TCR_Public/080611.mbx          T R O U B L E D   C O M P A N Y   R E P O R T E R

             Wednesday, June 11, 2008, Vol. 12, No. 138           

                             Headlines

ACA FINANCIAL: S&P Affirms 'CCC' Financial Strength Rating
AXS-ONE INC: March 31 Balance Sheet Upside-Down by $10,622,000
BELDEN INC: Augments Biz with $133MM Trapeze Networks Cash Buyout
BELDEN INC: Planned Trapeze Acquisition Won't Affect S&P's Rating
BHM TECHNOLOGIES: Section 341(a) Meeting Scheduled for June 26

BKF CAPITAL: Posts $456,000 Net loss in 2008 First Quarter
CALUMET SPECIALTY: S&P Revises Outlook to Negative from Positive
CANARGO ENERGY: Defers Annual Stockholders' Meeting to July 18
CATHOLIC CHURCH: Fairbanks Protests CIC's Lift Stay Motion
CATHOLIC CHURCH: Fairbanks' Creditors Must File Claims by Dec. 2

CATHOLIC CHURCH: Court to Appoint Claims Rep in Fairbanks' Case
CATHOLIC CHURCH: Plan Trustee Wants Spokane's Case Reopened
CENTEX CORP: Low Cash Flow Cues Moody's to Cut Ratings to Ba2
CHARTER COMMS: Launches Exchange Offer for $500MM of CCH II Notes
COLON BAZOR: Voluntary Chapter 11 Case Summary

CONTIMORTGAGE CORP: Fitch Retains CCC/DR2 Ratings on Four Classes
CRUM & FORSTER: S&P Lifts Ratings to BB+ from BB; Stable Outlook
CSFB HEAT: Fitch Downgrades Ratings on Six Certificate Classes
DARRELL KINER: Case Summary & 16 Largest Unsecured Creditors
DEL MAR VILLAS: Voluntary Chapter 11 Case Summary

DIAGNOSTIC IMAGING: Moody's Holds B3 Probability of Default Rating
DLJ COMMERCIAL: Fitch Holds 'B-' Rating on $13.8MM Cl. B-6 Certs.
D.R. HORTON: Moody's Lowers Subordinated Notes' Rating to B1
ECHO THERAPEUTICS: Posts $3,981,101 Net Loss in 2008 First Quarter
ENKU GELAYE: Voluntary Chapter 11 Case Summary

FELLOWSHIP ACADEMY: Case Summary & 20 Largest Unsecured Creditors
FOUNTAINS MOBILE: Case Summary & 5 Largest Unsecured Creditors
FRESH DEL MONTE: S&P's 'BB-' Rating Unmoved by Caribana Buyout
FRONTIER AIRLINES: Wants Period to Remove Pending Actions Extended
FRONTIER AIRLINES: Court Approves WilmerHale as Panel's Counsel

GETTY IMAGES: Hellman Buyout Cues Moody's to Assign Ba2 Rating
GETTY IMAGES: S&P Affirms 'BB-' Rating on New Credit Profile
GOLDMAN SACHS: Fitch Places Low-B Ratings Under Negative Watch
HEALTHMARKETS INC: Low Levels of EBITDA Cue S&P to Cut Rating
HOLLINGER INC: Creditors Have Until July 1 to File Proofs of Claim

IMMUNICON CORP: March 31 Balance Sheet Upside-Down by $12,737,000
INFOGROUP INC: S&P Keeps Low-B Rating Under Negative CreditWatch
INTERNATIONAL HOME: Case Summary & 20 Largest Unsecured Creditors
IRIDEX CORP: Posts $892,000 Net Loss in 2008 First Quarter
JOHN HETZEL: Case Summary & 20 Largest Unsecured Creditors

KB HOME: Moody's Cuts Rating on Sr. Subordinated Notes to B1
KGB: S&P Lifts Corp. Credit Rating to B+ from B on Strong EBITDA
KRISPY KREME: Reports $4 Million Net Income in Quarter Ended May 4
LENNAR CORP: Moody's Cuts Corp. Family Rating to Ba3
LONG DRIVE: Case Summary & 2 Largest Unsecured Creditors

LONG BEACH: Fitch Retains Junk Ratings on 18 Certificate Classes
MDRECOVERY INC: Files Voluntary Chapter 11 Case Summary
MICHAEL ANGELO: Case Summary & 9 Largest Unsecured Creditors
NORTHWEST AIRLINES: Wants Nine Claims Worth $2.4 Mil. Expunged
NORTHWEST AIRLINES: Wants R. Foster's $930,000 Claim Expunged

OPTION ONE: Fitch Takes Rating Actions on 39 Classes of Certs.
ORAGENICS INC: Inks Term Sheet for $2.6 Mil. in Equity Financing
OVALE GROUP: March 31 Balance Sheet Upside-Down by $5,209,363
PROTECTION ONE: Stockholders Okay 2008 Long-Term Incentive Plan
PULTE HOMES: Moody's Sees Challenges Ahead; Lowers Ratings to Ba2

RYLAND GROUP: Moody's Sees Continuing Decline & Cuts Rating to Ba2
SALANDER-O'REILLY: Auction of Furniture Brings in $1.6 Million
SOTHEBY'S: Moody's Rates New Senior Unsecured Notes Ba3
SOTHEBY: S&P Lifts Credit Rating to BBB- from BB+; Removes Watch
SOURCE INTERLINK: Moody's Junks Proposed $465MM Senior Notes

STEPHEN SMITH: Voluntary Chapter 11 Case Summary
STUART EDWARDS: Case Summary & 20 Largest Unsecured Creditors
SW DALLAS: Voluntary Chapter 11 Case Summary
TANEJA CENTER: Case Summary & 50 Largest Unsecured Creditors
TARGA RESOURCES: Mulls Offering of $250MM Senior Unsecured Notes

TARGA RESOURCES: Moody's Rates Proposed $250MM Sr. Notes B2
TARGA RESOURCES: S&P Rates $250 Million Note Issuance 'B'
TARGA RESOURCES: S&P Holds B Rating on Unit's $250MM Note Issuance
TELKONET INC: Posts $5,121,031 Net Loss in 2008 First Quarter
THEATER XTREME: March 31 Balance Sheet Upside-Down by $4,131,946

TOUSA INC: Allowed to Settle JPMorgan Facility Default
TOUSA INC: Court Approves Jasmine Ranch Settlement
TRANSDERM LABS: June 30 Balance Sheet Upside-Down by $37,844,000
TROPICANA ENT: Court Approves Lazard Freres as Investment Banker
UNIPROP MANUFACTURED: March 31 Balance Sheet Upside-Down by $21 MM

VALASSIS COMMS: Moody's Affirms B1 Ratings; Outlook Positive
WAMU MORTGAGE: S&P Junks Ratings on Four Certificate Classes
WEST CONTRA: S&P Puts 'C' Cert. Rating Under Developing Watch

* US CMBS Loan Defaults Remain Low, According to Fitch
* S&P's Cuts on MBIA & Ambac Have Broad Result for Global Markets

                             *********

ACA FINANCIAL: S&P Affirms 'CCC' Financial Strength Rating
----------------------------------------------------------
Standard & Poor's Ratings Services affirmed its 'CCC' financial
strength rating on ACA Financial Guaranty Corp.  The rating
remains on CreditWatch with developing implications.

In December 2007, S&P lowered ACA's financial strength rating to
'CCC', which triggered a requirement that the company post
significant amounts of collateral for the benefit of its credit
default swap counterparties.  Since then, ACA has been negotiating
with the counterparties to modify its obligations to permanently
solve the company's capital and liquidity issues.  With the
negotiations in progress, the counterparties have signed a series
of forbearance agreements that allowed ACA to avoid posting
collateral.  

The most recent forbearance agreement, signed on May 30, 2008,
extended the forbearance period until June 20, 2008.  ACA's rating
remains on CreditWatch with developing implications, reflecting
the dual possibilities that a favorable result of the negotiations
could improve the company's credit and liquidity standing, while a
negative outcome could leave the company with significant
liquidity and capital shortfalls.


AXS-ONE INC: March 31 Balance Sheet Upside-Down by $10,622,000
--------------------------------------------------------------
AXS-One Inc.'s consolidated balance sheet at March 31, 2008,
showed $5,529,000 in total assets and $16,151,000 in total
liabilities, resulting in a $10,622,000 total stockholders'
deficit.

At March 31, 2008, the company's consolidated balance sheet also
showed strained liquidity with $5,025,000 in total current assets
available to pay $8,341,000 in total current liabilities.

The company reported a net loss of $2,205,000, on total revenues
of $3,894,000, for the first quarter ended March 31, 2008,
compared with a net loss of $2,661,000, on total revenues of
$3,694,000, in the same period last year.

Revenues increased $200,000 or 5.4% for the three months ended
March 31, 2008, as compared to the corresponding prior year period
due to a $500,000 increase in service revenue offset somewhat by a
$300,000 decrease in license fees.

Operating loss decreased to $1,752,000 for the three months ended
March 31, 2008, as compared to $2,776,000 in the corresponding
prior year period as a result of the reductions in operating
expenses of $824,000 and higher sales revenue.

Other expense, net, was $453,000 for the three months ended
March 31, 2008, as compared to other income of $115,000 in the
same period in 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?2d93

                       Going Concern Doubt

As reported in the Troubled Company Reporter on April 25, 2008,
Amper, Politziner, & Mattia, P.C., in Edison, N.J., expressed
substantial doubt about AXS-One 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 losses from operations and
working capital deficiency.

The company has generated losses from operations of $1,752,000 for
the three months ended March 31, 2008.  Additionally, the company
was not in compliance with its quarterly license revenue covenant
as of March 31, 2008.  The bank waived such violation and changed
the covenants for future periods from a minimum license revenue
covenant and minimum three month rolling net loss covenant to (a)
a minimum three month rolling EBITDA covenant, (b) minimum cash
and accounts receivable availability covenant and (c) a minimum
equity infusion covenant of $500,000.

The company also had a working capital deficiency of $3,316,000 as
of March 31, 2008.

                        About AXS-One Inc.

Headquartered in Rutherford, N.J., AXS-One (OTC BB: AXSO)
-- http://www.axsone.com/-- provides Records Compliance  
Management software solutions.  The AXS-One Compliance Platform
enables organizations to implement secure, scalable and
enforceable policies that address records management for corporate
governance, legal discovery and industry regulations such as
SEC17a-4, NASD 3010, Sarbanes-Oxley, HIPAA, The Patriot Act and
Gramm-Leach Bliley.  AXS-One has offices worldwide including in
the United States, Australia, Singapore, United Kingdom and South
Africa.


BELDEN INC: Augments Biz with $133MM Trapeze Networks Cash Buyout
-----------------------------------------------------------------
Belden Inc. entered into a definitive agreement to acquire Trapeze
Networks for $133 million in cash.  The acquisition builds on
Belden's position as a complete signal transmission solutions
provider by adding a recognized company in the wireless LAN
market.

Belden stated that Wireless extends the reach of Belden's
physical-layer cable and connectivity products and enables the
company to address the growing mobility needs of customers.

"Belden's strategic vision is to provide the best signal
transmission solutions to our customers regardless of technology,"
John Stroup, president and chief executive officer of Belden,
said.  "We believe the acquisition of Trapeze Networks uniquely
positions Belden to offer our enterprise customers tailored
connectivity solutions that benefit from blending the strengths of
copper, fiber and wireless technologies."

Trapeze Networks Smart Mobile wireless LAN solutions deliver
superior performance, security, reliability and management
capabilities, making this a highly attractive wireless investment
for Belden's future," Mr. Stroup added.  "The acquisition will
make Belden the world's largest unified wired and wireless
solutions provider and will provide expanded market access for
Trapeze Networks' Smart Mobile solutions."

"We believe we are at an inflection point in enterprise wireless
LAN expansion, a market that is already growing nearly 25 percent
per year, and that wireless connectivity is no longer considered a
luxury but is a customer expectation," Mr. Stroup related.

"During the past six years, enterprise customers around the world
have invested in Trapeze Networks Smart Mobile because they can
depend on it for constant connectivity and reliable mobility," Jim
Vogt, president and chief executive officer of Trapeze, said.  
"The superior performance and cost benefits of our highly
acclaimed wireless LAN products have fueled our global growth
through distribution and through our OEM relationships with 3Com,
Enterasys, Nortel and other large networking companies. Our
customers can now be assured of continued product innovation and
new capabilities from the combined resources of Belden and
Trapeze."

                    Impact on Belden's Outlook

Because Trapeze Networks sells software well as hardware and
services, the company is required under accounting principles
generally accepted in the United States to defer and amortize
certain revenues over the lives of contracts until it can
establish vendor-specific objective evidence of the fair market
value of each separate deliverable.

The majority of Trapeze Networks' revenue is deferred and is
typically amortized over periods of a year or more.  This
accounting treatment makes the acquisition more dilutive to
Belden's expected earnings in 2008 and 2009 than would otherwise
be the case.

"The acquisition of Trapeze Networks furthers our strategy, and we
expect that it will provide a return on invested capital for
Belden consistent with or better than that of our successful 2007
acquisitions," Mr. Stroup said.  "We expect that the total
dilutive impact of revenue deferral and amortization for 6 months
in 2008 to be $0.15 to $0.20 and in 2009 $0.25 to $0.30.  Despite
this impact, we expect the transaction to be neutral in operating
cash flow in 2008 and a positive contributor to operating cash
flow in 2009 and beyond.

"The expected dilution from the Trapeze acquisition, including the
impact of revenue deferral and the recurring amortization of
intangible assets resulting from the purchase, but excluding
short-term, nonrecurring amortization, will be in the range of
$0.27 to $0.32 in 2008 and $0.25 to $0.30 in 2009," Mr. Stroup
said.  "We expect that the acquisition will be accretive on a GAAP
basis in 2010 and beyond.

"Our outlook for 2008 remains unchanged except for the expected
effects of the planned acquisition,Mr. Stroup said.  Because of
the mid-year timing of the closing of this transaction and the
deferral of Trapeze Networks' revenue, our expectations for
consolidated revenue remain in the range of $2.2 to $2.3 billion.
We expect our operating margin to be in the range of 11% to 12%,
and we are adjusting our expectation for 2008 earnings per diluted
share to the range of $3.15 to $3.35."

                       About Trapeze Networks

Based in Pleasanton, California, Trapeze Networks is a privately
held company that sells its products into healthcare, education,
manufacturing, retail, government and other enterprise verticals
through OEMs and distribution channels.  The Trapeze product
portfolio is an end-to-end WLAN system built on a highly scalable
and secure wireless operating system running on Trapeze Networks
access points and controllers and features the industry's most
robust management software capabilities.  More than 4,000
organizations around the world have deployed Trapeze wireless
platforms.

                        About Belden Inc.

Headquartered in St. Louis, Missouri, Belden Inc. (NYSE:BDC) --
http://www.belden.com/-- fka Belden CDT Inc., designs,    
manufactures, and markets signal transmission solutions for data
networking and specialty electronics markets including
entertainment, industrial, security and aerospace applications.


BELDEN INC: Planned Trapeze Acquisition Won't Affect S&P's Rating
-----------------------------------------------------------------
Standard & Poor's Ratings Services said that its ratings and
outlook on St. Louis-based Belden Inc. (BB+/Stable/--) are not
affected by the company's recently announced plan to acquire
Trapeze Networks Inc. for $133 million.  Following this
transaction, the company's financial leverage statistics will
still be moderate for the rating.


BHM TECHNOLOGIES: Section 341(a) Meeting Scheduled for June 26
--------------------------------------------------------------
Habbo G. Fokkena, the United States Trustee for Region 9, called
for a meeting of the creditors and equity shareholders of BHM
Technologies Holdings, Inc., and its debtor-subsidiaries pursuant
to Section 341 of the Bankruptcy Code on June 26, 2008, at 12:00
p.m., Eastern Daylight Time.

The meeting will be held in the Jury Assembly Room, Room 201,
Gerald R. Ford Federal Building, 110 Michigan Avenue NW, Grand
Rapids, Michigan 49503.

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
Debtors under oath.

Headquartered in Ionia, Michigan, BHM Technologies Holdings
Inc.-- http://www.browncorp.com/--manufactures and sells     
automobile parts including air bags and electrical systems.  It
has manufacturing facilites in Mexico and operates under Brown  
Corp.

BHM Technologies Holdings, Inc. and 14 affiliates filed separate
voluntary petitions under Chapter 11 of the United States
Bankruptcy Code in the United States Bankruptcy Court for the
Western District of Michigan on May 19, 2008 (Lead Case No. 08-
04413).  Hannah Mufson McCollum, Esq., Kay Standridge Kress,
Esq., Robert S. Hertzberg, Esq., and Leon R. Barson, Esq. of
Pepper Hamilton, LLP represent the Debtors in their
restructuring efforts.  When the Company filed for bankruptcy,
it listed estimated assets and debts to be both between
US$100 million and US$500 million.

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


BKF CAPITAL: Posts $456,000 Net loss in 2008 First Quarter
----------------------------------------------------------
BKF Capital Group Inc. reported a net loss of $456,000, on total
revenues of $769,000, in the first quarter ended March 31, 2008,
compared with a net loss of $2,113,000, on total revenues of
$827,000, in the same period last year.

The decrease in total revenues is attributable to lowering
interest rates and thus less interest revenue.

At March 31, 2008, BKF had cash, cash equivalents and U.S.
Treasury bills of $24,062,000, compared to $24,115,000 at Dec. 31,
2007.

At March 31, 2008, the company's consolidated balance sheet showed
$26,790,000 in total assets, $6,450,000 in total liabilities, and
$20,340,000 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?2d9e

                       Going Concern Doubt

As reported in the Troubled Company Reporter on March 18, 2008,
Holtz Rubenstein Reminick LLP, in New York, expressed substantial
doubt about BKF Capital Group 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 stated that the company experienced a total loss
of assets under management and as a result the company has had a
significant decline in revenues in 2007 and no longer has an
operating business.

The company continues to evaluate strategic alternatives: either
commence a new business or liquidate.  Historically, the company
has funded its cash and liquidity needs through cash generated
from operations; however, in light of the above, the company
expects that cash generated from current operations will not be
sufficient to fund operations and that the company will use its
existing working capital to fund operations.

                        About BKF Capital

New York City-based BKF Capital Group Inc. (OTHER OTC: BKFG.PK)
does not have significant operations.  Previously, the company was
engaged in the provision of investment advisory and asset
management services in the United States.  


CALUMET SPECIALTY: S&P Revises Outlook to Negative from Positive
----------------------------------------------------------------
Standard & Poor's Ratings Services revised its outlook on refining
and marketing company Calumet Specialty Products Partners L.P. to
negative from positive, and affirmed its 'B' corporate credit
rating on the company.  At the same time, S&P lowered its rating
on Calumet's $435 million senior secured first-lien term loan
facility to 'B' from 'BB-' and revised the recovery rating to '3',
indicating our expectation for meaningful (50% to 70%) recovery in
the event of a payment default, from '1'.
     
"Poor first-quarter margins, combined with cost overruns for the
Shreveport refinery expansion project, resulted in a significant
draw on Calumet's credit," said Standard & Poor's credit analyst
Paul Harvey.  "As a consequence, Calumet's debt leverage will be
elevated at a time of weaker margins, challenging the debt
covenants on its term loan and credit facility."
     
Although S&P expect the company to remain in compliance with its
covenants, helped by improving margins and cost reductions, its
financial measures will remain weaker than S&P previously
expected.


CANARGO ENERGY: Defers Annual Stockholders' Meeting to July 18
--------------------------------------------------------------
As a result of delays encountered in the review of its proxy
materials by the U.S. Securities and Exchange Commission, CanArgo
Energy Corporation has re-scheduled its Annual Meeting of
Stockholders from June 26, 2008 to July 18, 2008 in order to
provide the company with sufficient time to solicit proxies.  The
Meeting will be held at 10.30 a.m. Eastern Time at the American
Stock Exchange, 86 Trinity Place, New York, New York.  Only
stockholders of record at the close of business on June 9, 2008
will be entitled to notice of, and to vote at, such meeting or any
adjournments or postponements.

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

                     Going Concern Doubt

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

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

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

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

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


CATHOLIC CHURCH: Fairbanks Protests CIC's Lift Stay Motion
----------------------------------------------------------
The Catholic Bishop of Northern Alaska told the U.S. Bankruptcy
Court for the District of Alaska that Continental Insurance
Company's request is not warranted because Continental's coverage
action concerns both one of the most significant assets and
potentially one of the most significant claims in the Diocese's
reorganization case, and is premature at best.

Insurance contributions are a necessary component of any plan of
reorganization, asserted Susan G. Boswell, Esq., at Quarles &
Brady Streich Lang, LLP, in Tucson, Arizona.  She noted that the
Court has begun the process of ordering mediation involving the
Diocese, the Official Committee of Unsecured Creditors, the
parishes and other Catholic entities, and insurance companies.

Ms. Boswell contended that Continental clearly recognizes the
importance of the administrative proceedings in the Chapter 11
case, as evidenced by it having obtained pro hac vice admission
in the Bankruptcy Court for four attorneys even before the
Diocese asked the U.S. District Court for the District of Alaska
to refer the Coverage Action to the Bankruptcy Court, and before
its appearance at the May 16, 2008 status hearing.

Continental transparently filed the lift stay request to attempt
to gain leverage with respect to its objection to the Request to
Refer, and negotiations regarding a plan of reorganization, Ms.
Boswell told Judge Donald MacDonald, IV.  She contended that the
lift stay request is based on Continental's "myopic view" that
cause exists to lift the automatic stay merely because motions for
summary judgment in the Coverage Action had been filed and fully
briefed.  She pointed out that to the contrary, "no cause exists .
. .."

At a minimum, Ms. Boswell continued, the Bankruptcy Court should
defer deciding the lift stay request until the Request to Refer
is decided or the bar date has passed to see if Continental files
a proof of claim to promote judicial economy by reducing
duplicative litigation.  She also pointed out that by allowing the
stay to remain in effect pending the determination of the
universe of claims through the claims bar date process, the Court
will maintain the status quo with respect to the Diocese's
assets, and will keep a level playing field for the Diocese, the
Creditors Committee, Continental, and other parties-in-interest
to negotiate a consensual plan of reorganization.

The Official Committee of Unsecured Creditors agrees with, and
joins in the Diocese's opposition to Continental's lift stay
request.

The Creditors Committee noted that neither the Committee nor any
of the survivors of child sex abuse have participated in the
Coverage Action.  Yet, the Committee said, Continental's request
could materially and adversely impact (i) the creditors, who
suffered abuse, and (ii) efforts to reach a consensual resolution
of the reorganization case.

Accordingly, the Creditors Committee believes the lift stay
request is inappropriate and premature.

                       Continental's Motion

Since January 2006, Continental Insurance Company and the
Catholic Bishop of Northern Alaska have been involved in a
litigation seeking a judicial declaration concerning any duty
Continental may have to defend or indemnify the Diocese for
liability arising from claims asserted in Alaska courts by
individuals alleging abuse by priests affiliated with the
Diocese.

Discovery in the Coverage Action has been completed by Feb. 1,
2007, and cross-motions for summary judgment were filed on Oct. 1,
2007.  On Feb. 26, 2008, the U.S. District Court for the District
of Alaska ordered that oral argument on the cross-motions be held
on April 10, 2008.

After the Diocese filed its petition for bankruptcy protection,
however, the District Court stayed all proceedings in the
Coverage Action because of the imposition of the automatic stay.

By this motion, Continental asks the U.S. Bankruptcy Court for
the District of Alaska to lift the automatic stay for the limited
purpose of allowing oral argument in the Coverage Action to be
heard on the cross-motions for summary judgment, and to allow the
District Court to issue its ruling.

Brad E. Ambarian, Esq., at Lane Powell PC, in Anchorage, Alaska,
contended that with all briefing complete on the cross-motions for
summary judgment, there is no compelling reason to continue the
automatic stay with respect the Coverage Action.  He adds that the
Coverage Action has progressed to a point, where all that remains
are two actions -- oral argument and decision by the
District Court -- that will not burden the estate.

Mr. Ambarian related that the Diocese has made various
pronouncements about the importance of its alleged insurance
policies in achieving a successful reorganization.  Hence,
preventing the District Court from hearing the oral arguments and
ruling on the cross-motions simply impedes the Diocese's
reorganization, he said.

The automatic stay in the Coverage Action is creating a "log-jam"
that is preventing the successful negotiation of a consensual
plan of reorganization, Mr. Ambarian argued.  For this reason,  
the automatic stay should be lifted to allow arguments to
proceed, and a ruling to be made, Mr. Ambarian added.

