TCR_Public/080613.mbx          T R O U B L E D   C O M P A N Y   R E P O R T E R

              Friday, June 13, 2008, Vol. 12, No. 140           

                             Headlines

ACA FINANCIAL: S&P Retains 'CCC' FS Rating Under Developing Watch
AEGIS MORTGAGE: ZAIC Wants Stay Lifted to Cancel Surety Bonds
AIRTRAN HOLDINGS: Names Geoffrey T. Crowley to Board of Directors
AIRTRAN HOLDINGS: Promotes Arne Haak to Chief Financial Officer
AMAZON.COM: S&P Lifts Rtng. to BB+ on Strong Operating Performance

AMERICAN COLOR: Solicits Noteholders' Votes for Ch. 11 Plan
ANTARES FUNDING: Fitch Junks Ratings on Three Note Classes
ASARCO LLC: Wachovia Agrees to Reduce Remaining Claim to $2.1 Mil.
ASARCO LLC: Affiliates' Section 341 Meeting Set for June 18
ASARCO LLC: Can Expand Scope of Lehman Bro.'s Valuation Services

ATHOS FUNDING: Moody's Cuts Ca Ratings to C on Two Note Classes
BCBG MAX: Heightened Risk of Default Cues Moody's to Junk Ratings
BDB MANAGEMENT: Case Summary & 44 Largest Unsecured Creditors
BELMONT COUNTY: Fitch Assigns 'B+' Rating on $17.3MM Revenue Bonds
BERRY PETROLEUM: S&P's Rtng. Unmoved by $620MM Gas Reserves Buyout

BERTHEL GROWTH I: March 31 Balance Sheet Upside-Down by $5,597,511
BUILDERS FIRSTSOURCE: S&P Lowers Corp. Credit Rating to B from B+
CARDTRONICS INC: S&P Revises Outlook to Pos. on Leverage Reduction
CHARTER COMMS: Extends Private Offer Deadline to June 27
COMPLIANCE SYSTEMS: Posts $387,325 Net Loss in 2008 First Quarter

CONTINENTAL AIRLINES: Provides Details of Capacity Reductions
CORONA BASIN: Files Voluntary Chapter 11 Case Summary
COUDERT BROS: Five Ex-Partners Oppose Amended Disclosure Statement
CRAIG STEWART: Voluntary Chapter 11 Case Summary
DANKA BUSINESS: Stake Holders Spurn Voluntary Liquidation Proposal

DELPHI CORP: Trial on $2.55 Billion Lawsuit to Begin in April 2009
DELPHI CORP: Gets New Bid for Power Biz; 54 Pacts Part of Sale
DELPHI CORP: Amends $4.1BB Facility to Raise Available Amount
DEN-MARK CONSTRUCTION: Taps Mitchell & Nemitz as Accountant
DEN-MARK CONSTRUCTION: Final Sale Procedure Hearing Set June 26

DEN-MARK CONSTRUCTION: Court OKs Sale of Residential Properties
DIAMOND RANCH: Gruber & Company Expresses Going Concern Doubt
EARTH BIOFUELS: Montgomery Coscia Expresses Going Concern Doubt
EARTH BIOFUELS: Sells LNG Unit to PNG Ventures for $125 Million
EDUCATION RESOURCES: Wants to Abolish JPMorgan Student Loan Pacts

EDUCATION RESOURCES: Wants to Get Rasky Baerlein as Public Advisor
FREESCALE SEMICONDUCTOR: Board OKs Executive Employment Agreement
GAINESVILLE HOUSING: Moody's Cuts $2,765,000 Bond Rating to Ba3
GENERAL MOTORS: New Appointments Build GM Brand Channel Alignment
GOODY'S FAMILY: Gets Initial OK to Obtain $210 Mil. DIP Facility

H&H TRANSPORTATION: Voluntary Chapter 11 Case Summary
HANOVER INSURANCE: S&P Lifts B+ Ratings to BB- on Three Classes
HELIOS FINANCE: Weaker Performance Cues Fitch's Negative Watch
HOLYOKE MEDICAL: Moody's Holds Ba1 Rating; Changes Outlook to Neg.
HORIZON TRAVEL: Files for Creditor Protection, To Close Stores

HOVNANIAN ENT: Posts $340.7MM Net Loss in 2nd Qtr. Ended April 30
HI-LINE CONSTRUCTION: Case Summary & Seven Unsec. Creditors
IMMUNICON CORP: Case Summary & 35 Largest Unsecured Creditors
INNOVATIVE CARD: Posts $1,962,441 Net Loss in 2008 First Quarter
IXIS ABS: S&P Puts Default Ratings on Eight Classes of Notes

JAMES FALL: Voluntary Chapter 11 Case Summary
JONATHAN MATIAS: Case Summary & 20 Largest Unsecured Creditors
JHCI ACQUISITIONS: Moody's Cuts Corp. Family Rating to B3 from B2
LANDSOURCE COMMUNITIES: CalPERS Downplays Exposure, Stake Small
LEHMAN BROTHERS: Names Mr. McDade, President; Mr. Lowitt CFO

LPATH INC: Posts $5,078,181 Net Loss in 2008 First Quarter
MICHELLE SIDRIAN: Voluntary Chapter 11 Case Summary
MICRO COMPONENT: March 31 Balance Sheet Upside-Down by $6,603,000
MIDON RESTAURANT: Files for Chapter 11 Bankruptcy in Albany
MORGAN STANLEY: Moody's Reviews Ba2 Rating for Possible Downgrade

MORGAN STANLEY: Moody's Puts Ba2 Rating Under Review
MORGAN STANLEY: S&P Upgrades Rating on $3MM Notes to BB- from B
MUNOZ PRINTING: Voluntary Chapter 11 Case Summary
OCCULOGIX INC: Posts $2,943,500 Net Loss in 2008 First Quarter
PACIFIC LUMBER: Scopac Seeking DIP Financing from Lehman

PETROL OIL: Weaver & Martin Expresses Going Concern Doubt
PLANGRAPHICS INC: March 31 Balance Sheet Upside-Down by $2,998,713
PROTOCALL TECH: Marcum & Kliegman Expresses Going Concern Doubt
REFCO INC: Ch. 7 Trustee Wants GE Capital Claims Cut by $700,000
SANDY CREEK: S&P Says Dynergy & LS Power Sale is Favorable

SHARPER IMAGE: Seeks to Extend Plan Filing Date to Sept. 16
SHARPER IMAGE: Proposes to Set Aug. 18 as Claims Bar Date
SHUMATE INDUSTRIES: Malone & Bailey Raises Going Concern Doubt
SIRIUS COMPUTER: S&P Revises Outlook to Neg. on Weaker Revenue
SMART & FINAL: Higher Leverage Prompts Moody's to Chip Ratings

STRATUS SERVICES: March 31 Balance Sheet Upside-Down by $8,123,044
SUPERCONDUCTOR TECH: Posts $2,308,000 Net Loss in 2008 1st Quarter
SUPERIOR ESSEX: Korean LS Cable Deal Cues S&P's Developing Watch
SUPERIOR OFFSHORE: Has Until June 16 to File Schedules & SOFA
TALBOTS INC: Secures $50 Million Funding from Shareholder Aeon Co.

TEEVEE TOONS: Three Companies Seek to Block Record Contracts Sale
TELAVA NETWORKS: Posts $175,840 Net Loss in 2008 First Quarter
TELAVA NETWORKS: De Joya Expresses Going Concern Doubt
TENASKA OKLAHOMA: S&P Affirms 'BB-' Rating on $55.2MM Unsec. Bonds
TORRENT ENERGY: Subsidiary Needed $4.5MM at Bankruptcy Filing

UNI-MARTS LLC: U.S. Trustee Forms Seven-Member Creditors Committee
US AIRWAYS: To Cut Fourth Quarter Domestic Capacity by 8%
US INVESTIGATIONS: HireRight Acquisition Won't Affect S&P's Rtngs.
VERTIS COMMS: Seeking Creditors' Vote on Prepackaged Ch. 11 Plan
VYTERIS INC: March 31 Balance Sheet Upside-Down by $25,298,725

WAVE SYSTEMS: Posts $6,010,048 Net Loss in 2008 First Quarter
WELLMAN INC: Wants Court to Establish July 25 as Claims Bar Date
X-RITE INC: S&P Junks Rating as Firm Continues Talks with Lenders

* Moody's Says Casino Resorts Operators Can Avoid Rating Cuts
* S&P Downgrades Ratings on 47 Classes on Nine RMBS Transactions

* BOOK REVIEW: Crafting Solutions for Troubled Businesses

                             *********

ACA FINANCIAL: S&P Retains 'CCC' FS Rating Under Developing Watch
-----------------------------------------------------------------
Standard & Poor's Ratings Services said its 'CCC' financial
strength rating on ACA Financial Guaranty Corp. remains on
CreditWatch with developing implications.
     
In December 2007, S&P lowered ACA's financial strength rating to
'CCC', which triggered a requirement under the credit default
swaps it had written that the company post significant amounts of
collateral for the benefit of its credit default swap
counterparties.  Since then, ACA has been negotiating with its
counterparties to modify its obligations in a manner that would,
in S&P's view, substantially resolve the capital and liquidity
issues that have arisen as a result of the collateral posting
requirement.  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.


AEGIS MORTGAGE: ZAIC Wants Stay Lifted to Cancel Surety Bonds
-------------------------------------------------------------
Zurich American Insurance Company and its affiliates ask the U.S.
Bankruptcy Court for the District of Delaware to lift the
automatic stay to permit them to cancel five surety bonds it
issued for the benefit of Aegis Mortgage Corporation, Aegis
Wholesale Corporation and Aegis Lending Corporation.

The surety bonds were issued to the States of California, West
Virginia and Vermont to guarantee the obligations they imposed
upon the Debtors for the $625,000 that financed the Debtors'
mortgage lending business.

Ronald Gellert, Esq., at Eckert Seamans Cherin & Mellott LLC, in
Wilmington, Delaware, says the Debtors no longer need the surety
bonds for their operations in light of the cessation of their
loan origination business.  The surety bonds are also executory
contracts and are in the nature of a financial accommodation that
cannot be assumed by the Debtors, he adds.

Mr. Gellert notes that since the surety bonds continue to secure
the Debtors' obligations up to the effective date of the bonds'
cancellation, the Debtors are in effect continuing to use the
bonds as postpetition credit without Zurich's consent.

"Should the Debtors contest Zurich's request to withdraw and
cancel the surety bonds, Zurich is entitled to adequate
protection through the posting of collateral, the granting of a
lien, or other form of assurance of postpetition performance by
the Debtors," Mr. Gellert further asserts.

Headquartered in Houston, Texas, Aegis Mortgage Corporation --
http://www.aegismtg.com/-- offers a variety of mortgage loan         
products to brokers through its subsidiaries.  The company
together with 10 affiliates filed for chapter 11 protection on
Aug. 13, 2007 (Bankr. D. Del. Case No. 07-11119).  Curtis A. Hehn,
Esq., James E. O'Neill, Esq., Laura Davis Jones, Esq., and Timothy
P. Cairns, Esq., at Pachulski, Stang, Ziehl, & Jones, L.L.P.,
serve as counsel to the Debtors.  The Official Committee of
Unsecured Creditors is represented by Landis Rath & Cobb LLP. In
schedules filed with the Court, Aegis disclosed total assets of
$138,265,342 and total debts of $4,125,470.  (Aegis Bankruptcy
News, Issue No. 22; Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000).   


AIRTRAN HOLDINGS: Names Geoffrey T. Crowley to Board of Directors
-----------------------------------------------------------------
AirTran Holdings, Inc., the parent company of AirTran Airways,
Inc., disclosed that Geoffrey T. Crowley has been elected to the
company's Board of Directors.  His term commences immediately.

"[Mr. Crowley's] extensive background in the aviation industry
will serve our Board and shareholders well as we address the
challenges of the current high fuel costs environment," Bob
Fornaro, chairman, president and CEO for AirTran Airways, said.  
"We welcome him to AirTran and have confidence that he will be an
asset in helping us uphold our commitment to provide outstanding
service and shareholder value."

Mr. Crowley is president of Northshore Leasing of Appleton,
Wisconsin, and was a founder of Air Wisconsin Airlines
Corporation.  Prior to his current position, Mr. Crowley served as
chairman, president and CEO of AWAC, leading the company during
its growth from 12 aircraft and revenues of $100 million to more
than 80 aircraft and over $700 million in revenue at its peak.  In
addition, Mr. Crowley served as vice president of marketing
alliances at Northwest Airlines.

Mr. Crowley has a B.S. in Engineering from Purdue University in
West Lafayette, Indiana, with a focus on Transportation.  He
received his M.B.A. from Xavier University in Cincinnati, Ohio.  
Mr. Crowley was appointed by President Clinton and confirmed by
the Senate to serve on the FAA's first Management Advisory
Council.  He was also appointed by the Governor of Wisconsin to
serve on a committee to examine the state's transportation
infrastructure.

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

                          *     *     *

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


AIRTRAN HOLDINGS: Promotes Arne Haak to Chief Financial Officer
---------------------------------------------------------------
The Board of Directors of AirTran Holdings, Inc., the parent
company of AirTran Airways, Inc., has appointed Arne G. Haak,
current vice president of finance and treasurer, to the position
of senior vice president of finance, treasurer and chief financial
officer.

In his new role as CFO, Mr. Haak will also continue to oversee
financial planning and analysis, treasury, purchasing, and
investor relations.  Prior to his career at AirTran Airways, Mr.
Haak worked for US Airways.  Since joining AirTran Airways in
1999, he has worked in a variety of roles from financial planning
and analysis to investor relations.  He became vice president of
finance and treasurer in January 2006.

Mr. Haak received a Bachelor of Science degree in economics from
Pennsylvania State University, and he also earned a Masters of
Business Administration from the University of Maryland.  Mr. Haak
is a member of the Association for Financial Professionals, and he
has earned the designation of Certified Treasury Professional and
AFP Honors in 2007.  A graduate of Leadership Orlando, Mr. Haak is
a resident of Winter Springs, Florida, where he lives with his
wife, Denise, and three children.  Mr. Haak is fluent in both
English and Swedish.

"[Mr. Haak] possesses an impressive knowledge of the airline
business as well as finance, and has made significant
contributions over the last nine years which have aided in the
success of AirTran Airways," Bob Fornaro, AirTran Airways'
chairman, president and CEO, said.  "[Mr. Haak] brings a thorough
understanding of our business and has a proven set of leadership
skills which is critical in this time of record high fuel costs."

"I am honored to lead a strong team of financial and accounting
professionals at AirTran Airways," Mr. Haak commented.  "The
airline has established a solid competitive position based on low
costs, high quality, and the youngest all-Boeing fleet in the
United States. I look forward to both the challenges and the
opportunities that will arise from the impact of record high fuel
on our industry."

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

                          *     *     *

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


AMAZON.COM: S&P Lifts Rtng. to BB+ on Strong Operating Performance
------------------------------------------------------------------
Standard & Poor's Ratings Services raised its corporate credit
rating on Seattle-based Amazon.com to 'BB+' from 'BB'.  S&P
removed the ratings from CreditWatch with positive implications,
where they were placed on Feb 13, 2008.  At the same time, S&P
raised the rating on the company's 4.75% convertible subordinated
notes due February 2009 and its 6.875% premium adjustable
convertible securities to 'BB+' from 'B+' and assigned both issues
a recovery rating of '3', indicating its expectation of meaningful
(50%-70%) recovery in the event of default.  The outlook is
positive.
     
"The upgrade reflects the company's strong operating performance,"
said Standard & Poor's credit analyst David Kuntz.  He pointed to
its trailing 12-month growth rate of 39.4% as of March 31, 2008.  
Additional factors include the ability to manage sustained growth
and the beneficial impact on credit measures from the recent
redemption of the $500 million 4.75% convertible subordinated
notes.


AMERICAN COLOR: Solicits Noteholders' Votes for Ch. 11 Plan
-----------------------------------------------------------
American Color Graphics commenced a solicitation of votes for its
prepackaged plan of reorganization from its 10% Noteholders.

American Color submitted to the Securities and Exchange Commission
on June 11, 2008, a proposed joint prepackaged Chapter 11 plan of
reorganization and a disclosure statement explaining that plan.

"We are pleased with the progress both American Color and Vertis
Communications are making toward our announced merger plans and by
the support our noteholders have already shown for this
transaction.  Combining the services, talent, and expertise of the
two companies will offer new opportunities for our customers,
employees and suppliers," said Steve Dyott, chairman and CEO of
American Color.  "We look forward to the flexibility and strength
we expect from the combination of the two companies' service
offerings and resources."

Mr. Dyott also emphasized that it will be "business as usual"
during the solicitation process, that American Color's Plan calls
for suppliers and employees to continue to receive amounts owed to
them in the ordinary course of business, and that American Color's
commitment to providing its customers superior products and
uncompromising service will continue through all phases of the
process.

On May 22, 2008, and as updated on May 30, 2008, American Color
said it had the support of its 10% Note holders to merge with
Vertis Communications and complete its comprehensive restructuring
Plan.  Since then, American Color has received additional support.
At this time, American Color has agreements with the holders of
approximately 74% of the outstanding principal amount of its 10%
Senior Second Secured Notes due 2010 to vote to accept the Plan,
subject to certain conditions.

Vertis has agreements with approximately 79% of the outstanding
principal amount of its 9.75% Senior Secured Second Lien Notes due
2009, 84% of the outstanding principal amount of its 10.875%
Senior Notes due 2009, and 79% of the outstanding principal amount
of its 13.5% Senior Subordinated Notes due 2009 to support its
reorganization plan.

Under the plans, holders of 10% Notes and Vertis notes will be
exchanging their notes for an aggregate of $550 million in new
Vertis notes and substantially all the new equity in the combined
company.

The transaction is also supported by Vertis' principal
stockholders and the holders of over 95% of the outstanding
principal amount of Vertis Holdings' Mezzanine Notes. The
consensual financial restructurings will reduce the combined
companies' debt obligations -- including off-balance sheet
accounts receivable facilities and approximately
$248 million of Vertis Holdings Mezzanine Notes -- by
approximately $1 billion before transaction fees and
expenses.

American Color and Vertis intend to commence their prepackaged
Chapter 11 cases at the conclusion of the solicitation period to
implement the restructuring.  The restructuring transactions,
including the merger, are expected to close this summer.

Votes on the Plan must be received by Financial Balloting Group
LLC, Vertis' voting agent, before the applicable deadline.

Solicitation materials are being provided to noteholders of
record.

A full-text copy of the prepackaged joint Chapter 11 plan of
reorganization and disclosure statement is available for free
at http://ResearchArchives.com/t/s?2dda

                         About Vertis Inc.

Headquartered in Baltimore, Vertis Inc. dba Vertis Communications
-- http://www.vertisinc.com/-- is a provider of print advertising   
and direct marketing solutions to America's retail and consumer
services companies.  

                       About American Color

American Color Graphics Inc. -- http://www.americancolor.com/--      
is one of North America's largest and most experienced full
service premedia and print companies, with eight print locations
across the continent, six regional premedia centers, photography
studios nationwide and a growing roster of customer managed
service sites.  The company provides solutions and services such
as asset management, photography, and digital workflow solutions
that improve the effectiveness of advertising and drive revenues
for their customers.

                           *    *    *

Vertis' consolidated balance sheets show total assets of
$499,562,000 and total debts of $1,415,569,000 resulting in a
$916,007,000 stockholders' deficit.

American Color's consolidated balance sheets reveal total assets
of $224,080,000 and total debts of $493,973,000 resulting in a
$269,893,000 stockholders' deficit.


ANTARES FUNDING: Fitch Junks Ratings on Three Note Classes
----------------------------------------------------------
Fitch has affirmed two classes and downgraded three classes of
notes issued by Antares Funding, LP.  All classes of notes were
also removed from Rating Watch Negative.  These rating actions are
effective immediately:

  -- $28,500,000 class C-1 notes affirmed at 'BBB', removed from
     Rating Watch Negative;

  -- $15,000,000 class C-2 notes affirmed at 'BBB', removed from
     Rating Watch Negative;

  -- $23,911,911 class D-1 notes downgraded to 'CC/DR3' from
     'BB', removed from Rating Watch Negative;

  -- $14,065,830 class D-2 notes downgraded to 'CC/DR3' from 'BB',
     removed from Rating Watch Negative;

  -- $42,000,000 class E notes downgraded to 'C/DR6' from 'B-',
     removed from Rating Watch Negative.

Antares Funding is a collateralized debt obligation which closed
Dec. 14, 1999, with Antares Capital Corporation as collateral
manager. Subsequent to a merger in October 2005, GE Asset
Management, Inc. assumed collateral management responsibilities on
Aug. 31, 2007.  Antares Funding was established to issue
approximately $600 million in debt and equity tranches.  The
proceeds were invested in a portfolio of predominantly high-yield
bank loans, middle market loans and bonds.  As of the April 18,
2008 trustee report, approximately 62.5% of the collateral was
comprised of senior secured loans, 19.0% in senior unsecured debt,
13.2% in other senior secured debt, and the remaining balance in
subordinated debt.  Approximately 39.1% of the performing assets
were middle market loans that were shadow rated by Fitch.

Fitch released its updated criteria on April 30, 2008 for
Corporate CDO's.

The affirmations of the class C notes are the result of
substantial delevering of the class A notes.  The reinvestment
period ended in March 2006, and over $410 million of the class A
notes have been repaid since then (3.6% of the original class A
note balance remain).  As a result, credit enhancement levels have
improved for the class C notes, mitigating the risk of reduced
cushion from the deteriorated collateral.  The original issuance
amount of $48 million in class B notes remains outstanding. Fitch
does not rate the class A and B notes.

The downgrades on the class D and E notes are the result of
deteriorated collateral pool quality, exposure to long-dated
assets, limited excess spread, and structural features of the deal
that limit the amount of principal proceeds available for
repayments.  Although the trustee-reported weighted average rating
factor remained in compliance at 'B', relative to the trigger of
'B', approximately 10.0% of the collateral was on Rating Watch
Negative and another 10.7% of the collateral carried a Rating
Outlook Negative according to Fitch's methodology.

In addition, $10.1 million of the collateral pool totaling
$146.9 million was considered defaulted (6.9% of portfolio).  The
collateral pool also had considerable exposure to long-dated
assets, with $10.6 million (7.2% of portfolio) maturing after the
deal's stated maturity date of Dec. 14, 2011.  Moreover,
approximately $7.3 million of the long-dated assets are scheduled
to mature in 2013 and 2014.  According to the April trustee
report, while the weighted average spread was 3.24%, relative to a
trigger of 2.90%, the weighted average coupon on fixed securities
was reported at 7.89%, below the trigger of 10%.  While there may
be enough excess spread to support the payment of class C
interest, the limited interest proceeds may not be enough to pay
future interest expenses on the class D notes.

As a result, principal proceeds may be used to make such payments,
impairing the collateral pool's ability to repay the class D note
principal in full.  Furthermore, the first-loss class E notes,
which behave like the equity portion of the capital structure,
stopped receiving distributions since the September 2007 payment
date.  Since close, the class E notes have received over
$35 million in distributions, but it is projected that the tranche
will receive little or no payments going forward.

The ratings on the class C and D notes address the likelihood that
investors will receive ultimate payment of interest and repayment
of principal, as per the governing documents, by the legal final
maturity date.  The rating on the class E notes addresses the
likelihood that investors will receive ultimate repayment of
principal only by the legal final maturity date.

Fitch released updated criteria on April 30, 2008 for Corporate
CDOs and, at that time, noted it would be reviewing its ratings
accordingly to establish consistency for existing and new
transactions.  As part of this review, Fitch makes standard
adjustments for any names on Rating Watch Negative or with a
Negative Outlook, reducing such ratings for default analysis
purposes by two and one notch, respectively.  Fitch has noted its
review will be focused first on ratings most exposed to risks it
has highlighted in its updated criteria.  Committees are also
reviewing transactions that are least impacted by the new criteria
and/or portfolio migration.


ASARCO LLC: Wachovia Agrees to Reduce Remaining Claim to $2.1 Mil.
------------------------------------------------------------------
Wachovia Financial Services, Inc., filed Claim No. 10333 against
ASARCO LLC, asserting amounts relating to certain executory
contracts and a term note related to an equipment purchase.  The
part of Claim No. 10333, which relates to certain executory
contracts was resolved by a prior agreement and Court order, but
the term note portion was not addressed.  Wachovia subsequently
filed Claim No. 18205 reasserting the balance of Claim No. 10333.  

ASARCO and Wachovia entered into a stipulation, which provides
that Wachovia has agreed to reduce its remaining claim from
$2,340,169 to $2,091,156.

                           About ASARCO

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

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

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

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

ASARCO and its debtor affiliates are scheduled to file a plan of
reorganization on June 10, 2008.  (ASARCO Bankruptcy News, Issue
No. 73; Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000).


ASARCO LLC: Affiliates' Section 341 Meeting Set for June 18
-----------------------------------------------------------
Charles F. McVay, United States Trustee for Region 7, will
convene a meeting of creditors in the Chapter 11 cases of Wyoming
Mining and Milling Company, Alta Mining and Development Company,
Tulipan Company, Inc., Blackhawk Mining and Development Company,
Peru Mining Exploration and Development Company, and Green Hill
Cleveland Mining Company, on June 18, 2008, at 9:00 a.m., at 606
North Carancahua, Suite 1107, in Corpus Christi, Texas.

This is the first meeting of creditors required under Section
341(a) of the Bankruptcy Code in the Debtors' cases.  The Section
341(a) Meeting has been scheduled within the time required by
Rule 2003 of the Federal Rules of the Bankruptcy Procedure.

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

As reported in the Troubled Company Reporter on Apr. 22, 2008,
these six debtor-affiliates of ASARCO LLC filed for separate
voluntary Chapter 11 petitions with the U.S. Bankruptcy Court for
the Southern District of Texas on April 21, 2008.  These
affiliates have asked the Court to jointly administer their
bankruptcy cases with ASARCO LLC's Chapter 11 case.

                           About ASARCO

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

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

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

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

ASARCO and its debtor affiliates are scheduled to file a plan of
reorganization on June 10, 2008.  (ASARCO Bankruptcy News, Issue
No. 73; Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000).


ASARCO LLC: Can Expand Scope of Lehman Bro.'s Valuation Services
----------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of Texas
authorizes ASARCO LLC and its debtor-affiliates to expand the
scope of Lehman Brothers Inc.'s employment to include valuation
services in relation to pending avoidance actions ASARCO commenced
against several entities.

ASARCO is permitted to pay $800,000 to Lehman for valuation
services related to the proceedings against Americas Mining
Corporation and Montana Resources, Inc., and $100,000 each for
valuation services related to the proceedings involving the
Sacaton and Rosemont mining properties.

                           About ASARCO

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

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

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

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

ASARCO and its debtor affiliates are scheduled to file a plan of
reorganization on June 10, 2008.  (ASARCO Bankruptcy News, Issue
No. 73; Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000).


ATHOS FUNDING: Moody's Cuts Ca Ratings to C on Two Note Classes
---------------------------------------------------------------
Moody's Investors Service has withdrawn the rating on these notes
issued by Athos Funding, Ltd.:

Class Description: The Maximum CP Principal Component Amount of CP
Notes

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

According to Moody's, the rating action is due to the exercise of
the put option that resulted in all the CP Notes being converted
to the Funding Notes.

In addition, Moody's has also downgraded and left on review for
possible further downgrade these notes:

Class Description: $40,000,000 Class A-1 Floating Rate Notes Due
2043

  -- Prior Rating: Aa3, on review for possible downgrade
  -- Current Rating: B3, on review for possible downgrade

Finally, Moody's has downgraded these notes:

Class Description: $28,000,000 Class A-2 Floating Rate Notes Due
2043

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

Class Description: $20,000,000 Class B Floating Rate Subordinate
Notes Due 2043

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

Class Description: $5,000,000 Class Q Combination Notes Due 2043

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

According to Moody's, the rating actions are the result of
deterioration in the credit quality of the transaction's
underlying collateral pool, which consists primarily of structured
finance securities.


BCBG MAX: Heightened Risk of Default Cues Moody's to Junk Ratings
-----------------------------------------------------------------
Moody's Investors Service downgraded BCBG Max Azria Group, Inc.'s
corporate family and probability of default ratings to Caa2 from
B3.  The company's senior secured bank loan rating was lowered to
Caa2 from B3.  All ratings were placed on review for further
possible downgrade.  The LGD point estimate on the senior secured
term loan of LGD4, 55% is subject to change.

This rating action reflects BCBG's heightened risk of default
stemming from substantial operating losses by the company's Max
Rave division, a significant deterioration in liquidity, the delay
in the completion of its fiscal 2007 audited financial statements
due to a change in fiscal year end, and expectation the company
will not meet certain financial covenants.

The review for possible further downgrade considers that given the
unfavorable outlook for the company's near-term operating
performance, BCBG may find it difficult to obtain the waivers
and/or amendments necessary from its bank lenders to avoid a
potential default.  The company is currently negotiating with its
lending group.

The Caa2 probability of default rating reflects the company's
precarious liquidity situation and the challenges it faces to stem
the significant operating losses at its Max Rave division quickly
in order to avoid a potential default.  While the company has been
successful in entering into a new business arrangement which
places Max Rave in a major retailer, the initial size of this
business is still very small and will take time to ramp up to such
a size and scale to offset the current level of losses at Max
Rave.  Moody's notes that the BCBG core division, continues to
perform well but that the losses at Max Rave have reached such a
level that it places the whole company at risk for a potential
default.

BCBG Max Azria Group, Inc., headquartered in Vernon, California is
an apparel retailer and wholesaler.  Revenues for the fiscal year
2007 are estimated to be approximately $829 million.


BDB MANAGEMENT: Case Summary & 44 Largest Unsecured Creditors
-------------------------------------------------------------
Debtor: BDB Management LLC
        3000 Sand Hill Road
        Building 1, Suite 240
        Menlo Park, CA 94025

Bankruptcy Case No.: 08-31001

Debtor-affiliates filing separate Chapter 11 petitions:

      Entity                                 Case No.
      ------                                 --------
      BDB Management III, LLC                08-31002
      William J. Del Biaggio, III            08-30991

Type of Business: The Debtors have an affiliate, Sand Hill Capital
                  Partners III LLC, which filed for Chapter 11
                  protection on June 5, 2008 (Bankr. N.D. Calif.
                  Case No. 08-30989).

Chapter 11 Petition Date: June 7, 2008

Court: Northern District of California (San Francisco)

Judge: Dennis Montali

Debtors' Counsel: Judith Whitman, Esq.
                  (jwhitman@diemerwhitman.com)
                  Diemer, Whitman and Cardosi LLP
                  75 East Santa Clara Street
                  San Jose, CA 95113
                  Tel: (408) 971-6270

                         Estimated Assets    Estimated Debts
                         ----------------    ---------------
   BDB Management LLC          $1,310,768         $9,745,685

   BDB Management              $1,359,000         $2,956,000
   III LLC

   William J. Del        $50 million to      $50 million to
   Biaggio, III          $100 million        $100 million

A. BDB Management LLC's list of its 20 largest unsecured
   creditors:

   Entity                                   Claim Amount
   ------                                   ------------
1999 Del Biaggio Family Trust                 $2,990,685
3000 Sand Hill Road
Building 1, Suite 240
Menlo Park, CA 94025

Chuck Peterson                                  $950,000
12755 Folson Boulevard
Folsom, CA 95630

Staedler 1992 Revocable Trust                   $600,000
Rudy and Beverly Ann Staedler
938 Hook Court
Incline Village, NV 89451

David Connor                                    $500,000
3450 Quail Walk Court
Danville, CA 94506

Eric Brandenburg Sep Propety Trust              $450,000
Eric Brandenburg, Trustee
1122 Willow Street, Suite 200
San Jose, CA 95125

Karen Brandenburg                               $250,000
Attn: Joseph Di Leo
1122 Willow Street, Suite 200
San Jose, CA 95125

Brandenburg Rev Trust                           $250,000
Lee and Diane Brandenburg
1122 Willow Street, Suite 200
San Jose, CA 95125

William Brandenburg                             $200,000

Brandenburg Revocable Trust                     $200,000

John K. Goyak                                   $200,000

Richard E. Spanholtz                            $200,000

Irving Bronstein                                $200,000

Cesar M. Roth Mayo IRA                          $200,000

Gary T. Cook                                    $200,000

Baron Family Rev Trust                          $200,000

Marisigan, Rene and Ramona                      $175,000

Gary Brandenburg Revoc. Trust                   $150,000

Aymer 1991 Family Trust                         $150,000

Barbara Perkins                                 $150,000

K Fab Inc.                                      $150,000

B. BDB Management III LLC's list of its seven largest unsecured
   creditors:

   Entity                                   Claim Amount
   ------                                   ------------
1999 Del Biaggio Family Trust                 $1,000,000
3000 Sand Hill Road
Building 1, Suite 240
Menlo Park, CA 94025

Peters RW & CH 1992 Trust                     $1,000,000
Robert W. Peters, TTE
1282 St. Mark Court
Los Altos, CA 94024

Staedler Rudy and Beverly                       $506,000
1992 Revocable Trust
1122 Willow Street, Suite 200
San Jose, CA 95125

Irving Bronstein                                $200,000

Brandenburg Eric Sep Prop. Trust                $100,000

Brandenburg William Rev. Trust                  $100,000

Ronald Zraick Jr.                                $50,000

C. William J. Del Biaggio, III's list of its 17 largest unsecured
   creditors:

   Entity                         Nature of Claim    Claim Amount
   ------                         ---------------    ------------
Craig Leipold                                         $10,000,000
555 Main Street, Suite 500
Racine, WI 53403

Modern Bank                                           $10,000,000
667 Madison Avenue
New York, NY 10021

AEG Facilities                    Business Debt        $7,000,000
1100 South Flower Street
Suite 300
Los Angeles, CA 90015

Heritage Bank of Commerce         Business Debt        $5,000,000
150 Almaden Boulevard
San Jose, CA 95113

Security Pacific Bank                                  $5,000,000
12121 Wilshire Boulevard
Suite 1350
Los Angeles, CA 90025

Valley Community Bank                                  $4,218,582
5000 Pleasanton Avenue
Pleasanton, CA 94566

Paul D. Showerman                                      $3,450,000
540 White Pelican Drive
Vero Beach, FL 32963

DGB Investments                                        $3,000,000
40 Foxhill Road
Redwood City, CA 94062

Martha E. San                                          $3,000,000
Filippo Foundation
Attn: Bill Snyder
650 North Winchester Boulevard
San Jose, CA 95128

South Valley National Bank        Business Debt        $2,000,000
517 South Main Street
Salinas, CA 93901

United American Bank                                   $1,737,238
101 South Ellsworth Avenue
San Mateo, CA 94401

Brenton Lee Brandenburg           Business Debt        $1,500,000
Irrevocable Trust dtd
1122 Willow Street, No. 200
San Jose, CA 95125

The Private Bank                                         $900,000
505 Hamilton Avenue, Suite 110
Palo Alto, CA 94301

Citicorp Credit Services          Credit Card             $44,445
Centralized Bankruptcy            Business Debt

AMEX                              Credit Card                 $85

Andrew Arata                      Business Debt           Unknown

Daniel Arata                      Business Debt           Unknown


BELMONT COUNTY: Fitch Assigns 'B+' Rating on $17.3MM Revenue Bonds
------------------------------------------------------------------
Fitch Ratings assigned a rating of 'B+' to approximately
$17.3 million Belmont County, Ohio Health System Refunding and
Improvement Revenue Bonds, (East Ohio Regional Hospital) issued on
behalf of Ohio Valley Health Services and Education Corporation
Obligated Group.  Fitch also affirmed OVHSEC's outstanding Series
1998 bonds at 'B+'.  The Rating Outlook is revised to Negative
from Stable.

