their support is another indication
of the positive relationship that we have built with Frontier."

Frontier asked all of its employees, both represented and non-
represented, to take temporary wage and benefit concessions to
help the airline as it attempts to, among other things, secure
debtor in possession financing.  

Frontier's other two unions: the Frontier Airlines Pilots
Association and the Transportation Workers Union, ratified
agreements for those concessions two weeks ago.  At the beginning
of May, Frontier CEO Sean Menke and other members of the executive
management team also agreed to up to 20% in wage and benefits
concessions.  Frontier plans to reexamine all the employee
concessions in September based on the developing financial
condition of the company and current economic conditions.

                     About Frontier Airlines

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

The Debtor and its debtor-affiliates filed for Chapter 11
protection on April 10, 2008, (Bankr. S.D.N.Y. Case No. 08-11297
through 08-11299.)  Hugh R. McCullough, Esq. at Davis Polk &
Wardwell represent the Debtors in their restructuring efforts.
Togul, Segal & Segal LLP is Debtors' Conflicts Counsel, Faegre &
Benson LLP is the Debtors' Special Counsel, and Kekst and
Company is the Debtors' Communications Advisors.  Epiq
Bankruptcy Solutions serves as the Debtors' notice and claims
agent.  The Official Committee of Unsecured Creditors is
represented by Wilmer Cutler Pickering Hale and Dorr LLP.

At Dec. 31, 2007, Frontier Airlines and its subsidiaries' total
assets was US$1,126,748,000 and total debts was US$933,176,000.  
The Debtors have until Aug. 8, 2008, to exclusively file a
chapter 11 plan.  


GAYLE BETTER-PRIMROSE: Case Summary & 11 Largest Unsec. Creditors
-----------------------------------------------------------------
Debtor: Gayle Theresa Better-Primrose
        7111 Oakley Road
        Glenn Dale, MD 20769

Bankruptcy Case No.: 08-16923

Chapter 11 Petition Date: May 21, 2008

Court:  District of Maryland (Greenbelt)

Judge:  Paul Mannes

Debtor's Counsel: Justin M. Reiner, Esq.
                  Pels Anderson LLC
                  4833 Rugby Ave Fourth Fl
                  Bethesda, MD 20814
                  Tel: (301) 986- 5570
                  E-mail: jreiner@pallaw.com

Total assets:  $1,309,384.37
Total debts:   $1,386,918.52

A copy of the Debtor's petition, list of its 11 largest unsecured
creditors, and schedules of assets and liabilities is available at
no charge at:

     http://bankrupt.com/misc/mdb08-16923.pdf


GAYLE BETTER-PRIMROSE: Section 341 Meeting Scheduled for June 16
----------------------------------------------------------------
W. Clarkson McDow, Jr., the United States Trustee for the District
of Maryland, will convene a meeting of creditors in the chapter 11
case of Gayle Theresa Better-Primrose on June 16, 2008, at 2:00
p.m.  The meeting, which is required under Section 341 of the U.S.
Bankruptcy Code, will be held at the Sec. 341 meeting rooms at the
Office of the United States Trustee, Sixth Floor, in Greenbelt.

This is the first meeting of creditors required under Section
341(a) in all bankruptcy cases.

All creditors are invited, but not required, to attend.  This
Meeting of Creditors offers the one opportunity in a bankruptcy
proceeding for creditors to question a responsible office of the
Debtor under oath about the company's financial affairs and
operations that would be of interest to the general body of
creditors.

Additionally, holders of claims against the Debtor must file a
proof of claim by September 15, 2008.

Gayle Theresa Better-Primrose filed for chapter 11 bankruptcy
protection on May 21, 2008, before the U.S. Bankruptcy Court for
the District of Maryland (Case No. 08-16923).  The Debtor is
represented by Justin M. Reiner, Esq., at Pels Anderson LLC, in
Bethesda, Maryland.  The Debtor disclosed $1,309,384.37 in total
assets, and $1,386,918.52 in total debts when it filed for
bankruptcy.


GRAFTECH INT'L: Moody's Upgrades CFR to Ba2; Outlook Stable
-----------------------------------------------------------
Moody's Investors Service upgraded GrafTech International Ltd.'s
("GrafTech") corporate family rating to Ba2 from B1 and upgraded
the ratings on its debt issues. The company's upgrade follows
improvement in its operating performance and credit metrics,
significant de-levering, and reflects the anticipated robust
business conditions for the remainder of 2008. The SGL-1
speculative grade liquidity rating was affirmed and the ratings
outlook was revised to stable from positive. The following
summarizes the ratings activity.

Ratings upgraded for GrafTech International Ltd.:

   Corporate family rating -- Ba2 from B1

   Probability of default rating -- Ba2 from B1

   $225 million 1.625% Gtd sr unsec conv debentures due 2024 --
   Ba3 (LGD5, 73%) from B2 (LGD4, 66%)

Ratings upgraded for GrafTech's special purpose financing vehicle,
GrafTech Finance, Inc.:

   $215mm Gtd sr sec revolving credit facility due 2010 -- Baa3
   (LGD2, 21%) from Ba1 (LGD2, 11%)

   10.25% Gtd sr unsec global notes due 2012 -- Ba3 (LGD5, 73%)   
   from B2 (LGD4, 66%)

Ratings affirmed for GrafTech International Ltd.:

   Speculative grade liquidity rating: SGL-1

The recent upgrade in GrafTech's corporate family rating reflects
the company's improved operating performance which has resulted in
the firm generating positive free cash flow over the past eight
quarters and making significant debt reduction such that credit
metrics are supportive of the higher rating. Debt reduction has
been achieved with free cash flow as well as the proceeds from the
2006 sale of the company's cathodes business (approximately $135
million in gross proceeds) and other asset sales. GrafTech's
success in passing on higher raw material and energy costs to its
customers in 2007 and 2008 has allowed it to generate free cash
flow.

The company typically sets its graphite electrode prices annually
and negotiates needle coke prices with its suppliers on an annual
basis, and as a result Moody's expects the company to continue to
enjoy attractive operating margins for the balance of 2008. The
ratings incorporate Moody's assumption that the company will
likely re-lever its balance sheet after the redemption of its
convertible debentures and potentially redeeming the remaining $75
million of the 10.25% senior notes due 2012 with at least $200
million of debt. Additionally, the company has stated that it is
looking at internal as well as external growth opportunities,
which may include acquisitions.

GrafTech's stable rating outlook reflects the company's strong
free cash flow generation, excellent liquidity and conservative
financial philosophy that may lead to further debt reduction in
the next year. This outlook is supported by robust conditions in
the steel industry, and strong demand for GrafTech's electrodes
which is expected to allow GrafTech to continue to offset future
raw material and energy cost increases with higher prices for its
electrodes. The ratings could come under downward pressure if the
company made a large acquisition or took other actions to re-lever
its balance sheet such that its debt to EBITDA ratio exceeded 3x.

GrafTech International Ltd., headquartered in Parma, Ohio, is a
leading global manufacturer of graphite electrodes, and other
graphite products. Revenues were $1,067 million for the LTM ended
March 31, 2008.


GREEKTOWN CASINO: Interim DIP Financing Approved by Gaming Board
----------------------------------------------------------------
The Michigan Gaming Control Board approved an interim financing
that will enable Greektown Casino LLC and its debtor-affiliates to
continue construction of its permanent casino and hotel.

The financing package totaling $51.3 million was previously
approved on Wednesday by the Honorable Walter Shapero of the U.S.
Bankruptcy Court for the Eastern District of Michigan in Detroit.

With interim approval by the court and the MGCB, Greektown Casino
will pursue final approval of $150 million in additional financing
for operations and to complete construction of its new 400-room
hotel and 25,000-square-foot gaming floor expansion.  A hearing
before Judge Shapero for final approval of the $150 million from
lenders lead by Merrill Lynch bank is expected to be scheduled
this month.

"Securing financing to complete the permanent casino is the
centerpiece of our reorganization plan," said Greektown Casino
Management Board Chairman Tom Miller, who is also a member of the
Board of Directors of the Sault Ste. Marie Tribe of Chippewa
Indians, owners of the casino.  "Completing our world class
casino-hotel complex will increase the value of the asset as we
manage through our reorganization process.  We look forward to
continuing our work with the federal court, with our lenders
who have confidence in us, and the Michigan Gaming Control Board
to emerge a stronger enterprise for our employees, our patrons,
the City of Detroit, State of Michigan, and Sault Tribe members."

Greektown Casino will maintain normal business operations during
the reorganization.  Last May 29, Greektown Casino sought approval
from the Court to reorganize its finances and continue normal
business operations under the protection of Chapter 11 of the U.S.
Bankruptcy Code.

On behalf of the Sault Tribe, Miller expressed gratitude to the
contractors and subcontractors who have "stuck with us the past
couple of months."

"We are so very grateful to the many skilled laborers and their
employers who are on the job building our permanent casino and
hotel," Miller said.

Over the next couple of weeks, an official committee of unsecured
creditors will be formed to represent the interests of unsecured
creditors in the case.  Greektown has previously communicated that
it expects creditors to be paid as part of its plan of
reorganization.

In November 2007, Greektown Casino opened its new attached parking
structure, marking the completion of Phase 1 construction work on
the new permanent Greektown Casino and hotel.  Phase 2 --
construction of the casino's new 400-room hotel and expanded
gaming floor -- is scheduled to be completed in phases in the
coming months.  The permanent casino and hotel will include a
multi-purpose theater, buffet, three restaurants, and 25,000
square feet of additional gaming space.  Total investment in
the permanent Greektown Casino project will be about $500 million.

                    About Greektown Holdings

Based in Detroit, Michigan, Greektown Holdings, LLC and its
affiliates -- http://www.greektowncasino.com/-- operate world-
class casino gaming facilities located in Detroit's historic
Greektown district featuring over 75,000 square feet of casino
gaming space with more than 2,400 slot machines, over 70 tables
games, a 12,500-square foot salon dedicated to high limit gaming
and the largest live poker room in the metropolitan Detroit gaming
market.

Greektown Casino employs approximately 1,971 employees, and
estimates that it attracts over 15,800 patrons each day, many of
whom make regular visits to its casino complex and related
properties.  In 2007, Greektown Casino achieved a 25.6% market
share of the metropolitan Detroit gaming market.  Greektown Casino
has also been rated as the "Best Casino in Michigan" and "Best
Casino in Detroit" numerous times in annual readers' polls in
Detroit's two largest newspapers.

The company and seven of its affiliates filed for Chapter 11
protection on May 29, 2008 (Bankr. E.D. Mich. Lead Case No. 08-
53104).  Daniel J. Weiner, Esq., Michael E. Baum, Esq., and Ryan
D. Heilman, Esq., at Schafer and Weiner PLLC, represent the
Debtors in their restructuring efforts.  Judy B. Calton, Esq., at
Honigman Miller Schwartz and Cohn LLP, represents the Debtors as
their special counsel.  The Debtors chose Conway MacKenzie &
Dunleavy as their financial advisor, and Kurtzman Carson
Consultants LLC serves as the Debtors' claims, noticing, and
balloting agent.

When the Debtor filed for protection from its creditors, it listed
consolidated estimated assets and debts of $100 million to $500
million.


GREEKTOWN CASINO: Wants to Hire Conway Mackenzie as Fin'l Advisors
------------------------------------------------------------------
Greektown Casino LLC and its debtor-affiliates ask permission from
the U.S. Bankruptcy Court for the Eastern District of Michigan to
employ Conway Mackenzie & Dunleavy as their financial advisors,
nunc pro tunc to May 29, 2008.

Proposed counsel to the Debtors, Ryan D. Heilman, Esq., at
Schafer and Weiner, PLLC, in Bloomfield Hills, Michigan, asserts
that due to the large size and complexity of the Debtors' cases,
there is a need for immediate action on many fronts, including:  

     (i) negotiating agreements with a large number of interested
         parties;

    (ii) analysis of the Debtors' financial situation;

   (iii) necessary improvements in operations;

    (iv) analyzing various business and financial options
         available to the Debtors;

    (v)  supporting the Debtors' first day motions and responding
         to any motions or objections filed by other parties; and
  
    (vi) preparing the Debtors' schedules, statements of
         financial affairs and monthly operating reports.  

According to Mr. Heilman, to successfully manage, coordinate and
complete each of these tasks, the Debtors require the appointment
of Conway Mackenzie.

"The Debtors require the immediate services of CM&D," Mr. Heilman
asserts.  Without the firm's services, the Debtors would lose
substantial traction in discussions regarding postpetition
lending and the Debtors could well fail to obtain their
postpetition credit facility, he points out.  Furthermore, the
Debtors would be unable to generate necessary cash flow analyses,
budgets, projections, and other financial documents, and would be
effectively financially blind through the first 20 days of the
bankruptcy proceedings.

As financial advisors to the Debtors, Conway Mackenzie is
expected to:

   (a) assist in the preparation of the Debtors' cash collateral
       budgets;

   (b) assist the Debtors in developing a business plan;

   (c) prepare cash flow projections;

   (d) meet with and prepare presentations for creditors, lenders
       and other parties-in-interest;

   (e) assist the Debtors in meeting reporting requirements of
       the Bankruptcy Court;

   (f) assist in developing and preparing a plan of
       reorganization;

   (g) review and make recommendations regarding assumption or
       rejection of leases and contracts; and

   (h) perform other tasks that are agreed upon between the firm
       and the Debtors.

The Debtors will pay for Conway Mackenzie's services according to
the firm's hourly rates, which are:

            Senior Managing Director     $495
            Paraprofessional             $110

The rates of these Conway Mackenzie professionals are:
  
            Professional              Hourly Rate
            ------------              -----------
            Van Conway                   $545
            Charles Moore                $450
            Thomas Gordy                 $435   
            Kevin Berry                  $395
            Michael Fixler               $365
            Tammy Berry                  $285
            Jeffrey Addison              $270
            Alex Calderone               $265
            Andrea Hoffman               $265
            Emily McClain                $215
            Administrative               $115

Before the bankruptcy filing, Conway Mackenzie received
compensation from the Debtors totaling $569,388.  The Debtors also
paid the firm a $200,000 prepetition retainer, to be applied to
postpetition services.

Charles Moore, a senior managing director of Conway Mckenzie &
Dunleavy PLLC, assures the Court that his firm is a
"disinterested person," as that term is defined in Section
101(14) of the U.S. Bankruptcy Code, as modified by Section
1107(b).

                    About Greektown Holdings

Based in Detroit, Michigan, Greektown Holdings, LLC and its
affiliates -- http://www.greektowncasino.com/-- operate world-
class casino gaming facilities located in Detroit's historic
Greektown district featuring over 75,000 square feet of casino
gaming space with more than 2,400 slot machines, over 70 tables
games, a 12,500-square foot salon dedicated to high limit gaming
and the largest live poker room in the metropolitan Detroit gaming
market.

Greektown Casino employs approximately 1,971 employees, and
estimates that it attracts over 15,800 patrons each day, many of
whom make regular visits to its casino complex and related
properties.  In 2007, Greektown Casino achieved a 25.6% market
share of the metropolitan Detroit gaming market.  Greektown Casino
has also been rated as the "Best Casino in Michigan" and "Best
Casino in Detroit" numerous times in annual readers' polls in
Detroit's two largest newspapers.

The company and seven of its affiliates filed for Chapter 11
protection on May 29, 2008 (Bankr. E.D. Mich. Lead Case No. 08-
53104).  Daniel J. Weiner, Esq., Michael E. Baum, Esq., and Ryan
D. Heilman, Esq., at Schafer and Weiner PLLC, represent the
Debtors in their restructuring efforts.  Judy B. Calton, Esq., at
Honigman Miller Schwartz and Cohn LLP, represents the Debtors as
their special counsel.  The Debtors chose Conway MacKenzie &
Dunleavy as their financial advisor, and Kurtzman Carson
Consultants LLC serves as the Debtors' claims, noticing, and
balloting agent.

When the Debtor filed for protection from its creditors, it listed
consolidated estimated assets and debts of $100 million to $500
million.  (Greektown Casino Bankruptcy News, Issue No. 2;
Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000).


GREEKTOWN CASINO: Wants Schedules-Filing Deadline on June 13
------------------------------------------------------------
Greektown Casino LLC and its debtor-affiliates ask the Honorable
Walter Shapero of the U.S. Bankruptcy Court for the Eastern
District of Michigan to extend the deadline by which they must
file their schedules and statements, through and including
July 31, 2008.

Section 521(1) of the U.S. Bankruptcy Code and Rule 1007(c) of the
Federal Rules of Bankruptcy Procedure require a debtor to file
with the Court, within 15 days of the date of bankruptcy filing,
its schedules of assets and liabilities, schedules of current
income and expenditures, schedules of executory contracts and
unexpired leases, and statements of financial affairs.

The Debtors, however, believe that it will be impossible for them
to complete and file their Schedules and Statements by June 13,
2008.

Proposed counsel to the Debtors, Michael E. Baum, Esq., at
Schafer and Weiner, PLLC, in Bloomfield Hills, Michigan, says
that given the size and complexity of the Debtors' operations,
and the fact that certain prepetition invoices have not yet been
received and entered into the Debtors' financial systems, the
Debtors have not had the opportunity to gather necessary
information to prepare and file their respective schedules and
statements.

                    About Greektown Holdings

Based in Detroit, Michigan, Greektown Holdings, LLC and its
affiliates -- http://www.greektowncasino.com/-- operate world-
class casino gaming facilities located in Detroit's historic
Greektown district featuring over 75,000 square feet of casino
gaming space with more than 2,400 slot machines, over 70 tables
games, a 12,500-square foot salon dedicated to high limit gaming
and the largest live poker room in the metropolitan Detroit gaming
market.

Greektown Casino employs approximately 1,971 employees, and
estimates that it attracts over 15,800 patrons each day, many of
whom make regular visits to its casino complex and related
properties.  In 2007, Greektown Casino achieved a 25.6% market
share of the metropolitan Detroit gaming market.  Greektown Casino
has also been rated as the "Best Casino in Michigan" and "Best
Casino in Detroit" numerous times in annual readers' polls in
Detroit's two largest newspapers.

The company and seven of its affiliates filed for Chapter 11
protection on May 29, 2008 (Bankr. E.D. Mich. Lead Case No. 08-
53104).  Daniel J. Weiner, Esq., Michael E. Baum, Esq., and Ryan
D. Heilman, Esq., at Schafer and Weiner PLLC, represent the
Debtors in their restructuring efforts.  Judy B. Calton, Esq., at
Honigman Miller Schwartz and Cohn LLP, represents the Debtors as
their special counsel.  The Debtors chose Conway MacKenzie &
Dunleavy as their financial advisor, and Kurtzman Carson
Consultants LLC serves as the Debtors' claims, noticing, and
balloting agent.

When the Debtor filed for protection from its creditors, it listed
consolidated estimated assets and debts of $100 million to $500
million.  (Greektown Casino Bankruptcy News, Issue No. 2;
Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000).


GREY WOLF: Moody's Rates Credit Facilities at Ba1
-------------------------------------------------
Moody's Investors Service assigned a Ba1 (LGD 3, 39%) rating to
the credit facilities that fund the cash portion of the merger
between Grey Wolf, Inc. (GW) and Basic Energy Services, Inc.
(Basic). The borrower under the new credit facilities will be a
newly formed holding company called Horsepower Holdings, Inc.
(HHI), the new holding company for the merged entities. Upon
close, HHI will be renamed Grey Wolf (New GW). Moody's also
assigned a Ba2 corporate family rating (CFR), Ba2 probability of
default rating (PDR), and a speculative grade liquidity rating of
SGL-2 to Horsepower Holdings, Inc. The ratings Horsepower Holdings
are subject to final review of documentation. Moody's left the
ratings for GW and Basic under review for possible upgrade pending
close of the merger. The outlook for HHI is stable.

The new credit facilities will consist of a $325 million senior
secured revolver, a $325 million senior secured Term Loan A, and a
$275 million senior secured Term Loan B. Proceeds from the term
loans will fund the cash portion of the merger, which will be paid
to existing shareholders of both companies, in addition to their
receiving shares of the new GW. Under Moody's Loss Given Default
Methodology, the new credit facilities and the existing senior
notes of Basic are rated one notch above the CFR due to the amount
of senior unsecured bet in the capital structure. As part of this
transaction, Basic's senior unsecured notes will become secured
and rank pari-passu with the new senior secured credit facilities,
as the new facilities exceed the lien basket contained in the note
indenture. Therefore, it is likely that Basic's notes will be
rated the same as the new credit facilities. GW's existing two
issues of senior unsecured convertible notes will not become
secured, and a result, the rating on the $150 million 3.75%
converts will likely remain rated B1, but become two notches below
the CFR for HHI due to the significant amount of secured debt in
the pro forma capital structure.

The Ba2 CFR for the HHI reflects the combination of two well
established companies that serve the North American oil and gas
industry which are expected to maintain a conservative financial
profile. Separately, these companies have been managed with lower
than average leverage compared to similarly rated peers and it is
Moody's expectation that this conservative financial profile will
remain in place with the new company. At the close of the merger,
pro forma leverage (Debt/EBITDA) will be approximately about 1.9x,
based on 3/31/08 LTM EBITDA. This ranks very favorably to the Ba2
oilfield services peer group and is expected to remain within 2.0x
going forward. Moody's notes this leverage is gross leverage and
is not reflective of the roughly $152 million of cash that is
expected to be on hand at close.

The Ba2 CFR also reflects the increased scale and diversification
of the combined company, as well its relative position within
certain markets and product lines. Basic ranks among the top three
providers of workover rigs in North America, which provides the
pro forma company with more durable source of earnings and cash
flows that should serve to partially offset the more volatile
drilling business. In addition, the CFR considers the supportive
underlying fundamentals of both the oilfield services and drilling
markets for North America. As commodity prices remain supportive
and exploration and production (E&P) companies face production
growth challenges, producers have increased their focus on
unconventional resource plays. As a result of this growth pressure
facing producers, demand for both drilling rigs and general
oilfield services has been strong and is likely to remain that way
over the near to medium term. These plays are often characterized
by somewhat complex geology that requires horizontal drilling and
heavy fracturing and completion expertise, all of which the
combined company will be able to provide, as it will be able to
offer services over the entire life of a wellbore.

The Ba2 CFR is restrained by the inherent volatility of the
drilling business, which is still subject to dayrate and
utilization fluctuation. Pro forma, more than 50% of the combined
company's revenues will be driven by the drilling of new wells as
opposed to the more durable workover and production related
services. The ratings also incorporate the expectation that the
new company will continue to be an active consolidator within the
oilfield services business and possibly look to add to the rig
fleet, keeping event risk high.

The Ba2 CFR is further restrained by the company's concentration
within the North American markets. Although the mature North
American market is services intensive, it nonetheless remains
volatile as a number of smaller companies provide a significant
amount of demand and therefore are unable to sustain activity
levels when commodity prices decline.

The SGL-2 rating reflects the company's pro forma revolver
capacity which is expected to be undrawn at close, about $152
million of cash on hand at close, and the expectation that barring
any acquisitions, the company will be free cash flow positive over
the next twelve months. Moody's estimates that EBITDA will range
between $500 million and $600 million over the next four quarters,
which should provide ample cover for the estimated $50 to $55
million of interest expense, working capital of about $15 to $20
million and planned capex, leaving room for cash flow to reduce
debt.

The ratings left under review are the Ba3 CFRs and PDRs for both
GW and Basic, as well as Basic's B1 (LGD 5, 74%) ratings on its
senior notes, the Ba1 (LGD 2, 19%) on its existing senior secured
revolving credit facility, and the B1 and LGD 4 (61%) rating on
GW's $150 million 3.75% Contingent Convertible Senior Notes.
Moody's does not rate GW's $125 million floating-rate convertible
senior notes. Upon close, Moody's will withdraw the CFRs for both
GW and Basic as well as the Ba1 rating for Basic's existing
revolving credit facility.

Horsepower Holdings, Inc, will be headquartered in Houston, Texas.


HARLAND CLARKE: S&P Holds B+ Rating and Revises Outlook to Stable
-----------------------------------------------------------------
Standard & Poor's Ratings Services revised its rating outlook on
Harland Clarke Holdings Corp. to stable from negative.  Ratings on
the company, including the 'B+' corporate credit rating, were
affirmed.
     
"The outlook revision reflects our expectation that management
will continue to achieve a level of cost synergies sufficient to
drive EBITDA growth, which will continue to lead to improvements
in the company's credit metrics over time," said Standard & Poor's
credit analyst Ariel Silverberg.
     
Since the completion of the John H. Harland Co. acquisition in May
2007, the company's credit measures improved, with debt leverage,
as measured by total debt to EBITDA, improving toward the mid-5x
area, a level more in line with the rating.  Pro forma for a full
year's contribution from John H. Harland and Data Management,
leverage is 5.6x for the 12 months ended March 31, 2008.
     
Management continues to make good progress in achieving the more
than $100 million in synergies that it forecasted when the
acquisition closed.  The company's original cost savings plans
included a reduction in head count, elimination of facilities, and
reduced expenses relating to procurement and SG&A over a 24-month
period.  Through the first quarter of 2008, the company has
implemented several systems and strategies, which management
expects will result in an eventual $37 million in EBITDA
improvement during 2008.  Pro forma revenues increased 1.7% and
adjusted EBITDA improved by approximately 10% for the three months
ended March 31, 2008.
     
The 'B+' rating reflects Harland Clarke's high pro forma debt
leverage, continued risk surrounding the realization of cost
synergies, and vulnerability to volume declines in the check
printing industry.  In addition, the rating incorporates the
credit quality of M&F Worldwide Corp., the parent of Harland
Clarke Holdings, and the expectation that MFW will continue to
maintain an aggressive financial policy.  These factors are
mitigated by improved market position following the merger with
John H. Harland, stable cash flow generation, and increased
diversification following the new acquisitions in the software and
data collection and testing segments.


HOMEBANC CORP: Eckert Seamans Opposes Disclosure Statement
----------------------------------------------------------
Michael G. Busenkell, Esq., at Eckert Seamans Cherin & Mellott,
LLC, in Wilmington, Delaware, on behalf of Patrick S. Flood,
states that the Debtors' Disclosure Statement explaining their
Joint Consolidated Liquidating Chapter 11 Plan fails to provide
adequate information regarding:

    -- the Debtors' insurance policies;

    -- whether the right of set-off for indemnification claims
       will be preserved under the Plan; and

    -- whether the Liquidating Agent will preserve records and
       documentation relevant to the actions commenced by
       Mr. Flood and other former HBMC employees alleging
       violations of the Fair Labor Standards Act of 1938.

The hearing to consider the adequacy of the information in the
Disclosure Statement is adjourned until July 8, 2008.

Mr. Flood was HomeBanc Mortgage Corporation's chief executive
officer until January 12, 2007, when his employment with the
company ended.

Mr. Busenkell asserts that without these critical information,
the Disclosure Statement does not provide information sufficient
for unsecured creditors to analyze the merits of voting in favor
or against the Plan.

In addition, the Disclosure Statement describes a Chapter 11
Plan, which is facially non-confirmable in several aspects,
according to Joseph H. Huston, Jr., Esq., at Stevens & Lee, P.C.,
in Wilmington, Delaware, counsel for the Ad Hoc Committee of
Participants of the HomeBanc Mortgage Corporation Deferred
Compensation Plan.

Mr. Huston argues that the Plan is a substantive consolidation
plan and that it violates the statutory and other rights of the
Participants in the Compensation Plan Assets.

Indeed, the Disclosure Statement provides that the Plan
distributes the Compensation Plan Assets, on a pro rata basis, to
all of the Debtors' general unsecured creditors, Mr. Huston
points out.  Despite the fact that the Participants have alleged
before the United States Bankruptcy Court for the District of
Delaware that the Compensation Plan Assets are held for their
exclusive benefit -- an issue that remains subject to adjudication
-- the Plan presumes that these are assets of the Debtors' estates
to be shared among creditors as the proponents of the Plan might
indicate, he adds.

To the extent that the Participants prevail in their contention
that ERISA's substantive provisions apply to the Compensation
Plan, and that the Compensation Plan Assets are held for
exclusive benefit of the Participants, the Plan violates ERISA,
Mr. Huston tells the Court.

Even if the Participants do not prevail in their primary
contention that the Compensation is not an exempt "top hat" plan,
the Compensation Plan and Trust provide that the Participants
share only with "general creditors" of HBMC, and no other Debtor,
Mr. Huston asserts.

Moreover, the Plan also classifies the claims of the Participants
-- in the event that the Compensation Plan Assets are not held
for their exclusive benefit -- with the unsecured claims held by
other creditors of all of the other Debtors, despite the fact
that the Participants have legal rights not held by the other
claimants, Mr. Huston states.

Mr. Flood reserves the right to object on additional grounds to
the Disclosure Statement and the Plan at the hearing regarding
the Disclosure Statement, and before and at any hearing regarding   
Plan confirmation.

Headquartered in Atlanta, Georgia, HomeBanc Mortgage Corporation
-- http://www.homebanc.com/-- is a mortgage banking company
focused  on originating primarily prime purchase money residential
mortgage loans in the Southeast United States.

HomeBanc Mortgage together with five affiliates filed for chapter
11 protection on Aug. 9, 2007 (Bankr. D. Del. Case Nos. 07-11079
through 07-11084).  Joel A. Waite, Esq., at Young, Conaway,
Stargatt & Taylor was selected by the Debtors to represent them in
these cases.  The Official Committee of Unsecured Creditors
selected the firm Otterbourg, Steindler, Houston and Rosen, P.C.
as its counsel.  The Debtors' financial condition as of June 30,
2007, showed total assets of $5,100,000,000 and total liabilities
of $4,900,000,000.  The Debtors' exclusive period to file a plan
ends on April 7, 2008.

(HomeBanc Bankruptcy News, Issue No. 26; Bankruptcy Creditors'
Services Inc. http://bankrupt.com/newsstand/or 215/945-7000).


HOOP HOLDINGS: Walt Disney Shutters 98 Outlets After Buyout
-----------------------------------------------------------
The Walt Disney Co. is closing 98 The Disney Store outlets across
the United States and two in Canada, The (Calif.) Desert Sun
reports.  The report says the outlets have put up "Everything Must
Go" signs for final closeout sales.

As reported by the Troubled Company Reporter on May 2, 2008, Hoop
Holdings LLC, a subsidiary of The Children's Place Retail Stores,
Inc., completed the transition of the Disney Store North America
business and related assets to affiliates of Walt Disney.  Walt
Disney took back control of 220 store outlets in North America
from Hoop Holdings, Desert Sun says.

As reported in the TCR on April 9, under the asset purchase
agreement filed with the U.S. Bankruptcy Court in Delaware, the
purchase price for the Disney Store business and assets will be
roughly $50 million to $55 million, payable to Hoop, for the USA
Acquired Assets, subject to adjustment based on inventory levels
and $4 million, payable to accounts to be specified by TCP
Services, for the assignment of its Pasadena, California
headquarters office lease.

Hoop Holdings has agreed to provide transitional support services
to the Disney affiliates for a period of up to six months.  At
this time, the company estimates that it will incur cash exit
costs of approximately $50 million, at the low end of its
previously stated range of $50 million to $100 million.  The
majority of these cash costs have already been incurred in the
first quarter of fiscal 2008.  As part of the transaction, the
company has received a release from Disney and has settled
potential claims with Hoop.

"For The Children's Place, we can once again focus exclusively on
building our core namesake brand and driving the business forward.  
For Hoop, the transfer of the DSNA business back to Disney
maximizes the return to creditors, enables a substantial portion
of the chain to continue operating and is in the best interest of
Hoop's suppliers, landlords, creditors and others," Chuck Crovitz,
Interim Chief Executive Officer of The Children's Place Retail
Stores, Inc., has said.

                       About Hoop Holdings

Headquartered in Secausus, New Jersey, Hoop Holdings LLC owns and
operates gift, novelty, and souvenir shops.  The company and two
of its affiliates (Hoop Retail Stores, LLC and Hoop Canada
Holdings, Inc.) filed for Chapter 11 protection on March 27, 2008
(Bankr. D. Del. Lead Case No.08-10544).  Daniel J. DeFranceschi,
Esq., at Richards, Layton & Finger, represents the Debtors in
their restructuring efforts.  Gibson Dunn & Crutcher LLP serves as
the Debtors' as special counsel.  Traxi LLC provides crisis
management services to the Debtors.

The U.S. Trustee for Region 3 has appointed seven members to the
official committee of unsecured creditors.  Pepper Hamilton LLP
serves as the Committee's Delaware counsel.

When the Debtors' filed for protection against their creditors,
they listed assets and debts between $100 million to $500 million.


HUGHES NETWORK: Moody's Affirms B1 Corporate Family Rating
----------------------------------------------------------
Moody's Investors Service upgraded Hughes Network Systems, LLC's
(HNS) speculative grade liquidity rating to SGL-2 (indicating good
liquidity) from SGL-3 (indicating adequate liquidity). All of the
company's other ratings were affirmed, and the outlook continues
to be stable (B1 corporate family rating (CFR) and probability of
default rating (PDR), Ba1 senior secured and B1 senior unsecured).
The rating action was prompted by Hughes Communications, Inc.'s
(HCI) sale of approximately 2,000,000 shares for gross proceeds of
$100 million. HCI is HNS' publicly traded parent company. Net
proceeds will be down-streamed into HNS and will be set aside to
assist with the acquisition of additional satellite capacity and
for general corporate purposes. With cash resources significantly
bolstered, the company's liquidity position is much improved. With
over $250 million of cash and committed external financing
available to assist with meeting cash flow requirements, the
company has good liquidity, and the SGL rating was upgraded to
SGL-2 to reflect this change. The transaction does not change the
relationship between HNS' near term cash generating capability and
its debt load, and therefore has no long term ratings impact. The
rating outlook continues to be stable.

Rating Actions:

  Issuer: Hughes Network Systems, LLC

Upgrades:

  * Speculative Grade Liquidity Rating: to SGL-2 from SGL-3

Affirmations:

  * Corporate Family Rating: B1

  * Probability of Default Rating: B1

  * Senior Secured Bank Credit Facility: Ba1 (LGD1, 2%)

  * Senior Unsecured Term Loan / Global Notes: B1 (LGD4, 53%)

The ratings continue to be supported by HNS' strong market
position in the VSAT enterprise segment, and favorable industry
dynamics in the consumer segment where the company has an
advantage in its selected niche compared with terrestrial networks
service providers. The ratings are also supported by the sizable
backlog of roughly $750 million of non-cancelable enterprise
contracts. The company's small size, vulnerability to
technological erosion of its market access advantage and its
evolving business profile continue to constrain ratings.

Hughes Network Systems, headquartered in Germantown, MD, is a
global provider of broadband satellite networks and services to
the VSAT enterprise market and the largest satellite based
Internet access provider to the North American consumer market.
The company generated over $970 million in revenues in 2007.