                    About Diocese of Fairbanks

The Roman Catholic Diocese of Fairbanks in Alaska, aka Catholic
Bishop of Northern Alaska, aka Catholic Diocese of Fairbanks, aka
The Diocese of Fairbanks, aka CBNA filed for chapter 11 bankruptcy
on March 1, 2008 (Bankr. D. Alaska Case No. 08-00110).  Susan G.
Boswell, Esq., at Quarles & Brady LLP represents the Debtor in its
restructuring efforts.  Michael R. Mills, Esq., of Dorsey &
Whitney LLP serves as the Debtor's local counsel and Cook,
Schuhmann & Groseclose Inc. as its special counsel.  Judge Donald
MacDonald, IV, of the United States Bankruptcy Court for the
District of Alaska presides over Fairbanks' Chapter 11 case.  The
Debtor's schedules show total assets of $13,316,864 and total
liabilities of $1,838,719.   The church's exclusive plan filing
period expires on June 29, 2008.  (Catholic Church Bankruptcy
News, Issue No. 126; Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000).


CATHOLIC CHURCH: Fairbanks' Creditors Must File Claims by Dec. 2
----------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Alaska fixed
Dec. 2, 2008, as the deadline for parties to file claims against
the Catholic Bishop of Northern Alaska.

For claims resulting from the rejection of an executory contract
or unexpired lease, the Court set the bar date as the earlier of:

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

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

Judge Donald McDonald, IV, also approved the Tort Claim Form, the
Other Claims Form, the Bar Date Notices, the Publication Notice,
and the publication program and schedule.

To continue to protect the identity of the holders of the sexual
abuse claims, the Diocese's counsel will not provide copies of
the Tort Claim Forms to any other parties, except pursuant to
confidentiality protocols approved by the Court.

Prior to the approval of the Diocese's request, the Official
Committee of Unsecured Creditors filed a conditional objection
asking for certain changes and additions to the relief requested
by the Diocese, including:

   -- paid radio announcements on Alaska Public Radio, and
      Channel 2 TV;

   -- additional postings in villages' health clinics, and tribal
      and city offices;

   -- certain revisions on the sexual abuse claim form and bar
      date notices, including the indication of the Creditors
      Committee's toll free number of 1-888-570-6269; and

   -- portions of the announcements, notices and claim forms
      should be repeated and communicated in native Alaskan
      language, Yu'pik.

To address the objections, Judge MacDonald held that if the
Diocese and the Creditors Committee are unable to agree on the
Committee's additional requests, the Court will hold a hearing to
consider those additional program on June 11, 2008, at 10:00 a.m.

                    About Diocese of Fairbanks

The Roman Catholic Diocese of Fairbanks in Alaska, aka Catholic
Bishop of Northern Alaska, aka Catholic Diocese of Fairbanks, aka
The Diocese of Fairbanks, aka CBNA filed for chapter 11 bankruptcy
on March 1, 2008 (Bankr. D. Alaska Case No. 08-00110).  Susan G.
Boswell, Esq., at Quarles & Brady LLP represents the Debtor in its
restructuring efforts.  Michael R. Mills, Esq., of Dorsey &
Whitney LLP serves as the Debtor's local counsel and Cook,
Schuhmann & Groseclose Inc. as its special counsel.  Judge Donald
MacDonald, IV, of the United States Bankruptcy Court for the
District of Alaska presides over Fairbanks' Chapter 11 case.  The
Debtor's schedules show total assets of $13,316,864 and total
liabilities of $1,838,719.   The church's exclusive plan filing
period expires on June 29, 2008.  (Catholic Church Bankruptcy
News, Issue No. 126; Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000).  


CATHOLIC CHURCH: Court to Appoint Claims Rep in Fairbanks' Case
---------------------------------------------------------------
Judge Donald MacDonald, IV, of the U.S. Bankruptcy Court for the
District of Alaska, approved the request of the Roman Catholic
Diocese of Fairbanks in Alaska, aka Catholic Bishop of Northern
Alaska, to appoint a futures claims representative.  He noted that
the FCR will represent the holder of any claim that meets these
criteria:

   -- a claim for injury or damages to an individual;

   -- a claim arising from sexual abuse;

   -- a claim neither timely filed nor deemed to be timely filed,
      like due to excusable neglect; and

   -- a claim either:

      * held by a claimant, who turns 18 after Nov. 2, 2008,
        which is the date 30 days prior to Claims Bar Date; or

      * held by a claimant for whom the applicable Alaska tort
        claim statute of limitations, for any reason, has not
        expired, or has been tolled as of November 2, as
        determined under applicable Alaska or federal law, but
        without regard to federal bankruptcy law.

The person to act as the FCR will be appointed by the Court upon
request of the Diocese, the Creditors Committee, or both.

As reported in the Troubled Company Reporter on May 20, 2008,
Fairbanks asked the Court to:

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

   -- appoint a future claims representative to represent the
      Future Tort Claimants, who will make appearances; file
      pleadings; file a proof of claim on behalf of the Future
      Tort Claimants; participate in negotiating a plan of
      reorganization; participate in any claims estimation
      process; and take other actions, or perform other duties
      as the Court may authorize upon request of the Diocese or
      other party-in-interest.

                        Committee Objects

The request of the Catholic Bishop of Northern Alaska is unclear
as to which claims it seeks to have the future claims
representative authorized to represent, the Official Committee of
Unsecured Creditors complained.

The Creditors Committee told the Court that it would not object to
the request, provided that these claims arising from sexual abuse
would be covered by the FCR:

   (1) claims of persons not over 18 years of age as of Oct. 19,
       2008, which is 45 days prior to the claims bar date of
        Dec. 2, 2008; and

   (2) claims of other persons for whom applicable Alaska tort
       claim statute of limitations had not expired, or had been
       tolled, as of October 19.

                    About Diocese of Fairbanks

The Roman Catholic Diocese of Fairbanks in Alaska, aka Catholic
Bishop of Northern Alaska, aka Catholic Diocese of Fairbanks, aka
The Diocese of Fairbanks, aka CBNA filed for chapter 11 bankruptcy
on March 1, 2008 (Bankr. D. Alaska Case No. 08-00110).  Susan G.
Boswell, Esq., at Quarles & Brady LLP represents the Debtor in its
restructuring efforts.  Michael R. Mills, Esq., of Dorsey &
Whitney LLP serves as the Debtor's local counsel and Cook,
Schuhmann & Groseclose Inc. as its special counsel.  Judge Donald
MacDonald, IV, of the United States Bankruptcy Court for the
District of Alaska presides over Fairbanks' Chapter 11 case.  The
Debtor's schedules show total assets of $13,316,864 and total
liabilities of $1,838,719.   The church's exclusive plan filing
period expires on June 29, 2008.  (Catholic Church Bankruptcy
News, Issue No. 126; Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000).


CATHOLIC CHURCH: Plan Trustee Wants Spokane's Case Reopened
-----------------------------------------------------------
The Diocese of Spokane's Plan Trustee, Gloria Z. Nagler, Esq.,
asked the U.S. Bankruptcy Court for the Eastern District of
Washington to reopen the Diocese's bankruptcy case, which was
closed pursuant to a final decree entered by Judge Patricia C.
Williams on May 12, 2008.

Ms. Nagler said she is aware of at least four late claimants, who
have consulted with the Tort Claims Reviewer regarding evaluation
and allowance of their possible claims against the Diocese.  The
Plan Trustee told the Court that she intends to pay all remaining
funds in the Plant Trust, subject to reserves for administrative
fees and expenses, to the existing allowed claimants pursuant to
the terms of the confirmed Plan of Reorganization.  The
distribution, however, would leave no funds for payment of late
claims, even if those claims are subsequently allowed, she said.

Ms. Nagler wants the Court to approve her proposed distribution.

The Reorganized Debtor, however, objected to Ms. Nagler's request
saying that the reopening of the case would trigger payment by the
Reorganized Debtor of additional quarterly fees to the United
States Trustee.

"The recent emergence of at least four known, potential late
claimants, places the Plan Trustee in a difficult situation, the
resolution to which requires guidance from this Court," Ms. Nagler
countered.

By reopening the case, Ms. Nagler explained, she intends to seek
the Court's approval for a distribution which, by its terms, will
reserve nothing to pay late claims; and a Court ruling that the
late claims, whether or not allowed, will not be paid because the
funds available for distribution will have been distributed to all
timely-filed claims.

The Court approval of the final distribution and establishment of
administrative reserves, which are immune from late claims,
necessarily requires a motion brought on sufficient notice, which
itself necessarily requires an open case in which to file the
motion, Ms. Nagler contended.  Thus, she wants to have the case
reopened because she has no other recourse to solve the problem
created by late claims.

Ms. Nagler said she appreciates the Reorganized Debtor's desire to
avoid payment of additional quarterly U.S. Trustee fees.  However,
neither the confirmed Plan nor the Plan Trust Agreement vest her
with the authority to pay the fees from assets of the Plan Trust
Fund, unless the Court says so, she added.

"Since each of the late claims asserted are based in part upon
the rejection of [those] claims at the request of the Reorganized
Debtor, this reopening of the case should be considered an adjunct
to the Reorganized Debtor's own administrative responsibilities,"
Ms. Nagler further asserted.

                    About The Diocese of Spokane

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

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


CENTEX CORP: Low Cash Flow Cues Moody's to Cut Ratings to Ba2
-------------------------------------------------------------
Moody's Investors Service lowered all of the ratings of Centex
Corporation, including its corporate family rating to Ba2 from Ba1
and the ratings on its various issues of senior unsecured notes to
Ba2 from Ba1. At the same time, Moody's assigned a speculative
grade liquidity rating of SGL-2. The outlook remains negative.

The downgrades reflect that homebuilding cash flow, which had been
slow to develop, is still running behind expectations, despite the
company's success in reducing inventories in its fiscal year that
ended March 31, 2008. Future cash flow performance will depend on
continuing strong inventory reduction, which may be difficult to
accomplish in an environment of declining prices, slow sales, and
intense competition. In addition, Centex has been generating
quarterly losses even before charges and materially larger losses
when charges are included. As a result, tangible net worth has
been substantially eroded, making future covenant compliance
challenging and leaving the company with uncharacteristically
elevated debt leverage (an adjusted 61.6% at March 31, 2008).

Centex's current ratings are supported by its strong inventory
performance (in the top quartile of the industry), sharply reduced
land supply (four years on a go-forward basis), growing cash
position, and a recent new order performance that is relatively
stronger than its former Ba1 peers. The SGL-2 rating assignment
reflects the good year-ahead projected cash flow and growing cash
position, offset in part by covenant compliance challenges and
somewhat limited opportunities to quickly monetize assets.

The negative outlook reflects Moody's expectation that Centex's
credit metrics will continue eroding as homebuilding industry
conditions remain challenging into next year, with any recovery
likely to be sluggish at first, thus prolonging underperformance
until early in the next decade.

Going forward, the outlook could stabilize if the company were to
grow its homebuilding cash flow substantially and use the cash to
build additional liquidity and pay down debt; reduce costs
sufficiently to restore homebuilding profitability before charges;
and make it through the coming year without substantial additional
impairment charges, which could enable the company to reduce debt
leverage to more normal levels and remain in compliance with its
covenants.

The ratings could be lowered again if the company continues
generating quarterly losses before impairments, continues
impairing its assets at the same or near-same rate as it has done
to date, violates covenants in its bank credit agreement,
continues to increase its debt leverage, or begins experiencing
sharp reductions in its trailing twelve-month cash flow
generation.

These rating actions were taken:

  * Corporate family rating lowered to Ba2 from Ba1

  * Probability of default rating lowered to Ba2 from Ba1

  * Senior unsecured notes lowered to Ba2 (LGD4, 53%) from Ba1
    (LGD4, 54%)

  * SGL-2 rating assigned

Founded in 1950 and headquartered in Dallas, Texas, Centex
Corporation is one of the country's largest homebuilders, with
fiscal 2008 revenues and net income of $8.3 billion and ($2.7)
billion, respectively.


CHARTER COMMS: Launches Exchange Offer for $500MM of CCH II Notes
-----------------------------------------------------------------
Charter Communications, Inc.'s indirect subsidiaries, CCH II, LLC
and CCH II Capital Corp. are commencing a private exchange offer
to exchange up to $500 million principal amount of CCH II˙s
existing 10.25% Senior Notes due 2010 (CUSIP Nos. 12502CAD3,
12502CAE1 and 12502CAM3) for additional 10.25% Senior Notes due
2013 of CCH II.

The purpose of the Offer is to improve Charter˙s financial
flexibility by extending debt maturities.

The Offer is being conducted as a modified "dutch auction,"
pursuant to which holders of the Old Notes will have the
opportunity to specify an exchange ratio at which they would be
willing to exchange Old Notes for New Notes.  Holders must submit
tenders in the range of $1,047.50 to $1,077.50 principal amount of
New Notes per $1,000 principal amount of Old Notes with amounts in
the range specified in increments of $2.50 principal amount of New
Notes per $1,000 principal amount of Old Notes.

Charter will accept Old Notes tendered beginning with the minimum
exchange ratio and continuing in order of increasing increments of
$2.50 in New Notes per $1,000 principal amount of Old Notes, until
the aggregate principal amount of accepted Old Notes tendered
equals the Maximum Amount (including an increase in such amount,
if any).  The highest exchange ratio specified with respect to Old
Notes accepted for exchange in this process will be the "Clearing
Exchange Ratio."  If the aggregate principal amount of Old Notes
tendered in the Offer exceeds the Maximum Amount, all Old Notes
tendered at or below the Clearing Exchange Ratio will be accepted
on a pro rata basis and Old Notes tendered above the Clearing
Exchange Ratio will be rejected. All Old Notes tendered which are
accepted will be paid in New Notes based on the same Clearing
Exchange Ratio. Charter reserves the right, but is not obligated,
to increase the Maximum Amount.

The Clearing Exchange Ratio will include an early participation
payment of $30.00 in principal amount of New Notes per $1,000
principal amount of Old Notes.  In order to receive the Early
Participation Payment, investors must tender their Old Notes on or
prior to 5:00 p.m. ET on June 11, 2008, unless extended.  Eligible
investors who validly tender their Old Notes after that time will
receive, for their Old Notes tendered and accepted for exchange, a
principal amount of New Notes equal to the Clearing Exchange Ratio
for such Old Notes less the Early Participation Payment for such
Old Notes.

Tendered notes may be validly withdrawn until 5:00 PM ET, on June
11, 2008, unless extended.  The Offer will expire at 11:59 PM ET,
on June 27, 2008, unless extended.  The Offer is not subject to
any minimum amount of Old Notes being tendered.

The New Notes will be unconditionally guaranteed by Charter
Communications Holdings, LLC and will accrue interest from and
including the settlement date.  Holders who exchange Old Notes for
New Notes will receive accrued and unpaid interest to, but not
including, the settlement date.

The New Notes are being issued as part of the same series of notes
as CCH II˙s $250 million aggregate principal amount of 10.25%
Senior Notes due 2013 which were issued in September 2006 and will
be treated as a single class under the governing indenture.  The
New Notes initially will be subject to certain restrictions on
transfer, are expected to be issued with original issue discount
and will have a separate CUSIP number from the Existing CCH II
2013 Notes.

Noteholders who desire a copy of the eligibility letter may
contact Global Bondholder Service Corporation, the information
agent for the Offer, at (866) 470-3700 (U.S. Toll-free) or (212)
430-3774.

                    About Charter Communications

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

                        Possible Bankruptcy

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

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

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


COLON BAZOR: Voluntary Chapter 11 Case Summary
----------------------------------------------
Debtor: Colon F. Bazor, Jr.
        165 Big Creek Road
        Waynesboro, MS 39367-9549

Bankruptcy Case No.: 08-50962

Chapter 11 Petition Date: June 5, 2008

Court: Southern District of Mississippi (Gulfport Divisional
Office)

Judge: Hon. Neil P. Olack

Debtor's Counsel: Craig M. Geno, Esq.
                  (cmgeno@harrisgeno.com)
                  Harris Jernigan & Geno, PLLC
                  587 Highland Colony Pkwy.
                  P O Box 3380
                  Ridgeland, MS 39157
                  Telephone (601) 427-0048
                  Fax (601) 427-0050

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

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

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


CONTIMORTGAGE CORP: Fitch Retains CCC/DR2 Ratings on Four Classes
-----------------------------------------------------------------
Fitch Ratings has taken rating actions on seven ContiMortgage
Corporation Home Equity Loan Transactions.  Unless stated
otherwise, any bonds that were previously placed on Rating Watch
Negative are now removed.

ContiMortgage Home Equity Loan Trust, series 1996-4 Group 1:
-- A-11IO affirmed at 'AAA';
-- A-12IO affirmed at 'AAA';
-- A-8 affirmed at 'AA';
-- A-9 affirmed at 'AA';

Deal Summary
-- 60+ day Delinquency: 14.96%
-- Realized Losses to date (% of Original Balance): 8.92%

ContiMortgage Home Equity Loan Trust, series 1996-4 Group 2:
-- A-10 affirmed at 'AA';

Deal Summary
-- 60+ day Delinquency: 30.36%
-- Realized Losses to date (% of Original Balance): 4.71%

ContiMortgage Home Equity Loan Trust, series 1997-1:
-- A-10IO affirmed at 'AAA';
-- A-8 affirmed at 'AAA';
-- A-9 affirmed at 'AAA';
-- M-1 affirmed at 'A';
-- M-2 revised to 'C/DR3' from 'C/DR2';

Deal Summary
-- 60+ day Delinquency: 17.91%
-- Realized Losses to date (% of Original Balance): 8.91%

ContiMortgage Home Equity Loan Trust, series 1997-2 Group 1:
-- A-11IO affirmed at 'AAA';
-- A-8 affirmed at 'AAA';
-- A-9 affirmed at 'AAA';
-- M-1F affirmed at 'AA-';
-- M-2F remains at 'CC/DR1';

Deal Summary
-- 60+ day Delinquency: 19.61%
-- Realized Losses to date (% of Original Balance): 8.29%

ContiMortgage Home Equity Loan Trust, series 1997-2 Group 2:
-- M1-A affirmed at 'AAA';

Deal Summary
-- 60+ day Delinquency: 12.50%
-- Realized Losses to date (% of Original Balance): 4.97%


ContiMortgage Home Equity Loan Trust, series 1997-4:
-- B remains at 'CCC/DR2';

Deal Summary
-- 60+ day Delinquency: 16.10%
-- Realized Losses to date (% of Original Balance): 7.93%

ContiMortgage Home Equity Loan Trust, series 1998-4:
-- AF affirmed at 'AAA';
-- B remains at 'CCC/DR2';

Deal Summary
-- 60+ day Delinquency: 13.75%
-- Realized Losses to date (% of Original Balance): 10.11%

ContiMortgage Home Equity Loan Trust, series 1999-1:
-- A-6 affirmed at 'AA';
-- A-7 affirmed at 'AA';
-- A-8 affirmed at 'AA';
-- B remains at 'CCC/DR2';

Deal Summary
-- 60+ day Delinquency: 15.21%
-- Realized Losses to date (% of Original Balance): 8.58%

ContiMortgage Home Equity Loan Trust, series 1999-3:
-- B remains at 'CCC/DR2';

Deal Summary
-- 60+ day Delinquency: 19.70%
-- Realized Losses to date (% of Original Balance): 8.25%


CRUM & FORSTER: S&P Lifts Ratings to BB+ from BB; Stable Outlook
----------------------------------------------------------------
Standard & Poor's Ratings Services raised its counterparty credit
and financial strength ratings on Fairfax Financial Holdings
Ltd.'s operating insurance companies to 'BBB+' from 'BBB', and
also raised its ratings on FFH and Crum & Forster Holdings Corp.
to 'BB+' from 'BB'.  The outlook is stable.
     
"The upgrade is based on strong earnings in 2007 and in 2008
relative to peers," said Standard & Poor's credit analyst Damien
Magarelli.  "Previously restrictive negative ratings factors are
still viewed negatively, but no longer limit the rating to the
same degree: governance has improved, ERM remains adequate, and
reserves and reinsurance recoverables are not as great a concern."
     
The ratings are based on a good competitive position that is
diversified geographically and by sector, as well as reduced debt
leverage.  Fairfax historically had very high debt leverage, but
this has been steadily declining the last few years and at first
quarter 2008 was 24%--now a strength to the rating.  Negative
factors to the rating are the lack of a strong earnings track
record in a softening price market, high reinsurance recoverables,
though declining, and the historical use of finite reinsurance,
though many of these contracts have been commuted.
     
The stable outlook is based on the view that FFH's earnings in
2008 will be unusually strong based on investment earnings within
the CDS portfolio as well as strong underwriting performance with
a combined ratio near 100% from continuing operations.  The stable
outlook is further supported by a good competitive position,
decreasing financial leverage (to be maintained at less than 30%)
with interest coverage at 3x excluding realized capital gains, and
strong liquidity to be measured in part by the maintenance of
$350 million in cash and short-term investments at the holding
company level.  

A negative outlook may result if Fairfax changes its investments
strategy to a less conservative one, increases its holdings of
common stock to more than 30%, increases its reinsurance
recoverables, accounts significant reserve charges,
or reduces its cash and short-term investment holdings to less
than $350 million.  A positive outlook is possible if Fairfax
shows disciplined underwriting in a softening market, does not
have significant reserve charges, does not have accounting
restatements, and reduces its reinsurance recoverables, while
earnings remain strong on a consolidated basis.


CSFB HEAT: Fitch Downgrades Ratings on Six Certificate Classes
--------------------------------------------------------------
Fitch Ratings has taken rating actions on CSFB HEAT mortgage pass-
through certificates.  Unless stated otherwise, any bonds that
were previously placed on Rating Watch Negative are now removed.

CSFB HEAT 2002-5 TOTAL
-- M-1 affirmed at 'AA';
-- M-2 downgraded to 'BB+' from 'BBB';
-- B-1 downgraded to 'CC/DR4' from 'CCC/DR1';

Deal Summary
-- 60+ day Delinquency: 22.82%
-- Realized Losses to date (% of Original Balance): 2.39%

CSFB HEAT 2002-1 TOTAL
-- B-1 downgraded to 'C/DR6' from 'CCC/DR2';

Deal Summary
-- 60+ day Delinquency: 32.37%
-- Realized Losses to date (% of Original Balance): 2.79%

CSFB HEAT 2002-3 TOTAL
-- B-1 downgraded to 'C/DR5' from 'B';

Deal Summary
-- 60+ day Delinquency: 32.82%
-- Realized Losses to date (% of Original Balance): 2.78%

CSFB HEAT 2002-4 TOTAL
-- M-1 downgraded to 'A' from 'AA';
-- M-2 affirmed at 'B';
-- B-1 downgraded to 'C/DR6' from 'B-/DR1';

Deal Summary
-- 60+ day Delinquency: 31.62%
-- Realized Losses to date (% of Original Balance): 2.23%


DARRELL KINER: Case Summary & 16 Largest Unsecured Creditors
------------------------------------------------------------
Debtor: Darrell Kiner
        786 Conley Street
        Atlanta, GA 30315

Bankruptcy Case No.: 08-70526

Chapter 11 Petition Date: June 2, 2008

Court: Northern District of Georgia (Atlanta)

Judge: Hon. Robert Brizendine

Debtor's Counsel: Dorna Jenkins Taylor
                  (dorna.taylor@taylorattorneys.com)
                  Taylor & Associates, LLC
                  1401 Peachtree Street, Suite 500
                  Atlanta, GA 30309
                  Telephone (404) 870-3560
                  Fax (404) 745-0136

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

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

A copy of the debtor's petition and a list of its 16 largest
unsecured creditors is available for free at:

           http://bankrupt.com/misc/ganb08-70526.pdf


DEL MAR VILLAS: Voluntary Chapter 11 Case Summary
------------------------------------------------
Debtor: Del Mar Villas
        aka Spectrum LLC
        214 West Beltline, Suite C
        Cedar Hill, TX 75104

Bankruptcy Case No.: 08-32736

Chapter 11 Petition Date: June 3, 2008

Court: Northern District of Texas (Dallas)

Petitioner's Counsel: Nathan Matthew Johnson, Esq.
                      (nathanmj@sbcglobal.net)
                      Howard Marc Spector, P.C.
                      12770 Coit Road, Suite 1100
                      Dallas, TX 75251
                      Tel: (214)365-5379
                      Fax: (214)237-3380

   Petitioners                 Nature of Claim      Claim Amount
   -----------                 ---------------      ------------
   Brasha Builders, Inc.       accounts payable          $94,982
   c/o Richard Shaw
   17103 Preston Road
   Suite 250
   Dallas, TX 75248

   Provident Management        accrued management        $35,807
   c/o Richard Shaw            fee
   17103 Preston Road
   Suite 250
   Dallas, TX 75248

   TOGP Development            loans                     $65,000
   c/o Richard Shaw
   17103 Preston Road
   Suite 250
   Dallas, TX 75248

   PMI Employees, Inc.         loans                      $1,656
   c/o Richard Shaw
   17103 Preston Road
   Suite 250
   Dallas, TX 75248



DIAGNOSTIC IMAGING: Moody's Holds B3 Probability of Default Rating
------------------------------------------------------------------
Moody's Investors Service affirmed the ratings of Diagnostic
Imaging Group, LLC, including the B2 Corporate Family Rating. The
rating outlook remains negative.