The series 2008 will be issued as fixed-rate, tax-exempt bonds
maturing by January 2038.  The bond proceeds will be used to
partially refund the series 1998 bonds (approximately
$11.9 million) and retire a $5 million construction bank loan.  
The bonds are expected to price the week of June 23, 2008.  In
addition to the series 2008 bonds, OVHSEC is taking out two new
bank loans.  The first loan, in amount of $9.0 million, will
reimburse OVHSEC for prior capital expenditures.  The second loan
in an amount equal to approximately $10.2 million will refund the
remainder of the series 1998 bonds and retire approximately
$1.2 million of the amount drawn on a line of credit by OVHSEC,
the outstanding balance of which was $3.6 million as of April 30,
2008.  The bank loans will be on parity with the series 2008.

The Rating Outlook revision to Negative from Positive reflects
continued decline in liquidity.  As of April 30, 2008, OVHSEC had
$3.2 million of unrestricted cash and investments (net of
$3.6 million draw on a line of credit) equating to 7.3 days cash
on hand.  This is a decline from 15.4 days as of Dec. 31, 2006 and
11.4 days as of Dec. 31, 2007.  The Outlook reflects that a
negative rating action may be warranted if liquidity growth from
operations is not demonstrated over the near to medium term.  
OVHSEC is addressing their low liquidity position with the planned
restructuring which should increase liquidity substantially with
days cash on hand increasing to approximately 30 days.  If OVHSEC
is successful in securing the loan and can grow its unrestricted
cash and investment levels from operating cash flow, the Rating
Outlook is likely to be revised back to Stable.

Other concerns include OVHSEC's high average age of plant and a
highly competitive service area with unfavorable demographics.  
While OVHSEC's age of plant of 20.5 years remains one of the
highest in Fitch's portfolio, Fitch has toured the facilities and
found the areas of patient care, in large, satisfactory.  OVHSEC's
service area's socioeconomic indicators are well below national
averages resulting in a poor payor mix with high Medicaid and
self-pay concentrations.  Wheeling Hospital is the leading
provider of acute services in Wheeling, WV followed by OVHSEC.

Mitigating some of the concerns is OVHSEC's recent trend of
improved operations with the obligated group generating operating
margins of negative 0.5% and positive 1.7% (net of one-time
adjustments) in fiscal years 2006 and 2007, respectively, after
multiple years of significant losses in the 1990s and the earlier
part of 2000s.  Additionally, volume trends have been positive in
last two fiscal years (2006 and 2007) with admissions and
outpatient surgeries growing 8.1% and 5.3%, respectively.  Through
the first four months of fiscal 2008 (April 30), admission
remained flat while outpatient surgeries grew by 10.0% over prior
period.

OVHSEC is a two-hospital system consisted of OVMC, located in
Wheeling, West Virginia, and EORH, located in Martins Ferry, Ohio.  
The system had a combined total of 253 acute-care beds and 94
long-term care beds with total revenues of $175 million in 2007.  
Covenants pertaining to the series 2008 issuance are likely to
require OVHSEC to post annual and quarterly financial disclosure
on the nationally recognized municipal securities information
repositories.


BERRY PETROLEUM: S&P's Rtng. Unmoved by $620MM Gas Reserves Buyout
------------------------------------------------------------------
Standard & Poor's Ratings Services said that its 'BB' corporate
credit rating on oil and gas exploration and production company
Berry Petroleum Co. was unaffected by the company's announcement
that it will acquire approximately 335 billion cubic feet
equivalent of natural gas reserves, 29% proved developed, in the
Limestone and Harrison Counties of East Texas for approximately
$620 million.

The acquisition is expected to improve Berry's
geographic diversity and increase the company's growth prospects.  
On the other hand, Berry's adjusted debt will increase to more
than $1 billion as a result of the transaction; however, its
credit measures remain at acceptable levels for the current rating
with debt to barrel of oil equivalent below $5.


BERTHEL GROWTH I: March 31 Balance Sheet Upside-Down by $5,597,511
------------------------------------------------------------------
Berthel Growth & Income Trust I's consolidated statement of assets
and liabilities at March 31, 2008, showed $6,025,614 in total
assets and $11,623,125 in total liabilities, resulting in net
asset deficiency of $5,597,511.

The company reported net income of $530,512 on total revenues of
$24,060 for the first quarter ended March 31, 2008, compared with
net income of $76,578 on total revenues of $25,242 in the same
period last year.

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?2ddb

                       Going Concern Doubt

As reported in the Troubled Company Reporter on April 4, 2008,
McGladrey & Pullen, LLP, in Cedar Rapids, Iowa, expressed  
substantial doubt about Berthel Growth & Income Trust I'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 deficiency in net
assets and net investment losses during the years ended Dec. 31,
2006 and 2005.  In addition, Berthel SBIC, LLC, a wholly owned
subsidiary of the company, is in violation of the maximum capital
impairment percentage permitted by the United States Small
Business Administration.  Berthel SBIC has agreed to liquidate its
portfolio assets in order to pay its indebtedness to the United
States Small Business Administration.

                       About Berthel Growth

Based in Marion, Iowa, Berthel Growth & Income Trust I is a
Delaware business trust that has elected to be treated as a
business development company under the Investment Company Act of
1940.  The trust's Registration Statement was declared effective
June 21, 1995, at which time the trust began offering Shares of
Beneficial Interest.  The underwriting period was completed on
June 21, 1997, with a total of $10,541,000 raised.  

The trust is a closed-end management investment company intended
as a long-term investment and not as a trading vehicle.


BUILDERS FIRSTSOURCE: S&P Lowers Corp. Credit Rating to B from B+
-----------------------------------------------------------------
Standard & Poor's Ratings Services said it lowered its corporate
credit rating on Dallas-based Builders FirstSource Inc. to 'B'
from 'B+'.  S&P also lowered the issue-level rating on the
company's senior secured debt to 'B' from 'B+'.  The ratings
remain on CreditWatch with negative implications, where they were
placed on April 2, 2008.
     
The ratings downgrade and continued CreditWatch listing reflect
S&P's assessment that BLDR's operating performance will continue
to be hurt by challenging market conditions due to ongoing
weakness in the U.S. residential construction market.
     
"As a result, we expect that earnings will be pressured as long as
these conditions persist, which will lead to a material weakening
of credit measures and tighter liquidity," said Standard & Poor's
credit analyst Andy Sookram.
      
In resolving its CreditWatch listing, S&P will discuss with
management its near-term business and financial outlook in light
of the continued operating difficulties.


CARDTRONICS INC: S&P Revises Outlook to Pos. on Leverage Reduction
------------------------------------------------------------------
Standard & Poor's Ratings Services revised its outlook on Houston-
based Cardtronics Inc. to positive from stable.  At the same time,
S&P affirmed the ratings on the company, including the 'B+'
corporate credit rating.
     
"The outlook revision reflects Cardtronics' further leverage
reduction and the completion of its acquisition of 7-Eleven's ATMs
business," said Standard & Poor's credit analyst David Tsui.
     
The rating reflects the company's high leverage and aggressive
capital spending in a mature and consolidating industry.  These
factors are offset partially by Cardtronics' leading position in
the U.S. as an independent ATM provider, as well as its recurring
revenue streams.
     
Cardtronics owns more than 65% of its network of about 32,600 ATMs
and provides services for the balance.  The company's ATMs are
located in nonbanking sites such as convenience stores, grocery
stores, drugstores, and retailers.


CHARTER COMMS: Extends Private Offer Deadline to June 27
--------------------------------------------------------
Charter Communications Inc. has extended the early participation
deadline for the pending private offer by its indirect
subsidiaries, CCH II, LLC and CCH II Capital Corp., until 11:59
pm., ET, on June 27, 2008.  The exchange ratio range will remain
as previously announced.

The Offer, announced on May 29, provided for the exchange of 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 Offer is being conducted as a "modified Dutch auction,"
pursuant to which holders of the Old Notes 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.

Holders who validly tender their Old Notes will receive the
highest exchange ratio specified with respect to Old Notes
accepted for exchange in the auction process described in the
Confidential Offering Memorandum dated May 29, 2008.  The Clearing
Exchange Ratio includes an Early Participation Payment of $30.00
in New Notes per $1,000 principal amount of Old Notes.  Holders
who exchange Old Notes for New Notes will also receive accrued and
unpaid interest to, but not including, the settlement date.

The Offer will expire at 11:59 PM ET on June 27, 2008.  Old Notes
tendered pursuant to the Offer may no longer be withdrawn.

The New Notes have not been registered under the Securities Act of
1933, as amended, and may not be offered or sold in the United
States absent registration or an applicable exemption from
registration requirements.

The offer is being made only to qualified institutional buyers and
to certain non-U.S. investors located outside the United States.  
The complete terms and conditions of the Offer are set forth in
the informational documents relating to the Offer.

Documents relating to the Offer will only be distributed to
noteholders who complete and return a letter of eligibility
confirming that they are within the category of eligible investors
for this private offer.  Noteholders who desire a copy of the
eligibility letter may contact Global Bondholder Service
Corporation, the information agent for the Offer, at (866) 470-
3700 (U.S. Toll-free) or (212) 430-3774.

As reported by the Troubled Company Reporter on June 11, 2008,
Charter Communications'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.

                    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%).


COMPLIANCE SYSTEMS: Posts $387,325 Net Loss in 2008 First Quarter
-----------------------------------------------------------------
Compliance Systems Corp. reported a net loss of $387,325 on
revenues of $467,008 for the first quarter ended March 31, 2008,
compared with a net loss of $388,318 on revenues of $362,408 in
the same period last year.

The company's consolidated balance sheet at March 31, 2008, showed
$1,044,965 in total assets, $823,232 in total liabilities, and
$221,733 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?2dd4

                       Going Concern Doubt

As reported in the Troubled Company Reporter on April 14, 2008,
Holtz Rubenstein Reminick LLP, in Melville, New York, expressed
substantial doubt about  Compliance System Corporation's ability
to continue as a going concern after auditing the company's
consolidated financial statements for the year ended Dec. 31,
2007.  The auditing firm pointed to the company's losses from
operations in its last two fiscal years of $1,190,153 and
$1,242,531, respectively.

                     About Compliance Systems

Based in Glen Cove, N.Y., Compliance Systems Corp. (OTC BB: COPI)
-- http://www.callcompliance.com/-- is a developer of technology-
based compliance solutions for the teleservices industry.  The
company's primary proprietary product, TeleBlock(R) Call Blocking
System, automatically screens and blocks outbound calls against
federal, state, and in-house Do-Not-Call lists.  Compliance
Systems also offers a Regulatory Guide, an up-to-date, online
compilation of state and federal telemarketing laws, as well as
ongoing compliance auditing services.


CONTINENTAL AIRLINES: Provides Details of Capacity Reductions
-------------------------------------------------------------
Continental Airlines Inc. released to its more than 45,000
employees bulletin no. 10, detailing reductions in flying capacity
that were announced last week.  These actions are among the many
difficult steps Continental Airlines is taking to respond to
record-high fuel prices that are creating unprecedented challenges
for the airline industry, according to the company.

Starting in September, at the conclusion of the peak summer
season, the company will reduce capacity from its hubs, resulting
in an 11% decline of domestic mainline capacity (available seat
miles, or ASMs) in the fourth quarter, compared to the same period
last year.  The changes will result in a 6.4% decline in
consolidated (mainline plus regional) capacity in the fourth
quarter, compared to the same period last year.

The table shows the estimated capacity reductions by hub,
including certain capacity changes effective prior to Sept. 3:

   4th Quarter Total and Year-Over-Year ASM Comparison by
Hub            
                            (millions)

                       4Q - 08           ASM
   Hub                Est. ASMs        Decrease    % Decrease
   ---                ---------        --------    ----------
   Houston                11,208           (960)       (7.9%)
   Newark Liberty         13,251           (433)       (3.2%)
   Cleveland               1,462           (220)      (13.1%)
   Guam                      799           (219)      (21.5%)
   Total                  26,720         (1,832)       (6.4%)

As of Sept. 3, 2008, the company will be reducing frequencies in
certain markets and will also discontinue service between its hubs
and this cities or airports:

   * Houston George Bush Intercontinental:  Cali, Colombia,
     Chatanooga, Tennessee, Guayaquil, Ecuador, Hartford,
     Connecticut, Monclova, Mexico, Montgomery, Alabama,
     Oakland, California, Palm Springs, California, Reno, Nevada,
     Sarasota, Florida, Tallahassee, Florida, and Washington -
     Dulles.

   * Newark Liberty: Albuquerque, New Mexico, Cologne, Germany,
     Santiago, Dominican Republic, Sarasota, Florida, Salt Lake
     City, Utah, San Jose, California, and Tucson, Arizona.

   * Cleveland Hopkins: Austin, Texas, Birmingham, Alabama,
     Charleston, South Carolina, Charleston, West Virginia,
     Cincinnati, Ohio, Des Moines, Iowa, Detroit, Michigan,  Green
     Bay, Wisconsin, Greensboro, North Carolina, Lexington,
     Kentucky, Little Rock, Arkansas, Memphis, Tennessee,
     Nashville, Tennessee, Norfolk, Virginia; Oklahoma City,
     Oklahoma, Omaha, Nebraska, Ottawa, Canada, San Antonio,
     Texas, San Diego, California, Sarasota, Florida, Savannah,
     Georgia, Toledo, Ohio, Tulsa, Oklahoma, Washington - Dulles.

   * Guam A.B. Won Pat: Denpasar, Bali, Indonesia.

As a result of the discontinued service, this stations will close:

  Denpasar, Bali, Indonesia           Oakland, California
  Cali, Colombia                      Palm Springs, California
  Chattanooga, Tennessee              Reno, Nevada
  Cologne, Germany                    Santiago, Dominican Republic
  Green Bay, Wisconsin                Sarasota, Florida
  Guayaquil, Ecuador                  Tallahassee, Florida
  Monclova, Mexico                    Toledo, Ohio
  Montgomery, Alabama

As disclosed in the Troubled Company Reporter on June 6, 2008, the
company will eliminate 3,000 positions across all work groups,
including management positions, through voluntary and involuntary
separations, with the majority of them expected to be through
voluntary programs.  The specific number of involuntary furloughs
will not be determined until August, after the company knows how
many co-workers elect to take advantage of voluntary programs.

The company will work with furloughed/terminated co-workers to
provide information on benefits and other employment opportunities
available to them.  In the case where suppliers and vendors are
affected by capacity reductions, the company will work with them
to determine if there are other job opportunities for their
affected employees.

Customers who are currently booked on flights previously scheduled
to operate on or after September 3 that are affected by the
capacity reductions, will be contacted by Continental Airlines to
make alternate arrangements.

                   About Continental Airlines

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

                          *     *     *

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

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

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


CORONA BASIN: Files Voluntary Chapter 11 Case Summary
-----------------------------------------------------
Debtor: Corona Basin Land & Cattle Co. Inc.
        1400 Quail, Suite 275
        Newport Beach, California 92660

Bankruptcy Case No.: 08-13256

Chapter 11 Petition Date: June 11, 2008

Court: Central District Of California (Santa Ana)

Judge: Erithe A. Smith

Debtors' Counsel: Noelle R. Minto, Esq.
                  2901 W. Coast Highway, Suite 200
                  Newport Beach, California 92660
                  Tel: (949) 258-4324

Total Assets: $8,290,400

Total Debts:  $14,065,782

The Debtor does not have creditors who are not insiders.


COUDERT BROS: Five Ex-Partners Oppose Amended Disclosure Statement
------------------------------------------------------------------
The first amended disclosure statement describing Coudert Brothers
LLP's bankruptcy plan faced objection from five of the firm's
former partners, Bankruptcy Law 360 reports.

The former partners asserted that the changes in the disclosure
statement do not agree with what was discussed at a hearing,
Bankruptcy Law says.

The objecting party presented to the U.S. Bankruptcy Court for the
Southern District of New York on Wednesday their proposed
amendments to the Debtor's disclosure statement, Bankruptcy Law
adds.

A copy of the Debtor's first amended disclosure statement is
available for free at http://www.kccllc.net/impDateDocs.asp?D=2315

A copy of the Debtor's first amended plan is available for free at
http://www.kccllc.net/impDateDocs.asp?D=2316

As reported in the Troubled Company Reporter on June 9, 2008,
the Court indicated that the Debtor's disclosures statement
describing its amended chapter 11 plan of liquidation needed
further revision before it can be approved.

The Hon. Robert D. Drain said he is already inclined to give a
thumbs up to the Debtor's disclosure statement at a hearing
expected to take place in the second week of June 2008.  Judge
Drain, added that the Debtor's disclosure statement already
contains adequate information relating to changes that he had
suggested.

                      About Coudert Brothers

Coudert Brothers LLP was an international law firm specializing in
complex cross border transactions and dispute resolution.  The
firm had operations in Australia and China.  The Debtor filed for
Chapter 11 protection on Sept. 22, 2006 (Bankr. S.D.N.Y. Case
No. 06-12226).  John E. Jureller, Jr., Esq., and Tracy L.
Klestadt, Esq., at Klestadt & Winters, LLP, represent the Debtor
in its restructuring efforts.  Kurtzman Carson Consultants LLC is
the Debtor's claims and notice agent.  Brian F. Moore, Esq., and
David J. Adler, Esq., at McCarter & English, LLP, represent the
Official Committee Of Unsecured Creditors.  In its schedules of
assets and debts, Coudert listed total assets of $29,968,033 and
total debts of $18,261,380.  The Debtor's exclusive period to file
a plan expired on May 20, 2007.  The Debtor proposed a plan
confirmation hearing to be held on Aug. 15, 2008, at 10:00 a.m.


CRAIG STEWART: Voluntary Chapter 11 Case Summary
------------------------------------------------
Debtor: Craig Charles Stewart
        11628 S. Warcloud Court
        Phoenix, AZ 85044

Bankruptcy Case No.: 08-06820

Description: The Debtor's wholly owned company, Warehouse
             Equipment Depot Corporation sought protection
             under chapter 11 on May 2, 2007
             (Case No. 07-01989).

Chapter 11 Petition Date: June 9, 2008

Court: District of Arizona (Phoenix)

Judge: Randolph J. Haines

Debtor's Counsel: Donald W. Powell, Esq.
                  Carmichael & Powell PC
                  7301 North 16th Street, #103
                  Phoenix, AZ 85020
                  Tel: (602) 861-0777
                  Fax: 602-870-0296
                  (d.powell@cplawfirm.com)

Total Assets: $1,456,250

Total Debts:  $1,857,000

A copy of the Debtor's petition with a list of unsecured creditors
is available for free at http://bankrupt.com/misc/az08-06820.pdf


DANKA BUSINESS: Stake Holders Spurn Voluntary Liquidation Proposal
------------------------------------------------------------------
DCML LLC, in a letter to the Danka Business Services PLC's board
of directors, stated that it will not support the voluntary
liquidation of Danka, and intended to vote against it.

Robert Andrade has sent the letter on behalf of DCML LLC, and
certain related entities that own, in the aggregate, approximately
6% of the common stock of Danka Business Systems PLC.

He related that even if he supports the board's decision to
recommend shareholder approval of the sale of Danka Office Imaging
Company to Konica Minolta, Mr. Andrade related that the
Independent Committee erred in:

   1) recommending that the company enter liquidation
      subsequent to the sale;

   2) conditioning sale of DOIC upon shareholder approval of
      liquidation; and

   3) negotiating a distribution of sale proceeds in
      liquidation that would leave ordinary shareholders with a
      pittance -- $6.5 million, while holders of participating
      shares would receive substantially in excess of
      $100 million.

Mr. Andrade said that the proposed distribution to ordinary
shareholders is unfair, and he believe that the company could have
pursued alternative options for executing the sale of DOIC to KOM
while ensuring that the value derived from the sale is shared more
equitably among all of the company's shareholders.

The Committee's failure raises serious questions about the
exercise of its fiduciary duties and the board has failed its
majority shareholders in negotiating the Cypress transaction.  

DCML LLC filed a Schedule 13D with the Securities and Exchange
Commission, indicating its acquisition of a more than a 5%
interest in the outstanding Ordinary Shares of Danka Business
Services PLC.

                  About Danka Business Systems PLC

Danka Business Systems PLC (LON: DNK) -- http://www.danka.com/     
--  offers document solutions, including office imaging
equipment, software, support, and related services and supplies
in the United States.  It offers office imaging products,
services, supplies and solutions, including digital and color
copiers, digital and color multifunction peripherals printers,
facsimile machines and software.  It also provides a range of
contract services, including professional and consulting
services, maintenance, supplies, leasing arrangements, technical
support and training, collectively referred to as Danka Document
Services.  The company's revenue is generated from two primary
sources: new retail equipment, supplies and related sales, and
service contracts.  Danka sells Canon products, as well as
Kodak, Toshiba and Hewlett-Packard.  On Aug. 31, 2006, the
company sold its subsidiary, Danka Australasia, PTY Limited, to
Onesource Group Limited.  In January 2007, the company disposed
of its European businesses to Ricoh Europe B.V.

The company's Dec. 31, 2007 balance sheet showed total assets of
$233.5 million, total liabilities of $225.0 million, 6.5%
senior convertible participating shares of $362.6 million, and
total stockholders' deficit of $354.1 million.


DELPHI CORP: Trial on $2.55 Billion Lawsuit to Begin in April 2009
------------------------------------------------------------------
The Hon. Robert D. Drain of the U.S. Bankruptcy Court for the
Southern District of New York approved on June 10, 2008, the trial
and discovery schedule for Delphi Corporation's $2,550,000,000
lawsuit against Appaloosa Management, LP, et al.

After negotiations, a mutually acceptable schedule was reached by
the parties, which include Delphi Corp., and other defendants,
the Official Committee of Equity Security Holders, and the
Official Committee of Unsecured Creditors.  The parties met on
June 3, 2008, and thereafter, to discuss an appropriate schedule
for the progress of the adversary proceedings.  

Edward Friedman, Esq., at Friedman, Kaplan, Seiler and Adelman,
in New York, informed the Court the Plan Investors rejected
Delphi's contention of its right to seek specific performance of
all or portions of the contractual obligations under the Equity
Purchase and Commitment Agreement, and Delphi insisted that the
actions should proceed in an expedited manner to preserve its
claimed right to obtain that remedy.

The parties have acknowledged that in setting an expedited
schedule, each will be seeking a significant volume of pre-trial
documentary and testimonial discovery necessary for the
adjudication of the claims, counterclaims, if any, and defenses
in the Actions.

As a result of the agreed schedule, Delphi is withdrawing its
prior request for an expedited discovery and trial.  The parties
have agreed and stipulated:

  (1) Each party to the Actions may take discovery on all
      relevant matters.  The Official Committees may participate
      in the discovery;

  (2) Discovery and related matters will be governed by this
      schedule:

         (i) Each party will serve its initial disclosures
             required by Rule 26(a)(1) of the Federal Rules of
             Civil Procedure not later than June 11, 2008;
        
        (ii) The Plan Investors will each either answer or file a
             motion in response to the complaints in the Actions
             by June 20, 2008, and will coordinate with respect
             to any motions they file to avoid duplicative
             papers;

       (iii) The parties will serve initial sets of document
             requests not later than June 13, 2008.  Each party  
             will serve written document responses and objections
             on all parties within 21 days of the service of the
             document requests;

        (iv) Document production will begin on July 1, 2008, and
             must be complete by August 12, 2008.  The parties
             are not prohibited from making further request for
             additional documents beyond the Initial Requests,
             provided that responses to the requests will not be
             due before August 12, 2008;

         (v) Notices of deposition may be served at any time.
             A party or third-party deposition may commence on
             or after September 3, 2008.  If any party fails to
             complete its document production by August 12, 2008,
             the other parties reserve the right to move to
             modify the commencement date for depositions and  
             subsequent deadlines set forth, and for other  
             appropriate relief;
                
                (a) Delphi may take up to 30 depositions of    
                    fact witnesses;

                (b) The Plan Investors may take up to 50
                    depositions of fact witnesses; and

                (c) The parties agree to attempt in good faith to
                    schedule all depositions as expeditiously as
                    possible, at the rate of three days of
                    depositions a week;

        (vi) Delphi and the Plan Investors may as a group, each
             take the deposition of up to two natural persons on
             dates to be agreed upon between August 12, 2008, and
             August 22, 2008;

       (vii) Each party may serve interrogatories not earlier
             than June 13, 2008, and not later than 30 days
             before the fact discovery deadline;

        (vi) Each party may serve any requests to admit not
             earlier than June 13, 2008, and not later than 30
             days before the fact discovery deadline;

      (viii) With respect to the Court's order authorizing the
             Debtors to issue subpoenas directing expedited oral
             examinations of and production of documents by
             certain investors dated March 17, 2008, the parties
             agree that any further discovery taken pursuant to
             the order under Rule 2004 of the Federal Rules of
             Bankruptcy Procedure will be subject to the limits,
             procedures and schedules;

        (ix) All discovery will be completed by Dec. 31, 2008;

         (x) Any expert report will be served within 30 days of
             the fact discovery deadline, and rebuttal expert
             reports will be filed within 30 days after service
             of initial reports.  Depositions of expert witnesses
             will be completed within 30 days following the
             service of the last rebuttal expert report;

        (xi) Any party may move subject to Local Bankruptcy Rule
             7056-1, for summary judgment or partial summary
             judgment at any time;

       (xii) Each party reserves the right to move for injunctive
             relief and each party reserves its rights to oppose
             or object to any motion; and

      (xiii) Except as otherwise ordered by the Court, the
             Actions will be trial ready by 90 days following the
             fact discovery deadline.

                    Trial to Begin April 2009

As previously reported, Delphi targeted an August 9 trial to its
lawsuit seeking specific performance by the Plan Investors on the
EPCA, which is needed for the consummation of Delphi's Court-
confirmed reorganization plan.  Counsel pointed out that Delphi
has proposed a longer schedule than was the case in other recent
litigations also involving multibillion dollar disputes such as
the Solutia Inc. case in this district and the Clear Channel
Communications case in the New York State Court.

Judge Drain, however, affirmed the Plan Investors' contentions
and ruled that the schedule was "too ambitious," despite Delphi
counsel's claims that two years of tremendous efforts to achieve
a confirmed plan will be wasted if the the adversary proceedings
against the Plan Investors are not immediately resolved.

Mr. Friedman, special litigation counsel to Delphi, noted that by
virtue of waivers previously granted by the Pension Benefit
Guaranty Corp. and the Internal Revenue Service, Delphi has a
window of opportunity to emerge from Chapter 11 between June 15
and Sept. 30, 2008, without the need to go back to those agencies
and obtain new waivers.  In that light, Delphi is pursuing an
August 1 trial to be able to emerge on September 30 at the very
very latest.

At the May 29 conference, attorneys already debated on the merits
of the lawsuit, as to whether Delphi is currently entitled to
specific performance by Plan Investors.

Mr. Friedman noted that on April 4, when the EPCA was scheduled
for closing, Delphi satisfied the prerequisites for funding by
Appaloosa, et al. -- General Motors Corp., the exit lenders, all
other parties necessary for the consummation of the plan were
ready and able to close, and Delphi was able to raise funds from
the rights offering.

The Plan Investors, however, argued that Delphi is not entitled
to specific performance because they no longer satisfy the terms
of the EPCA -- funds received from investors in the rights
offering have been returned, the $6,000,000,000 exit debt
financing agreements have been terminated, and it has lost its
debt ratings.

Mr. Friedman, however, explained that Delphi is currently not in
full compliance because of the Plan Investors' wrongful conduct
and contractual breaches.  He cited, among other things, Delphi
made the decision to return funds received from the rights
offering in accordance with its fiduciary duties when the Plan
Investors' conduct made the closing impossible.

He avers that Delphi will be in compliance with all conditions if
the Court agrees that the remedy of specific performance is
warranted.  He said Delphi, among other things, would re-initiate
the rights offering, and would redevelop the commitments for the
exit financing, which it expects to be completed within 30 to 40
days after judgment.  

Delphi's theory -- after an order on specific performance, it
could restart its rights offering, raise public debt, and try to
put the whole plan back together -- is fundamentally flawed and
violates New York law, argued counsel for Appaloosa, Christopher
Shore, Esq., at White & Case LLP, in New York.

Counsel for UBS Securities, LLC, Jeffrey Rosenthal, Esq., at
Cleary Gottlieb Steen & Hamilton LLP, in New York, added,
"[Delphi] hasn't cited a single case that says that being ready,
willing, and able in the past allows them to get specific
performance in the future."

"Granted the debtors have not cited cases on this point, but it
seems to me that if a contract party's breach is preventing the
debtors from being ready, willing, and able they don't
necessarily have to do more than show that they could be able to
perform if that impediment, that breach were resolved," Judge
Drain said.  But he admitted the Debtors have not provided any
evidence showing that the exit loan lenders would be able to
advance in the future.

Mr. Friedman acknowledged at the conference that in an effort to
mitigate damages, Delphi is pursuing alternative steps to try to
develop a modified plan, which will require re-solicitation and
will be materially adverse to the stakeholders.

"The goal is to emerge from Chapter 11 by the end of the third
quarter if that's humanly possible either by means of
consummation of the plan that has already been confirmed, or if
the Court rejects Delphi's claims, then Delphi and the
stakeholders will be in the unfortunate position of pursuing a
modified plan," Mr. Friedman said.

                        About Delphi Corp.

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

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

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

(Delphi Bankruptcy News, Issue No. 133; Bankruptcy Creditors'
Service Inc., http://bankrupt.com/newsstand/or 215/945-7000)   


DELPHI CORP: Gets New Bid for Power Biz; 54 Pacts Part of Sale
--------------------------------------------------------------
Delphi Corp. and certain of its subsidiaries and affiliates
obtained a competing bid for their power products business.  
Delphi, however, did not identify the bidder in documents
submitted to the U.S. Bankruptcy Court for the Southern District
of New York.

In connection with their continuous evaluation of their product
portfolio, the Debtors have determined that the power products
business no longer fit within their future product portfolio.

Following extensive marketing efforts, on May 27, 2008, Delphi
and certain non-debtor affiliates entered into a master sale and
purchase agreement with Strattec Security Corporation, Witte-
Velbert GmbH & Co. Kg, Vehicle Access Systems Technology LLC, and
certain of their affiliates for the sale of certain assets
related to the Power Products Business.

Under the Agreement, the Strattec Buyers would purchase the Power
Products Business for $7,800,000, subject to certain adjustments.

Because the Purchase Price does not exceed $10,000,000, the
Debtors did not file with the Court a motion for approval of the
asset sale, and were allowed, pursuant to the Court-approved
procedures for selling de minimis assets, to sell those types of
assets, after notice with the Court and parties interested in
those assets, among other parties.

The Debtors served notice of the Power Products Sale on May 27,
which notice provides that the sale of would be consummated with
the Strattec Buyers unless written objections, bids, or requests
for additional time were received by the Debtors by June 3, 2008.

The Debtors received the competing bid from the unidentified
bidder on June 3.  The Debtors are currently in the process of
evaluating the bid, says John Wm. Butler, Jr., Esq., at Skadden,
Arps, Slate, Meagher & Flom LLP, in Chicago, Illinois.  He adds
that if the Debtors, in their sole discretion, determine that
this bid, or subsequent bid, constitutes the highest value bid,
then Delphi will seek relief from the Court to assume and assign
contracts related to the Power Products Business to the competing
bidder, instead of the Strattec Buyers.

            Assumption and Assignment of U.S. Contracts

Under Section 6.3 of the Strattec Agreement, as soon as
practicable after the Agreement was signed, Delphi was obligated
to seek the Court's authority to assume and assign to the
Strattec Buyers certain contracts identified by the parties.

Accordingly, by this motion, the Debtors ask the Court to enter
an order authorizing and approving the assumption and assignment
of 54 executory contracts in connection with the sale of their
Power Products Business to the Strattec Buyers, or the competing
bidder.