INDUSTRY MORTGAGE: Fitch Revises Ratings on Two Cert. Classes
-------------------------------------------------------------
Fitch Ratings has taken rating actions on the Industry Mortgage
Company mortgage pass-through certificates listed below.  Unless
stated otherwise, any bonds that were previously placed on Rating
Watch Negative are removed.

IMC 1997-3
  -- Class A-6 affirmed at 'AAA';
  -- Class A-7 affirmed at 'AAA';
  -- Class M1 affirmed at 'AA+';
  -- Class M2 affirmed at 'BB';
  -- Class B revised to 'C/DR6' from 'C/DR2'.

Deal Summary
  -- Originators: Industry Mortgage Company (100%)
  -- 60+ day Delinquency: 19.91%
  -- Realized Losses to date (% of Original Balance): 9.37%

IMC 1997-5
  -- Class A-9 affirmed at 'AAA';
  -- Class A-10 affirmed at 'AAA';
  -- Class M1 affirmed at 'AA+';
  -- Class M2 affirmed at 'BB';
  -- Class B remains at 'C/DR2'.

Deal Summary
  -- Originators: Industry Mortgage Company (100%)
  -- 60+ day Delinquency: 19.71%
  -- Realized Losses to date (% of Original Balance): 9.71%

IMC 1998-1
  -- Class A-5 affirmed at 'AAA';
  -- Class A-6 affirmed at 'AAA';
  -- Class M1 affirmed at 'AA+';
  -- Class M2 affirmed at 'BBB-';
  -- Class B revised to 'CC/DR3' from 'CC/DR2'.

Deal Summary
  -- Originators: Industry Mortgage Company (100%)
  -- 60+ day Delinquency: 18.89%
  -- Realized Losses to date (% of Original Balance): 7.88%

IMC 1998-5
  -- Class A-5 affirmed at 'AAA';
  -- Class A-6 affirmed at 'AAA';
  -- Class M1 downgraded to 'A' from 'AA';
  -- Class M2 downgraded to 'BBB+' from 'A+';
  -- Class B downgraded to 'B+' from 'BB-'.

Deal Summary
  -- Originators: Industry Mortgage Company (100%)
  -- 60+ day Delinquency: 17.06%
  -- Realized Losses to date (% of Original Balance): 6.86%


INDYMAC MORTGAGE: Fitch Takes Rating Actions on Various Classes
---------------------------------------------------------------
Fitch Ratings has taken rating actions on the IndyMac mortgage
pass-through certificates listed below.  Unless stated otherwise,
any bonds that were previously placed on Rating Watch Negative are
removed.

IndyMac SPMD 2000-A Group 1
  -- Class AF3 affirmed at 'AAA';
  -- Class MF-1 affirmed at 'BBB-';
  -- Class MF-2 revised to 'CC/DR3' from 'CC/DR2';
  -- Class BF revised to 'C/DR6' from 'C/DR5'.

Deal Summary
  -- 60+ day Delinquency: 14.29%
  -- Realized Losses to date (% of Original Balance): 4.85%

IndyMac SPMD 2000-A Group 2
  -- Class MV-1 downgraded to 'A+' from 'AA';
  -- Class MV-2 downgraded to 'BBB' from 'BBB+';
  -- Class BV downgraded to 'BB-' from 'BB'.

Deal Summary
  -- 60+ day Delinquency: 34.62%
  -- Realized Losses to date (% of Original Balance): 2.88%

Indymac SPMD 2000-B Group 1
  -- Class AF1 affirmed at 'AAA';
  -- Class MF1 downgraded to 'B' from 'BB';
  -- Class MF2 revised to 'C/DR5' from 'C/DR4'.

Deal Summary
  -- 60+ day Delinquency: 26.41%
  -- Realized Losses to date (% of Original Balance): 7.03%

Indymac SPMD 2000-B Group 2
  -- Class MV1 affirmed at 'AA';
  -- Class MV2 affirmed at 'B';
  -- Class BV revised to 'CCC/DR2' from 'CCC/DR1'.

Deal Summary
  -- 60+ day Delinquency: 19.65%
  -- Realized Losses to date (% of Original Balance): 4.09%

IndyMac SPMD 2000-C Group 1
  -- Class AF5 affirmed at 'AAA';
  -- Class AF6 affirmed at 'AAA';
  -- Class R affirmed at 'AAA';
  -- Class MF-1 downgraded to 'B' from 'BB-';
  -- Class MF-2 downgraded to 'C/DR6' from 'CC/DR3'.

Deal Summary
  -- 60+ day Delinquency: 45.52%
  -- Realized Losses to date (% of Original Balance): 6.35%

IndyMac SPMD 2000-C Group 2
  -- Class AV affirmed at 'AAA';
  -- Class MV-1 downgraded to 'CCC/DR2' from 'BBB';
  -- Class MV-2 downgraded to 'C/DR5' from 'CC/DR4'.

Deal Summary
  -- 60+ day Delinquency: 57.83%
  -- Realized Losses to date (% of Original Balance): 4.17%

IndyMac SPMD 2001-A Group 1
  -- Class AF5 affirmed at 'AAA';
  -- Class AF6 affirmed at 'AAA';
  -- Class MF-1 downgraded to 'CCC/DR2' from 'BB-';
  -- Class MF-2 revised to 'C/DR5' from 'C/DR4'.

Deal Summary
  -- 60+ day Delinquency: 52.48%
  -- Realized Losses to date (% of Original Balance): 5.12%

IndyMac SPMD 2001-A Group 2
  -- Class AV downgraded to 'AA' from 'AAA';
  -- Class MV-1 downgraded to 'B' from 'BB+';
  -- Class MV-2 downgraded to 'B' from 'BB-'.

Deal Summary
  -- 60+ day Delinquency: 47.79%
  -- Realized Losses to date (% of Original Balance): 3.26%

IndyMac SPMD 2001-B
  -- Class MF1 downgraded to 'BB' from 'A';
  -- Class MF2 downgraded to 'B' from 'BB';
  -- Class BF downgraded to 'C/DR6' from 'CC/DR3'.

Deal Summary
  -- 60+ day Delinquency: 50.06%
  -- Realized Losses to date (% of Original Balance): 2.91%

IndyMac SPMD 2001-C
  -- Class A-FA affirmed at 'AAA';
  -- Class A-FB4 affirmed at 'AAA';
  -- Class AR affirmed at 'AAA';
  -- Class M-1 affirmed at 'AA';
  -- Class M-2 affirmed at 'BBB-';
  -- Class B revised to 'CC/DR4' from 'CC/DR3'.

Deal Summary
  -- 60+ day Delinquency: 36.56%
  -- Realized Losses to date (% of Original Balance): 3.79%

IndyMac SPMD 2002-B
  -- Class AF affirmed at 'AAA';
  -- Class M-1 downgraded to 'A' from 'AA';
  -- Class M-2 downgraded to 'BBB-' from 'A';
  -- Class B-1 downgraded to 'C/DR5' from 'B';
  -- Class B-2 revised to 'C/DR6' from 'C/DR5'.

Deal Summary
  -- 60+ day Delinquency: 25.00%
  -- Realized Losses to date (% of Original Balance): 2.26%


IRON MOUNTAIN: Moody's Assigns B2 to Proposed Note Offering
-----------------------------------------------------------
Moody's Investors Service assigned a B2 rating to the proposed
$300 million senior subordinated notes due 2020 of Iron Mountain
Incorporated and concurrently affirmed the company's B1 Corporate
Family Rating.  Other ratings on outstanding debt instruments were
also affirmed.  The outlook for the ratings is stable. Iron
Mountain's liquidity rating was upgraded to SGL-2 from SGL-3, in
part due to liquidity benefits arising from the proposed
refinancing and further supported by ample covenant cushions and
the company's ongoing revenue stability.

The proceeds from the proposed B2-rated $300 senior subordinated
notes due 2020 are intended to repay a portion of outstanding
borrowings under the revolver, refinance the company's $72 million
8.25% senior subordinated notes due 2011 and for general corporate
purposes. The B2 rating on the notes reflects Moody's expectation
of loss-given-default greater or equal to 70% and less than 90%
(LGD 5). The notes are pari passu with existing senior
subordinated debt and are guaranteed by material domestic wholly
owned subsidiaries of the company.

The Corporate Family Rating of B1 is supported by the company's
prominent position as a global leader in information storage and
data protection, including its strategic expansion in the digital
market in recent years, as well as Moody's expectation of reduced
emphasis on acquisitions relative to the company's current size
going forward.  The ratings benefit from the company's historical
revenue stability, geographical diversification and low customer
concentration.  The ratings continue to be constrained by high
financial leverage, the significant amount of goodwill and
intangibles in relation to total assets and the low level of pro
forma free cash flow (defined as cash from operations less capital
expenditures less dividends) relative to debt.  Interest coverage
for the rating category of adjusted EBITDA less capital
expenditures to interest expense of 1.3 times is weak for the
category. The ratings also reflect a capital intensive business
with most revenues deriving from paper document storage and
related services which require significant customized physical
space.

Notwithstanding higher than anticipated capital expenditures and
year-end compensation and benefit accruals, the ratings recognize
continued strength in operating performance, including continued
strong growth in storage revenues and improved debt maturity
structure and overall liquidity following last year's refinancing
activity. The ratings also incorporate Moody's belief that the
primary focus of the company has shifted from growth through
acquisitions to achieving increased operational efficiencies.
Although acquisitions are likely to continue, the size of acquired
entities is likely to be substantially less material in relation
to Iron Mountain's size than has been the case in the past.

Moody's took these rating actions:

  * Assigned B2 (LGD5, 71%) to the proposed $300 million 8.25%
    senior subordinated notes due 2011;

  * Upgraded the Speculative Grade Liquidity to SGL-2 from SGL-3;

  * Affirmed the Corporate Family Rating of B1;

  * Affirmed the Probability of Default Rating of B1;

  * Affirmed the Ba1 (LGD2, 16%) rating on $790 million global
    revolving credit facility due 2012;

  * Affirmed the Ba1 (LGD2, 16%) rating on $410 million IMI term
    loan facility due 2014;

  * Affirmed the B2 (LGD5, 71%) rating on C$175 million 7.5%
    senior subordinated notes due 2017;

  * Affirmed the B2 (LGD5, 71%) rating on EUR 225 million 6.75%
    Euro senior subordinated notes due 2018;

  * Affirmed the B2 (LGD5, 71%) rating on $72 million 8.25%
    senior subordinated notes due 2011, subject to withdrawal
    upon completion of the proposed refinancing;

  * Affirmed the B2 (LGD5, 71%) rating on $200 million 8.75%
    senior subordinated notes due 2018;

  * Affirmed the B2 (LGD5, 71%) rating on $448 million 8.625%
    senior subordinated notes due 2013;

  * Affirmed the B2 (LGD5, 71%) rating on $300 million 7.25% GBP
    senior subordinated notes due 2014;

  * Affirmed the B2 (LGD5, 71%) rating on $438 million 7.75%
    senior subordinated notes due 2015; and

  * Affirmed the B2 (LGD5, 71%) rating on $316 million 6.625%
    senior subordinated notes due 2016.

The outlook for the ratings is stable.

Headquartered in Boston, Massachusetts, Iron Mountain Incorporated
is an international provider of information storage and protection
related services. The company offers comprehensive records
management and data protection solutions, along with the expertise
to address complex information challenges such as rising storage
costs, litigation, regulatory compliance and disaster recovery.
Founded in 1951, Iron Mountain has more than 100,000 corporate
clients throughout North America, Europe, Latin America, and Asia
Pacific. Revenue for fiscal 2007 was approximately $2.7 billion.


IXIS NET: Fitch Chips Ratings to 'C/DR6' on Five Note Classes
-------------------------------------------------------------
Fitch Ratings has taken these rating actions on 3 IXIS Net
Interest Margin notes:

IXIS 2005-HE2N
  -- $1.5 million Class N1 downgraded to 'C/DR6' from 'BBB-';
  -- $2.0 million Class N2 downgraded to 'C/DR6' from 'BB+';
     (underlying Transaction: IXIS Real Estate Capital Trust
     2005-HE2)

IXIS 2005-HE3N
  -- $3.4 million Class N1 downgraded to 'C/DR6' from 'BBB-';
     (underlying Transaction: IXIS Real Estate Capital Trust,
     Series 2005-HE3)

IXIS 2005-HE4N
  -- $0.5 million Class N1 downgraded to 'C/DR6' from 'BBB';
  -- $3.8 million Class N2 downgraded to 'C/DR6' from 'BB+';
     (underlying Transaction: IXIS Real Estate Capital Trust
     2005-HE4)

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.


LAUREATE EDUCATION: Moody's Affirms Caa1 Ratings on Senior Notes
----------------------------------------------------------------
Moody's Investors Service affirmed the B2 Corporate Family Rating
of Laureate Education, Inc. but changed the outlook to negative.
Moody's noted that, although the company is in many respects
successfully executing on its growth-oriented strategy, the
company's very high leverage and highly acquisitive and capital
intensive strategy is likely to leave it in a relatively weak
near-term liquidity position vis-ą-vis potentially unexpected
developments or contingent liabilities.

The ratings remain constrained by the high level of overall
indebtedness and expectations of negative free cash flow
generation (defined as cash from operations less capital
expenditures) in the medium term, which leaves little room for
execution missteps. Also, given the company's accelerated
expansion program for 2008, it appears highly unlikely that the
company will meet Moody's original expectations for reducing
financial leverage to levels more compatible with the B2 Corporate
Family rating in the medium term and generates the need to monitor
liquidity and progress with expansion initiatives very closely.
The company has substantial exposure to the Mexican and Chilean
economies, as well as significant seasonality as a result of
summer vacations which impact first and third quarter revenues.
Laureate's entry into new, large, emerging markets presents both
significant risks and opportunities.

The Corporate Family Rating of B2 continues to be supported by
Laureate's prominent market position in the international for-
profit, post-secondary education space, predictability of core
revenues, the strength of its brands in attractive, growing
economies and favorable fundamentals for the industry in terms of
recent and future expected growth in enrollments. The ratings are
also supported by the company's successful record in entering and
expanding markets over long periods of time and seasoned
management with continuing significant equity exposure in the
company.

The Caa1 ratings assigned to the $696 million senior unsecured
notes due 2015 and the $310 million senior subordinated notes due
2017 reflect the effective subordination of the notes to B1-rated
senior secured facilities, structural subordination issues with
respect to (unrated) debt and other liabilities at non-US
operating companies, as well as a substantively out-of-the-money
senior secured currency swap obligation of Laureate Education,
Inc. The ratings on the unsecured notes reflect Moody's
expectation of loss-given-default greater or equal to 70% and less
than 90% (LGD 5), while the ratings on the subordinated notes
reflect an expectation of loss-given-default of 90% or greater
(SGL 6).

The outlook could be stabilized if the pace of acquisitions were
to moderate and the company were to reduce financial leverage
below 6.5 times adjusted consolidated debt to EBITDA. Given the
very high level of leverage and Moody's expectations of negative
free cash flow generation over the next two to three years, along
with heavy, growth-oriented, capital investments, an upgrade is
unlikely.

Moody's took these rating actions:

   Affirmed the B2 Corporate Family Rating;
  
   Affirmed the B2 Probability of Default Rating;

   Affirmed the B1 (LGD3, 38%) rated $400 million senior secured
   revolving credit facility due 2014;

   Affirmed the B1 (LGD3, 38%) rated $695 million senior secured
   term loan B due 2014;

   Affirmed the B1 (LGD3, 38%) rated $100 million delayed draw
   term loan due 2014;

   Assigned Caa1 (LGD5, 81%) to $260 million 10% senior unsecured
   notes due 2015;

   Assigned Caa1 (LGD5, 81%) to $436 million 10.25%/11% senior
   unsecured PIK toggle notes due 2015; and

   Assigned Caa1 (LGD6, 94%) to $310 million 11.75% senior
   subordinated notes due 2017.

   Changed the outlook to negative from stable.

The ratings on the notes that had originally been proposed in
relation to the financing have been withdrawn. For further detail,
subscribers can refer to Moody's Credit Opinion for Laureate
Education, Inc.

Laureate Education, Inc. is based in Baltimore, Maryland, and
operates a leading international network of accredited campus-
based and online universities with 26 institutions in 15
countries, offering academic programs to about 311,000 students
through 74 campuses and online delivery. Laureate offers a broad
range of career-oriented undergraduate and graduate programs
through campus-based universities located in Latin America,
Europe, and Asia. Through online universities, Laureate offers the
growing population of non-traditional, working-adult students the
convenience and flexibility of distance learning to pursue
undergraduate, master's and doctorate degree programs in major
career fields including engineering, education, business, and
healthcare. Laureate had revenues of approximately $1.4 billion in
fiscal 2007.


LEAR CORP: S&P's Rating Unmoved by Lower Full-Year 2008 Guidance
----------------------------------------------------------------
Standard & Poor's Ratings Services said that Lear Corp.'s
(B+/Stable/--) lower full-year 2008 guidance, which results from
downward revisions to vehicle production in North America and
increased commodity costs, has no immediate impact on the ratings
or outlook on the company.  The current rating and outlook
adequately reflect the challenging operating environment for auto
suppliers in 2008, as S&P incorporated a very difficult 2008 into
our review of Lear late last month.

Lear's leverage and heavy dependence on the U.S. auto
manufacturers make the company especially vulnerable to negative
developments.  Nevertheless, even if the company's financial
profile continues to weaken in 2008, S&P expect it to remain
broadly consistent with the current rating metrics of adjusted
debt to EBITDA of less than 4x and funds from operations to debt
of 15%.


LENDER PROCESSING: Moody's Assigns Ba2 Rating on $400MM Sr. Notes
-----------------------------------------------------------------
Moody's Investors Service has assigned a first time corporate
family rating (CFR) of Ba1 for Lender Processing Services, Inc.
(LPS), along with a stable rating outlook. Concurrently, Moody's
assigned Baa3 ratings to LPS' proposed $700 million Term Loan A,
$485 million Term Loan B, and $140 million revolving credit
facility, and also assigned a Ba2 rating to its proposed $400
million of senior unsecured notes. The ratings reflect the
company's probability of default rating (PDR) of Ba1 and loss
given default assessments as reflected below. On October 25, 2007,
Fidelity National Information Services (parent company) announced
that its Board of Directors had approved the spin-off of LPS into
a separate publicly traded company. The spin-off transaction is
expected to be completed on July 1, 2008. The ratings assigned are
subject to the transaction closing with the proposed capital
structure. Any changes to the proposed capital structure may
result in changes to the assigned ratings.

The Ba1 CFR reflects the company's leading market position within
the mortgage transaction processing services market, its
substantial size and profitability in terms of pretax income and
return on assets, and a counter-cyclical revenue stream from its
loan originations and default management services. At the same
time, the rating is constrained by the company's high customer
concentration as its top 10 clients account for over 40% of total
revenues, and low geographic diversity given that substantially
all of its revenue is generated in North America. Also
constraining the rating is its financial leverage as measured by
free cash flow to debt, pro forma for the spin-off, which is
expected to be at levels lower than that of Ba1-rated business
services peers. The factors cited in Moody's Global Business
Services Industry Rating Methodology map to an overall Ba1 rating,
which is consistent with the Ba1 CFR.

The short term liquidity rating of SGL-2 reflects LPS' good
internal and external liquidity following the spin-off, which
includes an expected cash balance of $40 million and cash flow
from operations that should be sufficient to fund necessary
capital expenditures, working capital requirements and mandatory
debt amortization over the next twelve months. The company is
expected to have solid external liquidity in the form of its
undrawn $140 million revolving credit facility that matures in
2013. Moody's expects the company to be in and maintain compliance
with its two financial covenants, a debt-to-EBITDA leverage test
and a minimum debt service coverage test.

The stable rating outlook reflects the company's stable operating
performance, supported by the balance of revenues between mortgage
origination processing and default management services, as well as
the company's focus on debt reduction.

The Ba1 CFR could experience upward rating pressure if the company
were to continue to demonstrate organic revenue growth and
profitability such that free cash flow to debt was to exceed 16%
on a sustained basis. Additional financial leverage or a decline
in profitability, such that free cash flow to debt was to decline
to less than 10% on a sustained basis, would put downward pressure
on the ratings.

Ratings/assessments assigned:

  * Corporate family rating of Ba1;

  * Probability-of-default rating of Ba1;

  * $700 million secured term loan A facility due 2013 of Baa3
    (LGD 3, 36%);

  * $485 million secured term loan B facility due 2014 of Baa3
    (LGD 3, 36%);

  * $140 million secured revolving credit facility due 2013 of
    Baa3 (LGD 3, 36%);

  * $400 million senior unsecured notes due 2016 of Ba2
    (LGD 5, 89%);

  * Speculative grade liquidity rating -- SGL-2

Lender Processing Services, Inc., headquartered in Jacksonville,
Florida, is a leading provider of mortgage loan processing
services, including mortgage origination and default management
services, to financial institutions. For the year ended
December 31, 2007, revenues and operating income were $1.7 billion
and $424 million, respectively.


LINENS N' THINGS: Committee Wants to Retain Otterbourg as Counsel
-----------------------------------------------------------------
The Official Committee of Unsecured Creditors of Linens 'n Things
and its debtor-affiliates asks the United States Bankruptcy Court
for the District of Delaware for authority to retain Otterbourg
Steindler Houston & Rosen P.C. as its lead counsel.

The Committee believes that Otterbourg is qualified to represent
it in a cost-effective, efficient and timely manner.  In
addition, the Committee says that Otterbourg has extensive
experience and knowledge of business reorganizations, including
liquidations and sales of businesses under Chapter 11.

Otterbourg's services will include:

   -- assisting the Committee in its consultation with the
      Debtors relative to the administration of the Chapter 11
      cases;

   -- attending meetings and negotiating with the Debtors'
      representatives and other parties in interest;

   -- advising the Committee in its examination and analysis of
      the conduct of the Debtors' affairs;

   -- assisting the Committee in the review and analysis of any
      financing agreements, except if the task is assigned to
      Delaware co-counsel Cole, Schotz, Meisel, Forman & Leonard,
      P.A.;

   -- taking all necessary action to protect and preserve the
      interests of the Committee, including:

         (a) possible prosecution of actions on its behalf;

         (b) if appropriate, negotiations concerning all
             litigation in which the Debtors are involved; and

         (c) if appropriate, review and analysis of claims filed
             against the Debtors' estates;

   -- generally preparing all necessary motions, applications,
      answers, orders, reports and papers in support of positions
      taken by the Committee;

   -- appearing, as appropriate, before the Court, the appellate
      courts, and the United States Trustee, and protecting the
      Committee's interests; and

   -- performing all other necessary legal services.

The Committee notes that Otterbourg intends to work closely with
the Debtors' representatives and the other professionals retained
by the Committee to ensure that there is no unnecessary
duplication of services performed or charged to the Debtors'
estates.

Otterbourg will charge for its legal services on an hourly basis
in accordance with its ordinary and customary hourly rates and
for its actual and necessary out-of-pocket disbursements incurred
in connection with the performance of the services.  Otterbourg's
rates are:

          Partner/Counsel      $530 to $795
          Associate             245 to 520
          Paralegal             175 to 205

Scott L. Hazan, Esq., a member of Otterbourg, tells the Court
that before the Petition Date, his firm represented the Ad Hoc
Committee of Unsecured Trade Creditors of Linens 'n Things.  In
connection with the representation, Otterbourg received an
aggregate of $300,000 in retainers from the Debtors.  He says
that as of the Petition Date, Otterbourg held a balance of
approximately $34,000, which it will utilize pursuant to further
orders of the Court.

Mr. Hazan assures the Court that Otterbourg holds no interest
adverse to the Committee, the Debtors and their estates to the
matters in which it is to be employed.  He believes that
Otterbourg is a "disinterested person" as the term is defined in
Section 101(14) of the Bankruptcy Code.

The Committee says it is retaining Cole, Schotz, Meisel, Forman
& Leonard, P.A., as Delaware co-counsel.  However, an application
to retain Cole Schotz has yet to be filed with the Court.

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

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

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

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

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

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

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

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


LINENS N' THINGS: Court Approves Morgan Lewis as Special Counsel
----------------------------------------------------------------
The United States Bankruptcy Court for the District of Delaware
allowed Linens 'n Things and its debtor-affiliates to employ
Morgan, Lewis & Bockius LLP, as their special counsel.

The firm's representation of the Debtors will be limited to:

   (a) the negotiation and documentation of any DIP and exit
       loans, and related security arrangements, whether under or
       in connection with a plan of reorganization, as well as
       related issues in regard to reserves and availability, but
       was not including representation of the Debtors in related
       court proceedings or discovery; and

   (b) the possible disposition, sale or restructuring of the
       Debtors' Canadian subsidiaries.

Morgan Lewis will work closely with Richards, Layton & Finger,
P.A., Gardere Wynne Sewell L.L.P., and other professional
retained by the Debtors to avoid any unnecessary duplication of
effort.

Francis M. Rowan, the Debtors' senior vice president and chief
financial officer, says that Morgan Lewis has considerable
experience and resources.  He discloses that the firm has
represented the Debtors since 2005 in connection with certain
services, including negotiation and documentation of their
prepetition Credit Facility.

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

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

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

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

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

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

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

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

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

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


LINENS N' THINGS: Court Approves Richards Layton as Counsel
-----------------------------------------------------------
The United States Bankruptcy Court for the District of Delaware
authorized Linens 'n Things and its debtor-affiliates to employ
Richards, Layton & Finger, P.A., as their counsel.  The Court also
ruled that the retainer held by the firm as security was to be
applied to its first fee and expense invoice in the bankruptcy
cases.

Francis M. Rowan, the Debtors' senior vice president and chief
financial officer, says that Richards Layton has extensive
experience and knowledge in business reorganizations and
liquidations.  The Debtors believe that Richards Layton is well
qualified to represent them in a most efficient and timely
manner.

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

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

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

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

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

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

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

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

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

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

LINENS N' THINGS: Court Approves Gardere as Special Counsel
-----------------------------------------------------------
The United States Bankruptcy Court for the District of Delaware
approved a restated application of Linens 'n Things and its
debtor-affiliates for the employment of Gardere Wynne Sewell LLP
as their special counsel.

The Honorable Christopher S. Sontchi ruled that Gardere was not to
engage in the negotiation or preparation of any plan of
reorganization or disclosure statement, except to provide the
Debtors with non-bankruptcy advice related to the firm's services.  
Gardere was to also not appear before the Court on issues
pertaining to the conduct of the Chapter 11 cases, except as
necessary to provide non-duplicative factual and legal support to
Richards Layton.

Roberta A. DeAngelis, the acting United States Trustee for
Region 3, objected to the Debtors' application to employ Gardere
as their special counsel to deal with all matters that are not
"discretely related to the bankruptcy process."

Ms. DeAngelis said the application "runs afoul" of Section 327(e)
because the Debtors seek to retain a firm not for a "specified
special purpose" as required by Section 327(e), but to represent
them in "conducting the case."

"[Gardere] appears to have provided assistance to the Debtors on
virtually all of their legal matters.  The Debtors now seek
authorization for Applicant to continue performing all of these
services post-petition," Ms. DeAngelis pointed out.

Ms. DeAngelis also said the application runs afoul of Section
327(e)'s prohibition against assisting the trustee in "conducting
the case."  She asserted that the burden is on the Debtors to
demonstrate that Gardere's proposed scope of employment does not
violate Section 327(e)'s limits.  Because the Debtors have not and
cannot meet their burden with respect to the application, she
asked the Court to deny the request.

The Debtors disclosed that they do not have internal general
counsel or any internal legal department.  Rather, they said
Gardere has represented them in virtually every facet of their
business.  They disclosed that nearly 100 Gardere attorneys have
assisted them over the past two years.

Holland N. O'Neil, Esq., at Gardere, in Dallas, Texas, said the
Debtors propose to retain Gardere to continue utilizing the
firm not only because its continued involvement is irrefutably in
the best interests of the bankruptcy estates, but also because
the costs to replace Gardere's institutional knowledge would be
prohibitively expensive and detrimentally time-consuming.  At the
time the Debtors face the most crucial crossroads in their
business history, to deprive them of their long-time counsel
would be unwarranted and particularly punitive, Ms. O'Neil said.

After discussions with the Official Committee of Unsecured
Creditors, the Ad Hoc Committee of Noteholders, and the United
States Trustee for Region 3, the Debtors proposed to hone the
scope of Gardere's employment to certain specified special
purposes, and only to the extent materially non-duplicative of the
services authorized to be provided by Richards, Layton & Finger,
P.A., and Morgan, Lewis & Bockius LLP.

As special counsel, Gardere will:

   -- continue to advise the Debtors in these areas consistent
      with its prior representation of the Debtors as general
      counsel, and in the ordinary course of business:

      * general corporate;

      * securities, including applicable filings for the
        Securities and Exchange Commission, and attendant
        reporting obligations and compliance advice;

      * real estate, including leasing and utilities issues;

      * tax;

      * intellectual property;

      * labor, employment and employee benefits;

      * general commercial litigation;

      * regulatory compliance;

      * licensing;

      * insurance;

      * logistics, including customs and transportation;

      * vendor negotiations, including resolution of reclamation
        rights;

      * compliance with existing credit agreements; and

      * various matters applicable to the Canadian subsidiaries;
        and

   -- advise the Debtors with respect to any asset sales or other
      dispositions, including to negotiate and draft any asset
      purchase agreements, and related sale documents.

The Debtors also clarified that the preparation and presentation
of pleadings in the bankruptcy cases will be within the purview of
Richards Layton's services, and will not be included within the
scope of the Gardere's services.

Based on the proposed modifications, both committees stated their
satisfaction with the scope of Gardere's employment, and
determined that no objections were necessary, according to Ms.
O'Neil.

The U.S. Trustee, however, maintained its objection to the
application.

Ms. O'Neil, however, argued before the Court that Section 327(e)
is not violated merely because multiple "special purposes" will be
performed by one law firm.  To the contrary, Ms. O'Neil said,
efficiencies should be encouraged.  She pointed out that the level
of institutional knowledge obtained by Gardere cannot be
overstated, and to force the Debtors to replace Gardere at this
juncture would be detrimental.

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

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

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

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

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

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

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

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

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

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


MANCHESTER INC: Confirmation Hearing on Plan Set for June 12
------------------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of Texas will
confirm a second amended joint plan of reorganization of
Manchester Inc. and its debtor-affiliates on June 12, 2008, at
2:00 p.m.

Creditors and other interested parties have until 5:00 p.m. today,
June 6, 2008, to submit votes on or written objections to the
plan.

The plan and disclosure statement are available for review at

   -- the Debtors' headquarters located at 3131 McKinney Avenue,
      Suite 360 in Dallas, Texas;

   -- the Clerk of the Bankruptcy Court at 1100 Commerce Street,
      14th Floor in Dallas, Texas;

   -- the Debtors' balloting agent, Epiq Bankruptcy Solutions  
      LLC at 757 Third Avenue, 3rd Floor in New York City or at
      http://chapter11.epiqsystems.com/manchester

Any creditor who fails to vote by June 6 deadline or fails to file
a written objection to the plan may be deemed to have waived its
rights.

Questions regarding the matter may be directed to the Debtors'
counsel, Winston & Strawn LLP at 35 West Wacker Drive in Chicago,
Illinois, attention Jeremy T. Stillings, Esq., telephone numbers
(312) 558-5600.

                       About Manchester Inc.

Based in Dallas, Texas, Manchester Inc. (OTCBB: MNCS) --
http://www.manchesterinc.net/-- is in the Buy-Here/Pay-Here    
auto business.  Buy-Here/Pay-Here dealerships sell and finance
used cars to individuals with limited credit histories or past
credit problems, generally financing sales contacts ranging from
24 to 48 months.  It operates six automotive sales lots, which
focus on the Buy-Here/Pay-Here segment of the used car market.

The company and its seven affiliates filed for chapter 11
protection on Feb. 7, 2008 (Bankr. N.D. Tex. Case No.08-30703).  
Winston & Strawn LLP represents the Debtors in their
restructuring efforts.  Eric A. Liepins, Esq., is the Debtors'
local counsel.  The U.S. Trustee for Region 6 appointed creditors
to serve on an Official Committee of Unsecured Creditors in these
cases.  Powell Goldstein LLP represents the Committee as counsel.  
As of the Debtors' bankruptcy filing, it listed total assets of
$131,582,157 and total debts of $123,881,668.


MBIA INC: S&P Cuts Rating to A- from AA-, Puts Under Neg. Watch
---------------------------------------------------------------
Standard & Poor's Rating Services lowered its financial strength
ratings on Ambac Assurance Corp. and MBIA Insurance Corp. to 'AA'
from 'AAA' and placed the ratings on CreditWatch with negative
implications.
     
The ratings on the holding companies, Ambac Financial Group and
MBIA Inc., have also been lowered to 'A' and 'A-' from 'AA' and
'AA-', respectively, and placed on CreditWatch with negative
implications.
     
The rating actions on the companies reflect S&P's belief that
these entities will face diminished public finance and structured
finance new business flow and declining financial flexibility.  In
addition, S&P believe continuing deterioration in key areas of the
U.S. residential mortgage sector and related CDO structures will
place increasing pressure on capital adequacy.  The 'AA' financial
strength ratings of these companies are supported by currently
sound claims paying ability and liquidity levels in our opinion.
     
Resolution of the negative CreditWatch will be dependent on
clarification of ultimate potential losses as well as future
business prospects, the outcome of strategic business decisions,
and potential regulatory developments.

Bloomberg News says the bond insurers' ratings downgrade has put
at risk the credit ratings on about A$13 billion -- $12.4 billion
-- of Australian securities guaranteed by MBIA and Ambac.

Bloomberg also relates that Macquarie Group, Australia's biggest
securities firm, is planning to establish a U.S. bond-insurance
company to compete with MBIA and Ambac.  Bloomberg cited a June 5
e-mailed statement from New York State Insurance Department
Superintendent Eric Dinallo.


MEDINA IMPORTS: Chapter 11 Filing Halts Seizure of Assets
---------------------------------------------------------
Betty Lin-Fisher at Beacon Journal reports that Medina Imports
filed for Chapter 11 bankruptcy protection on May 30, 2008, before
the U.S. Bankruptcy Court for the Northern District of Ohio.  
Medina Imports is seeking to sell its assets to another dealer,
the report says.

Beacon Journal also relates that the May 30, 2008 bankruptcy
filing stayed a legal action against the company.

According to Beacon Journal, Mitsubishi Motors Credit of America
Inc. sued the company before the Medina Common Pleas Court,
alleging that the company owes it more than $6.8 million for loans
to purchase vehicles for sale and lease.  Beacon Journal says
Mitsubishi Motors Credit requested an emergency order, which was
granted on Thursday, to have the sheriff's office seize vehicles
and all goods, property and equipment at the dealership.  
Mitsubishi Motors Credit had said it feared the vehicles would be
moved off the property.

Medina Imports is also subject to a lien for $66,000 filed by the
State of Ohio Department of Taxation on May 20, the report adds.