The affirmation of the negative rating outlook reflects DIG's
current liquidity position which Moody's views as relatively weak.
If the company does not demonstrate improvement in its liquidity
position through improvement in cash flow and restoration of
availability under the revolver, there could be downward pressure
on the ratings. On the other hand, if the company is able to
improve its cash collections and pay down debt thus increasing the
availability under the revolver, Moody's could change the ratings
outlook to stable. Moody's had changed DIG's rating outlook to
negative from stable in July 2006, reflecting the significantly
higher capital expenditures than Moody's had expected at the time
of the original assignment of the ratings. As a result of the
company's aggressive acquisition and capital equipment investments
DIG had not reduced debt as Moody's expected. However, Moody's
believes that the company's capital expenditures will begin to
taper off and be considerably lower in 2008 than 2007.

DIG's ratings are constrained by the company's limited scale and
diversity, limited free cash flow generation and the risk of
future declines in reimbursement for diagnostic imaging services.
The ratings are supported by the company's solid competitive
position in the diagnostic imaging market, moderate financial
leverage and strong profitability margins.

Ratings affirmed/LGD estimates revised:

  * $25 million, senior secured revolver due 2010: to B1
    (LGD2, 23%) from B1 (LGD2, 25%)

  * $110 million, senior secured term loan B due 2012: to B1
    (LGD2, 23%) from B1 (LGD2, 25%)

  * Corporate Family Rating, B2

  * Probability of Default Rating, B3

The ratings outlook is negative.

Headquartered in Bethpage, New York, DIG is principally engaged in
establishing and operating fixed-site diagnostic imaging and
radiology facilities providing all types of outpatient
radiological services, including x-rays, CT scans, mammography and
MRIs. The company operates 36 multi-modality centers in the New
York metropolitan area, Florida and New Jersey. For the twelve
months ended March 31, 2008 DIG generated revenue of approximately
$178 million.


DLJ COMMERCIAL: Fitch Holds 'B-' Rating on $13.8MM Cl. B-6 Certs.
-----------------------------------------------------------------
Fitch Ratings has affirmed DLJ Commercial Mortgage Corp.'s
commercial mortgage pass-through certificates, series 1998-CF2,
as:

-- $175.4 million class A-1B at 'AAA';
-- Interest-only class S at 'AAA';
-- $55.4 million class A-2 at 'AAA';
-- $60.9 million class A-3 at 'AAA';
-- $13.8 million class A-4 at 'AAA';
-- $41.5 million class B-1 at 'AAA';
-- $16.6 million class B-2 at 'AAA';
-- $52.6 million class B-3 at 'A+';
-- $11.1 million class B-4 at 'A-';
-- $22.2 million class B-5 at 'BB+';
-- $13.8 million class B-6 at 'B-'.

Fitch does not rate the $14.6 million class C certificates.  Class
A-1A has paid in full.

Although credit enhancement has increased since Fitch's last
rating action, concentrations of upcoming maturities and a high
percentage of Fitch loans of concern warrant affirmations.  
Currently, 31 loans have defeased (29.6%), including four of the
top 10 loans (13.9%).  As of the May 2008 distribution date, the
pool has paid down 56.9% to $447.9 million from $1.11 billion at
issuance and an additional 36.8% since the last Fitch rating
action.  Approximately 75% of the pool (126 loans) matures in the
remainder of 2008, including 102 non-defeased loans (48.7% of the
pool) which have a weighted note rate of 7.03%.

There are currently three loans (2.9 %) in special servicing, two
of which are current and one of which is 90 days delinquent
(1.2%).  In addition, Fitch has identified 26 loans (13.8%) as
Fitch Loans of Concern.  These include specially serviced loans,
loans with debt service coverage ratios below 1.0 times and loans
with other performance issues.  The largest Fitch LOC (3.1%) is
secured by a hotel property in Louisville, Kentucky and is
current.

The largest specially serviced loan (1.2%) is secured by a hotel
property located in Youngstown, Ohio.  Losses on this specially
serviced loans are anticipated to be fully absorbed by the unrated
class C certificate.

As of the May 2008 remittance report, classes up to B-3
experienced interest shortfalls due to special servicing fees from
corrected loans that paid off at maturity.  The shortfalls are
expected to be refunded to B-3 through B-5 in the near future.  
Additional shortfalls are expected given concentrations of
corrected loans maturing in July 2008; however, these shortfalls
are expected to be repaid the month after they are incurred.


D.R. HORTON: Moody's Lowers Subordinated Notes' Rating to B1
------------------------------------------------------------
Moody's Investors Service lowered all of the ratings of D.R.
Horton, Inc., including its corporate family rating to Ba2 from
Ba1, the ratings on its various issues of senior unsecured notes
to Ba2 from Ba1, and the rating on its subordinated notes to B1
from Ba2. At the same time, a speculative grade liquidity rating
of SGL-2 was assigned. The outlook remains negative.

The downgrades reflect that the company has begun to generate
quarterly losses before impairments and other charges, and Moody's
expects this trend to continue into next year, as the rate of
expected revenue decline exceeds the pace at which the company can
continue to pare costs. When large and continuing impairment
charges are folded in, the company's debt leverage will continue
to edge up while covenant compliance will become, and remain, very
challenging. In addition, the company still retains a long land
position (a Moody's-projected greater than seven year supply on a
go-forward basis) while large mandatory debt payments for the next
few years may hold down the growth in its cash position.

Horton's current ratings are supported by its exceptionally strong
cash flow performance, sound liquidity, and transparent balance
sheet (e.g., no joint venture exposure). The SGL-2 rating
assignment reflects the strong year-ahead projected cash flow and
good cash position, offset in part by covenant compliance
challenges and somewhat limited opportunities to quickly monetize
assets.

The negative outlook reflects Moody's expectation that Horton's
credit metrics will continue eroding as homebuilding industry
conditions remain challenging into next year, with any recovery
likely to be sluggish at first, thus prolonging underperformance
until early in the next decade.

Going forward, the outlook could stabilize if the company were to
continue with its industry-leading cash flow performance; reduce
costs sufficiently to restore homebuilding profitability before
charges; and make it through subsequent quarters without
substantial additional charges to net worth, thereby maintaining a
debt leverage ratio consistent with its ratings.

The ratings could be lowered again if quarterly losses before
impairments begin to widen substantially; impairments were to
continue at the same or near-same rate as they have to date,
thereby imperiling covenant performance and/or causing debt
leverage to rise above Ba levels for more than a brief period; or
if the company begins experiencing sharp reductions in its
trailing twelve-month cash flow generation.

These rating actions were taken:

  * Corporate family rating lowered to Ba2 from Ba1

  * Probability of default rating lowered to Ba2 from Ba1

  * Senior unsecured notes lowered to Ba2 (LGD4, 53%) from Ba1
    (LGD4, 55%)

  * Senior subordinated notes lowered to B1 (LGD6, 96%) from Ba2
    (LGD6, 96%)

  * SGL-2 rating assigned

Headquartered in Ft. Worth, Texas, D.R. Horton, Inc. is one of the
country's largest homebuilders, with revenues and net income for
the trailing twelve-month period ended March 31, 2008 of $9
billion and ($2.3) billion, respectively.


ECHO THERAPEUTICS: Posts $3,981,101 Net Loss in 2008 First Quarter
------------------------------------------------------------------
Echo Therapeutics Inc. reported a net loss of $3,981,101, on zero
revenue, for the first quarter ended March 31, 2008, compared with
a net loss of $586,966, on total revenue of $22,267, in the same
period last year.

Licensing revenue for the three months ended March 31, 2008, was
zero compared to $12,500 for the three months ended March 31, 2007
through an agreement with HortResearch.

As a result of the company's decision not to pursue sales and
marketing of the SonoPrep System, the company had no product
revenue in the three months ended March 31, 2008.  For the same
period in 2007, the company had nominal revenues of $9,767.

At March 31, 2008, the company's consoliated balance sheet showed
$11,885,173 in total assets, $4,032,680 in total liabilities, and
$7,852,493 in total stockholders' equity.

The company's consolidated balance sheet at March 31, 2008, also
showed strained liquidity with $1,273,972 in total current assets
available to pay $2,280,054 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?2d9a

                       Going Concern Doubt

Wolf & Company, P.C., in Boston, expressed substantial doubt about
Echo Therapeutics 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
reported that the company has suffered recurring losses from
operations, has a significant accumulated deficit and has been
unable to raise sufficient capital to fund its operations.

As of March 31, 2008, the company had cash of approximately $1.2
million and an accumulated deficit of approximately $51.7 million.
Through March 31, 2008, the Company had no sales or revenues to
cover its costs and operating expenses. Although the Company has
been able to issue securities through senior promissory notes,
secured promissory notes and a series of private placements to
raise capital in order to fund its operations, it is not known
whether the Company will be able to continue this practice, or be
able to obtain other types of financing to meet its cash operating
expenses. This, in turn, raises substantial doubt about the
Company˙s ability to continue as a going concern. Subsequent to
March 31, 2008, the Company received gross proceeds from the 2008
Senior Secured Note and Warrant Financing of $500,000 and has the
right to issue additional Secured Notes in 2008 for additional
gross proceeds of $1,000,000 (see Note 5). Management is currently
pursuing additional private equity financing, and such financing
is expected to be completed during 2008. However, no assurances
can be given as to the success of these plans. The consolidated
financial statements do not include any adjustments that might
result from the outcome of these uncertainties.


ENKU GELAYE: Voluntary Chapter 11 Case Summary
----------------------------------------------
Debtor: Enku Gelaye Holdings LLC
        269 S Beverly Dr No. 612
        Beverly Hills, CA 90212

Bankruptcy Case No.: 08-17804

Type of Business: The Debtor is a single asset real estate
company.

Chapter 11 Petition Date: June 2, 2008

Court: Central District Of California (Los Angeles)

Judge: Ellen Carroll

Debtor's Counsel: Owen T.Mascott
                  210 N Salinas St
                  Santa Barbara, CA 93103
                  Tel (805) 845-4065

Estimated Assets: $1 million to $10 million

Estimated Debts: $1 million to $10 million

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


FELLOWSHIP ACADEMY: Case Summary & 20 Largest Unsecured Creditors
-----------------------------------------------------------------
Debtor: Fellowship Academy
        495 Cambridge Street
        San Francisco, CA 94134

Bankruptcy Case No.: 08-30984

Chapter 11 Petition Date: June 4, 2008

Court: Northern District of California (San Francisco)

Judge: Dennis Montali

Debtor's Counsel: Marianne Dickson
                  Email mdickson@ml-sf.com
                  Scott H. McNutt
                  Email: SMcNutt@ml-sf.com
                  McNutt Law Group
                  188 The Embarcadero No. 800
                  San Francisco, CA 94105
                  Tel (415) 995-8475

Total Assets: $6,559,908

Total Debts: $5,063,735

A copy of the Debtor's petition is available for free at
http://bankrupt.com/misc/canb08-30984.pdf


FOUNTAINS MOBILE: Case Summary & 5 Largest Unsecured Creditors
--------------------------------------------------------------
Debtor: The Fountains Mobile Home Community LLC
        No. 98, 7350 S. Tamiami Trail
        Sarasota, FL 34231

Bankruptcy Case No.: 08-08159

Chapter 11 Petition Date: June 5, 2008

Court: Middle District of Florida (Tampa)

Judge: K. Rodney May

Debtor's Counsel: Perry G Gruman
                  3400 West Kennedy Boulevard
                  Tampa, FL 33609
                  Tel (813) 870-1614
                  Email linda@grumanlaw.com

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/flmb08-08159.pdf


FRESH DEL MONTE: S&P's 'BB-' Rating Unmoved by Caribana Buyout
--------------------------------------------------------------
Standard & Poor's Ratings Services said that its ratings and
outlook on Fresh Del Monte Produce Inc. (BB-/Positive/--) were
unchanged following the company's announcement that it had
acquired the shares of Desarollo Agroindustrial de Frutales S.A.,
a producer of high quality bananas in Costa Rica; the shares of
Frutas de Exportacion S.A., a major provider of gold pineapples in
Costa Rica; and the shares of an affiliated sales and marketing
company, collectively known as "Caribana."  

The purchase price was $403 million, which we believe was financed
in a manner consistent with the company's rating.  S&P assume
Fresh Del Monte will maintain credit measures that are stronger
than its rating to compensate for inherent volatility in the
produce industry.  The acquisitions have the potential to generate
operating efficiencies and synergies, through optimization of
logistics and warehouse platforms, consolidation of administrative
functions, and procurement cost savings.


FRONTIER AIRLINES: Wants Period to Remove Pending Actions Extended
------------------------------------------------------------------
Frontier Airlines Holdings Inc. and its subsidiaries ask the U.S.
Bankruptcy Court for the Southern District of New York to extend
the period during which they may remove pending actions as of the
bankruptcy filing date, through and including the effective date
of any plan of reorganization in their Chapter 11 cases.

Rule 9027 of the Federal Rules of Bankruptcy Procedure sets forth
the time periods for filing notices to remove claims or causes of
action.  Specifically, Rule 9027(a)(2) provides that if the claim
or cause of action in a civil action is pending when a case under
the Bankruptcy Code is commenced, a notice of removal may be
filed only within the longest of:

   (a) 90 days after the order for relief in the case under the
       Bankruptcy Code,

   (b) 30 days after entry of an order terminating a stay, if the
       claim or cause of action in a civil action has been stayed
       under Section 362 of the Bankruptcy Code, or

   (c) 30 days after a trustee qualifies in a Chapter 11
       reorganization case but not later than 180 days after the
       order for relief.

Marshall S. Huebner, Esq., at Davis Polk & Wardwell, in New York,
relates that as of the bankruptcy filing, the Debtors'
professionals and employees have attended, and will continue to
attend, to these significant business and legal issues, including,
inter alia:

   (i) stabilizing the Debtors' business operations to maximize
       the value of their estates;

  (ii) analyzing executory contracts and nonresidential real
       property leases to be assumed or rejected;

(iii) negotiating new agreements with certain goods and
       services providers;

  (iv) evaluating numerous aircraft financing arrangements in
       light of Section 1110 of the Bankruptcy Code; and

   (v) compiling information from books, records and documents
       relating to large numbers of claims, assets and contracts
       to prepare their financial and lease or contract
       schedules.

The Debtors are also parties to various judicial and
administrative proceedings, which the Debtors have had to devote
enormous amount of time and effort to resolve, Mr. Huebner adds.

Consequently, the Debtors have not been able to analyze and make
a determination regarding the removal of each of the Prepetition
Actions, Mr. Huebner tells the Court.

Mr. Huebner maintains that the requested Extension will permit
the Debtors to make a full assessment of the possible removal of
Prepetition Actions, thereby maximizing the potential recovery
for creditors.

The Extension will also protect the Debtors' rights under
Section 1452 of the Judicial and Judiciary Procedures Code, he
notes.

Mr. Huebner says the Debtors' adversaries will not be prejudiced
by the requested Extension because the adversaries may not
prosecute a Prepetition Action absent relief from the automatic
stay.  Any party whose proceeding is removed may seek to have it
remanded under Section 1452(b) of the Judicial and Judiciary
Procedures Code.

                   About Frontier Airlines Inc.

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

The Debtor and its debtor-affiliates filed for Chapter 11
protection on April 10, 2008, (Bankr. S.D. N.Y. Case No.: 08-11297
thru 08-11299.)  Hugh R. McCullough, Esq. at Davis Polk & Wardwell
represent the Debtors in their restructuring efforts. Togul, Segal
& Segal LLP is Debtors' Conflicts Counsel, Faegre & Benson LLP is
the Debtors' Special Counsel, and Kekst and Company is the
Debtors' Communications Advisors.  At Dec. 31, 2007, Frontier
Airlines Holdings Inc. and its subsidiaries' total assets was
$1,126,748,000 and total debts was $933,176,000.  (Frontier
Airlines Bankruptcy News, Issue No. 9; Bankruptcy Creditors'
Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000)


FRONTIER AIRLINES: Court Approves WilmerHale as Panel's Counsel
---------------------------------------------------------------
The Official Committee of Unsecured Creditors of Frontier Airlines
Holdings Inc. and its subsidiaries obtained authority from the
U.S. Bankruptcy Court for the Southern District of New York to
retain Wilmer Cutler Pickering Hale and Dorr LLP as its counsel,
nunc pro tunc to April 24, 2008.

As the Committee's counsel, WilmerHale is expected to:

   (a) advise the Committee with respect to its rights, duties
       and powers in the Debtors' Chapter 11 cases;

   (b) assist and advise the Committee in its consultations with
       the Debtors;

   (c) assist the Committee in analyzing the Debtors' capital
       structure, the claims of the Debtors' creditors, and in
       negotiating with holders of claims and equity interests;

   (d) investigate the acts, conduct, assets, liabilities and
       financial condition of the Debtors and of the operation of
       the Debtors' businesses;

   (e) analyze, and negotiate with, the Debtors or any third
       party concerning matters related to, among other things,
       (i) the assumption or rejection of certain leases of non-
       residential real property and executory contracts, asset
       dispositions, financing of other transactions, and (ii)
       the terms of one or more plans of reorganization for the
       Debtors and accompanying disclosure statements and related
       Plan of Reorganization documents;

   (f) assist and advise the Committee as to its communications
       to the general creditor body regarding significant matters
       in the Debtors' Chapter 11 cases;

   (g) participate in all hearings and other proceedings;

   (h) review and analyze all motions, applications, orders,
       statements of operations and schedules filed with the
       Court;

   (i) assist and advise the Committee with respect to any
       legislative or governmental activities;

   (j) prepare pleadings and applications as may be necessary to
       uphold the Committee's interests and objectives;

   (k) investigate and analyze any claims against the Debtors'
       non-debtor affiliates;

   (l) prepare, on behalf of the Committee, any pleadings,
       including without limitation, motions, memoranda,
       complaints, adversary complaints, objections or comments;
       and

   (m) perform other legal services as may be required or are
       otherwise deemed to be in the interests of the Committee
       in accordance with the Committee's powers and duties.

The professionals in WilmerHale will be paid according to their
customary hourly rates of:

     Professional        Hourly Rate
     ------------        -----------
     Partners            $550 - $765
     Counsel             $515 - $595
     Associates          $345 - $515
     Paralegals          $210 - $250

Andrew N. Goldman, Esq., a partner at WilmerHale, asserted that
the firm does not represent any interest adverse to the Debtors,
their estates or creditors.  WilmerHale is a "disinterested
person" within the meaning of Section 101(14) of the Bankruptcy
Code, Mr. Goldman assured the Court.

                   About Frontier Airlines Inc.

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

The Debtor and its debtor-affiliates filed for Chapter 11
protection on April 10, 2008, (Bankr. S.D. N.Y. Case No.: 08-11297
thru 08-11299.)  Hugh R. McCullough, Esq. at Davis Polk & Wardwell
represent the Debtors in their restructuring efforts. Togul, Segal
& Segal LLP is Debtors' Conflicts Counsel, Faegre & Benson LLP is
the Debtors' Special Counsel, and Kekst and Company is the
Debtors' Communications Advisors.  At Dec. 31, 2007, Frontier
Airlines Holdings Inc. and its subsidiaries' total assets was
$1,126,748,000 and total debts was $933,176,000.  (Frontier
Airlines Bankruptcy News, Issue No. 9; Bankruptcy Creditors'
Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000)


GETTY IMAGES: Hellman Buyout Cues Moody's to Assign Ba2 Rating
--------------------------------------------------------------
Moody's Investors Service assigned a Ba2 corporate family rating
for Getty Images, Inc., and Ba2 ratings to its senior secured loan
facilities pending its acquisition by Hellman & Friedman LLC. The
$2.4 billion acquisition will be financed with a $970 million
senior secured term loan, an undrawn $75 million secured revolving
credit facility and approximately $1.1 billion of equity, with the
remainder from cash on hand. All existing debt of Getty Images,
Inc. will be repaid concurrent with the acquisition. The
acquisition is expected to close in July 2008. The outlook is
stable.

These ratings were assigned:

  * Corporate Family Rating: Ba2

  * Probability of Default Rating: Ba3

  * $970 million senior secured term loan: Ba2, LGD3 (31%)

  * $75 million senior secured revolver: Ba2, LDG3 (31%)

Upon repayment at the close of the transaction, this rating will
be withdrawn:

  * $265 million series B convertible subordinated notes due
    2023: Ba2

The Ba2 corporate family rating is driven by Getty Images's
leading market position in the stock imagery market, broad
geographic diversification of its customer base, and the strong
cash generating capabilities of the business. The ratings are
limited by the pro forma closing leverage of 3.2x (using Moody's
standard adjustments), which is reflective of Ba3- and Ba2-rated
business service and technology firms. The ratings are also
constrained by declining trends in the company's traditional
creative stills business, the increasing supply of lower priced
digital imagery and potential threats from new competitors or
technologies. Getty Images's iStock business has been offsetting
declines in their traditional business and will likely continue to
do so. The iStock business is only a few years old, however, and
the niche it operates in is still evolving.

The stable outlook reflects the expectation that growth in the
iStock business will continue to offset declines in Getty Images's
traditional imagery business, resulting in modest overall growth.
The ratings could face downward pressure if overall performance
was to deteriorate or the company was to make a large debt-
financed acquisition or distribution. Ratings could experience
upward pressure if the traditional imagery business stabilizes and
the company materially reduces leverage.

Getty Images Inc. is a leading global provider of stock imagery
for the business community. Revenues and adjusted EBITDA for FY
2007 were $858 million and $321 million, respectively. The company
is headquartered in Seattle, Washington.


GETTY IMAGES: S&P Affirms 'BB-' Rating on New Credit Profile
------------------------------------------------------------
Standard & Poor's Ratings Services affirmed and removed from
Credit Watch its 'BB-' corporate credit rating on Seattle-based
visual imagery and digital content company Getty Images Inc.  The
rating action is based on Getty Images' new credit profile as a
result of private-equity firm Hellman & Friedman's pending
acquisition of the company.
     
In addition, S&P assigned a rating of 'BB' to the company's
proposed $1.045 billion senior secured bank financing, one notch
higher than the corporate credit rating on Getty Images, and a '2'
recovery rating, indicating its expectation of substantial
recovery (70%-90%) of principal and prepetition interest in the
event of payment default.  Proceeds of the facilities will be
used to complete the acquisition and to repay existing
indebtedness.  The outlook is negative.
     
"The negative outlook incorporates our concern over unfavorable
secular trends," said Standard & Poor's credit analyst Tulip Lim,"
and its impact on the company's compliance with financial
covenants."


GOLDMAN SACHS: Fitch Places Low-B Ratings Under Negative Watch
--------------------------------------------------------------
Fitch Ratings has taken rating actions on the Goldman Sachs
mortgage pass-through certificates listed below.  Unless stated
otherwise, any bonds that were previously placed on Rating Watch
Negative are removed.

GSR Mortgage Loan Trust 2002-3F
-- Class 1A-A affirmed at 'AAA';
-- Class 1A-B affirmed at 'AAA';
-- Class 1A-C affirmed at 'AAA';
-- Class 1B-1 affirmed at 'AAA';
-- Class 1B-2 affirmed at 'AA+';
-- Class 1B-3 affirmed at 'BBB';
-- Class 1B-4 rated 'BB', placed on Rating Watch Negative;
-- Class 1B-5 rated 'B', placed on Rating Watch Negative.


HEALTHMARKETS INC: Low Levels of EBITDA Cue S&P to Cut Rating
-------------------------------------------------------------
Standard & Poor's Ratings Services lowered its counterparty credit
rating on HealthMarkets Inc. to 'BB' from 'BB+'.  At the same
time, the counterparty credit and financial strength ratings on
HealthMarkets' operating companies were also lowered by one notch.
     
The outlook on all of the companies is stable.
     
"The downgrade follows a trend in lower absolute levels of
operating EBITDA and our view that current plans to revamp the
product line and improve earnings prospectively are not likely to
demonstrate significant results for the next couple of years,"
said Standard & Poor's credit analyst Neal Freedman.  "The company
is transforming its health insurance product portfolio to include
benefit designs more similar to conventional, network-based,
health insurance than its older scheduled benefit products, and
which have a higher expected medical loss ratio."  