Mr. Butler notes the Assumed U.S. Contracts are important to the
operation of the Power Products Business, and the Strattec Buyers
would not purchase the Power Products Business unless the Assumed
U.S. Contracts are transferred to them.  Thus, the Debtors'
assumption of the Assumed U.S. Contracts and assignment of the
contracts to the Strattec Buyers is necessary to enable the
Sellers to consummate the sale of the Power Products Business to
the Strattec Buyers.

The approximate cost to cure the Assumed U.S. Contracts related
to the Power Products Business is $347,010.  Pursuant to the
order establishing procedures for solicitation of votes and
support on Delphi's Joint Plan of Reorganization, each non-Debtor
party to the 54 Assumed U.S. Contracts that are material supply
agreements already has received a cure notice.

The Plan Cure Notice stated, with respect to each Assumed U.S.
Contract, the cure amount that the Debtors believe is necessary
to assume the contract pursuant to Section 365 of the Bankruptcy
Code.  The Plan Cure Notice provided parties to these Assumed
U.S. Contracts with an opportunity to object to the Cure Amount,
and notified each party that such party's contract was to be
assumed under the Plan.

Of the 54 parties to the Assumed U.S. Contracts for which the
Debtors served a Plan Cure Notice, only four parties objected to
the Debtors' proposed Cure Amount.  Unless the Selling Debtor
Entities and the non-Debtor party to an Assumed U.S. Contract
agree otherwise to the Cure Amount or the Cure Amount is
otherwise resolved in accordance with Solicitation Procedures
Order or other order of the Court, the Cure listed on the Plan
Cure Notices control the amounts required to cure all defaults
under the Assumed U.S. Contracts that are material supply
contracts.

The Assumed U.S. Contracts would be assumed at the earlier of the
closing of the sale of the Power Products Business or the
Debtors' emergence date from the Chapter 11 cases.

Nonetheless, prior to the Closing Date or the Emergence Date, the
Selling Debtor Entities may revise their decision with respect to
the assumption and assignment of any Assumed U.S. Contract and
provide notice amending the information provided, Mr. Butler
notes.

The Assumed U.S. Contracts are:

    Contract To Be
    Assumed & Assigned                  Non-Debtor Contract Party
    ------------------                  -------------------------
    D0550076639                         AMTECH INDUSTRIES LLC
                                        (JV Amtech & Intec)

    D0550064001                         AMTEK MEXICO SA DE CV EFT

    D0550022116                         AUTOLIV ASP INC

    D0550022243                         AUTOLIV ASP INC EFT

    D0550076293                         AVON AUTOMOTIVE INC      

    D0550022971                         CAMCAR DIV OF TEXTRON INC

    D0550037665                         CAPSTAN ATLANTIC

    D0550059940                         CAPSTAN ATLANTIC

    D0550022122                         CASCADE DIE CASTING     

    D0550022830                         CHERRY ELECTRICAL
                                        PRODUCTS

    D0550052192                         COLLINS & AIKMAN PRODS CO

    D0550074455                         FOAMEX

    D0550074456                         FOAMEX

    D0550074457                         FOAMEX

    D0550074563                         FOAMEX

    D0550074564                         FOAMEX

    D0550079225                         FOAMEX

    D0550080330                         FUJIKURA AMERICA INC

    PO#OR3V0002 between General         GENERAL MOTORS CORP.
    Motors Corporation and Delphi S&I -
    Mount Sterling; Dated 8/25/2005;
    Amendment #002; Valid 3/28/2004 -
    8/1/2008; Part #10376548.

    D0550052145                         GKN SINTER METALS EFT

    D0550076310                         HANGZHOU TRANSAILING EFT

    D0550022536                         HYLAND MACHINE CO EFT

    D0550022842                         IN2CONNECT INC

    D0550023223                         IN2CONNECT INC

    D0550024506                         INTASCO USA INC

    D0550087191                         INT'L RESISTIVE CO

    D0550022592                         INTIER AUTOMOTIVE
                                        INTERIORS

    Grant of Security Int. in Patent    JP MORGAN CHASE BANK
    Rights between Delphi Technologies,
    Inc and JPMorgan Chase Bank, N.A.
    dated 06-14-05   

    D0550035472                         KOSTAL MEXICANA SA DE CV

    D0550026051                         L & W ENGINEERING CO INC

    D0550061252                         L & W ENGINEERING CO INC

    D0550024156                         LDI INCORPORATED

    D0550025201                         LDI INCORPORATED

    D0550022596                         MAC ARTHUR CORP

    D0550079811                         MAC ARTHUR CORP

    D0550023568                         MULTEX FLEXIBLE CIRCUITS

    D0550056439                         MULTIBASE INC

    D0550076391                         PRECISION RESOURCE
                                        CONNECTICUT

    D0550057079                         RED SPOT PAINT &     
                                        VARNISH EFT CO INC

    D0550057092                         RED SPOT PAINT & VARNISH

    D0550078829                         ROBIN INDUSTRIES INC

    D0550056677                         SOLVAY ENGINEERED
                                        POLYMERS EFT

    D0550077738                         SPARTECH POLYCOM       

    D0550056314                         TEKNOR APEX CO

    D0550056383                         TEKNOR APEX CO

    D0550056423                         TEKNOR APEX CO EFT

    D0550074858                         TESSY PLASTICS CORP

    D0550074860                         TESSY PLASTICS CORP

    Letter of Intent bet. Tjing Ling    TJING LING RESEARCH AND
    Research & Development Center Co.,  DEVELOPMENT CENTER CO.
    Ltd. and Delphi Thermal & Interior  LTD
    Division of Delphi Autom. Systems
    LLC dated 5/18/2005.                  

    D0550053417                         TRW VEHICLE SAFETY SYSTS

    D0550070364                         TRW VEHICLE SAFETY SYSTS

    D0550023217                         TYCO ELECTRONICS CORP     

    D0550074552                         WOORY INDUSTRIAL CO LTD     

    D0550074553                         WOORY INDUSTRIAL CO LTD     

    D0550074554                         WOORY INDUSTRIAL CO LTD
     
    D0550080042                         WOORY INDUSTRIAL CO LTD     

    D0550074776                         ZOHAR JACOBS ACQUISITION
                                        LLC

                        About Delphi Corp.

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

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

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

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


DELPHI CORP: Amends $4.1BB Facility to Raise Available Amount
-------------------------------------------------------------
The Honorable Robert Drain of the U.S. Bankruptcy Court for the
Southern District of New York has entered a written order
approving Delphi Corp.'s $4,350,000,000 DIP facility.  Due to the
oversubscription during the syndication of the loans, Delphi
sought to amend its $4,100,000,000 loan package by:

   (i) increasing the amount of availability under the Tranche A
       revolving credit facility to $1,100,000,000 and decreasing
       the amount of the Tranche B term loan to $500,000,000; and

  (ii) increasing the principal amount of the Tranche C Loan by
       approximately $254,000,000.

The DIP Facility matures Dec. 31, 2008.

According to the Amended and Restated Revolving Credit, Term Loan
and Guaranty Agreement dated May 9, 2008, these financial
institutions took part in arranging the loan:

   -- JPMORGAN CHASE BANK, N.A., as Administrative Agent,

   -- CITICORP USA, INC., as Syndication Agent,

   -- BANK OF AMERICA, N.A., GENERAL ELECTRIC CAPITAL CORPORATION
      and WACHOVIA CAPITAL FINANCE CORPORATION as Co-
      Documentation Agents for Tranche A and Tranche B,

   -- J.P. MORGAN SECURITIES INC., CITIGROUP GLOBAL MARKETS INC.
      and GE CAPITAL MARKETS, INC. as Joint Lead Arrangers for
      Tranche A and Tranche B,

   -- JPMORGAN SECURITIES INC., CITIGROUP GLOBAL MARKETS INC.,
      GE CAPITAL MARKETS, INC. and BANK OF AMERICA, N.A., as
      Joint Bookrunners for Tranche A and Tranche B,

   -- DEUTSCHE BANK SECURITIES INC., as Documentation Agent for
      Tranche C,
   
   -- J.P. MORGAN SECURITIES INC., CITIGROUP GLOBAL MARKETS INC.
      and DEUTSCHE BANK SECURITIES INC. as Joint Lead Arrangers
      for Tranche C, and

   -- J.P. MORGAN SECURITIES INC., CITIGROUP GLOBAL MARKETS INC.
      and DEUTSCHE BANK SECURITIES INC. as Joint Bookrunners for
      Tranche C.

The Amended Credit Agreement also provides for these changes:

   -- Lenders will fund the $254,179,760 addition Tranche C Loan
      on June 9.

   -- The Debtors will pay for the additional Tranche C loan a
      commitment fee computed (on the basis of the actual number
      of days elapsed over a year of 360 days) at the rate of
      2.625% per annum on the additional loan.

   -- Conditions precedent to the additional Tranche C Loan,
      include, JPMorgan, as administrative agent, will have
      received an amendment fee for the account of each Tranche C
      Lender in an amount equal to 200 basis points of the
      additional Tranche C commitments of each lender.

   -- Any Lender may assign to one or more special purpose
      funding vehicles all or any portion of its funded Tranche A
      Loans and may grant any SPV the option to fund all or any
      part of any Tranche A Loans that the Lender would otherwise
      be obligated to fund pursuant to the Credit Agreement.

A full-text copy of the Amended Credit Agreement is available for
free at http://bankrupt.com/misc/Delphi_May2008_DIP_Accord.pdf

                        About Delphi Corp.

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

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

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

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


DEN-MARK CONSTRUCTION: Taps Mitchell & Nemitz as Accountant
-----------------------------------------------------------
Den-Mark Construction Inc. and its three debtor-affiliates sought
permission from the U.S. Bankruptcy Court for the Eastern District
of North Carolina to employ Howard Mitchell, Esq., at Mitchell &
Nemitz PA as their accountant.

The Debtors told the Court that the firm and Mr. Mitchell do not
currently hold an interest adverse to the estate and that they are
disinterested persons.

The Debtors said they did not owe any fees to the firm or Mr.
Mitchell as of April 24, 2008.  The document filed with the Court
did not disclose the firm's compensation rates.

The firm can be reached at:

   Mitchell & Nemitz PA
   12324 Hampton Way Drive, Suite 201
   Wake Forest, NC 27587

                    About Den-Mark Construction

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


DEN-MARK CONSTRUCTION: Final Sale Procedure Hearing Set June 26
---------------------------------------------------------------
The U.S. Bankruptcy Court for the Eastern District of North
Carolina will convene a hearing on June 26, 2008, at 10:00 a.m. to
consider final approval of a sale procedure proposed by Den-Mark
Construction Inc. and its three debtor-affiliates.

The Debtors disclosed that they have some residential properties
listed for sale with Century 21 Weaver & Associates, Keller
Williams Preferred Realty Inc., Fonville Morisey & Barefoot, and
Coldwell Banker Advantage.

The Debtors told the Court that they wish to sell some or all of
the properties in the ordinary course of business, in an effort to
obtain the highest price for the properties.  The Debtors said
they believe they can continue to sell homes in the ordinary
course of business without the need for court order.  However, as
a caution and in order to provide clarity to the Debtors'
customers and creditors, the Debtors propose these sales
procedures:

   a. the Debtors' counsel will serve within 24 hours of
      execution via electronic mail all contracts to purchase
      any unit or lot that the Debtors wish to accept.  The
      approval and sale of the homes or lots will be deemed
      approved unless an objection is submitted in writing to
      the Debtors' counsel within seven days of receipt of the
      notice.  If the closing is set to occur prior to the
      expiration of the seven-day objection period, the sale
      will be approved unless an objection is submitted in
      writing to the Debtors' counsel within 72 hours of
      receipt.  If a notice party timely objects in writing,
      the Debtors will immediately advise the Court of the
      objection and obtain an expedited hearing with respect
      to the proposed sale.

   b. after the expiration of the objection period, any
      creditor holding a claim against the property for sale
      will be notified by the Debtors of the scheduled closing
      date.  Lienholders will provide the Debtors' counsel an
      itemized payoff in a form satisfactory to the Debtors no
      later than 48 business hours prior to the set closing.  
      The itemized payoff statement will include an itemization
      of all principle, prepetition and postpetition interest
      and costs.  When the payoff statement is not timely
      received by the Debtors, the Debtors may elect to escrow
      all or a portion of the sale proceeds owed to the
      lienholder until the Court approves a motin for
      distribution.

   c. the Debtors may sell the properties pursuant to the
      proposed terms until the Debtors' plan is confirmed, the
      case is converted to chapter 7 of the Bankruptcy Code, a
      trustee is appointed, or the Court modifies or vacates
      any order approving the sale procedures motion.

The Debtors have proposed these distribution scheme to be allowed
from the sale proceeds at closing without the need for further
court orders:

   1. reasonable closing costs;

   2. fees and costs of the closing attorney;

   3. payment of any real estate commission previously approved
      by separate Court order;

   4. any ad valorem property taxes for 2007, 2008, and
      subsequent years; and

   5. recording fees or charges.

Remaining proceeds will be distributed by the Court in accordance
with the cash collateral orders.  In the event of a dispute, the
sale will be allowed to close and the disputed portion of the
sales proceeds will be escrowed until the Court determines the
manner of their distribution.

               Wachovia Opposes Engagements of Brokers

As reported by the Troubled Company Reporter on June 5, 2008,
Wachovia Bank NA filed with the Court an objection to the request
of the Debtors to employ various brokers, Weichert Realtors
Southern Cost, Coldwell Banker Chicora Real Estate, and Coldwell
Banker Howard Perry & Walston Builder Services.  Wachovia
contests, among others, the commission rates of the brokers.

                    About Den-Mark Construction

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


DEN-MARK CONSTRUCTION: Court OKs Sale of Residential Properties
---------------------------------------------------------------
The U.S. Bankruptcy Court for the Eastern District of North
Carolina gave Den-Mark Construction Inc. approval to sell its
property free and clear of liens and other interests.

The Court permitted the Debtor to pay real estate commission
associated with the sale from the gross sale proceeds.  When the
Court finds that the realtor is not disinterested, the commission
may be subject to disgorgement.

The Debtor disclosed that these creditors assert a lien on its
property and proceeds:

   1. Deed of trust recorded in book 2899, page 852, Johnston
      County, North Carolina Registry, as amended and recorded
      in book 3156, page 286.

   2. Deed of trust recorded in book 2532, page 505, Wake
      County, North Carolina Registry.

   3. Deed of trust recorded in book 1144, page 215, Vance
      County, North Carolina Registry.

   4. Deed of trust recorded in book 9256, page 1335, Wake
      County, North Carolina Registry.

   5. Deed of trust recorded in book 10914, page 225, Wake
      County, North Carolina Registry.

   6. Claims of lien in file numbers 08 M 307 and 08 M 378
      Alamance County, North Carolina, office of the Clerk of
      Superior County.

   7. Claims of lien in file numbers 08 M 430-433, Johnston
      County, North Carolina, office of the Clerk of Superior
      County.

The Debtors had related in its sale motion that the sale proceeds
of any unencumbered or under-encumbered property will be subject
to payment of all reasonable administrative costs of the case, as
the Court may allow.

               Wachovia Opposes Engagements of Brokers

As reported by the Troubled Company Reporter on June 5, 2008,
Wachovia Bank NA filed with the Court an objection to the request
of the Debtors to employ various brokers, Weichert Realtors
Southern Cost, Coldwell Banker Chicora Real Estate, and Coldwell
Banker Howard Perry & Walston Builder Services.  Wachovia
contests, among others, the commission rates of the brokers.

                    About Den-Mark Construction

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


DIAMOND RANCH: Gruber & Company Expresses Going Concern Doubt
-------------------------------------------------------------
Gruber & Company, LLC, raised substantial doubt on the ability of
Diamond Ranch Foods, Ltd., to continue as a going concern after it
audited the company's financial statements for the year ended
March 31, 2008.  The auditor pointed to the company˙s recurring
losses from operations.

The company posted a net loss of $1,894,010 on total revenues of
$11,265,457 for the year ended March 31, 2008, as compared with a
net loss of $979,168 on total revenues of $12,750,457 in the prior
year.  The company reported a net loss from operations of $374,258
for March 31, 2008, compared with a net loss from operations of
$872,113 in 2007.

At March 31, 2008, the company's balance sheet showed $1,213,182
in total assets and $4,246,327 in total liabilities, resulting in
$3,033,145 stockholders' deficit.

The company's consolidated balance sheet at March 31, 2008, also
showed strained liquidity with $1,060,714 in total current assets
available to pay $2,044,395 in total current liabilities.

A full-text copy of the company's 2007 annual report is available
for free at http://ResearchArchives.com/t/s?2d8c

                       About Diamond Ranch

Diamond Ranch Foods, Ltd., -- www.diamondranchfoods.com/  --
processes and distributes meats and fresh cut portion controlled
poultry, and is located in the historic Gansevoort meatpacking
district in lower Manhattan, NY.  Operations include packing,
processing, labeling and distribution of products.  The company
also provides portion controlled meats, custom meat cutting, and
private labeling.  The company's diversified customer base
includes in-home food service businesses, retailers, hotels,
restaurants, and institutions, deli and catering operators and
industry suppliers.


EARTH BIOFUELS: Montgomery Coscia Expresses Going Concern Doubt
---------------------------------------------------------------
Houston-based Montgomery Coscia Greilich LLP raised substantial
doubt on the ability of Earth Biofuels, Inc., to continue as a
going concern after it audited the accompanying company's
financial statements for the year ended Dec. 31, 2007.  The
auditing firm pointed to the company's recurring operating losses
and working capital deficit.

Earth Biofuels has incurred significant losses from operations and
as of Dec. 31, 2007, and has limited financial resources.  The
company also has an accumulated deficit of $204,277, negative
current ratios and negative tangible net worth at Dec. 31, 2007.

          Chapter 7 Liquidation and Settlement Agreement

In addition, investors holding $52.5 million in senior unsecured
notes filed with the bankruptcy courts a chapter 7 -- Involuntary
Liquidation against EBOF during the second quarter of 2007.
However, on Nov. 14, 2007, EBOF negotiated and executed a
settlement agreement with the above note holders.  The Agreement
required the creditors to dismiss their petition of bankruptcy.

Under the terms of the Agreement, EBOF and subsidiaries granted
certain security interests to the creditors and will execute a
restructuring plan within 180 days. In addition, one of the
accredited investors of the original eight accredited investors
purchased four of the original investors interest, whereby
reducing the number of credit holders to three.  The company is
currently in negotiations with the remaining investors to settle
the outstanding debts.  The company intends to sell certain
operating assets and liabilities of the Liquid Natural Gas
business through a reverse merger and public offering of the LNG
Business, and raise $35 million in the newly formed public
company.  Management expects that the LNG Business will be
released as a guarantor of the EBOF notes totaling $52.5M by
providing the note holders with a security interest in the newly
formed public company.  The Restructuring will allow the company
to build new fueling stations, expand geographically and improve
its sales and marketing efforts.

Management believes that the LNG Business has substantial market
value that is not necessarily reflected by the accompanying
financial statements.  The LNG company acquisitions have produced
revenues over the past two years in excess of $50 million, and
this market has been the focus of Earth LNG's underlying company
efforts for over ten years.  While cash flows from operations were
flat year over the current year, the second half of 2007
demonstrated positive trends due to renewed and new customer
contracts, significant cost restructurings and management
improvements.

The company is also in the process of refinancing the term debt
related to the Durant, Oklahoma biodiesel plant, and retrofitting
the plant to allow for usage of other types of raw materials
besides soybean oil.  Due to the significant increase in feedstock
prices during the year this plant was idle for most of 2007,
resulting in reduced profit margins.

Earth believes the LNG business will be a major part of
establishing future financial stability of the company.  The
company also believes the above measures will significantly
enhance the liquidity position, profitability and allow for
repayment to the $52.5 million notes holders.  Earth's management
is attempting to seek strategic alternatives, including the
pursuit of additional financing for strategic acquisitions or a
merger with other businesses.  Management intends to raise capital
through other offerings, secure collateralized debt financing and
use these sources of capital to grow and enhance its alternative
fuel production and distribution operations.  If additional funds
are raised by issuing debt, the company may be subject to
restrictive covenants that could limit its operating flexibility.
Earth's performance will also be affected by prevailing economic
conditions.  Many of these factors are beyond Earth's control.  
There can be no assurance that adequate funds will be available
when needed and on acceptable terms, or that a strategic
alternative can be arranged.

                        Subsequent Events

On Feb. 20, 2008, WN Truck Stop, LLC., a Texas limited liability
company, a subsidiary of Earth Biofuels, Inc., in which the
company has a fifty percent member interest (with Trucker's
Corner, LP as the other member of the Borrower) entered into a
$4,750,000 secured promissory note with SBL Capital Funding, LLC,
a New Jersey limited liability company.  Pursuant to the terms of
the Note, Lender provided Borrower with a one-year term loan
facility.  The proceeds from the financing provided pursuant to
the Loan will be used to complete the construction of "Willie's
Place at Carl's Corner."  Earth maintains one operating segment
whose business is conducted through a separate legal entity that
is wholly owned by Earth.  This segment is Earth LNG, Inc.  LNG is
managed separately, as this business has a distinct customer base
and requires different strategic and marketing efforts.  The
accounting policies of the segment are the same as those described
in the summary of significant accounting policies.  The segment
company contains liquefied natural gas production, distribution
and marketing operations. The subsidiary revenues are in excess of
10% of consolidated revenues. There are no inter-segment revenues
or expenses.

                            Financials

The company posted a net loss of $122,480,000 on total revenues of
$27, 086,000 for the year ended Dec. 31, 2007, as compared with
net loss of $67,969,000 on total revenues of $39,737,000 in the
prior year.

At Dec. 31, 2007, the company's balance sheet showed $79,845,000
in total assets and $133,989,000 in total liabilities, resulting
in $54,144,000 stockholders' deficit.  

The company's consolidated balance sheet at Dec. 31, 2007, also
showed strained liquidity with $5,236,000 in total current assets
available to pay $133,989,000 in total current liabilities.

A full-text copy of the company's 2007 annual report is available
for free at http://ResearchArchives.com/t/s?2d61


                       About Earth Biofuels

Headquartered in Dallas, Texas, Earth Biofuels Inc. --
http://www.earthbiofuels.com/-- (OTC BB: EBOF) engages in the    
production, distribution, and sale of renewable fuels, with a
focus on biodiesel fuel, in the United States.  The company
produces pure biodiesel fuel (B100) through the utilization of
vegetable oils, such as soy and canola oil as raw material.  The
company distributes petroleum/biodiesel blended fuel, such as B20
through wholesale distributors, truck stops, and fueling stations.  
Earth Biofuels also produces and markets liquefied natural gas.

On July 11, 2007, five creditors with claims of around $33 million
filed an involuntary chapter 7 petition against the company
(Bankr. D. Del. Case. No. 07-10928).  Adam G. Landis, Esq., and
Kerri K. Mumford, Esq., at Landis Rath & Cobb LLP, represent the
petitioners.  A hearing to consider approval of an interim
settlement agreement entered into by the company and its creditors
is set for Dec. 10, 2007.  The agreement provides for the
dismissal of the involuntary chapter 7 petition in exchange for
the Debtor admitting its liability under a $52 million loan.  In
December 2007, the Court dismissed the chapter 7 petition.


EARTH BIOFUELS: Sells LNG Unit to PNG Ventures for $125 Million
---------------------------------------------------------------
Earth Biofuels Inc. executed a binding letter of intent with PNG
Ventures Inc. whereby PNG Ventures has agreed to purchase a 100%
ownership interest in Earth Biofuels' wholly owned subsidiary,
Earth LNG Inc.

The company said that PNG Ventures is to acquire 100% ownership of
Earth LNG and all of its subsidiaries, including ALT LNG and its
production facility located in Topock, Arizona.  Earth Biofuels is
to receive stock ownership in PNG Ventures as consideration for
the transaction.

PNG Ventures and Earth Biofuels have agreed to use best efforts to
close the transaction on or before June 30, 2008, and have agreed
to a break up fee to be paid to PNG Ventures in the event the
transaction does not close.

Earth Biofuels is actively engaged in the transition and the
establishment of the changes in PNG Ventures' management in order
to re-direct its business focus to liquefied natural gas  
production and distribution.

Earth Biofuels CEO, Dennis McLaughlin, stated, "This pending
transaction accomplishes several goals for our company.  First, it
will unlock the value of the LNG business by virtue of its
existence in a new public company dedicated to growing the LNG
operations.  Second, as Earth Biofuels will initially own a
controlling interest in PNG Ventures, we believe that it will
allow our shareholders to participate in the increased valuation
and future growth of the LNG business.  Based on the proposed
structure (which is yet to be finalized), the imputed value of the
transaction would be, in management's estimation,  approximately
$125 million.  Third, it will be part of an overall settlement
with prior Earth Biofuels creditors pursuant to the interim
restructuring agreement described in our SEC report on Form 8-K
filed on November 21 of last year."

"Earth Biofuels will now be able to focus on its business plan of
developing biodiesel production from diverse feedstocks, retail
distribution of alternative fuels through fueling stations and
truck stops such as 'Willie's Place at Carl's Corner', and the
development of cellulosic ethanol production facilities," Mr.
McLaughlin concluded.

                       About Earth Biofuels

Headquartered in Dallas, Texas, Earth Biofuels Inc. --
http://www.earthbiofuels.com/-- (OTC BB: EBOF) engages in the    
production, distribution, and sale of renewable fuels, with a
focus on biodiesel fuel, in the United States.  The company
produces pure biodiesel fuel (B100) through the utilization of
vegetable oils, such as soy and canola oil as raw material.  The
company distributes petroleum/biodiesel blended fuel, such as B20
through wholesale distributors, truck stops, and fueling stations.  
Earth Biofuels also produces and markets liquefied natural gas.

On July 11, 2007, five creditors with claims of around $33 million
filed an involuntary chapter 7 petition against the company
(Bankr. D. Del. Case. No. 07-10928).  Adam G. Landis, Esq., and
Kerri K. Mumford, Esq., at Landis Rath & Cobb LLP, represent the
petitioners.  A hearing to consider approval of an interim
settlement agreement entered into by the company and its creditors
is set for Dec. 10, 2007.  The agreement provides for the
dismissal of the involuntary chapter 7 petition in exchange for
the Debtor admitting its liability under a $52 million loan.  In
December 2007, the Court dismissed the chapter 7 petition.

At Dec. 31, 2007, the company's balance sheet showed $79,845,000
in total assets and $133,989,000 in total liabilities, resulting
in $54,144,000 stockholders' deficit.


EDUCATION RESOURCES: Wants to Abolish JPMorgan Student Loan Pacts
-----------------------------------------------------------------
The Education Resources Institute Inc. seeks authority from the
U.S. Bankruptcy Court for the District of Massachusetts to approve
a stipulation terminating its relationship with JP Morgan Chase
Bank, N.A., successor by merger to Bank One N.A., relating to
several student loan programs.  

The Stipulation provides that:

   (a) those program documents to which Chase and the Debtor are
       parties will be terminated;

   (b) the Debtor will transfer to Chase the full amount of funds
       in the Pledged Account and the automatic stay will be
       lifted to permit Chase to receive and retain these funds;

   (c) Chase will waive any claims and administrative expenses
       based on a Guaranty Event and will waive the Interest
       Claim up to the sum of $20,000;

   (d) the Debtor will waive any existing or future claim to
       guaranty fees;

   (e) Chase and the Debtor do not waive other claims, defenses
       and obligations; and

   (f) Chase and the Debtor will perform certain transitional
       activities.

Gina Lynn Martin, Esq., at Goodwin Procter LLP, in Boston,
Massachusetts, relates that Chase participated in several loan
programs guaranteed by the Debtor.  Beginning in September 2007
and continuing through February 2007, Chase made loans under the
Loan Programs in the aggregate principal amount of $626,000,000.  
Chase has funded additional loans since February 29, 2008, and
the initial disbursements of Pipeline Loans is expected to
continue until August 2008.  

Pursuant to a Deposit and Security Agreement, the Debtor funded a
Pledged Account with a portion of the guaranty fees that it
received upon the funding of loans by Chase.  Chase holds a
security interest in the Pledged Account, perfected by control
pursuant to the Uniform Commercial Code.  The balance of the
Pledged Account as of April 31, 2008, was approximately
$40,200,000.

Chase and the Debtor had agreed to suspend loan funding activities
under the Loan Programs, and the Debtor ceased accepting
applications for Program Loans as of April 23, 2008.  Chase did
fund and will continue to fund Program Loans that were approved
under the Program Documents based on applications received before
April 23, 2008.  Chase wishes to terminate the Loan Programs, and
the Debtor has agreed to the termination in respect of those
Program Documents to which it is a party, subject to certain terms
and conditions.

Pursuant to the Guaranty Agreement, the Debtor has guaranteed the
obligations of the borrowers in respect of the loans made
pursuant to the Loan Programs.  The Pledged Account provides
collateral to secure the performance of the Debtor's guarantee
obligations.  Depending on assumptions about default rates,
Ms. Martin says it is possible either that funds will remain in
the Pledged Account after realization of all of the Program Loans
obligations or that Chase will have a significant unsecured claim
against the Debtor.  However, she says it is virtually certain
that for a period of time, the sums in the Pledged Account will be
insufficient to fund the Debtor's guaranty.

Chase may also assert that loans funded subsequent to the
bankruptcy filing, including the Pipeline Loans, are entitled,
under the Guaranty Agreement, to be treated as if guaranteed by
the Debtor subsequent to the Petition Date so that the Debtor's
liability, if any, in respect of the loans would be an expense of
administration of its Chapter 11 proceeding.  

Ms. Martin says the Debtor would dispute that assertion based on
its right to reject the Program Documents as executory contracts
and based on its transfer to the Pledged Account of 100% of
guaranty fees paid in respect of Pipeline Loans.

Chase asserts that the Debtor owes it, as an administrative
expense, approximately $17,000 in interest on loans to student
borrowers as a consequence of the delay in their receipt of good
funds due to an interruption in the Debtor's cash management
systems caused by the Chapter 11 filing.

Accordingly, Chase and the Debtor have agreed to terminate their
relationship and resolve their controversies.

Ms. Martin says the Stipulation represents a reasonable exercise
of the Debtor's business judgment and the settlement is fair,
equitable and in the best interests of the estate.  She relates
that the Debtor's obligations under the Program Documents
constitute a potential burden to its estate, and in some
circumstances, could give rise to administrative claims.

                          Objections

(1) PNC Bank N.A.,

PNC Bank N.A., tells the Court that it does not object to the
Debtor's request to reject and terminate the Chase Agreements.  
PNC, however, objects to the Debtor remitting any amounts held in
Restricted Accounts prior to an accounting and reconciliation of
all money held in those accounts.

Claudia Z. Springer, Esq., at Reed Smith LLP, in Philadelphia,
Pennsylvania, relates that the amounts held in the Restricted
Accounts were pledged by the Debtor to the Lender Parties,
including PNC, to secure the Debtor's obligations under the
various guaranty agreements.  The amounts contained in those
accounts are subject to the interest of PNC and the other Lender
Parties and, thus, are deemed cash collateral under Section
363(a) of the Bankruptcy Code.

Ms. Springer points out that the Debtor fails to provide any
information as to how it determined which of the funds in the
Restricted Accounts are subject to Chase's interest.  

Accordingly, PNC asks the Court to require the Debtor to perform
an accounting and reconciliation of all money held in Restricted
Accounts prior to any distributions from the Restricted Accounts.

(2) Creditors Committee

The Official Committee of Unsecured Creditors says the gravaman
of the Rejection Motion appears to:

   (i) rescind the Debtor's liability under its guaranty
       agreements on the so-called "Pipeline Loans" without
       affecting the parties' respective rights under existing
       security agreements for loans already funded;

  (ii) terminate the Debtor's obligations to underwrite, and
       the obligations of Citizens' and its affiliates to fund
       new loans; and

(iii) to wind down the Debtor's relationship with Citizens at
       Citizen's cost and with very limited recourse to the
       Debtor or the assets of this estate.

The Committee also points out that the Debtor's rejection of the
various Citizens contracts operates as a breach on the date
immediately before the date of the Petition Date, and that the
TSA between the Debtor and Citizens provides for the retention by
all parties of various rights and obligations.  

The Committee asks the Court to sustain its objection and deny
the Debtor's motion.

            About The Education Resources Institute Inc.

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

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

(TERI Bankruptcy News, Issue No. 7; Bankruptcy Creditors' Service,
Inc., http://bankrupt.com/newsstand/or 215/945-7000)       


EDUCATION RESOURCES: Wants to Get Rasky Baerlein as Public Advisor
-----------------------------------------------------------------
The Education Resources Institute Inc. seeks authority from the
U.S. Bankruptcy Court for the District of Massachusetts to employ
Rasky Baerlein Strategic Communications Inc., as its public
advisor, nunc pro tunc to bankruptcy filing.

Willis J. Hulings III, president and chief executive officer of
The Education Resources Institute Inc., relates that Rasky is
one of the premier firms specializing in public relations and
crisis management support, which specializes in developing and
executing integrated communication programs and has extensive
experience in crisis management.  He says, in the first few weeks
of the Debtor's Chapter 11 case, Rasky has been instrumental in
fielding calls and providing a consistent message to the Debtor's
constituencies.  

As public advisor, Rasky will:

   (a) coordinate and execute a comprehensive media plan
       regarding the Debtor's reorganization;

   (b) review and catalog press coverage of the Debtor's
       restructuring to enable the Debtor to best respond
       to media requests and inaccuracies;

   (c) oversee communications with local and national political
       leaders that have supported the Debtor;

   (d) ensure that the public message surrounding the
       restructuring protects the Debtor's image and reputation;

   (e) create scripts to be given to vendors, employees, borrowers
       and other key constituents regarding the reorganization;

   (f) provide valuable advice regarding all aspects of public
       relations and media relations to the Debtor, its board of
       directors and its principals and advisors; and

   (g) provide other tasks relating to public relations as may be
       necessitated by the filing of the Debtor's Chapter 11
       case.