MEDINA IMPORTS: Case Summary & 10 Largest Unsecured Creditors
-------------------------------------------------------------
Debtor: Medina Imports, LLC
        dba Medina Mitsubishi
        dba Medina Suzuki
        2825 Medina Road
        Medina, OH 44256

Bankruptcy Case No.: 08-51965

Type of Business: The Debtor is a car dealer.

Chapter 11 Petition Date: May 30, 2008

Court: Northern District of Ohio (Akron)

Judge: Marilyn Shea

Debtor's Counsel: Diana M. Thimmig, Esq.
                  Roetzel & Andress
                  1375 East Ninth Street
                  One Cleveland Center
                  9th Floor
                  Cleveland, OH 44114
                  Tel: (216) 623-0150
                  Fax: (216) 623-0134
                  dthimmig@ralaw.com

Estimated Assets: $1 million to $10 million

Estimated Debts:  $10 million to $50 million

Debtor's list of its 10 largest unsecured creditors:

   Entity                        Nature of Claim   Claim Amount
   ------                        ---------------   ------------
Mitsubishi Motors Credit of     New car - Mitsubishi $6,026,270
America                         ($4,159,341.37)     ($5,956,104
6400 Katella Avenue             - Suzuki               secured)      
Cypress, CA 90630-0064          ($761,564.95)
                                Used cars
                                ($833,820.73)
                                Parts ($201,377)

State of Ohio                   Unpaid state sales     $355,717
150 E. Gay Street               tax
21st Floor
Columbus, OH 43215

Protective Administrative       Premiums for            $89,168
Services                        aftermarket service
P.O. Box 770                    contracts
Deerfield, IL 60015

Protective Life and Annuity     Premiums for            $42,386
                                credit life and
                                disability

WUAB-TV                         Advertising             $26,100

National City Bank              Line of Credit          $23,289

WTAM                            Advertising             $21,760

United Car Care, Inc.           Contractual             $16,919
                                obligations

NEO Marketing, LLC              Advertising             $15,000

WJW Fox 8 Cleveland             Advertising             $13,281


MELLON 1ST BUSINESS: Moody's Upgrades BFSR From B+ to A-
--------------------------------------------------------  
Moody's Investors Service concluded its ratings review of Mellon
1st Business Bank following the bank's acquisition by U.S. Bank
National Association, the lead bank subsidiary of U.S. Bancorp,
from The Bank of New York Mellon Corporation. Mellon 1st Business
Bank's deposit rating was lowered to Aa1 from Aaa and its bank
financial strength rating was raised to A- from B+. The new
ratings match the ratings of U.S. Bank National Association, which
were affirmed. Moody's noted that Mellon 1st Business Bank's
former ratings matched those of The Bank of New York.

Following the acquisition, the Mellon 1st Business Bank charter
was merged into U.S. Bank National Association and no longer
exists. The following ratings were changed:

Downgrades:

  Issuer: Mellon 1st Business Bank, N.A.

  * Issuer Rating, Downgraded to Aa1 from Aaa

  * Senior Unsecured Deposit Rating, Downgraded to Aa1 from Aaa

Upgrades:

  Issuer: Mellon 1st Business Bank, N.A.

  * Bank Financial Strength Rating, Upgraded to A- from B+

Outlook Actions:

  Issuer: Mellon 1st Business Bank, N.A.

  * Outlook, Changed To Stable From Rating Under Review

U.S. Bancorp, headquartered in Minneapolis, Minnesota, reported
$242 billion in total assets at March 31, 2008.


MESA AIR: Yucaipa Might Bid for Claim in Aloha Lawsuit
------------------------------------------------------
James Wagner, an attorney for Aloha Airlines, Inc.'s Chapter 7
trustee Dane Field, said the likeliest bidder for the legal claim
in the company's 2006 lawsuit against go! parent Mesa Air Group
Inc. would be Yucaipa Cos. LLC, Dave Segal of the Honolulu Star-
Bulletin reports.

Yucaipa Cos. is Aloha's majority shareholder and second secured
creditor behind Aloha's primary lender, GMAC Commercial Finance
LLC.  It is owed $106.7 million.

Mr. Wagner said Mesa also could be a possible bidder, the report
said.

As reported by the Troubled Company Reporter on June 3, 2008, the
Trustee in the bankruptcy of Aloha Airlines is planning to auction
off the legal claim in Aloha's lawsuit againt Mesa Air Group.  

As reported by the TCR on Oct. 19, 2006, Aloha Airlines, and Aloha
Airgroup, Inc., filed a suit in a state Circuit Court alleging
that Mesa Air Group received confidential information as a
potential investor in the company and used it improperly to enter
Hawaii's inter-island market with intent to drive the company out
of business.

The company alleged that Mesa used its proprietary information to
unethically compete in the Hawaii market by offering air fares
that failed to cover Mesa's costs.  

The company had sought damages and injunctive relief to stop Mesa
from competing unfairly, and threatening the jobs of the company's
3,500 employees in Hawaii.

Commenting on the possible auction, Mr. Wagner said "As you can
imagine, there's probably very few bidders for this asset."

A winning bid by Yucaipa would allow it to control the lawsuit,
while a bid by Mesa would be, in essence, an out-of-court
settlement, the Star-Bulletin reports.

The lawsuit had not yet been heard.  In Honolulu District Court
last week, federal Judge David Ezra said the Aloha-Mesa Air
lawsuit had languished so long, he will stick with the same
hearing schedule even if somebody buys the suit from Aloha, TMCnet
reports.  

The trial is scheduled for Oct. 28.

                    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.

                        About Mesa Air

Mesa Air -- http://www.mesa-air.com-- 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.  
Mesa has  5,000 employees overall.

Freedom Airlines currently operates 34 50-seat ERJ-145 and 7 76-
seat CRJ-900 aircraft for Delta Connection.

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.


METROPOLITAN MORTGAGE: Fitch Retains Junk Ratings on Three Classes
------------------------------------------------------------------
Fitch Ratings has taken rating actions on Metropolitan mortgage
pass-through certificates.  Unless stated otherwise, any bonds
that were previously placed on Rating Watch Negative are now
removed.

Metropolitan Asset 1998-A
  -- Class X affirmed at 'AAA';
  -- Class M-2 affirmed at 'AAA';
  -- Class B-1 affirmed at 'AA-';

Deal Summary
  -- Originators: Metropolitan
  -- 60+ day Delinquency: 11.56%
  -- Realized Losses to date (% of Original Balance): 4.87%

Metropolitan Asset 1998-B
  -- Class X affirmed at 'AAA';
  -- Class M-2 affirmed at 'AA';
  -- Class B-1 affirmed at 'CCC/DR2';
  -- Class B-2 remains at 'C/DR6';

Deal Summary
  -- Originators: Metropolitan
  -- 60+ day Delinquency: 14.99%
  -- Realized Losses to date (% of Original Balance): 4.69%

Metropolitan Asset 1999-A
  -- Class X affirmed at 'AAA';
  -- Class M-2 affirmed at 'AA';
  -- Class B-1 affirmed at 'CCC/DR2';
  -- Class B-2 remains at 'C/DR6';

Deal Summary
  -- Originators: Metropolitan
  -- 60+ day Delinquency: 12.43%
  -- Realized Losses to date (% of Original Balance): 4.87%

Metropolitan Asset 1999-B
  -- Class M-2 affirmed at 'AAA';
  -- Class B-1 affirmed at 'AA-';

Deal Summary
  -- Originators: Metropolitan
  -- 60+ day Delinquency: 17.16%
  -- Realized Losses to date (% of Original Balance): 3.87%

Metropolitan Asset 1999-C
  -- Class B-2 affirmed at 'AA+';
  -- Class B-3 affirmed at 'A+';

Deal Summary
  -- Originators: Metropolitan
  -- 60+ day Delinquency: 9.32%
  -- Realized Losses to date (% of Original Balance): 5.24%

Metropolitan Asset 1999-D
  -- Class M2 affirmed at 'AAA';
  -- Class B1 affirmed at 'AA';
  -- Class B2 affirmed at 'BB+';

Deal Summary
  -- Originators: Metropolitan
  -- 60+ day Delinquency: 23.29%
  -- Realized Losses to date (% of Original Balance): 5.52%

Metropolitan Mtg. 2000-A
  -- Class A-4 affirmed at 'AAA';
  -- Class A-IO affirmed at 'AAA';
  -- Class M-1 affirmed at 'A';
  -- Class M-2 remains at 'CC/DR3';

Deal Summary
  -- Originators: Metropolitan
  -- 60+ day Delinquency: 21.95%
  -- Realized Losses to date (% of Original Balance): 7.11%

Metropolitan Mtg. 2000-B
  -- Class M-1 affirmed at 'AAA';
  -- Class M-2 affirmed at 'BBB';
  -- Class B-1 downgraded to 'C/DR3' from 'CC/DR2';

Deal Summary
  -- Originators: Metropolitan
  -- 60+ day Delinquency: 20.59%
  -- Realized Losses to date (% of Original Balance): 7.77%


MICHAELS STORES: Moody's Reviewing Caa1 Ratings for Downgrade
-------------------------------------------------------------
Moody's Investors Service placed all ratings of Michaels Stores,
Inc. under review for possible downgrade. LGD assessments are
subject to change. The company's SGL-3 rating was affirmed.

"The review for possible downgrade follows the company's first
quarter results which showed comparable same store sales decline
of 2.9%, which follows weak same store sale performance in the
fourth quarter of 2007," said Moody's Senior Analyst Scott Tuhy.
Management has also indicated that it expects adjusted EBITDA (as
defined by the Company) for 2008 to remain consistent with fiscal
2007 levels. Moody's existing ratings anticipated the company
would demonstrate sustained improvement in revenues and operating
earnings and recent results are not consistent with these
expectations. The affirmation of the SGL-3 rating reflects Moody's
view that the company's overall liquidity remains adequate.

Moody's review will focus on the company's ongoing operating
strategies to arrest recent weakness in same store sales and
operating margins in the context of the company's high financial
leverage in a challenging macroeconomic environment.

These ratings were placed under review for possible downgrade (LGD
assessments are subject to change):

* Corporate Family Rating and Probability of Default Rating of
   B2

* $2.3 billion senior secured term loan facility due in 2013 of
   B2

* $750 million senior notes due 2014 of B2

* $400 million senior subordinated notes due 2016 of Caa1

* $469 million (principal amount at maturity) subordinated
   discount notes due 2016 of Caa1

Headquartered in Irving, Texas, Michaels Stores, Inc. is the
largest arts and crafts specialty retailer in North America. As of
March 31, 2008, the company operated 975 "Michaels" retail stores
in the United States and Canada and 163 Aaron Brothers Stores in
11 states. Revenues in the fiscal year ending
February 2, 2008, were approximately $3.9 billion.


MIRABILIS VENTURES: Chapter 11 Case Under Government Scrutiny
-------------------------------------------------------------
Assistant U.S. Attorney Randy Gold on Wednesday told the Hon.
Karen Jennemann of the U.S. Bankruptcy Court for the Middle
District of Florida that he questions the motives of Mirabilis
Ventures Inc. in filing a chapter 11 petition, Orlando Sentinel's
Jim Leusner says.  In addition, Mr. Gold told Judge Jennemann that
the Debtor should have filed a chapter 7 petition, Sentinel says.

                 IRS Probe and Seizure of Assets

Mr. Gold heads a probe regarding legal disputes involving the
Debtor, Sentinel relates.

The Debtor has pending lawsuits against two of its largest
unsecured creditors, Kenneth & Diane Hendricks owed $2,847,196 and
John Burcham owed $2,536,557.

Mr. Gold asserted that the Debtor's consultant, chief strategic
officer, and sole shareholder, Frank L. Amodeo, lack "mental
competency" to run the Debtor's operations, Sentinel says.

According to the Sentinel, Mirabilis had been a subject of a two-
year investigation by the Internal Revenue Service.  The report
reveals that Mirabilis units and companies connected with Mr.
Amodeo allegedly defrauded about $182.0 million in salary taxes.  
The IRS, based on the report, seized $13.3 million real property
owned by the Debtor and Mr. Amodeo, plus Mr. Amodeo's Learjet and
$900,000 held by 16 of the defendants' legal counsels.

Mr. Gold wanted the Debtor's bankruptcy case placed under the
supervision of U.S. District Judge John Antoon II, who is
presiding over a civil lawsuit between the Debtor and its ex-
officers, Sentinel reports.  Mr. Gold, in the alternative, said
that U.S. District Judge Anne Conway, who is presiding the IRS'
asset seizure, Sentinel says.

Mr. Gold claimed that while the IRS probe is ongoing, it's better
for a district judge to oversee the cases, Sentinel relates.

Separately, Mr. Gold asked Judge Antoon to postpone judgment over
a civil lawsuit between the Debtor and its ex-officers, Frank
Hailstones and Edith Curry, Sentinel reports.

Mr. Gold said that the ex-officers are government witnesses from
which the Debtor is attempting to obtain information on the civil
case, the report adds.

Millions of Mirabilis documents, video tapes and records are under
the government's review, which is expected to continue for half a
year, Sentinel says.  Payroll taxes of thousands of Mirabilis
workers were lost, Sentinel quotes Mr. Gold as stating.

Based on the report, there were no charges filed relating to the
investigation.

                   Debtor's Counsel Responds

Elizabeth Green, Esq., however, informed the Bankruptcy Court that
only 40% of the Debtor's units owned in 2004 remains and that none
is currently running, Sentinel relates.  She added that Hoth
Holdings LLC, a 90% owned by the Debtor, has gone bankrupt, the
report adds.

Ms. Green asserted that Mirabilis was pushed into bankruptcy by
IRS seizure of its assets, according to the report.  The Debtor
could recover a significant amount for its creditors if it were
not for the seizures, she continued.

Ms. Green also denied Mr. Gold's allegations that Mr. Amodeo is
the Debtor's sole shareholder.  She, however, acknowledged that
Mr. Amodeo's consulting company, AQMI Strategy Corp., has a
$40 million secured claim against the Debtor, the report says.

                     About Mirabilis Ventures

Orlando, Florida-based Mirabilis Ventures Inc. is a private equity
firm.  The company filed its chapter 11 petition on May 27, 2008
(Bankr. M.D. Fla. Case No. 08-04327).  Elizabeth A. Green, Esq.,
at Latham Shuker Eden & Beaudine LLP, represents the Debtor in its
restructuring efforts.  When the Debtor sought bankruptcy
protection, it listed assets and debts between $50 million and
$100 million.  The Debtor's three largest unsecured creditors are
First Commercial Ins. Corp. owed $8,400,000; Kenneth & Diane
Hendricks owed $2,847,196; and John Burcham owed $2,536,557.

Mirabilis has a 90% equity stake in Hoth Holdings LLC, which is
also based on Orlando.  Hoth filed its chapter 11 petition on May
27, 2008 (Bankr. M.D. Florida Case No. 08-04328).  Elizabeth A.
Green, Esq., also represents Hoth in its restructuring efforts.  
Hoth listed assets and debts between $1 million and $10 million
when it filed for bankruptcy.


MORGAN STANLEY: Fitch Downgrades Ratings on 37 Certificate Classes
------------------------------------------------------------------
Fitch Ratings has taken rating actions on these mortgage pass-
through certificates.  Unless stated otherwise, any bonds that
were previously placed on Rating Watch Negative are removed.

Series 2000-1
  -- B-1 affirmed at 'A'.

Deal Summary
  -- 60+ day Delinquency: 21.96%
  -- Realized Losses to date (% of Original Balance): 6.30%

Series 2001-AM1
  -- M-1 downgraded to 'AA' from 'AAA';
  -- M-2 affirmed at 'B';
  -- B-1 revised to 'C/DR5' from 'C/DR2'.

Deal Summary
  -- 60+ day Delinquency: 39.90%
  -- Realized Losses to date (% of Original Balance): 3.92%

Series 2001-NC1
  -- M1 downgraded to 'AA' from 'AAA';
  -- M2 downgraded to 'CC/DR3' from 'BBB+';
  -- B1 downgraded to 'C/DR5' from 'BB+'.

Deal Summary
  -- 60+ day Delinquency: 44.02%
  -- Realized Losses to date (% of Original Balance): 3.46%

Series 2001-NC2
  -- M-1 downgraded to 'A' from 'AAA';
  -- M-2 downgraded to 'B' from 'BBB';
  -- B-1 downgraded to 'C/DR6' from 'CCC/DR2'.

Deal Summary
  -- 60+ day Delinquency: 46.64%
  -- Realized Losses to date (% of Original Balance): 3.05%

Series 2001-NC3
  -- M-1 affirmed at 'AAA';
  -- M-2 downgraded to 'B' from 'A-';
  -- B-1 downgraded to 'C/DR5' from 'B+'.

Deal Summary
  -- 60+ day Delinquency: 49.54%
  -- Realized Losses to date (% of Original Balance): 2.99%

Series 2001-NC4
  -- M-1 affirmed at 'AAA';
  -- M-2 downgraded to 'B' from 'AA-';
  -- B-1 downgraded to 'C/DR6' from 'CCC/DR2'.

Deal Summary
  -- 60+ day Delinquency: 47.16%
  -- Realized Losses to date (% of Original Balance): 3.29%

Series 2001-WF1
  -- A-1 affirmed at 'AAA';
  -- M-1 affirmed at 'AA';
  -- M-2 affirmed at 'B';
  -- B-1 downgraded to 'CCC/DR2' from 'B'.

Deal Summary
  -- 60+ day Delinquency: 33.62%
  -- Realized Losses to date (% of Original Balance): 4.01%

Series 2002-AM1
  -- M-1 downgraded to 'AA' from 'AAA';
  -- M-2 affirmed at 'B';
  -- B-1 downgraded to 'C/DR6' from 'CC/DR3'.

Deal Summary
  -- 60+ day Delinquency: 35.30%
  -- Realized Losses to date (% of Original Balance): 3.97%

Series 2002-AM2
  -- M-1 downgraded to 'AA-' from 'AA';
  -- M-2 affirmed at 'B';
  -- B-1 remains at 'C/DR6'.

Deal Summary
  -- 60+ day Delinquency: 28.34%
  -- Realized Losses to date (% of Original Balance): 2.61%

Series 2002-AM3
  -- A-2 affirmed at 'AAA';
  -- A-3 affirmed at 'AAA';
  -- M-1 affirmed at 'AA';
  -- M-2 affirmed at 'A';
  -- B-1 affirmed at 'B';
  -- B-2 remains at 'C/DR4'.

Deal Summary
  -- 60+ day Delinquency: 17.67%
  -- Realized Losses to date (% of Original Balance): 2.83%

Series 2002-HE1
  -- A-1 affirmed at 'AAA';
  -- M-1 downgraded to 'BBB' from 'AA';
  -- M-2 downgraded to 'B' from 'BBB+';
  -- B-1 downgraded to 'C/DR6' from 'CC/DR2';
  -- B-2 revised to 'C/DR6' from 'C/DR5'.

Deal Summary
  -- 60+ day Delinquency: 36.29%
  -- Realized Losses to date (% of Original Balance): 2.81%

Series 2002-HE2
  -- A-1 affirmed at 'AAA';
  -- M-1 downgraded to 'A' from 'AA';
  -- M-2 downgraded to 'BBB' from 'A-';
  -- B-1 downgraded to 'C/DR5' from 'CCC/DR2';
  -- B-2 remains at 'C/DR6';

Deal Summary
  -- 60+ day Delinquency: 30.18%
  -- Realized Losses to date (% of Original Balance): 2.85%

Series 2002-HE3
  -- A-1 affirmed at 'AAA';
  -- A-2 affirmed at 'AAA';
  -- M-1 affirmed at 'AA';
  -- M-2 downgraded to 'B' from 'BBB+';
  -- B-1 downgraded to 'C/DR5' from 'CCC/DR2';
  -- B-2 remains at 'C/DR6'.

Deal Summary
  -- 60+ day Delinquency: 23.95%
  -- Realized Losses to date (% of Original Balance): 3.09%

Series 2002-NC1
  -- M-1 affirmed at 'AA+';
  -- M-2 affirmed at 'BBB';
  -- B-1 downgraded to 'CCC/DR2' from 'B+'.

Deal Summary
  -- 60+ day Delinquency: 23.15%
  -- Realized Losses to date (% of Original Balance): 2.52%

Series 2002-NC2
  -- M-1 affirmed at 'AA';
  -- M-2 affirmed at 'B';
  -- B-1 downgraded to 'CC/DR4' from 'CCC/DR2'.

Deal Summary
  -- 60+ day Delinquency: 26.50%
  -- Realized Losses to date (% of Original Balance): 2.33%

Series 2002-NC3
  -- A-2 affirmed at 'AAA';
  -- A-3 affirmed at 'AAA';
  -- M-1 downgraded to 'A' from 'AA';
  -- M-2 downgraded to 'BB' from 'BBB';
  -- B-1 downgraded to 'C/DR6' from 'B';
  -- B-2 revised to 'C/DR6' from 'C/DR5'.

Deal Summary
  -- 60+ day Delinquency: 38.06%
  -- Realized Losses to date (% of Original Balance): 2.42%

Series 2002-NC4
  -- M-1 affirmed at 'AA';
  -- M-2 downgraded to 'BB' from 'A';
  -- B-1 downgraded to 'CC/DR3' from 'CCC/DR2';
  -- B-2 revised to 'C/DR6' from 'C/DR5'.

Deal Summary
  -- 60+ day Delinquency: 25.36%
  -- Realized Losses to date (% of Original Balance): 2.76%

Series 2002-NC5
  -- M-1 affirmed at 'AA';
  -- M-2 downgraded to 'A-' from 'A+';
  -- M-3 downgraded to 'BBB-' from 'A';
  -- B-1 downgraded to 'CC/DR4' from 'B';
  -- B-2 revised to 'C/DR6' from 'C/DR5'.

Deal Summary
  -- 60+ day Delinquency: 21.70%
  -- Realized Losses to date (% of Original Balance): 2.44%

Series 2002-NC6
  -- M-1 downgraded to 'BBB' from 'AA';
  -- M-2 downgraded to 'BB-' from 'BBB-';
  -- B-1 revised to 'C/DR6' from 'C/DR4';
  -- B-2 remains at 'C/DR6'.

Deal Summary
  -- 60+ day Delinquency: 36.33%
  -- Realized Losses to date (% of Original Balance): 1.98%

Series 2002-OP1
  -- M-1 downgraded to 'BB' from 'A-';
  -- M-2 downgraded to 'CC/DR4' from 'B';
  -- B-1 revised to 'C/DR6' from 'C/DR5';
  -- B-2 remains at 'C/DR6'.

Deal Summary
  -- 60+ day Delinquency: 33.81%
  -- Realized Losses to date (% of Original Balance): 2.51%


MOVIE GALLERY: Wants to Clarify Timing of Claim Allowances
----------------------------------------------------------
The provisions of Movie Gallery Inc. and its debtor-affiliates'
Plan of Reorganization, which was confirmed on April 9, 2007,
explains the timing by which proofs of claims will be resolved.

Specifically, the confirmed Plan includes provisions to establish
deadlines related to the allowance of claims in the Debtors'
Chapter 11 cases:

   -- Administrative Claims should be filed 60 days after the
      Plan Effective Date, or July 19, 2008;

   -- Administrative Claim Objections should be filed by the
      later of (i) 180 days after the Effective Date, and (ii) 90
      days after the filing of the Claim; and

   -- Cure Claims should be filed by the later of (i) 60 days
      after the Court's entry of the order approving the
      assumption of the lease or contract, and (ii) 60 days after
      the Effective Date.

Peter J. Barrett, Esq., at Kutak Rock LLP, in Richmond, Virginia,
relates that several claimants who have filed requests for the
allowance and payment of their Claims have set purported
objection deadlines and hearings for their requests, all of which
contravene the provisions in the Plan.

In anticipation of the Reorganized Debtors' need to reconcile and
resolve the multitude of claims that have been or will be filed,
the Reorganized Debtors should not be forced to comply with
notices that contradict the provisions of the Plan, Mr. Barrett
says.

"All creditors and parties-in-interest are bound by the
provisions under the Plan; therefore, claimants may not set their
own timeline by which their claim is to be resolved," Mr. Barrett
notes.

Accordingly, the Reorganized Debtors ask the U.S. Bankruptcy Court
for the Eastern District of Michigan to:

   (a) clarify that the Plan governs the timing of the allowance
       of Claims against the Debtors; and

   (b) approve the form of the notice which the Debtors intend to
       file with the Court and serve on parties who have filed or
       will file requests for the allowance and payment of their
       claims.

                       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. 29; Bankruptcy Creditors' Service Inc.;
http://bankrupt.com/newsstand/or 215/945-7000)


MOVIE GALLERY: Delays Filing of 2008 Quarterly Financial Results
----------------------------------------------------------------
In a regulatory filing with the U.S. Securities and Exchange
Commission dated May 22, 2008, Movie Gallery Inc. and its debtor-
affiliates disclosed that it was unable to file its quarterly
report for the quarter ended April 6, 2008, on Form 10-Q by the
May 21 deadline.

As part of their business plan, the Reorganized Debtors were
focused on stabilizing and restructuring their operations that
enabled them to successfully emerge from Chapter 11; thus, the
Company was not able to timely file its Form 10Q without
unreasonable effort or expense, the SEC filing disclosed.

Thomas D. Johnson, Jr., Movie Gallery's executive vice president
and chief financial officer, stated that during the first and
second quarters of 2008, the Company's key personnel worked on,
among other things:

   * identifying and closing certain underperforming video rental
     stores; and

   * finalizing financing arrangements in preparation for the     
     confirmation of Movie Gallery's Plan of Reorganization.

Mr. Johnson told the SEC that it is undertaking "diligent
efforts" to file its quarterly report as soon as possible.

                       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. 29; Bankruptcy Creditors' Service Inc.;
http://bankrupt.com/newsstand/or 215/945-7000)


MRS FIELDS: To Restructure $196MM Debt, Warns of Bankruptcy
-----------------------------------------------------------
Mrs. Fields Famous Brands LLC reached agreement with the holders
of more than 78% of its 9% and 11-1/2% Senior Secured Notes due
2011, issued in the aggregate principal amount of $195.7 million,
on the terms and conditions of a consensual financial
restructuring that would reduce the company's debt obligations on
account of the Senior Notes by approximately $145.7 million.

The company, supporting noteholders and Mrs. Fields' Original
Cookies Inc. have entered into restructuring support agreements,
pursuant to which the parties have agreed to consummate the
restructuring through an out-of-court exchange offer and a
solicitation of consents to remove certain covenants from the
indenture under which the Senior Notes were issued.

To facilitate the consensual implementation of the restructuring,
the Restructuring Support Agreements contemplate that Mrs. Fields
and the Supporting noteholders will negotiate and enter into
definitive documentation and commence the Exchange Offer and
Consent Solicitation not later than June 30, 2008.

In the event that Mrs. Fields does not receive tenders into the
Exchange Offer from holders of 98% or more of the aggregate
principal amount of Senior Notes, but does receive tenders from
the holders of two-thirds in aggregate principal amount of the
Senior Notes and one-half in number of the noteholders, the
company will file voluntary petitions for relief under Chapter 11
of the United States Bankruptcy Code and seek confirmation of a
pre-packaged plan of reorganization not later than Aug. 15, 2008.
The company will include materials as part of the Exchange Offer
requesting support of the Bankruptcy Cases, if necessary.

Specifically, the Restructuring Support Agreements provide for the
following treatment of claims and interests through the Exchange
Offer or Bankruptcy Cases, as applicable:

   * In exchange for tendering into the exchange offer, the
     Noteholders will receive a pro rata share of:
     (i) $90 million in cash, subject to specified downward
         adjustments;
    (ii) new senior secured notes in an aggregate principal amount
         of $50 million plus the amount of any cash shortfall
         below $90 million; and
   (iii) 87.5% of the new common equity to be issued on the
         effective date of the Exchange Offer or Bankruptcy Cases.

   * Holders of all other claims against Mrs. Fields will receive
     full payment in the ordinary course of business.
    
   * Holders of Mrs. Fields' existing common equity will be
     entitled to retain or receive 12.5% of the new common equity
     to be issued on the effective date and warrants to increase
     its ownership to up to a 30% stake in restructured
     Mrs. Fields pursuant to a pricing formula set forth in the
     Restructuring Support Agreements.

The indicated levels of equity ownership in restructured
Mrs. Fields, for both the Noteholders and Mrs. Fields' existing
common equity, will be subject to dilution by a new management
incentive plan and future issuances of equity.

"By significantly de-levering our capital structure from over
$195 million of debt to only $50 million of new debt, the
Restructuring will greatly improve our near-term liquidity and
allow us to execute our growth business plan," Stephen Russo,
president and chief executive officer of Mrs. Fields, commented.

"Once the Restructuring is completed, we will be positioned to
realize the substantial value of the Mrs. Fields brands through
continued growth in our branded retail and gifting segments well
as our renewed commitment to upgrading and expanding the
Mrs. Fields store base in our franchising segment," Mr. Russo
added.  "We appreciate the involvement of the Supporting
Noteholders and look forward to working with our new
shareholders."

"Mrs. Fields does not anticipate any business interruption in its
day-to-day operations during the Restructuring," Mr. Russo stated.
"The new senior secured notes have a payment-in-kind option for
the next two years, pursuant to which the board of restructured
Mrs. Fields may elect to authorize interest payments or to pay the
interest in kind.  As a result, we will have considerably more
cash flow flexibility to pay our vendors, and we fully expect that
all vendor payments will be made in full during the Restructuring
and thereafter.  Moreover, we will have cash available to invest
in the growth of our business and the development of our brands."

"We are committed to supporting our franchisees as they continue
to serve our customers. Our franchisees are the foundation of our
company, and we will take every measure to ensure that it is
business as usual for them during this period," Mr. Russo said.
"This Restructuring will allow us to become a stronger company and
to further improve our relationships with our franchisees and
customers."

Mrs. Fields expects its post-Restructuring financial statements to
be given an unqualified audit opinion, removing any going-concern
qualification to reflect the large reduction in existing debt.  As
part of the Restructuring, the board of directors of restructured
Mrs. Fields will include seven members: four members appointed by
the Noteholders, two members appointed by existing holders of
Mrs. Fields common equity and the Mrs. Fields CEO.

The Exchange Offer will be made pursuant to Section 3(a)(9) of the
Securities Act of 1933, as amended.

Tenders of Senior Notes and delivery of related consents may only
be made pursuant to the Exchange Offer materials that Mrs. Fields
will be sending to the Noteholders once the Exchange Offer is
commenced.  These materials will set forth the complete terms of
the Exchange Offer and the Consent Solicitation.

Mrs. Fields was advised by Blackstone Advisory Services L.P. and
Skadden Arps Slate Meagher & Flom LLP.  The Supporting Noteholders
were advised by Akin Gump Strauss Hauer & Feld LLP.

               About Mrs. Fields Famous Brands

Headquartered in Salt Lake City, Utah, Mrs. Fields Famous Brands,
LLC -- http://www.mrsfields.com/--  develops and franchises  
retail stores which sell core products including cookies, brownies
and frozen yogurt through three specialty branded concepts: Mrs.
Fields, Great American Cookie company.  The company has more than
1,200 franchised and licensed concept locations worldwide.

At March 29, 2008, the company's balance sheet showed total assets
of $147.2 million and total liabilities of $247.2 million,
resulting in a total shareholders' deficit of approximately
$100.0 million.

                         Going Concern Doubt

As reported in the Troubled company Reporter on April 18, 2008,
KPMG LLP raised substantial doubt about the ability of Mrs. Fields
Famous Brands LLC to continue as a going concern after it audited
the company's financial statements for the year ended
Dec. 29, 2007.  The auditing firm reported that the company has
suffered recurring net losses and negative cash flows from
operations and has a net member's deficit at Dec. 29, 2007.


NEW YORK RACING: NYOTB Restructuring Plan Puts NYRA on The Red
--------------------------------------------------------------
Tom Precious of news.bloodhorse.com notes that a proposed plan
to maintain New York City Off-Track Betting Corp. is within
reach but could result in a $12 million loss to New York Racing
Associations that would put its efforts to exit from bankruptcy
protection at risk.

The proposed plan will enable New York City Off-Track to improve
the way in which its shares revenue with New York Racing, Mr.
Precious quotes Westchester County Democrat Gary Pretlow as
saying.  Nevertheless, a settlement which will ensure New York
Racing's bankruptcy proceeding to continue its plan to emerge from
bankruptcy has already been negotiated, Mr. Pretlow adds.

Mr. Pretlow told news.bloodhorse.com the proposed plan has to be
completed immediately due to speculations of NYCOTB personnel
reaction, which is expected to occur on June 7, 2008.

The city of New York is still planning to close NYCOTB by June 15,
2008, says The New York Sun, because it could no longer pay the
required amount to the city.

                Amended Chapter 11 Plan Confirmed

As reported in the Troubled Company Reporter on April 29, 2008,
The United States Bankruptcy Court for the Southern District of
New York confirmed the Modified Third Amended Chapter 11 Plan of
Reorganization dated April 27, 2008, of The New York Racing
Association Inc., aka NYRA.

The Court approved the adequacy of the Debtor's Third Amended
Disclosure Statement dated Nov. 29, 2007.

                    State and NYRA Obligations

The State of New York will provide $105,000,000, of which
$75 million will be used to pay bankruptcy claims and $30 million
to pay for operating costs for the next 12 months, Bloomberg News
reports.  The State's fund will also pay for services and expenses
required relating to payments for capital works -- including
payments for the purpose of acquisition of clear title to the
racetracks and other transferred property.  

NYRA's Plan is expected to pay at least $1.4 million in taxes to
the State, report says.

In addition, the State will waive any entitlement to receive
distributions for the benefit of the Debtor's estate and the
reorganized Debtor under the Plan.

                       Treatment of Claims

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

Holders of Secured Claims will receive in full of their allowed
claim amount through any of these distributions:

   a) the payment of the holders' allowed secured claims in
      cash;

   b) the sale or disposition proceeds of the property securing
      any allowed secured claims to the extent of the value of
      their respective interests in the property;

   c) the surrender to the holder of any allowed secured claims of
      the property securing the claims; or

   d) other distributions as necessary to satisfy the requirements
      of Chapter 11 of the Bankruptcy Code.

Each holder of unsecured claim is expected to get 100% of its
unsecured claim, plus interest accrued at 4% per annum during the
period from Feb. 1, 2008, until the plan effective date.

Holders of allowed Penalty Claim will receive 100% of its claim
provided that all allowed unsecured claims have been paid in full.

Holders of Insured Litigation Claims are entitled to:

   -- proceed with the liquidation of their claims, including
      any litigation pending as of the Debtor's bankruptcy
      filing; and

   -- seek recovery from applicable insurance carrier.

Pursuant to the terms of a certain settlement agreement, all
State Claims will be deemed allowed and each State Claims holder,
other than the holder of the New York State Tax Claim, will not
be entitled to, and will not receive or retain, any property or
interest in property on account of such Allowed State Claims under
the Plan.

