TCR_Public/080620.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 20, 2008, Vol. 12, No. 146           

                             Headlines

AIMS WORLDWIDE: Posts $599,480 Net Loss in 2008 First Quarter
ALLTEL CORP: DBRS Keeps Ratings Under Review for Possible Cut
ALLTEL CORP: Reports 2007 Net Earnings of $183.2 Million
AMBAC FINANCIAL: Moody's Cuts Ambac Assurance's IFS Rating to Aa3
AMBAC FINANCIAL: Disappointed with Moody's Recent Downgrade Action

AMERICAN HOME: Court Approves Settlement with Financial Guaranty
AMERICAN INTERNATIONAL: New CEO Might Sell Assets, WSJ Says
ASSOCIATED EYE: Voluntary Chapter 11 Case Summary
ATARI INC: Posts $3.7 Million Net Loss in 4th Qtr. Ended March 31
AVENTINE RENEWABLE: Securities Sale Boosts Liquidity, S&P Says

BAKERS FOOTWEAR: Posts $4,874,068 Net Loss in 1st Qtr. Ended May 3
BEAR STEARNS: Messrs. Cioffi and Tannin Indicted on Fraud Charges
BELLACH'S LEATHER: Court Turns Estate Over to Chapter 11 Trustee
BHM TECHNOLOGIES: US Trustee Objects to Rothschild as Advisor
BHM TECHNOLOGIES: Trustee Objects to Pepper Hamilton as Counsel

BHM TECHNOLOGIES: US Trustee Objects to Varnum as Counsel
BLUEGRASS ABS: Moody's Cuts and Reviews Ratings on Three Classes
BOB WILSON: Delivers Schedules of Assets and Liabilities
BOB WILSON: Stichter Riedel Retention Faces Limited Opposition
BOB WILSON: Hiring of Fin. Advisor Won't Add Value, Lender Says

BWAY CORP: Moody's Holds B1 CF Rating and Changes Outlook to Neg.
CANADA MORTGAGE: DBRS Lifts Ratings on 18 Classes of Certificates
CHATTEM INC: S&P Holds 'BB-' Rating and Revises Outlook to Stable
CLEAR CHANNEL: S&P Cuts Rating to B from B+ on Proposed Financing
COUNTRYWIDE FINANCIAL: Preferential Treatments Raise Eyebrows

DALE JARRETT: Posts $259,323 Net Loss in 2008 First Quarter
DELTA FUNDING: Moody's Puts B3 Underlying Rating on Cl. A-1A Notes
DELTA AIR: IRS and Palm Beach Withdraw $2 Million Claims
DELTA AIR: Cooking Joint Pilot Deal with Northwest Airlines
DELTA AIR: Severance Payout Takers Increase to 4,000

DELTA AIR: To Axe 13% of Domestic Capacity by Second Half 2008
DEN-MARK CONSTRUCTION: Wants Wachovia's Reconsider Motion Denied
DEN-MARK PROPERTIES: Files Chapter 11 Voluntary Case Summary
DOCUMENT CAPTURE: Posts $480,000 Net Loss in 2008 First Quarter
EDUCATION RESOURCES: Wants to Reject Contracts with RBS Citizens

EMPIRE LAND: Pachulski Ziehl Approved as Bankruptcy Counsel
ENERGAS RESOURCES: Posts $42,914 Net Loss in 1st Qtr. Ended April
EVERGREEN INVESTMENTS: Wachovia Affiliate to Liquidate EUBAX Fund
FINDEX.COM INC: Earns $419,121 in First Quarter Ended March 31
FORD MOTOR: Tracinda Increases Shareholding to 6.49%

FOUNTAIN POWERBOAT: Plan to Cure AMEX Violation Due July 11
GLOBAL WINE: Owes $5MM to Noteholders, Court Filings Show
GRAY TELEVISION: Moody's Cuts Credit Facility Rating to B3 from B2
GREEKTOWN CASINO: Tribe Head Rallies Confidence on Ch. 11 Filing
HARMAN INTERNATIONAL: S&P Retains 'BB-' Rating Under Pos. Watch

HARTSHORNE CDO: Moody's Junks Rating on $625MM Class A1S Notes
HAWAIIAN AIRLINES: Relations with Pilots Going Sour, ALPA Says
HOMEBANC CORP: Wants Solicitation Deadline Moved to Oct. 6
IMC HOME: Moody's Assigns Caa1 Underlying Ratings on Two Classes
INTEGRETEL INC: Sale of PaymentOne to Cancel $12.8MM Debt

JACOBS ENTERTAINMENT: Moody's Holds Rating, Assigns Neg Outlook
JOHN REYNEN: U.S. Trustee Amends Creditors' Committee
JOHN REYNEN: Court OKs Meyers Firm as Replacement Counsel
JPMORGAN CHASE: S&P Junks Rating on Class P Certificates
LEAR CORP: Buys 75% of Shares in New Trend's Auto Fabric Business

LIQUIDATION WORLD: Closes Seven Stores to Rationalize Investment
MATRIX DEVELOPMENT: Section 341(a) Meeting Scheduled For July 15
MATRIX DEVELOPMENT: Taps Greene & Markley as Bankruptcy Counsel
MBIA INSURANCE: Moody's Cuts Aaa Financial Strength 5 Notches Down
MDRECOVERY INC: Repossesses Saratoga Lab from Creditors

MIDON RESTAURANT: Case Summary & 20 Largest Unsecured Creditors
MIRABILIS VENTURES: Section 341(a) Meeting Scheduled for June 23
MIRABILIS VENTURES: Seeks to Employ Yoakum as Forensic Accountant
MISTER S INC: Case Summary & 20 Largest Unsecured Creditors
MKP CBO: Moody's Junks Rating on $94.5 Million Class A-2 Notes

NATIONAL LAMPOON: April 30 Balance Sheet Upside-Down by $3,750,368
NORTHWEST AIRLINES: Talks on Joint Pilot Deal to Last a Week
NORTHWEST AIRLINES: High Fuel Prices Cue Further Capacity Cuts
NUANCE COMMS: Fitch Holds 'B+' Rating; Changes Outlook to Stable
OCHOA POULTRY: Case Summary & Eight Largest Unsecured Creditors

OMER BEAIRD: Case Summary & 13 Largest Unsecured Creditors
OMNOVA SOLUTIONS: Weaker Margins Prompt Moody's Stable Outlook
PARMALAT SPA: Settles with UBS, Credit Suisse for U$548MM
PASA FUNDING: Moody's Withdraws B3 Rating on $2.81 Billion Notes
PICCADILLY CAFETERIAS: Must Pay Stamp Taxes, High Court Says

PRC LLC: Addresses BofA, et al.'s Confirmation Objections
QUEBECOR WORLD: Quebec Court Acknowledges Aircraft Sale Approval
QUEBECOR WORLD: Wants to Assume Deals with Three Entities
QUEENS SEAPORT: Trustee Defends Settlement with Mr. Prevratil
REXAIR LLC: S&P Lifts Rating to B from B- on $139.5MM Sr. Facility

RIVER ELKS: Case Summary & 11 Largest Unsecured Creditors
ROCKVALE INC: Case Summary & 17 Largest Unsecured Creditors
ROPER INDUSTRIES: Moody's Reviews All Ratings for Possible Upgrade
SHARPER IMAGE: Proposes Incentive Plan for Wind-Down Team
SHARPER IMAGE: Hearing on Plan Filing Extension Motion Set June 24

SHARPER IMAGE: To Delay Filing of 1st Quarter 2008 Report
SMART ENERGY: March 31 Balance Sheet Upside-Down by $537,110
SOTHEBY'S: Moody's Affirms Ratings After $200MM Notes Issuance
SPARE BACKUP: March 31 Balance Sheet Upside-Down by $2,392,151
SPEEDWAY MOTORSPORTS: Aggressive Stance Prompts S&P's Neg. Watch

SWIFT TRANSPORTATION: Moody's Cuts PD & CF Ratings to B3 from B2
TABS 2006-6: Moody's Chips Ca Ratings on Eight Note Classes to C
THORNBURG MORTGAGE: Gets SEC Subpoenas, Financial Woes Continue
THORNBURG MORTGAGE: S&P Puts Default Rating on Preferred Stock
TRICADIA CDO: Moody's Downgrades Ratings on Seven Classes of Notes

TRIPLE-S MANAGEMENT: A.M. Best Adjusts ICR to bb+ to Fit Standard
TYSON FOODS: Promotes Dennis Leatherby to Chief Financial Officer
UAL CORP: Wants ReGen's Cure Claim Immediately Disallowed
UAL CORP: Fails to Support Objections to Claims, MassPort Says
UNITED AMERICAN CORP: Earns $65,881 in 2008 First Quarter

VERDIER PLANTATION: Files Schedules of Assets and Liabilities
VERDIER PLANTATION: Wants Court to Approve Levy Firm as Attorney
VISTEON CORP: Completes $344 Million Offer of 8.25% Notes due 2010
VOICE MOBILITY: March 31 Balance Sheet Upside-Down by $11,106,952
WHITEHALL JEWELERS: In Search of Financing, Warns of Bankruptcy

WHITEHALL JEWELERS: PWJ Agrees to Raise Loan Commitment to $50MM
WINDY CITY: Case Summary & Largest Unsecured Creditor
WYOMING ETHANOL: Files for Bankruptcy in Wyoming
WYOMING ETHANOL: Voluntary Chapter 11 Case Summary

* Fitch Thinks US Agribusiness Cos. Face High Risk of Credit Fall
* S&P Thinks Canadian Municipalities Can Pull Through Tough Times

* FDIC Chair Suggests Supervision of Failing Investment Banks

* Reznick Group Fortifies Practice with Palladium Pacific Merger

* BOOK REVIEW: Corporate Players: Designs for Working and
                       Winning Together

                             *********

AIMS WORLDWIDE: Posts $599,480 Net Loss in 2008 First Quarter
-------------------------------------------------------------
AIMS Worldwide Inc. reported a net loss of $599,480 on revenue of
$1,244,213 for the first quarter ended March 31, 2008, compared
with a net loss of $436,842 on revenue of $109,328 in the
corresponding period of 2007.

The increase in revenue was substantially due to the acquisitions
of Bill Main and Associates, Target America Inc., and 55% of IKON
Public Affairs Group LLC.  

At March 31, 2008, the company's consolidated balance sheet showed
$6,823,247 in total assets, $6,240,442 in total liabilities,
($240,155) in minority interest, and $822,960 in total
stockholders' equity.

The company's consolidated balance sheet at March 31, 2008, also
showed strained liquidity with $394,888 in total current assets
available to pay $5,680,523 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?2e46

                       Going Concern Doubt

Turner, Jones & Associates, PLLC, in Vienna, Va., expressed
substantial doubt about AIMS Worldwide Inc.'s ability to continue
as a going concern after auditing the company's consolidated
financial statements for the year ended Dec. 31, 2007.  The
auditing firm pointed to the company's recurring losses from
operations, negative working capital, and negative cash flows from
operations.

                    About AIMS Worldwide Inc.

Based in Fairfax, Virginia, AIMS Worldwide Inc. (OTC BB: AMWW)
-- http://www.aimsworldwide.com/-- is a vertically   
integrated marketing communications consultancy providing
organizations with its AIMSolutions branded focused marketing
solutions.  AIMS(TM) (Accurate Integrated Marketing Solutions)
increases the accuracy of the strategic direction of its client's
marketing program, improves results and reduces the cost, by
refocusing "mass marketing" to a more strategic "One-2-One(TM)"
relationship with the ideal customer.


ALLTEL CORP: DBRS Keeps Ratings Under Review for Possible Cut
-------------------------------------------------------------
On June 5, 2008, DBRS placed its ratings of ALLTEL Corporation and
its wholly-owned subsidiary, ALLTEL Communications Inc., under
Review with Positive Implications.  This  rating action included
ACIs BB(low) Issuer Rating.  The review was prompted by the
company's announcement that it had signed an agreement to be
acquired by Verizon Wireless Inc. in a cash deal that values
ALLTEL at an enterprise value of $28.1 billion, including
$5.6 billion of equity and $22.2 billion of projected debt at
closing.  

Additionally, based on DBRSs new Leveraged Finance rating
methodology, DBRS has assigned recovery ratings to ALLTEL and ACIs
specific debt securities.  These recovery ratings and the
resulting instrument ratings are reflected in the table below,
with several ACI instrument ratings having been upgraded,
including its Senior Secured Credit Facility to BBB(low) from
BB(high) and Senior Unsecured Bridge/Notes and Senior Unsecured
PIK Bridge/Notes to BB(low) from B(high).  ALLTELs Senior
Unsecured Notes & Debentures have been maintained at B.   