The Debtor will pay Rasky according to its standard hourly rates:

     Professional               Hourly Rates
     ------------               ------------
     Partner                      $550
     Senior Vice-President        $250
     Vice President               $200
     Senior Account Executive     $150
     Account Coordinator          $100

The Debtor will also pay Rasky a 3% flat fee for expenses like
phone calls, non-bulk mail, and photocopying charges, and other
reasonable expenses.  The Debtor will pay additional, allocable,
expenses that are not included in the Expense Fee.

Pursuant to an engagement agreement, dated April 3, 2008, the
Debtor agree to indemnify Rasky and certain related persons under
certain circumstances, other than claims resulting from the gross
negligence or willful misconduct of Rasky.  The Debtor believes
that the fee arrangement is reasonable in light of industry
practice, market rates both in and out of Chapter 11 proceedings,
Rasky's experience in public relations and crisis management, and
the scope of work to be performed pursuant to its retention.

Lawrence Rasky, chairman of Rasky Baerlein Strategic
Communications Inc., assures the Court that his firm is a
"disinterested person" within the meaning of Section 101(4) of
the Bankruptcy Code, holds no interest adverse to the Debtor and
its estate, and has no connection to the Debtor, its creditors or
other parties-in-interest.

Mr. Rasky, discloses that the Debtor provided Rasky with a
$50,000 retainer on April 3, 2008, which retainer will applied
against the firm's fees and expenses.  The Debtor and Rasky have
agreed that any portion of the Retainer not used to compensate
Rasky for its fees and expenses will be held and
applied to its final bill for professional fees and expenses with
any excess amounts refunded to the Debtor.  Rasky will not place
the retainer on a separate account.

                            Objections

(1) U.S. Trustee

The U.S. Trustee objects to the Debtor's motion to employ Rasky
Baerlein as its public relations advisor because the employment
application:

   (a) suggests, absent supplemental disclosure, that Rasky is
       not disinterested;

   (b) seeks authority to employ Rasky nunc pro tunc to the
       bankruptcy filing but fails to demonstrate the
       extraordinary circumstances necessary for the Court to
       approve post facto retention; and
   
   (c) seeks authority to reimburse Rasky for expenses as a
       percentage of its fees for services, rather than for the
       firm's actual expenses

Accordingly, the U.S. Trustee asks the Court to deny the Debtor's
application.

2. Creditors Committee

The Official Committee of Unsecured Creditors asserts the
Debtor's application does not provide sufficient information to
allow the Committee, the Debtor's creditors, or the Court to
determine whether the employment of Rasky is reasonably necessary
during the administration of the Debtor's Chapter 11 case.

The Committee's proposed counsel, Jeffrey D. Sternklar, Esq., at
the Duane Morris LLP in Boston, Massachusetts, notes that the
Application does not explain why the Debtor requires the services
of a sophisticated public relations consultant or why it is in
the best interests of creditors and the estate for the Debtor to
employ Rasky.

The Committee objects to the broad indemnification contained in
the proposed Rasky engagement agreement.  Mr. Sternklar points
out that the Debtor does not explain why it is in the best
interests of its creditors that the Debtor incur a potentially
significant liability.  The potentially significant costs and
liabilities the Debtor seeks to incur for Rasky's services are
particularly troubling in light of the Debtor's operations.  

The Committee asks the Court to sustain its objection and deny
the Debtor's Application.

            About The Education Resources Institute Inc.

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

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

(TERI Bankruptcy News, Issue No. 7; Bankruptcy Creditors' Service,
Inc., http://bankrupt.com/newsstand/or 215/945-7000)     


FREESCALE SEMICONDUCTOR: Board OKs Executive Employment Agreement
-----------------------------------------------------------------
The Compensation and Leadership Committee of the Board of
Directors of the Freescale Semiconductor Inc. authorized and
approved a form of Employment Agreement to be entered into with
certain senior executives, including certain named executive
officers.  The Form Employment Agreement provides for the annual
base salary and initial target bonus for the executive on the date
the Employment Agreement is executed.

The Form Employment Agreement also provides that the executive
will be eligible to participate in any long-term incentive plans
or programs and welfare and other benefit plans established by the
Company for its senior officers generally.

The executive is also entitled to severance upon a qualifying
termination of employment. The severance prior to a change in
control is equal to the executive˙s pro-rated bonus plus two times
the executive˙s annual base salary if the executive is terminated
on or prior to Dec. 31, 2009; and one and a half times the
executive˙s annual base salary if the executive is terminated on
or after Jan. 1, 2010.  Upon a qualifying termination in
connection with a change in control, the executive is entitled to
severance equal to the executive's pro-rated bonus plus two times
the executive˙s annual base salary and target bonus.

In addition, the company will provide a gross-up payment to the
executive under certain circumstances with respect to excise taxes
resulting from parachute payments received by the executive upon a
qualifying termination following a change in control.

The Form Employment Agreement also includes a release of claims
and non-competition and non-solicitation covenants by the
executive for a two-year period following termination of
employment with the company.

A full-text copy of the Form Employment Agreement is available for
free at http://ResearchArchives.com/t/s?2dc8

Headquartered in Austin, Texas, Freescale Semiconductor Inc.
(NYSE:FSL) -- http://www.freescale.com/-- designs and     
manufactures embedded semiconductors for the automotive, consumer,
industrial, networking and wireless markets.  It offers families
of embedded processors that include microcontrollers, digital
signal and communications processors.  It also offers a portfolio
of complementary devices that facilitate connectivity between
products, across networks and to real-world signals, such as
sound, vibration and pressure.  Its complementary products include
sensors, radio frequency semiconductors, power management and
other analog and mixed-signal integrated circuits.  It has three
business groups: transportation and standard products group,
networking and computing systems group, and wireless and mobile
solutions group.  In December 2006, the company completed its
merger with an entity controlled by a consortium of private equity
funds led by The Blackstone Group, including The Carlyle Group,
funds advised by Permira Advisers LLC and Texas Pacific Group.

                           *     *     *

As reported in the Troubled Company Reporter on Feb. 15, 2008,
Fitch Ratings revised the rating outlook on Freescale
Semiconductor Inc. to negative from stable and affirmed these
ratings: (i) issuer default rating at 'B+'; (ii) senior secured
bank revolving credit facility at 'BB+/RR1'; (iii) senior secured
term loan at 'BB+/RR1'; (iv) senior unsecured notes at 'B/RR5';
and (v) senior subordinated notes at 'CCC+/RR6'.


GAINESVILLE HOUSING: Moody's Cuts $2,765,000 Bond Rating to Ba3
---------------------------------------------------------------
Moody's Investors Service has downgraded the rating on $2,765,000
of outstanding Gainesville (TX) Housing Authority Multifamily
Mortgage Revenue Refunding Bonds, Series 1992A to Ba3 from Ba2.   
The outlook remains negative.  The downgrade is based on low debt
service coverage levels, resulting from increasing property
expenses and a lack of rental rate increases.

The bonds are supported by an apartment pool consisting of 196
units located among Pecan Creek Village, Turner Apartments,
Washington Court and Walnut Lane apartments.  The properties are
located in the City of Gainesville in Cook County, Texas.  Rental
income from each of the properties is pledged to Series 1992A
bondholders for the life of the HAP Contract; after the HAP
Contract expires, bondholders no longer have a lien on rental
income.  The HAP Contract for Pecan Creek Village expires in 2009,
the HAP Contract for Turner Apartments expires in 2011, and the
HAP Contract for Washington Court and Walnut Lane expires in 2020.   
Rental rate increases at the properties are limited by the annual
adjustment factor and subject to approval by HUD.

Strengths

  * Fully funded debt service reserve fund

  * Well-funded trustee-held funds, including a Replacement
    Reserve Fund and a Contingency Reserve Fund.  The Contingency
    Reserve is available to provide funds for the optional
    redemption of the bonds after certain conditions are met,
    including rating agency approval.  The Trustee is directed to
    draw upon the Contingency Reserve before tapping the Debt
    Service Reserve Fund.  The Contingency Reserve is
    approximately the size of the Debt Service Reserve Fund.

  * 97% occupancy rate among each property as of March, 2008

  * Rental rates are below Fair Market Rent, making future
    increases in rental rates possible.

  * High REAC score at Washington Court and Walnut Lane (91c)

Challenges

  * Debt service coverage levels have declined. Audited financial
    statements show debt service coverage levels have declined     
    from 0.87x (FY2004) to 0.76x (FY2006) to 0.58x (FY2007).  The
    FY2007 debt service coverage level is in line with other
    Moody's-rated Section 8 properties at this rating level.

  * Increased property expenses. Property expenses have increased
    by 33% over the past three fiscal years.  Even as management
    has taken steps to reduce controllable expenses, non-
    controllable operating expenses have continued to increase.

  * Low REAC scores at Pecan Creek Village (60b) and Turner
    Apartments (61c) indicate maintenance - related expenses may
    rise at these properties.

Outlook

The outlook on the bonds remains negative.  The HAP Contract for
Pecan Creek Village expires in 2009, and the impact on debt
service coverage levels is uncertain.  Pecan Creek currently
accounts for 35% of potential rental income, whereas the debt
service requirement will decline by 27% after the HAP Contract
expires.  The negative outlook reflects this uncertainty, as well
as the downward trend in debt service coverage levels.

Current Occupancy: 97%

Bond Maturity: 12/1/2020

HAP Expiration: Pecan Creek Village (12/1/2009); Turner Apartments
(12/1/2011); Washington Court/Walnut Lane (12/1/2020)

Debt Service Coverage (FY2007): 0.58x

Average Rent as % of FMR: 85%


GENERAL MOTORS: New Appointments Build GM Brand Channel Alignment
-----------------------------------------------------------------
General Motors Corp. disclosed personnel moves in support of its
four retail channels: Chevrolet; Premium (Cadillac, Hummer, Saab);
Buick-Pontiac-GMC; and Saturn.  The moves streamline the
organization by combining or eliminating job functions.  This will
help the brands better deliver world-class products to customers,
and build value for GM and its dealers.

These appointments are effective July 1, 2008; however, these
individuals will begin to transition into their new roles
immediately.

Reporting to Ed Peper, North America vice president, Chevrolet
Channel will be:

   * Kim Kosak, general director, advertising and promotions.  
     This is essentially a continuation of Kosak's current
     responsibilities.

   * Rick Scheidt, executive director, product marketing.  Mr.
     Scheidt was previously executive director, Chevrolet product
     development.

   * Kurt McNeil, general sales manager.  Mr. McNeil was
     previously regional general manager - South Central Region.

Reporting to Mark McNabb, North American vice president, Premium
Channel will be:

   * Steve Hill, general sales manager.  Mr. Hill was previously
regional general manager - North Central Region.

   * Steve Shannon, Jim Taylor, and Martin Walsh will continue to
     report to Mr. McNabb as general managers of Saab, Cadillac
     and Hummer respectively.

Reporting to Susan Docherty, North America vice president, BPG
Channel will be:

   * Cheryl Catton, general director, advertising and promotions.  
     Ms. Catton was previously general director, Chevrolet car
     marketing.

   * Russ Clark, executive director, product marketing.  Mr. Clark
     was previously executive director, BPG product development.

   * Brian Sweeney, general sales manager.  Mr. Sweeney was
     previously general director, BPG retail development.

Reporting to Jill Lajdziak, Saturn General Manager will be:

   * Sterling Wesley, general sales manager.  Mr. Wesley was
     previously executive director, Motors Holding Division.

   * Dan Keller, director of advertising and promotions.  Mr.
     Keller was previously director of marketing, Saturn.

   * Stuart Pierce, director of product marketing.  Mr. Pierce was
     previously director of brand and product development, Saturn.

"This is a natural follow-up to our recent announcement to more
strongly align marketing and field operations into four retail
channels," Mark LaNeve, GM North American vice president, said.  
"These new assignments will help each channel meet targeted
customer needs, align closely with our dealer partners, and make
each of our brands stronger with more focused models."

                            About GM

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

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

                          *     *     *

As related in the Troubled Company Reporter on June 5, 2008,
Standard & Poor's Ratings Services said that its ratings on
General Motors Corp. (B/Negative/B-3) are not immediately affected
by the company's announcement that it will cease production at
four North American truck plants over the next two years.  These
closures are in response to the re-energized shift in consumer
demand away from light trucks.  GM previously said only one shift
was being eliminated at each of the four truck plants.  Production
is being increased at plants producing small and midsize cars, but
the cash contribution margin from these smaller vehicles is far
less than that of light trucks.


GOODY'S FAMILY: Gets Initial OK to Obtain $210 Mil. DIP Facility
----------------------------------------------------------------
The United States Bankruptcy Court for the District of Delaware
authorized Goody's Family Clothing Inc. and its debtor-affiliates
to obtain, on an interim basis, in the aggregate amount up to
$210,000,000 in debtor-in-possession financing from several
financial institutions, Bloomberg News reports.

A hearing is set for July 15, 2008, to consider final approval of
the Debtors' DIP request, Bloomberg relates.

According to papers filed with the Court, the lenders comprised
of; (i) General Electric Capital Corporation and Bank of America
N.A., (ii) 1903 Onshore SPV LLC and GB Merchant Partners LLC, and
(iii) PGDYS Lending LLC.

The committed $210,000,000 DIP financing is comprised of:

   a) a $175,000,000 senior revolving credit facility including
      (i) a $75,000,000 letter of credit sub-limit and (ii) a $20
      million swingline loan sub-limit from General Electric and
      BoA,

   b) a $15,000,000 Term Loan B Credit Facility from 1903 onshore,
      and

   c) a $20 million DIP Tranche C Facility from PDGYS Lending
      consist of (i) $15 million term loan, and (ii) a $5 million
      revolving credit overadvance facility.

The proceeds of the loans will be used to provide working capital
and general corporate demands and refinance prepetiton debt
obligations.

The DIP facility is subject to a $1,500,000 carve-out for payment
of expenses incurred by professional advisors retained by the
Debtors.

The Debtors will pay a host of fees including a $600,000 non-
refundable closing fee in the aggregate.

To secure their DIP obligations, the lender will be granted a
superpriority administrative expense claim status over any and
all administrative expense claims against the Debtors' estate.  
Furthermore, the DIP liens will be secured by substantially all
assets of the Debtors and junior the carve-out.

The DIP agreement contain appropriate and customary events of
default.  Specifically, failure to comply these requirements
constitute an event of default, among them:

   i) failure to file a Chapter 11 plan and disclosure statement
      by Oct. 10, 2008, and obtain court approval of a disclosure
      statement by Nov. 25, 2008, and

  ii) failure to obtain confirmation of a plan by Jan. 12, 2008,
      and become effective by Feb. 10, 2009.

The Debtors also asked the Court to use the lenders' cash
collateral for payments to operating expenses.

Before they filed for bankruptcy, the Debtors entered into a
senior secured credit agreement that provided for:

   i) a $210,000,000 revolving credit facility and a $15,000 Term
      A Loan from several lenders led by The CIT Group/Business
      Credit Inc. and

  ii) a $10,000,000 Term B Loan from 1903 Onshore.

In addition, the Debtor reached another credit agreement that
provided a $40,000,000 loan and subsequent loan of $15,000,000
from GMM Capital LLC and PGDYS Lending.

At present, GMM Capital owns 15% of the equity interests in
Goody's Holdings Inc., a non-debtor entity.

As of the Debtors' bankruptcy filing, about $139,000,000 in loans
in the aggregate remain outstanding under the agreements.

On Jan. 16. 2008, PGDYS Lending provided an additional $65,000,000  
financing under the term loan agreement.  Approximately
$67,000,000 in loans remain outstanding as of June 9, 2008.

A full-text copy of the debtor-in-possession motion is available
for free at http://ResearchArchives.com/t/s?2dce

                       About Goody's Family

Headquartered in Knoxville, Tennessee, Goody's Family Clothing
Inc. -- http://www.shopgoodys.com/-- operates chains of clothing  
stores.  The company is owned by Goody's Holdings Inc., a non-
debtor entity.  As of May 31, 2008, the company operates 355
stores in several states with approximately 9,868 personnel of
which 170 employees are covered under a collective bargaining
agreement.

The company and 19 of its affiliates filed for Chapter 11
protection on June 9, 2008 (Bankr. D. Del. Lead Case No.08-11133).  
Gregg M. Galardi, Esq., and Marion M. Quirk, Esq., at Skadden Arps
Slate Meagher & Flom LLP, represent the Debtors.  When the Debtors  
filed for protection against their creditors, they listed assets
and debts between $100 million and $500 million.

As of May 3, 2008, the Debtors' records reflected total assets of
$313,000,000 -- book value -- and total debts of $443,000,000.


H&H TRANSPORTATION: Voluntary Chapter 11 Case Summary
-----------------------------------------------------
Debtor: H&H Transportation Inc.
        645 Gerdau Ameristeel Road
        Jackson, TN 38305

Bankruptcy Case No.: 08-12051

Description: Jeff Harbin, president, filed the petition on the
             Debtor's behalf.

Chapter 11 Petition Date: June 10, 2008

Court: Western District of Tennessee (Jackson)

Judge: G. Harvey Boswell

Debtor's Counsel: Timothy B. Latimer, Esq.
                  (ul@utleylatimer.com)
                  425 E. Baltimore
                  Jackson, TN 38301
                  Tel: (731) 424-3315

Total Assets: $1,814,100

Total Debts:  $1,298,077

A copy of the Debtor's petition with a list of unsecured creditors
is available for free at http://bankrupt.com/misc/tnwb08-12051.pdf


HANOVER INSURANCE: S&P Lifts B+ Ratings to BB- on Three Classes
---------------------------------------------------------------
Standard & Poor's Ratings Services raised its ratings on two
synthetic asset-backed securities transactions related to The
Hanover Insurance Group Inc. (formerly Allmerica Financial Corp.).
     
The rating actions reflect the May 30, 2008, raising of the rating
on the underlying securities, the preferred stock issued by AFC
Capital Trust I (a wholly owned subsidiary of The Hanover
Insurance Group Inc.).
     
Both deals are pass-through transactions, and the ratings on the
deals are based solely on the rating assigned to the underlying
collateral, the preferred stock issued by AFC Capital Trust I.
     

                         Ratings Raised

                 PreferredPLUS Trust Series ALL-1
            $48 million trust certificates series ALL-1

                                 Rating
                                 ------
                      Class    To     From
                      -----    --     ----
                      A        BB-    B+
                      B        BB-    B+

                CorTS Trust For AFC Capital Trust I
  $36 million Allmerica Corporate-backed trust securities
(CorTS)                      
                   certificates series 2001-19

                                  Rating
                                  ------
                       Class    To     From
                       -----    --     ----
                       A        BB-    B+


HELIOS FINANCE: Weaker Performance Cues Fitch's Negative Watch
--------------------------------------------------------------
Fitch Ratings has placed these classes of notes of the HELIOS
Finance Limited Partnership 2007-S1 (2007-S1) on Rating Watch
Negative:

  -- Class B-3 'B';
  -- Class B-4 'B-'.

Fitch has also affirmed these classes:

  -- Class A-1 at 'AAA';
  -- Class A-2 at 'AA';
  -- Class A-3 at 'A';
  -- Class B-1 at 'BBB';
  -- Class B-2 at 'BB'.

All classes of notes are still outstanding.  The rating actions
reflect the weaker than expected performance of the 2007-S1
transaction above Fitch's original base case expectations for both
delinquencies and cumulative net losses.  The transaction was
placed 'Under Analysis' by Fitch in early May for review according
to Fitch's surveillance-screener logic, SMARTView.

Through month 13 (the April collection period), total
delinquencies stood at 3.36% and CNL were at 2.31%.  Fitch has
noted that the performance in both delinquency and CNL have
exhibited weaker trends in recent months.  Furthermore, a CNL
performance-based trigger was breached earlier in the year
preventing the transaction's payment waterfall from switching from
a sequential payment structure to a pro-rata payment structure.  
Had the trigger not been breached, the switch would have occurred
only after month 12, which at the time had not occurred.  Despite
current performance, credit enhancement continues to build in the
transaction for certain classes of notes.

Fitch's analysis of the transaction incorporated stresses of the
revised base case CNL assumptions, the timing of the remaining
losses and various prepayment assumptions.  Even though current
loss performance is worse than originally expected, the stressed
coverage of expected loss for the classes A-1, A-2, A-3, B-1, B-2
and B-3 is within the recommended loss coverage range for their
current rating categories of 'AAA' for the class A-1; 'AA' for the
class A-2 notes; 'A' for the class A-3 notes; 'BBB' for the class
B-1 notes and 'BB' for the class B-2 notes.  While the stressed
coverage of expected losses for the class B-3 and B-4 notes has
weakened, it is currently within the recommended loss coverage
range.  However, the continued negative trends in both delinquency
and CNL may negatively impact the ratings of these classes of
notes.

Wachovia Bank, N.A., the master servicer of 2007-S1, indicated
that the reasons for the weaker-than-expected performance of 2007-
S1 are due to several factors including weaker macro-economic
conditions along with escalating losses in certain geographical
areas, and recent softness in the wholesale vehicle market,
particularly in the truck and SUV segments contributing to higher
loss severity.

Fitch will continue to closely monitor the performance of this
transaction over the next three to six months, and expects to take
rating action within that time period to resolve the Rating Watch
Negative status.


HOLYOKE MEDICAL: Moody's Holds Ba1 Rating; Changes Outlook to Neg.
------------------------------------------------------------------
Moody's Investors Service has affirmed the Ba1 rating assigned to
Holyoke Medical Center's bonds.  The bonds are issued by the
Massachusetts Health and Educational Facilities Authority.  The
outlook has been revised to negative from stable and is
attributable to a decline in financial performance through five
months fiscal year 2008 and uncertainty regarding the financial
impact of Massachusetts healthcare reform on the hospital's
financial performance.

Legal Security: The bonds are secured by a revenue pledge.  There
is no mortgage.

Interest Rate Derivatives: None

Strengths

  * Success recruiting additional surgeons to replace retired
    surgeon

  * Sustained success at reducing days in accounts receivable over
    the past several years, which has contributed to increase in
    cash

  * Maintenance of higher cash balance in the last two years after
    several years of lower liquidity; through five months FY 2008,
    Holyoke reports 94% cash-to-debt and 45 days cash on hand,
    which compares favorably to FYE 2005 when the hospital had
    only 60% cash-to-debt and 45 days cash on hand (financial
    numbers reflect the consolidated reporting entity, Valley
    Health Systems, Inc. and Affiliates)

Challenges

  * Deterioration of financial performance through five months FY
    2008 resulting in very low operating cash flow and weakened
    leverage measures

  * High reliance on supplemental government funds.  The amount
    and process for receiving the funds has been impacted by
    healthcare reform in Massachusetts and the net effect on
    Holyoke, while difficult to determine at this point, is likely
    negative.

  * Weak demographics in service area; government payers account
    for high 66% of gross revenues (this percentage is
    approximately 70% after including veterans, Tri-care and other
    government payers)

  * Underinvestment in physical plant resulting in high 15 year
    average age of plant

  * Uncertainty surrounding recent entry of recovery audit
    contractors on the hospital's Medicare reimbursement

Recent Developments/Results

Financial performance at Holyoke declined in FY 2007 as the
hospital suffered a decline in volumes due to physician
departures, including the loss of a surgeon in the emergency
department.  Although inpatient admissions only declined 0.8%,
surgeries declined 5.4%, continuing a multi-year trend of
declining surgical volumes.  Management reports success in
recruiting several replacement surgeons, although the new surgeons
only started in January 2008 and it remains too early to tell how
volumes will increase due to their arrival.

The volume decline in FY 2007 operating performance resulted in a
$0.9 million decline in operating cash flow to $5.7 million
(4.3% operating cash flow margin) from a stronger $6.6 million
(5.4% operating cash flow margin) in FY 2006.  Leverage measures
at FYE 2007 were adequate, owing largely to the relatively small
amount of debt outstanding; debt-to-cash flow was a manageable 3.3
times and maximum annual debt service coverage moderate at 1.8
times.

Interim results through five months FY 2008 reflect the hospital's
heavy reliance on supplemental government funding and the
uncertain impact of healthcare reform in Massachusetts.  Holyoke
relies on government payers for a high 66% of gross revenues of
which Medicaid accounts for a very high 21%.  Over the past three
years, Holyoke has received increasing amounts of various
government payments including Uncompensated Care Pool funds and
Distressed Provider and Essential Community Provider Trust funds
(Essential Community Provider funds replaced the Distressed
Provider funds in FY 2007).

UCC funds rose to $3.9 million in FY 2007 from $3.0 million in
both FY 2005 and 2006 and the Essential Community Provider funds
totaled $3.3 million in FY 2007, up from $2.5 million in FY 2005.    
In FY 2008, payments from both of these sources will be
significantly reduced.  Holyoke's share of the Essential Community
Provider funds will decrease by $1 million and changes to the UCC
reimbursement methodology are expected to lower payments by up to
50%.

The shortfall from UCC funds is expected to be made up by
increased enrollment in new insurance products introduced under
the rubric of Commonwealth Care, but actual reimbursement will be
subject to the number and timing of enrollees.  This has been
coupled with a significant boost in Medicaid inpatient rates,
although Medicaid reimbursement is still below cost and many
providers continue to report a financial loss from serving
Medicaid patients.  The net effect of changes to supplemental
funds programs and payment methodologies will be difficult to
asses until the end of the fiscal year, but under current rules,
Holyoke expects to receive significantly less money in FY 2008
than in FY 2007.

As a result, through five months of FY 2008, operating cash flow
is down significantly to $0.5 million from $3.0 million a year
ago.  At the current rate, Holyoke may violate its rate covenant
of 1.1 times coverage.  MADS coverage is currently 0.77 times.  If
the rate covenant is violated, Holyoke must employ a consultant.

Holyoke operates an acute care hospital in Holyoke, Massachusetts.   
Located in western Massachusetts, Holyoke operates in an
economically depressed part of the state with wealth levels below
state averages.  The hospital faces significant competition from
Baystate Medical Center (A1/Stable) and Mercy Medical Center
(owned by Catholic Health East, rated A1/Stable), both located
approximately fifteen miles south in Springfield.
Outlook

The negative outlook reflects Holyoke's high reliance on
supplemental funds and government payers and the uncertain nature
regarding the level and timing of reimbursement tied to
Massachusetts healthcare reform.  Moody's believe the hospital's
cash flow is more variable today than in the past due to changes
and uncertainties in healthcare reimbursement methodologies and
funding in Massachusetts.

What could change the rating--UP

Clarity regarding the timing and size of supplemental funds and an
increase in those funds; material strengthening of operating
profitability and liquidity measures; strengthening of leverage
measures including MADS coverage; increase in volumes and hospital
utilization

What could change the rating--DOWN

Absence of financial improvement during second half of FY 2008;
additional reductions in supplemental funds or negative changes to
government sponsored reimbursement funds; additional debt

Key Indicators

Assumptions & Adjustments:

  -- Based on financial statements for Valley Health Systems, Inc.
     and Affiliates

  -- First number reflects audit year ended September 30, 2006
  -- Second number reflects audit year ended September 30, 2007
  -- Investment returns normalized at 6% unless otherwise noted

  * Inpatient admissions: 7,161; 7,103
  * Total operating revenues: $122.3 million; $130.7 million
  * Moody's-adjusted net revenue available for debt service:
    $8.8 million; $6.9 million

  * Total debt outstanding: $21.8 million; $18.7 million
  * Maximum annual debt service (MADS): $3.8 million; $3.8 million
  * MADS Coverage with reported investment income: 2.0 times; 1.7
    times

  * Moody's-adjusted MADS Coverage with normalized investment
    income: 2.3 times; 1.8 times

  * Debt-to-cash flow: 2.9 times; 3.3 times
  * Days cash on hand: 57 days; 54 days
  * Cash-to-debt: 83%; 100%
  * Operating margin: 0.1%; (0.7%)
  * Operating cash flow margin: 5.4%; 4.3%

Rated Debt (Debt outstanding as of September 30, 2007)

  -- Series 1993B; fixed rate; $10.4 million outstanding; rated
     Ba1


HORIZON TRAVEL: Files for Creditor Protection, To Close Stores
--------------------------------------------------------------
Convenience store chain Horizon Travel Plazas LLC has filed a
petition for Chapter 11 protection with the U.S. Bankruptcy Court
for the Middle District of Tennessee, reports say.

Wendy Lee of The Tennessean reports that the bankruptcy of the
company was due to soaring gas prices and rising credit card
transaction fees.

According to CSNews Online (N.Y.), the Franklin-based company
closed two of its Jackson-based stores, as well as other locations
across the Southeast last week.   The Tennessean reports that
Horizon Travel Plazas plans to shut down 11 stores and keep 14
locations open in four Southeastern states, including some stores
in Tennessee, in order to pay creditors, said the company's
attorney, Elliott Warner Jones.

The company owes Coca-Cola Enterprises Inc., in Florida $230,080
and wholesale distributor H.T. Hackney Co. in Lenoir City, Tenn.,
$731,006, Ms. Lee reports ciging bankruptcy records.

Horizon Travel Plazas was founded in 2003 by James Alligood,
former Mapco president and CEO, and Steve Ramer. It also does
business as Horizon Stores, Horizon Travel Plazas, Ms. Horizon's
assets are valued at $5 million to $10 million and the company has
about $5 million to $7 million in liabilities, the company's
attorney said, according to the report by Ms. Lee.  The chain also
operates in Mississippi, Alabama and Arkansas.


HOVNANIAN ENT: Posts $340.7MM Net Loss in 2nd Qtr. Ended April 30
-----------------------------------------------------------------
Hovnanian Enterprises Inc. reported a net loss of $340.7 million
for the second quarter ended April 30, 2008, compared with a net
loss of $30.7 million in the second quarter of fiscal 2007.  For
the six month period, the company reported a net loss of
$471.7 million, compared to an $88.0 million net loss in the same
period a year ago.

Total revenues were $776.4 million for the second quarter of
fiscal 2008 compared with total revenues of $1.1 billion in the
same quarter a year ago.  For the first half of fiscal 2008, total
revenues were $1.9 billion compared to $2.3 billion for the same
period last year.

Excluding unconsolidated joint ventures, the company delivered
2,494 homes in the second quarter of fiscal 2008, a decrease of
21% from 3,150 home deliveries in the fiscal 2007 second quarter.
For the first six months of fiscal 2008, the company delivered
6,098 homes, excluding unconsolidated joint ventures, a 5% decline
from 6,416 home deliveries in the first half of last year.

The number of net contracts for the second quarter of fiscal 2008,
excluding unconsolidated joint ventures, declined 29% to 2,226
homes compared with last year's second quarter.  For the first
half of fiscal 2008, the number of net contracts, excluding
unconsolidated joint ventures, decreased 34% to 3,737 homes
compared with the same period in the prior year.

The company's contract cancellation rate, excluding unconsolidated
joint ventures, for the second quarter of fiscal 2008 was 29%,
compared with the rate of 38% reported for the first quarter of
fiscal 2008 and 32% in the second quarter of fiscal 2007.

During the second quarter of fiscal 2008, the company incurred a
total of $251.0 million of pre-tax land-related charges including
land impairments of $226.4 million and write-offs of
predevelopment costs and land deposits of $19.5 million, as well
as $5.1 million representing its equity portion of write-offs and
impairment charges in unconsolidated joint ventures.

Excluding land-related charges, the company reported a pre-tax
loss of $92.4 million and $167.1 million, respectively, for the
three month and six month periods ended April 30, 2008.  Including
all land-related charges, the company reported a pre-tax loss of
$343.4 million for the second quarter of fiscal 2008 and
$512.2 million for the first six months of fiscal 2008.

The company recorded a $120.6 million FAS 109 deferred tax
valuation allowance charge during the second quarter and a
$141.8 million charge year to date.

                Balance Sheet as of April 30, 2008

The company generated $56.1 million of positive cash flow during
the second quarter of fiscal 2008.  At April 30, 2008, the company
had $119.9 million of homebuilding cash and the balance on the
company's revolving credit facility was $325.0 million.

Hovnanian's total land position decreased by 6,646 lots compared
to Jan. 31, 2008, reflecting owned and optioned position decreases
of 2,108 lots and 4,538 lots, respectively.  As of April 30, 2008,
the company had 27,191 lots controlled under option contracts and
owned 25,264 lots.  The total land position of 52,455 lots
represents a 57% decline from the peak total land position at
April 30, 2006.

The company realized a 19% decline in started unsold homes and
models, from 2,321 at Jan. 31, 2008, to 1,885 at April 30, 2008.
Excluding model homes, the company had 1,503 started unsold homes
as of the end of the second quarter of fiscal 2008.

                     Other Key Operating Data

Homebuilding gross margin, before interest expense included in
cost of sales, was 6.8% in the 2008 second quarter, compared with
16.3% in the second quarter of 2007 and 6.7% in the first quarter
of 2008.

Pretax income from Financial Services in the second quarter of
fiscal 2008 was $4.1 million and $7.2 million for the first six
months of fiscal 2008.

The company had 379 active selling communities on April 30, 2008,
excluding unconsolidated joint ventures, a decline of 25 active
communities, or 6%, from Jan. 31, 2008.  The company had 437
active selling communities on April 30, 2007, excluding
unconsolidated joint ventures.

During the second quarter of fiscal 2008, the company delivered
196 homes through unconsolidated joint ventures, compared with 275
homes in last year's second quarter.

The company delivered 351 homes through unconsolidated joint
ventures during the first half of 2008 compared with 564 homes
during the same period in 2007.

Contract backlog, as of April 30, 2008, excluding unconsolidated
joint ventures, was 3,577 homes with a sales value of
$1.2 billion, a decrease of 54% from the same period a year ago.
Excluding backlog from the company's Fort Myers-Cape Coral
operations in both periods, backlog decreased 41%.