On the effective, the Debtor will assume the benefit plan and
obligations of contributing sponsor under ERISA -- including the
obligations to make required minimum funding contributions
pursuant to the benefit plan and ERISA.  The Debtor will make
these payments to its benefit plans:

   1) funding deficiencies for the years ended on or prior to
      Dec. 31, 2007; and

   2) all payments made during the period from the Debtor's
      bankruptcy filing until the effective date.

Upon assumption of the benefit plans and payment of the amounts,
the Pension Benefit Guaranty Corporation claims will be deemed
withdrawn, without prejudice to the rights of the PBGC.

NYRA Equity Interest will be canceled and holders will not receive
any property under the plan.  Three new shares of NYRA Equity
Interests will be issued to the reorganized Debtor plan
administrator, who will hold the non-certified and non-
transferable shares of common stock, as custodian for the
directors of the reorganized Debtors.

A full-text copy of the Modified Third Amended Chapter 11 Plan of
Reorganization is available for free at

               http://ResearchArchives.com/t/s?2b43

Based in Jamaica, New York, The New York Racing Association
Inc. aka NYRA -- http://www.nyra.com/-- operates racing tracks in
Aqueduct, Belmont Park and Saratoga.  The company filed for
chapter 11 protection on Nov. 2, 2006 (Bankr. S.D.N.Y. Case No.
06-12618).  Brian S. Rosen, Esq., at Weil, Gotshal & Manges LLP,
Henry C. Collins, Esq., at Cooper, Erving & Savage LLP, and
Irena M. Goldstein, Esq., at Dewey Ballantine LLP represent the
Debtor in its restructuring efforts.  Jeffrey S. Stein of The
Garden City Group Inc. serves as the Debtor's claims and noticing
agent.  The U.S. Trustee for Region 2 appointed an Official
Committee of Unsecured Creditors and Edward M. Fox, Esq., Eric T.
Moser, Esq., and Jeffrey N. Rich, Esq., at Kirkpatrick & Lockhart
Preston Gates Ellis LLP, represent the Committee.  When the Debtor
sought protection from its creditors, it listed assets of
$153 million and debts of $310 million.


NORCROSS SAFETY: Moody's Withdraws All Ratings
----------------------------------------------
Moody's Investors Service withdrew all ratings of Norcross Safety
Products LLC and its parent Safety Products Holdings Inc.  The
rating action follows the recent acquisiton of the companies by
Honeywell International Inc. and repayment of all rated debt at
Norcross and SPH.

Outlook Actions:

  Issuer: Norcross Safety Products, LLC

  * Outlook, Changed To Rating Withdrawn From Stable

  Issuer: Safety Products Holdings, Inc.

  * Outlook, Changed To Rating Withdrawn From Stable

Withdrawals:

  Issuer: Norcross Safety Products, LLC

  * Probability of Default Rating, Withdrawn, previously rated B1

  * Corporate Family Rating, Withdrawn, previously rated B1

  * Senior Secured Bank Credit Facility, Withdrawn, previously
    rated Ba1, 16 - LGD2

  * Senior Subordinated Regular Bond/Debenture, Withdrawn,
    previously rated B2, 57 - LGD4

  Issuer: Safety Products Holdings, Inc.

  * Senior Unsecured Regular Bond/Debenture, Withdrawn,
    previously rated B3, 87 - LGD5

Norcross Safety Products L.L.C., headquartered in Oak Brook,
Illinois, is a leading manufacturer of personal protection
equipment.


NORTHWEST AIRLINES: Moody's Cuts Corporate Family Rating to B2
--------------------------------------------------------------
Moody's Investors Service downgraded the Corporate Family Rating
of Northwest Airlines Corp. to B2 from B1, as well as the ratings
of its outstanding corporate debt instruments and selected classes
of Northwest's Enhanced Equipment Trust Certificates ("EETC").
The Speculative Grade Liquidity rating was lowered to SGL-3 from
SGL-2. The ratings remain on review for possible downgrade.

The rating downgrade reflects the weakening financial performance
of Northwest which, despite a reduced cost structure following its
restructuring, reported operating and net losses and deteriorating
financial metrics during the first quarter of 2008. Sustained high
fuel costs are likely to increase the potential for near term cash
operating losses at a time when Northwest faces approximately $450
million in near term debt maturities. Despite the elimination of
approximately $4.2 billion of unsecured debt and lease obligations
upon emergence from bankruptcy in 2007, the company's capital
structure remains highly leveraged.

Although Northwest's dominant position at its core hubs may
provide the company the ability to differentiate its product and
charge higher ticket prices, Moody's does not expect Northwest
will be able to increase fares sufficiently to offset the cost
increases it faces from the escalation in fuel prices. As a
consequence, Moody's expects the company will sustain operating
cash losses that will erode the cash position over time. Debt to
EBITDA of 6.9x and EBIT to interest expense of 1.3x for the 12
months to March 31, 2008 (both using Moody's standard adjustments)
have weakened, and expected continued negative operating profits
and free cash flow are likely to exert pressure on the ratings.
Northwest's fleet, older than mainline competitors is less
efficient and likely to increase costs in the current environment
of high fuel costs.

In lowering the Speculative Grade Liquidity rating to SGL-3,
Moody's noted that Northwest should maintain an adequate liquidity
profile during the next 12 months despite the expectation that
cash losses from operations will represent an increasing use of
funds. Although the company has financed most of the cost of its
2008 aircraft deliveries, Northwest's $175 million revolving
credit facility which is secured by a first lien on the company's
Pacific route authorities, is fully drawn. Northwest reported
approximately $3.2 billion of unrestricted cash and short term
investments at March 31, 2008, the highest percentage of last
twelve months revenue among U.S. network airlines. Importantly,
Northwest has achieved a waiver on its fixed charge covenant
through June 30, 2009, followed by a slow ramp up, and as a
result, is expected to comply with all of its debt covenants.
Northwest is not subject to any holdbacks by its credit card
processors at this time.

Moody's downgraded the Class A and B certificates of the Series
2007-1 Pass Through Certificates consistent with the downgrade of
the underlying Corporate Family rating of Northwest. The ratings
of the Certificates also reflect the continuing availability of
liquidity facilities to meet interest payments for 18 months in
the event of a default by Northwest, and the asset values of
specific aircraft which secure the Certificates. The junior
classes of any EETC are generally more vulnerable to uncertainty
in recovery as they hold a first loss position. Moody's notes that
the transaction is secured by new vintage Embraer regional jets,
for which demand is expected to remain strong. As a result,
Moody's has not changed its view of relative value for the Series
2007-1 Pass Through Certificates.

The rating remains under review for possible downgrade (see Press
Release "Moody's reviews debt ratings of Delta and Northwest for
possible downgrade" dated April 15, 2008) pending Moody's review
of Northwest's merger plans. During its review, Moody's will
assess the potential for a combined Delta and Northwest to achieve
expected revenue and cost synergies in relation to the ongoing
pressures on performance from rising costs, as well as the
financial structure and liquidity profile of the combined entity.

Downgrades:

  Issuer: Northwest Airlines Corporation

  * Probability of Default Rating, Downgraded to B2 from B1

  * Speculative Grade Liquidity Rating, Downgraded to SGL-3 from
    SGL-2

  * Corporate Family Rating, Downgraded to B2 from B1

  Issuer: Northwest Airlines, Inc.

  * Senior Secured Bank Credit Facility, Downgraded to B1, LGD3
    (32%) from Ba3, LGD3 (41%)

  * Senior Secured Enhanced Equipment Trust

    -- Class A Certificates, downgraded to Baa1 from A3

    -- Class B Certificates, downgraded to Ba2 from Ba1

Northwest Airlines, Inc., a wholly owned subsidiary of Northwest
Airlines Corp., (collectively, "Northwest") is the 6th largest
airline that provides scheduled passenger service throughout North
America and Asia (and access to Europe through an alliance with
KLM-Air France) and is headquartered in Eagan, Minnesota.


NOVASTAR FINANCIAL: Gets Acceleration Notice, Warns of Bankruptcy
-----------------------------------------------------------------
On June 4, 2008, NovaStar Financial Inc. and its wholly owned
subsidiary NovaStar Mortgage Inc. received a written notice of
acceleration from the holders of the trust preferred securities of
NovaStar Capital Trust I.

The written notice declared all obligations of NMI under the
related Notes and Indenture (calculated by the trust preferred
security holders to be approximately $51.0 million as of May 31,
2008) to be immediately due and payable, and stated the
intention of the trust preferred security holders to pursue all
rights and remedies available to them, including but not limited
to enforcing their rights under the related Parent Guarantee
Agreement.

As of June 5, 2008, no acceleration notice or payment demand has
been received by the company or NMI under the Notes, Indenture or
Parent Guarantee Agreement related to NovaStar Capital Trust II.

While the company intends to attempt to restructure the terms of
the Indentures, there can be no assurance that it will be able to
do so.  Enforcement of remedies against NMI and the company under
the Notes, Indentures and related Parent Guarantee Agreements
would have a material adverse effect on the company and its
financial condition and liquidity and would likely cause the
company to seek the protection of applicable bankruptcy laws.

The default under the Indentures constitutes a cross-default under
certain Letter of Credit and Reimbursement Agreements between the
company and Wachovia Bank, under which letters of credit have been
issued to support certain surety bonds.  The surety bonds relate
to certain state licenses previously held by the company in  
connection with its prior mortgage lending business.  The company
has previously posted cash collateral to secure the outstanding
letters of credit in an amount equal to 105% of the face amount of
the outstanding letters of credit.  

While the company has surrendered the underlying state licenses
and has requested the cancellation of the surety bonds and related
letters of credit, as of June 5, 2008, certain surety bonds remain
outstanding and, consequently, approximately $8.3 million remains
posted as cash collateral on related letters of credit still
outstanding.  Absent a default, the cash collateral is to be
returned to the company from time to time upon the expiration,
replacement, termination or return of a letter of credit, to the
extent that, following such expiration, replacement, termination
or return, the aggregate amount posted exceeds 105% of the
remaining letters of credit and any other due and unpaid amounts.  

However, so long as a default exists under the Letter of Credit
and Reimbursement Agreements, Wachovia Bank is not obligated to
return any cash collateral to the company.  A material delay or
reduction in the company's receipt of the cash collateral would
have a material adverse effect on the company's liquidity position
and could force the company to seek the protection of applicable
bankruptcy laws.

NMI previously failed to make quarterly interest payments totaling
approximately $1.7 million on its unsecured junior subordinated
notes issued to NovaStar Capital Trust I and NovaStar Capital
Trust II (collectively, the Trusts) that were due on March 30, and
April 30, 2008.  Novastar Financial Inc. has guaranteed NMI's
obligations under these Notes.

Upon expiration of the applicable 30-day grace period, these
payment failures became defaults under the Junior Subordinated
Indenture, dated March 15, 2005, between NMI, and JPMorgan Chase
Bank, National Association, as Trustee, and the related Parent
Guarantee Agreement of the same date between the company and the
Trustee, as well as under the Junior Subordinated Indenture dated
April 18, 2006, among NMI, the company, and JPMorgan Chase Bank,
National Association, as Trustee, and the related Parent Guarantee
Agreement of the same date between the company and the Trustee.

However, also as previously reported, prior to the expiration of
the 30-day grace period, NMI, the company, and the trustees and
security holders of the Trusts entered into Forbearance  
Agreements, under which the security holders and the trustees
agreed to forbear in the exercise of their rights and remedies
with respect to these payment failures until May 30, 2008.

Neither NMI nor the company paid the delinquent interest amounts
to the Trusts prior to or upon the expiration of the forbearance
period on May 30, 2008.  As a result, the trustees and holders of
25% of the outstanding trust preferred securities of the  
applicable Trust (excluding the trust preferred securities held by
the company and its affiliates) have the right to accelerate all
principal, accrued interest, and other obligations of NMI under
the Notes and to demand payment of all such amounts from the
company under the related Parent Guarantee Agreements.

The total principal and accrued interest owed under the Notes, net
of amounts owed in respect of the trust preferred securities
purchased by NMI, was approximately $80.5 million as of June 5,
2008.  In addition, NMI and the company are obligated to reimburse
the trustees for all reasonable expenses, disbursements and
advances in connection with the exercise of rights under the
Indentures.

                        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.

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.

                          *     *     *

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.


NOVASTAR FINANCIAL: NMI Inks Securities Purchase with Kodiak CDO
----------------------------------------------------------------
NovaStar Financial Inc. disclosed in its form 8-K filing with the
Securities and Exchange Commission on Thursday that on May 21,
2008, its wholly owned subsidiary NovaStar Mortgage Inc., agreed
to purchase trust preferred securities of NovaStar Capital Trust
II from Kodiak CDO II Ltd., having a par value of $6.875 million,
for a cash purchase price of $550,000.  The purchase was settled
through a broker on May 29, 2008.

The trust preferred securities purchased by NMI were part of a
$35 million private placement of trust preferred securities in
April 2006 by NovaStar Capital Trust II.  The trust preferred
securities of NovaStar Capital Trust II represent indirect  
interests in unsecured junior subordinated notes, due June 30,
2036, issued by NMI to NovaStar Capital Trust II, which are
guaranteed by company.

                        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.

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.

                          *     *     *

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.


OMEGA WALLBEDS: Case Summary & 12 Largest Unsecured Creditors
-------------------------------------------------------------
Debtor: Omega Wallbeds, Inc.
        10730 E. Sky High Dr.
        Tucson, AZ 85730

Bankruptcy Case No.: 08-05366

Chapter 11 Petition Date:  May 8, 2008

Court: District of Arizona (Tucson)

Judge: James M. Marlar

Debtors' Counsel: ERIC SLOCUM SPARKS, ESQ.
                  ERIC SLOCUM SPARKS PC
                  110 S CHURCH AVE #2270
                  TUCSON, AZ 85701
                  Tel: (520) 623-8330
                  Fax: (520) 623-9157
                  E-mail: ericssparks@hotmail.com

Total assets:  $1,111,823.95

Total debts:   $1,171,907.86

A copy of the Debtor's petition, list of its 12 largest unsecured
creditors, and schedules of assets and liabilities is available at
no charge at:

     http://bankrupt.com/misc/azb08-05366.pdf


OMEGA WALLBEDS: Section 341 Meeting Scheduled for June 12
---------------------------------------------------------
The United States Trustee for the District of Arizona will convene
a meeting of creditors in the chapter 11 case of Omega Wallbeds
Inc. on June 12, 2008, at 1:00 p.m.  The meeting, which is
required under Section 341 of the U.S. Bankruptcy Code, will be
held at the U.S. Trustee Meeting Room, James A. Walsh Court, 38 S
Scott Ave., St. 140, in Tucson.

This is the first meeting of creditors required under Section
341(a) in all bankruptcy cases.

All creditors are invited, but not required, to attend.  This
Meeting of Creditors offers the one opportunity in a bankruptcy
proceeding for creditors to question a responsible office of the
Debtor under oath about the company's financial affairs and
operations that would be of interest to the general body of
creditors.

Omega Wallbeds, Inc., filed for chapter 11 bankruptcy protection
on May 8, 2008, before the U.S. Bankruptcy Court for the District
of Arizona (Case No. 08-05366).  Eric Slocum Sparks, Esq., in
Tucson, represents the Debtor.  When it filed for bankruptcy, the
Debtor reported $1,111,823.95 in total assets, and $1,171,907.86
in total debts.


PACIFIC SOUTHWEST: Fitch Affirms 'BB' Rating on Class B-2 Certs.
----------------------------------------------------------------
Fitch Ratings has taken rating actions on Pacific Southwest Bank
mortgage pass-through certificates.  Unless stated otherwise, any
bonds that were previously placed on Rating Watch Negative are now
removed.

PSB 1997-2
  -- A-5 affirmed at 'AAA';

Deal Summary
  -- Originators:
  -- 60+ day Delinquency: 6.07%
  -- Realized Losses to date (% of Original Balance): 16.69%

PSB 1997-4
  -- M-1 affirmed at 'AA';
  -- M-2 affirmed at 'A';
  -- B-1 affirmed at 'BBB';
  -- B-2 affirmed at 'BB'.

Deal Summary
  -- Originators:
  -- 60+ day Delinquency: 6.64%
  -- Realized Losses to date (% of Original Balance): 15.29%


PALM HARBOR: Posts $124.3 Million Net Loss in Year Ended March 28
-----------------------------------------------------------------
Palm Harbor Homes Inc. reported a net loss of $124.3 million for
the year ended March 28, 2008, compared with a net loss of
$11.6 million for the year ended March 30, 2007.

Included in the net loss for the fiscal year ended March 28, 2008,
is a non-cash impairment charge of $78.5 million recorded in the
second quarter of fiscal 2008, related to the company's
factory-built housing segment goodwill balance.  Due to the
difficult market environment, particularly the recent fallout in
the sub-prime market, and the company's recent losses, the
company, with the assistance of an independent valuation firm,
performed an interim goodwill impairment analysis and concluded
that the goodwill relating to the its factory-built housing
reporting unit was impaired.

Net sales decreased 16.1% to $555.1 million in fiscal 2008 from
$661.2 million in fiscal 2007.  This decrease is primarily the
result of a $111.6 million decrease in factory-built housing net
sales offset by a $5.4 million increase in financial services net
revenues.  

For fiscal 2008, the operating loss was $95.3 million compared
with the operating loss of $2.2 million in fiscal 2007.

                      Fourth Quarter Results

Net sales for the fourth quarter totaled $126.5 million compared
with $135.9 million in the year-earlier period.  Palm Harbor
reported an operating loss of $7.7 million for the fourth quarter
compared with operating loss of $7.3 million in the same period
last year.  Net loss for the fourth quarter of 2008 totaled
$12.7 million, compared with a net loss of $7.2 million a year
ago.  

                 $70 Million Floor Plan Facility

As of March 28, 2008, the company was not in compliance with the
tangible net worth covenant under its $70.0 million floor plan
facility which expires on March 30, 2009.  The company received a
waiver for non-compliance through March 28, 2008, and executed an
amendment to the agreement effective June 1, 2008.  The amendment
extends the agreement to March 31, 2011, changes interest rate to
LIBOR plus 3.75% and alters certain covenant levels.  The company
had $59.4 million and $43.6 million outstanding under these floor
plan credit facilities at March 28, 2008, and March 30, 2007,
respectively.

                          Key Strategies

The company plans to increase revenues through an expanded product
offering (including the less expensive manufactured and modular
products introduced during the first quarter of fiscal 2008),
enhanced marketing and advertising efforts, and expanded
distribution channels.  Along with this, the company says it will
continue to identify ways to reduce its fixed costs and improve
operating efficiencies.

                          Balance Sheet

At March 28, 2008, the company's consolidated balance sheet showed
$565.4 million in total assets, $438.8 million in total
liabilities, and $126.6 million in total stockholders' equity.

Full-text copies of the company's consolidated financial
statements for the year ended March 28, 2008, are available for
free at http://researcharchives.com/t/s?2d5d

                        About Palm Harbor

Headquartered in Dallas, Palm Harbor Homes Inc. (Nasdaq: PHHM)
-- http://www.palmharbor.com/-- is one of the nation's leading  
manufacturers and marketers of multi-section manufactured homes.
The company markets nationwide through vertically integrated
operations, encompassing manufacturing, marketing, financing and
insurance.

                          *     *     *

Palm Harbor Homes Inc.'s fiscal 2008 results continue to be
affected by worsening conditions in the manufactured housing
industry.  In addition, the company sees no signs of recovery for
the factory-built housing industry in the near term.

The company has reported seven (7) consecutive quarterly snet
losses since the second quarter of fiscal 2007.


PEP BOYS: Moody's Junks Rating on $200MM Senior Sub. Notes
----------------------------------------------------------
Moody's Investors Service downgraded Pep Boys' -- Manny, Moe &
Jack's corporate family rating to B2 from B1 with a negative
outlook . The downgrade was prompted by the company's weak credit
metrics, slim margins, negative comparable stores sales trend, and
negative free cash flow. It is Moody's opinion -- upon review of
the company's new strategic plan -- the financial ratios will not
significantly improve over the next twelve months. The company
competes against large scale players in a highly fragmented
industry. The negative outlook reflects Moody's continuing
concerns with the company's ability to successfully execute its
turnaround strategy and improve its fundamental credit profile. It
also reflects concerns with high management turnover at this
strategically important time, as well as the material weaknesses
found in the company's internal control over financial reporting.
This concludes the review initiated on January 18, 2008.

These ratings were downgraded:

  * Corporate family rating to B2 from B1

  * Probability of default rating to B2 from B1

  * $200 million senior subordinated notes due 2014 to Caa1
    (LGD 5, 86%) from B3 (LGD 5, 82%)

This rating was confirmed and LGD point estimate adjusted:

  * $155 million senior secured term loan due 2013 at Ba3 with
    (LGD 2, 23%) from (LGD 2, 29%)

Pep Boys' B2 corporate family rating is constrained by the
company's weak interest coverage and EBITA margin and its negative
free cash flow. The ratings are supported by the company's scale,
moderate product volatility, and the positive long-term business
fundamentals of the segment in which it operates.

Headquartered in Philadelphia, Pennsylvania, Pep Boys is an
automotive parts and service retailer, operating over 560 stores
in 35 states and Puerto Rico. Revenues for fiscal year ended
February 2, 2008, were approximately $2.1 billion.


PERFORMANCE TRANS: Gets Court's Authority to Reduce Wages by 15%
----------------------------------------------------------------
Performance Transportation Services Inc. and its debtor-affiliates  
obtained authority from the U.S. Bankruptcy Court for the Western
District of New York to reduce their unionized employees' wages by  
15%.

The Debtors intend to withdraw their membership from the National
Automobile Transporters Labor Division.

The Debtors propose the Wage Reduction to be effective for all
work performed on or after June 4, 2008, and continuing until the
earlier of (a) July 31, 2008, (b) the effective date of a new
collective bargaining agreement exclusively between the Debtors
and the International Brotherhood of Teamsters, or (c) the
effective date of the Court's approval of the Debtors' request for
rejection of the National Master Automobile Transporters Agreement
concerning them.

In a news statement, the Teamsters said union leaders are weighing
all options in order to fight the company's move.  The union said
about 1,250 Teamsters at PTS are affected by the wage cuts.

The Debtors are party to a National Master Automobile
Transporters Agreement dated June 1, 2003 to May 31, 2008, with
the Teamsters National Automobile Transporters Industry
Negotiating Committee and certain local unions affiliated with
the Teamsters represented by the TNATINC.

The Debtors want to withdraw from the NATLD so that they can
conduct independent negotiations with TNATINC for modifications
that address the Debtors' financial needs.

Garry M. Graber, Esq., at Hodgson Russ LLP, in Buffalo, New York,
said the Debtors have fully drawn on their $15,000,000 debtor-in-
possession loan facility.  The DIP Facility expired on May 19,
2008, and the Debtors are in a payment default under it.  The
Debtors are currently operating under a cash collateral
stipulation, which provided for the use of cash collateral
through June 4, 2008.

Mr. Graber said without additional funding, the Debtors' financial
projections indicate that the Debtors will run out of cash on or
about the third week in June 2008.  He said the Debtors will
require additional liquidity through July 31, 2008, to sustain
operations of their business.

The Debtors' postpetition lenders have agreed to extend the
maturity date under the DIP Facility through July 31, 2008, and
to provide the Debtors an additional $2,500,000 in financing,
Mr. Graber said.  To address their liquidity requirements and
ensure ongoing operations, the Debtors will need funds in
addition to the New Facility.  

Given the immediacy of their needs and the limited amount of the
proposed New Facility, the Debtors believe they can satisfy their
total liquidity requirements only if they secure temporary wage
concessions of 15% from the IBT employees.  The 15% concession is
2.5% less than the labor concessions given by the IBT to the
Debtors' largest competitor, Allied Holdings, Inc., in connection
with its own Chapter 11 bankruptcy case last year, Mr. Graber
noted.

The Debtors value the relationship with their employees, and are
aware that the business cannot successfully reorganize without
their cooperation in the plan process, Mr. Graber added.  If the
request is granted, the Debtors fully intend to use the next
eight weeks to pursue a consensual modification of the NMATA
which will enable the Debtors to successfully reorganize as a
going concern and preserve the jobs of its IBT employees.  

According to Mr. Graber, the Debtors would prefer not to impose
unilateral wage concessions on its employees -- even on an interim
basis -- but time is short and no other options exist.  The
survival of the business is at stake, he asserts.  The Debtors
must either obtain the interim wage reductions, or they will be
forced to liquidate.  Because a liquidation will eliminate at
least 1,700 jobs, approximately 1,500 of which are union jobs,
and destroy the enterprise value of the business, all of the
Debtors' constituencies will lose if the Request is not granted,
Mr. Graber contends.

The Teamsters initially tried to ask the Bankruptcy Court to stay
proceedings related to the Debtors' request.  The Teamsters wanted
the U.S. District Court for the Western District of New York to
rule on the Debtors' request.

The Teamsters wanted the Bankruptcy Court to withdraw the
reference of all matters pertaining to the modification or
rejection of the collective bargaining agreements, pointing out
that the Debtors' request requires consideration of federal
statutes affecting interstate commerce, namely the National Labor
Relations Act and the Labor Management Relations Act, as well as
the Bankruptcy Code because the Debtors' request damages, among
other things, the good faith in bargaining of the Debtor entities
that are signatory to the NMATA, and the interplay between federal
labor law and bankruptcy law on the question of waiver of the
statutory right to engage in and withdraw from multi-employer
bargaining.

The Debtors, however, indicated to the Bankruptcy Court that if
proceedings related to their request is stayed, they would suffer
irreparable injury.

The union argued before the Bankruptcy Court that the CBA is not
the cause of the collapse of the Debtors' business and there is no
collapse seen in the immediate future.  The union also pointed out
that the Debtors' managers are paying  themselves bonuses -- a
clear indication that they have no economic difficulty, or if they
do, it is not caused by the contract that formerly covered their
productive workforce, but by their own bonuses.

Fred Zuckerman, Teamsters Carhaul Division Director and lead NMATA
negotiator, said in the news statement, "We remain vigorously
opposed to PTS' wage cuts because they undermine the entire
Teamster-represented carhaul industry.  I will be discussing our
options with General President Jim Hoffa and will also be talking
to carhaul local union leaders."

"Our priority is to protect the interests of our PTS members and
all our carhaul members and we will do whatever it takes to make
that happen," Mr. Zuckerman said.  "Nothing is being ruled out at
this point and we continue to urge PTS to return to the bargaining
table in good faith and to withdraw the wage cuts immediately."

This past weekend, Teamsters at PTS approved -- by a more than 3-1
margin -- authorization for the union to strike PTS if necessary.

"Our members have given their overwhelming support to strike and
that is an option for us," Mr. Zuckerman said.

              About Performance Transportation

Performance Transportation Services Inc. is the second largest
transporter of new automobiles, sport-utility vehicles and light
trucks in North America, and operates under three key
transportation business lines including: E. and L. Transport,
Hadley Auto Transport and Leaseway Motorcar Transport.

The company and 13 of its affiliates previously filed for Chapter
11 protection on Jan. 25, 2006 (Bankr. W.D.N.Y. Lead Case No. 06-
00107). The U.S. Bankruptcy Court for the Western District of New
York confirmed the Debtors' plan on Dec. 21, 2006, and that plan
became effective on Jan. 29, 2007. Garry M. Graber, Esq. of
Hodgson, Russ LLP and Tobias S. Keller, Esq. of Jones Day
represented the Debtors in their restructuring efforts.  When the
Debtor filed for protection from their creditors it reported more
than $100,000,000 in total assets. It also disclosed owing more
than $100,000,000 to at most 10,000 creditors, including $708,679
to Broadspire and $282,949 to General Motors of Canada Limited.

The company and its debtor-affiliates filed their second Chapter
11 bankruptcy on Nov. 19, 2007 (Bankr. W.D.N.Y. Case Nos: 07-04746
thru 07-04760).  Tobias S. Keller, Esq., at Jones Day, represents
the Debtors.  Garry M. Graber, Esq., at Hodgson, Russ LLP, serve
as the Debtors' local counsel.  The Debtors' claims and balloting
agent is Kutzman Carson Consultants LLC.  The Debtors have until
March 18, 2008, to file a plan of reorganization.  (Performance
Bankruptcy News, Issue No. 47; Bankruptcy Creditors' Services
Inc.; http://bankrupt.com/newsstand/or 215/945-7000).


PERFORMANCE TRANS: Seeks Court Nod to Exit from NATLD Contract
--------------------------------------------------------------
Performance Transportation Services Inc. and its debtor-affiliates
have asked the U.S. Bankruptcy Court for the Western District of
New York's authority to reject their contract with the National
Automobile Transporters Labor Division, nunc pro tunc to May 29,
2008, pursuant to Section 365 of the Bankruptcy Code.

Garry M. Graber, Esq., at Hodgson Ross LLP in Buffalo, New York,
tells the Court that the Debtors, in order to survive and
reorganize in the current automotive climate, must achieve a
competitive cost structure.  This can be achieved through a
negotiated consensual modification of the Debtors' Collective
Bargaining Agreement with the International Brotherhood of
Teamsters, represented by the Teamsters National Automobile
Transporters Industry Negotiating Committee, the committee
addressing the Debtors' specific labor problems.

The Debtors want to exit from the NATLD Contract in order to
prevent them from being bound to any terms and conditions of
employment that the NATLD and TNATINC may agree to in the current
bargaining session. tThe Debtors also want to bargain
independently with TNATINC to obtain modifications to the
National Master Automobile Transporters Agreement, to reach a new
labor agreement that adequately addresses the Debtors' financial
needs which is vital to continued operations and preservation of
the Debtors' estates, Mr. Graber asserts.

Mr. Graber notes the Debtors are only one of five principal
members of the NATLD. One member of the NATLD, Allied Holdings,
Inc., already received a 17.5% wage concession from the IBT.  The
remaining members, although not in receipt of that same wage
concession, are not in bankruptcy and are not facing an imminent
cessation of business operations if they are unable to obtain
significant concessions from the IBT.  Accordingly, the Debtors
are not similarly situated with the other members of the NATLD,
who have no incentive to seek the sort of concessions that the
Debtors need to successfully reorganize.  The Debtors, therefore,
require the ability to independently bargain with the TNATINC to
avoid irreparable harm to the Debtors' estates.

Mr. Graber adds rejection of the NATLD Contract is also necessary
to remove the Debtors from the contract negotiations which are
currently taking place between TNATINC and the NATLD concerning
an extension of the NMATA.  As it is the Debtors' intent to
independently negotiate a modification and extension of the
NMATA, the Debtors should not be required to participate further
in multiemployer negotiations involving the NMATA, nor be bound
by any negotiated agreement resulting from those multiemployer
bargaining sessions.

                About Performance Transportation

Performance Transportation Services Inc. is the second largest
transporter of new automobiles, sport-utility vehicles and light
trucks in North America, and operates under three key
transportation business lines including: E. and L. Transport,
Hadley Auto Transport and Leaseway Motorcar Transport.

The company and 13 of its affiliates previously filed for Chapter
11 protection on Jan. 25, 2006 (Bankr. W.D.N.Y. Lead Case No. 06-
00107). The U.S. Bankruptcy Court for the Western District of New
York confirmed the Debtors' plan on Dec. 21, 2006, and that plan
became effective on Jan. 29, 2007. Garry M. Graber, Esq. of
Hodgson, Russ LLP and Tobias S. Keller, Esq. of Jones Day
represented the Debtors in their restructuring efforts.  When the
Debtor filed for protection from their creditors it reported more
than $100,000,000 in total assets. It also disclosed owing more
than $100,000,000 to at most 10,000 creditors, including $708,679
to Broadspire and $282,949 to General Motors of Canada Limited.

The company and its debtor-affiliates filed their second Chapter
11 bankruptcy on Nov. 19, 2007 (Bankr. W.D.N.Y. Case Nos: 07-04746
thru 07-04760).  Tobias S. Keller, Esq., at Jones Day, represents
the Debtors.  Garry M. Graber, Esq., at Hodgson, Russ LLP, serve
as the Debtors' local counsel.  The Debtors' claims and balloting
agent is Kutzman Carson Consultants LLC.  The Debtors have until
March 18, 2008, to file a plan of reorganization.  (Performance
Bankruptcy News, Issue No. 47; Bankruptcy Creditors' Services
Inc.; http://bankrupt.com/newsstand/or 215/945-7000).


PERFORMANCE TRANS: Says Motion for Ch. 11 Trustee Should be Denied
-----------------------------------------------------------------
Performance Transportation Services Inc. and its debtor-affiliates
ask the U.S Bankruptcy Court for the Western District of New York
to deny D.E. Shaw Laminar Portfolios, L.L.C.'s request to (i)
appoint a Chapter 11 Trustee or, (ii) in the alternative, appoint
an examiner, and terminate the Debtors' exclusive rights to file
and solicit acceptances of a Chapter 11 plan.

As reported in the Troubled Company Reporter on May 30, 2008,
Black Diamond Commercial Finance, L.L.C. -- agent for the
postpetition secured lenders and first priority prepetition
secured lenders of the Debtors -- clarified that it neither seeks
replacement of the members of the Board nor a "transfer of power"
away from the Debtors, nor seeks a relief the same as the
appointment of a trustee.

As reported by the Troubled Company Reporter on May 19, 2008,
Black Diamond filed a request to require the board of directors of
Performance Logistics Group, Inc., to appoint a committee of
independent directors for all matters relative to the formulation
and development of a plan in the Debtors' Chapter 11 cases.  The
motion, however, was met with objections from the Debtors; the
Teamsters National Automobile Transporters Industry Negotiating
Committee; Yucaipa American Alliance Fund I, LP and Yucaipa
Alliance (Parallel) Fund I, LP; and D.E. Shaw Laminar Portfolios,
L.L.C.

Garry M. Graber, Esq., at Hodgson Russ LLP, in Bufallo, New York,
relates that DE Shaw would have the Court believe that it has no
discretion but to approve the appointment of an examiner simply
because of the amount of the Debtors' unsecured debt.  The Court,
however, has discretion to deny the appointment of an examiner
where, as in this case, the circumstances and facts dictate that
the appointment of an examiner would be inappropriate, improper
and inconsistent with section 1104(c), Mr. Graber notes.

Mr. Graber states that notwithstanding the foregoing, should the
Court determine that it must appoint an examiner in the
bankruptcy cases, the investigation should be limited
significantly in scope, duration and expense.  "Section 1104 of
the Bankruptcy Code directs that an examiner be appointed to
conduct 'such an investigation of the debtor as is appropriate,'
but the Bankruptcy Code does not specify how the determination of
appropriateness should be made," Mr. Graber says.

Moreover, DE Shaw has failed to demonstrate sufficient cause to
terminate exclusivity.  If the Court believes that it is
constrained to appoint an examiner, however, it must deny DE
Shaw's request to terminate exclusivity because DE Shaw has
failed to demonstrate cause.

                   Black Diamond Joins Debtors

Black Diamond Commercial Finance, L.L.C., asks the Court to deny
DE Shaw's Trustee Appointment Request.