The rating actions and the review initiated on June 5, 2008,
follow DBRSs initial rating action on Nov. 16, 2007 that coincided
with ALLTELs announcement that day that it had closed the planned
sale of the company to TPG Capital Partners and GS Capital
Partners.  The all-cash deal valued ALLTELs equity and preferred
securities at $25 billion for a total enterprise value of
approximately $28 billion.

DBRS notes that the privatization was largely completed in
November 2007 as DBRS had expected and discussed in its report
dated Aug. 30, 2007.  The Aug. 30, 2007, report shortly followed
shareholder approval on Aug. 29, 2007.  

As part of the privatization, DBRS notes that in November 2007 the
Sponsors injected $4.5 billion of equity or roughly 18% of the
total equity value of ALLTEL, with the remaining portion funded
with debt.  DBRS notes that the remaining financing required an
incremental $21.7 billion of debt, which was funded with new
financing at the ACI level.  Prior to the close of the
privatization, the Company completed: (1) a tender offer to
refinance $423 million in existing operating company debt; and (2)
the redemption of its two classes of preferred shares for roughly
$1.0 billion.

DBRSs Issuer Rating of BB(low) for ACI is largely supported by
ALLTELs overall business risk profile, which DBRS believes has,
despite the privatization, largely remained intact.  This includes
its strong position in the regional wireless market and solid
wireless operating metrics, including churn below 2.0% per month
and good EBITDA margins in the mid-30% range.  Additionally, the
Issuer Rating is based on: (1) significantly high consolidated
debt levels ($23.6 billion at March 31, 2008) with gross debt-to-
EBITDA at 7.53 times at March 31, 2008; (2) leverage expected to
improve in 2008 to below 7.0 times, largely due to organic EBITDA
growth; and (3) free cash flow expected to be positive in 2008 and
2009, albeit well below 2007 levels of roughly $1.0 billion.  

The Under Review with Positive Implications status reflects the
expectation that should Verizon Wirelesss acquisition of ALLTEL be
consummated as currently planned, the debt that was placed at ACI
to complete the privatization will be repaid with the legacy
ALLTEL debt likely to remain outstanding.  It is not clear at this
stage if Verizon Wireless or its parent, Verizon Communications
Inc., will support or guarantee the ALLTEL legacy debt following
the close of the acquisition.

DBRS has assigned ACIs Senior Secured Credit Facility
($13.97 billion drawn under a 7.5-year term facility and a
$1.5 billion six-year revolver available but undrawn) a Recovery
Rating of RR1 and an instrument rating of BBB low), which is three
notches above ACIs BB(low) Issuer Rating.  This reflects
outstanding recovery prospects for senior secured lenders as a
result of: (1) overall asset coverage for the secured debt under a
stressed default scenario of greater than 100%; (2) security
against all of the assets of ALLTELs operating subsidiaries; (3)
guarantees from ALLTEL and all of its operating subsidiaries; and
(4) secured leverage of roughly 4.5 times EBITDA at March 31, 2008
vs. consolidated gross debt-to-EBITDA of 7.53 times, indicating
substantial cushion below the secured debt.


ALLTEL CORP: Reports 2007 Net Earnings of $183.2 Million
--------------------------------------------------------
Alltel Corp. filed on Monday an amendment to its annual report on
Form 10-K for the year ended Dec. 31, 2007, originally filed with
the Securities and Exchange Commission on March 20, 2008, to
include a revised financial suplement in response to comments
received by the company from the staff of the Division of
Corporation Finance of the SEC in connection with the staff's
review of the company's 2007 Form 10-K.

Net income, including discontinued operations was $183.2 million
for the year ended Dec. 31, 2007, and consisted of a net loss of
$103.4 million in the period Nov. 16, 2007, to Dec. 31, 2007
(Successor Period) and net income of $286.6 million in the 10-and-
a-half month period ended Nov. 15, 2007 (Predecessor Period).

                     Successor Period of 2007

Net loss from continuing operations was $104.0 million in the
period Nov. 16, 2007, to Dec. 31, 2007.

Total revenues and sales were $1.1 billion, and service revenues
were $1.0 billion in the period Nov. 16, 2007, to Dec. 31, 2007.

Income tax benefit was $168.5 million in the period Nov. 16, 2007,
to Dec. 31, 2007.

The income tax beneit and net loss from continuing operations in
the Successor period of 2007 reflected the loss before income
taxes resulting from the significant increases in interest costs
and depreciation and amortization expense.

Interest expense were $280.4 million and included incremental
interest costs of approximately $257.4 million resulting from the
significant increase in Alltel's long-term debt balance following
the completion of the Merger.  

Depreciation and amortization expense of $260.2 million included
approximately $79.0 million of incremental expense resulting from:

(1) the write-up in the carrying value of Alltel's property,
     plant and equipment of $402.5 million in connection with the
     Merger;

(2) the recognition of $3.6 billion of finite-lived intangible
     assets recognized in connection with the Merger, consisting
     of a customer list of $2.8 billion, trademark and
     tradenames of $800.0 million, non-compete agreement of
     $30.0 million and roaming agreement of $4.0 million; and

(3) the effects of using an accelerated amortization method for
     the customer list intangible asset.  

               Predecessor Periods of 2007 and 2006

Net income from continuing operations decreased $535.6 million, or
65 percent, to $288.1 million in the period Jan. 1, 2007, to
Nov. 15, 2007.  The decrease in the 10-and-a-half month period of
2007 primarily reflected the adverse effects of the merger-related
expenses, comparing operating results for a 320-day period to one
consisting of 365 days, lower interest income and the significant
increase from 2006 in the company's effective income tax rate.

Total revenues and sales decreased 3 percent, or $213.8 million,
to $7.7 billion, and service revenues decreased 1 percent, or
$72.5 million, to $6.9 billion in the period Jan. 1, 2007, to
Nov. 15, 2007, compared to the annual period of 2006.  The
decreases in both service revenues and total revenues and sales is
directly attributable to comparing operating results for a 320-day
period to one consisting of 365 days.  

The unfavorable effects on service revenues and total revenues and
sales due to the difference in the number of days of operations
included in each period were partially offset by the additional
revenues attributable to acquired properties, growth in revenues
derived from data services and increased regulatory and other fee
revenues.  

In addition to the unfavorable effects on service revenues
resulting from comparing operating results for a 320-day period to
one consisting of 365 days, service revenues in the 10-1/2 month
period of 2007 also reflected lower wireless airtime and retail
roaming revenues due to the continued effects of customers
migrating to rate plans with a larger number of packaged minutes.

      Acquisition of Alltel by Two Private Investment Firms
                             (Merger)

On Nov. 16, 2007, Alltel was acquired by Atlantis Holdings LLC, a
Delaware limited liability company (Parent) and an affiliate of
private investment funds TPG Partners V, L.P. and GS Capital
Partners VI Fund, L.P.  The acquisition was completed through the
merger of Atlantis Merger Sub Inc., a Delaware corporation and
wholly-owned subsidiary of Parent, with and into Alltel, with
Alltel surviving the merger as a privately-held, majority-owned
subsidiary of Parent.

                  Pending Acquisition of Alltel

On June 5, 2008, Verizon Wireless, a joint venture of Verizon
Communications and Vodafone, entered into an agreement with Alltel
and Atlantis Holdings to acquire Alltel in a cash merger.  Under
terms of the merger agreement, Verizon Wireless will acquire the
equity of Alltel for approximately $5.9 billion in cash and assume
Alltel's outstanding long-term debt.  

Consummation of the transaction is subject to certain conditions,
including the receipt of regulatory approvals, including, without
limitation, the approval of the FCC and the expiration of the
applicable waiting period under the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended.  The transaction is
currently expected to close by the end of 2008, subject to
obtaining regulatory approvals.   

                 Liquidity and Capital Resources


Following the completion of the Merger, Alltel has a substantial
amount of indebtedness and will incur significantly higher
interest costs which will adversely affect the company's future
operating results.  Alltel believes it has sufficient cash and
short-term investments on hand ($833.3 million at Dec. 31, 2007)
and has adequate operating cash flows to finance its ongoing
requirements, including capital expenditures and the payment of
principal and interest related to its long-term debt obligations.  

Additional sources of funding available to Alltel include
additional borrowings of up to $1.5 billion available under the
company's revolving credit agreement.

                          Balance Sheet

At Dec. 31, 2007, the company's consolidated balance sheet showed
$32.1 billion in total assets, $27.7 billion in total liabilities,
and $4.4 billion in total stockholders' equity.

Full-text copies of the Amendment No. 1 to the company's Annual
Report on Form 10-K for the year ended Dec. 31, 2007, is available
for free at http://researcharchives.com/t/s?2e42

                        About Alltel Corp.

Based in Little Rock, Ark., Alltel Corp. -- http://www.alltel.com/  
-- operates America's largest wireless network, which delivers
voice and advanced data services nationwide to more than 13
million customers.

Alltel completed its merger with an affiliate of TPG Capital and
GS Capital Partners in November 2007 and ceased trading on the New
York Stock Exchange.

                          *     *     *

As reported in the Troubled Company Reporter on June 10, 2008,
Moody's Investors Service placed the long-term ratings of Alltel
on review for possible upgrade, including the company's
$2.3 billion Senior Unsecured Notes -- Caa1, LGD 6 (95%) and
$1.0 billion Senior Unsecured Toggle Notes -- Caa1 LGD 5 ratings.
This action follows Verizon Wireless' June 5, 2008 announcement
that it plans to acquire Alltel for about $28.1 billion in cash
and assumed debt.


AMBAC FINANCIAL: Moody's Cuts Ambac Assurance's IFS Rating to Aa3
-----------------------------------------------------------------
Moody's Investors Service has downgraded to Aa3, from Aaa, the
insurance financial strength ratings of Ambac Assurance
Corporation and Ambac Assurance UK Limited.  In the same rating
action, Moody's also downgraded the debt ratings of Ambac
Financial Group, Inc. (NYSE: ABK -- senior unsecured debt to A3
from Aa3) and related financing trusts.

The rating action concludes a review for possible downgrade that
was initiated on June 4, 2008, and reflects Moody's views on
Ambac's overall credit profile in the current environment,
including the company's significantly constrained new business
prospects, its impaired financial flexibility and increased
expected and stress loss projections among its mortgage-related
risk exposures relative to previous estimates.

The outlook for the ratings is negative, reflecting uncertainties
regarding the company's strategic plans going forward, as well as
the possibility of further adverse developments in its insured
portfolio.  Moody's noted, however, that these risks are mitigated
somewhat by the company's substantive capital cushion at the
current rating level and that this was an important consideration
in arriving at the Aa3 insurance financial strength rating.

As a result of the rating action, the Moody's-rated securities
that are guaranteed or "wrapped" by Ambac are also downgraded to
Aa3, except those with higher public underlying ratings.

Moody's said that the uncertainty about the ultimate performance
of Ambac's mortgage-related exposures continues to adversely
affect market perceptions of the firm, greatly impairing its
financial flexibility and ability to write new business.  Ambac
has recorded more than $3.3 billion of cumulative loss reserves
and credit impairments on its mortgage-related portfolio, mostly
related to recent vintage second-lien and Alt-A RMBS and ABS CDOs.

Moody's noted that Ambac has written little new business in the
last few months.  Furthermore, the company's financial flexibility
has deteriorated substantially since its $1.5 billion capital
raise in March 2008, as evidenced by the profound decline in
Ambac's market capitalization and high current spreads on its debt
securities, making it extremely difficult to economically address
potential capital shortfalls should markets continue to worsen.

Moody's has re-estimated expected and stress loss projections on
Ambac's insured portfolio, focusing on the company's mortgage-
related exposures, as well as other sectors of the portfolio
potentially vulnerable to deterioration in the current
environment.

Based on Moody's revised assessment of the risks in Ambac's
portfolio, estimated stress-case losses would approximate
$12.1 billion at the Aaa threshold and $9.6 billion at the Aa3
threshold.  This compares to Moody's estimate of Ambac's total
claims paying resources of approximately $15.4 billion.

Moody's noted that its stress case estimates for Ambac's
residential mortgage-related exposures increased by roughly
$200 million to $5.6 billion, which was largely offset by insured
portfolio amortization since year-end 2007.  Relative to Moody's
1.3x "target" level for capital adequacy, Ambac is currently
$225 million below the Aaa target level and is approximately
$3 billion above the Aa3 target level.

Moody's said that, beyond Ambac's affected mortgage-related
exposures, portfolio risks appear to be well-contained as
reflected by its core low-risk municipal book and high average
underlying ratings.  Most non-mortgage-related structured segments
are performing well, although certain exposures, such as private
student loans, may be more sensitive to economic or sector
deterioration.

While portfolio losses could increase in a sharp economic
downturn, strong premium accretion, investment earnings and
portfolio amortization should help to offset any resulting impact
on capital adequacy.  Moody's noted, however, that downward rating
pressure could occur if Ambac's capital cushion at the current
rating level were to be materially eroded through the extraction
of capital from Ambac Assurance Corporation, or due to further
increases in projected stress loss estimates on the insured
portfolio.