The product line rebalancing has furthermore created challenges
for the company's agency force as demonstrated by a decrease in
the average number of writing agents in 2007 to 1,874 from 2,143
in 2006 as well as a 6% decrease in agent productivity in 2007
based on the average number of weekly applications submitted per
writing agent.
     
In 2008, Standard & Poor's expects HealthMarkets' premium revenue,
excluding Medicare and dental insurance, to decrease about 3%,
reflecting the realignment of the company's health insurance
product portfolio.  This realignment coupled with the introduction
of Medicare and dental insurance products is expected to increase
the medical loss ratio in 2008 resulting in an operating EBITDA
decline. Capitalization is expected to remain adequate on a
double-leverage adjusted basis, while debt plus preferred leverage
is expected to decrease to 40%-45% and operating EBITDA fixed-
charge coverage is expected to decline to 4.5x-5.0x.  If the
company does not meet 2008 expectations, the outlook could be
revised to negative and/or the ratings lowered an additional
notch.


HOLLINGER INC: Creditors Have Until July 1 to File Proofs of Claim
------------------------------------------------------------------
The Ontario Superior Court of Justice set 5:00 p.m, Eastern
Standard Time, on July 11, 2008, as the deadline wherein creditors
of Hollinger Inc. and its debtor-affiliates may file proofs of
claims.

Creditor with claims prior to Aug. 1, 2007, must file a separate
proof of claim for each Debtor against which it asserts a claim.

For more information on proof of claim filing, contact Ernst &
Young LLP at 1-888-788-9099.

Based in Toronto, Ontario, Hollinger Inc. (TSX: HLG.C)(TSX:
HLG.PR.B) -- http://www.hollingerinc.com/-- owns approximately
70.1% voting and 19.7% equity interest in Sun-Times Media Group
Inc. (formerly Hollinger International Inc.), a media company with
assets which include the Chicago Sun-Times newspaper and
Suntimes.com and a number of community newspapers and websites
serving communities in the Chicago area.

The company, along with two affiliates, 4322525 Canada Inc. and
Sugra Limited, filed separate Chapter 15 petitions on Aug. 1, 2007
(Bankr. D. Del. Case Nos. 07-11029 through 07-11031).  Hollinger
also initiated Court-supervised restructuring under the Companies'
Creditors Arrangement Act (Canada) on the same day.

Derek C. Abbott, Esq., and Kelly M. Dawson, Esq., at Morris,
Nichols, Arsht & Tunnell LLP, represents the Debtors in their U.S.
proceedings.

As reported in the Troubled Company Reporter on Feb. 22, 2008,
Hollinger Inc.'s consolidated balance sheet at Dec. 31, 2007,
showed C$79.8 million in total assets and C$219.3 million in
total liabilities, resulting in a C$139.5 million total
stockholders' deficit.


IMMUNICON CORP: March 31 Balance Sheet Upside-Down by $12,737,000
-----------------------------------------------------------------
Immunicon Corp.'s consolidated balance sheet at March 31, 2008,
showed $22,477,000 in total assets and $35,214,000 in total
liabilities, resulting in a $12,737,000 total stockholders'
deficit.

At March 31, 2008, the company's consolidated balance sheet also
showed strained liquidity with $16,869,000 in total current assets
available to pay $33,230,000 in total current liabilities.

The company reported a net loss of $15,524,000, on total product
and service revenue of $3,732,000 for the first quarter ended
March 31, 2008, compared with a net loss of $4,116,000, on total
product and service revenue of $2,554,000, in the same period last
year.

The company has generated limited revenues from product sales and
has incurred substantial losses since the company's inception.  
The company anticipates anticipates incurring additional losses
over the foreseeable future.

The company has incurred significant negative cashflow for several
years due to a lower than expected revenue, significant legal
costs due to the Veridex arbitration and continuing efforts in
research and development programs to improve its products products
and develop new products.

The company will need additional funds to continue to fund its  
business beyond the third quarter of 2008.

                       Veridex Arbitration

On May 31, 2007, the company announced that it had filed a Demand
for Arbitration against Veridex, LLC, a Johnson & Johnson Company,
or Veridex, pursuant to which it was seeking termination of the
20-year exclusive worldwide agreement to market, sell and
distribute its cancer diagnostic products and rescission of all
licenses currently held by Veridex under the Development, License
and Supply Agreement, or the DLS Agreement, based on "repudiation
and fundamental breaches by Veridex of its contractual, agency and
other fiduciary obligations to market, sell and distribute our
cancer diagnostic products."  The comapny also sought monetary
damages including compensatory damages of $220.2 to $254.2 million
and punitive damages of $480 million.

On March 3, 2008, the arbitrator in the arbitration proceedings
issued its Decision.  In the Decision, the arbitrator determined
that Veridex was not in breach of its "best efforts" marketing
obligation and dismissed the company's claims.  The arbitrator
awarded Veridex approximately $304,000 in contract damages,
pursuant to Veridex's counterclaim in which Veridex had challenged
the company's use of circulating tumor cell, or CTC reagents and
analyzers as part of the company's "Service"  business.  The
company paid the award in full in April 2008.

The company has been in negotiations with Veridex in regards to
this business and in May 2008, the company signed an agreement
that allows the company to continue to perform these services and
pay Veridex a royalty for the ability to perform these tests.  
This agreement is temporary and the company expects to transfer
these contracts to other laboratories in the near future,
therefore the company will only have revenue from these services
until they have been transferred.  The company is not certain how
long the transition will take, but anticipate that it is likely to
occur by the end of the third quarter of 2008.

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?2da1

                       Going Concern Doubt

Deloitte & Touche LLP, in Philadelphia, expressed substantial
doubt about Immunicon Corp.'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 losses from
operations, accumulated deficit and negative cash flows from
operations.

                      About Immunicon Corp.

Headquartered in Huntingdon Valley, Pa., Immunicon Corp.
(OTC BB: IMMC) -- http://www.immunicon.com/-- is developing and  
commercializing proprietary cell- and molecular-based human
diagnostic and life science research products, and is providing
certain analytical services to pharmaceutical and biotechnology
companies to assist them in developing new therapeutic agents,
with an initial focus on cancer disease management.


INFOGROUP INC: S&P Keeps Low-B Rating Under Negative CreditWatch
----------------------------------------------------------------
Standard & Poor's Ratings Services kept its ratings on infoGROUP
Inc. on CreditWatch with negative implications, where they were
placed on March 11, 2008.  The company announced that it intends
to file its 10-K for the fiscal year ended Dec. 31, 2007, and its
10-Q for the quarter ended March 31, 2008, on or before July 31,
2008.  S&P note that this date is after the June 30, 2008, date
required in its recently amended credit agreement.  S&P believe
the company is addressing these issues with lenders and will
successfully negotiate a waiver.
     
S&P initially placed the ratings on infoGROUP on CreditWatch after
the company announced it would delay its filings, which would
result in a default under its credit facilities.  The company
stated that it was unable to file its 10-K and 10-Q reports on
time because of the ongoing investigation by the Denver regional
office of the SEC.  Lenders subsequently provided a temporary
waiver of this default through June 30, 2008.  S&P's concerns
regarding the informal investigation by the SEC and the formation
of a special litigation committee by infoGROUP's board of
directors were heightened given that these developments had led to
a filing delay.
     
"We expect to resolve the CreditWatch listing in conjunction with
the receipt and review of the report by the special litigation
committee," said Standard & Poor's credit analyst Liz Fairbanks.
     
The company expects that this committee will complete its
interview and document work by mid-June.


INTERNATIONAL HOME: Case Summary & 20 Largest Unsecured Creditors
-----------------------------------------------------------------
Debtor: International Home Fashions, Inc.
        507 West State Street
        Black Mountain, NC 28711

Bankruptcy Case No.: 08-10434

Type of Business: The debtor is a textile holding company.

Chapter 11 Petition Date: June 4, 2008

Court: Western District of North Carolina (Asheville)

Judge: Hon. George R. Hodges

Debtor's Counsel: David G. Gray
                  (judyhj@bellsouth.net)
                  81 Central Avenue
                  Asheville, NC 28801
                  Telephone (828) 254-6315

Total Assets: $2,438,964   

Total Debts: $7,507,221

A copy of the debtor's petition and a list of 20 largest unsecured
creditors is available for free at:

            http://bankrupt.com/misc/ncwb08-10434.pdf


IRIDEX CORP: Posts $892,000 Net Loss in 2008 First Quarter
----------------------------------------------------------
IRIDEX Corporation reported a net loss of $892,000, on revenues of
$11,474,000, for the first quarter ended March 29, 2008, compared
with a net loss of $4,920,000, on revenues of $12,566,000, in the
same period ended March 31, 2007.

The decline in revenues primarily reflects a 26.8% decrease in the
company's aesthetics revenues due to the difficulties incurred in
the US distribution channel during 2007 that are still being
experienced coupled with the overall softening of the US
aesthetics market, partly offset by a 4.8% increase in
opthalmology revenues.

Research and development expenses decreased by 40.7% to
$1,025,000 from $1,729,000 for the three months ended
March 29, 2008, compared to the three months ended March 31, 2007.
The primary reason for this was reduced salary and related costs
resulting from the reduction in headcount from period to period
and reduced material costs incurred on product development.

Sales, general and administrative expense decreased in the three
months ended March 29, 2008, by 45.4% to $4,518,000 from
$8,274,000 for the three months ended March 31, 2007.  

At March 29, 2008, the company's consolidated balance sheet showed
$39,921,000 in total assets, $22,011,000 in total liabilities, and
$17,910,000 in total stockholders' equity.

Full-text copies of the company's consolidated financial
statements for the quarter ended March 29, 2008, are available for
free at http://researcharchives.com/t/s?2d99

                       Going Concern Doubt

Burr, Pilger & Mayer LLP, in San Francisco, expressed substantial
doubt about IRIDEX Corp.'s ability to continue as a going concern
after auditing the company's consolidated financial statements for
the year ended Dec. 29, 2007.  The auditing firm pointed to the
company's losses from operations.

In addition, as of Dec. 29, 2007, the company was out of
compliance with its debt covenants on its existing credit
facilities with Mid-Peninsula Bank and the Export-Import Bank.
However, the company obtained a waiver for the default and in
March 2008 the company terminated the credit facilities and
entered into a new credit facility with Wells Fargo Bank which
provides the company with the ability to borrow up to $8 million
under an asset-based revolving credit facility.

Management believes that the new facility with Wells Fargo Bank
provides sufficient liquidity to operate for the next 12 months
and that the covenants are reasonable and management expects to be
able to meet those covenants based on its operating plan for 2008.
However, recent operating results indicate that there is
significant risk in achieving the operating plan, particularly for
the remaining period where the company is obligated to make
payments to American Medical Systems Inc.  If the company is not
able to perform in accordance with its operating plan for 2008 and
fails to maintain compliance with its debt covenants, Wells Fargo
Bank would be entitled to exercise its remedies under this
facility which include declaring all outstanding obligations due
and payable, and disposing of the collateral if obligations are
not paid.

                        About IRIDEX Corp.

Headquartered in Mountain View, California, Iridex Corp.
(Nasdaq: IRIX) -- http://www.iridex.com/-- is a lworldwide  
provider of therapeutic based laser systems, disposable laser
probes and delivery devices to treat eye diseases in ophthalmology
and skin disorders in the aesthetics market.  IRIDEX products are
sold in the United States through a direct sales force and
internationally through a combination of a direct sales force and
a network of approximately 100 independent distributors into 107
countries.


JOHN HETZEL: Case Summary & 20 Largest Unsecured Creditors
----------------------------------------------------------
Debtor: John R Hetzel
        70 Kostenbader Rd
        Blairstown, NJ 07825

Bankruptcy Case No.: 08-20487

Chapter 11 Petition Date: June 5, 2008

Court: District of New Jersey (Trenton)

Debtor's Counsel: Andre L. Kydala, Esq.
                  (kydalalaw@aim.com)
                  12 Lower Center Street
                  PO Box 5537
                  Clinton, NJ 08809
                  Telephone (908) 735-2616
                  Fax (908) 735-0765

Total Assets: 1,116,700

Total Debts: 1,800,600

A copy of the debtor's petition and a list of its 20 largest
unsecured creditors is available for free at:

             http://bankrupt.com/misc/njb08-20487.pdf


KB HOME: Moody's Cuts Rating on Sr. Subordinated Notes to B1
------------------------------------------------------------
Moody's Investors Service lowered all of the ratings of KB Home.,
including its corporate family rating to Ba2 from Ba1, the ratings
on its various issues of senior unsecured notes to Ba2 from Ba1,
and the rating on its subordinated notes to B1 from Ba2. At the
same time, a speculative grade liquidity rating of SGL-2 was
assigned. The outlook remains negative.

The downgrades reflect that the company has begun to generate
quarterly losses before impairments and other charges, and Moody's
projection that these quarterly pre-impairment losses will
continue into 2009, as the rate of expected revenue decline
exceeds the pace at which the company can continue to pare its
expenses. When large and ongoing impairment charges are folded in,
the continuing erosion of KB Home's net worth will drive up the
company's already high lease-adjusted debt leverage of 59.2% and
make covenant compliance challenging. In addition, the company's
joint venture exposure could lead to additional capital calls as
the year progresses.

At the same time, KB Home's current ratings are supported by its
very strong inventory performance and cash flow generation, robust
liquidity, relatively short land position (4.6 years on a go-
forward basis), and the lowest net debt leverage (incorporating
cash balances) among its peer group. The SGL-2 rating assignment
reflects the strong year-ahead projected cash flow and healthy
cash position, offset in part by covenant compliance challenges
and somewhat limited opportunities to quickly monetize assets.

The negative outlook reflects Moody's expectation that many of the
company's credit metrics will continue eroding as homebuilding
industry conditions remain challenging into next year, with any
recovery likely to be sluggish at first, thus prolonging
underperformance until early in the next decade.

Going forward, the outlook could stabilize if the company were to
continue with its industry-leading inventory and cash flow
performance; reduce costs sufficiently to restore homebuilding
profitability before charges; and make it through subsequent
quarters without substantial additional charges to net worth,
thereby beginning to restore debt leverage to more normal levels.

The ratings could be lowered again if quarterly losses before
impairments begin to widen substantially; impairments were to
continue at the same or near-same rate as they have to date,
thereby imperiling covenant performance and/or causing debt
leverage to remain above Ba levels; or the company begins
experiencing sharp reductions in its trailing twelve-month cash
flow generation.

These rating actions were taken:

  * Corporate family rating lowered to Ba2 from Ba1

  * Probability of default rating lowered to Ba2 from Ba1

  * Senior unsecured notes lowered to Ba2 (LGD4, 51%) from Ba1
    (LGD3, 49%)

  * Senior subordinated notes lowered to B1 (LGD6, 93%) from Ba2
    (LGD6, 92%)

  * SGL-2 rating assigned

Headquartered in Ft. Worth, Texas, KB Home. is one of the
country's largest homebuilders, with revenues and net income for
the trailing twelve-month period ended February 29, 2008 of $5.8
billion and ($1.2) billion, respectively.


KGB: S&P Lifts Corp. Credit Rating to B+ from B on Strong EBITDA
----------------------------------------------------------------
Standard & Poor's Ratings Services raised its ratings on New York
City-based kgb (formerly known as INFONXX Inc.).  S&P raised the
corporate credit rating to 'B+' from 'B'.  Debt outstanding at
March 31, 2008, totaled about $452 million.  The outlook is
positive.
     
"The upgrade reflects the company's strong EBITDA and cash flow
growth over the past year," said Standard & Poor's credit analyst
Susan Madison, "driven by pricing and volume increases for its
European retail directory assistance business."  Another factor is
a material reduction in advertising expense following the
successful launch of its French DA brand in mid-2006.  "The
positive outlook reflects the potential for further rating upside
if kgb's financial profile continues to strengthen," added
Ms. Madison.


KRISPY KREME: Reports $4 Million Net Income in Quarter Ended May 4
------------------------------------------------------------------
Krispy Kreme Doughnuts Inc., in a press statement, reported net
income of $4.0 million, for the first quarter ended May 4, 2008,
compared to a net loss of $7.4 million in the first quarter last
year.

According to the Birmingham Business Journal, this is Krispy
Kreme's first quarterly gain in three years.   

Dow Jones says that shares of Krispy Kreme shot up 7.6% in early
trading Monday as the company disclosed its fiscal first-quarter
earnings of 6 cents a share, up from a loss of 12 cents a share at
the same time last year.

The company stated in a statement that it was able to report a
profit, in part, because the loss in 2008's first quarter was
largely due to a $9.6 million charge related to the refinancing of
long-term debt.  In the 2009 quarter, the company did not report
any refinancing charge.

"We are pleased to report improved bottom line results in the
first quarter of fiscal 2009 compared to the first quarter of last
year," Jim Morgan, chairman, president and chief executive
officer, said.  "Much work remains to be done to achieve the
consistent profitability and sustainable growth we envision.  

"While we continue to face many challenges, I believe more than
ever there also are many opportunities ahead of us," Mr. Morgan
added.  "Although our near term results may be uneven, our
employees are working hard to implement the further improvements
necessary for us to be successful for the long term."

Among the other factors that affected the company's results for
the first quarter of fiscal 2009 were a $930,000 non-cash gain on
the disposal of equity interests in two franchisees and the
related release of the company's guarantees of certain debt and
leases; well as a net credit in impairment and lease termination
costs of $645,000 resulting from changes in estimated sublease
rentals on a closed store and the realization of proceeds on the
assignment of another closed store lease.

As of May 4, 2008, the company's consolidated balance sheet
reflects cash of approximately $29.2 million and debt of
approximately $75.7 million.

During the first quarter of fiscal 2009, 28 new Krispy Kreme
stores, comprised of four factory stores and 24 satellites, were
opened systemwide, and seven stores, comprised of six factory
stores and one satellite, were closed systemwide.

This brings the total number of stores systemwide at quarter end
to 470, consisting of 289 factory stores and 181 satellites.  The
net increase of 21 stores in the quarter reflects a net increase
of 27 international stores and a net decrease of six domestic
stores.  Approximately 75% of total stores are operated by
franchisees, and half are located outside the United States.

                       About Krispy Kreme

Headquartered in Winston-Salem, North Carolina, Krispy Kreme
Doughnuts Inc. (NYSE: KKD) -- http://www.KrispyKreme.com/--
is a retailer and wholesaler of doughnuts.  The company's
principal business, which began in 1937, is owning and franchising
Krispy Kreme doughnut stores where over 20 varieties of doughnuts
are made, sold and distributed and where a broad array of coffees
and other beverages are offered.

As of Feb. 3, 2008, there were 449 Krispy Kreme stores operated
systemwide in 37 U.S. states and in the District of Columbia,
Australia, Canada, Hong Kong, Indonesia, Japan, Kuwait, Mexico,
the Philippines, Qatar, Saudi Arabia, South Korea, the United Arab
Emirates and the United Kingdom, of which 105 were owned by the
company and 344 were owned by franchisees.  Of the 449 total
stores, there were 295 factory stores and 154 satellites.  Of the
Krispy Kreme factory stores and satellites in operation at Feb. 3,
2008, 210 and 35, respectively, were located in the United States.

                          *     *     *

Standard & Poor's placed Krispy Kreme Doughnuts Inc.'s long term
foreign and local issuer credit ratings at 'B-' in September 2007.  
The ratings still hold to date with a negative outlook.


LENNAR CORP: Moody's Cuts Corp. Family Rating to Ba3
----------------------------------------------------
Moody's Investors Service lowered all of the ratings of Lennar
Corporation, including its corporate family rating to Ba3 from Ba1
and the ratings on its various issues of senior unsecured notes to
Ba3 from Ba1. At the same time, a speculative grade liquidity
rating of SGL-2 was assigned. The ratings outlook remains
negative.

The downgrades reflect these considerations:

1) The company has been generating losses before impairments, and
   a return to consistent pre-impairment profitability will be
   difficult, given Moody's expectations of declining deliveries,
   revenues, and prices in 2008.

2) Covenant compliance will be challenging if impairments and
   other charges continue apace.

3) Joint venture exposure, while being curtailed, remains
   significant--and the industry's largest--and could represent a
   sizable drain on cash flow in 2008 and 2009.

4) Although the company expects to generate significant cash flow
   in fiscal 2008, it is largely as a result of the sizable first
   quarter tax refund.

5) Debt leverage at February 29, 2008, adjusted for operating
   leases, contractual joint venture debt, and financial letters
   of credit, stood at a relatively high 52.5%.

6) The company's current borrowing base restrictions require it
   to use available cash balances in excess of $500 million
   before it draws on its revolver. Borrowing base availability
   is calculated at that time.

7) Lennar's inventory performance, before taking into account the
   Morgan Stanley transaction, is only in the middle of industry
   performance.

8) The company's owned and controlled lot inventory, while
   reduced, remains high, at a Moody's-projected greater than
   nine-year supply on a go-forward basis.

At the same time, Lennar's ratings are supported by the company's
ability to generate positive cash flow, in good times and in bad;
its strong recent pre-impairment gross margin performance relative
to its former Ba1 peers; its willingness and ability to structure
large tax loss recapturing land sales; and its aggressiveness to
date in booking impairments. The SGL-2 rating assignment reflects
the satisfactory year-ahead projected cash flow and strong cash
position, offset in part by covenant compliance challenges and
somewhat limited opportunities to quickly monetize assets.

The negative ratings outlook reflects Moody's expectation that
many of the company's credit metrics will continue eroding as
homebuilding industry conditions remain challenging into next
year, with any recovery likely to be sluggish at first, thus
prolonging underperformance until early in the next decade.

Going forward, the outlook could stabilize if the company were to
continue growing its free cash flow; reduce costs sufficiently to
restore homebuilding profitability before charges; make it through
upcoming quarters without substantial additional charges to net
worth, thereby restoring adjusted debt leverage to acceptable
levels; remain comfortably in compliance with its financial
covenants; improve its inventory performance and materially reduce
its lot supply; and substantially reduce its joint venture
exposure.

The ratings could be lowered again if quarterly losses before
impairments begin to widen substantially; impairments were to
continue at the same or near-same rate as they have to date,
thereby imperiling covenant performance and/or causing debt
leverage to rise to unacceptable levels; or if the company were to
experience sharp reductions in its trailing twelve-month cash flow
generation.

These rating actions were taken:

  * Corporate family rating changed to Ba3 from Ba1

  * Probability of default rating lowered to Ba3 from Ba1

  * Senior unsecured notes changed to Ba3 (LGD4, 59%) from Ba1
    (LGD4, 61%)

  * SGL-2 rating assigned

Founded in 1954 and headquartered in Miami, FL, Lennar is one of
the country's largest homebuilders. Revenues and net income for
the trailing twelve month period ended February 29, 2008 were $8.5
billion and ($2.1) Billion, respectively.


LONG DRIVE: Case Summary & 2 Largest Unsecured Creditors
--------------------------------------------------------
Debtor: Long Drive LLC
        1111 SE 201st Avenue
        Camas, WA 98607  

Bankruptcy Case No.: 08-42634

Chapter 11 Petition Date: June 5, 2008

Court: Western District of Washington (Tacoma)

Debtor's Counsel: Timothy J. Dack
                  1201 Main St
                  P.O. Box 61645
                  Vancouver, WA 98666-1645
                  Tel (360) 694-4227
                  Email bkfile@dackoffice.com

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/wawb08-42634.pdf


LONG BEACH: Fitch Retains Junk Ratings on 18 Certificate Classes
----------------------------------------------------------------
Fitch Ratings has taken rating actions on the 36 Long Beach
mortgage pass-through certificates listed below.  Unless stated
otherwise, any bonds that were previously placed on Rating Watch
Negative are removed.

Series 2000-1
-- AF-3 affirmed at 'AAA';
-- AF-4 affirmed at 'AAA';
-- AV-1 affirmed at 'AAA';
-- M-1 affirmed at 'BBB';
-- M-2 downgraded to 'CC/DR4' from 'CCC/DR2';
-- M-3 remains at 'C/DR6'.

Deal Summary
-- Originators: Long Beach Mortgage
-- 60+ day Delinquency: 30.11%
-- Realized Losses to date (% of Original Balance): 6.59%

Series 2000-LB1 Group 1
-- AF-5 affirmed at 'AAA';
-- AF-6 affirmed at 'AAA';
-- M1F affirmed at 'BBB+';
-- M2F remains at 'CC/DR3'.