         Recent Capital Markets Activity During May 2008

During May 2008, subsequent to the end of the second fiscal
quarter, the company completed the following transactions:

  -- Raised $126 million from issuing 14.0 million shares of Class
     A Common Stock offering at $9.50 per share; and

  -- Issued $600 million aggregate principal amount of 11 ½%
     Senior Secured Notes due May 1, 2013.

Net proceeds from these offerings of approximately $705 million
were used to pay off outstandings under the corporate credit
facility and the excess will be used for general corporate
purposes.  After giving effect to these transactions, the company
would have had approximately $500 million in homebuilding cash and
no borrowings on its revolving credit agreement as of April 30,
2008.

In addition, during May 2008, the company amended its revolving
credit agreement to substantially eliminate financial maintenance
covenants and reduced total commitments to $300 million from
$900 million, leaving the facility in place largely for the
issuance of letters of credit, which at April 30, 2008, were
$219.3 million.  The maturity of the credit facility remains
unchanged at May 2011.

                     Comments from Management

"Despite a persistently challenging market environment, we
successfully achieved positive cash flow one quarter earlier than
we originally expected at the outset of the year," commented Ara
K. Hovnanian, president and chief executive officer of the
company.  

"Through diligent focus and effort, we reduced our prospective
land-purchase and land-development expenditures, which gave us the
confidence to project homebuilding cash in excess of $800 million
dollars at Oct. 31, 2008.  Through the combination of our recent
capital market activity and increased cash flow expectations, we
now believe that we have ample liquidity to weather the current
downturn.  In each of the downturns we have been through during
the past 49 years, we emerged as a better and stronger company.  
We expect to persevere through the current downturn and we will be
in position to thrive again once the housing markets begin to
recover," concluded Mr. Hovnanian.

At April 30, 2008, the company's consolidated balance sheet showed
$4.0 billion in total assets, $3.1 billion in total liabilities,
$38.6 million in minority interest from inventory not owned,
$1.4 million in minority interest from consolidated joint
ventures, and $850.2 million in total stockholders' equity.

Full-text copies of the company's consolidated financial
statements for the quarter ended April 30, 2008, are available for
free at http://researcharchives.com/t/s?2dde  

                   About Hovnanian Enterprises

Hovnanian Enterprises Inc. (NYSE: HOV) -- http://www.khov.com/--  
founded in 1959 by Kevork S. Hovnanian, chairman, is headquartered
in Red Bank, New Jersey.  The company is one of the nation's
largest homebuilders with operations in Arizona, California,
Delaware, Florida, Georgia, Illinois, Kentucky, Maryland,
Michigan, Minnesota, New Jersey, New York, North Carolina, Ohio,
Pennsylvania, South Carolina, Texas, Virginia and West Virginia.

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

                          *     *     *

As reported in the Troubled Company Reporter on June 12, 2008, Jun
Fitch Ratings affirmed Hovnanian Enterprises Inc.'s 'B-' Issuer
Default, 'CCC/RR6' Senior subordinated notes, and 'CCC-/RR6'
Series A perpetual preferred stock ratings.  HOV's Rating Outlook
remains Negative.


HI-LINE CONSTRUCTION: Case Summary & Seven Unsec. Creditors
-----------------------------------------------------------
Debtor: Hi-Line Construction, Inc.
        1200 Nevada St., Ste. 202
        Redlands, CA 92374

Bankruptcy Case No.: 08-16753

Type of Business: The Debtor provides construction services.

Chapter 11 Petition Date: June 6, 2008

Court: Central District Of California (Riverside)

Judge: Peter Carroll

Debtor's Counsel: Stephen R. Wade, Esq.
                  Email: dp@srwadelaw.com
                  400 N. Mountain Ave. Ste. 214B
                  Upland, CA 91786
                  Tel: (909) 985-6500
                  Fax: (909) 985-2865
                  http://srwadelaw.com/

Estimated Assets:        Less than $50,000

Estimated Debts: $1 million to $10 million

A copy of Hi-Line Construction, Inc's petition is available for
free at:

      http://bankrupt.com/misc/cacb08-16753.pdf


IMMUNICON CORP: Case Summary & 35 Largest Unsecured Creditors
-------------------------------------------------------------
Debtor: Immunicon Corporation
        3401 Masons Mill Road
        Suite 100
        Huntingdon Valley, PA 19006

Bankruptcy Case No.: 08-11178

Debtor-affiliates filing separate Chapter 11 petitions:

      Entity                                   Case No.
      ------                                   --------
      Immunicon Europe, Inc.                   08-11179
      IMMC Holdings, Inc.                      08-11180
      Immunivest Corporation                   08-11181

Type of Business: The Debtors offer products and services for
                  cell analysis and molecular research.  They also
                  offer clinical trial testing services to
                  incorporate rare cell molecular analysis and
                  FISH testing into clinical research.
                  See http://www.immunicon.com/

Chapter 11 Petition Date: June 11, 2008

Court: District of Delaware (Delaware)

Judge: Kevin J. Carey

Debtors' Counsel: Sheldon K. Rennie, Esq.
                  (srennie@foxrothschild.com)
                  Fox Rothschild LLP
                  919 North Market Street
                  Suite 1300
                  Wilmington, DE 19801
                  Tel: (302) 654-7444
                  Fax: (302) 656-8920

                            Estimated Assets   Estimated Debts
                            ----------------   ---------------
   Immunivest Corporation   $9,231,264         $24,309,838

   Immunicon Europe, Inc.   $100,000 to        $100,000 to
                            $500,000           $500,000

   IMMC Holdings, Inc.      $1 million to      Less than
                            $10 million        $50,000

   Immunivest Corporation   Less than          Less than
                            $50,000            $50,000

A. Immunivest Corporation's list of its 20 largest unsecured
   creditors:

   Entity                        Nature of Claim     Claim Amount
   ------                        ---------------     ------------
SF Capital Partners              Noteholder            $8,812,803
c/o Stark Offshore Management
3600 Lakeshore Drive
St. Francis, WI 53235-3716

Portside Growth and              Noteholder            $7,050,243
Opportunity Fund
c/o Ramius Capital Group LLC
666 Third Avenue
26th Floor
New York, NY 10017

Veridex LLC                      Vendor                $2,129,967
A Johnson & Johnson Company
1001 U.S. Route 202
Raritan, NJ 08869-0606

JGB Capital LP                   Noteholder            $1,621,555
660 Madison Avenue
21st Floor
New York, NY 10021

Scoggin Capital                  Noteholder            $1,586,304
Management, LP II
660 Madison Avenue
20th Floor
New York, NY 10021

Scoggin International Fund Ltd.  Noteholder            $1,586,304
c/o Scoggin LLP
660 Madison Avenue
20th Floor
New York, NY 10021

SASM&F LLP                       Vendor                $1,582,852
P.O. Box 1764
White Plains, NY 10602

JGB Offshore                     Noteholder              $493,517
660 Madison Avenue
21st Floor
New York, NY 10021

Sparton/Astro                    Vendor                  $250,937
22740 Lunn Road
Strongsville, OH 44149

Jonathan Cool                    Board of Director        $88,602

Innovative Mold Solutions Inc.   Vendor                   $48,192

Covidien/Kendall                                          $47,700

Kreatech Biotechnology           Vendor                   $37,394

Protiviti                        Vendor                   $34,167

Brian Geiger                     Board of Director        $18,785

J. William Freytag               Board of Director        $18,435

Interpublic Group of Co., Inc.   Vendor                   $17,621

Fisher Scientific                Vendor                   $15,420

Erie Scientific Company          Vendor                   $14,726

Invitrogen Life Technologies     Vendor                    $9,595

B. Immunicon Europe, Inc.'s list of its 10 largest unsecured
   creditors:

   Entity                        Nature of Claim     Claim Amount
   ------                        ---------------     ------------
Tristar Technology Group LLC     Vendor                    $7,975
9700 Great Seneca Highway
Unit 258
Rockville, MD 20850

DHL International BV             Vendor                    $6,976
Inbound Postbus 2717
Teminalweg 36
Amersfoort 3800 GG
Netherlands

BTC                              Vendor                    $2,906
Postbus 545
Hengelosestraat 705
Enschede 7500 AM
Netherlands

Essent Retail                    Vendor                      $969

DHL International BV             Vendor                      $823

Aces Direct BV                   Vendor                      $577

Quinto Groep                     Vendor                      $510

DHL Hengelo                      Vendor                      $197

Leferink                         Vendor                       $88

Tempo Team                       Vendor                       $58

C. IMMC Holdings, Inc. does not have any unsecured creditors
   who are not insiders.

D. Immunivest Corporation's list of its five largest unsecured
   creditors:

   Entity                        Nature of Claim     Claim Amount
   ------                        ---------------     ------------
Bromhead Johnson                 Vendor                    $5,695
Kingsbourne House
229-231 High Holborn
London WC1V7DP

Mewburn Ellis                    Vendor                    $3,639
York House
23 Kinsway
London WC2B6HPP

Bereskin & Parr                  Vendor                    $1,563
P.O. Box 401
40 King Street West
Toronto
Ontario, Canada M5H 3Y2

Towa International                                           $406

Aoyama & Partners                Vendor                      $401


INNOVATIVE CARD: Posts $1,962,441 Net Loss in 2008 First Quarter
----------------------------------------------------------------
Innovative Card Technologies Inc. reported a net loss of
$1,962,441 on revenues of $217,216 for the first quarter ended
March 31, 2008, compared with a net loss of $2,206,807 on revenues
of $1,420 in the same period last year.

The increase in revenue is attributable to sales of the ICT
DisplayCard in the current period.  For the three months ended
March 31, 2007, revenue was from LensCard royalties.

At March 31, 2008, the company's consolidated balance sheet   
showed $6,229,136 in total assets, $5,565,924 in total
liabilities, and $663,212 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?2dd7

                       Going Concern Doubt

As reported in the Troubled Company Reporter on April 29, 2008,
Singer Lewak Greenbaum & Goldstein LLP, in Los Angeles, expressed  
substantial doubt about Innovative Card Technologies Inc.'s
ability to continue as a going concern after auditing the
company's consolidated financial statements for the years ended
Dec. 31, 2007, and 2006.  The auditing firm pointed to the
company's recurring losses and negative cash flows from
operations.

                      About Innovative Card

Headquartered in Los Angeles, Innovative Card Technologies Inc.
(Nasdaq: INVC) -- http://www.incardtech.com/-- develops and  
markets secure powered cards for payment, identification, physical
and logical access applications.  The company's main product, the
ICT DisplayCard, integrates the security of a one-time password
token directly into a card the size of a standard credit or debit
card.


IXIS ABS: S&P Puts Default Ratings on Eight Classes of Notes
------------------------------------------------------------
Standard & Poor's Ratings Services lowered its ratings to 'D' on
eight classes of notes from IXIS ABS CDO 2 Ltd., following the
liquidation of the portfolio collateral.  Five of the lowered
ratings were previously on CreditWatch with negative implications.  
IXIS ABS CDO 2 Ltd. is a hybrid collateralized debt obligation of
asset-backed securities transaction collateralized mostly by
mezzanine classes of residential mortgage-backed securities.  The
deal experienced an event of default and the controlling
noteholders subsequently voted to liquidate the collateral in the
transaction.

The current rating actions follow notice from the trustee that the
liquidation of the portfolio assets is complete and that the
available proceeds have been distributed to the noteholders.  The
trustee has indicated that the proceeds of the liquidation were
insufficient to pay down the balances of any of the notes in full.


                          Rating Actions

                                               Rating
                                               ------
      Transaction               Class         To    From
      -----------               -----         --    ----
      IXIS ABS CDO 2 Ltd.       A-1 Funded    D     BB/Watch Neg
      IXIS ABS CDO 2 Ltd.       A-1 Unfunded  D     BB/Watch Neg
      IXIS ABS CDO 2 Ltd.       A-X           D     BB/Watch Neg
      IXIS ABS CDO 2 Ltd.       A-2           D     CCC-/Watch Neg
      IXIS ABS CDO 2 Ltd.       B             D     CCC-/Watch Neg
      IXIS ABS CDO 2 Ltd.       C             D     CC
      IXIS ABS CDO 2 Ltd.       D             D     CC
      IXIS ABS CDO 2 Ltd.       E             D     CC


JAMES FALL: Voluntary Chapter 11 Case Summary
---------------------------------------------
Debtor: James Edward Fall
        Rose R. Fall
        dba Harold Fall & Sons
        1961 South Holland Sylvania Road
        Maumee, OH 43537

Bankruptcy Case No.: 08-33018

Chapter 11 Petition Date: June 10, 2008

Court: Northern District of Ohio (Toledo)

Judge: Richard L. Speer

Debtor's Counsel: Deborah K. Spychalski, Esq.
                  (dk_spychalski@yahoo.com)
                  P.O. Box 711
                  Toledo, OH 43697-0711
                  Tel: (419) 243-9424
                  Fax: 419-244-0454

Estimated Assets: $1 million to $10 million

Estimated Debts:  $1 million to $10 million

A copy of the Debtors's petition is available for free at
http://bankrupt.com/misc/ohnb08-33018-pet.pdf

A copy of the Debtor's list of unsecured creditors is available
for free at http://bankrupt.com/misc/ohnb08-33018-cred.pdf


JONATHAN MATIAS: Case Summary & 20 Largest Unsecured Creditors
--------------------------------------------------------------
Debtor: Jonathan Allan Matias
        aka Sharon Lorenzo Bacani-Matias
        Sharon Lorenzo Bacani
        1671 Observation Way
        Antioch, CA 94531

Bankruptcy Case No.: 08-42925

Type of Business: The Debtors own and operate Bastard and Friends,
                  Inc., which is engaged in retailing.

Chapter 11 Petition Date: June 8, 2008

Court: Northern District of California (Oakland)

Judge: Edward D. Jellen

Debtor's Counsel: Marc Voisenat, Esq.
                  Email: voisenat@msn.com
                  1330 Broadway, Ste. 1035
                  Oakland, CA 94612
                  Tel: (510) 272-9710

Total Assets: $1,457,790

Total Debts:  $2,322,019

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

      http://bankrupt.com/misc/canb08-42925.pdf


JHCI ACQUISITIONS: Moody's Cuts Corp. Family Rating to B3 from B2
-----------------------------------------------------------------
Moody's Investors Service has lowered the ratings of JHCI
Acquisitions, Inc., Corporate Family Rating to B3 from B2.  The
rating outlook has been changed to negative from stable.

The ratings were lowered in recognition of weaker than expected
operating results that have occurred since the June 2007
acquisition of The Jacobson Companies by Oak Hill Capital
Partners.  As a result, the company's credit metrics and liquidity
profile have deteriorated below levels anticipated when Moody's
assigned the original rating to JHCI in May of 2007.  Moody's
expects that the weaker operating environment will persist through
2008 and into 2009, as the domestic economy impacts the company's
operational performance.

According to David Berge, Vice President of Moody's, "Jacobson,
like many companies in the industry, will continue to face
significant headwind from what is expected to be a deep and
possibly prolonged recession in the transportation sector."  As
such, key credit metrics such as EBIT to Interest and Debt to
EBITDA will likely remain at levels more appropriate for the B3
rating category over the near term.

Of particular concern to Moody's are financial covenant
restrictions imposed by terms of the company's senior secured
credit facilities.  As of March 31, 2008, JHCI's leverage ratio
exceeded the maximum level permitted under the agreement.

JHCI is not currently drawn on this facility, and Moody's does not
expect that the company will need to draw on it in the near term.  
Since the leverage covenant is only applicable if the facility is
drawn, this breach does not constitute a default under the
covenants.  However, because the excess leverage will prevent JHCI
from using the facility, Moody's believes that the removal of an
important external source of liquidity for any length of time is a
material impairment of the company's liquidity profile.

Moody's assesses JHCI's overall liquidity profile to be adequate,
as moderate to strong cash balances and expected operating cash
flows will likely cover all but unexpected capital expenditure
needs, which the company has reduced in line with the weaker
operating environment.  JHCI faces no material debt maturities
until 2014, and only modest amortization of debt over the near
term.  Still, the lack of access to a credit facility that would
otherwise provide important flexibility to weather any further
deterioration in overall market conditions amplifies the company's
risk profile over the near term.

The negative outlook reflects concern over the near term about the
company's liquidity condition, particularly to the extent that the
company lacks access to its credit facility due to covenant
restrictions.  The outlook also anticipates on-going difficulties
in the company's transportation businesses that will coincide with
soft economic conditions in the U.S. over the near term.

The ratings could be downgraded if free cash flow were to become
negative before access to the revolver could be restored, leaving
the company constrained on sources of liquidity at its disposal to
cover its operating cash needs.  Also, ratings could also be
lowered if metrics were to deteriorate further, such that Debt to
EBITDA were to exceed 7.0 times or funds from operations plus
interest to interest were to fall below 1.5 times.

The ratings could be stabilized if the credit facilities' leverage
covenant cushion were restored to levels allowing full access to
the revolver, while the company demonstrates sustained levels of
positive free cash flows.

Downgrades:

Issuer: JHCI Acquisition, Inc.

  -- Probability of Default Rating, Downgraded to B3 from B2
  -- Corporate Family Rating, Downgraded to B3 from B2
  -- Senior Secured First Lien Bank Credit Facility, Downgraded to
     B1 (LGD3, 32%) from Ba3

  -- Senior Secured Second Lien Term Loan Facility, Downgraded to
     Caa2 (LGD5, 79%) from Caa1

Outlook Actions:

Issuer: JHCI Acquisition, Inc.

  -- Outlook, Changed To Negative From Stable

JHCI Acquisition is a wholly-owned subsidiary of JHCI Holdings,
Inc., the vehicle majority owned by Oak Hill Capital Partners,
created to effect the acquisition of Jacobson Holding Co. and the
2007 merger of Arnold Logistics, LLC

Jacobson Companies, headquartered in Des Moines, Iowa, are
logistics providers, offering warehousing, contract packaging and
freight management services.


LANDSOURCE COMMUNITIES: CalPERS Downplays Exposure, Stake Small
---------------------------------------------------------------
The California Public Employees' Retirement System said it has
expected the announced Chapter 11 bankruptcy protection filing by
LandSource Communities Development LLC, in which CalPERS had well
over a $900 million investment through its investment partner
MacFarlane Partners.  CalPERS will represent the interests of the
CalPERS fund in the bankruptcy process.  LandSource is one of
thousands of investments of CalPERS, and it does not represent a
large portion of the overall fund.

The investment by CalPERS went to MacFarlane Partners, who along
with Weyerhaeuser took a 68% interest in the venture known as
LandSource.  Other partners of LandSource are Lennar and LNR, each
with a 16% stake.  The bankruptcy protection process allows
LandSource to restructure its debts and obligations and the
company is expected to continue to operate.  LandSource, with
heavy investments in Southern California land, fell victim to the
housing industry downturn.

CalPERS investment represents less than a half of 1% of its
overall investment portfolio.  The CalPERS fund, which includes
stocks, bonds, real estate, private equity and inflation-linked
assets, remains strong, with a market value of assets of
approximately $245.4 billion.

Bloomberg News says CalPERS may sell part of its $2,000,000,000 in
residential land holdings after the investments lost 31% last year
amid falling home prices and forecasts of further declines.  
CalPERS, Bloomberg says, hired investment bank Morgan Stanley to
review seven land deals that it made with joint-venture partners
and real estate advisors, fund spokeswoman Pat Macht said.  The
fund may sell some of the land, purchased to develop new homes, or
renegotiate the partnerships, according to the report.

                   About LandSource Communities

LandSource Communities Development LLC, which operates in Arizona,
California, Florida, New Jersey, Nevada and Texas, is involved in
the planning and development of master planned communities and
transforming undeveloped land into ready-to-build home sites and
commercial properties.  With the exception of one development
project in Marina del Rey, California, LandSource does not build
homes or commercial properties.

LandSource and 20 of its affiliates filed for chapter 11
bankruptcy protection before the U.S. Bankruptcy Court for the
District of Delaware on June 8, 2008 (Lead Case No. 08-11111).  
The Debtors are represented by Marcia Goldstein, Esq., at Weil
Gotshal & Manges in New York, and Mark D. Collins, Esq., at
Richards Layton & Finger in Wilmington, Delaware.  Lazard Freres &
Co. acts as the Debtors' financial advisors, and Kurtzmann Carson
Consultants serves as the Debtors' notice and claims agent.

According to the Troubled Company Reporter on May 22, 2008,
LandSource sought help from its lender consortium to restructure
$1.24 billion of its debt.  LandSource engaged a 100-bank lender
group led by Barclays Capital Inc., which syndicates LandSource's
debt.  LandSource had received a default notice on that debt from
the lender group after it was not able to timely meet its payments
during mid-April.  However, LandSource failed to reach an
agreement with its lenders on a plan to modify and restructure its
debt, forcing it to seek protection from creditors.

The Debtors' exclusive plan filing period expires on Oct. 6, 2008.  
(LandSource Bankruptcy News; http://bankrupt.com/newsstand/or  
215/945-7000).


LEHMAN BROTHERS: Names Mr. McDade, President; Mr. Lowitt CFO
------------------------------------------------------------
Lehman Brothers Holdings Inc. disclosed that Herbert (Bart) H.
McDade III will succeed Joseph Gregory as president and chief
operating officer of the Firm, and Ian Lowitt will succeed Erin
Callan as the firm's chief financial officer.  Mr. Lowitt will
join the firm's Executive Committee.  These management changes are
effective immediately.

"[Mr. McDade], who has been my partner for 25 years and has proven
himself to be the firm's best operator, is the right individual to
take on this responsibility and lead the Firm to the next level.  
His experience in both Fixed Income and Equities Capital Markets
will benefit the firm, especially during these challenging times,"
Richard S. Fuld, Jr., Lehman Brothers˙ chairman and chief
executive officer, said.  

"[Mr. Gregory] has been my partner for over 30 years and has been
a driving force behind who we are today and what we have achieved
as a Firm.  This has been one of the most difficult decisions
either of us has ever had to make," Mr. Fuld continued.

Ms. Callan, who has served as the firm's chief financial officer
since December 2007, will be rejoining the Investment Banking
Division in a senior capacity.  Prior to his appointment as
president and chief operating officer, Mr. McDade, 48, was the
global head of the firm's Equities Division, a position he has
held since June 2005.  He served as global head of the Fixed
Income Division from 2002 to 2005 and as co-head of the Fixed
Income Division from 2000 to 2002.  He is a member of Lehman
Brothers' Executive Committee.  Mr. McDade joined the Firm in 1983
in Corporate Bond Trading.  He was named head of the Firm's
Corporate Bond Department in 1991.  In 1998, he was named global
head of Debt Capital Markets in the Investment Banking Division.
Mr. McDade received a B.A. from Duke University and an M.B.A. from
the University of Michigan.

Since October 2006, Mr. Lowitt, 44, has been the firm's Co-CAO.  
In this role, he was responsible for the global oversight of
Corporate Real Estate, Expense and Sourcing Services,
Finance, Operations, Productivity and Process Improvement, Risk
Management, and Technology.  Prior to his Co-CAO position, Mr.
Lowitt was the CAO of Lehman Brothers Europe.  He has also served
as global treasurer and global head of Tax.  Before becoming
global treasurer, he was the firm's head of Strategy and Corporate
Development.  Mr. Lowitt joined Lehman Brothers in 1994 from
McKinsey & Company.  Mr. Lowitt has a B.Sc. and an M.Sc.
from the University of the Witwatersrand.  He also has a B.A. and
an M.Sc. from the University of Oxford, which he attended as a
Rhodes Scholar.

Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- an    
innovator in global finance, serves the financial needs of
corporations, governments and municipalities, institutional
clients, and high net worth individuals worldwide.  Founded in
1850, Lehman Brothers maintains leadership positions in equity and
fixed income sales, trading and research, investment banking,
private investment management, asset management and private
equity.  The firm is headquartered in New York, with regional
headquarters in London and Tokyo, and operates in a network of
offices around the world.

As reported by the Troubled Company Reporter on June 10, Lehman
Brothers Holdings Inc. disclosed that continued challenging market
conditions will result in an expected net loss of approximately
$2.8 billion for the second quarter ended May 31, 2008, compared
to net income of $489.0 million for the first quarter of fiscal
2008 and $1.3 billion for the second quarter of fiscal 2007.

According to the Wall Street Journal, this expected net loss far
exceeded the $300 million net loss predicted by analysts.


LPATH INC: Posts $5,078,181 Net Loss in 2008 First Quarter
----------------------------------------------------------
Lpath Inc. reported a net loss of $5,078,181 on revenue of $13,126
for the first quarter ended March 31, 2008, compared with a net
loss of $2,722,598 on revenue of $196,981 in the same period last
year.

The decrease in revenue reflects the completion of work on certain
grants in 2007.  Revenue in the first quarter of 2008 was
comprised entirely of royalties.

At March 31, 2008, the company's consolidated balance sheet showed
$6,550,375 in total assets, $3,699,472 in total liabilities, and
$2,850,903 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?2dd5

                       Going Concern Doubt

As reported in the Troubled Company Reporter on April 22, 2008,
San Diego, Calif.-based LevitZacks expressed substantial doubt
about Lpath 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 incurred
significant cash losses from operations since inception and
expects to continue to incur cash losses from operations in 2008
and beyond.

                        About Lpath Inc.

Headquartered in San Diego, California, Lpath Inc. (OTC BB: LPTN)
-- http://www.Lpath.com/-- is the category leader in bioactive-
lipid-targeted therapeutics, an emerging field of medical science
whereby bioactive signaling lipids are targeted for treating
important human diseases.


MICHELLE SIDRIAN: Voluntary Chapter 11 Case Summary
---------------------------------------------------
Debtor: Michelle Patrice Sidrian
        4160 South Royal Links Cir.
        Antioch, CA 94509

Bankruptcy Case No.: 08-42959

Chapter 11 Petition Date: June 10, 2008

Court: Northern District of California (Oakland)

Judge: Leslie J. Tchaikovsky

Debtor's Counsel: Mark A. McLaughlin, Esq.
                  (nmclaug226@sbcglobal.net)
                  Law Offices of McLaughlin and Wildman
                  3012 Lone Tree Way #300
                  Antioch, CA 94509
                  Tel: (925) 754-2622

Total Assets: $7,099,856

Total Debts:  $7,251,954

A copy of the Debtor's petition with a list of unsecured creditors
is available for free at http://bankrupt.com/misc/canb08-42959.pdf


MICRO COMPONENT: March 31 Balance Sheet Upside-Down by $6,603,000
-----------------------------------------------------------------
Micro Component Technology Inc.'s consolidated balance sheet at
March 31, 2008, showed $5,079,000 in total assets and $11,682,000
in total liabilities, resulting in a $6,603,000 total  
stockholders' deficit.

The company reported a net loss of $1,116,000 on net sales of
$2,198,000 for the first quarter ended March 31, 2008, compared
with a net loss of $159,000 on net sales of $3,377,000 in the same
period last year.

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?2dc7

                       Going Concern Doubt

As reported in the Troubled Company Reporter on April 18, 2008,
Olsen, Thielen & Co. Ltd., in St. Paul, Minnesota, expressed  
substantial doubt about Micro Component Technology 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 frim reported that the
company has suffered recurring losses from operations and has a
stockholders' deficit.

                      About Micro Component

Based in St. Paul, Minnesota, Micro Component Technology Inc.
(OTC BB: MCTI) -- http://www.mct.com/-- is a smanufacturer of  
test handling and automation solutions satisfying the complete
range of handling requirements of the global semiconductor
industry.


MIDON RESTAURANT: Files for Chapter 11 Bankruptcy in Albany
-----------------------------------------------------------
Midon Restaurant Corp. filed for Chapter 11 bankruptcy protection
before U.S. Bankruptcy Court in Albany, New York, on Monday.

The Albany, N.Y., Times-Union reports that the filing was made
nine months after Midon opened an Old Chicago pizza restaurant and
video arcade.  Midon formerly operated Boston Chicken and Burger
King franchises in the Capital Region, the report says.

Times-Union, citing court documents, relates that Midon cited
lower than expected sales and business performance, higher food
and beverage costs, high management turnover, poor kitchen
management and excessive payroll spending as a result of
overstaffing as reasons for its demise.

Donald M. Cepiel Sr., principal of Midon, said in papers filed in
court that he started the business at a time when customers were
cutting back on going out to eat due to the soft economy,
according to Times-Union.  Mr. Cepiel said his cash flow was
impacted by the cost of building the restaurant, and that he needs
to meet a weekly payroll of $22,000, the report says.

A typical Old Chicago restaurant costs $1.2 million to $2 million
to open, Times-Union notes, citing the company's Web site.

Midon reported $41,631 in assets and $1.4 million in liabilities
in the bankruptcy petition, Times-Union says.

The Debtor is seeking permission to allocate funds for payroll
dating to late May, as well as for rent, cleaning, insurance, and
food and beverage purchases, the report adds.

Given the breathing room afforded by the debtor's filing, Mr.
Cepiel said Midon will be able to pay its ongoing operating
expenses -- while it attempts to reorganize its business, the
report continues.


MORGAN STANLEY: Moody's Reviews Ba2 Rating for Possible Downgrade
-----------------------------------------------------------------
Moody's Investors Service has placed on review for possible
downgrade the ratings on these notes issued by Morgan Stanley
Managed ACES SPC Series 2005-2:

Class Description: $40,000,000 Class V Secured Floating Rate Notes
due 2013

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

According to Moody's, the rating actions are the result of
deterioration in the credit quality of the transaction's reference
obligation pool, which consists primarily of corporate securities.


MORGAN STANLEY: Moody's Puts Ba2 Rating Under Review
----------------------------------------------------
Moody's Investors Service has placed on review for possible
downgrade the ratings on these notes issued by Morgan Stanley ACES
SPC, Series 2006-37:

Class Description: $19,000,000 Class IA Secured Floating Rate
Notes due 2016

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

Class Description: JPYen1,000,000,000 Class IB Secured Floating
Rate Notes due 2016

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

Class Description: $5,000,000 Class II Secured Floating Rate Notes
due 2016

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

Class Description: $5,700,000 Class IIIA Secured Floating Rate
Notes due 2016

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

Class Description: $1,500,000 Class IV Secured Floating Rate Notes
due 2016

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

According to Moody's, the rating actions are the result of
deterioration in the credit quality of the transaction's reference
obligation pool, which consists primarily of corporate securities.


MORGAN STANLEY: S&P Upgrades Rating on $3MM Notes to BB- from B
---------------------------------------------------------------
Standard & Poor's Ratings Services raised its rating on the
$3.0 million class A-1 secured fixed-rate notes from Morgan
Stanley ACES SPC's series 2006-8 to 'BB-' from 'B'.  At the same
time, S&P lowered its rating on the $3.5 million class A-14
secured fixed-rate notes from the same series to 'BB-' from 'BB'
and removed it from CreditWatch, where it was placed with negative
implications on March 18, 2008.
     
The upgrade reflects the June 3, 2008, raising of the senior
unsecured debt rating on Reliant Energy Inc. and the downgrade
reflects the May 29, 2008, lowering of the senior unsecured debt
rating on American Axle & Manufacturing Holdings Inc.
     
Morgan Stanley ACES SPC's series 2006-8 is a credit-linked note
transaction.  The rating on each class of notes is based on the
lowest of (i) the rating on the respective reference obligations
for each class (with respect to class A-1, the senior unsecured
notes issued by Reliant Energy Inc. {'BB-'}; with respect to class
A-14, the senior unsecured notes issued by American Axle &
Manufacturing Holdings Inc. {'BB-'}); (ii) the rating on the
guarantor of the counterparty to the credit default swap, the
interest rate swap, and the contingent forward agreement (in each
instance, Morgan Stanley {A+/Negative/A-1}); and (iii) the rating
on the underlying securities, the class A certificates issued by
BA Master Credit Card Trust II's series 2001-B due 2013 ('AAA').


MUNOZ PRINTING: Voluntary Chapter 11 Case Summary
-------------------------------------------------
Debtor: Munoz Printing Co., Inc.
        2655 Freewood
        Dallas, TX 75220

Bankruptcy Case No.: 08-32866

Type of Business: The Debtor provides printing services.  See
                  http://www.munozprinting.com

Chapter 11 Petition Date: June 11, 2008

Court: Northern District of Texas (Dallas)

Debtor's Counsel: Hanh H. Duong, Esq.
                  Email: duonglawfirm@yahoo.com
                  1204 N. Josey Lane, Ste. 106
                  Carrollton, TX 75006
                  Tel: (214) 390-0999
                  Fax: (214) 390-0998

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.


OCCULOGIX INC: Posts $2,943,500 Net Loss in 2008 First Quarter
--------------------------------------------------------------
OccuLogix Inc. reported a net loss of $2,943,500 on revenue of
$7,200 for the first quarter ended March 31, 2008, compared with a
net loss of $4,272,744 on revenue of $90,000 in the same period
last year.

At March 31, 2008, the company's consolidated balance sheet showed
$9,832,552 in total assets, $6,518,600 in total liabilities,
$274,288, in minority interest, and $3,039,664 in total
stockholders' equity.

The company's consolidated balance sheet at March 31, 2008, also
showed strained liquidity with $3,130,655 in total current assets
available to pay $6,518,600 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?2dd6

                       Going Concern Doubt

As reported in the Troubled Company Reporter on Mar 24, 2008,
Ernst & Young LLP, in Toronto, Canada, expressed substantial doubt
about OccuLogix Inc.'s ability to continue as a going concern
after auditing the company's consolidated financial statements for
the years ended Dec. 31, 2007, and 2006.  The auditing firm
pointed to the company's recurring operating losses and working
capital deficiency.

                       About OccuLogix Inc.

Headquartered in Mississauga, Ontario, Canada, OccuLogix Inc.
(Nasdaq: OCCX; TSX: OC) -- http://www.occulogix.com/-- is a   
healthcare company focused on ophthalmic devices for the diagnosis
and treatment of age-related eye diseases.