Moody's will continue to evaluate Ambac's ratings in the context
of the future performance of the company's risk exposures relative
to expectations and resulting capital adequacy levels, as well as
changes to the company's strategic and capital management plans as
an Aa-rated company.  Ambac has announced it intends to pursue
opportunities in the public finance market through its Connie Lee
Insurance Company subsidiary.

LIST OF RATING ACTIONS

These ratings have been downgraded:

  -- Ambac Assurance Corporation -- insurance financial strength
     to Aa3 from Aaa;

  -- Ambac Assurance UK Limited -- insurance financial strength to
     Aa3 from Aaa;

  -- Ambac Financial Group, Inc. -- senior unsecured debt to A3
     from Aa3, junior subordinated debt to Baa1 from A1 and
     provisional rating on preferred stock to (P)Baa2 from (P)A2;

  -- Anchorage Finance Sub-Trusts I-IV -- contingent capital
     securities to A3 from Aa3; and

  -- Dutch Harbor Finance Sub-Trusts I-IV -- contingent capital
     securities to A3 from Aa3.

Ambac Financial Group, Inc. (NYSE: ABK), headquartered in New York
City, is a holding company whose affiliates provide financial
guarantees and financial services to clients in both the public
and private sectors around the world.  For the three months ended
March 31, 2008, the company reported a GAAP net loss of
approximately $1.7 billion.  As of March 31, 2008, ABK had
shareholders' equity of approximately $1.3 billion.


AMBAC FINANCIAL: Disappointed with Moody's Recent Downgrade Action
------------------------------------------------------------------
Ambac Financial Group, Inc. on June 19, 2008, issued a response to
Moody's decision to downgrade the insurance financial strength
ratings of Ambac Assurance Corporation and Ambac Assurance UK with
this statement:

"We are disappointed with Moody's decision to downgrade us to Aa3
with a negative outlook designation.  More importantly, we
disagree with the negative outlook designation.  The company's
strong capital base, even under Moody's stress-case scenarios,
will allow it to manage through the current credit crisis.
Moreover, we are actively managing our portfolio and expect to see
concrete positive results from our remediation efforts."

Ambac separately confirmed that the downgrade does not have any
material impact on its obligations to collateralize its guaranteed
investment contracts and the swaps in its financial services
segment.  Ambac also confirmed that the Moody's action did not, in
any way, impair the Company's ability to proceed with its plans
related to the capitalization of Connie Lee Insurance Company.  
Ambac said it plans to use Connie Lee Insurance to capitalize on
its 37-year track record in the public finance market.

                      About Ambac Financial

Based in New York City, Ambac Financial Group, Inc. --
http://ir.ambac.com/-- is a holding company that provides  
financial guarantees and financial services to clients in both the
public and private sectors around the world through its principal
operating subsidiary, Ambac Assurance Corporation.  As an
alternative to financial guarantee insurance credit protection is
provided by Ambac Credit Products, a subsidiary of Ambac
Assurance, in credit derivative format.

                           *    *    *

The TCR said on June 9, 2008, that Standard & Poor's Ratings
Services lowered its standard long-term ratings on 20 Ambac
Assurance Corp.-backed issues listed below to 'AA' from 'AAA' and
placed them on CreditWatch with negative implications.  At the
same time, Standard & Poor's lowered its underlying ratings on
seven Ambac Assurance Corp.-backed issues listed below to 'AA'
from 'AAA' and placed them on CreditWatch with negative
implications.  These actions follow Standard & Poor's downgrade of
Ambac Assurance Corp. to 'AA' from 'AAA' and placement on
CreditWatch with negative implications.

Ambac Financial Group Inc. said in a statement responding to the
rating actions by Standard & Poor's Rating Services that it is
disappointed by the actions taken by S&P, the TCR said on June 9.


AMERICAN HOME: Court Approves Settlement with Financial Guaranty
----------------------------------------------------------------
Judge Christopher Sontchi of the U.S. Bankruptcy Court for the
District of Delaware approved the settlement agreement between
American Home Mortgage Investment Corp., its debtor-affiliates and
Financial Guaranty Insurance Company.

Under the terms of the Settlement Agreement, the Debtors agree
not to challenge the assertion of Financial Guaranty that a Rapid
Amortization event occurred after January 11, 2008.  However, the
Debtors reserve their right to challenge any assertions by
Financial Guaranty, or any other party, as to whether a Rapid
Amortization Event occurred prior to January 11.  In exchange,
Financial Guaranty agrees to dismiss without prejudice, the
adversary proceeding.

Judge Sontchi authorized either parties to file a "Stipulation of
Dismissal of Complaint and Request for Declaratory Judgment," as
contemplated by the Settlement Agreement, when the Order becomes
final and nonappealable.

             Parties Resolve Adversary Proceeding

American Home Mortgage Servicing, Inc., and American Home
Acceptance, Inc., serviced certain home equity line of credit
mortgage loans in 2005, under three HELOC Servicing Agreements
which they entered into with various entities.  The agreements
were in connection with certain securitization transactions
including American Home Mortgage Investment Trust 2005-1, American
Home Mortgage Investment Trust 2005-2 and American Home Mortgage
Investment Trust 2005-4A.  

The Trusts established in the securitizations acquired and own
the mortgage loans, and issued securities which were, in turn,
insured by Financial Guaranty Insurance Company -- a third
party beneficiary under the agreements.

Prior to the Petition Date, Financial Guaranty instructed GMAC
Mortgage, LLC, the servicer under the three HELOC Servicing
Agreements, to terminate the servicing rights of the Debtor-
Subsidiaries under the Agreements.  The termination was required
by the agreements, which provide that the servicing rights of the
Debtor-Subsidiaries are subject to termination if:

     (a) American Home Mortgage Investment Corp. and its
         subsidiaries would fail to have a tangible net worth of
         at least $530,000,000;

     (b) the Debtor-Subsidiaries admit in writing of their
         inability to pay their debts generally as they become
         due; and

     (c) the Debtor-Subsidiaries voluntarily suspend their
         payment obligations.

When the Debtors sought to sell their loan servicing business and
assume and assign executory contracts, they included the HELOC
Servicing Agreements.

Consequently, on October 10, 2007, Financial Guaranty initiated
an adversary proceeding against the Debtors, asking the Court to,
among other things:

   * declare that the Debtor-Subsidiaries' servicing rights under
     the HELOC Servicing Agreements were terminated before the
     Petition Date;

   * declare that the Debtor-Subsidiaries cannot transfer any
     servicing rights under the agreements to any third party
     other than GMAC Mortgage, LLC; and

   * direct the Debtor-Subsidiaries to cooperate with a
     transition of servicing functions to GMAC as the servicer
     of certain home equity line of credit mortgage loans under
     the agreement, and transfer to GMAC all the documents and
     data.

The Debtors subsequently sought the dismissal of the Complaint.

The Debtors anticipate that litigating the claims advanced in the
Complaint will be time consuming and expensive because of
complicated legal and factual disputes, James L. Patton, Jr,
Esq., at Young Conaway Stargatt & Taylor, LLP, in Wilmington,
Delaware, states.  Moreover, litigating the Adversary Proceeding
to conclusion would take months to complete, Mr. Patton adds.  

To resolve their dispute, the Debtors and Financial Guaranty
entered into a settlement agreement governed by the terms of Rule
9019 of the Federal Rules of Bankruptcy Procedure.  

Under the terms of the Settlement Agreement, the Debtors agree
not to challenge the assertion of Financial Guaranty that a Rapid
Amortization event occurred after January 11, 2008.  However, the
Debtors reserve their right to challenge any assertions by
Financial Guaranty -- or any other party -- as to whether a Rapid
Amortization Event occurred prior to January 11.

In exchange, Financial Guaranty agrees to dismiss without
prejudice, the Adversary Proceeding.

                   About American Home

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

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

(American Home Bankruptcy News, Issue No. 39; Bankruptcy
Creditors' Service, Inc., Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000).     


AMERICAN INTERNATIONAL: New CEO Might Sell Assets, WSJ Says
-----------------------------------------------------------
American International Group Inc.'s new chief executive officer
Robert Willumstad said in a conference call with investors Monday
he would look at AIG with a fresh eye and conduct a strategic and
operational review, The Wall Street Journal reports.

According to WSJ, it is an assurance that Wall Street might have
expected to embrace considering the insurance giant's troubles.

That stand could put much of the company's empire off-limits for
sale, since AIG gets most of its profit from its life and
property-casualty insurance operations, WSJ indicates.

WSJ points out that it could also mean that Mr. Willumstad would
consider spinning off other units that focus on noninsurance
businesses such as consumer lending or aircraft leasing, or
complex financial instruments like the ones responsible for most
of the recent write-downs.

If AIG under Mr. Willumstad, were to shed some of its businesses,
the move could free up resources to devote to its insurance
operations, particularly in developing markets, WSJ relates.

Analysts doubt whether AIG in its current form could return to its
former glory, considering the dilemma it is into: (i) two biggest
quarterly losses this year, (ii) the accounting probe that federal
investigators conduct and (iii) its stock nearing an 11-year low.

Investors say they are unsure if Mr. Willumstad, who has been
AIG's board chairman since 2006, could improve the company's
prospects quickly, WSJ indicates.

            About American International Group Inc.

Based in New York City, American International Group Inc. is an
international insurance and financial services organization, with
operations in more than 130 countries and jurisdictions.  The
company is engaged through subsidiaries in General Insurance, Life
Insurance & Retirement Services, Financial Services and Asset
Management. AIG reported total revenues of $14.0 billion and a net
loss of $7.8 billion for the first quarter of 2008.  Shareholders'
equity was $79.7 billion as of March 31, 2008.

                          *     *     *

As disclosed in the Troubled Company Reporter on May 26, 2008,
Moody's Investors Service has downgraded the senior unsecured debt
rating of American International Group, Inc. (NYSE: AIG) to Aa3
from Aa2. The rating agency has also downgraded the ratings of
several subsidiaries, including those whose ratings have relied on
material support from the parent company, as well as those with
significant exposure to the US residential mortgage market. These
rating actions largely conclude the reviews for possible downgrade
announced by Moody's on May 9 and May 15, 2008, following AIG's
announcement of a $7.8 billion net loss for the first quarter of
2008. The rating outlook for AIG (parent company) is negative,
reflecting the company's exposure to further volatility in the US
mortgage market as well as uncertainty surrounding the strategic
direction for AIG Financial Products Corp. (AIGFP).


ASSOCIATED EYE: Voluntary Chapter 11 Case Summary
-------------------------------------------------
Lead Debtor: Associated Eye Institute of Detroit PC
             65 Cadillac Square
             Detroit, MI 48226

Bankruptcy Case No.: 08-54707

Debtor-affiliates filing separate Chapter 11 petitions:

        Entity                                     Case No.
        ------                                     --------
        Associated Eye Specialists of Farmington   08-54708
        Hills

        Michigan Glaucoma Institute PC             08-54709

        Associated Surgical Center PC              08-54710

        Luna Cosmetic Center of Toledo PC, Inc.    08-54711

        Luna Surgical Center of Toledo, Inc.       08-54712

        Luna Cosmetic Centers PC                   08-54713

Type of Business: The Debtors are involved in the health care
                  business, specializing in eye treatment.

Chapter 11 Petition Date: June 18, 2008

Court: Eastern District of Michigan (Detroit)

Judge: Thomas J. Tucker

Debtors' Counsel: Robert N. Bassel, Esq.
                  Email: bbassel@gmail.com
                  P.O. Box T
                  Clinton, MI 49236
                  Tel: (248) 835-7683
                  Fax: (248) 928-0656

Associated Eye Institute of Detroit PC's Financial Condition:

Estimated Assets:   $500,000 to $1 million

Estimated Debts: $1 million to $10 million

The Debtors did not file lists of their largest unsecured
creditors.


ATARI INC: Posts $3.7 Million Net Loss in 4th Qtr. Ended March 31
-----------------------------------------------------------------
Atari Inc. released last week results for its fourth quarter and
year ended March 31, 2008.

Net loss for the fourth quarter ended March 31, 2008, was
$3.7 million, compared to net loss of $61.7 million in the year-
earlier period.  Without restructuring charges, the net loss for
the fourth quarter ended March 31, 2008, would have been a loss of
$1.8 million.

Net revenue for the fourth quarter ended March 31, 2008, was
$15.3 million versus $26.9 million in the comparable year-earlier
period.  Publishing net revenue was $13.5 million, versus
$25.8 million in the prior year, while distribution revenue was
$1.8 million, versus $1.1 million in the comparable year-earlier
period.