Deal Summary
-- Originators: Long Beach Mortgage
-- 60+ day Delinquency: 21.70%
-- Realized Losses to date (% of Original Balance): 9.68%

Series 2000-LB1 Group 2
-- M2V affirmed at 'B';
-- BV remains at 'C/DR5'.

Deal Summary
-- Originators: Long Beach Mortgage
-- 60+ day Delinquency: 29.10%
-- Realized Losses to date (% of Original Balance): 7.83%

Series 2001-1
-- A-1 affirmed at 'AAA';
-- M-1 affirmed at 'A-';
-- M-2 affirmed at 'B+';
-- M-3 remains at 'C/DR6'.

Deal Summary
-- Originators: Long Beach Mortgage
-- 60+ day Delinquency: 30.95%
-- Realized Losses to date (% of Original Balance): 6.69%

Series 2001-2
-- A-1V affirmed at 'AAA';
-- M-1 affirmed at 'A';
-- M-2 affirmed at 'BB';
-- M-3 remains at 'C/DR6'.

Deal Summary
-- Originators: Long Beach Mortgage
-- 60+ day Delinquency: 35.83%
-- Realized Losses to date (% of Original Balance): 7.81%

Series 2001-3
-- A1 affirmed at 'AAA';
-- M1 affirmed at 'A+';
-- M2 affirmed at 'B';
-- M3 remains at 'C/DR6'.

Deal Summary
-- Originators: Long Beach Mortgage
-- 60+ day Delinquency: 28.17%
-- Realized Losses to date (% of Original Balance): 6.77%

Series 2001-4 Group 1
-- I-A affirmed at 'AAA';
-- M-2 remains at 'C/DR2';
-- M-3 remains at 'C/DR6'.

Deal Summary
-- Originators: Long Beach Mortgage
-- 60+ day Delinquency: 29.73%
-- Realized Losses to date (% of Original Balance): 7.59%

Series 2001-4 Group 2
-- II-A1 affirmed at 'AAA';
-- II-A3 affirmed at 'AAA';
-- II-M1 affirmed at 'A-';
-- II-M2 remains at 'C/DR2';
-- II-M3 remains at 'C/DR6'.

Deal Summary
-- Originators: Long Beach Mortgage
-- 60+ day Delinquency: 32.83%
-- Realized Losses to date (% of Original Balance): 3.71%

Series 2002-1 Group 1
-- I-A affirmed at 'AAA';
-- I-M2 affirmed at 'B';
-- I-M3 remains at 'C/DR4'.

Deal Summary
-- Originators: Long Beach Mortgage
-- 60+ day Delinquency: 27.02%
-- Realized Losses to date (% of Original Balance): 5.29%

Series 2002-1 Group 2
-- II-M1 affirmed at 'BBB+';
-- II-M2 affirmed at 'B';
-- II-M3 remains at 'C/DR4'.

Deal Summary
-- Originators: Long Beach Mortgage
-- 60+ day Delinquency: 25.93%
-- Realized Losses to date (% of Original Balance): 2.22%

Series 2002-2 Group 1
-- I-A affirmed at 'AAA';
-- I-M2 affirmed at 'BB';
-- I-M3 remains at 'C/DR3';
-- I-M4 remains at 'C/DR6'.

Deal Summary
-- Originators: Long Beach Mortgage
-- 60+ day Delinquency: 24.13%
-- Realized Losses to date (% of Original Balance): 5.08%

Series 2002-2 Group 2
-- II-M2 affirmed at 'BB';
-- II-M3 remains at 'C/DR3';
-- II-M4 remains at 'C/DR6'.

Deal Summary
-- Originators: Long Beach Mortgage
-- 60+ day Delinquency: 24.13%
-- Realized Losses to date (% of Original Balance): 5.08%

Series 2002-5
-- M-1 affirmed at 'AA';
-- M-2 affirmed at 'A-';
-- M-3 revised to 'C/DR3' from C/DR2';
-- M-4A remains at 'C/DR6';
-- M-4B remains at 'C/DR6'.

Deal Summary
-- Originators: Long Beach Mortgage
-- 60+ day Delinquency: 20.70%
-- Realized Losses to date (% of Original Balance): 3.40%


MDRECOVERY INC: Files Voluntary Chapter 11 Case Summary
-------------------------------------------------------
Debtor: MDRecovery Inc.
        103 Union Wharf
        Boston, Massachusetts 02109

Bankruptcy Case No.: 08-14214

Debtor-affiliates filing separate Chapter 11 petitions:

      Entity                                  Case No.
      ------                                  --------
      Schuyler Labs, Inc.                     08-14216

Chapter 11 Petition Date: June 9, 2008

Court: District of Massachusetts (Boston)

Judge: Henry Boroff

Debtors' Counsel: Harold B. Murphy, Esq.
                   (bankruptcy@hanify.com)
                  Natalie B. Sawyer, Esq.
                   (nbs@hanify.com)
                  Hanify & King, P. C.
                  One Beacon Street, 21st Floor
                  Boston, Massachusetts 02108
                  Tel: (617) 423-0400
                  Fax: (617)556-8985

                 Total/            Total/
                 Estimated Assets  Estimated Debts
                 ----------------  ---------------
MDRecovery Inc   $1 million to     $1 million to
                 $10 million       $10 million

Schuyler Labs    Less than         $500,000 to
Inc.             $50,000           $1 million

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

          http://bankrupt.com/misc/massb08-14214.pdf


MICHAEL ANGELO: Case Summary & 9 Largest Unsecured Creditors
------------------------------------------------------------
Debtor: Michael J. Angelo
        139 Ryder Avenue
        Dix Hills, NY 11746

Bankruptcy Case No.: 08-72936

Chapter 11 Petition Date: June 5, 2008

Court: Eastern District of New York (Central Islip)

Judge: Dorothy Eisenberg

Debtor's Counsel: Salvatore LaMonica, Esq.
                  (sl@lhmlawfirm.com)
                  LaMonica Herbst and Maniscalco
                  3305 Jerusalem Avenue
                  Wantagh, NY 11793
                  Telephone (516) 826-6500
                  Fax (516) 826-0222

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

Estimated Debts: $500,001 to $1 million

A copy of the debtor's list of 9 largest unsecured creditors is
available for free at: http://bankrupt.com/misc/nyeb08-72936.pdf


NORTHWEST AIRLINES: Wants Nine Claims Worth $2.4 Mil. Expunged
--------------------------------------------------------------
Northwest Airlines Corp. and its debtor-affiliates asked the U.S.
Bankruptcy Court for the Southern District of New York to expunge
in its entirety Claim No. 12392 filed by the Hawaii Department of
Taxation for $604, on the grounds that it seeks payment of a
prepetition claim.

                    Previously Satisfied Claims

The Debtors asked the Court to disallow in their entirety eight
claims totaling $2,460,152, because the Claims have been satisfied
in the ordinary course of business:

   Claimant                        Claim No.        Claim Amount
   --------                        ---------        ------------
   Tennessee Revenue Dept.             12446         $1,187,615
   Denver Treasury                     12490            747,823
   Grapevine-Colleyville               12423            471,697  
   San Diego County Treasurer          12518             21,182
   Tennessee Revenue Dept.             12496             12,243
   County of Loudoun, Virginia         12440             10,799
   Aldine Independent School           12380              7,623
   Minnesota Revenue Dept.             12322              1,170

                       Claims To be Resolved                   

The Debtors asked the Court to permit six claimants to resolve --
outside of the bankruptcy process -- their claims totaling
$40,698, because the Claims are subject to ongoing negotiations
between the Debtors and the Claimants:

   Claimant                            Claim No.    Claim Amount
   --------                            ---------    ------------
   Illinois Revenue Dept.                11900          $29,227
   Florida Revenue Dept.                 11570            9,432
   North Carolina Employment Security    12516            1,894
   New York Dept. of Taxation            12267              114
   Illinois Revenue Dept.                12382               24
   Boone County Collector                  800                7

                     About Northwest Airlines

Northwest Airlines Corp. (NYSE: NWA) -- http://www.nwa.com/--
is the world's fourth largest airline with hubs at Detroit,
Minneapolis/St. Paul, Memphis, Tokyo and Amsterdam, and about
1,400 daily departures.  Northwest is a member of SkyTeam, an
airline alliance that offers customers one of the world's most
extensive global networks.  Northwest and its travel partners
serve more than 1000 cities in excess of 160 countries on six
continents.  Northwest and its travel partners serve more than
1000 cities in excess of 160 countries on six continents,
including Italy, Spain, Japan, China, Venezuela and Argentina.

The company and 12 affiliates filed for chapter 11 protection on
Sept. 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-17930).  Bruce
R. Zirinsky, Esq., and Gregory M. Petrick, Esq., at Cadwalader,
Wickersham & Taft LLP in New York, and Mark C. Ellenberg, Esq.,
at Cadwalader, Wickersham & Taft LLP in Washington represent the
Debtors in their restructuring efforts.  The Official Committee
of Unsecured Creditors has retained Akin Gump Strauss Hauer &
Feld LLP as its bankruptcy counsel in the Debtors' chapter 11
cases.

When the Debtors filed for bankruptcy, they listed $14.4 billion
in total assets and $17.9 billion in total debts.  On Jan. 12,
2007 the Debtors filed with the Court their Chapter 11 Plan.  On
Feb. 15, 2007, they Debtors filed an Amended Plan & Disclosure
Statement.  The Court approved the adequacy of the Debtors'
Disclosure Statement on March 26, 2007.  On May 21, 2007, the
Court confirmed the Debtors' Plan.  The Plan took effect May 31,
2007.  (Northwest Airlines Bankruptcy News, Issue No. 94;
Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000).

                           *     *     *

As reported in the Troubled Company Reporter on June 6, 2008,
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.  The
Speculative Grade Liquidity rating was lowered to SGL-3 from
SGL-2. The ratings remain on review for possible downgrade.f


NORTHWEST AIRLINES: Wants R. Foster's $930,000 Claim Expunged
-------------------------------------------------------------
Northwest Airlines Corp. and its debtor-affiliates asked the U.S.
Bankruptcy Court for the Southern District of New York to expunge
in its entirety the claim of Robert Foster worth $930,000.

Gregory M. Petrick, Esq., at Cadwalader, Wickersham & Taft LLP,
in New York, told the Court that Mr. Foster appeared to have
misunderstood whether he was purchasing shares of the Old Stock
that was immediately canceled, or shares of the new common stock
that was to be issued by the Debtors, which at the time Mr.
Foster purchased the Old Stock, was trading on a "when issued"
basis.

Mr. Petrick also pointed out that the Debtors' intention to cancel
the Old Stock was known publicly since January 12, 2007, when the
Debtors first filed their Plan of Reorganization.  According to
Mr. Petrick, the cancellation of the Old Stock was also explained
in the Disclosure Statement accompanying the Plan, was reported by
the general media, and was fully disclosed with the U.S.
Securities and Exchange Commission.  

The Debtors also issued a press release announcing its intention
to cancel the Old Stock for no consideration.  "Contrary to Mr.
Foster's assertion, Northwest had no duty to prevent the trading
of the Old Stock on the over-the-counter market prior to the
Effective Date of the Plan," Mr. Petrick asserted.

The Plan effectuates Section 510(b) of the Bankruptcy Code, which
provides that all claims for damages arising from the sale of Old
Stock are subordinated and are not entitled to a distribution.  

Under the Plan, Mr. Petrick clarified, the Old Stock was canceled
as of May 31, 2007, and holders of Old Stock will neither receive
nor retain any property or interest in property on account of the
Old Stock.  Claims asserting the return of the amount that the
claimant paid for stock in a debtor, like Claim No. 12505, are
subject to disallowance, Mr. Petrick maintained.

                     About Northwest Airlines

Northwest Airlines Corp. (NYSE: NWA) -- http://www.nwa.com/--
is the world's fourth largest airline with hubs at Detroit,
Minneapolis/St. Paul, Memphis, Tokyo and Amsterdam, and about
1,400 daily departures.  Northwest is a member of SkyTeam, an
airline alliance that offers customers one of the world's most
extensive global networks.  Northwest and its travel partners
serve more than 1000 cities in excess of 160 countries on six
continents.  Northwest and its travel partners serve more than
1000 cities in excess of 160 countries on six continents,
including Italy, Spain, Japan, China, Venezuela and Argentina.

The company and 12 affiliates filed for chapter 11 protection on
Sept. 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-17930).  Bruce
R. Zirinsky, Esq., and Gregory M. Petrick, Esq., at Cadwalader,
Wickersham & Taft LLP in New York, and Mark C. Ellenberg, Esq.,
at Cadwalader, Wickersham & Taft LLP in Washington represent the
Debtors in their restructuring efforts.  The Official Committee
of Unsecured Creditors has retained Akin Gump Strauss Hauer &
Feld LLP as its bankruptcy counsel in the Debtors' chapter 11
cases.

When the Debtors filed for bankruptcy, they listed $14.4 billion
in total assets and $17.9 billion in total debts.  On Jan. 12,
2007 the Debtors filed with the Court their Chapter 11 Plan.  On
Feb. 15, 2007, they Debtors filed an Amended Plan & Disclosure
Statement.  The Court approved the adequacy of the Debtors'
Disclosure Statement on March 26, 2007.  On May 21, 2007, the
Court confirmed the Debtors' Plan.  The Plan took effect May 31,
2007.  (Northwest Airlines Bankruptcy News, Issue No. 94;
Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000).

                           *     *     *

As reported in the Troubled Company Reporter on June 6, 2008,
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.  The
Speculative Grade Liquidity rating was lowered to SGL-3 from
SGL-2. The ratings remain on review for possible downgrade.


OPTION ONE: Fitch Takes Rating Actions on 39 Classes of Certs.
--------------------------------------------------------------
Fitch Ratings has taken rating actions on 39 mortgage pass-through
certificates.  Unless stated otherwise, any bonds that were
previously placed on Rating Watch Negative are now removed.

Option One 2002-6 TOTAL
-- Class A-1 affirmed at 'AAA';
-- Class A-2 affirmed at 'AAA';
-- Class M-1 affirmed at 'AA';
-- Class M-2 affirmed at 'BB';
-- Class M-3 affirmed at 'B';

Deal Summary
-- Originators: Option One
-- 60+ day Delinquency: 22.01%
-- Realized Losses to date (% of Original Balance): 1.15%

Option One 2000-D
-- Class A-5 affirmed at 'AAA';
-- Class A-6 affirmed at 'AAA';
-- Class A7 affirmed at 'AAA';

Deal Summary
-- Originators: Option One
-- 60+ day Delinquency: 29.26%
-- Realized Losses to date (% of Original Balance): 4.20%

Option One 2001-A
-- Class A-5 affirmed at 'AAA';
-- Class A-6 affirmed at 'AAA';
-- Class A-7 affirmed at 'AAA';

Deal Summary
-- Originators: Option One
-- 60+ day Delinquency: 7.73%
-- Realized Losses to date (% of Original Balance): 3.78%

Option One 2001-B
-- Class A1 affirmed at 'AAA';
-- Class A3 affirmed at 'AAA';

Deal Summary
-- Originators: Option One
-- 60+ day Delinquency: 33.47%
-- Realized Losses to date (% of Original Balance): 3.11%

Option One 2001-C
-- Class A affirmed at 'AAA';
-- Class S affirmed at 'AAA';

Deal Summary
-- Originators: Option One
-- 60+ day Delinquency: 33.88%
-- Realized Losses to date (% of Original Balance): 1.82%

Option One 2001-D
-- Class A affirmed at 'AAA';
-- Class P affirmed at 'AAA';

Deal Summary
-- Originators: Option One
-- 60+ day Delinquency: 30.72%
-- Realized Losses to date (% of Original Balance): 2.04%

Option One 2002-A
-- Class A affirmed at 'AAA';

Deal Summary
-- Originators: Option One
-- 60+ day Delinquency: 28.52%
-- Realized Losses to date (% of Original Balance): 1.66%

Option One 2000-5
-- Class A affirmed at 'AAA';

Deal Summary
-- Originators: Option One
-- 60+ day Delinquency: 36.61%
-- Realized Losses to date (% of Original Balance): 4.63%

Option One 1999-A GROUP 1
-- Class A-5 affirmed at 'AAA';

Deal Summary
-- Originators: Option One
-- 60+ day Delinquency: 17.86%
-- Realized Losses to date (% of Original Balance): 4.19%

Option One 1999-A GROUP 2
-- Class A-6 affirmed at 'AAA';

Deal Summary
-- Originators: Option One
-- 60+ day Delinquency: 30.25%
-- Realized Losses to date (% of Original Balance): 4.86%

Option One 1999-B
-- Class A affirmed at 'AAA';

Deal Summary
-- Originators: Option One
-- 60+ day Delinquency: 24.77%
-- Realized Losses to date (% of Original Balance): 4.75%

Option One 1999-C Group 1
-- Class A-5 affirmed at 'AAA';
-- Class A-6 affirmed at 'AAA';

Deal Summary
-- Originators: Option One
-- 60+ day Delinquency: 20.12%
-- Realized Losses to date (% of Original Balance): 7.08%

Option One 1999-C Group 2
-- Class A-7 affirmed at 'AAA';

Deal Summary
-- Originators: Option One
-- 60+ day Delinquency: 32.70%
-- Realized Losses to date (% of Original Balance): 5.86%

Option One 2002-1
-- Class A affirmed at 'AAA';
-- Class M-1 affirmed at 'AA';
-- Class M-2 affirmed at 'BB';
-- Class M-3 affirmed at 'B';

Deal Summary
-- Originators: Option One
-- 60+ day Delinquency: 29.53%
-- Realized Losses to date (% of Original Balance): 1.30%

Option One 2002-3 TOTAL
-- Class A1 affirmed at 'AAA';
-- Class A2 affirmed at 'AAA';
-- Class M1 downgraded to 'A-' from 'AA';
-- Class M2 downgraded to 'BBB-' from 'A';
-- Class M3 downgraded to 'BB' from 'BBB';

Deal Summary
-- Originators: Option One
-- 60+ day Delinquency: 31.69%
-- Realized Losses to date (% of Original Balance): 1.70%

Option One 2002-5 TOTAL
-- Class M-1 affirmed at 'AA';
-- Class M-2 downgraded to 'BBB' from 'A';
-- Class M-3 downgraded to 'BB' from 'BBB';
-- Class M-4 downgraded to 'BB-' from 'BBB-';
-- Class B downgraded to 'BB-' from 'BB+';

Deal Summary
-- Originators: Option One
-- 60+ day Delinquency: 28.82%
-- Realized Losses to date (% of Original Balance): 2.22%


ORAGENICS INC: Inks Term Sheet for $2.6 Mil. in Equity Financing
----------------------------------------------------------------
Oragenics Inc. entered into a definitive financing agreement
providing for equity financing of $2,600,000 consisting of common
stock at $0.45 per share and warrants with an exercise price of
$1.30 per share.  Funding is expected to finalize by June 12,
2008.

"This capital will help the Company to begin generating revenue
from our Probiora3 oral health product, to accelerate our efforts
to develop and commercialize our proprietary DPOLT antibiotic
platform, to test our SMaRT Replacement Therapy product for the
elimination of tooth decay, to market our LPT3-04 weight loss
product, and continue the development of our unique diagnostic
platforms, IVIAT and CMAT, as well as other uses," Stanley B.
Stein, the company˙s President and CEO stated.

Headquartered in Alachua, Florida, Oragenics Inc. (AMEX: ONI) --
www.oragenics.com/ -- operates as an early-stage biotechnology
company in the United States.  Founded in 1996, it primarily
focuses on developing technologies associated with oral health,
broad spectrum antibiotics, and other general health benefits.

                     Going Concern Doubt

As reported in the Troubled Company Reporter on April 3, 2008,
Kirkland Russ Murphy & Tapp, PA, exressed substantial doubt about
the Oragenics Inc.'s ability to continue as a going concern
after auditing the company's financial statements for the year
ended Dec. 31, 2007.  The auditing firm pointed to the company's
recurring operating losses, negative operating cash flows and
accumulated deficit.

The company's operating activities used cash of $531,881 for the
three months ended March 31, 2008.


OVALE GROUP: March 31 Balance Sheet Upside-Down by $5,209,363
-------------------------------------------------------------
Ovale Group Inc.'s consolidated balance sheet at March 31, 2008,
showed $3,779,863 in total assets and $8,989,226 in total
liabilities, resulting in a $5,209,363 total shareholders'
deficit.

At March 31, 2008, the company's consolidated balance sheet also
showed strained liquidity with $1,498,904 in total current assets
available to pay $8,989,226 in total current liabilities.

The company reported a net loss of $290,242, on sales of $486,261,
for the first quarter ended March 31, 2008, compared with a net
loss of $311,492, on sales of $324,925 in the same period last
year.

The increase in sales can be attributed to the store opened in
London in December 2007, and increased sales in Switzerland and
France.

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?2d96

                       Going Concern Doubt

As reported in the Troubled Company Reporter on May 29, 2008,
Tabriztchi & Co., CPA, P.C., in Garden City, N.Y. expressed  
substantial doubt about Ovale Group 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 reported that the company has incurred net losses,
had negative cash flows from operations, and needs to raise
additional capital.

In addition, the company has limited operations, no substantial
continuing source of revenues, and working capital and
stockholders' deficits.

                        About Ovale Group

Based in Hempstead, New York, Ovale Group Inc., formerly Orion
Diversified Technologies, Inc. (0VLG.PK) is engaged in the retail
sale of luxury gifts and apparel for infants.


PROTECTION ONE: Stockholders Okay 2008 Long-Term Incentive Plan
---------------------------------------------------------------
The stockholders of Protection One, Inc. approved the Protection
One, Inc. 2008 Long-Term Incentive Plan at the 2008 Annual Meeting
of Stockholders.

The 2008 LTIP was adopted by the company's Board of Directors,
subject to stockholder approval.  The 2008 LTIP became effective
on June 4, 2008 as a result of its approval by the company's
stockholders.  A total of 1,500,000 shares of the company's common
stock have been reserved for issuance pursuant to awards under the
2008 LTIP, subject to its anti-dilution provisions.  All awards
under the 2008 LTIP are granted at the discretion of the
Compensation Committee or the Board.

A full-text copy of the 2008 LTIP is available at
http://ResearchArchives.com/t/s?2da2

Headquartered in Lawrence, Kan., Protection One Inc. (Nasdaq:
PONE) -- http://www.ProtectionOne.com/-- is a vertically   
integrated national provider of sales, installation, monitoring,
and maintenance of electronic security systems to homes and
businesses.  Network Multifamily, Protection One's wholly owned
subsidiary, is the largest security provider to the multifamily
housing market.  The company also owns the nation's largest
provider of wholesale monitoring services, the combined operations
of CMS and Criticom International.

At March 31, 2008, the company's consolidated balance sheet showed
$655.0 million in total assets and $700.2 million in total
liabilities, resulting in a $45.2 million total stockholders'
deficit.


PULTE HOMES: Moody's Sees Challenges Ahead; Lowers Ratings to Ba2
-----------------------------------------------------------------
Moody's Investors Service lowered all of the ratings of Pulte
Homes, Inc., including its corporate family rating to Ba2 from Ba1
and the ratings on its various issues of senior unsecured notes to
Ba2 from Ba1. At the same time, a speculative grade liquidity
rating of SGL-2 was assigned. The outlook remains negative.

The downgrades reflect these considerations:

1) Covenant compliance in 2008 and 2009 will be challenging, in
   large part because of continuing erosion of the company's net
   worth from ongoing impairments and other charges;

2) The company has been generating small quarterly losses before
   impairments, and given Moody's expectations for a decline in
   deliveries and weak pricing in 2008, the company will be hard
   pressed to turn this performance around;

3) Debt leverage has crept up to levels inconsistent with its
   former rating, to a lease-adjusted rate of 51.4% at March 31,
   2008. While debt levels will be reduced going forward (e.g.,
   as a result of the tender for the notes due 2009), net worth
   is likely to decrease faster (from impairments), thus keeping
   debt leverage high for the rating.

3) Pulte's inventory performance, i.e., reduction of actual
   inventory levels (as opposed to reported inventories), is in
   the bottom half of industry performance; and

4) The company's lot supply, at 5.9 years on a go-forward basis,
   is high compared to many of its peers.

Pulte's current ratings are supported by its strong cash flow
generation, growing cash position and robust liquidity,
underpinning its SGL-2 rating assignment; declining net debt
leverage (which incorporates cash into the ratio); and modest
joint venture exposure.

The negative outlook reflects Moody's expectation that many of
Pulte's credit metrics will continue eroding as homebuilding
industry conditions remain challenging into next year, with any
recovery likely to be sluggish at first, thus prolonging
underperformance until early in the next decade.