Black Diamond does not agree with the Debtors' assertion that
they have acted properly and in the best interests of their
estates and stakeholders throughout their Chapter 11 Cases.  
However, the Debtors' recent requests in the Court mitigate many
of the prior concerns raised by Black Diamond in its request to
require the Debtors to establish a plan committee of independent
directors, William J. Brown, Esq., at Phillips Lyttle LLP, in
Buffalo, New York says.  Black Diamond prefers an appointment of
a Plan Committee rather than of an Examiner or a Exclusivity
Termination at the critical juncture in the cases.

Mr. Brown relates the Debtors recently made three requests which
are essential and critical to their restructuring efforts:

   i. rejection of executory contract with the National
      Automobile Transporters Labor Division;

  ii. interim wage cuts under the National Master Automobile
      Transporters Agreement with the Teamsters National
      Automobile Transporters Industry Negotiating Committee and
      certain local unions affiliated with the International
      Brotherhood of Teamsters; and

iii. additional postpetition financing and use of cash
      collateral.

Both the Wage Cuts Request and the Rejection Request, if granted,
will provide the Debtors with an additional eight weeks to pursue
a consensual modification of their collective bargaining
agreement and enable the Debtors to continue to pursue a
restructuring as a going concern, Mr. Brown contends.

In addition, the DIP Amendment Request seeks approval of an
amendment to the Debtors' postpetition credit facility which
requires the establishment of a Plan Committee, as previously
requested by Black Diamond and other parties in interest, as a
condition to obtaining $2,500,000 additional postpetition
financing, Mr. Brown notes.

Mr. Brown tells the Court that the granting of the Critical
Requests, including approval of the DIP Amendment requiring the
establishment of a Plan Committee, is a better alternative to the
appointment of an examiner for the Debtors.  He contends that if
the Court grants the Critical Requests, the need for a Chapter 11
Trustee or an Examiner will be decrease and the cost and
potential for delay that would be caused by an appointment of a
Trustee or an Examiner can be avoided.

Black Diamond also opposes DE Shaw's request that the Debtors'
exclusivity periods be terminated at this time.  Mr. Brown says
the Court's determination of the Critical Requests likely will
dictate the outcome of the Debtors' reorganization.  Terminating
exclusivity at this critical juncture could lead to a mess of
additional litigation and the filing of competing plans of
reorganization.  The additional litigation and competing plans
will bring both chaos and additional expenses to the Debtors'
Chapter 11 cases at a time in which both must be avoided.

                About Performance Transportation

Performance Transportation Services Inc. is the second largest
transporter of new automobiles, sport-utility vehicles and light
trucks in North America, and operates under three key
transportation business lines including: E. and L. Transport,
Hadley Auto Transport and Leaseway Motorcar Transport.

The company and 13 of its affiliates previously filed for Chapter
11 protection on Jan. 25, 2006 (Bankr. W.D.N.Y. Lead Case No. 06-
00107). The U.S. Bankruptcy Court for the Western District of New
York confirmed the Debtors' plan on Dec. 21, 2006, and that plan
became effective on Jan. 29, 2007. Garry M. Graber, Esq. of
Hodgson, Russ LLP and Tobias S. Keller, Esq. of Jones Day
represented the Debtors in their restructuring efforts.  When the
Debtor filed for protection from their creditors it reported more
than $100,000,000 in total assets. It also disclosed owing more
than $100,000,000 to at most 10,000 creditors, including $708,679
to Broadspire and $282,949 to General Motors of Canada Limited.

The company and its debtor-affiliates filed their second Chapter
11 bankruptcy on Nov. 19, 2007 (Bankr. W.D.N.Y. Case Nos: 07-04746
thru 07-04760).  Tobias S. Keller, Esq., at Jones Day, represents
the Debtors.  Garry M. Graber, Esq., at Hodgson, Russ LLP, serve
as the Debtors' local counsel.  The Debtors' claims and balloting
agent is Kutzman Carson Consultants LLC.  The Debtors have until
March 18, 2008, to file a plan of reorganization.  (Performance
Bankruptcy News, Issue No. 47; Bankruptcy Creditors' Services
Inc.; http://bankrupt.com/newsstand/or 215/945-7000).


PET MEDICAL: Case Summary & 20 Largest Unsecured Creditors
----------------------------------------------------------
Debtor: Friends of St. Frances, LLC
        dba Pet Medical Center of Houston
        dba Aberdeen Animal Hospital
        11920 Barker Cypress Road
        Cypress, TX 77433

Bankruptcy Case No.: 08-33667

Chapter 11 Petition Date: June 3, 2008

Court:  Southern District of Texas (Houston)

Judge:  Karen K. Brown

Debtors' Counsel: Jeffrey P. Norman, Esq.
                  Gipson & Norman
                  450 N. Texas Avenue, Suite A
                  Webster, TX 77598-4963
                  Tel: (281) 332-4800
                  Fax: (281) 332-4808
                  E-mail: jpnorman@gipsonandnorman.com

Total assets:  $1,691,487.07

Total debts:   $1,924,100.95

A copy of the Debtor's petition, list of 20 largest unsecured
creditors, and schedules of assets and liabilities is available at
no charge at:

     http://bankrupt.com/misc/txsb08-33667.pdf


PIERRE FOODS: Default Prompts Moody's to Cut CFR to Caa2
--------------------------------------------------------
Moody's Investors Service lowered the long-term ratings of Pierre
Foods, Inc., including the company's corporate family rating and
probability of default rating to Caa2 from B3. All long-term
ratings remain under review for further possible downgrade. LGD
assessments are also subject to adjustment. This rating action
follows Pierre's announcement that it was in default under the
financial covenants in its bank agreement for the fiscal quarter
ended March 1, 2008. Moody's affirmed Pierre's speculative grade
liquidity rating of SGL-4.

Ratings downgraded and under review for further possible
downgrade:

  * Corporate family rating to Caa2 from B3

  * Probability-of-default rating to Caa2 from B3

  * $40 million senior secured revolving credit facility maturing
    2009 to Caa2 from B2

  * $227 million senior secured term loan facility maturing 2010
    to Caa2 from B2

  * $125 senior subordinated notes maturing 2012 to Ca from Caa2

Rating affirmed:

  * Speculative Grade Liquidity rating at SGL-4

Pierre is in discussion with its bank lenders to address the
covenant default situation. The bank lenders have notified the
company that all borrowings under the facility -- $240 million at
May 31, 2008 -- shall bear a default interest rate as of February
29, 2008. Pierre is also evaluating strategic and restructuring
alternatives, and has retained a financial advisor to assist in
this process. There is thus great uncertainty about the company's
near term liquidity and longer term profile. Separately, Pierre
disclosed that it had not filed its 10K within the prescribed
time.

Moody's recognizes that a possible alternative for the company is
a sale. Moody's view is that recovery in a default scenario would
likely be modestly below-average due to the company's very weak
earnings in a tough economic environment.

Pierre's SGL-4 rating incorporates the financial covenants default
and the expected very weak operating profitability and liquidity
over the next 12 months.

Moody's continuing review will focus on (1) liquidity, especially
the possible outcomes of the discussions with bank lenders; (2)
Pierre's initiatives to boost profitability, including improved
customer fulfillment rate, rationalization of stock keeping units,
inventory reduction, and the potential for further price
increases; and (3) its progress in integrating Zartic, which was
acquired in December 2006.

Headquartered in Cincinnati, Ohio, Pierre Foods, Inc. is a
manufacturer, marketer and distributor of processed food
solutions, focusing on formed, pre-cooked and ready-to-cook
protein products, compartmentalized meals and hand-held
convenience sandwiches. Revenues for the twelve months ended
December 1, 2007 were approximately $642 million. The company was
purchased by Madison Dearborn Partners (MDP) and certain members
of Pierre's management on June 30, 2004.


PINNACLE FOODS: Moody's Affirms Caa2 Rating on $199MM Sr. Notes
---------------------------------------------------------------
Moody's Investors Service affirmed the long term ratings of
Pinnacle Foods Finance LLC ("Pinnacle"), including its corporate
family rating and probability of default rating of B3, as well as
the company's speculative grade liquidity rating of SGL-2. The
rating outlook remains stable.

Ratings affirmed:

   Corporate family rating at B3
   Probability of default rating at B3
   Speculative grade liquidity rating of SGL-2
   
Ratings affirmed, with LGD % revised

   $125 million senior secured Revolving Credit at B2 (LGD3);
   LGD% to 37% from 36%

   $1251 million (original $1250 million) senior secured Term
   Loan B at B2 (LGD3); LGD% to 37% from 36%

   $325 million 9.25% Senior Notes at Caa2 (LGD5); LGD% to 85%
   from 83%

   $199 million (original $250 million) Senior Subordinated Notes
   at Caa2 (LGD6); LGD% to 94% from 93%

The affirmation of the company's long term ratings is based upon
Pinnacle's progress in reducing leverage since its acquisition by
affiliates of The Blackstone Group on April 2, 2007. The
affirmation of Pinnacle's SGL-2 rating reflects Moody's
expectation that cash flow generation over the next twelve months
will be sufficient to fund working capital, capital expenditures
and scheduled debt payments. Pinnacle may need to borrow under its
$125 million revolving credit to fund seasonal working capital
needs in its third fiscal quarter.

Pinnacle's B3 corporate family rating incorporates its still weak
credit metrics, with high though improved leverage, and the
pressure on operating margins from rising commodity costs.
Pinnacle's ratings also reflect the diversification of its brand
portfolio and the solid market share of its leading brands.

For more information on Pinnacle, refer to Moody's credit opinion
on http://www.moodys.com/

Headquartered in Mountain Lakes, New Jersey, Pinnacle Foods
Finance LLC manufactures and markets branded convenience food
products in the US and Canada. Its brands include Hungry-Man and
Swanson Dinners, Vlasic pickles, Mrs. Paul's and Van de Kamp's
frozen prepared seafoods, Aunt Jemima frozen breakfasts, Log Cabin
and Mrs. Butterworth's syrup and Duncan Hines cake mixes. Net
sales for the twelve months ended March 30, 2008 were
approximately $1.5 billion.


PLASTECH ENGINEERED: Seeks Court Nod on Revised Bidding Procedures
------------------------------------------------------------------
Plastech Engineered Products Inc. and its debtor-affiliates, on
one hand, and several parties-in-interest, on the other, have
reached an agreement on -- and ask the U.S. Bankruptcy Court for
the Eastern District of Michigan to approve -- a revised bidding
procedure with respect to the sale of some or all of the Debtors'
business units and miscellaneous assets.

These parties-in-interest include:

   i) major customers Johnson Controls, Inc., General Motors
      Corp., and Ford Motor Company;

  ii) the Official Committee of Unsecured Creditors;

iii) the Debtors' Term Lenders -- Goldman Sachs Credit Partners,
      L.P. as Prepetition First Lien Term Loan Agent, the Steering
      Committee of First Lien Term Loan Lenders; and

  iv) some dissenting equipment lessors -- GE Capital Corporation,
      Wells Fargo Equipment Finance, Inc., Huntington National
      Bank, and Fifth Third Bank.

The Revised Bidding Procedures did not provide for changes to the
schedule:

    -- Bids are due June 13, 2008, and must be accompanied by a
       cash deposit in the amount of 5% of the purchase price.  
       Bids will be evaluated on numerous grounds; however, bids
       that are unconditional and contemplate (i) sales that must
       be consummated on or before June 30, 2008; (ii) assumption
       of the collective bargaining agreements relating to that
       particular Business Unit; and (iii) the assumption of the
       Plastech Exterior Systems Inc. Retirement Plan if
       applicable to that particular Business Unit, are strongly
       encouraged.

    -- Commencing at 9:00 a.m. on June 16, 2008, the Debtors will
       hold auctions for the Debtors' assets in this order:

          1. the Interiors Business,
          2. the Exteriors Business
          3. the Stamping Business,
          4. the Carpet Business, and
          5. the Miscellaneous Assets.

    -- the Debtors will seek approval of the sales at the June 18
       hearing.

The Revised Bidding Procedures also provide for these terms:

   (a) A bidder must provide for a list of the executory
       contracts and unexpired leases it proposes to assume in
       connection with the purchase of the Debtors' assets, and
       must be able to consummate a transaction and perform its
       assumed obligations under the contracts and leases and
       satisfy the standards under Section 365 of the Bankruptcy
       Code.

   (b) A bidder must provide a written evidence or any other
       evidence signifying the bidder's ability to consummate the
       purchase transaction pursuant to Section 365 of the
       Bankruptcy Code.

   (c) By June 11, 2008, the Debtors intend to designate one or
       more stalking horse bidders for one of the Business units.  
       The Debtors are willing to provide a combined break-up fee
       and expense reimbursement of 2.5% of the purchase price
       proposed by the Staking Horse Bidder.

   (d) The Debtors and their advisors, after consultation with
       the Creditors Committee and its advisors, will, among
       other things, identify qualified bidders and negotiate any
       offers made to purchase the Business Units or
       Miscellaneous Assets.

   (e) In connection with one or more proposed Sales of the
       Interiors Business or Exteriors Business or any other
       assets upon which they have a security interest, the
       collateral agents on behalf of the Debtors' First Lien
       Term Loan lenders and Second Lien Term Loan lenders, as
       the case may be may, subject to the terms of the
       Intercreditor Agreement between them, credit bid some or
       all of the amounts owing to them.

A full-text copy of the revised procedures is available for free
at http://researcharchives.com/t/s?2d5e

Deborah L. Fish, Esq., counsel to the Debtors, at Allard & Fish,
P.C., in Detroit, Michigan, says the Bidding Procedures have been
modified to resolve issues raised by the Term Lenders, Johnson
Controls, Inc., the Pension Benefit Guaranty Corporation
and the Equipment Lessors.  The Stipulating Parties agree to the
entry of an order by the Court that would provide that:

   (i) The Debtors will serve a notice of the sale by first-class
       mail, postage prepaid, within five business days after
       entry of a Court order, or as soon as practicable, upon
       these parties:

       * all entities who have expressed an interest in the sale
         of one or more of the Business Units and Miscellaneous
         Assets at any time;

       * all entities who have asserted any lien, claim,
         interest or encumbrance in any of the  Miscellaneous
         Assets;

       * all federal, state and local regulatory or taxing
         authorities or recording offices which have a known
         interest in the requested relief;

       * all non-residential real property lessors;

       * the United States Attorney's office;

       * the Securities and Exchange Commission;

       * the Internal Revenue Service;

       * counsel to the Official Committee of Unsecured
         Creditors; and

       * counsel to the Major Customers.

  (ii) The Debtors will publish notice of the Sale in The Wall
       Street Journal or The New York Times and other local
       newspapers the Debtors deem appropriate within the five
       days from entry of a Court order.

(iii) The break-up fees and expense reimbursements are approved,
       provided that the Stalking Horse Bidders are not in
       default under the Stalking Horse Agreements.  The Stalking
       Horse Bidders are entitled to the Break-Up Fees and
       Expense Reimbursements provided that they must have waived
       or satisfied any financial or due diligence conditions to
       closing as of June 11, 2008 in the event:

       * the Court approves a Competing Transaction or  
         Alternative Transaction with a qualified bidder other
         than the Stalking Horse Bidders, and

       * the Debtors either consummate the competing transaction
         or alternative transaction or fail to consummate a
         transaction with the Stalking Horse Bidders or any other
         qualified bidder.

  (iv) The Break-Up Fees and Expense Reimbursements -- if
       earned pursuant to the Stalking Horse Agreement and the
       Court order -- until paid, will constitute a superpriority
       administrative claim over all administrative expenses
       specified in Sections 503(b) and 507(b) Bankruptcy Code
       junior only to the claims of the Major Customers pursuant
       to the Customer Financing.

A final hearing is set on June 18, 2008 at 9:30 a.m. (Eastern
Time) to approve the Sale of the Debtors' Business Units and
Miscellaneous Assets to the qualified bidders.  Any objections
must be filed and served on the Debtors' counsel by June 11, 2008
at 4:00 p.m. (Eastern Time).

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


PLASTECH ENGINEERED: Plastic Mold Wary Over Interest in GM Tooling
------------------------------------------------------------------
Vendor Plastic Mold Technologies, Inc. asks the U.S. Bankruptcy
Court for the Eastern District of Michigan to compel Plastech
Engineered Products Inc. and its debtor-affiliates to identify
whether certain tooling at General Motors' plants are subject to
the bidding procedures for the proposed asset sale.

Before the bankruptcy filing, the Debtors entered into a contract
with PMT, pursuant to which PMT designs, fabricates, manufactures,
modifies and repairs certain dies and molds to produce plastic
automobile parts for General Motors, one of the Debtors' major
customers.  The Debtors owe at least $295,368 for the GM Tooling,
David S. Lefere, Esq., at Bolhouse, Vander Hulst, Risko & Baar,
P.C., in Grandville, Michigan, says.

Mr. Lefere maintains that prepetition, PMT perfected liens on the
GM Tooling pursuant to Michigan Mold Lien Act by permanently
affixing its name on the GM Tooling.  It has also filed U.C.C.-1
financing statements on the Tooling pursuant to Uniform
Commercial Code, he discloses, and says both compliance earned
PMT a legal, valid, perfected, unavoidable, first priority
statutory lien on the GM Tooling.  A list of the GM Tooling is
available for free at http://researcharchives.com/t/s?2d5f

Mr. Lefere says the bidding procedures fail to identify whether
the GM Tooling is included in the sale of their exterior trim
plant in Elwood, Indiana where the GM Tooling is believed to be
located.

PMT objects to any sale, transfer or relocation of the GM Tooling
without first receiving full payment pursuant to its legal,
valid, perfected, unavoidable, first priority statutory
lien on the GM Tooling.

Thus, PMT asks the Court to compel the Debtors to identify whether
the GM Tooling will be relocated and whether it is subject to the
Bidding Procedures.  PMT also asks the Court to compel adequate
assurance by the Debtors to protect its statutory lien on the GM
tooling prior to the proposed sale.

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


PLASTECH ENGINEERED: Seeks OK of Wind Down Funding & Sale Pacts
---------------------------------------------------------------
Plastech Engineered Products Inc. and its debtor-affiliates ask
the U.S. Bankruptcy Court for the Eastern District of Michigan to
approve a wind-down settlement entered into with their prepetition
first lien term loan lenders, their prepetition second lien term
loan lenders, and their major customers -- General Motors
Corporation, Ford Motor Company, Chrysler LLC, and Johnson
Controls, Inc.

Pursuant to the Wind-down Settlement, the First Lien Term Loan
Lenders and the Major Customers will fund the Debtors' expenses
related to the wind-down of their estates, with these salient
terms:

   (a) Allowed Section 503(b)(9) administrative expense claims
       will be funded up to $17,000,000 in the aggregate.  The
       Major Customers will fund up to $8,500,000 -- by making
       additional DIP Loans available to the Debtors -- and the
       Term Lenders arrange funding from the proceeds of the
       Interiors Acquisition up to $8,500,000 -- using cash
       proceeds they receive from the Interiors Acquisition or by
       arranging that cash proceeds they might otherwise receive
       to be paid to the Debtors -- as consideration in the
       Interiors Acquisition.  An escrow will be created for this
       purpose.

   (b) The Major Customers, Term Lenders and the Debtors have
       agreed to a wind-down budget that will be filed with the
       Court prior to the hearing.  The Customers have agreed to
       fund one-half of the wind down budget and the Term
       Lenders have agreed to arrange funding of the other half
       of the wind down budget from the proceeds of the Interiors
       Acquisition:

       * in the form of additional cash consideration for assets  
         purchased in the Interiors Acquisition;

       * as a loan;

       * as a settlement payment(s);

       * as a "gift"; or

       * a combination of these forms.

       An escrow will be created for this purpose.

   (c) The Customers will waive any deficiency claims arising
       from the DIP Loans and prepetition revolving credit loans
       that may arise after liquidating the liquid collateral
       that secures their loans.

   (d) The Debtors and the Term Lenders will release the Major
       Customers from all claims against the Major Customers,
       except for claims arising from a breach of the Funding
       Agreement.

       The Debtors and the Major Customers will release the Term
       Lenders from all potential claims against the Term
       Lenders, except for claims arising from a breach of the
       Funding Agreement.

   (e) These terms are subject to:

       -- a Court order approving the Funding Agreement that
          will:
   
          * approve the releases;
   
          * limit further funding and surcharge obligation on the
            part of the Term Lenders and the Major Customers,  
            other than the Major Customers' obligations as DIP
            Lenders under the DIP financing; and

          * allocate proceeds of the Interiors Acquisition and
            Exteriors Sale;

       -- closing the Interiors Acquisition and the Exteriors
          Sale by June 30, 2008; and

       -- other waivers and conditions to be set forth in the
          Funding Agreement.
             
                 Other Sale-Related Settlements

Contemporaneous with the Wind-down Settlement request, the
Debtors also seek approval of these sale-related settlements:

   (i) settlement between the Term Lenders, the Official
       Committee of Unsecured Creditors and the Debtors pursuant
       to which the Term Lenders will make available a
       $14,000,000 lump sum cash contribution from the proceeds
       of a Sale(s) of the Interiors Business for the exclusive
       benefit of the general, non-priority unsecured creditors
       of the Debtors' estates;

  (ii) settlement between the Steering Committee of First Lien
       Term Loan Lenders; Julie N. Brown, James A. Brown and
       their family members; and the Debtors pursuant to which
       the parties have settled certain disputes and released
       certain potential claims and causes of action;

(iii) settlement between Chrysler LLC; Goldman Sachs, as agent
       to the the Term Lenders; the Term Lenders; and the Debtors
       pursuant to which the parties agree to resolve the
       disputes relating to Chrysler's purported termination of
       certain production contract with the Debtors; and

  (iv) settlement between the Debtors and the Term Lenders
       allowing the Term Lenders' claims and validating the Term
       Lenders' liens against their collateral.

Approval of each of the sale-related settlements is expressly
contingent upon the approval of each other sale-related
settlement.

In the event that the Court denies of approval of one sale-
related settlement or in the event one sale-related settlement is
terminated, breached or fails, the Debtors will promptly withdraw
their requests for approval of the other sale-related settlements
and forgo prosecution of the related requests.

Thus, the Debtors ask the Court to approve the Wind-down
Settlement, with the relief expressly predicated upon
substantially contemporaneous approval of the other Sale-Related
Settlements including all releases, obligations and rights,
pursuant to Section 105 of the Bankruptcy Code,m and Rule 9019 of
the Federal Rules of Bankruptcy Procedure.

The Debtors believe that no party-in-interest would be prejudiced
by the Wind-down Settlement.  The Debtors' major constituencies
and parties-in-interest, including the Creditors Committee, the
Term Lenders and the Major Customers, are all aware of the
provisions contained in the Wind-down Settlements, and upon
information and belief, do not object to the Debtors' request,
Gregg M. Galardi, Esq., at Skadden, Arps, Slate, Meagher & Flom
LLP, in Wilmington, Delaware, says.

Mr. Galardi asserts that the Wind-down Settlement provides a
direct benefit to their estates and creditors by establishing a
source of funds to wind-down their estates and exit Chapter 11.   
It will also generate funds to pay allowed claims under Section
503(b)(9) of the Bankruptcy Code.  The approval of the Wind-down
Settlement, however, is contingent upon approval of the Committee
Settlement, which likewise provides a source of funds for
payments to the Debtors' general unsecured creditors, Mr. Galardi
relates.

The Debtors ask the Court to shorten notice period to allow a
hearing on June 17, 2008, with respect to their request.

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


PLY-GEM INDUSTRIES: Moody's Affirms Caa2 Rating on $360MM Notes
---------------------------------------------------------------
Moody's Investors Service affirmed Ply Gem Industries, Inc.'s
corporate family rating at B3 and subordinated notes at Caa2. At
the same time, Moody's assigned a B2 rating to the company's
proposed $700 million senior secured notes. The ratings outlook
remains negative.

These ratings and assessments were affected:

  * Corporate family rating affirmed at B3;

  * Probability of default affirmed at B3;

  * $700 million senior secured notes due 2013, assigned B2
    (LGD3, 36%);

  * $360 million subordinated notes due 2012, affirmed at Caa2
    (LGD5, 88%), previously at (LGD5, 85%).

These ratings will be withdrawn upon the close of the transaction:

  * $688.5 million ($678 million outstanding) first lien term
    loan rated B2 (LGD3, 34%);

  * $75 million revolving credit facility rated B2 (LGD3, 34%).

The ratings outlook is negative.

The proceeds of the new $700 million of senior secured notes and
$150 million ABL revolving credit facility due 2013 (not rated by
Moody's) will be used to refinance the company's existing first
lien term loan and revolving credit facility. Moody's notes that
the new first lien notes are currently contemplated to mature
after the company's subordinated notes. The ABL is to have a
springing maturity if the existing senior subordinated notes are
not refinanced six months before the existing senior sub notes
mature. The $700 million senior secured notes are secured on a
first lien basis by the company's property plant an equipment and
the majority of the company's assets with a few exceptions
including accounts receivable, inventory, cash and certain assets,
and proceeds, that the notes will have a second lien on.

The affirmation of the company's B3 corporate family rating
reflects Moody's expectation that the company's financial metrics
will remain weak due to the continued slow new home construction,
and weakness in repair and remodeling. Furthermore, raw material
cost inflation continues to exert pressure on Ply Gem's margins
and cash flow. Moody's projects the company's debt to EBITDA to be
above 7 times for 2008 and FCF to debt is estimated to be in low
single digits.

The negative outlook reflects residual uncertainty about the depth
and duration of both end-market deterioration and cost pressures.
The rating could come under additional pressure if the new home
construction and repair and remodeling market deteriorates beyond
current expectations. Moody's currently anticipates new home
starts to improve for 2009 vs. 2008's projected level. The rating
could also deteriorate if the company's liquidity position
weakens.

Ply-Gem Industries, Inc., headquartered in Kearney, Missouri, is a
manufacturer of vinyl siding, windows, patio doors, fencing,
railing, and decking serving both the new construction and repair
and remodel end markets. Revenues for the trailing twelve month
period ended March 29, 2008 were $1.34 billion.


PREMD INC: Wants to Reverse AMEX's Determination to Delist Stocks
-----------------------------------------------------------------
PreMD Inc. will appeal the decision made by American Stock
Exchange to delist its stock on the Exchange.

As reported in the Troubled Company Reporter on June 4, 2008,
Predictive medicine company PreMD Inc. has been notified by the
American Stock Exchange that it will not continue to support
PreMD's plan for regaining compliance with the continued listing
standards and that it intends to delist the company's common stock
from the Exchange by filing a delisting application with the
Securities and Exchange Commission pursuant to Section 1009(d) of
the AMEX Company Guide.

The determination by the staff of the AMEX to initiate the
delisting of the common stock from the AMEX is based on the
company's failure to meet several of the Exchange's conditions for
continued listing.

The company continues to be noncompliant with Sections 1003(a)(i),
1003(a)(ii), and 1003(a)(iii) of the Company Guide, all of which
relate to the company's insufficient stockholder's equity as
previously reported in the company's filings with the SEC. The
AMEX also cites deficiencies regarding the company's ongoing
losses and low share price as additional reasons for the staff's
determination.

During the appeal determination process, the company's stock will
continue to trade on the AMEX under the symbol PME.  PreMD also
continues to trade on the Toronto Stock Exchange under the symbol
PMD.

"We believe that our plans will allow PreMD to meet every
objective standard for continued listing of its common stock on
the American Stock Market and we look forward to the opportunity
to present our appeal of the proposed delisting," Brent Norton,
president and CEO of PreMD, said.

In accordance with applicable AMEX rules, the company has appealed
the proposed delisting and requested a hearing before an AMEX
Listing Qualifications Panel.

There can be no assurance that the company's appeal will be
successful or that the company's request for continued listing or
any delay in delisting by AMEX will be granted.

                       About PreMD Inc.
  
Headquartered in Ontario, Canada, PreMD Inc. (TSX: PMD; Amex: PME)
-- http://www.premdinc.com/-- is a predictive medicine company   
focused on improving health outcomes with non- or minimally
invasive tools for the early detection of life-threatening
diseases, particularly cardiovascular disease and cancer.  The
company's products are designed to identify those patients at risk
for disease.  With early detection, cardiovascular disease and
cancer can be effectively treated, or perhaps, prevented
altogether.  PreMD is developing accurate and cost-effective tests
designed for use at the point of care, in the doctor's office, at
the pharmacy, for insurance testing and as a home use test.

                      Going Concern Doubt

Ernst & Young LLP expressed substantial doubt about PreMD Inc.'s
ability to continue as a going concern after auditing PreMD Inc.'s
financial results for the year ended Dec. 31, 2007.  The auditors
pointed to the company's loss of C$6.3 million and shareholders'
deficiency of C$4,419,890.  The auditors also related that the
company has experienced significant operating losses and cash
outflows from operations since its inception.  The company has
operating and liquidity concerns due to its significant net losses
and negative cash flows from operations.


PROSPECT MEDICAL: Moody's Cuts 2nd Lien Sr. Debt Rating to Caa3
---------------------------------------------------------------
Moody's Investors Service has downgraded Prospect Medical
Holdings, Inc.'s (Prospect, AMEX:PZZ) first lien senior secured
debt rating to B3 from B2; second lien senior secured debt rating
to Caa3 from Caa2; and the corporate family rating to Caa1 from
B3. The outlook on all the ratings is negative.

This action completes the review Moody's started on January 11,
2008 after Prospect announced it would miss the filing deadline
for its 10-K. The rating agency stated that the rating action
reflects the deterioration in the earnings of Prospect's core IPA
management segment as well as the terms of the renegotiated credit
facility, including additional interest expense and restrictions
on its revolving credit facility. Moody's noted that while the
earnings ability of the hospital segment is currently good, it has
concerns with the ability of the hospital to produce consistent
earnings to meet the debt service requirements. According to
Moody's, this is a particular concern as it is unclear how soon
the IPA management segment can be returned to profitability.

In addition, the company's decision to sell a small portion of its
IPA business raises concerns that it may be willing to sell
additional IPA's. While the proceeds of any sale would be used to
pay down debt, it is not clear that given the current challenging
circumstances, Prospect could expect to receive a "fair value" for
these properties. The negative outlook reflects Moody's
uncertainty with respect to both earnings stability and the
company's strategy.

Moody's indicated that as a result of the negative outlook, it is
unlikely that the ratings will be upgraded; however, if the
company restores the profitability of its IPA management segment,
produces consolidated operating margins of at least 7% and net
margins of 3% and reduces its debt to capital ratio below 5 times,
the outlook may be returned to stable. Conversely, if there is
continued deterioration in the earnings in its core IPA management
segment resulting in overall EBITDA margins of less than 3% and
net profit margins less than 1%, if debt to EBITDA increases above
7 times, if EBITDA coverage is less than 1 times, or if cash flow
from operations is less than one times annual interest expense,
the ratings may be downgraded.

These ratings were downgraded with a negative outlook:

   Prospect Medical Holdings, Inc.

   -- first lien senior secured debt rating to B3 from B2;
   -- second lien senior secured debt rating to Caa3 from Caa2;   
   -- corporate family rating to Caa1 from B3.

Moody's corporate family rating is an opinion of a corporate
family's ability to honor all of its financial obligations and is
assigned to a corporate family as if it had a single class of debt
and a single consolidated legal entity structure.


QUALITY HOME: S&P Junks Rating on Weak Operating Performance
------------------------------------------------------------
Standard & Poor's Ratings Services lowered its ratings on Cary,
North Carolina-based Quality Home Brands Holdings LLC, including
its corporate credit rating to 'CCC' from 'B-'.  All ratings
remain on CreditWatch, where they had been placed with negative
implications on April 8, 2008, following weaker-than-expected
operating performance for the fiscal year ended Dec. 28, 2007, and
concern that the company would not be able to meet its financial
covenants in 2008.  About $451 million of reported debt was
outstanding at March 31, 2008 (including a $44.3 million holding
company payment-in-kind note).
     
The downgrade reflects Quality Home Brands' continued weak
operating performance which resulted in lease- and pension-
adjusted leverage of over 7.5x at the quarter ended March 31, 2008
(including the holdco note) and the company's implementation of
the required cure to avoid violation of its first-quarter
financial covenants.  The company exercised an equity cure
provision provided in its senior secured credit facility, whereby
its financial sponsor contributed additional equity, allowing
Quality Home Brands to maintain access to its $30 million
revolving credit facility.
     
"Given the current weak housing market and challenging economic
conditions, we believe the company will not be able to
meaningfully improve its operating performance and meet its
maximum total leverage covenant for the remainder of fiscal 2008,"
said Standard & Poor's credit analyst Bea Chiem.  Quality Home
Brands will only be able to exercise the equity cure for one more
quarter.
     
The ongoing CreditWatch listing reflects Standard & Poor's
expectation that the company will not be able to remain in
compliance with its financial covenants in the absence of an
amendment.  "We believe Quality Home Brands faces liquidity
concerns in the second half of fiscal 2008 as noncompliance
could result in loss of access to its revolving credit facility
after its remaining cure period expires," said Ms. Chiem.  "We may
consider lowering the rating further if the company does not
present a viable plan to remedy its covenant issues."
     
Standard & Poor's will monitor Quality Home Brands' operating
performance and ability to restore permanent access to its
revolver, and discuss its financial results and plans with
management before resolving the CreditWatch.


RAFAELLA APPAREL: Poor 3rd Quarter Results Cue S&P to Lower Rating
------------------------------------------------------------------
Standard & Poor's Ratings Services lowered its corporate credit
rating on apparel maker Rafaella Apparel Group Inc. to 'B-' from
'B'.  At the same time, S&P assigned a '5' recovery rating on
Rafaella's senior secured notes, indicating the expectation for
modest (10% to 30%) recovery in the event of a payment default,
and S&P affirmed the 'CCC+' issue-level rating on the notes.  
Standard & Poor's also removed the ratings from CreditWatch, where
they had been placed with negative implications on May 22, 2008,
following continued weak results in the third quarter ended
March 31, 2008.  The outlook is negative.
     
The New York City-based apparel company had about $128 million of
debt outstanding on March 31, 2008.
     
"The downgrade follows Rafaella's third-quarter results that
showed continued deterioration in credit protection measures
because of a significant contraction in its EBITDA base," said
Standard & Poor's credit analyst Susan Ding.  Other factors
causing the downgrade include the difficult retail environment,
the company's concentration in the department store channel, and
high leverage.
     
The ratings on Rafaella reflect the company's participation in a
highly competitive and very promotional retail environment, its
relatively small size in the apparel industry (which is dominated
by much larger players such as VF Corp., Liz Claiborne Inc., and
Jones Apparel Group Inc.), its narrow product focus, its customer
concentration, and the significant debt incurred from the June
2005 acquisition of the company by Cerberus Capital Management
L.P.


RAINBOW NATIONAL: Moody's Affirms B2 Senior Sub. Notes Rating
-------------------------------------------------------------
Moody's Investors Service affirmed all existing ratings for
Rainbow National Services LLC (Rainbow), a wholly-owned indirect
subsidiary of Cablevision Systems Corporation (Cablevision), other
than Rainbow's senior secured bank debt ratings, which were
lowered to Ba2 from Ba1 following placement of an incremental $280
million add-on to its revolving credit facility which was
completed yesterday. The rating outlook is stable.