Net revenue for the year ended March 31, 2008, was $80.1 million
versus $122.3 million in the comparable year-earlier period.
Publishing net revenue was $69.8 million, versus $104.7 million in
the prior year, while distribution revenue was $10.3 million,
versus $17.6 million in the comparable year-earlier period.

Net loss for the year ended March 31, 2008 was $23.6 million,
compared to net loss of $69.7 million for fiscal 2007.  Without
restructuring charges, the net loss for the year ended March 31,
2008, would have been a loss of $17.1 million.

The company expects to file its Annual Report on Form 10-K for the
year ended March 31, 2008, before the June 29, 2008 deadline.

At March 31, 2008, the company's consolidated balance sheet showed
$42,819,000 in total assets, $39,725,000 in total liabilities, and
$3,094,000 in total stockholders' equity.

                         About Atari Inc.

Headquartered in New York, Atari Inc. (OTC Pink Sheets: ATAR)
-- http://www.atari.com/-- publishes and distributes interactive  
entertainment software in the U.S.  The 1,000+ titles that are
published and distributed by the company include hard-core, genre-
defining franchises such as Test Drive(R); and mass-market and
children's franchises such as Dragon Ball Z(R).  Atari Inc. is a
majority-owned subsidiary of France-based Infogrames Entertainment
SA, an interactive games publisher in Europe.

                          *     *     *

New York-based Deloitte & Touche LLP expressed substantial doubt
about Atari's ability to continue as a going concern after
auditing the company's consolidated financial statements for the
years ended March 31, 2007, and 2006.  The auditing firm pointed
to the company's significant operating losses.


AVENTINE RENEWABLE: Securities Sale Boosts Liquidity, S&P Says
--------------------------------------------------------------
Standard & Poor's Ratings Services said that the June 13 sale of
Aventine Renewable Energy Holding Inc.'s (B+/Watch Neg/--)
$127.2 million of auction-rate securities has alleviated the
company's immediate liquidity concerns in the face of continued
construction costs.  Under the agreements, the net sales price
realized by Aventine was about $97.1 million, representing a 23.4%
discount to par.  Through these transactions, Aventine should have
sufficient liquidity in the short term to complete construction at
its two ethanol facilities by first-quarter 2009.

However, the loss realized through the sale will likely result in
a draw on the $200 million asset-backed revolving credit facility
at levels that could increase the interest obligations to levels
that would detract from the company's credit quality.  In
addition, flooding in the Midwest has contributed to corn price
spikes approaching $8 per bushel, while natural gas spot prices
have surpassed $12 per million Btu, placing spot crush spreads in
the short term below economically viable levels.  The company has
significant corn supply locked in at a fixed price (39% of 2008
requirements at $5.11 per bushel as of the first quarter).

Over the next 12 to 24 months, however, S&P view the company's
financial condition--when combined with the industrywide
conditions reflected in corn, natural gas, and ethanol prices--as
sufficiently adverse to prevent an immediate resolution of the
company's current negative CreditWatch status.

S&P will resolve the CreditWatch after a more detailed review of
both the flood consequences on corn production and the effects of
corresponding draws on the revolver.


BAKERS FOOTWEAR: Posts $4,874,068 Net Loss in 1st Qtr. Ended May 3
------------------------------------------------------------------
Bakers Footwear Group Inc. reported a net loss of $4,874,068 on
net sales of $43,537,503 for the first quarter ended May 3, 2008,
compared with a net loss of $965,174 on net sales of $49,255,817
for the first quarter ended May 5, 2007.

Comparable store sales for the first quarter of fiscal 2008
decreased 11.1%, compared to a decrease of 9.3% in the prior-year
period.

Gross profit in the first quarter was $11,249,973, or 25.8% of net
sales, compared to $15,288,041, or 31.0% of net sales in the first
quarter last year.

Operating loss was $4,069,126, compared to $1,204,958 in the first
quarter last year.

During the first quarter of fiscal 2008, the company opened one
new store and closed one store, ending the quarter with 249 total
stores.

Peter Edison, chairman and chief executive officer of Bakers
Footwear Group commented, "Our first quarter results reflected a
difficult start to the spring selling season driven by   
unseasonably cool weather and an early Easter holiday as compared
to last year.  Comparable store sales in February and March were
down 16.1% but rebounded nicely in April, to flat comparable store
sales, due to strong customer response to our open-toe footwear
assortment, demonstrating the strength of our merchandising team.

"During the quarter, we also achieved our cost reduction goals and
continue to expect this effort to positively impact operating
results this year.  In addition, we were pleased to maintain our
tight inventory discipline during the quarter with inventories at
quarter end down 15% from the prior-year period.  

"As we begin the second quarter, we remain optimistic.  Comparable
store sales for the first five weeks of the second quarter are
down 0.7% but, other than the first week of the quarter due to
reduced promotional activity, have improved each week with June
sales starting off strongly positive.  We expect continued
positive comps given the increasing importance of our strongest
performing category of open-toe footwear as the second quarter
progresses."

Mr. Edison continued, "We continue to believe we have adequate
liquidity to operate throughout 2008 and a business plan that
allows us to meet our debt covenants.  In addition, we have
continued to cut costs and eliminate underperforming stores.  Both
of these initiatives will augment our liquidity and profit plans."

The company said it continues to face considerable liquidity
constraints as a result of lower sales in the first quarter and
through the first five weeks of the second quarter.  As of May 3,
2008, the company had negative working capital of $12,839,077 and
unused borrowing capacity under its revolving line of credit of
$2,500,000.  As of May 31, 2008, unused borrowing capacity was
$600,000.

                          Balance Sheet

At May 3, 2008, the company's balance sheet showed $71,479,341 in
total assets, $51,442,217 in total liabilities, and $20,037,124 in
total stockholders' equity.

The company's balance sheet at May 3, 2008, also showed strained
liquidity with $28,406,463 in total current assets available to
pay $41,245,540 in total current liabilities.

Full-text copies of the company's financial statements for the
quarter ended May 3, 2008, are available for free at:

               http://researcharchives.com/t/s?2e43

                       Going Concern Doubt

Ernst & Young LLP, in St. Louis, Missouri, expressed substantial
doubt about Bakers Footwear Group Inc.'s ability to continue as a
going concern after auditing the company's financial statements
for the years ended Feb. 2, 2008, and Feb. 3, 2007.  

The auditing frim reported that the company has incurred
substantial losses from operations in recent years.  In addition,
the company is dependent on its various debt agreements to fund
its working capital needs.  The debt agreements contain certain
financial covenants with which the company must comply, and
compliance cannot be assured.

                      About Bakers Footware

Based in St. Louis, Mo., Bakers Footwear Group Inc. (Nasdaq: BKRS)
-- http://www.bakersshoes.com/-- is a national, mall-based,  
specialty retailer of distinctive footwear and accessories for
young women.  The company's merchandise includes private label and
national brand dress, casual and sport shoes, boots, sandals and
accessories.  Bakers' stores focus on women between the ages of 16
and 35.  Wild Pair stores offer fashion-forward footwear to both
women and men between the ages of 17 and 29.


BEAR STEARNS: Messrs. Cioffi and Tannin Indicted on Fraud Charges
-----------------------------------------------------------------
An indictment was unsealed Thursday morning in federal court in
Brooklyn, New York, charging Ralph Cioffi, 52, the founder and
senior portfolio manager of two Bear Stearns hedge funds, and
Matthew Tannin, 46, a portfolio manager of the funds, with
conspiracy, securities fraud, and wire fraud, the U.S. Department
of Justice said in a press release.

As reported in the Troubled Company Reporter on June 18, 2008,
federal prosecutors are preparing to file criminal charges against
the Bear Stearns managers Messrs. Cioffi and Tannin, who oversaw
two Bear Stearns hedge funds that have recently collapsed.

The DOJ release said that Mr. Cioffi was also charged with insider
trading.  The defendants are scheduled to be arraigned later today
before United States Magistrate Judge Steven M. Gold, at the U.S.
Courthouse, 225 Cadman Plaza East in Brooklyn.  The case has been
assigned to United States District Judge Frederic Block.

The charges were announced by Benton J. Campbell, United States
Attorney for the Eastern District of New York, and Mark J.
Mershon, Assistant Director-in-Charge of the Federal Bureau of
Investigation, New York Field Division.

According to the indictment, CIOFFI created the Bear Stearns High
Grade Structured Credit Strategies Fund in 2003 and the Bear
Stearns High Grade Structured Credit Strategies Enhanced Fund in
2006.  The indictment alleges that the defendants marketed the
Funds as a low risk strategy that invested primarily in high grade
debt securities, such as AAA and AA rated tranches, or pieces, of
collateralized debt obligations.  CDOs are securities backed by a
pool of debt securities, such as mortgages. Both funds utilized
leverage, by borrowing capital from Wall Street lenders with the
hope of earning a higher rate of return on their investments than
the costs of the loans.  By the late summer of 2006, the Funds
held about $1.4 billion of investor funds under management.

The indictment alleges that by March 2007, the defendants believed
that the Funds were in grave condition and at risk of collapse.
However, rather than alerting the Funds' investors and creditors
to the bleak prospects of the Funds and facilitating an orderly
wind-down, the defendants made misrepresentations to stave off
withdrawal of investor funds and increased margin calls from
creditors in the ultimately futile hope that the Funds' prospects
would improve and that the defendants' incomes and reputations
would remain intact.  The subsequent collapse of the Funds during
the summer of 2007 resulted in losses to investors totaling more
than $1 billion.

              The Funds' Declining Financial Prospects

Throughout the spring of 2007, the defendants and other Fund
employees privately acknowledged the Funds' declining financial
prospects. According to the indictment, CIOFFI told another Fund
employee that he feared the current state of the CDO markets and
saw a long term meltdown on the horizon.

Similarly, in an April communication to Messrs. Cioffi and Tannin
stated,

"[T]he subprime market looks pretty damn ugly . . .. If we believe
[our internal modeling] is ANYWHERE CLOSE to accurate I think we
should close the funds now.  The reason for this is that if [our
internal modeling] is correct then the entire subprime market is
toast . . .. If AAA bonds are systematically downgraded then there
is simply no way for us to make money -- ever." (Emphasis in
original)

Notwithstanding their views to the contrary, the defendants led
investors and creditors to believe that, despite the challenges
presented in the market, the Funds would continue to generate an
increasing net asset value, the DOJ said.

           The Defendants' Own Investments in the Funds

As alleged in the indictment, in the hedge fund industry, the fact
that fund managers had their personal money in the funds they
managed was critically important to investors, the DOJ release
said.  Personal investment, or "skin in the game," established a
manager's faith in his fund and aligned the interests of managers
with investors.  However, the indictment charges that the
defendants misled investors about the true nature of their
investments in the Funds.  Specifically:

   -- Throughout March 2007, Mr. Tannin repeatedly told investors
      and Bear Stearns brokers responsible for selling the Funds
      that he believed that the market presented a buying
      opportunity and that he was adding to his investment in the
      Funds.  In one instance, Mr. Tannin told an investor,
      "[w]e are seeing opportunities now . . . I am adding capital
      to the Fund.  If you guys are in a position to do the same
      I think . . . this is a good opportunity."  In fact, Mr.
      Tannin never invested more of his own money in the Funds.

   -- At the same time, while he was touting the prospects of
      the Funds, Mr. Cioffi transferred $2 million of his about
      $6 million investment in the Enhanced Fund to another Bear
      Stearns hedge fund for which he had supervisory
      responsibilities.  This latter fund had recently
      experienced returns far superior to either the High Grade
      or Enhanced Funds.  He never told investors he made this
      transfer and continued falsely to represent to investors
      that he held about $6 million in the Enhanced Fund.

The indictment charges Mr. Cioffi with one count of insider
trading based on this $2 million redemption.

         Misrepresentations Regarding Investor Redemptions

The amount of investor redemptions, or requests to withdraw funds,
is significant to other investors in a hedge fund.  A relatively
large amount of pending redemptions may indicate a loss of
investor confidence in the fund.  A fund facing large redemption
requests runs the risk of reducing liquidity and of being forced
to sell assets at unfavorable prices to raise cash, thus
diminishing the value of the remaining investors' stake in the
fund.

During an April 2007 conference call with investors -- following
his acknowledgment of the importance of investors knowing the
status of redemptions -- Mr. Cioffi falsely represented that the
Funds "only have a couple million of redemptions for the June 30
date," when he knew of approximately $47 million in total
redemption requests for that date.  Mr. Cioffi also omitted any
reference to $67 million in redemption requests scheduled for
April 30, 2007 and May 31, 2007.  According to the indictment, Mr.
Tannin also made misrepresentations concerning redemptions to a
creditor of the Funds.

                          The Missing Notes

The indictment alleges that Mr. Tannin's tablet computer, on which
he took notes during 2007, and Mr. Cioffi's notebook, in which he
had made handwritten notes during the spring of 2007, both went
missing after the United States Securities & Exchange Commission
requested the production of documents and materials as part of its
investigation of the collapse of the funds in the summer of 2007.