Going forward, the outlook could stabilize if the company were to
continue with its exceptional cash flow performance; reduce costs
sufficiently to restore homebuilding profitability before charges;
and make it through subsequent quarters without substantial
additional charges to net worth, thereby remaining in compliance
with its covenants and restoring a debt leverage ratio consistent
with its ratings.

The ratings could be lowered again if quarterly losses before
impairments begin to widen substantially; impairments were to
continue at the same or near-same rate as they have to date,
thereby imperiling covenant performance and/or causing debt
leverage to rise above Ba levels for more than a brief period; or
if the company begins experiencing sharp reductions in its
trailing twelve-month cash flow generation.

These rating actions were taken:

  * Corporate family rating lowered to Ba2 from Ba1

  * Probability of default rating lowered to Ba2 from Ba1

  * Senior unsecured notes lowered to Ba2 (LGD4, 54%) from Ba1
    (LGD4, 56%)

  * SGL-2 rating assigned

Founded in 1950 and headquartered in Bloomfield Hills, Michigan,
Pulte Homes, Inc. is one of the country's largest homebuilders,
with revenues and net income for the trailing twelve months ended
March 31, 2008, of $8.7 billion and ($2.9) billion, respectively.


RYLAND GROUP: Moody's Sees Continuing Decline & Cuts Rating to Ba2
-----------------------------------------------------------------  
Moody's Investors Service lowered the ratings of The Ryland Group,
Inc., including its corporate family rating to Ba2 from Ba1 and
the rating on its four issues of senior unsecured notes to Ba2
from Ba1. At the same time, a speculative grade liquidity rating
of SGL-3 was assigned. The outlook remains negative.

The downgrades consider that the company has begun to generate
quarterly losses before impairments, and given Moody's
expectations for continuing declines in deliveries, revenues, and
pricing, it maybe difficult for Ryland to reduce expenses
sufficiently to turn this performance around in the near term. In
addition, the company faces a challenging covenant compliance
environment, reflecting the continuing erosion of its net worth
from impairments and other charges, which deplete the relatively
narrow cushions in its minimum tangible net worth and debt
leverage covenants. Liquidity, while satisfactory for its current
working capital requirements, is somewhat limited due to the low
availability on its currently undrawn $750 million revolver and
modest cash position, which support the SGL-3 rating assignment.

At the same time, Ryland's ratings are supported by its
consistently positive cash flow generation (six consecutive
quarters on a trailing twelve-month basis), reasonably strong
inventory performance (in the top quartile of the industry), and
minimal off-balance sheet risk.

The negative outlook reflects Moody's expectation that Ryland's
credit metrics will continue eroding as homebuilding industry
conditions remain challenging into next year, with any recovery
likely to be sluggish at first, thus prolonging underperformance
until early in the next decade.

Going forward, the outlook could stabilize if the company were to
continue with its strong inventory performance, grow its free cash
flow, return to profitability on a pre-impairment basis while
continuing to experience declining charges, maintain satisfactory
debt leverage, and remain comfortably in compliance with its
financial covenants.

The ratings could come under pressure if the company began to
consistently generate quarterly losses before charges; impairments
were to continue at the same or near-same rate as they have to
date, thereby imperiling covenant performance and/or causing debt
leverage to rise; or Ryland begins experiencing sharp reductions
in its trailing twelve-month cash flow generation.

These rating actions were taken:

  * Corporate family rating lowered to Ba2 from Ba1

  * Probability of default rating lowered to Ba2 from Ba1

  * Senior unsecured notes lowered to Ba2 (LGD4, 58%) from Ba1
    (LGD4, 60%)

  * SGL-3 rating assigned

Founded in 1967 and headquartered in Calabasas, CA, The Ryland
Group, Inc. is a mid-sized homebuilder with revenues and net
income for the trailing twelve month period ended March 31, 2008
of $2.7 billion and ($338 million), respectively.


SALANDER-O'REILLY: Auction of Furniture Brings in $1.6 Million
--------------------------------------------------------------
Philip Boroff of Bloomberg News reports that an auction of
European and American furniture and garden decorations from
Salander-O'Reilly Galleries LLC on Saturday brought in
$1.6 million.

The auction went ahead on June 7 after an objection to the sale by
Lawrence Salander's father-in-law Donald S. Dowden was rejected by
Judge Cecelia Morris of the U.S. Bankruptcy Court for the Southern
District of New York on June 3.  According to the report, the
auction at Stair Galleries in Hudson, New York, is the biggest to
date from the remains of Salander-O'Reilly.

Mr. Dowden asked the court to stop the auction saying its
estimated prices were too low.  Mr. Dowden said he owns a 20
percent interest in the lots for auction.

The sale "will unfairly transfer profit to alerted dealers," Mr.
Dowden wrote in a May 30 letter, the report said. Buyers will get
"inventory for much less than its fair market value."  

Judge Morris ruled the claim was unfounded speculation as a bigger
auction house would attract more competitive bidders.

                     About Salander-O'Reilly

Established in 1976, New York-based Salander-O'Reilly Galleries
LLC -- http://www.salander.com/-- exhibits and manages fine art
from renaissance to contemporary.  On Nov. 1, 2007, three
creditors filed an involuntary chapter 7 petition against the
gallery (Bankr. S.D.N.Y. Case Number 07-13476).  The petitioners,
Carol F. Cohen of Two Swans Farm, Cavallon Family LP, and Richard
Ellenberg, disclosed total claims of more than $5 million.  Amos
Alter, Esq., at Troutman Sanders LLP and John Koegel, Esq., at The
Koegel Group LLP represent the petitioners.

On Nov. 9, 2007, the Debtor's case was converted to a chapter 11
proceeding (Bankr. S.D.N.Y. Case No. 07-30005).  Alan D. Halperin,
Esq., at Halperin Battaglia Raicht, LLP, represents the gallery.

Salander-O'Reilly Galleries is owned by Lawrence B. Salander and
his wife, Julie D. Salander, of Millbrook, New York.  The couple
also has membership interests in galleries including non-debtor
entities, Renaissance Art Investors and Salander Decorative Arts
LLC.  The couple filed for chapter 11 protection on Nov. 2, 2007
(Bankr. S.D.N.Y. Case No. 07-36735).  The case was converted to
chapter 7 liquidation.  Douglas E. Spelfogel, Esq.
and Richard J. Bernard, Esq. at Baker & Hostetler LLP and Susan P.
Persichilli, Esq. at Buchanan Ingersoll PC represent the Debtors
in their restructuring efforts.  When they filed for bankruptcy,
Mr. and Mrs. Salander listed assets and debts between $50 million
and $100 million.

Prior to bankruptcy, Mr. Salander resigned as Salander-O'Reilly
Galleries' manager and turned over the control to Triax Capital
Advisors LLC, an independent turnaround firm.


SOTHEBY'S: Moody's Rates New Senior Unsecured Notes Ba3
-------------------------------------------------------
Moody's Investors Service assigned a Ba3 rating to Sotheby's new
senior unsecured notes and affirmed all existing ratings with a
stable outlook. The new senior notes are being issued in order to
refinance the existing $100 million senior unsecured notes
maturing in 2009, to finance a portion of the purchase price of
the York Avenue building, and for general corporate purposes.

These ratings are assigned:

  * $150 million senior unsecured notes due 2015 at Ba3
    (LGD 5, 84%);

  * $150 million senior convertible notes due 2013 at Ba3
    (LGD 5, 84%).

The ratings on the new senior unsecured notes are conditioned upon
review of final documentation.

These ratings are affirmed:

  * Corporate family rating at Ba2;
  * Probability of default rating at Ba2;
  * Senior unsecured notes due 2009 at Ba3 (LGD 5, 84%).

The rating on the $100 million senior unsecured notes due 2009
will be withdrawn upon completion of their redemption.

The Ba2 corporate family rating recognizes Sotheby's strong brand
name and its recognized expertise in an industry that has high
barriers to entry and is dominated by two players against. These
strengths are balanced against Moody's expectation that there is a
high likelihood that credit metrics may be uneven over the
intermediate term given the significant cyclicality of the
international auction market. Sotheby's operating performance has
been very strong since the middle of 2003 as a result of robust
conditions in the auction market. This has led to the industry
growing to a historical high of $11.2 billion in aggregate sales
for the fiscal year 2007 from $3.4 billion for fiscal year 2003.
This has also allowed the company to build up healthy cash
balances and to notably improve its credit metrics to solidly
investment grade levels. The corporate family rating also reflects
the company's good liquidity, which provides it with the
flexibility to weather a cyclical downturn in the auction market
and the potential for operating performance volatility given the
potential for industry cyclicality. The rating continues to be
constrained by the very high seasonality of the company's cash
flow and the high level of fixed costs that make it difficult for
it to adjust to cyclical downturns.

The rating on the senior unsecured notes reflects both the overall
probability of default of the company, at Ba2, and a loss given
default of LGD5. The new senior unsecured notes are rated one
rating level below the corporate family rating reflecting their
junior position to the $300 million senior secured revolving
credit facility and $235 million in secured mortgage financing, as
well as their size and scale in the capital structure.

Sotheby's, headquartered in New York NY, is one of the two largest
auction houses in the world. Total revenues for the fiscal year
ended 12/31/2007 were nearly $918 million.


SOTHEBY: S&P Lifts Credit Rating to BBB- from BB+; Removes Watch
----------------------------------------------------------------
Standard & Poor's Ratings Services raised its corporate credit
rating on New York City-based Sotheby's to 'BBB-' from 'BB+'.  S&P
also removed the ratings from CreditWatch with positive
implications, where they were placed on March 28, 2008.  At the
same time, S&P assigned a 'BBB-' issue-level rating to the
company's $150 million senior unsecured notes and $150 million
senior convertible notes.  Proceeds will be used to finance the
purchase of the York Avenue Property, prepay the $100 million
secured notes due February 2009, and support working capital
needs.  The outlook is stable.
     
"The upgrade, which returns the rating to investment grade after
an approximate seven-year gap," said Standard & Poor's credit
analyst David Kuntz, "reflects the continued good performance of
Sotheby's due to a strong worldwide auction market and the
company's successful implementation of its strategic initiatives."  
The company's credit protection profile remains above average for
the rating, and the repayment of the $100 million secured notes
due February 2009 improves the company's liquidity position as it
eliminates a near-term maturity.


SOURCE INTERLINK: Moody's Junks Proposed $465MM Senior Notes
------------------------------------------------------------
Moody's Investors Service has assigned a Caa2 rating to Source
Interlink Companies Inc.'s proposed $465 million senior unsecured
notes while downgrading the company's Corporate Family and
Probability of Default ratings to B3 from B2 and its Speculative
Grade Liquidity rating to SGL-3 from SGL-2. The downgrade of the
CFR largely reflects Moody's concern regarding the company's
financial performance which has fallen below expectations,
combined with weakening asset protection metrics. Details of the
rating action are as follows:

Ratings assigned:

  * $465 million senior unsecured facility due 2017
    -- Caa2, LGD5, 89%

Ratings downgraded:

  * $300 million senior secured asset based revolving credit
    facility due 2013 -- to B1, LGD2, 27% from Ba3, LGD2, 27%

  * $873 million senior secured term loan B due 2014 --
    to B2, LGD3, 36% from B1, LGD3, 35%

  * Corporate Family rating -- to B3 from B2

  * Probability of Default rating -- to B3 from B2

  * Speculative Grade Liquidity rating -- to SGL-3 from SGL-2

Rating affirmed, subject to withdrawal at closing

  * $465 million senior subordinated facility due 2017

The rating outlook is stable.

The downgrade of the CFR largely incorporates financial
performance which has fallen short of the estimates forecast by
Moody's at the time that ratings were initiated in April 2007.
Accordingly, Moody's now considers it unlikely that Source
Interlink will be able to reduce total debt below a 6.5 multiple
of EBITDA in the near term. In addition, the ratings downgrade
incorporates Moody's view that Source Interlink's enterprise value
may now be insufficient to completely cover debtholder claims in a
distress scenario and that the company's equity value will likely
provide de-minimus cushion to debtholders, especially to senior
unsecured creditors.

The downgrade of the speculative grade liquidity rating to SGL-3
from SGL-2 largely reflects the overhang that the minority owner
of automotive.com may exercise a put to sell its approximately 20%
interest in automotive.com to Source Interlink during 2009 at a
price estimated at around $30 million as early as the end of
December 2008. The potential payment of this put, if exercised, is
likely to place considerable strain on Source Interlink's liquid
resources.

The B3 CFR reflects the heavy debt burden, high leverage (which is
expected to remain above 7.0 times adjusted debt to EBITDA in the
intermediate term), the integration risk which Source Interlink
assumed in connection with its August 2007 acquisition of Source
Interlink Media (formerly Primedia Enthusiast Media, Inc.), as
well as the thin margins, customer concentration and weak growth
prospects of Source Interlink's core product offerings. Ratings
are supported by Source Interlink's leading market position in the
magazine, CD and DVD distribution and fulfillment market segments,
the cost efficiencies which the merged entity can expect through
the realization of synergies, and the company's development of a
more integrated vertical media platform, following the
acquisition.

The stable rating outlook continues to incorporate the good
reputation of Source Interlink's product range (including the
magazine titles recently acquired from PRIMEDIA), its long
standing customer relationships and its modestly positive free
cash flow generation (assuming the automotive.com put is not
exercised in 2009).

Source Interlink plans to use the proceeds of the proposed senior
unsecured notes issuance to retire and refinance all indebtedness
outstanding under its existing senior subordinated bridge loan
facility.

Source Interlink Companies is one of the largest providers of
integrated marketing, merchandising, publishing and fulfillment of
media-related products in the US. Headquartered in Bonita Springs
Florida, the company reported pro-forma sales of approximately
$2.5 billion for the LTM period ended April 30, 2008.


STEPHEN SMITH: Voluntary Chapter 11 Case Summary
------------------------------------------------
Debtor: Stephen G. Smith
        Elizabeth H. Smith
        P.O. Box 281
        Old Fields, WV 26845

Bankruptcy Case No.: 08-00889

Chapter 11 Petition Date: June 6, 2008

Court: Northern District of West Virginia (Elkins)

Judge: Patrick M. Flatley

Debtor's Counsel: Lawrence E. Sherman, Jr.
                  Sherman Law Firm
                  255 West Main Street
                  Post Office Box 1810
                  Romney, WV 26757
                  Tel (304) 822-4740
                  Fax (304) 822-7922
                  Email lesherman@leshermanlaw.com

Estimated Assets: $1 million to $10 million

Estimated Debts: $1 million to $10 million

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


STUART EDWARDS: Case Summary & 20 Largest Unsecured Creditors
-------------------------------------------------------------
Debtor: Stuart D. Edwards
        aka Stuart Denzil Edwards
        75 Corral De Tierra Rd.
        Salinas, CA 93908

Bankruptcy Case No.: 08-52920

Chapter 11 Petition Date: June 3, 2008

Court: Northern District of California (San Jose)

Judge: Arthur S. Weissbrodt

Debtor's Counsel: Charles B. Greene
                  (cbgattyecf@aol.com)
                  Law Offices of Charles B. Greene
                  84 W Santa Clara St. #770
                  San Jose, CA 95113
                  Telephone (408) 279-3518

Estimated Assets: $10,000,001 to $50 million

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

Debtor's 20 Largest Unsecured Creditors:

   Entity                             Claim Amount
   ------                             ------------
David Bennett                             $125,000
P.O. Box 115
Hakalau, HI 96710

Blackthorne Pools & Spas, Inc.             $33,308
875 A West Market St.
Salinas, CA 93901

Bank of America                            $23,000
P.O. Box 15716
Wilmington, DE 19886

Mercedes Benz Financial                    $18,500

Advanced Construction & Design             $14,600

GMAC                                       $12,861

Internal Revenue Service                    $6,477

Patane & Gumberg                            $6,097

HSBC                                        $5,056

Franchise Tax Board                         $3,939

PG&E                                        $3,052
                                            $1,700

Pets & Ponds                                $2,767

Sentry Alarm Systems                        $2,740

Community Hospital of Monterey              $1,654

Fireman's Fund                              $1,500

CSAA                                        $1,197

Monterey County Health Dept.                $1,187

Hawaii Electric Light Co.                     $800

Washington Mutual                             $545


SW DALLAS: Voluntary Chapter 11 Case Summary
--------------------------------------------
Debtor: SW Dallas L.P.
        Suite 411, 2911 E. Division St.
        Arlington, TX 76011

Bankruptcy Case No.: 08-32706

Chapter 11 Petition Date: June 2, 2008

Court: Northern District of Texas (Dallas)

Judge: Stacey G. Jernigan

Debtor's Counsel: Joyce W. Lindauer
                  8140 Walnut Hill Lane, Suite 301
                  Dallas, TX 75231
                  Tel (972)503-4033
                  Fax (972)503-4034
                  Email courts@joycelindauer.com

Estimated Assets: $10 million to $50 million

Estimated Debts: $1 million to $10 million

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


TANEJA CENTER: Case Summary & 50 Largest Unsecured Creditors
------------------------------------------------------------
Lead Debtor: Taneja Center, Inc.
             11211 Waples Mill Road, Ste. 200
             Fairfax, VA 22030

Bankruptcy Case No.: 08-13292

Debtor-affiliates filing separate Chapter 11 petitions:

        Entity                                     Case No.
        ------                                     --------
        Elite Entertainment Inc.                   08-13286
        Financial Mortgage Inc.                    08-13287
        NRM Investments Inc.                       08-13290
        Vijay K. Taneja                            08-13293

Chapter 11 Petition Date: June 9, 2008

Court: Eastern District of Virginia (Alexandria)

Judge: Robert G. Mayer

Debtors' Counsel: Bruce W. Henry, Esq.
                  Email: ksp@henrylaw.com
                  Henry & O'Donnell, P.C.
                  4103 Chain Bridge Rd. Ste. 100
                  Fairfax, VA 22030
                  Tel: (703) 273-1900
                  Fax: (703) 273-6884

Taneja Center, Inc's Financial Condition:

Estimated Assets: $10 million to $50 million

Estimated Debts:  $10 million to $50 million

A. Taneja Center, Inc's Eight Largest Unsecured Creditors:

   Entity                      Nature of Claim       Claim Amount
   ------                      ---------------       ------------
First Tennessee Bank           Goose Creek, Beltmont $5,300,000
Attn: Richard R. Spore, II,    Rd., Ashburn, VA;
Esq.                           value of security:
100 Peabody Pl., Ste. 900      $5,500,000; value of
Memphis, TN 38103-3672         senior lien:
                               $2,762,659

SGA Architects                 Architect             $1,088,622
7508 Wisconsin Ave., 4th Fl.
Bethesda, MD 20814

Treasurer of Loudoun County    Arcola-Route 50       $139,101
Attn: H. Roger Zurn, Jr.
P.O. Box 1000
Leesburg, VA 20177

Khanjee Holdings (US), Inc.    Alleged services      $30,000

Pan American Fin., Resources,  Alleged services      $25,000
LLC

Urban, Ltd.                    Engineer              $17,824

Reed Smith                     Legal services        $2,925

Culbert & Schmitt, PLLC        Legal services        Unknown

B. Elite Entertainment, Inc's Four Largest Unsecured Creditors:

   Entity                      Nature of Claim       Claim Amount
   ------                      ---------------       ------------
SunTrust                       2007-S600 Mercedes    $111,000
P.O. Box 791144                value of security:
Baltimore, MD 21279-1144       $90,000

Bank of America                Credit card           $54,625
Business Card and VISA
P.O. Box 15710
Wilmington, DE 19886-1570

Discover Card                  Credit card           $3,010
P.O. Box 15735
Wilmington, DE 19886-5735

Northern Leasing Systems, Inc. Credit card           Unknown
                               equipment
                               lease and equipment
                               returned

C. Financial Mortgage, Inc's 17 Largest Unsecured Creditors:

   Entity                      Nature of Claim       Claim Amount
   ------                      ---------------       ------------
First Tennessee Bank           Various notes         $5,708,000
Attn: Richard R. Spore, III,
Esq.
100 Peabody Place, Ste. 900
Memphis, TN 38103-3672

                               8012 Quill Street     $5,300,000
                               Bowie, MD; value of
                               security: $349,900

                               First Deed of Trust   $5,300,000
                               8012 Quill St.
                               Bowie, MD; value of
                               security: $349,900

Franklin Bank & Access Lending Notes; value of       $9,000,000
9800 Richmond Ave., Ste. 680   security: $1,000,000
Houston, TX 77042

Wells Fargo Bank               Attachment lien       $3,367,000
Attn: August J. Matteis, Jr.   April 11, 2008; value
1100 New York Ave., N.W.       of security: $74,000
Ste. 1100
Washington, DC 20005

Wells Fargo Funding, Inc.      Repurchase demands on $3,367,000
2701 Wells Fargo Way           mortgages
MAC X9902-12
Minneapolis, MN 55467

EMC Payment Processing         Property: 11141       $1,024,000
P.O. Box 660753                Willowbrook Dr.
Dallas, TX 75266-0755          Potomac, MD 20854

EMC Payment Processing         Property: 9605        $1,000,000
P.O. Box 660753                McWhorter Farm
Dallas, TX 75366-0754          Court Damascus, MD
                               20872

                               Property: 11141       $889,744
                               Willowbrook Dr.
                               Potomac, MD 20854

EMC Payment Processing         Property: 13720       $752,828
P.O. Box 660753                Highland Road
Dallas, TX 75266-0772          Clarksville, MD 21029

American Home Mortage          Property: 9036        $3,540,799
Servicing, Inc.                Bronson Dr.
P.O. Box 660029                Potomac, MD 20854
Dallas, TX 75266-0029

Ali Gharai                     Property: 8146        $1,985,891
8146 Dominion Dr.              Dominion Dr.
McLean, VA 22102               McLean, VA 22102

EMC Payment Processing         Property: 8146        $1,985,891
P.O. Box 660753                Dominion Dr.
Dallas, TX 75266-0767          McLean, VA 22102]

EMC Mortgage Corp.             Repurchases           $1,447,252
Attn: Bobbi Bingham
2780 Lake Vista Dr.
Lewisville, TX 75067

Ali Rassoulpour                Property: 11141       $1,024,000
11141 Willowbrook Dr.          Willowbrook Dr.
Potomac, MD 20854              Potomac, MD 20854

Satish Sood                    Property: 9605        $1,000,000
9065 McWhorter Farm Ct.        McWhorter Farm Ct.
Damascus, TX 20872-0005        Damascus, MD 20872

Nayrreh Rassoul                Property: 11141       $889,744
11141 Willowbrook Dr.          Willowbrook Dr.
Potomac, MD 20854              Potomac, MD 20854

Neeraj Verma                   Property: 13720       $752,828
13720 Highland Rd.             Highland Road
Sterling, VA 20129             Clarksville, MD 21029

GMAC Mortgage                  Property: 20311       $616,736
P.O. Box 9001719               Rosemeadow Court
Louisville, KY 40290-1719      Gaithersburg, MD
                               20882

Satish Sood                    Property: 20311       $616,736
9085 McWhorter Farm Ct.        Rosemeadow Ct.
Damascus, MD 20872             Gaithersburg, MD
                               20882

D. NRM Investments, Inc's Nine Largest Unsecured Creditors:


   Entity                      Nature of Claim       Claim Amount
   ------                      ---------------       ------------
Virginia Commerce Bank         Loan Guaranty         $3,109,000
5350 Lee Highway               9034 Bronson Rd.
Arlington, VA 22207

                               Guaranty of Holly     $2,510,000
                               Ave. loans

                               Construction loan     $774,820
                               guaranty

                               Construction loan     $742,000
                               guaranty
                               4620 Holly Ave.