The lower bank debt ratings reflect a continuation of the trend
towards more bank debt financing in Rainbow's capital structure,
and hence less junior capital to support multiple up-notching of
this debt class, notwithstanding its senior-most ranking and the
benefits afforded by its security interest in the assets of the
company. This trend began with a partial redemption of senior
subordinated notes last year and continues with the just completed
financing which brings the secured bank debt up to nearly 60% of
the company's debt capitalization. Notably, this has the effect of
raising Moody's loss given default (LGD) estimates and,
consequently, the expected loss for senior secured creditors, even
though the perceived risk of default and overall expected loss for
the company remains substantially unchanged, as reflected in the
Ba3 probability of default and corporate family ratings, both of
which were affirmed.

The company's very good SGL-1 liquidity profile improves only
modestly proforma for the transaction, with net proceeds expected
to be used to finance the cash component of the recently announced
acquisition of Sundance Channel LLC by Rainbow's parent company,
Rainbow Media Holdings LLC (RMH), the assets of which will notably
remain outside of the Rainbow restricted group of assets.

These reflects Moody's rating actions and current ratings for
Rainbow National Services LLC:

   Corporate Family Rating -- Affirmed at Ba3

   Probability of Default Rating -- Affirmed at Ba3

   Speculative Grade Liquidity Rating -- SGL1

   Senior Secured Bank Credit Facilities -- Downgraded to
   Ba2 (LGD2, 28%) from Ba1 (LGD2, 23%)

   Senior Unsecured Notes -- Affirmed at B1 (LGD5, 74%;
   previously LGD4, 68%)

   Senior Subordinated Notes -- Affirmed at B2 (LGD6, 91%;
   previously LGD5, 89%)

   Rating Outlook -- Stable

Rainbow's ratings continue to broadly reflect the risks associated
with the company's moderately high financial leverage,
shareholder-oriented fiscal strategies, and concentrated asset and
customer bases, the cash flows from which remain exposed to
greater media fragmentation in future periods. These risks remain
balanced, however, by the high perceived underlying value of the
company's primary assets and the free cash flow they generate
(albeit which is used to fund other investments), along with a
strong liquidity profile.

For additional information, please refer to the Rainbow National
Services credit opinion as posted to Moodys.com within one day of
this press release. A separate credit opinion for Rainbow's
ultimate parent company -- Cablevision Systems, the ratings for
which were affirmed on May 28, 2008 in conjunction with the $500
million bond financing by its main debt-issuing subsidiary CSC
Holdings, Inc. -- is also available on Moodys.com.

Headquartered in Jericho, New York, Rainbow National Services LLC
supplies television programming to cable and direct broadcast
satellite service providers throughout the United States. The
company predominantly operates three entertainment programming
networks -- AMC, WE tv and IFC (again, Sundance Channel will be
held outside of Rainbow, under RMH).


RENAISSANCE HOME: Fitch Chips Ratings to 'BB' on Two Cert. Classes
------------------------------------------------------------------
Fitch Ratings has taken rating actions on the Renaissance Home
Equity Loan Trust mortgage pass-through certificates listed below.  
Unless stated otherwise, any bonds that were previously placed on
Rating Watch Negative are removed.

Renaissance HELT 2002-1
  -- Class M-1 affirmed at 'AA';
  -- Class M-2 downgraded to 'BB-' from 'BBB-';
  -- Class B revised to 'C/DR5' from CC/DR4'.

Deal Summary
  -- Originators: Delta Funding
  -- 60+ day Delinquency: 39.94%
  -- Realized Losses to date (% of Original Balance): 4.64%

Renaissance HELT 2002-2
  -- Class A affirmed at 'AAA';
  -- Class M-1 downgraded to 'A' from 'AA';
  -- Class M-2 downgraded to 'BB' from 'BBB';
  -- Class B revised to 'C/DR5' from CC/DR3'.

Deal Summary
  -- Originators: Delta Funding
  -- 60+ day Delinquency: 34.25%
  -- Realized Losses to date (% of Original Balance): 3.08%

Renaissance HELT 2002-3
  -- Class A affirmed at 'AAA';
  -- Class M-1 downgraded to 'AA-' from 'AA';
  -- Class M-2 downgraded to 'BB' from 'BBB';
  -- Class B revised to 'C/DR5' from C/DR4'.

Deal Summary
  -- Originators: Delta Funding
  -- 60+ day Delinquency: 30.11%
  -- Realized Losses to date (% of Original Balance): 3.03%

Renaissance HELT 2002-4
  -- Class A affirmed at 'AAA';
  -- Class M-1 downgraded to 'AA-' from 'AA';
  -- Class M-2 downgraded to 'BBB' from 'A-';
  -- Class B downgraded to 'B+' from 'BB'.

Deal Summary
  -- Originators: Delta Funding
  -- 60+ day Delinquency: 22.15%
  -- Realized Losses to date (% of Original Balance): 1.24%


RESIDENTIAL CAPITAL: S&P Puts 'SD' Rating After Completed Offer
---------------------------------------------------------------
Standard & Poor's Ratings Services lowered selected ratings on
Residential Capital LLC, including lowering the long-term
counterparty credit rating to 'SD' from 'CC'.  The ratings were
removed from CreditWatch Negative, where they were placed April
24, 2008.
      
"This action follows the company's completion of an exchange offer
for unsecured bonds that we interpret as a distressed debt
exchange.  There are no ratings or outlook changes on GMAC LLC,
Residential Capital LLC's parent," said Standard & Poor's credit
analyst John K. Bartko, C.P.A.
     
The downgrade reflects the fact that the exchange offer paid less
than face value to certain Residential Capital LLC bondholders and
left untendered bonds in a subordinated position to the new notes.  
Notably, the exchange does not constitute a legal default.  The
exchange extends debt maturities, providing needed relief, but the
action illustrates the gravity of the company's financial
position.  S&P will reassess its rating on Residential Capital LLC
in the near term, factoring into our assessment among other
considerations the new liability structure, cash flow projections,
and the company's overall business strategy.
     
Residential Capital LLC's newly issued securities consist of two
classes: 8.5% second-lien notes due May 15, 2010, which it will
exchange for certain debt maturing in 2008 and 2009; and 9.625%
junior lien notes due in 2015 exchanged for debt maturing between
2010 and 2015.
     
The exchange offer is intended to advance Residential Capital
LLC's overall restructuring plan, which includes a focus on the
production of prime, conforming products; the reduction of credit
risk through the sale or elimination of noncore businesses and
products; increased production at GMAC Bank in an effort to
leverage the bank's lower-cost funding; structural cost
reductions; and deleveraging the balance sheet.


RITE AID: Commences $710MM Debt Offerings and Consent Solicitation
------------------------------------------------------------------
Rite Aid Corporation commenced a cash tender offer for any and all
of its 8.125% Senior Secured Notes due 2010 CUSIP No. 767754BF0,
9.25% Senior Notes due 2013 CUSIP No. 767754BH6, and 7.5% Senior
Secured Notes due 2015 CUSIP No. 767754BK9.  The three series of
debt securities have combined outstanding principal amounts of
$710 million.

Under the terms of the tender offer, the total consideration for
each $1,000 principal amount of 2010 notes tendered and accepted
in the tender offer will be $1,024.06, plus accrued and unpaid
interest to, but excluding the settlement date, the total
consideration for each $1,000 principal amount of 2013 notes
tendered and accepted in the tender offer will be $1,000, plus
accrued and unpaid interest to, but excluding the settlement date,
and the total consideration for each $1,000 principal amount of
2015 notes tendered and accepted in the tender offer will be
determined in the manner described in the Offer to Purchase and
Consent Solicitation Statement dated June 4, 2008, by reference to
the fixed spread of 75 basis points over the yield to maturity of
the reference treasury security, 3.625% U.S. Treasury Note due
Jan. 15, 2010, as calculated by the dealer manager at 2:00 p.m.,
New York City time, on June 18, 2008, unless such date is
extended, plus the consent payment.

The total consideration for each series includes a consent payment
that is equal to $20.00 per $1,000 principal amount of the notes.
Holders who validly tender their notes after the applicable
Consent Payment Deadline will not receive the consent payment.

As part of the tender offer, Rite Aid is soliciting consents from
the holders of the notes for certain proposed amendments that
would eliminate or modify substantially all restrictive covenants,
certain events of default and other provisions contained in the
indentures governing the notes, release the subsidiary guarantees
and release all the collateral securing the obligations of the
subsidiary guarantors under the 2010 notes and 2015 notes.

Adoption of the proposed amendments with respect to a series of
notes requires the consent of the holders of at least a majority
of the outstanding aggregate principal amount of notes of such
series.  Holders who tender their notes will be deemed to consent
to the proposed amendments and holders may not deliver consents to
the proposed amendments without tendering their notes in the
tender offer.

The tender offer and consent solicitation were made pursuant to
the Offer to Purchase and Consent Solicitation Statement, and a
related Consent and Letter of Transmittal, which more fully set
forth the terms and conditions of the tender offer and consent
solicitation.

The deadline to receive the consent payment for the consent
solicitation is 5:00 p.m., New York City time, on June 17, 2008,
and the tender offer will expire at midnight, New York City time,
on July 1, 2008.  The tender offer and these dates may be extended
by Rite Aid in its sole discretion, with respect to one or more
series of notes.

Holders may withdraw their tendered notes and related consents at
any time prior to the applicable Consent Payment Deadline.

Rite Aid intends to fund the payment of the total consideration
with the proceeds from new debt financing.  The tender offer and
consent solicitation are conditioned upon the receipt of debt
financing sufficient to pay the total consideration and related
fees and expenses.  

The tender offer and consent solicitation are also conditioned
upon, among other things, a minimum tender of outstanding notes of
each series, a documentation condition and certain other
conditions.  

Rite Aid does not anticipate making payment on the notes on any
date other than the final settlement date.  If Rite Aid elects to
purchase notes tendered at or before the Consent Payment Deadline
on an early settlement date, Rite Aid expects such date will be
promptly following the satisfaction of the Financing Condition,
provided that Rite Aid reserves the right, in its sole discretion,
to extend or forego the early settlement date, if any, for each
series of notes.

Rite Aid has retained Citi to serve as dealer manager for the
tender offer and consent solicitation.  Global Bondholder Services
Corporation will serve as the depositary and information agent for
the tender offer and consent solicitation.

Requests for documents relating to the tender offer and consent
solicitation may be directed to Global Bondholder Services
Corporation by telephone at 1-866-488-1500 (toll free) or 1-212-
430-3774.

Questions regarding the tender offer and consent solicitation may
be directed to Citi, Liability Management Group, at 1-800-558-3745
(toll free) or 1-212-723-6106 (collect).

                   About Rite Aid Corporation

Headquartered in Camp Hill, Pennsylvania, Rite Aid Corporation
(NYSE: RAD) -- http://www.riteaid.com/-- is a drugstore chain       
with more than 5,000 stores in 31 states and the District of
Columbia.

                           *     *     *

As reported in the Troubled Company Reporter on May 28, 2008,
Fitch Ratings has assigned 'CCC/RR6' ratings to Rite Aid
Corporation's new 8.5% $150 million senior unsecured convertible
notes due 2015.  The proceeds of the new offering will be used to
redeem its $150 million of its 6.125% senior unsecured notes due
2008 at a price equal to approximately 102% of the principal
outstanding amount.


SALEM COMMUNICATIONS: Moody's Cuts CFR to B1; Outlook Negative
--------------------------------------------------------------  
Moody's Investors Service downgraded Salem Communications Holding
Corporation's ("Salem") Corporate Family Rating to B1 from Ba3 and
downgraded its 7-3/4% Senior Subordinated Notes due 2010 to B3
from B2. The outlook is negative.

The downgrade reflects continued weakness experienced by Salem in
national advertising revenue and in local advertising revenue in
certain markets. In addition, declines in some of Salem's key
advertising categories have also contributed to a weaker operating
performance. As a result, Moody's expects that debt to EBITDA
leverage will remain above prior expectations over the rating
horizon. While Moody's expects the company to generate modest free
cash flow and be able to replace the revolving credit facility
that matures in March 2009, the rating and negative outlook
nevertheless reflect the tight covenant compliance margin and
risks related to refinancing the existing revolving credit
facility, in order to maintain adequate external liquidity.

Moody's subscribers can find further details in the Salem Credit
Opinion published on Moodys.com

Moody's has taken these ratings actions:

* Salem Communications Holding Corporation

   Corporate family rating -- downgraded to B1 from Ba3

   Probability-of-default rating -- downgraded to B1 from Ba3

   7-3/4% Senior Subordinated Notes due 2010 -- downgraded to B3
   from B2 (LGD 5, 88%)

   Rating Outlook -- Negative

Salem's rating reflects its high debt to EBITDA leverage of 6.3x
at 3/31/2008, narrow bank covenant compliance margin and lower
EBITDA margins vs. peers mainly due to spending associated with
the company's "development stage" stations and the news talk
stations, as well as spending and investments related to the
company's non-broadcast businesses. In addition, the rating
incorporates risks related to cross media-competition faced by
radio for audience and advertising spending and Moody's belief
that radio is a mature industry with modest growth prospects.

The ratings are supported by the value of the company's
geographically diversified station portfolio, presence in the top
25 markets, leading position in the religious format niche and
lack of significant competition within the format, improving free
cash flow generation and the relative stability of the revenue
stream from its block advertising sales.

Salem Communications Holding Corporation, headquartered in
Camarillo, California, is a religious programming radio
broadcaster, which, upon the close of all announced transactions,
will own and operate 96 radio stations, including 59 stations in
23 of the nation's top 25 markets. The company also owns a variety
of internet properties providing Christian content and online
streaming, and is also a publisher of Christian-themed magazines.
The company posted revenues of approximately $232 million for the
fiscal year ended December 31, 2007.


SANDRA GRAVES: Voluntary Chapter 11 Case Summary
------------------------------------------------
Debtor: Sandra C Graves, Debtor
           dba All the Little Things Count
        201 FM 2917 Rd
        Alvin, TX 77511

Bankruptcy Case No.: 08-80258

Type of Business: The Debtor is in the health care business.

Chapter 11 Petition Date: June 3, 2008

Court: Southern District of Texas (Galveston)

Judge: Letitia Z. Clark

Debtor's Counsel: Richard L Fuqua, II, Esq.
                  Fuqua & Keim
                  2777 Allen Parkway, Ste 480
                  Houston, TX 77019
                  Tel: 713-960-0277
                  e-mail: fuqua@fuquakeim.com

Total Assets: $2,773,279

Total Debts:  $2,330,537

A copy the Debtor's petition and schedules of assets and
liabilities is available for free at:

          http://bankrupt.com/misc/txsb08-80258.pdf


SCIENTIFIC GAMES: Moody's Rates $200MM Sr. Note Offering Ba3
------------------------------------------------------------
Moody's Investors Service assigned a Ba3 rating to Scientific
Games Corporation's (SGC) proposed $200 million senior subordinate
note offering. Moody's also upgraded the rating of SGC's proposed
$550 million term loan (originally $600 million) and $250 million
revolving credit agreement (collectively, the Facilties) to Baa3
from Ba1. The upgrade reflects the higher proportion of
subordinated debt relative to senior debt in SGC's capital
structure as a result of the subordinate note issuance. Moody's
also affirmed the company's Ba2 corporate family (CFR) and
probability of default rating, and Ba3 rating on the existing $200
million senior subordinated notes. Moody's will withdraw the
ratings of the company's existing term loans and revolver when the
proposed transaction closes. The rating outlook is stable.

The net proceeds of the senior subordinate note offering and
drawings under the company proposed new $800 million bank
facilities will be used to repay existing debt and supplement cash
balances. It is a condition to the closing of the subordinated
debt offering that the new credit facility closes and repays the
existing credit facilities. The obligor under the proposed senior
subordinate notes and proposed Facilities will be Scientific Games
International, Inc., a wholly owned subsidiary of SGC.

The Facilities will be secured by all assets and guaranteed by all
domestic subsidiaries, as well as by SGC. The senior subordinated
notes will be guaranteed on a subordinated basis by all domestic
subsidiaries, as well as by SGC.

The rating affirmation reflects SGC's leading position in the
faster growing instant ticket segment of the lottery industry,
good contract retention rates, and solid growth prospects
internationally. SGC has just finished absorbing several
acquisitions and consolidating instant ticket plant capacity.
Improvement in consolidated operating margins is expected as a
result of an improved cost structure along with the new instant
ticket contract in China, solid instant ticket growth in the UK
and Italy, and a growing installed base of server-based gaming
machines and sports betting terminals.

Credit concerns include above average leverage for the rating
category, a decline in consolidated operating margins over the
past few years, spending to support growth initiatives --
particularly in China, and a potential slow down in domestic
lottery demand due to weak macro-economic conditions.

Rating assigned:

Scientific Games International, Inc.

  * $200 million senior subordinated notes at Ba3 (LGD 5, 78%)

Ratings upgraded

  * $550 million term loan to Baa3 (LGD2, 22%) from Ba1
    (LGD 2, 29%)

  * $250 million revolving credit facility to Baa3 (LGD2, 22%)
    from Ba1 (LGD 2, 29%)

Scientific Games Corporation

Ratings to be withdrawn:

  * $300 million revolver at Ba1 (LGD2, 25%)
  * $100 million term loan C at Ba1 (LGD 2, 25%)
  * $150 million term loan D at Ba1 (LGD 2, 25%)
  * $200 million term loan E at Ba1 (LGD 2, 25%)

Scientific Games Corporation is a provider of services, systems,
and products to both the instant ticket lottery industry and pari-
mutuel wagering industry. The company operates in three business
segments: Printed Products, Lottery Systems, and Diversified
Gaming. Revenues for the year ended December 31, 2007 were
approximately $1.0 billion.


SEQUA CORP: Moody's Puts (P)Caa2 Ratings on New Unsecured Notes
---------------------------------------------------------------
Moody's Investors Service affirmed Sequa Corporation's Corporate
Family and Probability of Default Ratings of B3 as well the
company's senior secured bank debt rating of B1. At the same time,
the rating agency assigned (P)Caa2 ratings to approximately $711.4
million of new unsecured notes ($500 million with interest payable
in cash and approximately $211.4 million with interest payable on
a PIK basis). Sequa will offer to exchange the new notes for the
approximately $711.4 million currently outstanding under its
existing bridge loan facility that partially funded the December
2007 acquisition of Sequa by The Carlyle Group. In turn, the new
notes will be offered to investors in a 144A transaction without
registration rights. The outlook is stable.

The debt component of the roughly $2.9 billion acquisition price
of Sequa included: $1.2 billion of secured bank term loans and
unsecured bridge loans totaling $700 million with final maturities
in 2015. The mix of bridge loan facilities included a $500 million
loan with interest payable on a cash basis and a $200 million loan
on a PIK basis that would transition to interest payable on a cash
basis in December 2009. The $200 million principal amount of the
PIK loans will have increased under its terms to approximately
$211.4 million as of June 3, 2008. Terms of the bridge loans
included caps on the maximum applicable interest of 11.75% on the
cash-pay loan and 13.5% on the PIK loan.

The refinancing will not involve any material increase in total
debt nor alter the proportion represented by secured and unsecured
obligations. However, both cash interest expense and total
interest burden under the new unsecured notes will be marginally
higher than levels assumed in December. In addition, the PIK notes
will transition to interest payable on a cash basis some six
months earlier. This comes atop an aggressively leveraged capital
structure and previous expectations that pro forma EBIT/ interest
coverage could be less than 1 time. Nonetheless, the B3 rating
incorporated these weak metrics and provides some scope for modest
deterioration. Consequently, the B3 Corporate Family Rating
assigned in December has been affirmed.

On an incremental basis, the refinancing will stress the
importance of Sequa generating sizable cash flow from its
operations net of capital expenditures and to do so at an earlier
point in time given the marginally higher cash interest expense
arising from the refinancing and the earlier date at which PIK
instruments will convert to interest payable on a cash basis. The
company's predecessor historically experienced seasonality in its
cash flows, with the first quarter typically weak, and did not
have a track record of free cash flow generation in its last few
years as a public company despite lower leverage, in part due to
significant reinvestment rates.

Sequa's performance since its acquisition indicates year-over-year
growth in revenues and operating income (adjusted for amortization
of purchase accounting intangibles), but debt/EBITDA levels remain
greater than 7 times (using Moody's standard adjustments) and
EBITA/coverage of interest has been anemic. Similarly, several
markets addressed by the company's business units in the domestic
market are experiencing challenging developments, particularly in
the North American airline and automotive industries.
Notwithstanding these challenges, Sequa's diversification across
multiple sectors, its participation in several regional economies,
and the long-term business arrangements within several of its
subsidiaries should provide adequate support for the B3 rating.

The stable outlook continues to reflect Moody's expectations that
the company's core business units should experience revenue growth
over time while maintaining or modestly improving margins. The
outlook is further supported by an adequate liquidity profile with
minimal near term amortization requirements and availability of
roughly $85 million under its revolving credit facility at March
31, 2008. Sequa should begin to generate modest amounts of
positive free cash flow once its investment phase peaks, which, if
applied to debt reduction along with any prospective asset sale
proceeds, could lead to lower leverage.

The (P)Caa2 rating on the two issues of unsecured notes reflects
their effective subordination to substantial amounts of secured
bank debt as well as trade payables deemed to have administrative
priority status. The ratings flow from the application of a
probability of default of B3 and a Loss Given Default Assessment
of LGD-5, indicating a substantial loss in downside scenarios. The
(P) indicator designates some uncertainty associated with the
final amounts to be issued as the selling noteholders are under no
requirement to accept the new notes in an exchange for their
bridge loans or to do so at any minimum amount. The (P) is
expected to be removed once final amounts have been confirmed.

Ratings affirmed with refreshed Loss Given Default assessments:

  * Corporate Family, B3

  * Probability of Default, B3

  * $150 million secured revolving credit, B1, LGD-3, 31%

  * $1.19 billion secured term loan, B1, LGD-3, 31%

Ratings assigned:

  * $500 million unsecured notes due 2015, (P)Caa2, LGD-5, 84%

  * $211.4 million unsecured notes on a PIK basis due 2015,
    (P)Caa2, LGD-5, 84%

The last rating action was on November 8, 2007 at which time
initial ratings were assigned to Blue Jay Acquisition Merger
Corporation that has since merged with Sequa Corporation. The
current bridge loan facilities are not rated.

Sequa Corporation, headquartered in New York, NY, is a diversified
industrial company. Its operations manufacture and repair jet
engine components, perform metal coating, produce automotive
airbag inflators, cigarette lighters, power outlets and sensors,
and manufacture chemical detergent additives, auxiliary printing
press equipment, and emissions control systems. Annual revenues
are approximately $2.3 billion


SEQUA CORP: S&P Holds 'B-' Rating on $500MM Senior Unsecured Notes
------------------------------------------------------------------
Standard & Poor's Ratings Services affirmed its 'B-' issue-level
rating on Sequa Corp.'s $500 million 11.75% senior unsecured notes
due 2015 and $211.4 million 13.50% senior paid-in-kind notes due
2015.  The recovery rating on both tranches is '5', indicating
S&P's expectation of modest (10%-30%) recovery in the event of a
payment default.  The notes, which were initially proposed and
rated in November 2007, will be issued by Sequa to the selling
noteholders for the extinguishment of a corresponding amount of
loans under the company's bridge loan facility.
     
"The 'B' long-term corporate credit rating on Sequa reflects a
highly leveraged financial profile, very weak credit protection
measures, modest profitability, and risks associated with the
cyclical and competitive airline industry, the company's primary
customer base," said Standard & Poor's credit analyst Roman
Szuper.  Those factors outweigh Sequa's major positions in niche
markets.  The New York, N.Y.-based company is a diversified
manufacturer, with operations organized into several business
segments, including aerospace, automotive, metal coating,
specialty chemicals, and industrial machinery.
  
Ratings List

Sequa Corp.
  Corporate Credit Rating                           B/Stable/--
  $500 Mil. 11.75% Sr. Unsec. Nts Due 2015          B-
    Recovery Rating                                 5
  $211.4 Mil. 13.50% Sr. PIK Nts Due 2015           B-
    Recovery Rating                                 5


SHERMAG INC: Obtains Extension of CCAA Stay Order Until Sept. 8
---------------------------------------------------------------
Shermag Inc. obtained an order from the Quebec Superior Court to
extend to September 8, 2008 the period of the Court-ordered stay
of proceedings against it and its subsidiaries, Jaymar Furniture
Corp., Scierie Montauban Inc., Megabois (1989) Inc., Shermag
Corporation and Jaymar Sale Corporation under the Companies'
Creditors Arrangement Act. The purpose of the stay of proceedings
is to provide the Company with an opportunity to develop a plan of
arrangement to propose to its creditors.

In its order, the Court also relieved Shermag of any obligation to
prepare any quarterly financial statements, for any quarter ending
after May 5, 2008, until the conclusion of the CCAA proceedings.

The Company has been operating under the protection of the CCAA
since May 5, 2008.

The Troubled Company Reporter reported on May 9, 2008, that the
CCAA filing for Shermag is a necessary step in completing its
restructuring efforts.  The CCAA protection will stay creditors,
suppliers and others from enforcing any rights against Shermag and
will afford Shermag the opportunity to restructure its affairs.  
Shermag's Board of Directors authorized the company to take this
action as the best alternative for the long-term interests of the
company, its employees, customers, creditors and other
stakeholders.  Shermag will continue operations in the ordinary
course during the CCAA proceedings under the leadership of its
existing management team.  The company has made arrangements with
Wachovia, its current lender, to ensure continued financing.

Based in Sherbrooke, Quebec, Shermag Inc. (TSX: SMG) --
http://www.shermag.com/-- designs, produces, markets and   
distributes high-quality residential furniture.  The Company
employs more than 753 people and is a vertically integrated
manufacturer and importer with its own cutting rights, sawmill,
veneer facility, manufacturing operations and global sourcing
division.


SOLAR COSMETIC: U.S. Trustee Forms Seven-Member Creditors Panel
---------------------------------------------------------------
Donald F. Walton, the U.S. Trustee for Region 21, appointed seven
parties to serve on an Official Committee of Unsecured Creditor
for Solar Cosmetic Labs Inc. and Solar Packaging Corp.

The creditors committee members are:

   1) Yilin Zhang, Sales Manager
      Fujian Shuangfei Daily Chemicals Co. Ltd.
      Logwen Industrial Development Area
      No. 8, Zhangzhon City
      Fujian, China
      Tel: 86-596-2172337
      Fax: 86-596-2172633

   2) Ariel Calmanovici, CFO
      Frutarom USA
      9500 Railroad Avenue
      North Bergen, New Jersey
      Tel: (201) 861-9500
      Fax: (201) 861-6211

   3) Ian Lawrence
      DSM Nutritional Products, Inc.
      45 Waterview Boulevard
      Parsippany, New Jersey 07054
      Tel: (305) 937-7779
      Fax: (305) 937-7410

   4) George Liu, President
      Logistics Worldwide USA, Inc.
      18601 S. Susana Road, Suite #A
      Rancho Dominquez, California 90221
      Tel: (310) 808-0860
      Fax: (310) 808-0862

   5) Gordon E. Miller, General Credit Manager
      ISP Technologies
      1361 Alps Road
      Wayne, New Jersey 07470
      Tel: (973) 628-3700
      Fax: (973) 628-4079

   6) Mike Weber, Credit Manager
      Dan Dunwiddie, VP-Corp Operations
      Kranson Industries, Inc. dba Tricorbraun
      10330 Old Olive Street
      St. Louis, Missouri 63141
      Tel: (314) 983-2055
      Fax: (303) 995-5155

   7) Edward McClelland
      Timbar Packaging & Display
      148 N. Penn Street
      Hanover, Pennsylvania 17331
      Tel: (717) 630-3721
      Fax: (717) 632-4902

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 Solar Cosmetic

Headquartered in Miami Gardens, Florida, Solar Cosmetic
Labs Inc. -- http://www.solarcosmetics.com/-- and --    
http://www.bodyandearth.com/-- manufacture, markets and sells    
perfumes, cosmetics, and other toilet preparations.  The company
and Solar Packaging Corp. filed chapter 11 petition on May 6, 2008
(Bankr. S.D. Fla. Case Nos. 08-15793 and 08-15796).  Judge Laurel
Isicoff presides the case.  Peter E. Shapiro, Esq., at Shutts &
Bowen LLP, represents the Debtors in their restructuring efforts.

As reported in the Troubled Company Reporter on June 2, 2008
the Debtors' summary of schedules filed with the Court showed
total assets of $13,925,425 and total debts of $50,928,780.


SOLAR COSMETIC: Committee Wants Cases Converted to Chapter 7
------------------------------------------------------------
The Official Committee of Unsecured Creditors asks the United
States Bankruptcy Court for the Southern District of Floria to
convert the Chapter 11 cases of Solar Cosmetic Labs Inc. and  
Solar Packaging Corp. to liquidation proceedings under Chapter 7
or, to the possible extent, dismiss their cases.

The Committee says that certain provisions of the debtor-in-
possession financing entered with Key Bank National Association
are defective.  The Committee points out that the agreement allows
the bank to get security interest and superiority claims in the
proceeds of the Debtors' bankruptcy avoidance actions that
violates the provisions under Chapter 11 of the Bankruptcy Code.

In addition, the agreement has unreasonable termination provisions
with 2-3 days to cure certain defaults, which enable the bank to
terminate the agreement without court order, the Committee adds.

The Committee alleges that the agreement will allow the bank to
take control in the liquidation of its collateral, which will
result in the reduction of the Debtor's prepetition debt with
the bank.  The Debtors have sold most of their assets and is
identifying a qualified purchaser for their remaining assets at
present.

Furthermore, the bank has refused to agree to a carve-out under
the agreement for the benefit of the Debtors' unsecured creditors,
the Committee relates.  The absence of funding will limit the
Committee's ability to investigate any potential causes of action
against the bank.

Due to minimal income arising from prepetition sale of their
assets which indicates continuing loss of the Debtors' estate, the
possibility of an effective reorganization is impossible, the
Committee asserts.

As reported in the Troubled Company Reporter on May 14, 2008, the
Court authorized the Debtors to obtain up to $2.1 million of the
bank's $2.4 million financing including the use of its cash
collateral on an interim basis.

The DIP facility incurs a base rate plus 3%, with default rate of  
plus 3%.  The facility is set to expire by Nov. 30, 2008, or upon
liquidation of the Debtors' remaining assets.

Prior to their bankruptcy filing, the Debtors have defaulted on a
$26.2 million debt and a $38.8 million senior subordinated note to
the bank.  However, portion of the bank's debt has been paid
following the liquidation of some of the Debtors' assets.  EGM
Holdings Group LLC purchase a plant owned by the Debtors for $5.8
million.

                      About Solar Cosmetic

Headquartered in Miami Gardens, Florida, Solar Cosmetic
Labs Inc. -- http://www.solarcosmetics.com/-- and --    
http://www.bodyandearth.com/-- manufacture, markets and sells    
perfumes, cosmetics, and other toilet preparations.  The company
and Solar Packaging Corp. filed chapter 11 petition on May 6, 2008
(Bankr. S.D. Fla. Case Nos. 08-15793 and 08-15796).  Judge Laurel
Isicoff presides the case.  Peter E. Shapiro, Esq., at Shutts &
Bowen LLP, represents the Debtors in their restructuring efforts.

As reported in the Troubled Company Reporter on June 2, 2008
the Debtors' summary of schedules filed with the Court showed
total assets of $13,925,425 and total debts of $50,928,780.


SOLAR COSMETIC: Committee Taps Jeffrey Bast as Counsel
------------------------------------------------------
The Official Committee of Unsecured Creditors for Solar Cosmetic
Labs Inc. and Solar Packaging Corp. asks the United States
Bankruptcy Court for the Southern District of Florida for
permission to employ Jeffrey Bast, P.A., as its counsel.

The firm is expected to:

   1) advise the Committee with respect to its powers and duties
      as the Committee in this case;

   2) advise the Committee with respect to issues including use of
      cash collateral, sales of assets, approval of any disclosure       
      statement which may be filed, confirmation of any Chapter 11
      plan which may be filed, alternatives to the reorganization
      process, avoidance actions, and other pertinent matters;

   3) prepare motions, pleadings, orders, applications, adversary
      proceedings, and other legal documents necessary in the
      Debtors' cases;

   4) protect the interest of the Committee in all matters pending
      before the Court; and

   5) represent the Committee in negotiations with the Debtors and
      creditors in the Chapter 11 cases;

Jeffrey Bast, Esq., an attorney of the firm, charges $395 per hour
for this engagement.  The firm's other professionals and their
compensation rates are:

      Professionals         Designations    Hourly Rates
      -------------         ------------    ------------
      Brett Amorn, Esq.        Counsel          $300
      Brian Silverio, Esq.     Counsel          $250

Mr. Bast assures the Court the firm is a "disinterested person" as  
that term is defined under Section 101(14) of the Bankruptcy Code.

                      About Solar Cosmetic

Headquartered in Miami Gardens, Florida, Solar Cosmetic
Labs Inc. -- http://www.solarcosmetics.com/-- and --    
http://www.bodyandearth.com/-- manufacture, markets and sells    
perfumes, cosmetics, and other toilet preparations.  The company
and Solar Packaging Corp. filed chapter 11 petition on May 6, 2008
(Bankr. S.D. Fla. Case Nos. 08-15793 and 08-15796).  Judge Laurel
Isicoff presides the case.  Peter E. Shapiro, Esq., at Shutts &
Bowen LLP, represents the Debtors in their restructuring efforts.

As reported in the Troubled Company Reporter on June 2, 2008
the Debtors' summary of schedules filed with the Court showed
total assets of $13,925,425 and total debts of $50,928,780.


STALLION OILFIELD: Stirling Acquisition Won't Affect S&P's Ratings
------------------------------------------------------------------
Standard & Poor's Ratings Services said that its ratings and
outlook on Stallion Oilfield Services Ltd. (B/Negative/--) would
not change based on the company's announcement that it is
acquiring The Stirling Group, headquartered in Malta.  S&P have
taken no ratings action because the acquisition has not weakened
liquidity or resulted in increased leverage.


STATE STREET: Moody's Affirms B+ Financial Strength Rating
----------------------------------------------------------
Moody's Investors Service affirmed the Aa3 senior debt rating of
State Street Corporation (STT). Moody's also affirmed the ratings
of STT's lead bank, State Street Bank and Trust Company (B+ for
financial strength and Aa1 for deposits.) The rating announcement
follows STT's $2.5 billion common stock offering. The rating
outlook remains negative on both the holding company and the bank.

In affirming the ratings, Moody's stated that the increased
capital places STT in a better position to manage the potential
consolidation of its asset back commercial paper conduits and
associated writedowns, if any. The rating agency noted that STT's
financial performance remains strong, led by robust fee generation
and improved net interest income, as well as limited loan risk.