"Hedge fund investors, like all investors in our national markets,
are entitled to rely on those to whom they entrust their
investment dollars," stated United States Attorney Campbell.  
"Honesty and fair dealing are at the foundation of this
relationship of trust and confidence.  These defendants chose to
breach that trust, and they will now be held to account."  Mr.
Campbell expressed his grateful appreciation to the Federal Bureau
of Investigation and the United States Securities & Exchange for
their assistance.  Mr. Cambpell added that the investigation is
continuing.

FBI Assistant Director-in-Charge Mershon stated, "[i]nvesting in
hedge funds entails certain market risks, but investors don't
assume the risk that fund managers will misrepresent facts.  A
fund can perform poorly and lose investor capital as a result of
bad management, but losing investors' money isn't the crime.  The
crime is in misrepresenting the vitality of the fund, as these
defendants surely did."

If convicted of securities fraud, Messrs. Cioffi and Tannin face
maximum sentences of 20 years of imprisonment.  If convicted of
conspiracy, they each face a maximum sentence of five years.

The United States Attorney for the Eastern District of New York is
a member of the Corporate Fraud Task Force, a multi-agency group
formed by President Bush in July 2002 to restore public and
investor confidence in America's corporations following a number
of major corporate scandals.  In the past five years, the task
force has yielded more than 1,200 corporate fraud convictions.

The United States Securities & Exchange Commission announced today
that it has filed civil charges against both Messrs. Cioffi and
Tannin.

The government's criminal case is being prosecuted by Assistant
United States Attorneys Sean Patrick Casey, John A. Nathanson,
James Gatta, and Patrick Sean Sinclair.

                        About Bear Stearns

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

As reported by the Troubled Company Reporter, Bear Stearns
stockholders approved the investment bank's merger with JPMorgan
Chase & Co. at a Special Meeting of Stockholders held May 29,
2008.  Approximately 84% of shares voted were in favor of the
merger,  representing a substantial majority of Bear Stearns'
outstanding common stock.  The Wall Street Journal reports that
the value of the transaction  is about $1.4 billion, a large
difference from the $25 billion market capitalization value in
early 2007 before its defeat.

Upon completion of the merger, each outstanding share of common
stock of Bear Stearns will be converted into the right to receive
0.21753 shares of JPMorgan Chase common stock and Bear Stearns
will become a direct subsidiary of JPMorgan Chase.

                           *     *     *

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

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


BELLACH'S LEATHER: Court Turns Estate Over to Chapter 11 Trustee
----------------------------------------------------------------
Andrea Wurim, the Chapter 11 trustee in Bellach's Leather For
Living Inc.'s bankruptcy case, sold the Debtors' assets sub par
and fired its employees, much to the disappointment of owner
Jerome Bellach, the Marin Independent Journal reports.

Mr. Bellach filed for bankruptcy with the U.S. Bankruptcy Court
for the Northern District of California in the hope of
reorganizing successfully under Chapter 11 protection.  "There is
no revenue coming in but we still have overhead," Mr. Bellach
explained to the Journal.

However, according to the Trustee, the Debtor has "virtually no
prospect for organization" since it had continuing losses of
$200,000 per month, the Journal says, citing court documents.  In
addition, Mr. Bellach failed to pay payroll and certain taxes, and
refused to submit financial documents to the Court.

Mr. Bellach's attorney David Chandler, Esq. informed the Marin
Journal that the Court has the prerogative to take the estate away
from the Debtor if the Debtor has acted inappropriately in the
case.  "Clients have a hard time getting around that concept. . .  
[T]he trustee is free to exercise his business judgment - it can't
be second-guessed by the debtor or the court," the Journal quotes
Mr. Chandler as saying.

Mr. Chandler has filed a motion to be dismissed as the Debtor's
counsel.

Based in Belvedere, California, Bellach's Leather For Living Inc.
has manufactured furniture, furniture coverings, and various
upholstery for nearly 70 years.  The company filed for Chapter 11
protection on March 3, 2008 (Bankr. N.D. Calif. Case No. 08-
10362).  David N. Chandler, Esq. represents the Debtor in its
restructuring efforts.  When the Debtor filed for protection from
its creditors, it listed total assets of $1,596,000, and total
debts of $4,006,624.


BHM TECHNOLOGIES: US Trustee Objects to Rothschild as Advisor
-------------------------------------------------------------
Habbo Fokkena, United States Trustee for Region 9, objects,
pursuant to his authority under Section 307 of the Bankruptcy Code
and Section 586(a)(3) of the Judiciary and Judicial Procedure, to
the application of BHM Technologies Holdings, Inc., and its
debtor-subsidiaries to hire Rothschild, Inc., for these reasons:

   (1) The Debtors have filed applications to retain both
       AlixPartners, LLP, as financial advisors and Rothschild as
       an investment banker.  The applications do not delineate
       the duties of each firm, nor do the applications explain
       why both firms are needed to render financial advice to
       the Debtors.  The U.S. Trustee requests more time to
       review this issue with the Debtors and reserves the
       right to raise any objection based upon that review.

   (2) The Rothschild fee structure is based in part on the
       financing that the firm will arrange for the Debtors.
       Part of Rothschild's duties would be to arrange financing
       for the Debtors and to advise the Debtors as to the
       advantages and disadvantages of different financing
       proposals.  However, the U.S. Trustee notes that the
       financing has already been agreed upon in the term sheet,
       and will come form the first secured lenders and possibly
       the current shareholders.  It is unclear to the U.S.
       Trustee what role Rothschild will play now that the term
       sheet has been agreed by the parties.

   (3) Rothschild's fee arrangement is much more generous than is
       typical in the Western District of Michigan, as the firm
       will receive:

       (a) a monthly fee of $150,000, payable in advance on the
           first day of each month;

       (b) a $1,000,000 amendment fee if there is a transaction
           that materially restructures the Debtors credit
           arrangements;

       (c) between 1.5% and 6% fee for all new capital raised
           from investors other than current shareholders or
           equityholders;

       (d) a fee of $3,250,0000 on the confirmation of a plan,
           which would be reduced a credit of 50% of the monthly
           fees over $900,000 and 100% of the Amendment fee
           against the $3,2500,000 due at confirmation; and

       (e) expenses, including travel and lodging.

   (4) The proposed order states that the Rothschild fee
       applications will be reviewed under Section 328(a) but
       will "not be subject to the standard of review set forth
       in Section 330 of the Bankruptcy Code."  The U.S. Trustee
       believes that any fee must be reviewed under Section 330
       of the Bankruptcy Code.

   (5) The fees and expenses of Rothschild's attorney, who need
       not be appointed or file a separate fee application, are
       included as expenses reimbursable to Rothschild.  To the
       extent that the services of this attorney benefit
       Rothschild alone, the question arises as to why Rothschild
       should be reimbursed for a normal expense of its overhead.

   (6) Rothschild received $1,500,000 from the Debtors for its
       work within one year prior to filing, plus a retainer of
       $25,000 for application against as yet unbilled
       prepetition fees, and as of the Petition Date was not a
       creditor.  The U.S. Trustee has not yet been able to
       review the statements that support the billings in order
       to determine whether any of these payments were made on
       antecedent debts.  It wants more time to review this issue
       with Rothschild, the Debtors and their counsel.

   (7) Rothschild agrees to file fee petitions with time records
       kept in half hour increments.  However, the local rules
       require increments of one-tenth of an hour.

   (8) There are at least 55 connections between Rothschild and
       various entities in this case, including some that appear
       to be with secured creditors.  Rothschild states in its
       affidavit that it may have connections with many parties-
       in-interest in BHM's Chapter 11 cases, but that it will
       not represent them in the cases.  The U.S. Trustee
       requests more time to review these connections, and
       reserves the right to argue at connections with secured
       creditors may create an impermissible conflict of
       interest.

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

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

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


BHM TECHNOLOGIES: Trustee Objects to Pepper Hamilton as Counsel
---------------------------------------------------------------
Habbo Fokkena, United States Trustee for Region 9, objects to the
application of BHM Technologies Holdings, Inc., and its debtor-
subsidiaries to hire Pepper Hamilton, LLP, as their counsel, for
these reasons:

   (1) Pepper Hamilton appears to represent 33 customers, secured
       creditors, unsecured creditors or litigation parties of
       the Debtors that are either current clients, former
       clients, or affiliates of current or former clients of
       Pepper Hamilton, including Lehman, an affiliate of former
       clients and SAC, a former client itself.  The current
       clients of the law firm appear to include some of
       the secured lenders, including Deutsche Bank Ag, JP Morgan
       Chase Bank NA, Longacre Management, LLC, MH Davidson, The
       Bank of New York, The Carlyle Group, and Wachovia Bank.
       The U.S. Trustee requests further time to review these
       relationships, and reserves the right to argue that they
       constitute a conflict of interest which prohibits
       retention.

   (2) The list of parties that Pepper Hamilton ran through its
       conflicts search appears to have 312 names.  If that is
       accurate, it would appear to be less than the list of all
       parties-in-interest in this case.

   (3) Varnum, Riddering, Schmidt & Howlett, LLP has been
       retained as conflicts counsel, but the Pepper Hamilton
       application has no indication of what constitutes a
       conflict that would be referred to Varnum.

   (4) The affidavit states that Pepper Hamilton has been
       involved with many bankruptcy professionals in many other
       cases, but will not represent them in the Chapter 11 cases
       or have any relationships with them that are adverse to
       the Debtors.  The firm did not identify these
       professionals, nor define the relationships that they
       have.  This statement may be ambiguous and the U.S.
       Trustee requests more time to review this statement with
       the law firm, and reserve the right to argue that these
       relationships create a conflict based upon the results of
       that review.

   (5) The proposed fees range from $450 to $750 for partners,
       $240 to $345 for associates, and $175 to $205 for
       paralegals.  These rates are far above the rates that are
       customary in bankruptcy cases in the Western District of
       Michigan.  There is no commitment to charge less than full
       rates for travel time, which, upon information and belief,
       has been done in other large cases.  The U.S. Trustee
       desires additional time to discuss this with the debtors
       and their counsel, as well as the Committee counsel.

   (6) Pepper Hamilton has been appointed as one of a group of
       of mediators in the Collins & Aikman bankruptcy.   
       Collins & Aikman filed a preference against The Brown
       Corporation, one of the Debtors.  Pepper Hamilton has
       withdrawn from mediating that preference in the  
       Collins & Aikman bankruptcy.  The U.S. Trustee requests
       additional time to review this relationship with the law
       firm.

   (7) The U.S. Trustee reserves the right to raise further
       objections as may result from the consultation with the
       Debtors, the law firm, and counsel to the Official
       Committee of Unsecured Creditors.

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

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

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


BHM TECHNOLOGIES: US Trustee Objects to Varnum as Counsel
---------------------------------------------------------
Habbo Fokkena, United States Trustee for Region 9, objects,
pursuant to his authority under Section 307 of the Bankruptcy Code
and Section 586(a)(3) of the Judiciary and Judicial Procedure, to
the application of BHM Technologies Holdings, Inc., and its
debtor-subsidiaries to hire Rothschild, Inc. of Varnum, Riddering,
Schmidt & Howlett, LLP, as their conflicts counsel and
corporate counsel, for these reasons:

   (1) Varnum has been retained as conflicts counsel, but neither
       the Pepper Hamilton LLP application nor the Varnum
       application contain an explanation of what would
       constitute a conflict that would be referred to Varnum.

   (2) Varnum did not run conflicts checks against all parties-
       in-interest in the Chapter 11 cases.

   (3) According to the affidavit, Varnum has 40 current and 41
       former clients who are connected with BHM's case.  These
       are more connections than Pepper Hamilton has.  The U.S.
       Trustee requests more time to explore with the Debtors and
       its attorneys, how Varnum could be conflicts counsel given
       its number of potential conflicts.

   (4) On May 7, 2008, BHM sued the former shareholders and
       directors of BHM, alleging that the current BHM was misled
       about the value of BHM so that BHM paid "millions" of
       dollars too much for BHM.  According to the Varnum
       affidavit, it is possible that Varnum represented these
       defendants; but Varnum no longer represents these persons.  
       The U.S. Trustee believes the defendants are currently
       represented by Law Weathers but does not know whether
       these defendants are in fact the same clients that Varnum
       formerly represented, and if so, when this representation
       ceased and what Varnum's role was in this litigation.  

   (5) Varnum owns Varnum Consulting, which is not currently
       employed by the Debtors nor is a creditor.  Varnum's
       affidavit leaves open the possibility that Varnum
       Consulting has done work for the Debtors in the past and
       has been paid in full.

   (6) Once the U.S. Trustee understands the scope of Varnum's
       anticipated duties, it would request additional time to
       review the proposed fees with the Official Committee of
       Unsecured Creditors and its counsel.