PACIFIC LUMBER: Scopac Seeking DIP Financing from Lehman
--------------------------------------------------------
Bank of America NT&SA, as agent for itself and certain other
banks, and The Bank of New York, as Indenture Trustee for the
Timber Notes, have consented to Scotia Pacific Company's use of
cash collateral through June 27, 2008, pursuant to a stipulation
among the parties.  The Cash Collateral for Scopac's use includes
cash collateral in a BoNY account, which the parties refer to as
the Scheduled Amortization Reserve Account.

Scopac cannot access the full amount available to it under the  
Cash Collateral Stipulation because only some $2,500,000 of the
SAR account is presently liquid, Kathryn A. Coleman, Esq., at
Gibson, Dunn & Crutcher LLP, in New York, Scopac's counsel,
stated.  The remainder of the balance of the SAR Account is
invested in auction rate securities and is not presently liquid,
she noted.

To alleviate its inability to access the full amount of the Cash
Collateral, Scopac suggested to BoNY on May 14, 2008, of its
intent to repurchase the auction rate securities at par held in
the SAR Account, according to Ms. Coleman.  BoNY, however,
refused to give its consent, Ms. Coleman told the Hon. Richard
Schmidt of the U.S. Bankruptcy Court for the Southern District of
Texas.

Under the circumstances, Scopac said it cannot be assured that it
will have enough funds to make certain payments, going forward.

Ms. Coleman averred that in this light, Lehman Commercial Paper
offered to extend DIP financing to Scopac on terms provided for
in a term sheet.  Lehman informed Scopac that it will not be able
to extend credit until documentation was finalized.

Accordingly, at Scopac's behest, the Court authorizes the Debtor
to reimburse Lehman $150,000 for out-of-pocket and other expenses
the firm incurred or will incur in connection with document
preparations and negotiations for the DIP Financing.  The
$150,000 payment represents a portion of a total work fee of
$500,000.  

Scopac intends to seek approval of the Lehman DIP Financing at a
later date, Ms. Coleman tells Judge Schmidt.

                     About Pacific Lumber

Based in Oakland, California, The Pacific Lumber Company --
http://www.palco.com/-- and its subsidiaries operate in several
principal areas of the forest products industry, including the
growing and harvesting of redwood and Douglas-fir timber, the
milling of logs into lumber and the manufacture of lumber into a
variety of finished products.

Scotia Pacific Company LLC, Scotia Development LLC, Britt Lumber
Co., Inc., Salmon Creek LLC and Scotia Inn Inc. are wholly owned
subsidiaries of Pacific Lumber.

Scotia Pacific, Pacific Lumber's largest operating subsidiary, was
established in 1993, in conjunction with a securitization
transaction pursuant to which the vast majority of Pacific
Lumber's timberlands were transferred to Scotia Pacific, and
Scotia Pacific issued Timber Collateralized Notes secured by
substantially all of Scotia Pacific's assets, including the
timberlands.

Pacific Lumber, Scotia Pacific, and four other subsidiaries filed
for chapter 11 protection on Jan. 18, 2007 (Bankr. S.D. Tex. Case
Nos. 07-20027 through 07-20032).  Jack L. Kinzie, Esq., at Baker
Botts LLP, is Pacific Lumber's lead counsel.  Nathaniel Peter
Holzer, Esq., Harlin C. Womble, Jr., Esq., and Shelby A. Jordan,
Esq., at Jordan Hyden Womble Culbreth & Holzer PC, is Pacific
Lumber's co-counsel.  Kathryn A. Coleman, Esq., and Eric J.
Fromme, Esq., at Gibson, Dunn & Crutcher LLP, acts as Scotia
Pacific's lead counsel.   Kyung S. Lee, Esq., Esq., at Diamond
McCarthy LLP is Scotia Pacific's co-counsel, replacing Porter &
Hedges LLP.  John D. Fiero, Esq., at Pachulski Stang Ziehl & Jones
LLP, represents the Official Committee of Unsecured Creditors.

When Pacific Lumber filed for protection from its creditors, it
listed estimated assets and debts of more than $100 million.
Scotia Pacific listed total assets of $932,000,000 and total debts
of $765,978,335.

The Debtors filed their Joint Plan of Reorganization on Sept. 30,
2007, which was amended on Dec. 20, 2007.  Four other parties-in-
interest have filed competing plans for the Debtors -- The Bank of
New York Trust Company, N.A., as Indenture Trustee for the Timber
Notes; the Official Committee of Unsecured Creditors; Marathon
Structured Finance Fund L.P, the Debtors' DIP Lender and Agent
under the DIP Credit Facility; and the Heartlands Commission,
which represents the tribal members of the Bear River Band of
Rohnerville Rancheria and PALCO employees.

The Debtors' exclusive plan filing period expired on Feb. 29,
2008.  (Scotia/Pacific Lumber Bankruptcy News, Issue No. 61;
http://bankrupt.com/newsstand/or 215/945-7000).   


PETROL OIL: Weaver & Martin Expresses Going Concern Doubt
---------------------------------------------------------
Weaver & Martin LLC raised substantial doubt on the ability of
Petrol Oil & Gas Inc., to continue as a going concern after it
audited the company's financial statements for the year ended
Dec. 31, 2007.  The auditor pointed to the company's recurring
losses and negative cash flows from operations.

                        Subsequent Events

In January 2008, the company entered into a fixed price contract
covering approximately 45,000 DTH per month at a weighted average
price of $7.10 for a one-year period beginning April 1, 2008.

On April 30, 2008, Petrol Oil and Gas, Inc., Neodesha Pipeline,
Inc., and Coal Creek Pipeline, Inc., entered into a Foreclosure-
Related Agreement with LV Administrative Services, Inc.,
administrative and collateral agent for Laurus Master Fund, Ltd.,
Valens Offshore SPV I, Ltd., Valens U.S. SPV I, LLC, Calliope
Capital Corporation and Pallas Production Corp.

Petrol is in default of certain obligations to its Holders under
its Secured Convertible Term Note, dated Oct. 28, 2004, in the
principle amount of $8,000,000; its Secured Term Note, dated
Oct. 31, 2005, in the principle amount of $10,000,000; its Secured
Term Note, dated March 31, 2006, in the principle amount of
$5,000,000; and its Secured Term Note, dated May 26, 2006, in the
principle amount of $10,000,000, and has received from LV and the
Holders a default and acceleration notice with respect to the
Outstanding Obligations.  The aggregate amount due and owing to
the Holders as of April 30, 2008 is approximately $35,700,000.

The Outstanding Obligations are secured by various mortgages and
other fixed and mixed assets and real and personal property
pursuant to security and other agreements covering assets or other
rights to which Petrol has rights, a portion of which are assets
and rights referred to as the "Petrol-Neodesha Project," located
in Neosho and Wilson Counties, Kansas, consisting of, among other
Collateral, mortgages, and real, personal property and fixed and
mixed assets used in connection with the Petrol-Neodesha Project.

The Agreement allows the Holders to foreclose on the Neodesha
Collateral and governs the terms and conditions of the
foreclosure.  The Agreement provides that Petrol will not contest
the sale of the Neodesha Collateral, which will be conducted as a
public foreclosure sale in accordance with Kansas law.  Petrol has
agreed to reasonably assist LV and the Holders in the completion
of the foreclosure sale.  After the sale of the Neodesha
Collateral becomes final, LV and the Holders will release Petrol
of all remaining amounts owed or claims they may have, and the
Holders will reassign to Petrol their overriding royalty interests
in the mineral leases located at Petrol's Coal Creek Project.

As part of the Agreement, Petrol will cancel all outstanding
warrants for purchases of securities issued to Holders in
connection with the Outstanding Obligations and replace them with
warrants to purchase 1,000,000 shares of common stock at an
initial exercise price of $0.20 per share.

                       Various Loan Defaults

Convertible Note

On October 2004 the company issued an $8,000,000 secured
convertible term note to Laurus Master Fund, Ltd.  The note is
convertible into shares of our common stock at an initial
conversion price of $1.50 per share.  The convertible note has a
term of three years and accrues interest at the prime rate plus 3%
per year.  It is secured by substantially all our assets.  This
note is in default at Dec. 31, 2007.

Secured Term Notes

In October 2005, the company borrowed $10,000,000 from Laurus on a
secured term note.  The interest on the note is prime plus 3.25%.  
Principal payments are based on an amount that approximated 80% of
net revenues as defined in the note agreement.  This principally
consists of net revenue on new producing wells.  The loan will
mature on Oct. 31, 2008.  The loan is in default as of Dec. 31,
2007.

On March 31, 2006, the company borrowed $5,000,000 from Laurus
under the credit facility provided in October 2005.  Under the
terms of the agreement the company issued a Secured Term Note in
the aggregate principal amount of $5,000,000.  The note has a
three-year term and bears an interest rate equivalent to the
"prime rate" published by the Wall Street Journal from time to
time plus 3.25%, subject to a floor of 10% and a ceiling of 14%
per annum.  Concurrently with the agreements, the company amended
and restated its previous $10,000,000 Secured Term Note dated
Oct. 31, 2005, with Laurus Funds.  The loan will mature on
March 31, 2009, but is in default as of Dec. 31, 2007.

On May 31, 2006, the company borrowed $10,000,000 from Laurus
under the credit facility provided in October 2005.  Under the
terms of the agreement the company issued a Secured Term Note in
the aggregate principal amount of $5,000,000.  The note has a
three-year term and bears an interest rate equivalent to the
"prime rate" published by the Wall Street Journal from time to
time plus 3.25%, subject to a floor of 10% and a ceiling of 14%
per annum.  Concurrently with the agreements, the company amended
and restated its previous $10,000,000 Secured Term Note dated
Oct. 31, 2005 with Laurus Funds.  The loan will mature on May 31,
2009 but is in default as of Dec. 31, 2007.

The master security agreement establishes substantially all of the
company˙s assets as collateral for the convertible note as well as
for this note.

                            Financials

The company posted a net loss of $22,935,390 on total revenues of
$5,488,673 for the year ended Dec. 31, 2007, as compared with a
net loss of $7,795,208 on total revenues of $6,532,798 in the
prior year.

At Dec. 31, 2007, the company's balance sheet showed $11,502,462
in total assets and $27,325,491 in total liabilities, resulting in
$16,334,029 stockholders' deficit.  

The company's consolidated balance sheet at Dec. 31, 2007, also
showed strained liquidity with $1,156,560 in total current assets
available to pay $27,325,491 in total current liabilities.

A full-text copy of the company's 2007 annual report is available
for free at http://ResearchArchives.com/t/s?2d8c

                         About Petrol Oil

Petrol Oil and Gas Inc. in Overland Park, Kansas (OTC BB: POIG) --
http://www.petroloilandgas.com/-- develops and acquires gas and  
oil assets.  Its properties are located in the Cherokee and
Forrest City Basins along the Kansas and Missouri border.  Its
current focus is Coal Bed Methane reservoirs in the central U.S.,
which produce both Coal Bed Methane and at times conventional gas.


PLANGRAPHICS INC: March 31 Balance Sheet Upside-Down by $2,998,713
------------------------------------------------------------------
PlanGraphics Inc.'s consolidated balance sheet at March 31, 2008,
showed $1,376,838 in total assets and $4,375,551 in total
liabilities, resulting in a $2,998,713 total stockholders'
deficit.

At March 31, 2008, the company's consolidated balance sheet also
showed strained liquidity with $1,130,032 in total current assets
available to pay $4,375,551 in total current liabilities.

The company reported a net loss of $207,954 on revenues of
$1,036,423 for the second quarter ended March 31, 2008, compared
with a net loss of $134,760 on revenues of $869,751 in the same
period ended March 31, 2007.

On a consolidated basis,operating loss for the quarter ended
March 31, 2008, was $172,945, an increase of $67,961 over the
prior year operating loss of $104,984.  This change is
attributable to the increase in total cost and expenses during the
current quarter well exceeding the increase in revenue.

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?2dd8  

                       Going Concern Doubt

Sherb & Co., LLP, in Boca Raton, Florida, expressed substantial
doubt about PlanGraphics Inc.'s ability to continue as a going
concern after auditing the company's consolidated financial
statements for the years ended Sept. 30, 2007, and 2006.  The
auditing firm reported that the company has suffered recurring
losses and has a negative working capital position and a
stockholders' deficit.

                     About PlanGraphics Inc.

Headquartered in Frankfort, Ky., PlanGraphics Inc. (PK: PGRA)
-- http://www.plangraphics.com/-- is a full life-cycle systems  
integration and implementation firm providing a broad range of
services in the design and implementation of information
technology in the public and commercial sectors.


PROTOCALL TECH: Marcum & Kliegman Expresses Going Concern Doubt
---------------------------------------------------------------
Marcum & Kliegman LLP raised substantial doubt on the ability of
Protocall Technologies Inc., to continue as a going concern after
it audited the company's financial statements for the year ended
Dec. 31, 2007.

The auditing firm pointed to the company's recurring losses from
operations, accumulated deficit of $58,731,513, stockholders'
deficiency of $20,351,898 and a working capital deficit of
$20,106,026 at Dec. 31, 2007.  The company also experienced severe
cash short falls and has been unable to pay some of its operating
expenses as they became due.

The company posted a net loss of $14,625,936 on net sales of
$954,792 for the year ended Dec. 31, 2007, as compared with a net
loss of $5,988,672 on net sales of $1,071,081 in the prior year.

At Dec. 31, 2007, the company's balance sheet showed $965,369 in
total assets and $21,317,267 in total liabilities, resulting in
$20,351,898 stockholders' deficit.

The company's consolidated balance sheet at Dec. 31, 2007, also
showed strained liquidity with $248,554 in total current assets
available to pay $20,354,580 in total current liabilities.

A full-text copy of the company's 2007 annual report is available
for free at http://ResearchArchives.com/t/s?2d62

                        About Protocall

Based in Commack, New York, Protocall Technologies Incorporated
(OTCBB: PCLI.OB) -- http://www.protocall.com/-- provides   
retailers and software publishers with specialized systems
programming, digital rights management and electronic
merchandising services for front and back-end fulfillment
operations.


REFCO INC: Ch. 7 Trustee Wants GE Capital Claims Cut by $700,000
----------------------------------------------------------------
Pursuant to Section 502 of the Bankruptcy Code and Rule 3007 of
the Federal Rules of Bankruptcy Procedure, Albert Togut, the
Chapter 7 Trustee for Refco, LLC, asks the U.S. Bankruptcy Court
for the Southern District of New York to reduce and allow, in a
reduced amount, the claims of GE Capital in connection with
certain leased equipment.

On July 31, 2006, GE filed 17 proofs of claim, Claim Nos.  431
through 447, asserting an aggregate of $767,413, comprising:

     * arrears of $57,089;
     * late charges of $2,736;
     * sales tax of $6,921;
     * discounted stream of payments of $604,342; and
     * asserted residual value of equipment of $96,325.

The Chapter 7 Trustee tells the Court that GE Capital included a
"residual" value claim for the return of the leased equipment,
despite the fact that the Equipment was returned, as well as a
sales tax charge for periods after the Refco LLC rejected the
leases and returned the Equipment.  Moreover, GE Capital did not
deduct postpetition payments, and has not satisfied its burden of
mitigating its damages following the return of the Equipment.

The Chapter 7 Trustee states that the GE Claims should be
reduced, since GE Capital improperly included additional charges,
and did not reduce its claim to reflect a $15,868 postpetition
payment.  The Chapter 7 Trustee submits that the GE Claims should
be allowed for $41,221.  The proposed amount reflects the
asserted arrears of $57,089 less $15,868 of postpetition
payments.

Headquartered in New York, Refco Inc. -- http://www.refco.com/
-- is a diversified financial services organization with
operations in 14 countries and an extensive global institutional
and retail client base.  Refco's worldwide subsidiaries are
members of principal U.S. and international exchanges, and are
among the most active members of futures exchanges in Chicago,
New York, London and Singapore.  In addition to its futures
brokerage activities, Refco is a major broker of cash market
products, including foreign exchange, foreign exchange options,
government securities, domestic and international equities,
emerging market debt, and OTC financial and commodity products.
Refco is one of the largest global clearing firms for
derivatives.  The company has operations in Bermuda.

The company and 23 of its affiliates filed for chapter 11
protection on Oct. 17, 2005 (Bankr. S.D.N.Y. Case No. 05-60006).
J. Gregory Milmoe, Esq., at Skadden, Arps, Slate, Meagher & Flom
LLP, represent the Debtors in their restructuring efforts.  Luc
A. Despins, Esq., at Milbank, Tweed, Hadley & McCloy LLP,
represents the Official Committee of Unsecured Creditors.  Refco
reported US$16.5 billion in assets and US$16.8 billion in debts
to the Bankruptcy Court on the first day of its chapter 11
cases.

The Court confirmed the Modified Joint Chapter 11 Plan of
Refco Inc. and certain of its Direct and Indirect Subsidiaries,
including Refco Capital Markets, Ltd., and Refco F/X Associates,
LLC, on Dec. 15, 2006.  That Plan became effective on Dec. 26,
2006.  (Refco Bankruptcy News; Bankruptcy Creditors' Service
Inc., http://bankrupt.com/newsstand/or 215/945-7000)


SANDY CREEK: S&P Says Dynergy & LS Power Sale is Favorable
----------------------------------------------------------
Standard & Poor's Ratings Services said that the announcement by
Dynegy Inc. and LS Power Funding Corp. to sell 100 MW of their
indirect interest in the Sandy Creek Power facility to Lower
Colorado River Authority is favorable for the credit profile of
Sandy Creek Energy Associates L.P. (BB/Stable).  

Dynegy and LS Power have agreed to sell a 100 MW interest of their
675 MW stake in the unit to LCRA.  LCRA will also enter into a 30-
year power purchase contract for another 100 MW. With this
agreement, 325 MW of ownership interest in the original 900 MW
capacity has been sold and a further 250 MW has been contracted in
long-term power purchase agreements.

Proceeds from the sale are being proportionately used to pay down
debt and for distributions to the sponsors.  Sandy Creek's
strategy is to continue to sign up customers to long-term
contracts or sell down its interest.  To the extent that Sandy
Creek can do the former, and thus increase the proportion of its
capacity under contract, the rating could improve.


SHARPER IMAGE: Seeks to Extend Plan Filing Date to Sept. 16
-----------------------------------------------------------
Since the Petition Date, The Sharper Image Corp. has worked
diligently on a number of time-consuming tasks necessary to the
administration of its Chapter 11 case, including:

   * obtaining debtor-in-possession financing;

   * commencing and continuing going-out-of-business or
     store closing sales at nearly all of its 184 store
     locations;

   * rejecting burdensome leases;

   * preparing schedules of assets and liabilities and statements
     of financial affairs;

   * implementing an amended severance program for the benefit of
     the Debtor's non-management employees;

   * addressing demands from employees, vendors, taxing
     authorities, utility companies, gift card holders and
     other customers, landlords, and other parties-in-interest;

   * working with the office of the United States Trustee to
     provide requested financial information and comply with
     reporting requirements under the Bankruptcy Code;

   * marketing the business and negotiating with various
     parties-in-interest through an arduous auction and sale
     process; and

   * consummating a sale of substantially all of its assets.

Steven K. Kortanek, Esq., at Womble Carlyle Sandridge & Rice,
PLLC, in Wilmington, Delaware, relates that although the Debtor
has made substantial progress advancing the Chapter 11 case and
maximizing value for the benefit of its estate and creditors, it
needs additional time to, among other things, liquidate its
remaining assets in a manner that will maximize value of the  
assets for the benefit of the estate and creditors.

Mr. Kortanek notes that since the Petition Date, the Debtor has
attempted to quantify the amount of existing administrative,
priority, and unsecured claims against the estate, and the  
Debtor will require additional time to review and analyze the
validity, amount, and priority of those claims.

In light of these ongoing efforts, Mr. Kortanek continues,
additional time is needed to develop and negotiate a plan of
liquidation and a disclosure statement that contains adequate
information under Section 1125 of the Bankruptcy Code.

"The Debtor only recently obtained approval of the Sale [of its
Assets] and has worked expeditiously towards closing, Mr.
Kortanek maintains.  "The extension [of the exclusive plan filing
period] . . . will provide Sharper Image and its advisors with
the opportunity to analyze Sharper Image's post-Sale financial
circumstances and develop a plan that provides for the
expeditious conclusion of the chapter 11 case."

Section 1121(b) of the Bankruptcy Code provides for an initial
period of 120 days after the commencement of a chapter 11 case
during which a debtor has the exclusive right to propose and file
a chapter 11 plan.  Section 1121(c)(3) provides that, if a debtor
files a plan within the 120-day Plan Period, it has a period of
180 days after the commencement of the case to obtain acceptance
of that plan, during which time competing plans may not be filed.

Mr. Kortanek reminds the Court that pursuant to Section 1121(d),
the Court may extend a debtor's Exclusive Periods for cause, if  
the initial 120-day and 180-day Exclusive Periods provided for  
prove to be an unrealistic time frame for proposal and
solicitation of a plan.

By this motion, the Debtor asks the Court to extend the exclusive
period during which it may file a Plan through and including
Sept. 16, 2008, and the period during which it may solicit
acceptances of the plan through and including November 15.

"Sharper Image is not seeking an extension of the Exclusive
Periods to delay creditors or force them to accede to its
demands," Mr. Kortanek explains.  "Sharper Image and its
professionals have consistently conferred with and involved the
Statutory Creditors' Committee, the DIP Lender, the United States
Trustee and other parties in interest in all major substantive
and administrative matters in this case."

Extension of the Exclusive Periods will also increase the
likelihood of a greater distribution to the Debtor's stakeholders
by facilitating an orderly, efficient and cost-effective plan
process for the benefit of all creditors, Mr. Kortanek contends.
Termination of the Exclusive Periods, on the other hand, could
give rise to the threat of multiple plans and a contentious
confirmation process resulting in increased administrative
expenses and consequently diminishing returns to creditors, he
says.

                    About Sharper Image

Based in San Francisco, California, Sharper Image Corp. --
http://www.sharperimage.com/-- is a multi-channel specialty
retailer.  It operates in three principal selling channels: the
Sharper Image specialty stores throughout the U.S., the Sharper
Image catalog and the Internet.  The company has operations in
Australia, Brazil and Mexico.  In addition, through its Brand
Licensing Division, it is also licensing the Sharper Image brand
to select third parties to allow them to sell Sharper Image
branded products in other channels of distribution.  

The company filed for Chapter 11 protection on Feb. 19, 2008
(Bankr. D.D., Case No. 08-10322).  Steven K. Kortanek, Esq. at
Womble, Carlyle, Sandridge & Rice, P.L.L.C. represents the
Debtor in its restructuring efforts.  An Official Committee of
UnsecuredCreditors has been appointed in the case.  Whiteford
Taylor Preston LLC is the Committee's Delaware counsel
When the Debtor filed for bankruptcy, it listed total assets of
$251,500,000 and total debts of $199,000,000.  The Debtors'
exclusive period to file a plan expires on June 18, 2008.  
(Sharper Image Bankruptcy News, Issue No. 14; Bankruptcy
Creditors' Service, Inc., http://bankrupt.com/newsstand/or     
215/945-7000).


SHARPER IMAGE: Proposes to Set Aug. 18 as Claims Bar Date
---------------------------------------------------------
Pursuant to Rule 3003(c)(3) of the Federal Rules of Bankruptcy
Procedure and Section 502(b)(9) of the Bankruptcy Code, The
Sharper Image Corp. asks the U.S. Bankruptcy Court for the
District of Delaware to establish August 18, 2008, 5:00 p.m.,
prevailing Pacific Time, as:

    (i) the deadline for each person or entity to file proofs of
        claim against the Debtor based on prepetition claims,
        including claims asserted by holders of gift cards, gift
        certificates, merchandise certificates, and reward cards
        issued by Sharper Image Corporation; and

   (ii) the last date and time for governmental units to file
        proofs of claim against the Debtor.

Moreover, the Debtor asks the Court to approve its (a) proposed
Gift Certificate Proof of Claim Form, a specialized form of proof
of claim for claimants asserting Certificate Claims, (b) proposed
Bar Date notice, and (c) proposed notice and publication
procedure.

The Debtor asserts that each person or entity that asserts a
claim that arose prior to the Petition Date must file an
original, written proof of claim that substantially conforms to
Official Bankruptcy Form B10 or to the Gift Certificate Proof of
Claim Form, so as to be received on or before the Bar Date by the
Debtor's court-approved claims agent, Kurtzman Carson Consultants
LLC.  KCC will not accept proofs of claim sent by facsimile,
telecopy, or electronic mail transmission.

The Debtor proposes that these individuals or entities will not
be required to file a claim on or before the Claims Bar Date:

   * any person or entity whose claim is listed on the Debtor's
     schedules of assets and liabilities and (i) whose claim is
     not described as disputed, contingent, or unliquidated, and
     (ii) who does not dispute the amount or nature of the claim
     as set forth in the Schedules;

   * any person or entity having a claim under Sections 503(b) or
     507(a) of the Bankruptcy Code as an administrative expense;

   * any person or entity whose claim has been paid in full;

   * any person or entity that holds an interest in the Debtor,
     provided, however, that interest holders who wish to assert
     claims that arise out of or relate to the ownership or
     purchase of an interest, must file proofs of claim on or
     before the applicable Bar Date, unless another exception
     applies;

   * any person or entity that holds a claim that has been
     allowed by an order of the Court entered on or before the
     applicable Bar Date;

   * any holder of a claim for which a separate deadline is fixed
     by the Court; and

   * any holder of a claim that has properly filed, with the
     Clerk of the Court or with KCC, a proof of claim utilizing a
     claim form which substantially conforms to the General Proof
     of Claim Form.

Any person or entity that holds a claim that arises from the
rejection of an executory contract or unexpired lease must file a
proof of claim based on the rejection by the later of (i) the
applicable Bar Date, and (ii) the date that is 30 days after the
effective date of the rejection, to have any right to participate
in the Debtor's estate.

Any holder of a claim who is required, but fails, to file a proof
of claim in accordance with the Bar Date Order on or before the
applicable Bar Date will be forever barred, estopped and enjoined
from asserting the claim, and the Debtor and its property will be
forever discharged from any and all indebtedness or liability
with respect to the claim.

Moreover, the holder will not be permitted to vote to accept or
reject any plan of liquidation filed in the Chapter 11 case,
participate in any distribution in the Chapter 11 case on account
of the claim, or receive further notices regarding the claim.

The Debtor proposes to mail a bar date notice, and a General
Proof of Claim Form to:

   (a) the U.S. Trustee;

   (b) attorneys for the Creditors' Committee;

   (c) all known holders of claims listed on the Schedules at
       their stated addresses;

   (d) all parties known to the Debtor as having potential
       claims against its estate;

   (e) all counterparties to the Debtor's executory contracts
       and unexpired leases listed on the Schedules;

   (f) all parties to litigation with the Debtor; and

   (g) all parties who have requested notice.

The Debtor will mail a Bar Date Notice and a Gift Certificate
Proof of Claim Form to each person or entity asserting
Certificate Claims and for which KCC has been provided an
address.  However, KCC will not mail a Bar Date Notice and Gift
Certificate Proof of Claim Form to those persons or entities
asserting Certificate Claims who have already properly filed a
proof of claim substantially in the form of Official Bankruptcy
Form B1O.  Those persons or entities are not required to re-file
a proof of claim.

To the extent the Gift Certificate Proof of Claim Form is
approved by the Court, KCC will prominently display the Gift
Certificate Proof of Claim Form on KCC's Web site.  Those
asserting Certificate Claims may also obtain Gift Certificate
Proof of Claim Forms from the Debtor.
       
Additionally, the Debtor proposes to publish the Bar Date Notice
once in The New York Times, and The Wall Street Journal at least
25 days prior to the Bar Date.

A full-text copy of the proposed Gift Certificate Proof of Claim
is available for free at:

   http://bankrupt.com/misc/SI_GiftCertificateClaim.pdf

A full-text copy of the proposed Bar Date notice is available for
free at:

   http://bankrupt.com/misc/SI_BarDateNotice.pdf

                    About Sharper Image

Based in San Francisco, California, Sharper Image Corp. --
http://www.sharperimage.com/-- is a multi-channel specialty
retailer.  It operates in three principal selling channels: the
Sharper Image specialty stores throughout the U.S., the Sharper
Image catalog and the Internet.  The company has operations in
Australia, Brazil and Mexico.  In addition, through its Brand
Licensing Division, it is also licensing the Sharper Image brand
to select third parties to allow them to sell Sharper Image
branded products in other channels of distribution.  

The company filed for Chapter 11 protection on Feb. 19, 2008
(Bankr. D.D., Case No. 08-10322).  Steven K. Kortanek, Esq. at
Womble, Carlyle, Sandridge & Rice, P.L.L.C. represents the
Debtor in its restructuring efforts.  An Official Committee of
UnsecuredCreditors has been appointed in the case.  Whiteford
Taylor Preston LLC is the Committee's Delaware counsel
When the Debtor filed for bankruptcy, it listed total assets of
$251,500,000 and total debts of $199,000,000.  The Debtors'
exclusive period to file a plan expires on June 18, 2008.  
(Sharper Image Bankruptcy News, Issue No. 14; Bankruptcy
Creditors' Service, Inc., http://bankrupt.com/newsstand/or     
215/945-7000).


SHUMATE INDUSTRIES: Malone & Bailey Raises Going Concern Doubt
--------------------------------------------------------------
Houston-based Malone & Bailey, PC, raised substantial doubt on the
ability of Shumate Industries, Inc., to continue as a going
concern after it audited the company's financial statements for
the year ended Dec. 31, 2007 .  The auditing firm stated that
Shumate requires significant amount of cash in its operations and
does not have sufficient cash to fund its operations for the next
twelve months.

Management related that Shumate incurred recurring losses from
operations of $5,711,806 and $2,553,836 in 2007 and 2006,
respectively, and has an accumulated deficit of $27,087,780.  
These conditions raise substantial doubt as to Shumate's ability
to continue as a going concern.  "To address these concerns,
Shumate has raised proceeds of approximately $3,050,000 through a
convertible note private offering in 2007.  Additionally, Shumate
has sought recapitalization in debt or equity during 2008, however
there can be no assurance that it will successfully recapitalize,"
management said.

The company said it is trying to continue to increase Shumate's
revenues and improve its results of operations to a level of
profitability including revenues and cash flow from the Hemiwedge
Valve Corporation subsidiary.  "New sales representative
agreements have been executed during 2008 to assist in the sales
and marketing efforts to improve our results of operations.  We
believe that the company will not be able to fund its operations,
working capital requirements, and debt service requirements
through fiscal year 2008 through cash flows generated by
operations and may seek to raise additional capital in the future
if the company's results of operations do not continue to
improve," the management added.

The company posted a net loss of $7,210,784 on total revenues of
$9,033,614 for the year ended Dec. 31, 2007, as compared with a
net loss of $1,309,131 on total revenues of $7,719,882 in the
prior year.

At Dec. 31, 2007, the company's balance sheet showed $5,143,132 in
total assets and $9,628,740 in total liabilities, resulting in
$4,485,608 stockholders' deficit.  

The company's consolidated balance sheet at Dec. 31, 2007, also
showed strained liquidity with $2,342,385 in total current assets
available to pay $6,989,982 in total current liabilities.

A full-text copy of the company's 2007 annual report is available
for free at http://ResearchArchives.com/t/s?2d8b

                     About Shumate Industries

Headquartered in Conroe, Texas, Shumate Industries Inc.
(OTCBB: SHMT) -- http://www.shumateinc.com/-- is a Texas-based,  
energy field services company that incorporates new technologies
to bring products to market leveraging its existing
infrastructure, expertise and customer channels.  The company
operates through two wholly owned subsidiaries, Shumate Machine
Works, a contract machining and manufacturing division, and
Hemiwedge Valve Corporation, a division formed to launch a
proprietary new technology in a valve product line targeting flow
control, sub-sea, down-hole and tar sands applications.


SIRIUS COMPUTER: S&P Revises Outlook to Neg. on Weaker Revenue
--------------------------------------------------------------
Standard & Poor's Ratings Services revised its outlook on San
Antonio, Texas-based Sirius Computer Solutions Inc. to negative
from stable.  At the same time, S&P affirmed the 'B+' corporate
credit rating on the company.
     
"The outlook revision reflects weaker-than-expected revenue and
EBITDA growth, and limited financial flexibility resulting from
existing bank agreement requirements," said Standard & Poor's
credit analyst Molly Toll-Reed.
     
The rating on Sirius reflects the company's narrow business
profile, relatively small earnings base, and significant supplier
concentration.  These factors are offset partially by Sirius' good
position in the highly fragmented computer systems value-added
reseller market, diversified customer base, and consistent
profitability.
     
Sirius provides its customers hardware, software, and services
that enable the use of mission-critical applications, including
data storage, network security, network access, application
development, and web hosting.


SMART & FINAL: Higher Leverage Prompts Moody's to Chip Ratings
--------------------------------------------------------------
Moody's Investors Service downgraded Smart & Final Holdings
Corp.'s ratings, including the corporate family rating to B2 from
B1 and left these ratings under review for possible further
downgrade.  This action was prompted by the higher than expected
leverage, lower margins, and weak interest coverage due to the
delay in executing its business plan, principally as a result of
the delayed acquisition of the Henry's and Sun Harvest markets
from Whole Foods Market Inc. in late 2007.  This has led to a
credit profile that is inconsistent with its prior ratings.

Ratings downgraded and under review for possible further
downgrade:

  -- Corporate family rating to B2 from B1
  -- Probability of default rating to B2 from B1
  -- $150 million asset based revolving credit facility due 2013
     to Ba3 from Ba1

  -- $167 million first lien term loan due 2014 to B2 from B1
  -- $140 million second lien term loan due 2014 to Caa1 from B3

Moody's review will focus on the company's operating performance
and cash flow generation, as well as its ability to reduce
leverage and improve interest coverage.  Moody's will also follow
the progress of the company in implementing its delayed strategic
and tactical plans to determine the likelihood of Smart & Final
improving its operating performance from present levels.