Moody's assigned a negative rating outlook in January 2008, when
the company announced an after-tax charge of $279 million, partly
to build a litigation reserve that significantly reduced reported
net income in the fourth quarter 2007. In assigning the negative
outlook, Moody's noted the discrepancies between STT's clients'
investment directives and the firm's investment strategies that
imply a lapse in controls and a risk governance failure at State
Street Global Advisors, STT's asset management arm. The negative
outlook also reflects the reputational vulnerability of the asset
management franchise and any potential spillover into STT's other
businesses.

Moody's continues to monitor STT's risk oversight and potential
reputational damage to the franchise. If there is evidence of risk
management weakness, any lapses in internal controls are not fully
addressed and remedied, or reputational fallout proves to be
significant, Moody's could take a further negative rating action.
If, on the other hand, the franchise proves to be resilient, all
other credit aspects being equal, Moody's could return the outlook
to stable.

State Street Corporation, headquartered in Boston, MA, reported
total assets of $154 billion as of March 31, 2008.


STEAMERS RAW BAR: Case Summary & 6 Largest Unsecured Creditors
--------------------------------------------------------------
Debtor: Paul Dennis Wilson, Jr.
        dba Steamers Raw Bar, Inc.
        461 West Hwy. 98
        Apalachicola, FL 32320

Bankruptcy Case No.: 08-40261

Chapter 11 Petition Date:  April 29, 2008

Court: Northern District of Florida (Tallahassee)

Debtors' Counsel: Thomas B. Woodward, Esq.
                  P.O. Box 10058
                  Tallahassee, FL 32302
                  Tel: (850) 222-4818
                  Fax: (850) 561-3456
                  E-mail: woodylaw@embarqmail.com

Total assets:  $1,451,651.00

Total debts:   $878,849.34

A copy of the Debtor's petition, list of its 6 largest unsecured
creditors, and schedules of assets and liabilities is available at
no charge at:

     http://bankrupt.com/misc/flnb08-40261.pdf


STRATEGY DEV'T: Case Summary & 20 Largest Unsecured Creditors
-------------------------------------------------------------
Debtor: Strategy Development, L.L.C.
        P.O. Box 499
        Mandeville, Louisiana 70470

Bankruptcy Case No.: 08-11250

Chapter 11 Petition Date: June 3, 2008

Court: Eastern District of Louisiana (New Orleans)

Judge: Jerry A. Brown

Debtors' Counsel: Robin R. DeLeo, Esq.
                   (jennifer@northshoreattorney.com)
                  800 Ramon Street
                  Mandeville, Louisiana 70448
                  Tel: (985) 727-1664
                  Fax: (985) 727-4388

Total Assets: $1,554,456

Total Debts:  $1,131,947

A copy of the Debtor's petition is available for free at:

           http://bankrupt.com/misc/laeb08-11250.pdf


SUNSHINE VW: Files Voluntary Chapter 11 Case Summary
----------------------------------------------------
Debtor: Sunshine VW, LLC
        4717 Georgia Avenue N.W.
        P.O. Box 55373
        Washington, District of Columbia 20040

Bankruptcy Case No.: 08-00331

Chapter 11 Petition Date: May 12, 2008

Court: District of Columbia (Washington, D.C.)

Debtors' Counsel: Jeffrey C. Tuckfelt, Esq.
                   (tuckfelt@earthlink.net)
                  Obergh and Berlin
                  1424 K. Streeet Northwest, Suite 300  
                  Washington, DC 20005-2410
                  Tel: (202) 347-3520

Estimated Assets: $1 million to $10 million

Estimated Debts:  Less than $50,000

The Debtor did not file a list of 20 Largest Unsecured Creditors.

                       
SUPERIOR OFFSHORE: Section 341(a) Meeting Scheduled for July 1
--------------------------------------------------------------
Charles F. McVay, the U.S. Trustee for Region 7, will convene a
meeting of creditors of Superior Offshore International Inc. on
July 1, 2008, at 10:00 a.m., at 515 Rusk Avenue, Suite 3401 in
Houston, Texas.

This is the first meeting of creditors required under Section
341(a) of the Bankruptcy Code in all bankruptcy cases.

All creditors are invited, but not required, to attend.  This
Meeting of Creditors offers the one opportunity in a bankruptcy
proceeding for creditors to question a responsible office of the
Debtor under oath about the company's financial affairs and
operations that would be of interest to the general body of
creditors.

                     About Superior Offshore

Headquartered in Houston Texas, Superior Offshore (Nasdaq: DEEP)
-- http://www.superioroffshore.com/-- provides subsea   
construction and commercial diving services to the offshore
oil and gas industry.  The company's construction services include
installation, upgrading and decommissioning of pipelines and
production infrastructure.  The company operates a fleet of seven
service vessels and provides remotely operated vehicles (ROVs) and
saturation diving systems for deepwater and harsh environment
operations.

Superior Offshore International, Inc., filed for bankruptcy
protection on April 24, 2008 (Bankr. S.D. Tex. Case No. 08-32590).  
The Company continues to operate its business as "debtor in
possession" under the jurisdiction of the Court in accordance with
the applicable provisions of the Bankruptcy Code and orders of the
Court.

David Ronald Jones, Esq., and Joshua Walton Wolfshohl, Esq.,
at Porter & Hedges LLP, represent the Debtor.  The company's
consolidated balance sheets showed total assets of $300,532,000
and total debts of $141,139,000 for the quarterly period ended
Sept. 30, 2007.  The company incurred $1,038,000 in net loss in
nine months ended Sept. 30, 2007, compared with $37,000,000 in net
income the previous year.


SUPERIOR OFFSHORE: U.S. Trustee Forms Five-Member Committee
-----------------------------------------------------------
Charles F. McVay, the U.S. Trustee for Region 7, appointed five
creditors to serve on an Official Committee of Unsecured Creditors
of the Chapter 11 proceeding of Superior Offshore International
Inc.

The creditors committee members are:

   1) Cross Logistics, Inc./CrossMar, Inc.
      Attn: Terry P. Braud, Jr.
      1950 S. Van Avenue
      P.O. Box 3800
      Houma, Louisiana 70361
      Tel: (985) 868-3906
      Fax: (985) 868-3909
      
   2) Mako Technologies, L.L.C.
      Attn: Jacob Marcell
      P.O. Box 3186
      Morgan City, Louisiana 70381
      Tel: (985) 385-7817
      Fax: (985) 385-0056

   3) Amertrin Marine & Logistics Services, Ltd.
      Attn: William K. Terrill
      16801 Greenspoint Park Drive, Suite 225
      Houston, Texas 77060
      Tel: (281) 885-3578
      Fax: (281) 872-4444
      
   4) L & L Oil & Gas Services, L.L.C.
      Attn: Michael Hartsell
      3421 N. Causeway Boulevard, Suite 504
      Metairie, Louisiana 70002
      Tel: (504) 832-8652

   5) Buxo Trinidad & Tobago, Ltd.
      Attn: Stuart Young
      108 Duke Street
      Port of Spain, Trinidad
      Tel: (868) 623-4040
      Fax: (868) 625-1670

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 Superior Offshore

Headquartered in Houston Texas, Superior Offshore (Nasdaq: DEEP)
-- http://www.superioroffshore.com/-- provides subsea   
construction and commercial diving services to the offshore
oil and gas industry.  The company's construction services include
installation, upgrading and decommissioning of pipelines and
production infrastructure.  The company operates a fleet of seven
service vessels and provides remotely operated vehicles (ROVs) and
saturation diving systems for deepwater and harsh environment
operations.

Superior Offshore International, Inc., filed for bankruptcy
protection on April 24, 2008 (Bankr. S.D. Tex. Case No. 08-32590).  
The Company continues to operate its business as "debtor in
possession" under the jurisdiction of the Court in accordance with
the applicable provisions of the Bankruptcy Code and orders of the
Court.

David Ronald Jones, Esq., and Joshua Walton Wolfshohl, Esq.,
at Porter & Hedges LLP, represent the Debtor.  The company's
consolidated balance sheets showed total assets of $300,532,000
and total debts of $141,139,000 for the quarterly period ended
Sept. 30, 2007.  The company incurred $1,038,000 in net loss in
nine months ended Sept. 30, 2007, compared with $37,000,000 in net
income the previous year.


TERRA INDUSTRIES: Improved Earnings Prompt S&P to Lift Ratings
--------------------------------------------------------------
Standard & Poor's Ratings Services raised its corporate credit
rating on Terra Industries Inc. to 'BB' from 'BB-'.  At the same
time, S&P raised its issue rating on Terra Capital Inc.'s
$330 million senior unsecured notes due 2017 to 'BB' from 'BB-'.   
Terra Capital is a wholly owned subsidiary of Terra Industries.  
The outlook is stable.
     
At March 31, 2008, the company had about $560 million in debt
including convertible preferred shares exchangeable into
subordinated debentures, the capitalized value of operating
leases, and tax-adjusted postretirement benefits obligations.
     
"The upgrade reflects a meaningful improvement in Terra's earnings
and financial profile following several quarters of unprecedented
strength in nitrogen fertilizer demand and pricing, and our
expectation that the ongoing favorable market conditions are
sustainable over the next couple of years," said Standard & Poor's
credit analyst Paul Kurias.
     
Terra's earnings growth has resulted in strong credit metrics.  
The key ratio of funds from operations to total adjusted debt was
at slightly over 130% as of March 31, 2008.  The upgrade also
reflects our expectation that the company will maintain
satisfactory liquidity levels and a prudent financial policy--with
respect to potential shareholder rewards, acquisitions, or
investment decisions--which support the rating, and factors in the
cyclicality associated with the nitrogen fertilizer business.  In
particular, S&P expect funds from operations to total adjusted
debt to remain above 25% over a cycle.
     
The rating on Sioux City, Iowa-based Terra Industries reflects a
weak business position, including a narrow scope of operations in
nitrogen fertilizer and a cyclical, highly competitive commodity
business with margins susceptible to variable demand trends and
input cost volatility.  Partially offsetting these risks are
Terra's position as a leading player in the U.S. nitrogen market,
favorable long-term demand prospects, and the company's strong
cash flow protection measures and liquidity, which are backed by a
prudent financial policy.


TRIBUNE CO: To Trim Down 500 Pages in Newspapers, Cut Workforce
---------------------------------------------------------------
Tribune Co. chairman Sam Zell plans to reduce the number of news
pages in its newspapers and the journalists that produce them,
various reports say.  

The move could cut about 500 pages, or 12.5%, from the weekly page
total of Tribune's newspapers, excluding classifieds and other ad
sections, reports add.

According to reports, the changes indicate that Mr. Zell, who took
charge of the company after he led an $8.2 billion buyout in
December, is following through quickly on pledges to overhaul the
newspaper-and-television concern.  

The Wall Street Journal says that he has pledged to change
attitudes and business operations at Tribune, but his task has
been made more difficult by declines in newspaper advertising and
by the company's $13 billion debt load stemming from the buyout.

As part of Mr. Zell's corporate overhaul, Tribune plans in coming
weeks to begin trimming the page counts at its newspapers to
ensure that the amount of space devoted to news is roughly in line
with the amount of space devoted to advertising, WSJ relates.

Reports, citing Randy Michaels, Tribune's chief operating officer,
state that the changes will result in substantial savings.  The
reductions in page count are part of a broader redesign of Tribune
papers that involve the introduction of more photographs,
statistics and news nuggets along with altered layouts, WSJ says.  
The redesign will start with the Orlando Sentinel this month and
later extend to the Los Angeles Times and other Tribune titles
like the Chicago Tribune and Baltimore Sun, WSJ indicates.

WSJ adds that Tribune has also collected data on the productivity
of every journalist at its papers and plans to use that data to
right-size the staff size to correspond with smaller newspapers.  
WSJ says that the company didn't detail the planned size or timing
of staff reductions but said decisions would be left up to
publishers of the individual papers.

Tribune, like other newspaper publishers, has seen a sharp
deterioration in ad revenues in recent months, WSJ indicates.
The print advertising has improved somewhat since March, when an
early Easter holiday led to fewer ads, WSJ says citing Mr. Zell.  
WSJ Overall in the first quarter, publishing ad revenue fell 15%.

                   About Tribune Company

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

                          *     *     *

As reported in the Troubled Company Reporter on March 20, 2008,
Standard & Poor's Ratings Services lowered its ratings on the
class A and B units from the $79.795 million Structured Asset
Trust Unit Repackaging Tribune Co. Debenture Backed Series 2006-1
to 'CCC' from 'CCC+' and removed them from CreditWatch with
negative implications.


TRICADIA CDO: S&P Puts Default Ratings After Trustee's Notice
-------------------------------------------------------------
Standard & Poor's Ratings Services lowered its ratings to 'D' on
16 classes of notes from two collateralized debt obligation
transactions, Tricadia CDO 2007-8 Ltd. and NEO CDO 2007-1 Ltd.,
following the liquidation of the portfolios' collateral.  Two of
the lowered ratings were on CreditWatch negative before the
downgrades.
     
Both transactions are CDOs of CDOs backed predominantly by
tranches from CDO of asset-backed securities transactions with
exposure to residential mortgage-backed securities.  Both CDOs had
previously experienced events of default, and subsequently the
controlling noteholders voted to accelerate the maturity of the
notes and liquidate the collateral assets.
     
The rating actions follow notice from the trustee that the
liquidation of the portfolio assets is complete and that the
available proceeds have been distributed to the noteholders.  The
trustee has indicated that the proceeds of the liquidations for
both transactions were insufficient to pay down the balances of
any of the notes in full.


                           Rating Actions

                                        Rating
                                        ------
    Transaction            Class      To     From
    -----------            -----      --     ----
Tricadia CDO 2007-8 Ltd.   A-1VF      D      CCC-/Watch Neg
Tricadia CDO 2007-8 Ltd.   A-X        D      CC
Tricadia CDO 2007-8 Ltd.   A-2        D      CC
Tricadia CDO 2007-8 Ltd.   B          D      CC
Tricadia CDO 2007-8 Ltd.   C          D      CC
Tricadia CDO 2007-8 Ltd.   D          D      CC
Tricadia CDO 2007-8 Ltd.   E          D      CC
Tricadia CDO 2007-8 Ltd.   F          D      CC
NEO CDO 2007-1 Ltd.        A-1        D      CCC-/Watch Neg
NEO CDO 2007-1 Ltd.        A-2        D      CC
NEO CDO 2007-1 Ltd.        A-3        D      CC
NEO CDO 2007-1 Ltd.        B          D      CC
NEO CDO 2007-1 Ltd.        C          D      CC
NEO CDO 2007-1 Ltd.        D          D      CC
NEO CDO 2007-1 Ltd.        E          D      CC
NEO CDO 2007-1 Ltd.        F          D      CC


TRONOX WORLDWIDE: Moody's Cuts Corp. Family Rating to B3
--------------------------------------------------------
Moody's Investors Service downgraded Tronox Worldwide LLC's
(Tronox) corporate family rating (CFR) to B3 from B2. In addition,
Moody's downgraded the company's secured revolver and term loan to
Ba3 from Ba2 and its unsecured notes to Caa1 from B3. The
speculative grade liquidity rating was affirmed at SGL-4. The
rating outlook is negative.

The one notch downgrade for the CFR (following a two notch
downgrade in March of 2008) is due to the company's inability to
effect meaningful price increases to offset rapidly increasing
input costs that have caused operating margins to drop from 6% in
2006 to just below breakeven in 2007 and were still negative in
the first quarter of 2008. This margin contraction is reflective
of poor conditions in the housing industry, which is an important
end market for the coatings and PVC that use Tronox's TiO2. Tronox
initiated cost control programs, starting in mid 2006, that have
reduced cash costs by some $70 million cumulatively and $56
million in 2007 alone, without which Tronox's operating
performance would have been significantly worse. On May 22, 2008
the company announced a number of factors that will negatively
affect the second quarter including deficits attributable to
operating problems that if combined with increased borrowings may
pressure the company's ability to meet the adjusted covenants in
their amended bank agreement. In addition to operating problems,
management announced an acceleration of their cost cutting
initiatives as well as a cessation of dividend payments.

Tronox's and the industry's pricing power has been adversely
affected by a downturn in the North American housing industry,
which Moody's feels may continue into late 2009. Major end uses
for Tronox's Ti02 include architectural paints and coatings and
PVC. Moody's believes that the ratings are constrained by the
prospect of continuing weak operating performance, weakness in the
housing market, covenant compliance and liquidity related
pressures, and large legacy environmental liabilities (even as
reserves on existing active sites have been reduced). Moody's
believes that these legacy environmental liabilities are unique in
size and complexity, and constitute a key negative factor when
determining the rating.

Tronox's efforts to raise prices throughout 2007 did not begin to
see results until late in 2007 and several further pricing
announcements have been made in early 2008. However it appears
that higher costs, (including energy, raw materials, and freight)
and competitive conditions have continued to be difficult,
especially in Europe. The price increases, if only partially
adopted, are not likely to offset margin deterioration due to cost
increases. Furthermore, Moody's believes that current weak
economic conditions in the North American housing markets will
limit the success of price increases for coatings and PVC products
in 2008 such that operating margins will remain below breakeven.

Uncertainty over weakening economic conditions in North America
was a driver for management's successful effort in February 2008
to reach agreement with its banks to amend its financial
covenant's on its credit facility. This follows an earlier
covenant amendment in March of 2007. Leverage ratios were relaxed
by over a full turn in 2008 to a peak of 4.9 times before reducing
in 2009. Interest coverage was dropped by over 1.5 turns to 1.0
times in the first two quarters of 2008 and to 0.80 times in the
last two quarters before increasing in 2009. Tronox was in
compliance with its new covenants in the first quarter of 2008.
The proceeds from proposed asset sales were not factored into the
setting of these covenant levels such that if successful the
compliance headroom could improve. Still, the company's asset sale
efforts in 2007 were delayed by both current capital market
conditions related to commercial land sale financings and the
inability to reach a satisfactory price on a sale of a foreign
plant.

The negative outlook reflects Tronox's weakening business profile
as evidenced by the company's margin deterioration. While Moody's
believes that Tronox is fundamentally a stronger credit over the
medium term than the B3 CFR would imply. Moody's recognizes that
Tronox has a sizeable market share, relatively modest debt
maturities, positive geographic diversity, and stable customer
relationships. Moody's is focusing more on the company's near-term
performance due to the expectation of weaker credit metrics in
2008 and Moody's anticipation that the company may need to
renegotiate the recently amended financial covenants in its
revolver and term loan to maintain access to these facilities over
the next 12 months. It is this prospect of further covenant
pressure along with reduced cash flows and lower cash balances
that has resulted in the speculative grade liquidity rating of
SGL-4 reflecting the prospect of weakening liquidity. A turnaround
in the company's projected financial performance could result in a
positive rating action. Conversely, weaker conditions in the
company's main end-markets, coatings and PVC, resulting in weak
product pricing and cash flows, could lead to lower ratings.

Downgrades:

  Issuer: Tronox Worldwide LLC

  * Corporate Family Rating, Downgraded to B3 from B2

  * Probability of Default Rating, Downgraded to B3 from B2

  * Senior Secured Bank Credit Facility, Downgraded to Ba3 from
    Ba2, 19 - LGD2

  * Senior Unsecured Regular Bond/Debenture, Downgraded to Caa1
    from B3, 73 - LGD5

  * Speculative Grade Liquidity Rating, Affirmed at SGL-4

Outlook Action:

  * Outlook, Changed To Negative From Stable

Tronox Worldwide LLC is the third-largest global producer of TiO2,
a white pigment used in a wide range of products for its ability
to impart whiteness, brightness and opacity. TiO2 is used in a
variety of products including paints and coatings, plastics, paper
and consumer products. The company commands a 12% global market
share in TiO2, reporting sales of $1.4 billion for the twelve
months ended March 31, 2008.


UAL CORPORATION: Cuts Fleet and Staff to Survive Economic Slump
---------------------------------------------------------------
United Airlines Inc., UAL Corporation's unit, disclosed
significant fleet, capacity and personnel changes to enable the
company to build a stronger, more competitive business and
withstand record oil prices and a softening economy.

United will remove a total of 100 aircraft from its mainline
fleet, including the 30 previously announced Boeing 737s, and
reduce its mainline domestic capacity in the fourth quarter 2008
by 14% year over year.  The company expects to retire all of its
94 B737s, provided it can work out terms with certain lessors, and
six Boeing 747s.  Over the 2008 and 2009 period, cumulative
mainline domestic capacity will be reduced between 17% and 18% and
cumulative consolidated capacity between 9% and 10%.

"[W]e are taking additional, aggressive steps that demonstrate our
commitment to size our business appropriately to reflect the
current market reality, leverage capacity discipline to pass
commodity costs on to customers, develop new revenue streams and
continue to reduce non-fuel costs and capital expenditures," said
Glenn Tilton, United's chairman, president and CEO.  

"This environment demands that we and the industry act decisively
and responsibly.  At United, we continue to do the right work to
reduce costs and increase revenue to respond to record fuel costs
and the challenging economic environment."

With fuel at current prices, it creates more than a $3 billion
challenge to overcome.  United said it believes that these actions
will offset that challenge by 2009, assuming the industry as a
whole takes similar actions.

When complete, the fleet reduction is expected to retire United's
oldest and least fuel-efficient jets, and will lower the company's
average fleet age to 11.8 years.  The majority of schedule changes
related to the elimination of 30 B737s previously announced are
currently reflected in reservation systems.  Further changes
related to the retirement of an additional 50 aircraft by year end
will be reflected in these systems in the near future.

Schedule changes will be principally accommodated through modest
reductions of underperforming markets and through frequency
reductions while retaining a commitment to all five U.S. hubs.

                        Fleet Reduction  

About 80 planes are expected to be out of the system by the end of
2008, with the other 20 coming out by the end of 2009. The fleet
reduction also includes six Boeing 747s.

As part of these changes, United is eliminating its Ted product,
reconfiguring that fleet's 56 A320s to include United First class
seats.  The reconfiguration of the Ted aircraft will begin in
spring 2009 and be completed by year-end 2009.

"The decision to dramatically reduce our capacity profile,
particularly in the domestic marketplace, while over time
eliminating a fleet type, is a significant step leading to a more
effective and efficient operating fleet for United in the years
ahead, while improving our customer experience and reliability,"
said John Tague, executive vice president and chief operating
officer.

                         Staff Reduction

As United reduces the size of its operation, it is further
reducing staff.  United expects to reduce the number of salaried
and management employees and contractors by 1,400-1,600, including
the previously announced 500 employee reduction by year-end, and
the company will determine the number of front-line employee
furloughs as it finalizes the schedule over the next month.

                        Officer Promotion

The company named Joe Kolshak senior vice president of operations,
overseeing United Services, Flight Operations and Operations
Control.

Mr. Kolshak previously served as Delta's executive vice president
of operations, responsible for Delta's maintenance, flight
operations, ground operations, operations control, safety and
security as well as the Delta Express operations.  He will be
based in San Francisco, and will report to Mr. Tague.

"[Mr. Kolshak] brings a depth and breadth of experience to United
that will enable us to accelerate our work to improve customer
service and operational performance moving us toward a goal to be
the industry leader in the U.S.," Mr. Tague said.  "We are
committed to building a leadership team with the capability and
accountability to drive performance improvements across our
company and realize the full potential of United Airlines."

Alexandria Marren was also promoted to senior vice president -
Onboard Service, and will also oversee flight attendant
scheduling.  She previously served as vice president - Onboard
Service.  Ms. Marren will report to Mr. Tague.

William Yantiss, vice president -- Corporate Safety, Security and
Environment, also will report to Mr. Tague.

Cindy Szadokierski, who has been responsible for Operations
Control, will now be vice president of United Express and Airport
Operations Planning, reporting to Scott Dolan, senior vice
president -- Airport Operations, Cargo and United Express.  As a
result of the reorganization, the company also announced that Bill
Norman, senior vice president -- United Services, and Sean
Donohue, senior vice president -- Flight Operations and Onboard
Service, will be leaving United.

"We thank Bill and Sean for their many contributions during their
long and successful careers with United, and wish them well in
their future endeavors," Mr. Tague said.

                       About UAL Corporation

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, Issue No. 158; Bankruptcy
Creditors' Service Inc., http://bankrupt.com/newsstand/or   
215/945-7000)

                        *     *     *

As reported in the Troubled Company Reporter on May 3, 2007,
Fitch Ratings has affirmed the Issuer Default Ratings of UAL
Corp. and its principal operating subsidiary United Airlines
Inc. at B-.


WORLDSPACE INC: Holders Forbear $18MM Loan Payment Until June 30
----------------------------------------------------------------
The four holders of WORLDSPACE(R) Satellite Radio's secured notes
dated as of June 1, 2007, have agreed to defer until June 30,
2008, the company's obligation to pay $17.7 million in principal
amount of the Bridge Loan Notes plus accrued but unpaid interest
due on the Bridge Loan Notes and Convertible Notes, and to forbear
exercising their rights and remedies with respect to the payment
default.

On June 3, 2008, WORLDSPACE(R) Satellite entered into letter
agreements with each of the note holders, and Amended and Restated
Convertible Notes dated as of June 1, 2007.

"I am pleased we have been able to reach agreement with our
existing note holders to defer the payment, Noah A. Samara,
chairman and CEO, WORLDSPACE Inc., said.  "This agreement gives
the company time to bring in the funds already committed to it and
to raise new funding."

"While the agreement accelerates payment of the remaining
outstanding amount of the Bridge Loan Notes and the Convertible
Notes, such accelerated pay down of the Notes this year will
remove capital structure restrictions, which would have otherwise
remained until June 2010," Mr. Samara added.  "Our cash needs are
challenging, but we are working very hard to address this in order
to take full advantage of the milestones we have achieved in
Europe, including licenses from Germany and Switzerland, and
successful on-the-ground testing of our service in Italy, where we
expect to launch Europe's first satellite radio service as early
as 2009."

In addition, the company and the note holders have agreed to these
modifications to the existing debt arrangements between them:

   * The remaining unpaid principal amount of the Bridge Loan
     Notes including all accrued and unpaid interest thereon will
     be paid in full on or before July 31, 2008.
    
   * The Convertible Notes will be convertible into shares of
     Class A Common Stock at a conversion price of $2.00 per
     share, reduced from $4.25 per share.  In addition, all of the
     outstanding Convertible Notes will be repaid in full on
     Sept. 30, 2008, or such earlier date as elected by the
     company, and the company will also pay a prepayment fee equal
     to 1.5% of such outstanding principal and interest on such
     Convertible Notes.  The company's obligations with respect to
     the Convertible Notes will be secured by a first priority
     security interest in the assets of the company.  The company
     has agreed not to grant a lien on its assets with respect to
     any indebtedness other than the Bridge Loan Notes and the
     Convertible Notes while such Bridge Loan Notes and
     Convertible Notes are outstanding.
    
   * Each of the note holders will receive a pro rata portion of
     an aggregate of 5 million in new company warrants exercisable
     for shares of the Class A Common Stock of the company.  The
     New Warrants will be exercisable at $1.55 per share, and will
     be exercisable for a 5 year period from the date of issuance.

The company has agreed to enter into definitive documentation with
respect to the foregoing terms on or before June 15, 2008.

About WORLDSPACE® Satellite Radio

Based in the Washington, DC metropolitan area, WORLDSPACE, Inc.
(NASDAQ: WRSP) is the world's only global media and entertainment
company positioned to offer a satellite radio experience to
consumers in more than 130 countries with five billion people,
driving 300 million cars. WORLDSPACE delivers the latest tunes,
trends and information from around the world and around the
corner. WORLDSPACE subscribers benefit from a unique combination
of local programming, original WORLDSPACE content and content from
leading brands around the globe including the BBC, CNN
International, Virgin Radio UK, NDTV and RFI.

WORLDSPACE's satellites cover two-thirds of the earth's population
with six beams. Each beam is capable of delivering up to 80
channels of high quality digital audio and multimedia programming
directly to WORLDSPACE Satellite Radios anytime and virtually
anywhere in its coverage areas. WORLDSPACE is a pioneer of
satellite-based digital radio services (DARS) and was instrumental
in the development of the technology infrastructure used by XM
Satellite Radio.

                        About WorldSpace

Based in the Washington, DC metropolitan area, WorldSpace Inc.
(Nasdaq: WRSP) -- http://www.worldspace.com/-- is a media    
and entertainment company that offers a satellite radio to
consumers in more than 130 countries with five billion people,
driving 300 million cars.  It operates WORLDSPACE Satellite Radio,
which delivers the latest tunes, trends and information from
around the world and around the corner.  WORLDSPACE offers a
combination of local programming, original WORLDSPACE content and
content from brands around the globe including the BBC, CNN
International, Virgin Radio UK, NDTV and RFI.  WORLDSPACE's
satellites cover two-thirds of the earth's population with six
beams.  WorldSpace has offices in Australia and France.

As reported in the Troubled company Reporter on May 19, 2008, the
company balance sheet at March 31, 2008, showed total assets of
$323.7 million and total liabilities of $2.1 billion and minority
interest of $608,000, resulting in total shareholders' deficit    
of $1.7 billion.

                        Going Concern Doubt

As reported in the The Troubled company Reporter on May 1, 2008,
Grant Thornton LLP in McLean, Virginia, raised substantial doubt
about WorldSpace 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 net loss, negative working capital, and
shareholders' deficit.  Grant Thornton also cited that the
company's management does not believe its cash on hand and cash
available is sufficient to meet its operating needs during the
coming year.


XERIUM TECHNOLOGIES: Amends Terms of $660MM Credit Facility
-----------------------------------------------------------
Xerium Technologies, Inc. secured a fifth amendment to its
existing senior credit facility. Citigroup Global Markets Inc.
acted as the sole lead arranger, with more than 60 lenders
participating. The term loan portions of the amended and restated
$660 million Credit Facility mature on May 19, 2012, and the
revolving credit portion matures on November 19, 2011. The amended
facility requires the Company to comply with revised operating
controls and financial covenants. The revised covenants place the
Company in compliance with the financial requirements of the
credit facility for the period ending and as of March 31, 2008.

"We appreciate the active engagement and support of our many
lenders, who concur with the recently announced new strategic
direction of the company. Through this amendment process, the
lenders recognized that Xerium's historical covenant compliance
issues were the consequence of applying the Company's very strong
cash flows to purposes other than debt repayment," said Stephen
Light, President and Chief Executive Officer.

"Substantially reducing our debt through the term of the new
agreement is at the very heart of our strategic plan to improve
the company, enhance operational efficiencies, and maximize value
on behalf of our numerous stakeholders. We believe this new
agreement provides us access to the funds we need to execute our
plan. I'm very pleased we've reached this agreement with our
lenders in a timely manner and thank them, CitiBank and the Alix
Partners for their perseverance throughout this complex process."

Key provisions of the Amended and Restated Credit Facility
include:

      -- Libor based grid rate pricing at an initial rate of Libor
         + 5.50% with three identified step downs contingent upon
         future improvements in credit ratings: Libor + 4.25%,
         Libor + 3.75%, and Libor + 2.75%;

      -- Covenants governing the use of proceeds from asset and
         equity sales;

      -- Prohibition against dividend payments for the term of the
         agreement;

      -- Limits on capital expenditures, restructuring,
         acquisitions and certain other investments;

      -- Freezing foreign exchange rates for the purpose of
         calculating debt for certain covenant purposes;

      -- Increased debt pay down requirements; and

      -- Increased performance reporting requirements.

The Credit and Guaranty Agreement was entered among the Company,
certain subsidiaries of the Company, Citigroup Global Markets Inc.
and CIBC World Markets plc, as Joint Lead Arrangers and Lead
Bookrunners, Citigroup Global Markets Inc. and CIBC World Markets
plc, as Syndication Agents, Citicorp North America, Inc., as
Administrative Agent, Citicorp North America, Inc., as Collateral
Agent.

In the company's form 8-k filing, the company stated that for the
period ended March 31, 2008, it did not satisfy its leverage ratio
covenant as previously in effect, and its independent registered
public accounting firm included an explanatory paragraph in its
report on 2007 consolidated financial statements related to the
uncertainty in the company's ability to continue as a going
concern. Absent a waiver, these matters would constitute defaults
under the company's credit facility.

The Restated Credit Agreement revises the company's financial
covenants. For all periods going forward, the Company will be
subject to these significant financial covenants:

Minimum Interest Coverage Ratio:

The ratio of adjusted four quarter adjusted EBITDA to interest
expense.

                    Fiscal Quarter(s) Ending              Ratio
                    ------------------------              -----
                    March 31, 2008                      3.00:1.00
                    June 30, 2008                       2.75:1.00
                    September 30, 2008                  2.50:1.00
                    December 31, 2008                   2.25:1.00
                    March 31, 2009 to March 31, 2010    2.00:1.00
                    June 30, 2010 to March 31, 2011     2.25:1.00
                    June 30, 2011 to December 31, 2011  2.50:1.00
                    March 31, 2012 2.75:1.00


Minimum Fixed Charge Coverage Ratio:

The ratio of the adjusted four quarter adjusted EBITDA to fixed
charges (interest expense, principal payments, and taxes)

                    Fiscal Quarter(s) Ending              Ratio
                    ------------------------              -----
                    March 31, 2008                      1.85:1.00
                    June 30, 2008                       1.70:1.00
                    September 30, 2008                  1.60:1.00
                    December 31, 2008                   1.40:1.00
                    March 31, 2009                      1.40:1.00
                    June 30, 2009 to March 31, 2012     1.20:1.00

Maximum Leverage Ratio:

The ratio of outstanding debt to four quarter adjusted EBITDA

                    Fiscal Quarter(s) Ending              Ratio
                    ------------------------              -----                   
                    March 31, 2008 4.50:1.00
                    June 30, 2008 5.75:1.00
                    September 30, 2008 5.75:1.00
                    December 31, 2008 5.50:1.00
                    March 31, 2009 5.50:1.00
                    June 30, 2009 5.25:1.00
                    September 30, 20095.25:1.00
                    December 31, 2009 5.00:1.00
                    March 31, 2010 4.75:1.00
                    June 30, 2010 4.75:1.00
                    September 30, 2010 4.50:1.00
                    December 31, 2010 4.25:1.00
                    March 31, 2011 4.25:1.00
                    June 30, 2011 to March 31, 2012 4.00:1.00

At March 31, 2008 the company would have been in compliance with
these revised covenants.

The company has agreed to pay the lenders additional fees and an
initial higher interest rate on the loans. Under the Restated
Credit Agreement, the interest rate on the Term B and revolving
loans is LIBOR plus 5.50% through the remainder of 2008. Beginning
in 2009, the company can substantially reduce the interest rate if
we obtain favorable credit ratings. A rating of B3 by Moody's and
B- by S&P would reduce the margin to 4.25%, a rating of B1 by
Moody's or B+ by S&P would reduce the margin to 3.75%, and a
rating of Ba3 or higher by Moody's and BB- or higher by S&P would
reduce the margin to 2.75%. The aggregate fees paid to the lenders
and Citigroup Global Markets Inc. in connection with the approval
of the Restated Credit Agreement were approximately $6.8 million.