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

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

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


BLUEGRASS ABS: Moody's Cuts and Reviews Ratings on Three Classes
----------------------------------------------------------------
Moody's Investors Service has downgraded and left these notes
issued by Bluegrass ABS CDO II Ltd. on review for possible
downgrade:

Class description: $248,000,000 Class A-1 Notes Due April 2039

  -- Prior Rating: Aa2, on review for possible downgrade
  -- Current Rating: Aa3, on review for possible downgrade

Class description: $58,000,000 Class A-2 Floating Rate Notes due
April 2039

  -- Prior Rating: Baa3, on review for possible downgrade
  -- Current Rating: B2, on review for possible downgrade

In addition Moody's has downgraded these notes:

Class description: $52,800,000 Class B Floating Rate Notes due
April 2039

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

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.


BOB WILSON: Delivers Schedules of Assets and Liabilities
--------------------------------------------------------
Bob Wilson Dodge Chrysler Jeep LLC submitted to the U.S.
Bankruptcy Court for the Middle District of Florida its schedules
of assets and liabilities, disclosing:

   Schedule                             Assets     Liabilities
   --------                           ----------   -----------
   A. Real Property
   B. Personal Property              $25,755,784
   C. Property Claimed as
      Exempt
   D. Creditors Holding                            $18,490,487
      Secured Claims
   E. Creditors Holding Unsec.                        $133,875
      Priority Claims
   F. Creditors Holding Unsec.                      $2,165,233
      Nonpriority Claims
                                      ----------   -----------
      TOTAL                          $25,755,784   $20,789,595

Headquartered in Tampa, Florida, Bob Wilson Dodge Chrysler Jeep
LLC -- http://www.bobwilsondodgesuperstore.com/--  is a certified   
DaimlerChrysler Five Star dealership with a huge inventory of high
quality new and pre-owned vehicles.  The Debtors and its debtor-
affiliates filed for separate Chapter 11 protection on April 25,
2008 (Bankr. M.D.Fla. Case No.: 08-05759 thru 08-05763.)  Harley
E. Riedel, Esq. at Stichter Riedel Blain & Prosser PA represents
the Debtors in their restructuring efforts.  


BOB WILSON: Stichter Riedel Retention Faces Limited Opposition
--------------------------------------------------------------
Bob Wilson Dodge Chrysler Jeep LLC asked the U.S. Bankruptcy Court
for the Middle District of Florida for permission to hire
Stichter, Riedel, Blain & Prosser PA as its counsel.

Stichter Riedel will, among others, render legal advice with
respect to the Debtor's powers and duties as a debtor in
possession, the continued operation of the Debtor's business, and
the management of its property, and perform other legal services
necessary for the proper preservation and administration of the
chapter 11 case.

The Debtor's motion to employ the firm did not disclose the
compensation rates of Stichter Riedel.

The Debtor said that Stichter Riedel represents no interest
adverse to the Debtor or to the estate.

The firm can be reached at:

   Harley E. Riedel, Esq.
   Russell M. Blain, Esq.
   Scott A. Stichter, Esq.
   (sstichter@srbp.com)
   Stichter, Riedel, Blain & Prosser PA
   110 Madison Street, Suite 200
   Tampa, FL 33602
   Tel: (813) 229-0144
   Fax: (813) 229-1811

                         Limited Objection

DaimlerChrysler Financial Services Americas LLC told the Court
that it holds a properly perfected first in right security
interest in and to substantially all of the assets of the Debtors,
Bob Wilson Dodge Chrysler Jeep LLC, Bob Wilson Dodge Inc. and Pabo
LLC.  Chrysler Financial added that the Debtors know of the
existence of its perfected lien and the nature of the collateral
it held.

On Feb. 25, 2008, Chrysler Financial said the Debtors commenced an
intentional practice of selling the collateral of Chrysler
Financial out of trust and converting the proceeds.  Some 91 new
and used vehicles were sold from the Debtors' inventory between
Feb. 25, 2008, and April 24, 2008, resulting in the sold out of
trust of $2,114,527.

When the Debtors sought bankruptcy protection on April 25, 2008,
Chrysler Financial said they know of events of default under the
terms of a master loan and security agreement and its conversion
of the proceeds of the collateral secured to Chrysler Financial
before April 25.

Chrysler Financial said Stichter Riedel also know about Chrysler
Financial's status as principal secured creditor and the scope of
its security interest in the Debtors' assets.  The firm also know
about the events of default and the fact that the Debtors had sold
various items of Chrysler Financial collateral and converted the
proceeds to its own use was in violation of that agreement.  

Chrysler Financial said that the firm knew about the perfected
security interest when it accepted a $50,000 retainer on April 25,
2008.  That retainer, Chrysler Financial alleged, constituted the
proceeds of its collateral, which Chrysler Financial wants to
recover.

Deily, Mooney & Glastetter, LLP represents DaimlerChrysler.

The Court will hear the matter on June 24, 2008, at 3:30 p.m.

                         About Bob Wilson

Headquartered in Tampa, Florida, Bob Wilson Dodge Chrysler Jeep
LLC -- http://www.bobwilsondodgesuperstore.com/--  is a certified   
DaimlerChrysler Five Star dealership with a huge inventory of high
quality new and pre-owned vehicles.  The Debtors and its debtor-
affiliates filed for separate Chapter 11 protection on April 25,
2008 (Bankr. M.D.Fla. Case No.: 08-05759 thru 08-05763.)  Harley
E. Riedel, Esq. at Stichter Riedel Blain & Prosser PA represents
the Debtors in their restructuring efforts.  Bob Wilson Dodge
Inc.'s estimated assets and debts at the bankruptcy filing were
both between $10 million and $50 million.  Bob Wilson Dodge
Chrysler Jeep's schedules of assets and liabilities showed total
assets of  $25,755,784 and total liabilities of $20,789,595.


BOB WILSON: Hiring of Fin. Advisor Won't Add Value, Lender Says
---------------------------------------------------------------
Bob Wilson Dodge Chrysler Jeep LLC, Bob Wilson Dodge Inc. and Pabo
LLC asked the U.S. Bankruptcy Court for the Middle District of
Florida for permission to hire Tatum LLC as their consultant and
financial advisor, nunc pro tunc to the Debtors' bankruptcy
filing.

Tatum will assist the Debtors in connection with the sale of their
businesses including the identification of prospective buyers and
assist potential buyers with due diligence, assist in negotiations
with potential lenders and comply with the existing lenders'
requirements, and assist in the preparation of documents and other
procedures required by the Court.

The Debtors will pay Tatum at these hourly rates:

   Designation                   Rate
   -----------                   ----
   Managing Partner              $375
   Restructuring Partner         $345
   Engagement Partner            $225
   Principal                     $175

                        Limited Objection

DaimlerChrysler Financial Services Americas LLC told the Court
that it holds a properly perfected first in right security
interest in and to substantially all of the assets of the Debtors,
Bob Wilson Dodge Chrysler Jeep LLC, Bob Wilson Dodge Inc. and Pabo
LLC.  Chrysler Financial added that the Debtors know of the
existence of its perfected lien and the nature of the collateral
it held.

Chrysler Financial also said that Tatum know of the existence of
Chrysler Financial status as a principal secured creditor and the
scope of its security interest in the Debtors' assets.

Chrysler Financial told the Court that the Debtors sought to
employ Tatum, nunc pro tunc to April 28, 2008, but stated no
grounds to support nunc pro tunc relief.  Tatum, Chrysler
Financial added, failed to timely make an application for
retention approval, for which there is no excuse proffered.

According to Chrysler Financial, the services to be rendered by
Tatum that include consulting and assisting in bankruptcy sales to
maximize value of the estate, performing claim analysis and
attending hearings are duplicative of the legal services being
provided by the Debtors' counsel.

Upon information and belief, the Debtors are not presently
operating, thus there is no income being generated, Chrysler
Financial said.  All of the Debtors' assets are subject to
Chrysler Financial's security interests.  There are no funds
available to pay for the Debtors' administrative expenses,
Chrysler Financial asserted.

Chrysler Financial does not believe that Tatum would bring any
value to the estate and would not approve a "carve out" of its
fees from Chrysler Financial's security.

Deily, Mooney & Glastetter, LLP represents DaimlerChrysler.

The Court will hear the matter on June 24, 2008, at 3:30 p.m.

                         About Bob Wilson

Headquartered in Tampa, Florida, Bob Wilson Dodge Chrysler Jeep
LLC -- http://www.bobwilsondodgesuperstore.com/--  is a certified   
DaimlerChrysler Five Star dealership with a huge inventory of high
quality new and pre-owned vehicles.  The Debtors and its debtor-
affiliates filed for separate Chapter 11 protection on April 25,
2008 (Bankr. M.D.Fla. Case No.: 08-05759 thru 08-05763.)  Harley
E. Riedel, Esq. at Stichter Riedel Blain & Prosser PA represents
the Debtors in their restructuring efforts.  Bob Wilson Dodge
Inc.'s estimated assets and debts at the bankruptcy filing were
both between $10 million and $50 million.  Bob Wilson Dodge
Chrysler Jeep's schedules of assets and liabilities showed total
assets of  $25,755,784 and total liabilities of $20,789,595.


BWAY CORP: Moody's Holds B1 CF Rating and Changes Outlook to Neg.
-----------------------------------------------------------------
Moody's Investors Service affirmed the B1 corporate family rating
of BWAY Corporation and changed the outlook to negative.

Moody's took these rating actions:

  -- Affirmed $50 million senior secured first lien revolver due
     2012, Ba2 (to LGD 2, 28% from LGD 2, 26%)

  -- Affirmed $5 million Canadian senior secured first lien
     revolver due 2012, Ba2 (to LGD 2, 28% from LGD 2, 26%)

  -- Affirmed $190 million senior secured first lien term loan B
     due 2013, Ba2 (to LGD 2, 28% from LGD 2, 26%)

  -- Affirmed $50 million senior secured first lien term loan C
     due 2012, Ba2 (to LGD 2, 28% from LGD 2, 26%)

  -- Affirmed $200 million 10% senior subordinated notes due 2010,
     B3 (LGD 5, 86%)

  -- Assigned Speculative Liquidity Rating of SGL-3

  -- Affirmed corporate family rating, B1

  -- Affirmed probability of default rating, B1

The ratings outlook is changed to negative.

The change in the ratings outlook to negative reflects the
company's limited cushion under certain financial covenants in its
credit agreement, continuing weakness in its primary end markets
and concentration of sales.  Credit metrics have declined over the
last twelve months as the company was negatively impacted by
increases in raw material prices, competition, and a decline in
its primary end market.

The paint market is expected to remain soft over the intermediate
term as housing sales, both new and existing, remain depressed.  
BWAY's credit facility has financial covenant step downs going
into year end 2008 which leave little room for negative variance
in operating performance.

The ratings are supported by the company's strong market share,
the limited number of suppliers in its market, logistical barriers
to entry in the industry, and long standing customer
relationships.  Credit metrics are expected to improve over the
intermediate term as BWAY has increased prices, instituted cost
saving and productivity initiatives, and improved raw material
supply agreements.

A Speculative Grade Liquidity Rating of SGL-3 was assigned
reflecting the limited cushion under existing financial covenants,
potentially constrained availability under the credit facilities
and weakness in the company's primary end market which has
negatively impacted free cash flow over the last twelve months.

Headquartered in Atlanta, Georgia, BWAY Corporation is a leading
North American manufacturer of metal paint and specialty
containers and industrial general line rigid plastic containers
for industrial and consumer products.  Revenues for the twelve
months ended March 30, 2008 were approximately $983 million.


CANADA MORTGAGE: DBRS Lifts Ratings on 18 Classes of Certificates
-----------------------------------------------------------------
DBRS has removed the Series 2004-C1, Series 2004-C2, Series 2005-
C3, Series 2006-C4 and Series 2006-C5 certificates issued by
Canada Mortgage Acceptance Corporation from Under Review with
Developing Implications where they were placed on May 7, 2008, due
to the concern of the reduced financial ability of Residential
Funding of Canada, Limited, as the Administrator and Advancing
Agent for CMAC, and Residential Capital LLC, as Backup
Administrator and Report Agent.

Since then, RFOC has undertaken several steps to address the above
concern, including the initiation of re-registration of the
mortgages in the name of a third-party custodian as nominee for
the Certificate holders.  As all of the underlying mortgages were
purchased by CMAC on a true sale basis, CMAC, instead of RFOC has
security interests in the mortgages.

In addition, MCAP Service Corporation, one of the largest mortgage
servicing companies in Canada, is retained as a sub-servicer to
administer and service all of the underlying assets.  There is no
commingling of mortgage payments with the funds of the Seller as
all periodic payments are automatically debited from the accounts
of the borrowers and deposited into CMAC accounts maintained by
MCAP.