                               Two lots-Stone        $378,000
                               Road - Guaranty

                               Guaranty of letter    $361,000

                               Overdraft on          $29,258
                               operating account

GHA Contractor                 General contractor    $275,000
8146 Old Dominion Dr.
Mc Lean, VA 22102

American Express               Credit card           $90,347
P.O. Box 1270
Newark, NJ 07101-1270

Ferguson Enterprises           Jobs under            $41,300
                               construction

Bank of America & Platinum     Credit card           $14,819
Visa Business Card

CitiBank                       Credit card           $7,038

CitiBusiness                   Credit card           $6,669

Fagelson, Schonberger, Payne   Legal services        $3,357
& Deichmeister, PC

City Of Fairfax                Site cleanup          $769
                               Judicial Drive

E. Vijay K. Taneja's 13 Largest Unsecured Creditors:

   Entity                      Nature of Claim       Claim Amount
   ------                      ---------------       ------------
First Tennessee Bank           Various notes         $5,708,000
Attn: Richard R. Spore, II,
100 Peabody Place, Ste. 900
Memphis, TN 38103-3672
                      
                               9034 Bronson Road     $5,300,000
                               Potomac, MD; value of
                               security: $7,200,000;
                               value of senior lien:
                               $3,109,000

                               Rental 12515          $5,300,000
                               Chronicle Dr.,
                               Fairfax, VA; value of
                               security: $1,500,000;
                               value of senior lien:
                               $919,544

                               Rental:               $5,300,000
                               1005 N. VA Dare Trail
                               Kill Devil Hills, NC;
                               value of security:
                               $3,200,000; value of
                               senior lien:
                               $2,355,002

                               Rental:               $5,300,000
                               9036 Bronson Rd.,
                               Potomac, MD 20854;
                               value of security:
                               $5,000,000; value of
                               senior lien:
                               $3,541,000

Virginia Commerce Bank         Guarantys for:        $9,285,000
5350 Lee Highway               $1,300,000-10611
Arlington, VA 22207            Judicial Dr.;
                               $407,000-4633 Holly
                               Ave.; $378,000-Stone
                               Road; $7,200,000-
                               Route 50

EMC Payment Processing         Property: 8146        $1,985,891
P.O. Box 660753                Dominion Dr.
Dallas, TX 75266-0767          McLean, VA 22102

                               Property: 11141       $1,024,000
                               Willowbrook Dr.
                               Potomac, MD 20854

                               Property: 9605        $1,000,000
                               McWhorter Farm
                               Court Damascus, MD
                               20872

                               Property: 11141       $889,744
                               Willowbrook Dr.
                               Potomac, MD 20854

Mutual Bank, IL                Guaranty:             $2,625,000
16540 S. Halsted St.           GooseCreek, Belmont
Harvey, IL 60426               Road, Ashburn, VA

American Home Mortage          Property: 9036        $3,540,799
Servicing, Inc.                Bronson Dr.
P.O. Box 660029                P.O. Box 660029
Dallas, TX 75266-0029          Potomac, MD 20854


Homecoming Financial           Residence:            $2,949,000
P.O. Box 205                   5335 Summit Dr.
Waterloo, IA 50704-0205        Fairfax, VA 22030

Midland Mortgage               Residence:            $2,947,000
P.O. Box 26648                 5335 Summit Dr.
Oklahoma City, OK 73126-0648   Fairfax, VA 22030

Chevy Chase Federal Savings    Residence:            $2,927,000
6151 Chevy Chase Dr.           5335 Summit Dr.
Laurel, MD 20707-2918          Fairfax, VA 22030

EMC Mortgage                   Residence:            $2,898,000
P.O. Box 660753                5335 Summit Dr.
Dallas, TX 75266-0753          Fairfax, VA 22030

Wells Fargo Home               Residence:            $2,824,000
Mortgage                       5335 Summit Dr.
P.O. Box 11701                 Fairfax, VA 22030
Newark, NJ 07101-4701

Ali Gharai                     Property: 8146        $1,985,891
8146 Dominion Dr.              Dominion Dr.
McLean, VA 22102               McLean, VA 22102

Ali Rassoulpour                Property: 11141       $1,024,000
11141 Willowbrook Dr.          Willowbrook Dr.
Potomac, MD 20854              Potomac, MD 20854


Satish Sood                    Property: 9605        $1,000,000
9065 McWhorter Farm Ct.        McWhorter Farm
Damascus, TX 20872-0005        Court Damascus, MD
                               20872

TARGA RESOURCES: Mulls Offering of $250MM Senior Unsecured Notes
----------------------------------------------------------------
Targa Resources Partners LP and its subsidiary Targa Resources
Partners Finance Corporation intend to sell $250 million in
aggregate principal amount of senior unsecured notes due 2016.  

The Partnership intends to use the net proceeds from the offering
to repay borrowings under its senior secured credit facility.

Headquartered in Houston, Texas, Targa Resources Partners LP
(NASDAQ:NGLS) -- http://www.targaresources.com/-- was formed by   
Targa Resources Inc. to engage in the business of gathering,
compressing, treating, processing and selling natural gas and
fractionating and selling natural gas liquids and natural gas
liquids products.  The Partnership operates in the Fort Worth
Basin in north Texas.  A subsidiary of Targa Resources Inc. is the
general partner of the Partnership.  Targa Resources Partners owns
a  network of integrated gathering pipelines, two natural gas
processing plants and a fractionator.  



TARGA RESOURCES: Moody's Rates Proposed $250MM Sr. Notes B2
-----------------------------------------------------------
Moody's Investors Service assigned first-time ratings to Targa
Resources Partners LP (NGLS) including a Ba3 Corporate Family
Rating (CFR), a Ba3 Probability of Default rating, and a B2 rating
(LGD-5, 87%) to its proposed $250 million of senior unsecured
notes due 2016. Moody's also assigned a Speculative Grade
Liquidity (SGL) rating of SGL-3 to NGLS. The rating outlook is
stable.

NGLS' Ba3 CFR reflects its growing scale of operations, modest
financial leverage, expectations of a more balanced financial
policy than its parent and general partner, Targa Resources, Inc.
(TRI, B1 CFR), and the benefits associated with being a primarily
drop-down entity including greater visibility for future growth
and a generally lower level of growth capital expenditures. With
total assets of approximately $1.5 billion and LTM EBITDA of
approximately $199 million as of March 31, 2008, NGLS is currently
similar in terms of size and scale to its Ba3/B1-rated peers,
including Atlas Pipeline Partners, Copano Energy, MarkWest Energy
Partners, and Regency Energy Partners. NGLS' leverage currently is
lower than most its peers with debt/LTM EBITDA of approximately 3x
as of March 31, 2008. Depending on potential transactions
including foreseeable drop-downs from TRI or acquisitions of
assets from third parties, Moody's expects that NGLS' leverage
will be maintained at less than 4x.

NGLS' natural gas gathering and processing operations are located
in three geographic regions: the North Texas System in the Fort
Forth Basin, the San Angelo Operating Unit (SAOU) System in the
Permian Basin, and the Louisiana Operating Unit (LOU) System in
Southwest Louisiana. Its assets are in modestly active areas and
volumes have been roughly flat across the different systems. NGLS'
contract profile is approximately 79% percent-of-proceeds (POP),
19% wellhead purchase/keep-whole, and 2% fee-based and other. NGLS
has commodity hedges that protect margins under its POP contracts
for up to 80% of near-term equity volumes. For the wellhead
purchase/keep-whole exposure (nearly all of which is in the LOU
System), NGLS has flexibility to avoid negative frac spreads
including the ability to bypass processing and deliver rich gas to
the Lake Charles industrial market.

NGLS is controlled by TRI, which is rated one notch lower
primarily due to higher leverage. Factors that Moody's considered
in assigned a higher rating to NGLS included: (i) a strategy to
use NGLS as a monetization and growth vehicle and therefore a
motivation to maintain a higher degree of financial flexibility at
NGLS; (ii) TRI has its own assets/operations and is not dependent
on distributions from NGLS to service its debt; (iii) the high
public ownership (73.5%) of NGLS' outstanding units; (iv) a
separate board of directors at NGLS; and (v) no common ownership
of assets with TRI. That said, there is linkage between the two
credits and higher leverage at TRI (caused by, for instance, not
sufficiently reducing debt in connection with drop-downs to NGLS,
undertaking separate growth projects or acquisitions with debt,
and/or paying distributions to shareholders) could have negative
rating implications for both entities. Specifically, Moody's will
look for TRI to maintain consolidated (including Holdco loan)
debt/EBITDA of less than 5x.

Targa Resources Partners LP is headquartered in Houston, Texas.


TARGA RESOURCES: S&P Rates $250 Million Note Issuance 'B'
---------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'BB-' corporate
credit rating to midstream energy company Targa Resources Partners
L.P. and its 'B' issue credit rating to TRP's $250 million senior
unsecured notes due 2016.  At the same time, S&P assigned a '6'
recovery rating to this debt.  The '6' recovery rating indicates
that lenders can expect negligible (0% to 10%) recovery in the
event of a payment default.  The offering proceeds will refinance
debt on TRP's revolving credit facility.  The outlook is stable.
     
Master limited partnership TRP engages in natural gas gathering
and processing in the Fort Worth Basin, Permian Basin, and onshore
Louisiana Gulf Coast.  The company had adjusted debt of about
$579 million as of March 31, 2008.
     
The rating on TRP reflects a weak business risk profile and
aggressive financial profile.  TRP's business profile reflects its
limited customer diversity, with about 60% of revenue coming from
affiliates of its lower-rated general partner Targa Resources Inc.
(TRI; B/Stable/--).  Furthermore, cash flow volatility from
exposure to unhedged commodity prices, a relatively undiversified
business mix, and the MLP structure that requires the distribution
of virtually all distributable cash flow pressure ratings.  The
company's geographic diversity, asset quality, conservative
hedging policy, high distribution coverage, and favorable
commodity price environment partially mitigate these risks.
     
The outlook on TRP is stable.  Upward movement in the rating is
limited in the near term.  An increase in cash flow metrics
leading to sustained FFO to debt in the high 20% range, continued
strong distribution coverage, and financial discipline with
acquisitions and growth plans could result in a positive outlook
or a higher rating.
     
"We could change the outlook to negative or lower the ratings if
significantly lower commodity prices result in FFO-to-debt metrics
below 20% for sustained periods, if debt-to-EBITDA exceeds 4.5x
for several quarters, if distribution coverage is consistently
below at least 1.3x, or more aggressive financial policies of its
parent and general partner exerts pressure on the business and
financial profiles," said Standard & Poor's credit analyst
Michael Grande.


TARGA RESOURCES: S&P Holds B Rating on Unit's $250MM Note Issuance
------------------------------------------------------------------
Standard & Poor's Ratings Services affirmed its 'B' corporate
credit rating on midstream energy company Targa Resources Inc.,
following the announcement by Targa Resources Partners L.P. that
it will issue $250 million of senior unsecured notes due 2016.  At
the same time, S&P affirmed its 'B+' rating and '2' recovery
rating on TRI's $1.25 billion senior secured term loan,
$300 million synthetic letter of credit facility, and $250 million
revolving credit facility.  S&P also affirmed the 'CCC+' rating
and '6' recovery rating on TRI's $250 million senior unsecured
notes.  

The '2' recovery rating on the senior secured term loan indicates
that lenders can expect substantial (70% to 90%) recovery if a
payment default occurs.  The '6' recovery rating indicates that
lenders can expect negligible (0% to 10%) recovery in the event of
a payment default.  The offering proceeds of the TRP debt issuance
will refinance debt on TRP's revolving credit facility.  The
outlook is stable.

TRI engages in natural gas gathering and processing, and natural
gas liquids logistics and marketing.  Operations are primarily
concentrated in the Permian Basin in Texas, and on Louisiana's
Gulf Coast.  TRI is the parent company to the general partner of
TRP, a natural gas gathering and processing master limited
partnership that operates in the Fort Worth Basin, Permian Basin,
and onshore Louisiana Gulf Coast.  Consolidated debt was about
$1.4 billion as of March 31, 2008.
     
The rating on TRI reflects a vulnerable business risk profile and
aggressive financial profile.  TRI's business profile reflects
financial policies of majority owner Warburg Pincus LLC that have
resulted in high leverage and debt-financed dividends.
     
"The business profile also acknowledges potential cash flow
volatility from exposure to unhedged commodity prices, and TRI's
participation in the highly competitive midstream industry," said
Standard & Poor's credit analyst Michael Grande.
     
The company's conservative hedging policy, favorable commodity
price environment, and asset diversity partially mitigates these
risks.  
     
The outlook on TRI is stable.  Strong commodity conditions support
near-term ratings.  Debt reduction that is greater than expected
and leads to improved credit metrics (specifically FFO to debt of
about 18% to 20%), coupled with a consistent demonstration of
commitment to credit quality from the TRI's owners, could result
in a positive outlook or a higher rating.  S&P could change the
outlook to negative or lower the rating if there are significantly
lower commodity prices that result in lower cash flow
expectations, consolidated debt-to-EBITDA above 5x for more than
15 months, or further aggressive financial policies exert pressure
on the business and financial profiles.


TELKONET INC: Posts $5,121,031 Net Loss in 2008 First Quarter
-------------------------------------------------------------
Telkonet Inc. reported a net loss of $5,121,031, on total revenue
of $4,959,021, in the first quarter ended March 31, 2008, compared
with a net loss of $5,401,476, on total revenue of $1,246,269, in
the same period last year.

At March 31, 2008, the company's consolidated balance sheet showed
$36,133,160 in total assets, $13,049,437 in total liabilities,
$3,855,877 in minority interest, and $19,227,846 in total
stockholders' equity.

The company's consolidated balance sheet at March 31, 2008, also
showed strained liquidity with $4,715,470 in total current assets
available to pay $8,960,987 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?2da3

                       Going Concern Doubt

As reported in the Troubled Company Reporter on April 22, 2008,
RBSM LLP, in McLean, Va., expressed substantial doubt about
Telkonet 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 significant operating losses in the current year and
also in the past.

The company believes that anticipated revenues from operations
will be insufficient to satisfy its ongoing capital requirements
for at least the next 12 months.  

                          About Telkonet

Based in Germantown, Md., Telkonet Inc. (AMEX: TKO) --
http://www.telkonet.com/-- provides centrally managed solutions  
for integrated energy management, networking, building automation,
and proactive support services in the United States and Canada.


THEATER XTREME: March 31 Balance Sheet Upside-Down by $4,131,946
----------------------------------------------------------------
Theater Xtreme Entertainment Group Inc.'s balance sheet at
March 31, 2008, showed $2,524,609 in total assets and $6,656,555
in total liabilities, resulting in a $4,131,946 total
stockholders' deficit.

At March 31, 2008, the company's balance sheet also showed
strained liquidity with $1,584,992 in total current assets
available to pay $3,877,753 in total current liabilities.

The company reported a net loss of $957,255, on revenues of
$825,187 for the third quarter ended March 31, 2008, compared with
a net loss of $828,700, on revenues of $1,821,275, in the same
period ended March 31, 2007.

For the three months ended March 31, 2008, retail sales decreased
by $671,002, or 48%, when compared to the three months ended
March 31, 2007.

For the three months ended March 31, 2008, the company recognized
wholesale sales, principally sales to franchisees, of $21,015
compared to $341,723 for the three months ended March 31, 2007,
reflecting a decrease of $320,708 or 94%.

For the three months ended March 31, 2008, the company recognized
franchise royalties of $67,443 compared to $46,821 in royalties
recognized for the three months ended March 31, 2007.

Full-text copies of the company's financial statements are
available for free at:

               http://researcharchives.com/t/s?2d94

                       Going Concern Doubt

As reported in Troubled Company Reporter on Oct. 19, 2007,
Morison Cogen LLP, in Bala Cynwyd, Pa., expressed substantial
doubt about Theater Xtreme Entertainment Group Inc.'s ability to
continue as a going concern after auditing the company's
financial statements for the fiscal year ended June 30, 2007.  The
auditing firm reported that the company incurred significant
losses from operations, has negative working capital and an
accumulated deficit.

The company expects to incur significant expenditures to further
the development and commercialization of its products.  To achieve
this, the company has requested and received deferral of interest
payments due to its principal debtor (Kinzer Technology LLC)
through July 1, 2008, and the deferral of principal payments due
to its non-convertible debenture holders through June 30, 2008.

The company is also currently negotiating with both its principal
lender and its short term debenture and promissory note creditors
for modification of the terms of all of its debt instruments and
is diligently pursuing the raising of additional funds.

                       About Theater Xtreme

Headquartered in Newark, Delaware, Theater Xtreme Entertainment
Group Inc. (TXEG.OB) -- http://www.theaterxtreme.com/-- is a    
specialty retailer of real movie theaters for the home.  The
company's 80" to 120" front projection systems deliver an
authentic movie theater experience, as an increasingly popular
alternative to flat panel televisions.  It operates 3 company
owned stores and 11 franchises in 12 states.


TOUSA INC: Allowed to Settle JPMorgan Facility Default
------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of Florida
allowed certain Debtors in the bankruptcy case of TOUSA Inc. and
its debtor-affiliates to settle an event of default in a credit
facility used to fund the Engle/Sunbelt Holdings, LLC operations.

In December 2004, TOUSA Homes, Inc., and Suntous Investors, LLC,
entered a joint venture agreement to form Engle/Sunbelt Holdings,
LLC.  Sunbelt was formed to develop homesites and deliver homes
in the Phoenix, Arizona market, according to Paul Steven
Singerman, Esq., at Berger Singerman, P.A., in Miami, Florida.

The Debtors were appointed as day-to-day manager of Sunbelt and
received management fees for its service.

              Sunbelt Existing Credit Facilities

TOUSA Homes and Suntous made capital contributions to finance
Sunbelt's business operations, but additional funding was
required.  Thus, Sunbelt entered into a (i) credit agreement
dated December 16, 2004, with JPMorgan Chase Bank, N.A., as
agent, and J.P. Morgan Securities, Inc., as lead arranger and
sole book runner, for a $150,000,000 term loan; and (ii) a loan
agreement dated December 17, 2008, with CapitalSource Finance,
LLC, for a $30,000,000 revolving mezzanine financing loan.

In July 2005, Sunbelt received an additional capital contribution
from TOUSA, Inc.  The parties' second amendment of the JPM Credit
Facility modified the aggregate commitment of the lenders to
$200,000,000, and extended the maturity date to March 17, 2008.

As of May 7, 2008, the outstanding obligations under the Existing
Facility total approximately $90,500,000, according to Mr.
Singerman.

Although the Existing Facility is non-recourse to the Debtors,
(i) TOUSA agreed to complete any property development commitments
in the event Sunbelt defaults under the JPM Credit Agreement, and
(ii) TOUSA and Suntous agreed to indemnify the Existing Lenders
for potential losses resulting from fraud, misappropriation and
similar acts by Sunbelt.

TOUSA's Chapter 11 filing, however, resulted in an immediate and
unambiguous event of default under the Existing Facility.  
Moreover, a potential investor to the sale of the Joint Venture's
equity interests withdrew citing a further deterioration in the
Phoenix real estate market.

On March 17, 2008, the JPM Credit Facility matured and Sunbelt
was unable to repay all outstanding amounts.  JPMorgan thus
served a  notice of the default and demanded payment of all
outstanding obligations.

Faced with the events of default under the JPM Credit Agreement
and the inability to provide adequate funding for the Joint
Venture, the Debtors focused their efforts on minimizing claims
that could be asserted in connection with their Chapter 11 cases
and any foreclosure action instituted by JPMorgan, Mr. Singerman
relates.

In an effort to minimize Joint Venture-related claims against the
Joint Venture Partners, Sunbelt, TOUSA, TOUSA Homes, Suntous and
JPMorgan engaged in settlement discussions to develop an agreed
process for addressing the defaults and JPMorgan's remedial
rights under the JPM Credit Agreement.

Having explored and exhausted all other potential options, and in
light of the obligations under the Construction Agreement and
Indemnity Agreement, the Debtors and Suntous determined that it
would be advantageous to permit JPMorgan to exercise remedies
against the Joint Venture assets on an uncontested basis, if
appropriate terms and accommodations could be reached, Mr.
Singerman tells the Court.

                       Settlement Agreement

After lengthy arm's-length negotiations concerning the Joint
Venture and their rights and obligations, the Parties entered
into a settlement agreement.

The salient terms of the Settlement Agreement are:

   (a) JPMorgan will file an action in Maricopa County Superior
       Court, requesting the appointment of Morrie C. Aaron of
       MCA Financial Group, Ltd. as receiver with respect to all
       the Collateral.  JPMorgan has already taken this
       action and on April 25, 2008, the Superior Court appointed
       the Receiver.

   (b) JPMorgan has commenced, or intends to commence, a non-
       judicial foreclosure of the Collateral, including a
       trustee's sale and UCC sale with respect to personal
       property constituting part of the Collateral.  The Loan
       Parties agree not to institute any court action,
       arbitration or similar action that would challenge or
       delay the trustee's and UCC sales or the exercise of other
       rights or remedies under the Loan Documents.

       The Loan Parties include Debtors TOUSA Inc., TOUSA Homes,
       Engle Homes Residential Construction, LLC, and TOUSA
       Associates Services Company; Engle/Sunbelt, LLC; Sunbelt;
       Suntous; and Sunbelt Holdings Operating Limited
       Partnership.

   (c) The Loan Parties will provide the Lenders with a deed in
       lieu of foreclosure, which will fully terminate, transfer
       and release all right, title and interest of each Loan
       Party in and to all Collateral.

   (d) Absent the consent of Suntous or TOUSA Homes, as
       applicable, JPMorgan and Lenders will not solicit for
       employment any Arizona-based employee of Suntous and its
       affiliates, and TOUSA Homes and its affiliates before the
       later of (i) the final foreclosure date or the completion
       of a Deed in Lieu and (ii) the date six months after the
       Settlement Agreement.

By entering into the Settlement Agreement and in exchange for
agreeing to cooperate with JPMorgan by, among other things, (i)
consenting to the appointment of a receiver and the granting of a
deed in lieu of foreclosure and (ii) providing certain services
to the Receiver in exchange for full payment, TOUSA Inc. and
TOUSA Homes will free themselves of potentially significant
indemnification and completion obligations that may otherwise
diminish recoveries for creditors in the Debtors' Chapter 11
cases, Mr. Singerman asserted.

                         About TOUSA Inc.

Headquartered in  Hollywood, Florida, TOUSA Inc. (Pink Sheets:
TOUS) -- http://www.tousa.com/-- fka Technical Olympic
U.S.A. Inc., dba Technical U.S.A., Inc., Engle Homes, Newmark
Homes L.P., TOUSA Homes Inc. and Newmark Homes Corp. is a leading
homebuilder in the United States, operating in various
metropolitan markets in 10 states located in four major geographic
regions: Florida, the Mid-Atlantic, Texas, and the West.  TOUSA
designs, builds, and markets high-quality detached single-family
residences, town homes, and condominiums to a diverse group of
homebuyers, such as "first-time" homebuyers, "move-up" homebuyers,
homebuyers who are relocating to a new city or state, buyers of
second or vacation homes, active-adult homebuyers, and homebuyers
with grown children who want a smaller home.  It also provides
financial services to its homebuyers and to others through its
subsidiaries, Preferred Home Mortgage Company and Universal Land
Title Inc.

The Debtor and its debtor-affiliates filed for separate Chapter 11
protection on Jan. 29, 2008. (Bankr. S.D. Fla. Case No.:
08-10928).  The Debtors have selected M. Natasha Labovitz, Esq.,
Brian S. Lennon, Esq., Richard M. Cieri, Esq. and Paul M. Basta,
Esq., at Kirkland & Ellis LLP and Paul Steven Singerman, Esq., at
Berger Singerman to represent them in their restructuring efforts.  
Lazard Freres & Co. LLC is the Debtors' investment banker and
financial advisor.  Ernst & Young LLP is selected as the Debtors'
independent auditor and tax services provider.  Kurtzman Carson
Consultants LLC acts as the Debtors' Notice, Claims & Balloting
Agent.  The Official Committee of Unsecured Creditors  hired
Patricia A. Redmond, Esq., and the law firm Stearns Weaver
Weissler Alhadeff & Sitterson, P.A., as its local counsel. The
Debtors' financial condition as of April 30, 2008, showed total
assets of $1,826,724,633 and total debts of $2,265,568,841.  

The Debtors can exclusively file their chapter 11 plan until
Oct. 25, 2008.  (Sharper Image Bankruptcy News, Issue No. 13;
Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000).  


TOUSA INC: Court Approves Jasmine Ranch Settlement
--------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of Florida
allowed TOUSA Homes, Inc.,
to enter into a settlement agreement with Jasmine Valley, LLC,
Bramble Development Group, Inc., and the Jasmine Homeowners'
Association.  

Judge John K. Olson modifies the automatic stay for the sole
purpose of allowing the Settlement Agreement to be considered and
approved in the action filed by the Jasmine Homeowners'
Association in the Eighth Judicial District Court, in Clark
County, Nevada, Case No. A523205 captioned "Jasmine Homeowners
Association v. Jasmine Valley, L.L.C., et al." and allowing an
amended complaint to be filed in that action consistent with the
terms of the Settlement Agreement.

                       Jasmine Ranch Project

Jasmine Valley originally commenced the Jasmine Ranch
Condominiums project in Las Vegas, Nevada.  The Project consists
of 296 condominium units and certain related common elements,
covenants and other related rights.  Jasmine Valley hired Bramble
Development to act as the Project's general contractor, Paul
Steven Singerman, Esq., at Berger Singerman, P.A., in Miami,
Florida, relates.

As part of its obligations, Bramble Development obtained a
project-specific Owner Controlled Insurance Program policy issued
by Clarendon America Insurance Company with a completed
operations limit of $3,000,000.  Nearly all of Bramble
Development's subcontractors were enrolled in the OCIP Policy,
according to Mr. Singerman.