The company is also subject to additional operating covenants. The
Restated Credit Agreement requires that its  maximum consolidated
capital expenditures be limited to $50 million in 2008 and
$35 million thereafter. Additionally, for each fiscal year, the
company must deliver to the administrative agent a detailed budget
and business plan, including projected financial statements, for
the Company and its subsidiaries. Under the Restated Credit
Agreement, 75% of excess cash flow must be used to pay down debt.
Similarly, 75% of the cash proceeds from an equity sale must be
used to pay down debt. Use of proceeds from asset sales has been
further restricted, such that only $3 million of net proceeds from
asset sales may be reinvested instead of being used to pay down
debt. Finally, the company is prohibited from issuing any
dividends for the life of the Restated Credit Agreement.

                  About Xerium Technologies

Based on Youngsville, North Carolina, Xerium Technologies Inc.
(NYSE: XRM) -- http://www.xerium.com/-- manufactures and supplies   
consumable products used primarily in the production of paper:
clothing and roll covers.  With 35 manufacturing facilities in 15
countries, including Austria, Brazil and Japan, Xerium
Technologies has approximately 3,900 employees.


YANKEE CANDLE: Moody's Holds Caa1 Rating on $200MM Sr. Sub. Notes
-----------------------------------------------------------------
Moody's Investors Service revised its rating outlook for Yankee
Candle Company (YCC) to negative from stable. All ratings of the
company were affirmed.

"The rating outlook revision to negative from stable reflects
concerns that negative trends in the company's retail and
wholesale businesses, evident in the first quarter of 2008, may
persist through the year as consumer spending remains challenged"
said Moody's Senior Analyst Scott Tuhy. He added, "In addition,
the company's wholesale business may also be adversely impacted by
the recent bankruptcy filing of Linens 'N Things, a significant
wholesale customer for YCC. While the company's potential
unsecured credit exposure to Linens 'N Things is not considered
material, significant door closures as part of Linen's
reorganization could create additional headwinds for the company's
wholesale business." The ability of the company to absorb
challenges of these types is limited following the significant
increase in financial leverage following the company's February,
2007 leveraged buyout by an investor group led by Madison Dearborn
Partners.

These ratings were affirmed (and LGD point estimates adjusted):

  * Corporate family rating at B2

  * Probability of default rating at B2

  * Speculative grade liquidity rating at SGL-2

These ratings were affirmed, and LGD assessments amended:

  * $125 million secured revolving credit facility at Ba3
    (LGD 2, 26% from LGD 2, 28%)

  * $600 million senior secured term loan due 2014 at Ba3
    (LGD 2, 26% from LGD 2, 28%)

  * $325 million senior notes due 2015 at B3 (LGD 5, 75% from
    LGD 5, 77%)

  * $200 million senior subordinated notes due 2017 at Caa1
    (LGD 6, 93%)

Headquartered in South Deerfield, Massachusetts, Yankee Candle
Company is the largest designer, manufacturer, and distributor of
premium scented candles in the U.S. Revenues for the company's
fiscal year 2007 were approximately $737 million.


* S&P Lowers Ratings on 41 Trances from 10 Cash Flow & Hybrid CDOs
------------------------------------------------------------------
Standard & Poor's Ratings Services lowered its ratings on 41
tranches from 10 U.S. cash flow and hybrid collateralized debt
obligation transactions.  S&P removed 11 of the lowered ratings
from CreditWatch with negative implications.  At the same time,
S&P affirmed two ratings from one transaction and removed them
from CreditWatch with negative implications.  S&P also placed the
rating on one tranche on CreditWatch with negative implications.  

In addition, the ratings on 26 of the downgraded tranches remain
on CreditWatch with negative implications, indicating a
significant likelihood of further downgrades.  The CreditWatch
placements primarily affect transactions for which a significant
portion of the collateral assets currently have ratings on
CreditWatch negative or which have significant exposure to assets
rated in the 'CCC' category.
     
The downgraded tranches have a total issuance amount of
$5.234 billion.  Four of the 10 affected transactions are high-
grade structured finance CDOs of asset-backed securities, which
are CDOs collateralized at origination primarily by 'AAA' through
'A' rated tranches of residential mortgage-backed securities and
other SF securities.  The other six transactions are mezzanine SF
CDOs of ABS, which are collateralized in large part by mezzanine
tranches of RMBS and other SF securities.
     
The CDO downgrades reflect a number of factors, including credit
deterioration and recent negative rating actions on U.S. subprime
RMBS securities and on U.S. Alternative-A RMBS securities, as well
as changes Standard & Poor's has made to the recovery rate and
correlation assumptions it uses to assess U.S. RMBS held within
CDO collateral pools.
     
To date, including the CDO tranches listed below and including
actions on both publicly and confidentially rated tranches, S&P  
have lowered its ratings on 3,402 tranches from 804 U.S. cash
flow, hybrid, and synthetic CDO transactions as a result of stress
in the U.S. residential mortgage market and credit deterioration
of U.S. RMBS.  In addition, 524 ratings from 157 transactions are
currently on CreditWatch negative for the same reasons.  In all,
S&P have downgraded $357.225 billion of CDO issuance.  
Additionally, S&P's ratings on $10.426 billion in securities have
not been lowered but are currently on CreditWatch negative,
indicating a high likelihood of downgrades.     

                           Rating Actions

                                           Rating
                                           ------
   Transaction                Class  To              From
   -----------                -----  --              ----
Charles Fort CDO I Ltd.       A-1  CCC+/Watch Neg    BB
Charles Fort CDO I Ltd.       A-2    CC              CCC+
Charles Fort CDO I Ltd.       B      CC              CCC-
ESP Funding I Ltd.            A-2  BBB+/Watch Neg  AA-/Watch Neg
ESP Funding I Ltd.            A-3  B+/Watch Neg    BB-/Watch Neg     
ESP Funding I Ltd.            A-4  CCC/Watch Neg   CCC+/Watch Neg   
ESP Funding I Ltd.            B      CC            CCC-/Watch Neg  
FAB US 2006-1 PLC             A2   B-/Watch Neg       B+   
FAB US 2006-1 PLC             A3   CCC-/Watch Neg     CCC+
FAB US 2006-1 PLC             S    BBB-/Watch Neg     AAA  
Ipswich Street CDO Ltd.       A-1  B/Watch Neg     BB-/Watch Neg
Ipswich Street CDO Ltd.       A-2  CCC+/Watch Neg  B-/Watch Neg  
Ipswich Street CDO Ltd.       B    CCC-/Watch Neg  CCC+/Watch Neg
Ipswich Street CDO Ltd.       C      CC            CCC/Watch Neg  
Ipswich Street CDO Ltd.       D      CC            CCC-/Watch Neg
Ipswich Street CDO Ltd.       E      CC            CCC-/Watch Neg   
Kleros Real Estate CDO IV Ltd A-2  BBB+/Watch Neg  A+/Watch Neg   
Kleros Real Estate CDO IV Ltd A-3  CCC+/Watch Neg  B-/Watch Neg  
Kleros Real Estate CDO IV Ltd A-4  CCC/Watch Neg   CCC+/Watch Neg
Kleros Real Estate CDO IV Ltd B    CCC-/Watch Neg  CCC+/Watch Neg
Kleros Real Estate CDO IV Ltd C      CC            CCC-/Watch Neg  
Kleros Real Estate CDO IV Ltd D      CC            CCC-/Watch Neg  
Laguna Seca Funding I Ltd.    A-1  CCC+/Watch Neg  BB/Watch Neg       
Laguna Seca Funding I Ltd.    A-2  CCC-/Watch Neg  CCC+/Watch Neg    
Laguna Seca Funding I Ltd.    A-3    CC            CCC-/Watch Neg   
Nautilus RMBS CDO II Ltd.     B      BBB-            BBB
Nautilus RMBS CDO II Ltd.     C      BB-             BB
Newbury Street CDO Ltd.       A2   CCC+/Watch Neg  B/Watch Neg      
Newbury Street CDO Ltd.       A3   CCC/Watch Neg   CCC+/Watch Neg
Pine Mountain CDO III Ltd.    A-1  A-/Watch Neg    AA+/Watch Neg  
Pine Mountain CDO III Ltd.    A-2  BBB+/Watch Neg  A+/Watch Neg   
Pine Mountain CDO III Ltd.    A-3  B-/Watch Neg    BB/Watch Neg  
Pine Mountain CDO III Ltd.    A-4  CCC/Watch Neg   B/Watch Neg   
Pine Mountain CDO III Ltd.    B    CCC-/Watch Neg  CCC/Watch Neg
Pine Mountain CDO III Ltd.    C      CC            CCC-/Watch Neg  
Pine Mountain CDO III Ltd.    D      CC            CCC-/Watch Neg  
Vertical ABS CDO 2007-2 Ltd.  A1J  CCC-/Watch Neg  CCC/Watch Neg  
Vertical ABS CDO 2007-2 Ltd.  A1S  CCC+/Watch Neg  B+/Watch Neg   
Vertical ABS CDO 2007-2 Ltd.  A2     CC            CCC-/Watch Neg   
Vertical ABS CDO 2007-2 Ltd.  A3     CC            CCC-/Watch Neg
Vertical ABS CDO 2007-2 Ltd.  X    B/Watch Neg     AA-/Watch Neg     

              Rating Placed on Creditwatch Negative

                                                 Rating
                                                 ------
   Transaction                 Class       To              From
   -----------                 -----       --              ----
   FAB US 2006-1 PLC           A1          BBB-/Watch Neg  BBB-

       Ratings Affirmed and Removed from Creditwatch Negative

                                           Rating
                                           ------
       Transaction          Class       To        From
       -----------          -----       --        ----
       Verde CDO Ltd.       B           B         B/Watch Neg     
       Verde CDO Ltd.       C           CCC-      CCC-/Watch Neg  

                      Other Outstanding Ratings

         Transaction                     Class  Rating
         -----------                     -----  ------
         Charles Fort CDO I Ltd          C      CC                   
         Charles Fort CDO I Ltd          D-1    CC                   
         Charles Fort CDO I Ltd          D-2    CC                   
         Charles Fort CDO I Ltd          E      CC                   
         ESP Funding I Ltd               A-1R   AAA/Watch Neg        
         ESP Funding I Ltd               A-1T1  AAA/Watch Neg        
         ESP Funding I Ltd               A-1T2  AAA/Watch Neg        
         ESP Funding I Ltd               C      CC                   
         FAB US 2006-1 PLC               A4     CC                   
         FAB US 2006-1 PLC               B      CC                   
         FAB US 2006-1 PLC               C      CC                   
         Kleros Real Estate CDO IV Ltd   A-1    AAA/Watch Neg        
         Kleros Real Estate CDO IV Ltd   E      CC                   
         Laguna Seca Funding I Ltd       A-4    CC                   
         Laguna Seca Funding I Ltd       B      CC                   
         Laguna Seca Funding I Ltd       C      CC                   
         Laguna Seca Funding I Ltd       D      CC                   
         Nautilus RMBS CDO II Ltd.       A-1S   AAA            
         Nautilus RMBS CDO II Ltd.       A-1J   AAA            
         Nautilus RMBS CDO II Ltd.       A-2    AA            
         Nautilus RMBS CDO II Ltd.       A-3    A            
         Newbury Street CDO Ltd          A1     AAA/Watch Neg        
         Newbury Street CDO Ltd          A4     CCC-/Watch Neg       
         Newbury Street CDO Ltd          B      CC                   
         Newbury Street CDO Ltd          C      CC                   
         Newbury Street CDO Ltd          D      CC                   
         Pine Mountain CDO III Ltd.      E      CC                   
         Verde CDO Ltd.                  A-1    AA                   
         Verde CDO Ltd.                  A-2    BBB-                 
         Verde CDO Ltd.                  D      CC                   
         Vertical ABS CDO 2007-2 Ltd     B      CC


* Pilot Reps Spur U.S. Congress to Bar Bankruptcy Law Abuse
-----------------------------------------------------------
Airline Pilots Association International Managing Attorney Marcus
Migliore and AFL-CIO representatives, on June 5, 2008, testified
before the U.S. House Committee on the Judiciary's Commercial and
Administrative Law Subcommittee to urge Congress to swiftly reform
Section 1113 of the Bankruptcy Code.

Mr. Migliore underscored the urgent need to prevent airline and
other management from exploiting the law to gut employee labor
contracts and deny workers their most powerful leverage in
bargaining -- the right to strike -- while corporate executives
pay themselves millions in bonuses.

"Employers, including airlines, have successfully hijacked the
1113 process from Congress' original intent to protect workers and
their families and now use it as a 51-day countdown to
unilaterally terminate employees' hard-won contracts," said Mr.
Migliore.  "Skyrocketing fuel costs and a sluggish economy
mean that bankruptcy continues to loom as a threat to airline
employees--the time is now for Congress to act decisively to
protect U.S. workers."

The Protecting Employees and Retirees in Business Bankruptcies Act
of 2007 (H.R. 3652) would tighten loose standards and reverse
unfair court decisions that have permitted employers to decimate
employees' pay, retirement and working conditions, deny workers
compensation for breach of their labor agreements, and prohibit
workers from striking when their agreements are set aside in
bankruptcy.

The legislation will ensure that labor contract changes can be
forced upon employees only when truly necessary and require that
sacrifices of employees and retirees be fair and proportional to
those of corporate executives.  By ensuring the right to strike in
response to a breach of employees' labor agreement, the bill also
aims to put workers back on a more equal footing with
businesses and other creditors who have the right not to perform
services when their contracts are set aside in bankruptcy.

"Management uses current bankruptcy law to rubberstamp multi-
million dollar rewards for the very corporate executives and
stakeholders who made the business decisions that led to the
airlines' bankruptcies in the first place," said ALPA's President,
Capt. John Prater, when commenting on Mr. Migliore's
testimony.  "Meanwhile, pilots and workers are locked into long-
term, deeply concessionary contracts."

"U.S. workers suffered a horrific setback when airlines succeeded
in asking bankruptcy and federal courts to strip employees of
their right to strike when facing unilateral and fundamental
breaches of their collective bargaining agreements," said Mr.
Prater.  "Given the state of the airline industry today, Congress
must take a stand now, for airline pilots, and every U.S. worker,
and swiftly reform this country's flawed bankruptcy code."

                   
* Allen Matkins Adds Michael Adele as Sr. Counsel in Del Mar Unit
-----------------------------------------------------------------
Allen Matkins Leck Gamble Mallory & Natsis LLP disclosed the
addition of Michael R. Adele as senior counsel in the firm's Del
Mar Heights office.

Mr. Adele joins Allen Matkins' technology and intellectual
property and litigation practice groups.  He graduated with honors
from Harvard Law School in 1988 and has litigated intellectual
property matters for approximately 20 years.

Mr. Adele helped found Cooley Godward's San Diego litigation
practice, became a partner there in 1997 and served as head of
litigation management for its San Diego office.  

He served as the head of litigation for Weiland, Golden et al.,
where he first chaired trials in state and federal court, and
successfully represented clients in bet-the-company trademark and
licensing disputes, trade secret matters, distribution agreements
and other civil matters.

"[Mr. Adele] brings substantial courtroom experience to Allen
Matkins' existing intellectual property transactional and
registration practices," Randy Broberg, chair of Allen Matkins'
technology and intellectual property practice group, said.

"[Mr. Adele's] outstanding reputation as a litigator is a great
fit for our successful technology and intellectual property
practice group," John Gamble, chair of Allen Matkins' recruiting
program, said.

"It is a unique and exciting opportunity to lead Allen Matkins'
intellectual property litigation practice," Mr. Adele said.  
"Allen Matkins has done a phenomenal job expanding its
intellectual property practice, and the potential for further
growth and success is enormous.  I am looking forward to working
closely with the Del Mar Heights IP team to provide first rate
intellectual property services to its existing and future
clients."

Allen Matkins' Del Mar Heights office provides legal
representation to clients in the areas of corporate, securities,
technology, intellectual property, tax, real estate and
litigation.  The firm was named as a "Go To" Law Firm for Leading
Technology Companies by Corporate Counsel magazine and Randy
Broberg was named among the Top 10 Trademark Attorneys in
California in 2008 by the Daily Journal.

                     About Allen Matkins

Headquartered in Los Angeles, California, Allen Matkins Leck
Gamble Mallory & Natsis LLP -- www.allenmatkins.com -- founded in
1977, is a law firm with approximately 240 attorneys practicing
out of seven offices in Los Angeles, Orange County, San Francisco,
San Diego, Century City, Del Mar Heights and Walnut Creek.  The
firm's broad-based areas of focus include corporate, real estate,
construction, real estate finance, business litigation, taxation,
land use, environmental, bankruptcy and creditors' rights, and
employment and labor law.


* Alvarez & Marsal Names Xavier Oustalniol as Managing Director
---------------------------------------------------------------
Alvarez & Marsal Dispute Analysis & Forensic Services LLC expanded
its west coast presence.  Xavier Oustalniol, an experienced
forensic accounting and litigation consultant, has joined as a
managing director based in San Francisco.

Mr. Oustalniol focuses on forensic accounting, fraud
investigations and litigation consulting including securities
litigation, international arbitrations, audit malpractice,
purchase price disputes and damages analysis.  

He has worked with clients across a range of industries, with a
notable focus on financial services institutions such as hedge
funds, banks, insurance companies, investment companies, and
broker-dealers. Over the course of his career, he has been
involved with investigations and international disputes brought
before the International Centre for Settlement of Investment
Disputes, the American Accounting Association, the International
Chamber of Commerce and other cross-border litigations or matters
involving companies in Europe, Latin America and Asia.  He has
also testified as an accounting expert.

"[Mr. Oustalniol] brings deep experience advising counsel and
companies across a broad range of industries on international
arbitrations and corporate investigations," Bill Abington, a
managing director and head of A&M Dispute Analysis & Forensic
Services, said.  "His leadership and knowledge will play an
integral role as we further expand our capabilities with the
addition of more forensic accounting and litigation consultants."

Prior to joining A&M, Mr. Oustalniol was a managing director with
the litigation consulting practice of Aon Consulting in San
Francisco.  Before that, he was a managing director with the
dispute consulting practice of Kroll Zolfo Cooper, where he worked
for the Enron estates and assisted creditors with the recovery of
funds. He spent the first 12 years of his career in auditor and
litigation consultant roles at Deloitte & Touche.

Mr. Oustalniol earned a "Maitrise" or bachelor's degree in
financial and accounting techniques from the University Paris IX
"Dauphine."  He is a Certified Public Accountant and a Certified
Insolvency and Restructuring Advisor.  Mr. Oustalniol is fluent in
French and English.

About Alvarez & Marsal Dispute Analysis & Forensic Services LLC

For 25 years, Alvarez & Marsal -- http://www.alvarezandmarsal.com/
-- has set the standard in working with organizations to solve
complex problems, boost performance and maximize value for
stakeholders.  With its roots in operational and financial
restructuring, A&M is an independent, professional services firm
that brings a bias towards action and results whether serving as
advisors or in interim management roles.  From nearly forty
locations around the world, A&M professionals serve large and
midsize businesses and their stakeholders in need of improving or
enhancing operating and financial performance.

Alvarez & Marsal Dispute Analysis & Forensic Services provides:
International Arbitration; Damages Calculation and Valuation;
Forensic Accounting; Forensic Investigations; Purchase Price
Disputes; Forensic Technology and Data Mining; Business
Interruption and Licensing Advisory Services.


* Loughlin Meghji Expands Practice with Five Sr. Staff Additions
----------------------------------------------------------------
Loughlin Meghji + Company appointed five senior staffs, expanding
the firm's senior-consulting expertise to meet increased demand
from distressed and turnaround situations in 2008 and beyond.  In
addition, the firm disclosed a move to new, larger offices in New
York City, almost tripling its headquarters facility.

"We are seeing a tremendous increase in distressed situations,"
James J. Loughlin, Jr., founding principal of LM+Co., said.  "With
the addition of these new senior-level appointments, Loughlin
Meghji + Company will be prepared to meet this heightened demand."

"Now more than ever, companies and their lenders - well as private
equity sponsors and hedge funds - are turning to firms like LM+Co
for counsel and assistance in today's unusually volatile economic
climate," Mohsin Y. Meghji, founding principal of LM+Co., said.

Senior staff members joining the firm as managing directors are:
Stephen J. Gawrylewski, Sanjay Purohit, Kevin T. Shea, and Patrick
Tremblay.  Brian J. Griffith has joined as a director.  

"[Mr.] Gawrylewski brings hands-on executive experience, coupled
with two decades as a restructuring consultant, to our firm," said
Mr. Loughlin.  "[Mr.] Purohit, CEO of several textile companies,
comes to us with his outstanding track record helping troubled
companies improve profitability and competitiveness through global
supply chain initiatives."

"[Mr.] Shea deepens our existing turnaround bench strength while
[Mr.] Tremblay broadens our transaction and risk-advisory
abilities," Mr. Meghji said.  "And in Brian Griffith, we add
substantial experience in advising creditors and lenders, as well
as corporate restructuring expertise."

"The firm has had an ongoing hiring program, at all levels,
through the first half of the year, resulting in a 50% net staff
increase," Mr. Meghji added.  "Given the level of demand for our
services, we are continuing to augment staff and expect to more
than double the size of our team by the end of 2008."  

The firm is relocating to new office space.  The firm expects to
be in its new offices - located at 220 West 42nd Street, New York,
NY 10036 - by July 1, 2008.

                       Stephen J. Gawrylewski

Mr. Gawrylewski has more than 30 years of experience in
turnarounds, restructurings, mergers, and acquisitions.  He has
assisted clients as an interim CEO, chief restructuring officer
and as a financial advisor.  Mr. Gawrylewski has extensive
experience in the chemicals, transportation and automotive
industries well as in heavy and consumer products manufacturing.
In addition, he has conducted engagements in the paper, textile
and plastics industries.

Significant manufacturing engagements include Twin Labs, National
Machinery Co., Aladdin Industries, Crown Vantage, Champion Inc.,
Smurfit Stone Container, Universal Fibers, Burlington Industries
and General Cable Inc.  Equity sponsor clients have included
Investcorp, KPS, Citicorp Venture Capital, Sterling Ventures,
Palladium Equity Partners, RFE Investment Partners, Atlas
Holdings, and Pegasus Partners.  Mr. Gawrylewski has served as
president and CEO of C.T. Film Corporation and in senior posts at
Tenneco Chemicals.

Mr. Gawrylewski is a member of the Turnaround Management
Association.  He holds a B.S. degree from the University of
Maryland.

                           Sanjay Purohit

Until September 2007, Mr. Purohit was president and chief
executive officer of GHCL Limited's U.S. operations, which
included a leading manufacturer and marketer of textile products
for the home fashions and apparel fabrics markets.  Mr. Purohit
also became CEO of Best Manufacturing when GHCL Limited acquired
it in February 2007.  GHCL, an India-based company, acquired Dan
River in 2005 and has other interests in the textile business.

Prior to joining the GHCL companies, Mr. Purohit was CEO of
Colwell-Salmon Inc., an outsourcing services provider, and
Caretel, an international business process outsourcing firm.  His
specific expertise includes using information technology and
business process outsourcing resources to improve corporate
profitability.

Earlier in his career, Mr. Purohit was a member of the India entry
strategy team of AT&T Wireless in the early 1990s.  In 1996, he
was hired by Motorola when it entered in India to lead its new
product launch initiatives.  Mr. Purohit also structured financing
solutions for Indian and Asian telecom companies.  He was promoted
to Motorola's Chicago headquarters in 1999 and held various senior
responsibilities in strategy and marketing until 2002, when he
left to join an IT BPO start-up, Epicenter Technologies, which was
sold to a private equity firm in 2004.

Mr. Purohit received his MBA, gold medalist, from the Indian
Institute of Management in Ahmedabad and also holds a Master's
degree in Mechanical Engineering from the Indian Institute of
Technology in Mumbai.

                           Kevin T. Shea

Mr. Shea has more than 20 years of extensive experience in a broad
range of public and private corporate finance, M&A and interim
executive assignments.  Mr. Shea has served as the chief
restructuring officer for an international motorcycle parts and
accessories distributor, where he managed the sale process.  

Other successful engagements include interim CFO and CRO roles
several consumer products manufacturers, and business development
and strategic planning roles in the paging industries.

Mr. Shea spent more than a decade in corporate finance at the
Chase Manhattan Bank, as a vice president in the Media and Telecom
group.  Mr. Shea holds an undergraduate degree in Marketing and
Finance from Marquette University and he has pursued independent
studies in bankruptcy and reorganization law at New York
University.

                          Patrick Tremblay

Mr. Tremblay is an executive with a finance and strategy
background and a 15-year international corporate and consulting
track record in risk management and M&A.  He also has experience
in business process redesign and execution. Before joining LM+Co,
Mr. Tremblay's consulting experience included service as partner
and national leader, Global Manufacturing, Risk Advisory Services
for KPMG well as risk management positions with Bombardier Inc.
and Deloitte Consulting and Braxton Associates, both in Canada.

Mr. Tremblay received a B.A. degree in Economics and Political
Science from McGill University in Montreal, Canada; an M.A. degree
in European Community Law and Public Policy from Robert Schuman
University in Strasbourg, France; and a Masters degree in Finance
from the London School of Economics in the U.K.

                         Brian J. Griffith

Mr. Griffith has more than 12 years of finance and restructuring
advisory experience.  His restructuring experience includes
advising debtors and various creditor classes in both in and out-
of-court restructurings, maximizing stakeholder returns in
turnaround situations ranges from short-term project cost analyses
to multi-year bankruptcy proceedings in numerous industries,
including: mortgage and retail lending, energy, consumer products,
manufacturing, automotive and food & beverage.

Prior to joining LM+Co, Mr. Griffith worked for a restructuring
firm where he advised both debtors and creditors in restructuring
assignments well as providing transaction advisory services.  
Brian served as the lead financial advisor to Heating Oil
Partners, a $600-million oil distributor, including negotiations
with pre-petition creditors and arranging a $100-million Debtor-
in-Possession financing, cost reduction programs and
reorganization plan negotiations.

Mr. Griffith earned his M.B.A. with honors from Fordham University
and received his B.S. degree in Marketing from Villanova
University.  He is a Certified Insolvency & Restructuring Advisor  
and is a member of the Turnaround Management Association.

                  About Loughlin Meghji + Company

Loughlin Meghji + Company  -- http:www.lmco-ny.com/ -- is a
restructuring advisory firm in the United States that provides an
array of consulting, crisis and interim management services,
focused on underperforming and distressed companies facing complex
financial and operational challenges.  LM+Co was founded in 2002
by two former Arthur Andersen restructuring partners, each with
more than 20 years of broad restructuring experience.  The firm's
mix of operational and financial skills and experience is called
on for a variety of assignments, representing the various
stakeholders in distressed situations - including lending
institutions, corporations and private equity sponsors - on
operational and financial restructuring matters.


* Ulmer & Berne Forms Practice to Address Subprime Mortgage Crisis
------------------------------------------------------------------
Ulmer & Berne LLP created its new Subprime Task Force to address
the issues created by the subprime mortgage crisis.  The firm's
recognized business and litigation lawyers have the depth and
expertise to advise clients on subprime-related issues, including
complex regulatory and transactional matters, investigations,
bankruptcy and litigation.

Specialized areas of this multidisciplinary Task Force include
Banking and Commercial Litigation, Financial Services Regulatory
Law, Commercial Real Estate, Bankruptcy and Restructuring,
Internal Corporate Investigations, and Litigation Against Clients
with "Deep Pockets."

                 Banking and Commercial Litigation

The Subprime Task Force includes experienced banking and
commercial litigation lawyers who represent some of the nation's
financial institutions in complex subprime litigation matters,
including those filed by the cities of Buffalo, New York, and
Cleveland, Ohio, against the issuers and securitizers of subprime
debt.

Ulmer & Berne lawyers have defended banks, hedge funds, mortgage
brokers, and other financial institutions, well as their
individual directors, officers, and third-party agents, in nearly
every type of lending and commercial litigation.  

Experience includes handling litigation involving collateralized
mortgage obligations, credit-related securities, truth-in-lending
and consumer disclosure, financial privacy, Uniform Commercial
Code, federal preemption, credit discrimination, unfair or
deceptive practices, commercial lending law, and lender liability.

The firm has defended claims arising from the subprime crisis not
only against financial institutions, but also against their
advisers and agents, including lawyers and accountants.

                Financial Services Regulatory Law

Ulmer & Berne provides a full range of services essential to keep
financial institutions competitive in today's marketplace, while
continuing to remain focused on compliance with existing and
emerging subprime lending regulations.  Ulmer & Berne lawyers
represent financial institutions before regulatory agencies in
response to examination and enforcement proceedings and advise
clients on all aspects of regulatory compliance.

They also assist clients in complying with the full range of
financial services laws and regulations, including the Fair Credit
Reporting Act, the Fair Debt Collection Practices Act, the Truth
in Lending Act, the Real Estate Settlement Procedures Act, the
Home Mortgage Disclosure Act, the USA PATRIOT Act, the Bank
Secrecy Act, and many other statutes and regulations affecting the
financial services industry.

Ulmer & Berne lawyers also counsel clients on forming, merging,
and acquiring full-service and limited purpose banks, savings
associations, and holding companies.

                        Commercial Real Estate

The lawyers of the Real Estate Practice advise commercial mortgage
loan issuers and servicers on lending and servicing relationships
and represent clients in loan transactions, including the sale of
beneficial interests.  The real estate lawyers work with the
firm's other practice groups to provide specialized expertise in
traditional mortgage financing and securitizations well as other
non-traditional transactional structures responsive to their needs
and to those of their customers and markets.

                    Bankruptcy and Restructuring

Ulmer & Berne lawyers assist clients in acquiring and selling
distressed assets, whether through direct transactions or through
proceedings such as secured party sales and sales under Section
363 of the Bankruptcy Code.  The firm serves secured and unsecured
creditors, debtors, trustees, and others in restructurings, out-
of-court workouts, bankruptcies, receiverships, and other
insolvency proceedings.  The lawyers also work to develop
strategies and structure resolutions in connection with claims
arising from or related to insolvencies and distressed businesses.

                 Internal Corporate Investigations

The firm has performed internal investigations of entities,
officers, and employees in alleged securities, disclosure,
employment, and financial reporting misconduct for a variety of
clients.  These investigations have included representing and
working with special board and board audit committees in extensive
due diligence, project and document review, employee and related-
party interviews, comprehensive reporting, and other tasks related
to internal investigations.

          Litigation against Clients with "Deep Pockets"

In this unsettled financial climate, investors increasingly look
to the perceived "deep pockets" of financial institutions, well as
their officers and directors, for recovery.  Many of the nation's
major banks and other financial institutions turn to Ulmer & Berne
for defense against charges of securities fraud,
misrepresentation, unauthorized trading, or alleged violations of
federal and state laws and related regulations.

The firm's lawyers also represent entities and individuals in
regulatory and white-collar investigations at both the federal and
state levels, and advise clients on disclosure issues related to
the subprime crisis.  

Based on recent reports, it appears likely that even more claims
will be filed against those who participated in packaging and
selling securities backed by subprime mortgages.

                     About Ulmer & Berne LLP

Headquartered in Cleveland, Ohio, Ulmer & Berne LLP --
http://www.ulmer.com/-- is a full-service firm with 180 lawyers  
in Cleveland, Columbus, Cincinnati and Chicago.  Ulmer & Berne
represents publicly traded and privately held companies, financial
institutions, pharmaceutical companies, family businesses,
international joint ventures and affiliations, investor groups,
start-ups and emerging businesses, public bodies and nonprofit
organizations.  The firm was established in 1908.


* Bankruptcy Attorney Hank Baer is Finn Dixon's New Partner
-----------------------------------------------------------
Finn Dixon & Herling LLP said that Hank Baer, Esq., has joined the
firm as a partner.

Mr. Baer's bankruptcy and insolvency practice includes the
representation of purchasers of assets in distressed situations
and the representation of secured lenders in workouts of troubled
loans.  Mr. Baer has significant experience in asset acquisitions
under section 363 of the bankruptcy code, the representation of
first lien, second lien, and mezzanine lenders in and out of
bankruptcy proceedings, and the representation of DIP lenders in
formal chapter 11 proceedings.  Mr. Baer has represented all of
the primary constituencies in chapter 11 proceedings, including
debtors, official committees, agents for syndicated loans,
individual lenders, indenture trustees, and retained
professionals.  Before coming to Finn Dixon, Mr. Baer worked at
Latham & Watkins LLP and Dechert LLP, both in New York City.

"We're very pleased that [Mr. Baer] has joined our firm," said
Brett W. Dixon, Administrative Partner of Finn Dixon & Herling.  
"[Mr. Baer] brings with him a wealth of knowledge and experience
that will be highly complementary to our existing practice areas.
We're confident our clients will value the addition of Hank to our
team."

"I am very excited for the opportunity to join Finn Dixon &
Herling," Mr. Baer said.  "Finn Dixon's existing practices and
expertise are the perfect match for a growing distressed practice,
and I expect for the bankruptcy and corporate reorganizations
practice to offer a valuable new service to existing and new
clients alike."

Mr. Baer is a graduate of Fordham University School of Law (J.D.,
1997), where he was the Editor in Chief of the Environmental Law
Journal, and Bates College (B.A., 1987).

Mr. Baer is admitted to practice law in the State of New York and
the Commonwealth of Massachusetts.

                    About Finn Dixon & Herling

Finn Dixon & Herling LLP -- http://www.fdh.com/-- is a law firm  
with extensive experience providing corporate, transactional,
securities, investment management and litigation counsel.  Its
clients range in size from large to small corporations, and
include venture capital and private equity firms, financial
institutions, hedge funds and investment advisors, executives,
management teams and entrepreneurs.

The firm's practice areas include Bankruptcy and Corporate
Reorganizations, Commercial Litigation, Debt Financing, Executive
Compensation, Benefits and Employment, General Corporate, Hedge
Funds/Alternative Investment Funds, Investment Advisers/Broker-
Dealers, Mergers and Acquisitions, Private Equity, Public Finance,
Securities and Public Companies, Tax, and Venture Capital.


* BOOK REVIEW: Trump: The Saga of America's Most Powerful Real
                    Estate Baron
--------------------------------------------------------------
Author:     Jerome Tuccille
Publisher:  Beard Books
Hardcover:  262 pages
List Price: $34.95

Order your personal copy at
http://amazon.com/exec/obidos/ASIN/1587982234/internetbankrupt  

This book is the remarkable unfinished saga of an extraordinary
American.  When this book was first published in 1985, Donald J.
Trump was scarcely into his fourth decade.  He had made the leap
from local New York City boy who had made good to a national and
even world-prominent figure.

It all started some 10 years earlier when Trump gambled that New
York City would rebound from its financial morass.  People laughed
and scoffed at the time, but he was right, and he has profited
mightily from his faith and vision.

This is compelling reading about the inside machinations of his
glamorous world.

                             *********

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 ***