Headquartered in Commerce, California, Smart & Final Inc. is a
leading non-membership warehouse and wholesale grocery store chain
specializing in food and foodservice products, as well as daily
household products like paper and packaging and janitorial
equipment/supplies.  For FYE 2007, the company generated
$2.3 billion in net sales.


STRATUS SERVICES: March 31 Balance Sheet Upside-Down by $8,123,044
------------------------------------------------------------------
Stratus Services Group Inc.'s consolidated balance sheet at
March 31, 2008, showed $3,950,726 in total assets, $11,671,518 in
total liabilities, and $402,252 in minority interest, resulting in
a $8,123,044 total stockholders' deficit.

At March 31, 2008, the company's consolidated balance sheet also
showed strained liquidity with $1,861,780 in total current assets
available to pay $10,503,349 in total current liabilities.

The company reported a net loss of $213,167 on revenues of
$2,977,914 for the second quarter ended March 31, 2008, compared
with a net loss of $85,982 on revenues of $1,810,705 in the same
period last year.

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?2dd0

                       Going Concern Doubt

As reported in the Troubled Company Reporter on Jan. 17, 2008,
Gruber & Company LLC, in Lake Saint Louis, Mississippi, expressed
substantial doubt about Stratus Services Group Inc.'s ability of
to continue as a going concern after auditing the company's
consolidated financial statements for the year ended Sept. 30,
2007.  The auditing firm pointed to the company's recurring losses
from operations and net capital deficit.

                      About Stratus Services

Headquartered in Shrewsbury, N.J., Stratus Services Group Inc.
(OTC BB: SSVG.OB) -- http://www.stratusservices.com/-- offers all    
the traditional staffing services.  Stratus has developed a one-
of-a-kind labor management program which focuses on the
performance parameters defined by the client's productivity goals.
This program, which is the backbone of the company's services, is
known as "Smart Solutions(TM)".

                          
SUPERCONDUCTOR TECH: Posts $2,308,000 Net Loss in 2008 1st Quarter
------------------------------------------------------------------
Superconductor Technologies Inc. reported a net loss of $2,308,000
on total net revenues of $3,472,000 for the first quarter ended
March 29, 2008, compared with a net loss of $2,937,000 on total
net revenues of $4,183,000 in the same period ended March 31,
2007.

Net revenues consist primarily of commercial product revenues and
government contract revenues.  Net commercial product revenues
decreased to $1,993,000 in the first quarter of 2008 from
$3,534,000 in the first quarter of 2007, a decrease of $1,541,000,
or 44%.  The decrease is primarily the result of lower sales
volume for the company's SuperLink product due to customer program
delays.

Government contract revenues increased by $830,000, or 128% to
$1,479,000 in the first quarter of 2008 from $649,000 in the first
quarter of 2007.  This increase is primarily attributable to an
increased number of government contracts.

At March 29, 2008, the company's consolidated balance sheet showed
$25,553,000 in total assets, $3,617,000 in total liabilities, and
$21,936,000 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?2dcd

                       Going Concern Doubt

Stonefield Josephson Inc., in Los Angeles, expressed substantial
doubt about Superconductor Technologies 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 net losses
since its inception, accumulated deficit.  In addition, the
auditing firm said that the company expects to incur substantial
additional losses and costs.

For the quarter ended March 29, 2008, the company incurred a net
loss of $2,308,000 and negative cash flows from operations of
$3,080,000.

                About Superconductor Technologies

Headquartered in Santa Barbara, California,, Superconductor
Technologies Inc. (Nasdaq: SCON) -- http://www.suptech.com/--
is a provider of high performance infrastructure products for
wireless voice and data applications.  STI's SuperLink(R) solution
increases capacity utilization, lowers dropped and blocked calls,
extends coverage, and enables faster wireless data rates.  Its
AmpLink(TM) solution enhances the performance of wireless base
stations by improving receiver sensitivity and geographic
coverage.


SUPERIOR ESSEX: Korean LS Cable Deal Cues S&P's Developing Watch
----------------------------------------------------------------
Standard & Poor's Ratings Services placed its 'BB' corporate
credit rating, 'BBB-' senior secured rating, and 'BB-' senior
unsecured rating on Superior Essex Inc. on CreditWatch with
developing implications.  The CreditWatch listing follows the
company's announcement that it has signed a definitive agreement
to be acquired by Korea-based LS Cable Ltd. (unrated) for
$900 million, or $45 per share, in a cash tender offer.  
Developing implications means that S&P could raise, lower, or
affirm the ratings following the completion of its review.
     
The combined entity would be the world's third-largest wire and
cable manufacturing company in the world, with pro forma
consolidated 2007 revenues of $12.8 billion.
     
LS Cable indicated that it has fully committed financing to
complete the transaction.  The transaction is subject to customary
closing conditions and regulatory approvals, including the tender
of a majority of the outstanding shares of Superior Essex.  LS
Cable expects the tender offer to commence on July 1, 2008, at the
same time it completes the previously announced internal corporate
reorganization and name change to LS Corp.
     
Standard & Poor's currently lacks sufficient information regarding
the credit quality of the combined entity or the structure of the
transaction or financing to make a preliminary ratings assessment.
     
"We hope to meet with management to assess the combined company's
financial profile, the impact of the corporate reorganization, and
strategy and financial policy," said Standard & Poor's credit
analyst David Tsui.


SUPERIOR OFFSHORE: Has Until June 16 to File Schedules & SOFA
-------------------------------------------------------------
The United States Bankruptcy Court fort the Southern District of
Texas extended, until June 16, 2008, the period within which
Superior Offshore Inc. may file schedules of assets and
liabilities, and statements of financial affairs.

The Debtor tells the Court that it was unable to complete the
schedules and statements by May 9, 2008, the initial filing
deadline, due to its limited staff.  Thus, the Debtor needs
additional time to complete the requirements pursuant to Rule
1007(c) of the Federal Rules of the Bankruptcy Procedure.

The Debtor reminds the Court that it terminated approximately 200
personnel before it filed for bankruptcy in April 2008.

The Debtor employed H. Malcolm Lovett, Jr., as chief restructuring
officer, and Strategic Capital Corporation, as financial advisor.  
Mr. Lovett is the remaining executive officer of the Debtor.  Mr.
Lovett and Strategic Capital have devoted their efforts on
assessing the Debtor's financial needs and evaluating alternatives
for an orderly wind-down of the Debtor's assets.

Headquartered in Houston Texas, Superior Offshore (Nasdaq: DEEP)
-- http://www.superioroffshore.com/-- provides subsea    
construction and commercial diving services to the offshore
oil and gas industry.  The company's construction services include
installation, upgrading and decommissioning of pipelines and
production infrastructure.  The company operates a fleet of seven
service vessels and provides remotely operated vehicles (ROVs) and
saturation diving systems for deepwater and harsh environment
operations.

Superior Offshore International, Inc., filed for bankruptcy
protection on April 24, 2008 (Bankr. S.D. Tex. Case No. 08-32590).  
The Company continues to operate its business as "debtor in
possession" under the jurisdiction of the Court in accordance with
the applicable provisions of the Bankruptcy Code and orders of the
Court.

David Ronald Jones, Esq., and Joshua Walton Wolfshohl, Esq.,
at Porter & Hedges LLP, represent the Debtor.  The U.S. Trustee
for Region 7 appointed five creditors to serve on an Official
Committee of Unsecured Creditors.  Douglas S. Draper, Esq., at
Heller Draper Hayden Patrick & Horn LLC, represent the Committee
in this case.  The company's consolidated balance sheets showed
total assets of $300,532,000 and total debts of $141,139,000 for
the quarterly period ended Sept. 30, 2007.  The company incurred
$1,038,000 in net loss in nine months ended Sept. 30, 2007,
compared with $37,000,000 in net income the previous year.


TALBOTS INC: Secures $50 Million Funding from Shareholder Aeon Co.
------------------------------------------------------------------
The Talbots Inc. disclosed that Aeon Co. Ltd., which through its
subsidiary, is the majority shareholder of The Talbots Inc., has
agreed to provide to the company $50 million unsecured
subordinated working capital term loan credit facility to support
its turnaround plan, maturing Jan. 28, 2012.

This proposed new $50 million credit facility would supplement the
company's existing working capital lines of credit of
$165 million.  This new credit facility would increase the
company's total working capital borrowing capacity to
$215 million.

"Talbots delivered a solid first quarter performance, despite the
broader macroeconomic issues facing retailers," Trudy F. Sullivan,
Talbots president and chief executive officer, said.  "We are also
experiencing improving sales trends at both our brands and remain
on track to achieve our outlook for earnings per share from
ongoing core operations for fiscal 2008."

"While we believe we had in place sufficient liquidity to fund the
turnaround of our business, this new credit facility will provide
us with an additional level of assurance and even greater
flexibility to weather the current uncertainty in the credit
markets," Mr. Sullivan added.  "We appreciate Aeon's demonstration
of confidence in our strategic plan and in our ability to
successfully execute it."

"This commitment of a new credit facility underscores our
confidence in Talbots management team and the company's turnaround
plan previously approved by the Board of Directors, which is
already showing positive signs of success," Tsutomu Kajita, senior
vice president, international operations for Aeon Co., Ltd. and a
member of the Talbots board of directors, commented,

Under the proposed new credit facility with Aeon, interest on
outstanding principal will be LIBOR plus 500 basis points.  The
company will pay a fee of 50 basis points per annum on the undrawn
portion of the commitment.  

Proceeds of the borrowings under the new credit facility will be
used for general working capital and other appropriate corporate
purposes in connection with the company's turnaround plan.

The proposed new working capital facility with Aeon is subject to
various conditions including completion of satisfactory
confirmatory due diligence by Aeon, the preparation and execution
of definitive loan documentation mutually satisfactory to Aeon and
Talbots and generally consistent with the summary of terms agreed
upon between the companies, and mutual agreement on all other
terms, conditions, covenants and provisions of the definitive loan
documentation.

The principal terms of Aeon's proposed financing were reviewed and
considered along with other proposals from unrelated financial
institutions.  The Aeon proposal was approved by The Talbots Inc.
independent audit committee.

                   Letter of Credit Reductions

As reported in the Troubled company Reporter on April 17, 2008,
the company disclosed in a regulatory filing with the Securities
and Exchange Commission filing, that on April 9, 2008, The Talbots
Inc., and The Talbots Group Limited Partnership received
notification from The Hongkong and Shanghai Banking Corporation
Limited that HSBC was no longer prepared to continue making letter
of credit facilities available to Talbots.  Prior to the
notification, Talbots had available from HSBC a letter of credit
facility, used to finance the import of merchandise, with a limit
of $135 million.

Pursuant to its notification, effective as of April 8, 2008, HSBC
reduced the company's prior letter of credit facility limit of
$135 million to $60 million.  HSBC also advised that it will
further reduce the company's letter of credit facility limit to
$45 million on May 8, 2008, to $30 million on June 9, 2008, to
$15 million on July 8, 2008, and the facility will be cancelled on
Aug. 8, 2008.  Any further letters of credit would be at the
bank's discretion and considered on a case by case basis.

The Talbots Inc., clarified that its recent arrangements with
major vendors, along with currently available working capital
lines, are expected to be sufficient to fund Talbots' working
capital needs under its 2008 operating plan.

                           About Talbots

Headquartered in Hingham, Massachusetts, The Talbots Inc.
(NYSE:TLB) -- http://www.talbots.com/--  is a specialty retailer   
and direct marketer of women's apparel, shoes and accessories.  
The company operates stores in 869 locations in 47 states, the
District of Columbia, and Canada, with 595 locations under the
Talbots brand name and 274 locations under the J. Jill brand name.
Both brands target the age 35 plus customer population.  Talbots
brand on-line shopping site is located at http://www.talbots.com/  
and the J. Jill brand on-line shopping site is located at
http://www.jjill.com/


TEEVEE TOONS: Three Companies Seek to Block Record Contracts Sale
-----------------------------------------------------------------
NME.com, UK reports that The Polyphonic Spree, Ambulance Ltd. and
Universal Music Group want to block TVT from selling record
contracts with bands that signed to the label before it went
bankrupt.

The three companies filed court papers stating their objection on
June 6.

As reported by the Troubled Company Reporter on Feb. 20, 2008,
TEEVEE Toons Inc. dba as T.V.T. Records filed a Chapter 11
bankruptcy petition with the U.S. Bankruptcy Court for the
Southern District of New York on Feb. 19, 2008.

TEEVEE was supposed to receive $132 million settlement from a
litigation involving the distribution of a Ja Rule album, however,
an appeal chipped off the figure.  In addition, TEEVEE was
directed to pay more than $9 million in damages to a Miami label
over album rights.

According to NME.com, "as a result of the filing, Ambulance Ltd.
are currently prevented from releasing any new music but are
continuing to perform and work on new material for the follow up
to their debut LP, released in 2004."

Headquartered in New York City, TEEVEE Toons Inc. dba T.V.T.
Records --  http://www.tvtrecords.com/-- is an American record    
label.  The Debtor filed for Chapter 11 petition on Feb. 19, 2008
(Bankr. S. D. N.Y. Case No.: 08-10562.)  The Official Committee of
Unsecured Creditors has selected Sonnenschein Nath & Rosenthal LLP
as its counsel.   Alec P. Ostrow, Esq. and Constantine Pourakis,
Esq, at Stevens & Lee, P.C. represent the Debtor in its
restructuring efforts.  When the Debtor filed for protection from
its creditors, it listed estimated assets and debts of between
$10 million and $50 million.

TEEVEE Toons is also seeking to sell its back catalogues.


TELAVA NETWORKS: Posts $175,840 Net Loss in 2008 First Quarter
--------------------------------------------------------------
Telava Networks Inc. reported a net loss of $175,840 on net sales
of $1,438,851 for the first quarter ended March 31, 2008, compared
with net income of $8,400 on net sales of $1,277,519 in the same
period ended March 31, 2007.

The increase in sales was primarily derived from purchase of the
intangible asset from the Korean business, Ttoore Company, which
the company acquired on Jan. 3, 2007.  At the time of acquisition,
TToore's business was not significant in comparison with the
company.  

At March 31, 2008, the company's consolidated balance sheet showed
$5,926,142 in total assets, $4,236,839 in total liabilities,
$323,185 in minority interest, and $1,366,118 in total
stockholders' equity.

The company's consolidated balance sheet at March 31, 2008, also
showed strained liquidity with $1,995,215 in total current assets
available to pay $4,236,839 in total current liabilities.

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

                       Going Concern Doubt

De Joya Griffith & Company, LLC, in Henderson, Nev., expressed
substantial doubt about Telava Networks 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
for the year ended Dec. 31, 2007.

The companyhas incurred a net loss of $175,840 for the three
months ended March 31, 2008, and has a working capital deficit of
$2,241,624 at March 31, 2008.

                      About Telava Networks

Based in San Francisco, Telava Networks Inc. (OTC: TLVA) provides
advertising and directory listings for small and medium sized
businesses on its Internet Website in a Yellow Pages format.  The
company provides those services to its subscribers for a monthly
fee.  These services are provided primarily to small and medium
sized businesses throughout the United States.


TELAVA NETWORKS: De Joya Expresses Going Concern Doubt
------------------------------------------------------
Henderson, Nev.-based De Joya Griffith & Company, LLC, raised
substantial doubt on the ability of Telava Networks, Inc., to
continue as a going concern after it audited the company's
financial statements for the year ended Dec. 31, 2007.  The
auditor pointed to the company's losses from operations for the
year ended Dec. 31, 2007.

The company has incurred a net loss for the 12 months ended
Dec. 31, 2007, and has a working capital deficit of $346,374 at
Dec. 31, 2007, all of which raises substantial doubt about its
ability to continue as a going concern.  The company has funded
its operations and marketing efforts through the issuance of debt
and equity securities.  In order to continue execution of the
business plan, increase marketing efforts and achieve profitable
operations, management anticipates a need for additional
financing.  Management's plans for funding future operations
primarily include the sale of debt and equity securities.

The company posted net loss of $572,190 on net sales of $2,380,869
for the year ended Dec. 31, 2007, as compared with a net income of
$230,032 on net sales of $3,099,342 in the prior year.

At Dec. 31, 2007, the company's balance sheet showed $4,288,370 in
total assets, $2,380,869 in total liabilities, $344,930 in
minority interest, and $1,562,571 in total stockholders' equity.  

The company's consolidated balance sheet at Dec. 31, 2007, showed
strained liquidity with $2,034,495 in total current assets
available to pay $2,380,869 in total current liabilities.

A full-text copy of the company's 2007 annual report is available
for free at http://ResearchArchives.com/t/s?2dc2

                     About Telava Networks

Telava Networks, Inc., (Other OTC: TLVA.PK) --
http://www.telava.com-- provides fixed and mobile WiMAX broadband  
solutions to residence customers, small and medium businesses,
public safety organizations, schools, and local and state
governments in the United States.  It operates in four divisions:
Telava Wireless, Telava Towers, Telava Marketing, and Telava
Spectrum.  In addition, the company offers advertising and
directory listings to small and medium sized businesses on its Web
site in a Yellow Pages' format.  As of Dec. 17, 2007, it owned a
wireless broadband network covering approximately 45 cities and
towns in 22 states.  Telava Networks, Inc., was founded in 2003
and is headquartered in San Francisco, Calif.


TENASKA OKLAHOMA: S&P Affirms 'BB-' Rating on $55.2MM Unsec. Bonds
------------------------------------------------------------------
Standard & Poor's Ratings Services affirmed its 'BB-' rating on
Tenaska Oklahoma I L.P.'s $55.2 million (as of March 31, 2008)
unsecured bonds due in 2014.  At the same time, S&P assigned a '6'
recovery rating, indicating its expectation for negligible
recovery (0% to 10%) in the event of a payment default.
     
At the same time, S&P affirmed the 'BBB-' rating on Kiowa Power
Partners LLC's $536.1 million (as of March 31, 2008) senior
secured bonds due in 2013 and 2021.  S&P also assigned a '2'
recovery rating to KPP's debt, indicating its expectation for a
substantial recovery (70% to 90%) if a payment default occurs.  
The outlook is stable.
     
Tenaska Oklahoma is KPP's holding company.  KPP sells capacity and
energy under an 18-year electricity manufacturing agreement with
Shell Energy North America (US) L.P. (SENA: A-/Stable/--), a
subsidiary of Shell Oil Co. (AA/Positive/A-1+).  The project's
previous offtaker, Coral Power, was merged into SENA in June 2008
with no effect on Tenaska Oklahoma's ratings.
     
The rating on Tenaska Oklahoma reflects the following risks:

Tenaska Oklahoma's ability to service debt is directly related to
KPP's operational performance, which must meet minimum
availability and capacity performance requirements under the EMA.  
The bondholders fully bear the project's operating risks.  Tenaska
Oklahoma's notes, which are structurally subordinated to KPP's
senior secured bonds, have a higher sensitivity to default than
KPP's bonds.  Tenaska Oklahoma's senior secured notes are serviced
only if KPP can meet a 1.2x debt service coverage test.  Standard
& Poor's expects that Tenaska Oklahoma's lenders would have
negligible recovery of principal after a default because these
notes are secured only by the holding company's equity and any
cash that may be held in its accounts.

Minimum consolidated debt service coverage (including KPP's debt
and Tenaska Oklahoma's debt) is a relatively low 1.3x.  Standard &
Poor's expects KPP's minimum coverage to be 1.48x for the senior
debt's term.  Payments under the EMA could, in limited
circumstances, be disputed and thus delay the timeliness of
payments.  To the extent that there is a disagreement under the
EMA, the obligations of Shell under the guarantee are no broader
than those of SENA under the EMA.  Standard & Poor's believes that
delay risk is manageable given SENA's commitment to the project
and the strong creditworthiness of the counterparties.  

The project's majority ownership by Tenaska Inc. affiliates
implies a degree of exposure to Tenaska's creditworthiness because
the project does not meet Standard & Poor's criteria for being
bankruptcy remote from Tenaska.  Tenaska is a privately owned
project developer not rated by Standard & Poor's.  The 30%
ownership stake of Diamond largely mitigates this risk.
     
The following strengths partially temper the project's risks:

The EMA has a strong contractual framework with a reputable and
creditworthy off-taker.  Due to capacity payments that fully cover
fixed costs and debt service, debt service coverage ratios resist
deterioration under several stress-case scenarios, including a
zero-dispatch case.

The facility uses proven General Electric 7FA turbine-generator
technology, with limited technical risks.

The long-term service agreement with General Electric
(AAA/Stable/A-1+) is structured to allow for recovery of
nonavailability payments if the project fails to maintain the
availabilities mandated under the EMA with SENA.  

Performance guarantees from investment-grade counterparties, e.g.,
Shell Oil guarantees SENA's obligations.  A six-month debt service
reserve fund provides project liquidity.  
     
Standard & Poor's post-default valuation is based on a liquidation
scenario, with the expectation that, post-default, the assets
would be sold rather than Kiowa emerging as a going concern.  The
most likely default scenario would be high operating and
maintenance costs beginning in 2009, combined with a significant
deterioration in plant heat rate, capacity, and availability.
     
Under this scenario, any unrestricted cash would be exhausted and
all liquidity facilities would be fully drawn by 2011, leading to
a default.  With conservative recovery assumptions including a 12%
discount rate, holders of KPP's bonds can expect to receive 70% to
90% of their remaining principal in a post-default asset sale.  
Tenaska Oklahoma's bondholders, however, would not expect to
recover any remaining principal post default.
     
The stable outlook on Tenaska Oklahoma reflects Standard & Poor's
view that the project will be able to meet availability and
capacity requirements under the EMA, which in turn we expect will
provide a predictable and stable revenue stream.
     
"We could lower the ratings or revise the outlook to negative if
the facility develops further operational problems.  Because
Tenaska Oklahoma receives its cash flow from a single asset, there
is limited potential for a ratings upgrade," said Standard &
Poor's credit analyst Mark Habib.


TORRENT ENERGY: Subsidiary Needed $4.5MM at Bankruptcy Filing
-------------------------------------------------------------
Loran Wiese of Methane Energy Corp., a subsidiary of Torrent
Energy Corp., says the company filed for Chapter 11, since it
needs approximately $4.5 million to complete a current phase of a
project in the South Coast,  Azenith Smith of the KCBY.com (Ore.)
reports.

Since 2005, the company has been exploring and developing natural
gas from coal in the Coos Bay Basin region, including several
wells on West Port Hill, south of Coos Bay, according to the
report.              

Headquartered in Portland, Oregon, Torrent Energy Corporation fka
iRV Inc. -- http://www.torrentenergy.com/-- engages in natural  
gas exploration. The company and two of its affiliates, Methane
Energy Corp. and Cascadia Energy Corp., filed for
Chapter 11 protection on June 2, 2008 (Bankr. D. Ore Led Case
No.08-32638-08-32640). Jeanette L. Thomas, Esq., at Perkins Coie
LLP, represents the Debtors in their restructuring efforts.

The Debtors' consolidated balance sheets listed total assets of
$35,955,866 and total debts of $23,073,091 for the quarterly
period ended Dec. 31, 2007.

As reported by the Troubled Company Reporter on June 12, 2008, the
Hon. Elizabeth Perris of the U.S. Bankruptcy Court for the
District of Oregon authorized Torrent Energy Corp. and its debtor-
affiliates to obtain, on an interim basis, up to $1.34 million in
debtor-in-possession financing from YA Global Investment LP, as
lender.  A hearing is set for July 9, 2008, to consider final
approval of
the Debtors' DIP request.


UNI-MARTS LLC: U.S. Trustee Forms Seven-Member Creditors Committee
------------------------------------------------------------------
Roberta A. DeAngelis, the U.S. Trustee for Region 3, appointed
seven creditors to serve on an Official Committee of Unsecured
Creditors for the Chapter 11 cases of Uni-Marts LLC and its
debtor-affiliates.

The creditors committee members are:

   1) BP Products North America Inc.
      Attn: Robert R. Ross
      Central Park Lisle
      3333 Warrenville Road, Suite 8079
      Lisle, Illinois 60532
      Tel: (630) 245-3433
      Fax: (630) 245-3513

   2) McLane Company, Inc.
      Attn: Neal A. Mayes
      4747 McLane Parkway
      Temple, Texas 76504
      Tel: (254) 771-7490
      Fax: (254) 771-7582

   3) Bottling Group LLC
      dba Pepsi Bottling Group
      Attn: Michael T. Bevilacqua
      1100 Reynolds Boulevard
      Winston-Salem, North Carolina 27102
      Tel: (336) 896-5577
      Fax: (336) 896-6002

   4) Petroleum Products Corp.
      Attn: Dennis M. Shaw, CFO
      P.O. Box 2621
      Harrisburg, Pennsylvania 17105
      Tel: (717) 939-0466
      Fax: (717) 939-0294

   5) Farm & Home Oil Co., LLC
      Attn: 3115 State Road
      Telford, Pennsylvania 18969
      Tel: (215) 258-2100
      Fax: (215) 257-8508

   6) National Retail Properties Trust
      Attn: Christopher Tessitore,
      450 S. Orange Avenue, Suite 900,
      Orlando, Florida 32801
      Tel: (407) 650-1115
      Fax: (321) 206-2138

   7) Exxon Mobil Oil Corporation
      Attn: James Michael Mulhern
      P.O. Box 937
      McMurray, Pennsylvania 15317,
      Tel: (724) 942-4427
      Fax: (724) 942-4428

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

                          About Uni-Marts

Headquartered in State College, Pennsylvania, Uni-Marts LLC sells
consumer goods.  The company and six of its affiliates filed for
Chapter 11 protection on May 29, 2008 (Bankr. D. Del. Lead Case
No.08-11037).  Michael Gregory Wilson, Esq., at Hunton & Williams
LLP represents the Debtors in their restructuring efforts.  The
Debtor selected Epiq Bankruptcy Solutions LLC as their claims,
noticing and balloting agent.  When the Debtors filed for
protection, they listed assets and debts between $50 million
and $100 million.


US AIRWAYS: To Cut Fourth Quarter Domestic Capacity by 8%
---------------------------------------------------------
US Airways Group Inc. said it is making additional domestic
capacity reductions, reducing headcount and implementing several
new revenue and cost-cutting initiatives in response to rising
fuel costs.  At current fuel prices, the company estimates that it
will spend an average of $299 in fuel costs alone to carry one
mainline passenger on a round trip journey, which is an increase
from an average of $151 in 2007 and $70 in 2000.

                        Capacity Reduction

The company announced it will reduce its fourth quarter domestic
mainline capacity by 6% to 8% on a year-over-year basis as opposed
to the previously announced 2% to 4% decrease.  The company also
announced that domestic mainline capacity for 2009 is planned to
be reduced seven to 9% from 2008 levels.

The company intends to reduce the size of the fleet by returning
six Boeing 737-300 aircraft by the end of 2008, four Airbus A320
aircraft in the first half of 2009, and the cancellation of leases
of two A330-200 wide-body aircraft that had been scheduled for
delivery in the second quarter of 2009.  The airline is also
planning to reduce additional aircraft in 2009 and 2010.

The company also announced that effective Sept. 3, 2008, it will
close most of its Las Vegas night operation, which will reduce
daily departures from Las Vegas to 81 flights as of the September
3 schedule change with additional reductions by the end of 2008.

The company also announced that in connection with its reduction
in the number of flights and the size of the fleet, it would
require about 1,700 fewer positions across the system including
about 300 pilots, 400 flight attendants, 800 airport employees and
200 staff and management.

                        Additional Savings

The company announced plans to close (i) the US Airways Clubs in
the Baltimore/Washington International Airport and the Raleigh-
Durham International Airport, (ii) arrivals lounges in Munich,
Rome, and Zurich, and (iii) cargo stations in Burbank, Colorado
Springs and Reno.  The company also intends to revise its
wholesale programs for cruise lines, tour operators and
consolidators, including reducing the number of agency partners,
decreasing discounts, adding tighter restrictions on travel rules,
and reducing commissions.

                   Revenue and Fee Initiatives

The company also announced these revenue and fee initiatives:

    * First-Checked-Bag Fee: The company plans to implement a
      first-checked-bag service fee of $15. The new fee goes
      into effect for tickets booked on or after July 9, 2008,
      and will apply to most customers on flights within the
      U.S. and to or from Canada, Latin America, and the
      Caribbean.

    * In-Flight Beverage Purchase Program: Effective Aug. 1,
      2008, the company plans to begin selling all non-alcoholic
      beverages (including sodas, juices, bottled water and
      coffee) in its domestic coach cabins and increasing the
      cost of alcoholic beverages.  Complimentary beverages will
      continue to be served to domestic First Class, US Airways
      Shuttle, trans-Atlantic Envoy and trans-Atlantic economy
      class passengers and to unaccompanied minors.

    * Call Center Ticket Fees: US Airways has instituted a $25
      service fee for domestic tickets and a $35 service fee for
      international tickets purchased through its call center
      reservations line, and tickets purchased at airport/city
      ticket offices will be assessed a $35 (domestic) or $45
      (international) service fee.

    * Dividend Miles Changes: The company intends to increase
      the award redemption processing fee on all Dividend Miles
      award tickets issued on or after Aug. 6, 2008, and
      eliminate its special bonus miles program for Preferred
      status Dividend Miles members.

    * Employee Guest Pass Price Increase: While the company's
      employees and their eligible dependents will continue to
      enjoy free travel throughout the airline's domestic and
      international network, the company intends to increase
      fees paid by employees' guests and parents, who travel on
      a standby basis.

The company believes that the preceding revenue and fee
initiatives combined with the previously announced Choice Seats
and second-checked-bag carry programs will generate between
$300 million and $400 million annually.

             Results of Annual Meeting of Stockholders

US Airways diclosed the results of its annual meeting of
stockholders held on June 12, 2008, at its corporate headquarters
in Tempe, Ariz. Stockholders voted to re-elect W. Douglas Parker
and Bruce R. Lakefield to three-year terms on the Board of
Directors, expiring at the annual meeting of stockholders in 2011.  
In addition, stockholders voted to ratify the appointment of KPMG
LLP as the company's independent registered accounting firm.  
Stockholders also voted in favor of the US Airways Group, Inc.
2008 Equity Incentive Plan, and against two shareholder proposals,
one relating to disclosure of political contributions and one
relating to the preparation of a corporate sustainability report.

                         About US Airways

Based in Tempe, Arizona, US Airways Group Inc.'s (NYSE: LCC) -
http://www.usairways.com/-- primary business activity is the
ownership of the common stock of US Airways, Inc., Allegheny
Airlines, Inc., Piedmont Airlines, Inc., PSA Airlines, Inc.,
MidAtlantic Airways, Inc., US Airways Leasing and Sales, Inc.,
Material Services Company, Inc., and Airways Assurance Limited,
LLC.

Under a Chapter 11 plan declared effective on March 31, 2003,
USAir emerged from bankruptcy with the Retirement Systems of
Alabama taking a 40% equity stake in the deleveraged carrier in
exchange for $240 million infusion of new capital.

US Airways and its subsidiaries filed another chapter 11 petition
on Sept. 12, 2004 (Bankr. E.D. Va. Case No. 04-13820).  Brian P.
Leitch, Esq., Daniel M. Lewis, Esq., and Michael J. Canning, Esq.,
at Arnold & Porter LLP, and Lawrence E. Rifken, Esq., and Douglas
M. Foley, Esq., at McGuireWoods LLP, represent the Debtors in
their restructuring efforts.  In the Company's second bankruptcy
filing, it lists $8,805,972,000 in total assets and $8,702,437,000
in total debts.

The Debtors' Chapter 11 plan for its second bankruptcy filing
became effective on Sept. 27, 2005.  The Debtors completed their
merger with America West on the same date.  (US Airways Bankruptcy
News, Issue No. 158; Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000).

                          *     *     *

As reported in the Troubled Company Reporter on June 2, 2008,
Fitch Ratings has downgraded the debt ratings of US Airways Group,
Inc. as: Issuer Default Rating to 'CCC' from 'B-'; Secured term
loan rating to 'B/RR1' From 'BB-/RR1'; and Senior unsecured rating
to 'CC/RR6' from 'CCC/RR6'.  Fitch's ratings apply to
approximately $1.7 billion in outstanding debt.  The Rating
Outlook is Negative.


US INVESTIGATIONS: HireRight Acquisition Won't Affect S&P's Rtngs.
------------------------------------------------------------------
Standard & Poor's Ratings Services said that its ratings and
outlook on U.S. Investigations Services Inc. (B/Negative/--) are
currently unaffected by the company's announcement that it will
acquire HireRight Inc. (unrated) for approximately $195 million,
less cash on hand at closing.
     
S&P assume the partially debt-financed acquisition will result in
adjusted leverage remaining close to current levels. U.S.
Investigations Services' adjusted leverage as of the 12 months
ended March 31, 2008, was approximately 7.4x, and its expect
leverage to improve to the 7x area by fiscal year end Sept. 30,
2008.  S&P will continue to monitor the company's progress in
reducing leverage; if leverage does not improve as expected, it
could lower the ratings.
     
Falls Church, Virginia-based U.S. Investigations Services provides
preemployment screening, professional security, and background
investigation services to government and corporate clients.


VERTIS COMMS: Seeking Creditors' Vote on Prepackaged Ch. 11 Plan
----------------------------------------------------------------
Vertis Communications commenced a solicitation of votes for its
prepackaged plan of reorganization from its creditors, including
holders of Vertis' 9.75 percent Senior Secured Second Lien Notes
due 2009, 10.875 percent Senior Notes due 2009 and 13.5 percent
Senior Subordinated Notes due 2009.

Vertis Communications delivered with the Securities and Exchange
Commission on June 11, 2008, a proposed prepackaged joint Chapter
11 plan of reorganization and a disclosure statement explaining
that plan.