Jasmine Valley sold the Project when it was partially completed
to TOUSA Homes.  At the time of the sale, Jasmine Valley sold and
delivered 33 Project units to customers.  After the sale, TOUSA
Homes contracted with Bramble Development to complete the
construction of an additional 63 units and sold those units to
customers as well, Mr. Singerman informs the Court.  Thus,
Bramble Development constructed a total of 96 units.  In addition
to the Released Units, Bramble Development also constructed
various appurtenances, common elements and limited common
elements for the Project, including a clubhouse, pool and
portions of the streets, sidewalks, curbs and gutters,
landscaping, site walls and fencing -- Released Common Property.

After completion of the Released Property, TOUSA Homes went on to
construct an additional 200 units at the Project, along with
certain appurtenances, common elements and limited common
elements -- TOUSA Homes Property.  The TOUSA Homes Property is
not addressed in the Settlement Agreement, Mr. Singerman says.

As part of the purchase agreement for the Project between Jasmine
Valley and TOUSA Homes, all relevant parties agreed that TOUSA
Homes would be added as an additional name insured on the OCIP
Property.  According to Mr. Singerman, TOUSA Homes maintained
separate wrap insurance beyond the OCIP Policy for the TOUSA
Homes Property and the Released Property.

                        Jasmine Complaint

On June 12, 2006, the Jasmine HOA and "Doe Homeowners 1 through
100" filed a complaint in the Eighth Judicial District Court,
Clark County, Nevada, Case No. A523205, captioned Jasmine
Homeowners Association v. Jasmine Valley, L.L.C., at al.

The Complaint names both Bramble Development and TOUSA Homes as
defendants and seeks damages for alleged construction defects
related to the Project, Mr. Singerman relates.  Before the
Petition Date, the parties to the Complaint stipulated to stay
the action to allow them time to conduct an investigation of the
project with neutral experts, he says.

On December 3, 2007, after conclusion of the investigation, the
Jasmine HOA issued an N.R.S. Section 40.645 Notice of
Constructional Defects to Bramble Development and TOUSA Homes for
construction defects at the Project.  The Jasmine HOA Action was
stayed by operation of Section 362 of the Bankruptcy Code.

                       Proposed Settlement

After engaging in extensive negotiations and following the
investigatory period, the parties to the Jasmine HOA Action have
reached a settlement of the claims in the Complaint and Chapter
40 Notices, with respect solely to the Released Property.

The salient terms of the Settlement Agreement are:

   (a) Clarendon will pay to Jasmine HOA $2,437,432 in full and
       complete settlement of all clams against TOUSA Homes,
       Bramble Development and other third parties, with respect
       to the Released Property;

   (b) Upon receipt of the Settlement Amount, Jasmine HOA will
       dismiss the Complaint with prejudice as to Bramble
       Development.  An amended complaint will be filed against
       TOUSA Homes, clarifying the scope of the remaining claims
       and explicitly limiting its claims to the TOUSA Homes
       Property.  Litigation would continue to be subject to the
       automatic stay in the Chapter 11 cases of TOUSA Inc. and
its debtor-affiliates;

   (c) In further consideration for the Settlement, TOUSA Homes,
       Bramble Development and Jasmine HOA will fully and finally
       release one another from any liability arising out of or
       connected with the Complaint as to the Released Property;
       and

   (d) TOUSA Homes and Bramble Development are indemnified
       against any and all claims or liability arising out of, or
       in connection with, any subrogation action involving the
       Released Property by any insurer of Jasmine HOA that
       relates to any claims the association made before the
       execution of the Settlement Agreement.

                         About TOUSA Inc.

Headquartered in  Hollywood, Florida, TOUSA Inc. (Pink Sheets:
TOUS) -- http://www.tousa.com/-- fka Technical Olympic
U.S.A. Inc., dba Technical U.S.A., Inc., Engle Homes, Newmark
Homes L.P., TOUSA Homes Inc. and Newmark Homes Corp. is a leading
homebuilder in the United States, operating in various
metropolitan markets in 10 states located in four major geographic
regions: Florida, the Mid-Atlantic, Texas, and the West.  TOUSA
designs, builds, and markets high-quality detached single-family
residences, town homes, and condominiums to a diverse group of
homebuyers, such as "first-time" homebuyers, "move-up" homebuyers,
homebuyers who are relocating to a new city or state, buyers of
second or vacation homes, active-adult homebuyers, and homebuyers
with grown children who want a smaller home.  It also provides
financial services to its homebuyers and to others through its
subsidiaries, Preferred Home Mortgage Company and Universal Land
Title Inc.

The Debtor and its debtor-affiliates filed for separate Chapter 11
protection on Jan. 29, 2008. (Bankr. S.D. Fla. Case No.:
08-10928).  The Debtors have selected M. Natasha Labovitz, Esq.,
Brian S. Lennon, Esq., Richard M. Cieri, Esq. and Paul M. Basta,
Esq., at Kirkland & Ellis LLP and Paul Steven Singerman, Esq., at
Berger Singerman to represent them in their restructuring efforts.  
Lazard Freres & Co. LLC is the Debtors' investment banker and
financial advisor.  Ernst & Young LLP is selected as the Debtors'
independent auditor and tax services provider.  Kurtzman Carson
Consultants LLC acts as the Debtors' Notice, Claims & Balloting
Agent.  The Official Committee of Unsecured Creditors  hired
Patricia A. Redmond, Esq., and the law firm Stearns Weaver
Weissler Alhadeff & Sitterson, P.A., as its local counsel. The
Debtors' financial condition as of April 30, 2008, showed total
assets of $1,826,724,633 and total debts of $2,265,568,841.  

The Debtors can exclusively file their chapter 11 plan until
Oct. 25, 2008.  (Sharper Image Bankruptcy News, Issue No. 13;
Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000).  


TRANSDERM LABS: June 30 Balance Sheet Upside-Down by $37,844,000
----------------------------------------------------------------
Transderm Laboratories Corp.'s consolidated balance sheet at
June 30, 2007, showed $3,664,000 in total assets and $41,508,000
in total liabilities, resulting in a $37,844,000 total
stockholders' deficit.

At June 30, 2007, the company's consolidated balance sheet also
showed strained liquidity with $2,187,000 in total current assets
available to pay $29,497,000 in total current liabilities.

The company reported a net loss of $1,321,000 on total revenues of
$1,164,000, for the second quarter ended June 30, 2007, compared
with a net loss of $435,000, on total revenues of $1,387,000 in
the same period ended June 30, 2006.

The increase in net loss was attributable primarily to a decline
in product sales and to additional selling, general and
administrative expenses.

                 Key License/Settlement Agreement

As of June 30, 2007, the company˙s sole product and continuing
source of revenues were transdermal nitroglycerin patches used for
transdermal relief of the vascular and cardiovascular symptoms
related to angina pectoris which it has manufactured and sold
pursuant to the terms of a license agreement between Key  
Pharmaceuticals Inc. and Hercon entered into in March 2000.

On April 26, 2007, Key terminated the Key License for failure to
pay royalties and sued the company for accrued royalties owed.  In
May 2007, the company and Key entered into a Final Judgment On
Consent which, among other things, granted the company a limited
right to manufacture and sell the Hercon Products through August
16, 2007, and outlined a financial settlement between Key and
Hercon as to royalties owed under the License Agreement and that
contemplated that the company would discontinue manufacturing and
selling the Hercon Products after August 16, 2007.

Over the ensuing months, Key periodically extended the time during
which the company could manufacture and sell the Hercon Products
under the Key License.  

On April 21, 2008, the company and Key entered into a Settlement
Agreement that entitles the company to manufacture and sell
transdermal products under the Key License indefinitely, subject  
to the company's continued satisfaction of the terms of such
agreement, which consists principally of the payment of an
aggregate of $425,000 in seven equal installments of $60,714.29,
the first of which is due and owing on or before July 21, 2008,
and the remaining installments to be due and owing on or before
Oct. 21, 2008, Jan. 21, 2009, April 21, 2009, July 21, 2009,
Oct. 21, 2009, and Dec. 21, 2009.

Full-text copies of the company's consolidated financial
statements for the quarter ended June 30, 2007, are available for
free at http://researcharchives.com/t/s?2d98

          Going Concern Doubt/Possible Bankruptcy Filing

As reported in the Troubled Company Reporter on April 24, 2007,
Demetrius & Company LLC, in Wayne, N.J., expressed substantial
doubt about Transderm Laboratories Corporation's ability to
continue as a going concern after auditing the company's financial
statements for the year ended Dec. 31, 2006.  The auditing firm
pointed to the company's having defaulted on payments to its
bondholders and licensors, and working capital deficiencies.

At June 30, 2007, the company had aggregate debts and liabilities
of $41,508,000 and had a working capital deficiency of
$27,310,000.  These debts and liabilities include $7,072,000 of
royalties due under the Key Pharmaceuticals Inc. License and
$31,473,000 to Health-Chem.  The company has sustained operating
losses in each of the last three years.

In addition, at June 30, 2007, Health-Chem owes $11,779,000 under
outstanding debentures which became due in 1999 and under which it
currently is in default, which exerts pressure on the financial
condition of the Group as a whole.

The company's financial condition has prevented it from securing
financing or obtaining loans from which it could repay all or a
portion of its liabilities.

If the company does not abide by the terms of the Settlement
Agreement, including its obligations to make quarterly cash
payments going forward, the company could lose its right to
manufacture and sell transdermal products under the Key License,
and will have no other source of revenue.

In light of the uncertainty relating to the company's ability to
continue operating without the benefit of a license to utilize
Key's technology in its transdermal patch products, Transderm or
Hercon may have to seek protection under federal bankruptcy laws
in which case it would not be able to continue as a going concern.

                  About Transderm Laboratories

Headquartered in Emigsville, Pa., Transderm Laboratories
Corporation (Other OTC: TLCC.PK) engages in the development,
manufacture and marketing of transdermal drug delivery systems.  
Transderm operates principally through its 98.5% owned subsidiary,
Hercon Laboratories Corporation.  Transderm is 90% owned by
Health-Chem Corporation.


TROPICANA ENT: Court Approves Lazard Freres as Investment Banker
----------------------------------------------------------------
Judge Kevin J. Carey of the U.S. Bankruptcy Court for the District
of Delaware authorized Tropicana Entertainment LLC and its debtor-
affiliates to employ Lazard Freres & Co. LLC, as their investment
banker, nunc pro tunc to May 5, 2008.

Lazard is expected to:

   a. review and analyze the Debtors' business, operations, and
      financial projections;

   b. evaluate the Debtors' potential debt capacity light of its
      projected cash flows;

   c. assist in determining a capital structure for the Debtors;

   d. assist in determining a range of estimated values for the
      Debtors on a going concern basis;

   e. advise the Debtors on tactics and strategies for
      negotiating with the stakeholders;

   f. render financial advice to the Debtors and participate in
      meetings or negotiations with the Stakeholders, rating
      agencies or other appropriate parties in connection with
      any Restructuring;

   g. advise the Debtors on the timing, nature, and terms of new
      securities, other consideration or other inducements to be
      offered pursuant to the Restructuring;

   h. advise and assist the Debtors in evaluating potential
      financing transactions by the Debtors, and, subject to
      Lazard's agreement so to act, and, if requested by Lazard,
      to execution of appropriate agreements, on behalf of the  
      Debtors, contacting potential sources of capital as the
      Debtors may designate and assist the Debtors in
      implementing the Financing;

   i. assist the Debtors in preparing documentation within
      Lazard's area of expertise that is required in connection
      with the Restructuring;

   j. subject to the mutual agreement of the Debtors and Lazard,
      assist the Debtors in identifying and evaluating candidates
      for a potential sale transaction, advise the Debtors in
      connection with negotiations and aid in the consummation
      of a Sale Transaction;

   k. attend meetings of the Debtors' Board of Directors and its
      committees with respect to matters on which Lazard has been
      engaged to advise the Debtors; and

   l. provide testimony, as necessary, with respect to matters on
      which Lazard has been engaged to advise the Debtors in any
      proceeding before any bankruptcy court.

In addition, Lazard will provide any additional investment
banking and financial advisory services in connection with the
engagement as the Debtors may reasonably request from time to
time.

Judge Carey also approved the engagement letter, dated Feb. 7,
2008, between the Debtors and Lazard, as modified.  The Modified
Engagement Letter provides that Lazard is entitled to these fees:

   (a) A monthly fee of $150,000 payable on the first day of each
       month until the earlier of the effective date of any plan
       of reorganization or liquidation confirmed in the Debtors'
       Chapter 11 cases or the termination of Lazard's
       engagement.  About 50% of all Monthly Fees paid with
       respect to any month after six months from the Petition
       Date will be credited against any other fees payable under
       the terms of the Engagement Letter.

   (b) A completion fee payable upon the effective date of a
       confirmed plan in the Debtors' Chapter 11 cases, equal to
       1% of the aggregate face value of the Existing
       Institutional Obligations involved in any restructuring.
       The Completion Fee will not exceed $12,000,000.  Existing
       Institutional Obligations will mean the debt obligations
       under two credit agreements and the 9.625% Senior
       Subordinated Notes due 2014 of Tropicana Entertainment,
       LLC, and Tropicana Finance, LLC, and certain guarantors.

   (c) A fee payable upon closing of a Financing, equal to these
       amounts:

             Type of Fund Raised               Fee
             -------------------               ---
             Senior Secured Debt              1.00%
             Senior Unsecured Debt            1.75%
             Subordinated Debt                2.25%
             Convertible Debt                 2.50%
             Preferred Stock                  3.75%
             Common Stock                     4.25%

       About 50% of any Financing Fee payable to Lazard will
       be credited against any Completion or Sale Transaction Fee
       payable to the firm under the Engagement Letter.

A full-text copy of the Lazard Retention Order is available for
free at http://bankrupt.com/misc/Tropicana_OrderLazardApp.pdf

               About Tropicana Entertainment

Based in Crestview Hills, Kentucky, Tropicana Entertainment LLC --
http://www.tropicanacasinos.com/-- is an indirect subsidiary of    
Tropicana Casinos and Resorts. The company is one of the largest
privately-held gaming entertainment providers in the United
States. Tropicana Entertainment owns eleven casino properties in
eight distinct gaming markets with premier properties in Las
Vegas, Nevada and Atlantic City, New Jersey.

Tropicana Entertainment LLC filed for Chapter 11 protection on
May 5, 2008, (Bankr. D. Del. Case No. 08-10856) Its debtor-
affiliates filed for separate Chapter 11 petitions but with no
case numbers assigned yet. Kirkland & Ellis LLP represents the
Debtors in their restructuring efforts.  Their financial advisor
is Lazard Ltd.  Their notice, claims, and balloting agent is
Kurtzman Carson Consultants LLC.  The Debtors' consolidated
financial condition as of Feb. 29, 2008, showed $2,845,847,596 in
total assets and $2,429,890,642 in total debts.

(Tropicana Bankruptcy News, Issue No. 8; Bankruptcy Creditors'
Service Inc., http://bankrupt.com/newsstand/or 215/945-7000)


UNIPROP MANUFACTURED: March 31 Balance Sheet Upside-Down by $21 MM
------------------------------------------------------------------
Uniprop Manufactured Housing Communities Income Fund's balance
sheet at March 31, 2008, showed $17,071,974 in total assets and
$38,058,157 in total liabilities, resulting in a $20,986,183 total
partners' deficit.

The company reported a net loss of $523,906, on total income of
$155,417, for the first quarter ended March 31, 2008, compared
with a net loss of $991,483, on total income of $173,157, in the
same period last year.

Results for the current quarter included a net loss from
discontinued operations of $470,587, compared to a net loss of
$891,112 for the same quarter in 2007.

The decrease in gross revenues was mainly due to decrease in
occupancy at the Old Dutch Farms property due to economic
conditions in southeastern Michigan.

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?2d9d

                       Going Concern Doubt

As reported in the Troubled Company Reporter on April 14, 2008,
BDO Seidman, LLP, in Troy, Mich., expressed substantial doubt
about Uniprop Manufactured Housing Communities Income Fund's
ability to continue as a going concern after auditing the
company's financial statements for the years ended Dec. 31, 2007,
and 2006.  The auditing firm reported that the partnership has
suffered losses from operations and has a substantial accumulated
deficit.

For the quarter ended March 31, 2008, the partnership incurred a
net loss of $523,906.  As of March 31, 2008, the partnership had
an accumulated deficit of $20,986,183 and insufficient cash on
hand to meet its expected liquidity requirements after the next
five to eight months.

                          About Uniprop

Headquartered in Birmingham, Michigan, Uniprop Manufactured
Housing Communities Income Fund -- http://www.uniprop.com/-- a  
Michigan Limited Partnership, was originally formed to acquire,
maintain, operate and ultimately dispose of income producing
residential real properties consisting of four manufactured
housing communities.  

The general partner of the partnership is P. I. Associates Limited
Partnership.  


VALASSIS COMMS: Moody's Affirms B1 Ratings; Outlook Positive
------------------------------------------------------------
Moody's Investors Service affirmed Valassis Communications, Inc.'s
B1 Corporate Family rating, B1 Probability of Default rating and
associated debt ratings and changed the company's rating outlook
to positive from stable. The positive outlook reflects Moody's
expectation that Valassis will continue to make good progress in
integrating and improving ADVO's shared mail operations, as the
company has done already since the $1.2 billion acquisition in
March 2007, and will continue to allocate free cash flow to debt
reduction. Moody's believes this will sustain further improvement
in Valassis' credit metrics since the ADVO acquisition and could
position the company for an upgrade in 2009, although the company
will need to manage ongoing pricing pressure in its free-standing
insert business and through a difficult economic and advertising
environment.

Outlook Actions:

  Issuer: Valassis Communications, Inc.

    * Outlook, Changed To Positive From Stable

Valassis has made good progress integrating and improving ADVO's
performance since the acquisition, including reducing excess
shared mail package supply, and reducing printing and duplicate
overhead costs. This shared mail optimization strategy is
negatively affecting revenue but increasing profitability through
reductions in excess inventory and higher package utilization
(pieces per package). Moody's believes the company's target for a
more moderate leverage profile will continue to guide the use of
free cash flow to reduce debt. Valassis has repaid more than $100
million of debt since the acquisition, driving a reduction in
debt-to-EBITDA leverage to 4.9x (LTM 3/31/08 incorporating Moody's
standard adjustments) from approximately 6.2x over that span.

Valassis is conservatively managing the sizable cash needs to
cover debt maturities in 2008 and 2009. The company borrowed its
$160 million delayed draw term loan a month in advance of the May
22nd bondholder put date on the 2033 convertible notes (which were
successfully refinanced) to provide time to manage any funding
difficulties in the current credit environment. Moody's
anticipates the company will fund the January 2009 $100 million
note maturity with excess cash on hand, projected free cash flow
through the maturity date, and a modest revolver draw. The
maturity profile improves considerably thereafter with term loan
amortization of less than $8 million per year representing the
only meaningful repayment obligation (aside from an excess cash
flow sweep) until the revolver expires in 2012.

Valassis Communications, Inc., headquartered in Livonia, MI,
offers a wide range of promotional and advertising products
including shared mail, newspaper advertising and inserts, targeted
marketing, sampling, coupon clearing and consulting and analytic
services. Annual revenue approximates $2.5 billion.


WAMU MORTGAGE: S&P Junks Ratings on Four Certificate Classes
------------------------------------------------------------
Standard & Poor's Ratings Services lowered its ratings on six
classes of prime jumbo mortgage pass-through certificates from
WaMu Mortgage Pass-Through Certificates Series 2007-HY1 Trust.  In
addition, S&P placed its ratings on two additional classes on
CreditWatch with negative implications.
     
S&P took rating actions on three of the five loan groups in this
transaction.  Cumulative losses for classes 1-A2, 2-A4, and L-B-1
through L-B-5 from the combined loan groups 1 and 2 totaled
$1.043 million of the original principal pool balance as of the
May 27, 2008, distribution date.  In addition, the dollar amount
of loans in foreclosure totaled $19.267 million of the current
principal balance, and $8.807 million of the loans from these two
loan groups are real estate owned.  As a result, S&P downgraded
classes L-B-1 through L-B-5 to reflect its projected lifetime
losses for the combined loan groups 1 and 2.
     
Similarly, S&P's downgrade of class 3-B-5 reflects the current
remaining credit support compared with its projected lifetime
losses for loan group 3.  There was $0.56 million in foreclosures
for loan group 3, with no loans in REO and no cumulative realized
losses to date.
     
The negative CreditWatch placements reflect S&P's belief that the
affected classes may no longer have sufficient credit support to
warrant the current 'AAA' ratings based on its projected lifetime
losses.  Classes 1-A2 and 2-A4 are from loan groups 1 and 2,
respectively, which have the combined credit support provided by
classes L-B-1 through L-B-6 (not rated) and have the same
combined performance information.
     
Subordination provides credit enhancement for this transaction.  
The underlying collateral for this deal consists primarily of
first-lien single-family U.S. residential prime jumbo mortgage
loans with interest rates (after an initial fixed-rate period)
that adjust annually.  The mortgage loans provide for a fixed
interest rate during an initial period of approximately five years
in the case of loan group 1, approximately seven years in the case
of loan group 2, and approximately 10 years in the case of loan
group 3, from the date of origination of each mortgage loan.


                        Ratings Lowered

   WaMu Mortgage Pass-Through Certificates Series 2007-HY1 Trust
                Mortgage pass-through certificates

                                    Rating
                                    ------
                Class        To                From    
                -----        --                ----
                L-B-1        BB                AA
                L-B-2        B                 A
                L-B-3        CCC               BBB
                L-B-4        CC                BB
                L-B-5        CC                B
                3-B-5        CCC               B

               Ratings Placed on Creditwatch Negative

   WaMu Mortgage Pass-Through Certificates Series 2007-HY1 Trust
                 Mortgage pass-through certificates

                                    Rating
                                    ------
                Class        To                From
                -----        --                ----
                1-A2         AAA/Watch Neg     AAA
                2-A4         AAA/Watch Neg     AAA


WEST CONTRA: S&P Puts 'C' Cert. Rating Under Developing Watch
-------------------------------------------------------------
Standard & Poor's Rating Services placed its 'C' underlying rating
on the West Contra Costa Healthcare District, California's series
2004 certificates of participation, on CreditWatch with developing
implications.  The rating action reflects a court order approving
the district's disclosure statement and fixing the time for
objecting to the district's plan for the adjustment of debt.  

The district filed for Chapter 9 bankruptcy protection on Oct. 1,
2006.  The plan includes the district's funding and proposed
treatment of creditors, which was originally filed in the U.S.
Bankruptcy Court on April 17, 2008, and was revised on May 28 and
June 2, 2008.  According to the June 2, 2008, plan, the COPs, paid
from parcel tax revenues, are not impaired and are unaffected by
both the Chapter 9 case and the plan.  The resolution of the
CreditWatch with developing implications will depend on the
outcome of the confirmation hearing, scheduled for Aug. 14, 2008.


* US CMBS Loan Defaults Remain Low, According to Fitch
------------------------------------------------------
U.S CMBS loan defaults remain low, with defaults totaled only
$1.2 billion, or 22 basis points, of $535 billion of loans
outstanding in 2007, according to Fitch's annual default study of
commercial mortgages underlying its rated CMBS transactions.  The
10-year cumulative default rate totaled 7.37% down from previous
studies.  Fitch expects future results to worsen as solid real
estate fundamentals are impacted by a slowing economy and limited
capital availability.

Multifamily properties represented the highest of all property
type defaults in 2007, with $763 million defaulting or 63% of all
newly defaulted loans.  The multifamily cumulative default rate
ranks third at 4.16%, behind only health care and hotels.

The 2005 vintage had the largest dollar amount of defaults in 2007
with $237.8 million added; however, the 2000 vintage had the
highest default rate (0.52%) when comparing defaulted loan
balances to the vintage year's issuance.


* S&P's Cuts on MBIA & Ambac Have Broad Result for Global Markets
-----------------------------------------------------------------
Standard & Poor's Ratings Services' downgrades of monoline bond
insurers MBIA Insurance Corp. and Ambac Assurance Corp. on June 5,
2008, have broad ramifications for diverse sectors of the global
financial markets, said a report titled, "Who Will Feel The
Downgrades Of MBIA And Ambac, And By How Much."
      
"After taking a close look, our analysts expect the effects to
vary from sector to sector, as well as within each sector.  And
while we expect some areas to feel the impact immediately, others
will more likely have delayed effect," said Standard & Poor's
Chief Credit Officer Mark Adelson.

                             *********

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 ***