DBRS has reviewed the status of the procedures taken by RFOC and
has determined that the rating action of Under Review with
Developing Implications is no longer necessary.

Subsequent to the removal of all CMAC ratings from Under Review
with Developing Implications, DBRS has also upgraded the ratings
of these 18 classes of the Certificates issued by CMAC:

CMAC Series 2004-C1, Class C to AAA from AA
CMAC Series 2004-C1, Class D to AA from A
CMAC Series 2004-C1, Class E to A from BBB
CMAC Series 2004-C1, Class F to BBB from BB
CMAC Series 2004-C2, Class C to AAA from AA
CMAC Series 2004-C2, Class D to AA from A
CMAC Series 2004-C2, Class E to A from BBB
CMAC Series 2004-C2, Class F to BBB from BB
CMAC Series 2005-C3, Class B to AAA from AA
CMAC Series 2005-C3, Class C to AA from A
CMAC Series 2005-C3, Class D to A from BBB
CMAC Series 2005-C3, Class E to BBB from BB
CMAC Series 2005-C3, Class F to BB from B
CMAC Series 2006-C4, Class B to AAA from AA
CMAC Series 2006-C4, Class C to AA from A
CMAC Series 2006-C4, Class D to A from BBB
CMAC Series 2006-C4, Class E to BBB from BB
CMAC Series 2006-C4, Class F to BB from B

In addition, DBRS has also confirmed the remaining classes of the
Certificates issued by CMAC as:

CMAC Series 2004-C1, Class A at AAA
CMAC Series 2004-C1, Class IO at AAA
CMAC Series 2004-C1, Class B at AAA
CMAC Series 2004-C2, Class A at AAA
CMAC Series 2004-C2, Class IO at AAA
CMAC Series 2004-C2, Class B at AAA
CMAC Series 2005-C3, Class A at AAA
CMAC Series 2005-C3, Class IO-P at AAA
CMAC Series 2005-C3, Class IO-C at AAA
CMAC Series 2006-C4, Class A-2 at AAA
CMAC Series 2006-C4, Class VFC 2 at AAA
CMAC Series 2006-C4, Class IO-P at AAA
CMAC Series 2006-C4, Class IO-C at AAA
CMAC Series 2006-C5, Class A-2 at AAA
CMAC Series 2006-C5, Class VFC 2 at AAA
CMAC Series 2006-C5, Class IO-P at AAA
CMAC Series 2006-C5, Class IO-C at AAA
CMAC Series 2006-C5, Class B at AA
CMAC Series 2006-C5, Class C at A
CMAC Series 2006-C5, Class D at BBB
CMAC Series 2006-C5, Class E at BB
CMAC Series 2006-C5, Class F at B

The confirmation and upgrades are based on these factors:

(1) Since closing, the gradual principal repayment of the senior
Certificates and the non-amortizing nature of the subordinate
Certificates have effectively increased the levels of credit
enhancement supporting all CMAC Certificates.  As of May 31, 2008,
the enhancements available to the transactions are:

  -- Series 2004-C1: Class A  91.9%, B  62.3%, C  39%, D  24.1%,
      E  13.6%, F - 10.6%. Series 2004-C1 Certificates were
      previously upgraded in October 2006.

  -- Series 2004-C2: Class A  70.5%, B  47.9%, C  30.2%, D  17.4%,
      E  9.3%, F  6.4%. Series 2004-C2 Certificates were
      previously upgraded in January 2007.
  -- Series 2005-C3: Class A  43.2%, B  29.6%, C  19%, D  11.1%,
      E  6.2%, F  4.3%.

  -- Series 2006-C4: Class A (including Class VFC)  14.8%, B  
      10.3%, C  6.8%, D  4.1%, E  2.7%, F  2%.

  -- Series 2006-C5: Class A (including Class VFC)  15.4%, B  
      10.3%, C  6.5%, D  3.9%, E  2.4%, F  1.8%.

(2) The performance of the underlying assets for all CMAC
transactions has been better than expected.  The cumulative losses
experienced to date (as of May 31, 2008) are 0.15%, 0.55%, 0.50%,
0.19% and 0.14%, for Series 2004-C1, Series 2004-C2, Series 2005-
C3, Series 2006-C4 and Series 2006-C5, respectively, and current
three-month average default ratios are below 3% for all CMAC
transactions.

Constraints to the ratings are:

(1) Certain aspects of the mortgage loans are non-conventional,
rendering it more difficult to predict the pools future
performance.

(2) The VFC Certificates of Series 2006-C4 and Series 2006-C5 are
designed to absorb prepayments in order to maintain the bullet
payment schedule of other Class A Certificates.  The proceeds from
the issuance of Class VFC Certificates are used for the repayment
of maturing Class A Certificates.  In the event that Series 2006-
C4 or Series 2006-C5 is unable to sufficiently refinance the Class
VFC Certificates to fully repay the respective Class A
Certificates on their Targeted Maturity Dates, an early
amortization will begin and all outstanding Class A Certificates
will receive pro rata principal repayments in priority to the
subordinated Certificates.

The ratings assigned by DBRS reflect the creditworthiness of the
assets and address the likelihood of timely payment of principal
and interest on or prior to the Scheduled Final Distribution
Dates.


CHATTEM INC: S&P Holds 'BB-' Rating and Revises Outlook to Stable
-----------------------------------------------------------------
Standard & Poor's Ratings Services revised its outlook on Chattem
Inc. to stable from negative.  At the same time, S&P affirmed the
company's 'BB-' corporate credit and other ratings.  As of
Feb. 29, 2008, the company had about $498 million of debt.
     
The revised outlook is based on the company's reduced debt levels,
improved credit metrics, and stable operating performance since
the company acquired the U.S. rights to five Johnson & Johnson
brands for $410 million in January 2007.  Debt leverage has
declined to 3.5x from 4.5x pro forma for the transaction.  In
addition, the company maintains solid operating margins of more
than 30% and adequate liquidity.  S&P expect the company will
continue to reduce leverage through free cash flow and manage its
growth strategy consistent with the current ratings.
     
The ratings on Chattanooga, Tennessee-based Chattem reflect the
company's aggressive acquisition history and moderately high debt
leverage.  Chattem's operating stability in recent years and
strong margins offset these factors.  The company maintains a
solid position in certain niches of the branded over-the-counter
health care market.
     
The outlook on Chattem is stable.  S&P expect that debt leverage
will not increase beyond the current mid-3x area and that Chattem
will continue to demonstrate stable operating performance.  S&P
anticipate that the company will continue to use free cash flow to
reduce near-term leverage and that it will manage its growth
strategy consistent with the current ratings.
     
"Even if sales growth is flat and margins decline by 300 basis
points, we believe the company can comfortably manage leverage at
or below 4x in the near term," said Standard & Poor's credit
analyst Patrick Jeffrey.  We would consider a negative outlook if
the company demonstrates a more aggressive financial policy, where
its leverage exceeded 4.5x. "Standard & Poor's is unlikely to
consider a positive outlook in the near term, given the
challenging operating environment due to the weak U.S. economy,"
he continued.


CLEAR CHANNEL: S&P Cuts Rating to B from B+ on Proposed Financing
-----------------------------------------------------------------
Standard & Poor's Ratings Services lowered its corporate credit
rating on San Antonio, Texas-based Clear Channel Communications
Inc. to 'B' from 'B+' based on the proposed financing of the
company's pending leveraged buyout by the private equity group
co-led by Thomas H. Lee Partners L.P. and Bain Capital Partners
LLC.  

At the same time, S&P removed all the ratings from CreditWatch,
where they had been placed with negative implications on Oct. 26,
2006, following the company's announcement that it was exploring
strategic alternatives to enhance shareholder value, including a
possible sale of the company.  The outlook is stable.
     
"The downgrade reflects Clear Channel's significant pro forma
lease-adjusted debt leverage, about 10x during the 12 months ended
March 31, 2008, increased financial risk, and reduced liquidity
following the proposed LBO," said Standard & Poor's credit analyst
Michael Altberg.
     
The total transaction value is roughly $24.5 billion, including
existing debt.  The outlook is stable.
     
At the same time, Standard & Poor's assigned its 'B' bank loan
rating and '3' recovery rating on Clear Channel's $16.1 billion of
new senior secured credit facilities.  The '3' recovery rating
indicates S&P's expectation for meaningful (50% to 70%) recovery
of principal and pre-petition interest in the event of a payment
default.
     
S&P also assigned its 'CCC+' rating on the company's $2.3 billion
of new senior unsecured notes, with a recovery rating of '6',
indicating its expectation for negligible (0% to 10%) recovery in
the event of a payment default.
     
At the same time, S&P lowered its rating on the company's $5.1
billion of existing senior unsecured notes to 'CCC+' from 'B-' and
assigned a recovery rating of '6' on these issues.

The 'B-' rating on the company's existing 8% senior notes due
November 2008 at its AMFM Operating Inc. subsidiary remains on
CreditWatch with negative implications pending the completion of
the company's tender offer for these notes.
     
S&P lowered the rating on Clear Channel's existing $750 million of
7.65% senior notes due 2010 to 'CCC+' from 'B-' and assigned a
recovery rating of '6', reflecting the potential for this issue to
remain outstanding until maturity.
     
Based on the company's proposed financing, existing senior
unsecured debt will be rolled over into the new capital structure,
but will be structurally subordinate to both proposed new bank
debt and new senior unsecured notes.  The new bank debt and the
new senior unsecured notes will benefit from upstream operating
company guarantees, while the existing senior notes will not.  Pro
forma for the transaction, the company had $20.8 billion of debt
outstanding as of March 31, 2008.
     
The ratings reflect Clear Channel's steep pro forma lease-adjusted
debt leverage and weakened credit metrics following the proposed
LBO, negative secular trends facing the radio industry, and the
company's exposure to advertising cyclicality.  The company's
prominent position in radio and outdoor advertising and its top
clusters of radio stations in large markets, which tend to be more
lucrative, partially offset the negative factors.  In addition,
significant geographic and format diversity, radio broadcasting
and outdoor advertising's high-margin potential and strong
discretionary cash flow-generating capabilities, and largely
resilient station asset values are positive rating factors.
     
Clear Channel is the No. 1 radio operator in the U.S., in terms of
revenue and number of stations, and it has approximately 90%
ownership interest (through Clear Channel Holdings) in Clear
Channel Outdoor Inc., the largest global outdoor advertiser.  
Clear Channel's radio segment has significant geographic and
format diversity, and is ranked No. 1 or No. 2 in terms of market
share in all of the top 10 markets and roughly 70% of the top
25 markets.


COUNTRYWIDE FINANCIAL: Preferential Treatments Raise Eyebrows
-------------------------------------------------------------
Countrywide Financial Corp. is again in hot water for allegedly
giving perks and favorable terms to leading U.S. political figures  
on their housing loans, various reports said.

CondeNast Portfolio magazine, who first broke the news, reported
that these preferred customers were referred to as "Friends of
Angelo" in internal documents, according to the Agence France-
Presse.  President Angelo Mozilo openly disclosed these favors to
U.S. lawmakers such as Senators Kent Conrad and Chris Dodd, former
cabinet members Alphonso Jackson and Donna Shalala, and the former
United Nations ambassador Richard Holbrooke, the AFP related.

Mr. Mozilo was "fairly forthcoming" in his favored treatment to
these politicians, the AFP cited Guy Cecala, of the Inside
Mortgage Finance Publications.  "Make an exception due to the fact
that the borrower is a senator,"Mr.Mozilo revealed in an e-mail
message obtained by CondeNast Portfolio.

             Sen. Conrad Rebuffs Allegations,
                  Donates Savings on Loan

In the midst of these allegations, Senator Kent Conrad said that
he will donate $10,500 to charity, Bloomberg News reported.  The
amount also represents the savings he made on his vacation-home
loan after Mr. Mozilo "dropped a point" from this loan porfolio.

Sen. Conrad has acknowledged that change in his loan record, said
Bloomberg.  "Although I did not ask for or know that I was
receiving a discount, and even though I was offered a competitive
loan from another lender, I do not want to have received
preferential treatment," Sen. Conrad vigorously denied.

According to Bloomberg, Countrywide has a "V.I.P." loan program
designed to give special treatment to important officials, by
waiving points and borrowing terms on respective loan portfolios.

"He is paying this [donation] to make absolutely clear he will not
partake in any preferential treatment," Bloomberg quoted a
spokesman for Sen. Conrad.

Senator Dodd also denies receiving special discounts.  "The Dodds
received a competitive rate on their loans. . .  [T]hey did not
seek or anticipate any special treatment and they were not aware
of any," a representative for Sen. Dodd told Bloomberg in a
telephone interview.