"We have made great progress with our plan to merge with American
Color Graphics and our restructuring initiatives are on track.  
These actions will make Vertis a much stronger marketing partner
for our valued clients, a superior business partner for our
suppliers and an even better place to work for our employees,"
said Mike DuBose, chairman and CEO of Vertis.  "As always, we
remain completely focused on providing our customers with quality
products and on-time delivery, as well as maintaining our
relationships with our suppliers and vendor partners."

Mr. DuBose also stated that throughout the solicitation process,
trade creditors, suppliers and employees will continue to receive
amounts owed to them in the ordinary course of business.  In
addition, the Plan provides that the allowed claims of trade
creditors, suppliers and employees will be paid in full.

On May 22, 2008, as updated on May 30, 2008, Vertis announced it
had support of its noteholders to merge with American Color
Graphics and complete its comprehensive restructuring plans.

Since then, Vertis has received additional support.  At this time,
Vertis has agreements with an aggregate of approximately 79
percent of the outstanding principal amount of its 9.75 percent
Senior Secured Second Lien Notes due 2009, 84 percent of the
outstanding principal amount of its 10.875 percent Senior Notes
due 2009, and 79 percent of the outstanding principal amount of
its 13.5 percent Senior Subordinated Notes due 2009, along with
the holders of an aggregate of approximately 74 percent of the
outstanding principal amount of the 10 percent Secured Second Lien
Notes due 2010 of ACG, to vote to accept the Plan, subject to
certain conditions.

Under the Plan, holders of Vertis Notes and American Color Graphic
Inc. Notes will be exchanging their notes for an aggregate of $550
million in new notes and substantially all of the new equity in
the combined company.

The transaction is also supported by Vertis" principal
stockholders and the holders of over 95 percent of the outstanding
principal amount of Vertis Holdings Mezzanine Notes.  The
consensual financial restructurings will reduce the combined
company"s debt obligations -- including the off-balance sheet
accounts receivable facility and approximately $248 million of
Vertis Holdings Mezzanine Notes -- by approximately $1 billion
before transaction fees and expenses.

Vertis and ACG intend to commence prepackaged Chapter 11 cases at
the conclusion of the solicitation period to implement the
restructuring.  The restructuring transactions, including the
merger, are expected to close this summer.

Votes on the Plan must be received by Financial Balloting Group
LLC, the company's voting agent, before the applicable deadline.
Solicitation materials are being provided to creditors of record.

A full-text copy of the prepackaged joint Chapter 11 plan of
reorganization and disclosure statement is available for free
at http://ResearchArchives.com/t/s?2dda

                       About American Color

American Color Graphics Inc. -- http://www.americancolor.com/--      
is one of North America's largest and most experienced full
service premedia and print companies, with eight print locations
across the continent, six regional premedia centers, photography
studios nationwide and a growing roster of customer managed
service sites.  The company provides solutions and services such
as asset management, photography, and digital workflow solutions
that improve the effectiveness of advertising and drive revenues
for their customers.

                         About Vertis Inc.

Headquartered in Baltimore, Vertis Inc. dba Vertis Communications
-- http://www.vertisinc.com/-- is a provider of print advertising   
and direct marketing solutions to America's retail and consumer
services companies.  

                       Going Concern Doubt

Deloitte & Touche LLP, in Baltimore, Maryland, expressed
substantial doubt about Vertis Inc.'s ability to continue as a
going concern after auditing the company's consolidated financial
statements for the years ended Dec. 31, 2007, and 2006.  The
auditing firm said that the company has incurred recurring net
losses and is experiencing difficulty in generating sufficient
cash flow to meet its obligations and sustain its operations.

                           *    *    *

Vertis' consolidated balance sheets show total assets of
$499,562,000 and total debts of $1,415,569,000 resulting in a
$916,007,000 stockholders' deficit.

American Color's consolidated balance sheets reveal total assets
of $224,080,000 and total debts of $493,973,000 resulting in a
$269,893,000 stockholders' deficit.


VYTERIS INC: March 31 Balance Sheet Upside-Down by $25,298,725
--------------------------------------------------------------
Vyteris Inc.'s consolidated balance sheet at March 31, 2008,
showed $3,370,253 in total assets and $28,668,978 in total
liabilities, resulting in a $25,298,725 total stockholders'
deficit.

At March 31, 2008, the company's consolidated balance sheet also
showed strained liquidity with $2,331,944 in total current assets
available to pay $13,630,676 in total current liabilities.

The company reported a net loss of $1,764,296 on total revenues of  
$719,751 for the first quarter ended March 31, 2008, compared with
a net loss of $9,789,006 on total revenues of $950,301 in the same
period last year.

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?2dd2

                       Going Concern Doubt

Amper, Politziner & Mattia, P.C., in Edison, N.J., expressed
substantial doubt about Vyteris 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 incurred recurring
losses and is dependent upon obtaining sufficient additional
financing to fund operations.  

                        About Vyteris Inc.

Headquartered in Fair Lawn, N.J., Vyteris Inc. (OTC BB: VYHN) --
http://www.vyteris.com/-- fka. Vyteris Holdings (Nevada) Inc.,
is the maker of the first active drug delivery patch to receive
marketing clearance from the U.S. Food and Drug Administration
(FDA).  Vyteris' proprietary active transdermal drug delivery
(iontophoresis) technology delivers drugs comfortably through the
skin using low-level electrical energy.  


WAVE SYSTEMS: Posts $6,010,048 Net Loss in 2008 First Quarter
-------------------------------------------------------------
Wave Systems Corp. reported a net loss of $6,010,048 on total net
revenues of $1,699,079 for the first quarter ended March 31, 2008,
compared with a net loss of $5,045,560 on total net revenues of
$1,287,040 in the same period last year.

The increase in total net revenues was due primarily to licensing
revenues, which increased by $438,014 during the quarter.  This
increase was due to a higher volume of shipments of Wave's OEM
customer products, primarily as a result of its OEM relationship
with Dell Inc., for which Wave receives royalty income.  

Selling, general and administrative (´SG&AĦ) expenses for the
three months ended March 31, 2008, were $4,297,090, as compared to
$3,665,592 for the comparable period of 2007, an increase of
approximately 17%.  

Research and development expenses for the three months ended
March 31, 2008 were $3,253,479, as compared to $2,542,860 for the
comparable period of 2007, an increase of 28%.  

At March 31, 2008, the company's consolidated balance sheet showed
$4,139,175 in total assets, $3,817,032 in total liabilities, and
$322,143 in total stockholders' equity.

The company's consolidated balance sheet at March 31, 2008, also
showed strained liquidity with $3,312,935 in total current assets
available to pay $3,817,032 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?2dd9

                       Going Concern Doubt

As reported in the Troubled Company Reporter on March 28, 2008,
KPMG LLP, in Boston, expressed substantial doubt about Wave
Systems 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 and accumulated
deficit.

                        About Wave Systems

Headquartered in Lee, Mass., Wave Systems Corp. (Nasdaq : WAVX)
-- http://www.wave.com/-- provides software to help solve  
critical enterprise PC security challenges such as strong
authentication, data protection, network access control and the
management of these enterprise functions.


WELLMAN INC: Wants Court to Establish July 25 as Claims Bar Date
----------------------------------------------------------------
Wellman Inc. and its debtor-affiliates ask the U.S. Bankruptcy
Court for the Southern District of New York to:

   (a) establish July 25, 2008, as the deadline for creditors
       to file their proofs of claim that arose before the
       bankruptcy filing; and

   (b) establish Aug. 21, 2008, as the deadline for governmental
       units to file their prepetition claims; and

   (c) give creditors 30 days after receiving a notice of
       amendment of the Debtors' schedules of liabilities, to
       file their proofs of claim in connection with the
       amendment.

In connection with the rejection of their executory contracts and
unexpired leases, the Debtors request the Court to fix the later
of (i) July 25, 2008; (ii) the date provided in the order
authorizing the rejection of contract or lease; or (iii) if no
such date is provided, 30 days after the date that order or
rejection notice is issued, for creditors to file their proofs of
claim.

Jonathan Henes, Esq., at Kirkland & Ellis LLP, in New York, says
the purpose of the Bar Dates is to allow the Debtors and
creditors to expeditiously evaluate the liabilities of the
estate, and to ensure that the interests of the creditors are
protected.

Creditors holding these claims need not file a proof of claim by
the Bar Dates:

   (1) claims already filed against the Debtors with the Clerk
       of the Bankruptcy Court for the Southern District of New
       York;

   (2) claims listed in the Debtors' schedules of liabilities,
       provided that (i) the claims are not scheduled as
       disputed, contingent or unliquidated; (ii) the creditors
       do not disagree with the amount, nature and priority of
       their claims; and (iii) the creditors do not dispute that
       their claims are an obligation of the specific Debtors;

   (3) claims allowed by the Court prior to the approval of the
       proposed deadline for filing proofs of claim;

   (4) claims that had been paid in full by the Debtors or any
       other party;

   (5) claims held by the Debtors in their Chapter 11 cases;

   (6) claims of the Debtors' current employees, if an order of
       the Court authorized the Debtors to honor those claims
       in the ordinary course as a wage or benefit;

   (7) claims limited exclusively to the repayment of principal,
       interest or other charges owed under any bond or note
       issued by the Debtors pursuant to an indenture;

   (8) claims based on interest in the Debtors' equity security,
       provided that any holder asserting a claim against the
       Debtors for damages or rescission based on the purchase
       or sale of an equity security must file its claim on or
       before July 25, 2008; and

   (9) claims allowable under Sections 503(b) and 507(a)(I)
       as administrative expenses of the Debtors' bankruptcy
       cases.

The Debtors propose that any creditor that fails to file a proof
of claim on or before the Bar Dates be barred from asserting its
claims, will not be permitted to vote for or against their plan
of reorganization, and will not receive any distribution on
account of its claim.

The Debtors intend to mail the notice of the Bar Date as well as
the proof of claim form to all creditors no later than three days
after the Court approves the proposed deadline.  The Debtors also
intend to publish the notice in the Wall Street Journal on or
before June 30, 2008.

Headquartered in Fort Mill, South Carolina, Wellman Inc. ([OTC]:
WMANQ.OB) -- http://www.wellmaninc.com/-- manufactures and     
markets packaging and engineering resins used in food and beverage
packaging, apparel, home furnishings and automobiles.  They
manufacture resins and polyester staple fiber a three major
production facilities.

The company and its debtor-affiliates filed for Chapter 11
protection on Feb. 22, 2008 (Bankr. S.D. N.Y. Case No. 08-10595).   
Jonathan S. Henes, Esq., at Kirkland & Ellis, LLP, in New York
City, represents the Debtors.

Wellman Inc., in its bankruptcy petition, listed total assets
of $124,277,177 and total liabilities of $600,084,885, as of
Dec. 31, 2007, on a stand-alone basis.  Debtor-affiliate ALG,
Inc., listed assets between $500 million and $1 billion on a
stand-alone basis at the time of the bankruptcy filing.  
Debtor-affiliates Fiber Industries Inc., Prince Inc., and
Wellman of Mississippi Inc., listed assets between $100 million
and $500 million at the time of their bankruptcy filings.

On a consolidated basis, Wellman Inc., and its debtor-affiliates
listed $498,867,323 in assets and $684,221,655 in liabilities as
of Jan. 31, 2008.

(Wellman Bankruptcy News, Issue No. 14; Bankruptcy Creditors'
Service Inc., http://bankrupt.com/newsstand/or 215/945-7000)  


X-RITE INC: S&P Junks Rating as Firm Continues Talks with Lenders
-----------------------------------------------------------------
Standard & Poor's Ratings Services lowered its corporate credit
rating on X-Rite Inc. to 'CCC+' from 'B+'.  Ratings remain on
CreditWatch, where they were placed on April 3, 2008, following
the company's announcement that it was not in compliance with
certain covenants in its secured credit facilities.  The
CreditWatch implications have been revised to developing from
negative, which means that the ratings could be raised, lowered,
or affirmed following the completion of its review.

At the same time, S&P lowered the ratings on the company's first-
and second-lien term loans.  The first-lien term loan rating was
lowered to 'B-' from 'BB-', and the second-lien term loan rating
was lowered to 'CCC' from 'B'.  The recovery ratings for the term
loans remain unchanged.
     
"The rating action reflects the company's ongoing negotiations
over covenant violations with its lenders, lack of further access
to its revolver, ongoing negative free cash flows, Standard &
Poor's further assessment of weakening market conditions, and the
challenges of completing two acquisitions," said Standard & Poor's
credit analyst Bruce Hyman.
     
X-Rite is in negotiations with its lenders to address its covenant
defaults and believes that it has sufficient cash to meet interest
payments and operate its business.  The company had cash balances
of $13 million on May 27, 2008, pro forma for approximately
$9 million in interest payments due in June and the cash costs of
the company's April restructuring action.  The company believes
that it has sufficient cash for operational requirements, although
it does not currently have access to the approximately $15 million
undrawn balance in its revolving credit agreement.
     
X-Rite generated $5.7 million in negative free operating cash flow
in the March 2008 quarter, although cost reduction actions
announced in April have been targeted to improve profitability and
reduce cash operating costs by about $18 million annually.  Still,
economic conditions are weaker than initially expected, and S&P
expect June quarter revenues to decline sequentially, while we
expect sales for the full year to be flat to down compared with
2007 sales.  The company's projected covenant-defined EBITDA for
2008, $60 million to $68 million, is lower than the current senior
debt covenant requirement for the year of $72.5 million.  Adjusted
leverage, as computed by Standard & Poor's, was about 8x EBITDA
for the 12 months ended March 30, 2008.
     
Standard & Poor's will monitor discussions between X-Rite and its
lenders.  S&P could raise the rating if the company is able to
renegotiate its credit agreements on favorable terms and restore
its free cash flows to sustainable levels, or if the company is
able to access other sources of capital.  However, S&P could lower
the ratings if negotiations were protracted while market
conditions continued to weaken, or if discussions do not result
in meaningful relief.  An acceleration of the debt could result in
a default.


* Moody's Says Casino Resorts Operators Can Avoid Rating Cuts
-------------------------------------------------------------
Las Vegas Strip casino resort operators should be able to avoid
ratings downgrades due strictly to the current economic downturn,
but will be vulnerable to negative rating actions if the slowdown
is prolonged or takes a turn for the worse, says Moody's Investors
Service.

"The Las Vegas resorts are not as recession-resistant as they used
to be," says Moody's VP/Senior Credit Officer Margaret Holloway.  
"Most operators have some room within their respective rating
categories to withstand negative trends, but if the downturn is
more prolonged or deeper than we currently anticipate, the ratings
could come under pressure."

Key risks to ratings are the duration and depth of the economic
downturn, companies' position within their respective rating
categories, and financial policies, says Moody's.

The city is receiving fewer visitors, and tight corporate travel
budgets are taking a toll on the Las Vegas convention business.  
High fuel prices as well as the reduction of Las Vegas flights
have also contributed to the negative financial results of Las
Vegas Strip operators.

While it remains to be seen whether the current US downturn will
become an official recession, the fallout for Las Vegas casino
operators is likely to be worse than they experienced in previous
downturns, including post 9/11, says Moody's.

Today, Las Vegas is decidedly more vulnerable to macroeconomic
weakness than it was during the last consumer-led recession in
1990-1991.  The successful positioning of the city as a desirable
destination for middle-class family vacations has shifted more of
its profitability to non-gaming sources which are heavily reliant
on discretionary spending, such as hotel rooms, food and beverage,
entertainment and retail operations, says Moody's.

Nevertheless, the current macroeconomic challenges have had no
effect on Las Vegas as a desirable travel destination over the
long term.  "Despite the near-term negative outlook, Las Vegas has
long-term staying power," says Holloway.

According to the analyst, the city's new amenities, the size and
flexibility of its convention meeting space, as well as its room
inventory spanning all budgets make it a particularly attractive
destination for leisure and business travelers.  More broadly,
population and leisure-travel spending trends support an
optimistic view of Vegas' gaming future.  "Las Vegas will rebound;
the question is when," says Holloway.


* S&P Downgrades Ratings on 47 Classes on Nine RMBS Transactions
----------------------------------------------------------------
Standard & Poor's Ratings Services lowered its ratings on 47
classes from nine residential mortgage-backed securities
transactions backed by U.S. subprime mortgage loan collateral
issued in 2006 and 2007.  At the same time, S&P removed all of the
lowered ratings from CreditWatch with negative implications.  In
addition, S&P affirmed its ratings on 62 classes from nine RMBS
transactions backed by U.S. subprime loans and removed them from
CreditWatch negative.
     
The downgrades reflect S&P's opinion that projected credit support
for the affected classes is insufficient to maintain the previous
ratings, given its current projected losses.  As announced in
"Projected Losses For U.S. Subprime RMBS Issued In 2006 And First-
Half 2007 As Of April 24, 2008," published April 24, 2008, on
RatingsDirect, S&P calculated its projected deal-specific losses
by reviewing the individual loan-level characteristics and most
recent performance data, as described in "S&P Revises Projected
Losses For U.S. Subprime RMBS Transactions Issued In First-Half
2007," which S&P published April 24, 2008, on RatingsDirect.  Due
to current market conditions, S&P are assuming that it will take
approximately 15 months to liquidate loans in foreclosure and
approximately eight months to liquidate loans categorized as real
estate owned.  In addition, S&P are assuming a loss severity of
approximately 45% for U.S. subprime RMBS transactions issued in
2007.
     
The lowered ratings reflect our assessment of credit support under
three constant prepayment rate scenarios.  The first scenario
utilizes the lower of the lifetime or 12-month CPR, while the
second utilizes a 6% CPR, which is very slow by historical
standards.  The third scenario uses a prepayment rate that is
equal to two times the lower of the lifetime or 12-month CPR.  S&P
incorporated a third CPR scenario into our cash flow analysis to
account for potential increases in prepayments, which may occur
from normal increases typically found in the seasoning of pools
combined with a chance that governmental proposals, if adopted,
may lead to increased CPRs.  

S&P assumed a constant default rate for each pool.  Because the
analysis focused on each individual class with varying maturities,
prepayment scenarios may cause an individual class or the
transaction itself to prepay in full before it incurs the entire
loss projection.  Slower prepayment assumptions lengthen the
average life of the mortgage pool, which increases the likelihood
that total projected losses will be realized.  The longer a class
remains outstanding, however, the more excess spread it generates.
     
Standard & Poor's has updated its projected excess spread to
account for the recent cuts in U.S. interest rates.  Standard &
Poor's recently announced that it will discount a portion of
excess spread to account for potential interest rate modifications
in an upwardly sloping mortgage rate environment.  An interest
rate modification may extend the initial fixed-rate period of a
mortgage loan to five years from two and three years.  The
reduction in interest rates has effectively extended the initial
interest rates beyond the interest rate reset period.  As a result
of the reduction in excess spread, many loan modifications may no
longer be needed.  Standard & Poor's has updated its assumptions
on excess spread to reflect the current environment.
     
To assess the creditworthiness of each class, S&P reviewed the
individual delinquency and loss trends of each transaction for
changes, if any, in risk characteristics, servicing, and the
ability to withstand additional credit deterioration.  For
mortgage pools that are continuing to show increasing
delinquencies, S&P increased its cash flow stresses to account for
potential increases in monthly losses.  

In order to maintain a rating higher than 'B', a class had to
absorb losses in excess of the base case assumption S&P assumed in
its analysis.  For example, a class may have to withstand 115% of
our base case loss assumption in order to maintain a 'BB' rating,
while a different class may have to withstand 125% of its base
case loss assumption to maintain a 'BBB' rating.  Each class that
has an affirmed 'AAA' rating can withstand approximately 150% of
its base case loss assumptions under its analysis, subject to
individual caps assumed on specific transactions.  S&P determined
the caps by limiting the amount of remaining defaults to 90% of
the current pool balances.

A combination of subordination, excess spread, and
overcollateralization provide credit support for the affected
transactions.  The underlying collateral for these deals consists
of fixed- and adjustable-rate U.S. subprime mortgage loans that
are secured by first and second liens on one- to four-family
residential properties.
     
To date, including the classes listed below and actions on both
publicly and confidentially rated classes, S&P have resolved the
CreditWatch placements of the ratings on 2,945 classes from 485
U.S. RMBS subprime transactions from the 2006 and 2007 vintages.  
Currently, S&P's ratings on 194 classes from 36 U.S. RMBS subprime
transactions from the 2006 and 2007 vintages are on CreditWatch
negative.
     

       Ratings Lowered and Removed from Creditwatch Negative

       Bear Stearns Asset Backed Securities I Trust 2007-HE4
                          Series 2007-HE4

                                         Rating
                                         ------
           Class      CUSIP         To             From
           -----      -----         --             ----
           M-1        07386RAF6     BBB            AA+/Watch Neg
           M-2        07386RAG4     B              AA/Watch Neg

         Morgan Stanley ABS Capital I Inc. Trust 2007-HE6
                          Series 2007-HE6

                                         Rating
                                         ------
           Class      CUSIP         To             From
           -----      -----         --             ----
           M-2        61755CAF9     BBB            AA/Watch Neg
           M-3        61755CAG7     BB             AA/Watch Neg

              Renaissance Home Equity Loan Trust 2006-1
                             Series 2006-1

                                         Rating
                                         ------
           Class      CUSIP         To             From
           -----      -----         --             ----
           M-5        759950HD3     BBB            A/Watch Neg
           M-6        759950HE1     BB             A-/Watch Neg
           M-7        759950HF8     B+             BBB+/Watch Neg
           M-8        759950HG6     B              BBB/Watch Neg
           M-9        759950HH4     B-             BBB-/Watch Neg
           M-10       759950HJ0     CCC            BBB-/Watch Neg

             Renaissance Home Equity Loan Trust 2006-2
                            Series 2006-2

                                        Rating
                                        ------
           Class      CUSIP         To             From
           -----      -----         --             ----
           M-2        759676AL3     AA             AA+/Watch Neg
           M-3        759676AM1     A              AA/Watch Neg
           M-4        759676AN9     BBB            AA/Watch Neg
           M-5        759676AP4     BB             A+/Watch Neg
           M-6        759676AQ2     B              A/Watch Neg
           M-7        759676AR0     B-             A-/Watch Neg
           M-8        759676AS8     CCC            BBB/Watch Neg
           M-9        759676AT6     CCC            BBB-/Watch Neg
           M-10       759676AU3     CCC            BBB-/Watch Neg

             Renaissance Home Equity Loan Trust 2006-3
                            Series 2006-3

                                        Rating
                                        ------
           Class      CUSIP         To             From
           -----      -----         --             ----
           M-1        75971EAK2     A              AA+/Watch Neg
           M-2        75971EAL0     BBB            AA/Watch Neg
           M-3        75971EAM8     BB             AA-/Watch Neg
           M-4        75971EAN6     B+             A+/Watch Neg
           M-5        75971EAP1     B              A/Watch Neg
           M-6        75971EAQ9     B-             A-/Watch Neg
           M-7        75971EAR7     CCC            BBB+/Watch Neg
           M-8        75971EAS5     CCC            BBB/Watch Neg
           M-9        75971EAT3     CCC            BBB-/Watch Neg

             Renaissance Home Equity Loan Trust 2006-4
                            Series 2006-4

                                        Rating
                                        ------
           Class      CUSIP         To             From
           -----      -----         --             ----
           M-1        75970HAK6     A              AA+/Watch Neg
           M-2        75970HAL4     BBB            AA/Watch Neg
           M-3        75970HAM2     BB             AA/Watch Neg
           M-4        75970HAN0     B+             A+/Watch Neg
           M-5        75970HAP5     B              A/Watch Neg
           M-6        75970HAQ3     B-             BBB+/Watch Neg
           M-7        75970HAR1     CCC            BB/Watch Neg
           M-8        75970HAS9     CCC            BB/Watch Neg
           M-9        75970HAT7     CCC            B/Watch Neg

             Renaissance Home Equity Loan Trust 2007-1
                           Series 2007-1

                                        Rating
                                        ------
           Class      CUSIP         To             From
           -----      -----         --             ----
           AV-3       75970JAC0     AA             AAA/Watch Neg
           AF-5       75970JAH9     AA             AAA/Watch Neg
           AF-6       75970JAJ5     AA             AAA/Watch Neg
           M-1        75970JAK2     BBB            AA+/Watch Neg
           M-2        75970JAL0     BB             AA/Watch Neg

             Renaissance Home Equity Loan Trust 2007-2
                           Series 2007-2

                                        Rating
                                        ------
           Class      CUSIP         To             From
           -----      -----         --             ----
           M-1        75970QAK6     A              AA+/Watch Neg
           M-2        75970QAL4     BBB            AA/Watch Neg
           M-3        75970QAM2     BB             AA/Watch Neg

    Structured Asset Securities Corporation Mortgage Loan Trust
                     2007-OSI Series 2007-OSI

                                        Rating
                                        ------
           Class      CUSIP         To             From
           -----      -----         --             ----
           M1         863619AF9     A              AA+/Watch Neg
           M2         863619AG7     BB             AA/Watch Neg

       Ratings Affirmed and Removed from Creditwatch Negative

       Bear Stearns Asset Backed Securities I Trust 2007-HE4
                          Series 2007-HE4

                                        Rating
                                        ------
           Class      CUSIP         To             From
           -----      -----         --             ----
           I-A-1      07386RAA7     AAA            AAA/Watch Neg
           I-A-2      07386RAB5     AAA            AAA/Watch Neg
           I-A-3      07386RAC3     AAA            AAA/Watch Neg
           I-A-4      07386RAD1     AAA            AAA/Watch Neg
           II-A       07386RAE9     AAA            AAA/Watch Neg

            CWABS Asset-Backed Certificates Trust 2007-4
                             Series 2007-4

                                        Rating
                                        ------
           Class      CUSIP         To             From
           -----      -----         --             ----
           M-1        12668WAR8     AA+            AA+/Watch Neg
           M-2        12668WAS6     AA             AA/Watch Neg
           M-3        12668WAG2     AA-            AA-/Watch Neg
           M-4        12668WAH0     A+             A+/Watch Neg
           M-5        12668WAJ6     A              A/Watch Neg
           M-6        12668WAK3     A-             A-/Watch Neg
           M-7        12668WAL1     BBB+           BBB+/Watch Neg
           M-8        12668WAM9     BBB            BBB/Watch Neg

          Morgan Stanley ABS Capital I Inc. Trust 2007-HE6
                            Series 2007-HE6

                                        Rating
                                        ------
           Class      CUSIP         To             From
           -----      -----         --             ----
           A-1        61755CAA0     AAA            AAA/Watch Neg
           A-2        61755CAB8     AAA            AAA/Watch Neg
           A-3        61755CAC6     AAA            AAA/Watch Neg
           A-4        61755CAD4     AAA            AAA/Watch Neg
           M-1        61755CAE2     AA+            AA+/Watch Neg

              Renaissance Home Equity Loan Trust 2006-1
                            Series 2006-1

                                        Rating
                                        ------
           Class      CUSIP         To             From
           -----      -----         --             ----
           M-3        759950HB7     AA-            AA-/Watch Neg
           M-4        759950HC5     A+             A+/Watch Neg

             Renaissance Home Equity Loan Trust 2006-3
                           Series 2006-3

                                        Rating
                                        ------
           Class      CUSIP         To             From
           -----      -----         --             ----
           AV1        75971EAA4     AAA            AAA/Watch Neg
           AV2        75971EAB2     AAA            AAA/Watch Neg
           AV3        75971EAC0     AAA            AAA/Watch Neg
           AF1        75971EAD8     AAA            AAA/Watch Neg
           AF2        75971EAE6     AAA            AAA/Watch Neg
           AF3        75971EAF3     AAA            AAA/Watch Neg
           AF4        75971EAG1     AAA            AAA/Watch Neg
           AF5        75971EAH9     AAA            AAA/Watch Neg
           AF6        75971EAJ5     AAA            AAA/Watch Neg

              Renaissance Home Equity Loan Trust 2006-4
                             Series 2006-4

                                        Rating
                                        ------
           Class      CUSIP         To             From
           -----      -----         --             ----
           AV-1       75970HAA8     AAA            AAA/Watch Neg
           AV-2       75970HAB6     AAA            AAA/Watch Neg
           AV-3       75970HAC4     AAA            AAA/Watch Neg
           AF-1       75970HAD2     AAA            AAA/Watch Neg
           AF-2       75970HAE0     AAA            AAA/Watch Neg
           AF-3       75970HAF7     AAA            AAA/Watch Neg
           AF-4       75970HAG5     AAA            AAA/Watch Neg
           AF-5       75970HAH3     AAA            AAA/Watch Neg
           AF-6       75970HAJ9     AAA            AAA/Watch Neg

             Renaissance Home Equity Loan Trust 2007-1
                            Series 2007-1

                                        Rating
                                        ------
           Class      CUSIP         To             From
           -----      -----         --             ----
           AV-1       75970JAA4     AAA            AAA/Watch Neg
           AV-2       75970JAB2     AAA            AAA/Watch Neg
           AF-1       75970JAD8     AAA            AAA/Watch Neg
           AF-1A      75970JAW6     AAA            AAA/Watch Neg
           AF-1B      75970JAX4     AAA            AAA/Watch Neg
           AF-1Z      75970JAY2     AAA            AAA/Watch Neg
           AF-2       75970JAE6     AAA            AAA/Watch Neg
           AF-3       75970JAF3     AAA            AAA/Watch Neg
           AF-4       75970JAG1     AAA            AAA/Watch Neg
           M-3        75970JAM8     B              B/Watch Neg

             Renaissance Home Equity Loan Trust 2007-2
                           Series 2007-2

                                        Rating
                                        ------
           Class      CUSIP         To             From
           -----      -----         --             ----
           AV-1       75970QAA8     AAA            AAA/Watch Neg
           AV-2       75970QAB6     AAA            AAA/Watch Neg
           AV-3       75970QAC4     AAA            AAA/Watch Neg
           AF-1       75970QAD2     AAA            AAA/Watch Neg
           AF-2       75970QAE0     AAA            AAA/Watch Neg
           AF-3       75970QAF7     AAA            AAA/Watch Neg
           AF-4       75970QAG5     AAA            AAA/Watch Neg
           AF-5       75970QAH3     AAA            AAA/Watch Neg
           AF-6       75970QAJ9     AAA            AAA/Watch Neg

    Structured Asset Securities Corporation Mortgage Loan Trust
                      2007-OSI Series 2007-OSI

                                        Rating
                                        ------
           Class      CUSIP         To             From
           -----      -----         --             ----
           A1         863619AA0     AAA            AAA/Watch Neg
           A2         863619AB8     AAA            AAA/Watch Neg
           A3         863619AC6     AAA            AAA/Watch Neg
           A4         863619AD4     AAA            AAA/Watch Neg
           A5         863619AE2     AAA            AAA/Watch Neg


* BOOK REVIEW: Crafting Solutions for Troubled Businesses
---------------------------------------------------------
Full Title: Crafting Solutions for Troubled Businesses: A
            Disciplined Approach to Diagnosing and
            Confronting Management Challenges
Author:     Stephen J. Hopkins and S. Douglas Hopkins
Publisher:  Beard Books
Hardcover:  316 pages
List Price: US$74.95

Order your personal copy at
http://www.amazon.com/exec/obidos/ASIN/1587982870/internetbankrupt

So the first thing to do when dealing with a troubled business
is to find the guilty and lop someone's head off!  Don't be so
quick to react, advise co-authors Stephen J. Hopkins and S.
Douglas Hopkins in their thoughtful, well-researched book,
Crafting Solutions for Troubled Businesses.

The father-son team of Steve and Doug Hopkins are principals of
Kestrel Consulting LLC, a firm they founded in March 2004.

Each has more than 25 years of experience working with troubled
businesses and providing turnaround advisory and interim
management services.

Steve got his first taste of a troubled business when, as chief
financial officer of an 80-year-old chemical company, Bill
Nightingale of Nightingale & Associates assisted him in taking
the company through a Chapter 11 filing.  The company
subsequently emerged from bankruptcy with payment in full to all
creditors.

Steve then joined Nightingale, staying for 23 years and serving
initially as a principal and eventually as president from 1994
to 2000.  Doug began working at Nightingale in 1978 as a part-
time resource for special projects.  After working in this
capacity for 10 years, Steve joined Nightingale full time in the
1980s and became a principal in 1994.  Both Steve and Doug have
served in various C-level roles in troubled companies, including
CEO, CFO, COO, and CRO.

To write this book, the Hopkinses drew upon their vast
experience in dealing with troubled companies.  They took 100 of
the largest projects they have been involved in and applied a
"disciplined analysis" to diagnose problem situations and
produce successful outcomes.

The projects -- helpfully set apart by shaded boxes --
demonstrate the authors' theories and methods in dealing with
troubled businesses.

The authors also analyze some well-known cases like Enron,
WorldCom, and Sunbeam to help the reader connect the dots in a
very real sense and use the book for actionable advice.

The book is divided into five parts:

   1) Conceptual Approach and Key Issues,
   2) Managing the Crisis,
   3) The Diagnosis Process,
   4) Alternatives and Action Plans, and
   5) Lessons Learned in 100 Completed Assignments.

Each part has multiple chapters expanding on these themes, and
each chapter concludes with a recap of what was discussed.  For
speed readers and the time crunched, these recaps are an
excellent way of extracting from the book the essence of what
the authors are advocating.

So what about lopping off that head?  The authors contend that
management's role is much less pivotal than is commonly
believed.

The real issue when working with a troubled business is
determining the viability of the business.  To do that, the
underlying causes must be identified at different stages of the
corporate lifecycle.

The authors categorize troubled businesses as Undisciplined
Racehorses, Overburdened Workhorses, and Aging Mules.  Only
through a step-by-step diagnosis can the core problems be dealt
with.  Pursuing a turnaround may not always be a viable and, in
fact, in only one-third of the 100 cases the authors worked on
did the company achieve a true operational turnaround.

Crafting Solutions to Troubled Businesses should be on the must-
read list of anyone involved in dealing with, consulting for, or
operating a troubled business.

                             *********

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.

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