Jim Johnson, adviser to the presumptive Democratic presidential
candidate Barack Obama, resigned after being hounded by
allegations of receiving preferred treatment from Countrywide, AFP
said.

                   About Countrywide Financial

Based in Calabasas, California, Countrywide Financial Corporation
(NYSE: CFC) -- http://www.countrywide.com/-- is a
diversified financial services provider and a member of the S&P
500, Forbes 2000 and Fortune 500.  Through its family of
companies, Countrywide originates, purchases, securitizes, sells,
and services residential and commercial loans; provides loan
closing services such as credit reports, appraisals and flood
determinations; offers banking services which include depository
and home loan products; conducts fixed income securities
underwriting and trading activities; provides property, life and
casualty insurance; and manages a captive mortgage reinsurance
company.

                         *     *     *

As reported in the Troubled Company Reporter on Jan. 15, 2008,
Moody's placed the ratings of Countrywide Financial Corporation
and its subsidiaries under review for upgrade.  CFC and
Countrywide Home Loans senior debt is rated Baa3 and short-term
debt is rated Prime-3.  Countrywide Bank FSB's bank financial
strength rating is C-, deposits are rated Baa1 and short-term debt
Prime-2.  All long and short-term ratings are placed under review
for possible upgrade.

The company is continuing to face a barrage of lawsuits coming
from disgruntled homeowners that filed for bankruptcy protection.  
Countrywide has been accused by these homeowners and various
federal agencies of dubious and questionable lending practices,
and for abusing the bankruptcy system.


DALE JARRETT: Posts $259,323 Net Loss in 2008 First Quarter
-----------------------------------------------------------
Dale Jarrett Racing Adventure Inc. reported a net loss of $259,323
on sales of $416,787 for the first quarter ended March 31, 2008,
compared with a net loss of $218,873 on sales of $321,225 in the
same period last year.

At March 31, 2008, the company's balance sheet showed $1,655,405
in total assets, $1,470,522 in total liabilities, and $184,883 in
total stockholders' equity.

The company's balance sheet at March 31, 2008, also showed
strained liquidity with $1,105,288 in total current assets
available to pay $1,377,898 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?2e40

                       Going Concern Doubt

As reported in the Troubled Company Reporter on April 18, 2008,
Stark Winter Schenkein & Co., LLP, in Denver, expressed  
substantial doubt about Dale Jarrett Racing Adventure Inc.'s
ability to continue as a going concern after auditing the
company's financial statements for the year ended Dec. 31, 2007.  
The auditor stated that the company has incurred significant
losses from operations and has working capital and stockholder
deficiencies.

                        About Dale Jarrett

Based in Newton, N.C., Dale Jarrett Racing Adventure Inc. (OTC:
DJRT) -- http://www.racingadventure.com/-- offers entertainment-
based oval driving schools and events.  These classes are
conducted at various racetracks throughout the United States.  The
company owns 15 race cars that are classified as stock cars and
are equipped for oval or round tracks only.  These race cars are
loaded with race engines, six point harnesses, neck and head
restraints, communications, track specific gears and safety cages.


DELTA FUNDING: Moody's Puts B3 Underlying Rating on Cl. A-1A Notes
------------------------------------------------------------------
Moody's Investors Service has published the underlying ratings on
the notes that are guaranteed by the financial guarantors listed
below.  The underlying ratings reflect the intrinsic credit
quality of the notes in the absence of the guarantee.

The current ratings on the following notes are consistent with
Moody's practice of rating insured securities at the higher of the
guarantor's insurance financial strength rating or any underlying
rating that is public.

Complete rating actions are:

Issuer: Delta Funding Home Equity Loan Trust 1995-2

Class Description: Class A-5 Notes

  -- Current Rating: Aaa, under review for possible downgrade

  -- Financial Guarantor: MBIA Insurance Corporation (Aaa, under
     review for possible downgrade)

  -- Underlying Rating: Aa2

Class Description: Class S Notes

  -- Current Rating: Aaa, under review for possible downgrade

  -- Financial Guarantor: MBIA Insurance Corporation (Aaa, under
     review for possible downgrade)

  -- Underlying Rating: Aa2

Issuer: Delta Funding Home Equity Loan Trust 1996-1

Class Description: Class A-7Notes

  -- Current Rating: Aaa, under review for possible downgrade

  -- Financial Guarantor: MBIA Insurance Corporation (Aaa, under
     review for possible downgrade)

  -- Underlying Rating: Aa2

Issuer: Delta Funding Home Equity Loan Trust 1996-2

Class Description: A-5 Notes

  -- Current Rating: Aaa, under review for possible downgrade

  -- Financial Guarantor: MBIA Insurance Corporation (Aaa, under
     review for possible downgrade)

  -- Underlying Rating: Baa2

Issuer: Delta Funding Home Equity Loan Trust 1996-3

Class Description: Class A-5 Notes

  -- Current Rating: Aaa, under review for possible downgrade

  -- Financial Guarantor: MBIA Insurance Corporation (Aaa, under  
     review for possible downgrade)

  -- Underlying Rating: Baa2

Class Description: Class S Notes

  -- Current Rating: Aaa, under review for possible downgrade

  -- Financial Guarantor: MBIA Insurance Corporation (Aaa, under
     review for possible downgrade)

  -- Underlying Rating: Baa2

Issuer: Delta Funding Home Equity Loan Trust 1997-1

Class Description: Class A-5 Notes

  -- Current Rating: Aaa, under review for possible downgrade

  -- Financial Guarantor: MBIA Insurance Corporation (Aaa, under
     review for possible downgrade)

  -- Underlying Rating: Baa3

Class Description: Class A-6 Notes

  -- Current Rating: Aaa, under review for possible downgrade

  -- Financial Guarantor: MBIA Insurance Corporation (Aaa, under
     review for possible downgrade)

  -- Underlying Rating: Baa3

Class Description: Class S Notes

  -- Current Rating: Aaa, under review for possible downgrade

  -- Financial Guarantor: MBIA Insurance Corporation (Aaa, under
     review for possible downgrade)

  -- Underlying Rating: Baa3

Issuer: Delta Funding Home Equity Loan Trust 1998-1

Class Description: Class A-6F Notes

  -- Current Rating: Aaa, under review for possible downgrade

  -- Financial Guarantor: MBIA Insurance Corporation (Aaa, under
     review for possible downgrade)

  -- Underlying Rating: Aa1

Issuer: Delta Funding Home Equity Loan Trust 1999-1

Class Description: Class A-5F Notes

  -- Current Rating: Aaa, under review for possible downgrade

  -- Financial Guarantor: MBIA Insurance Corporation (Aaa, under
     review for possible downgrade)

  -- Underlying Rating: Aa2

Class Description: Class A-6F Notes

  -- Current Rating: Aaa, under review for possible downgrade

  -- Financial Guarantor: MBIA Insurance Corporation (Aaa, under
     review for possible downgrade)

  -- Underlying Rating: Aa2

Class Description: Class A-1A Notes

  -- Current Rating: Aaa, under review for possible downgrade

  -- Financial Guarantor: MBIA Insurance Corporation (Aaa, under
     review for possible downgrade)

  -- Underlying Rating: B3

Issuer: Delta Funding Home Equity Loan Trust 1999-3

Class Description: Class A-1F Notes

  -- Current Rating: Aaa, under review for possible downgrade

  -- Financial Guarantor: MBIA Insurance Corporation (Aaa, under
     review for possible downgrade)

  -- Underlying Rating: Aa2

Class Description: Class A-2F Notes

  -- Current Rating: Aaa, under review for possible downgrade

  -- Financial Guarantor: MBIA Insurance Corporation (Aaa, under
     review for possible downgrade)

  -- Underlying Rating: Aa2

Class Description: Class A-1A Notes

  -- Current Rating: Aaa, under review for possible downgrade

  -- Financial Guarantor: MBIA Insurance Corporation (Aaa, under
     review for possible downgrade)

  -- Underlying Rating: Aa2


DELTA AIR: IRS and Palm Beach Withdraw $2 Million Claims
--------------------------------------------------------
Maria Valerio, insolvency specialist at the Department of
Treasury -- Internal Revenue Service, notified the U.S. Bankruptcy
Court for the Southern District of New York and parties-in-
interest that the IRS has withdrawn its Claim No. 5093
asserting a total of $2,005,284,273, which consists of:

   * an unsecured priority claim for $1,282;
   * a secured priority claim for $23,101,437; and
   * a priority claim for $1,982,181,554.

In a separate filing, the Palm Beach County in West Palm Beach,
Florida, disclosed that it has withdrawn its Claim Nos. 780 and
781 asserting undetermined amounts.

                         About Delta Air

Based in Atlanta, Georgia, Delta Air Lines Inc. (NYSE:DAL) --
http://www.delta.com/-- is the world's second-largest airline
in terms of passengers carried and the leading U.S. carrier
across the Atlantic, offering daily flights to 328 destinations
in 56 countries on Delta, Song, Delta Shuttle, the Delta
Connection carriers and its worldwide partners.  Delta flies to
Argentina, Australia and the United Kingdom, among others.

The company and 18 affiliates filed for chapter 11 protection on
Sept. 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-17923).
Marshall S. Huebner, Esq., at Davis Polk & Wardwell, represents
the Debtors in their restructuring efforts.  Timothy R. Coleman
at The Blackstone Group L.P. provides the Debtors with financial
advice.  Daniel H. Golden, Esq., and Lisa G. Beckerman, Esq., at
Akin Gump Strauss Hauer & Feld LLP, provide the Official
Committee of Unsecured Creditors with legal advice.  John
McKenna, Jr., at Houlihan Lokey Howard & Zukin Capital and James
S. Feltman at Mesirow Financial Consulting, LLC, serve as the
Committee's financial advisors.

The Debtors filed a chapter 11 plan of reorganization and
disclosure statement explaining that plan on Dec. 19, 2007.  On
Jan. 19, 2007, they filed revisions to the plan and disclosure
statement, and submitted further revisions to the plan on
Feb. 2, 2007.  On Feb. 7, 2007, the Court approved the Debtors'
disclosure statement.  In April 25, 2007, the Court confirmed the
Debtors' plan.  That plan became effective on April 30, 2007.  The
Court entered a final decree closing 17 cases on Sept. 26, 2007.    
(Delta Air Lines Bankruptcy News, Issue No. 101; Bankruptcy
Creditors' Service, Inc., http://bankrupt.com/newsstand/or       
215/945-7000).


DELTA AIR: Cooking Joint Pilot Deal with Northwest Airlines
-----------------------------------------------------------
Negotiations on a joint pilot contract covering Delta Air Lines,
Inc. and Northwest Airlines Corp. pilots were said to have started
on July 18, 2008, according to a message from the Northwest pilots
union to its members, the Atlanta-Journal Constitution reports.

AJC says the "round-the-clock" negotiations on a joint pilot
contract for Delta and Northwest's proposed merger are planned to
last seven days in New York, or until middle of next week.

Delta's pilots had ratified in May 2008, Letter of Agreement 19
with Delta management, which modifies the current Pilot Working
Agreement and will take effect upon the completion of the Delta-
Northwest merger.  Among other things, the modifications include
granting Delta pilots a 3.5% equity stake in the combined company
and annual pay raises of 5% in 2009, and 4% in 2010 to 2012.

The concessions do not cover Northwest pilots.

Prior to the ratification, particularly during the earlier months
of the merger talks, Delta's and Northwest's pilot unions tried,
but failed, to reach an agreement on a joint labor contract and a
plan for merging their seniority lists.  Essentially, seniority
determines pilots' work schedules and pay levels.

Northwest pilots clamor for, among other things, pay parity
immediately upon the merger's close, the report says.

    Delta Pilots Union Leader Expects No Concession Request,
           Believes Joint Contract Will Be Reached

In an interview with AJC, Delta pilots union chairman Lee Moak
disclosed that he doesn't think that record-high fuel prices will
force Delta to ask for pilot concessions as it proceeds with its
acquisition of Northwest.

"But at some point, something is going to have to give.  I don't
think it's going to be labor concessions.  I think it's going to
be rational ticket pricing to cover our cost," Mr. Moak said.

Mr. Moak reiterated that the Delta pilots union aims to reach a
joint contract and seniority list integration agreement with
Northwest pilots before the carriers' merger completes.

"The contract could be done relatively quickly.  It's just a
matter of the parties coming together," Mr. Moak told AJC.

"I'm confident we're going to get a deal done (by the close of
the merger)," Moak said.  "But if there isn't a deal done, we'll
continue to work on it."

The merger is expected to happen by the end of 2008, subject to
regulators' and shareholders' approval.

                    About Northwest Airlines

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

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

When the Debtors filed for bankruptcy, they listed $14.4 billion
in total assets and $17.9 billion in total debts.  On Jan. 12,
2007 the Debtors filed with the Court their Chapter 11 Plan.  On
Feb. 15, 2007, they Debtors filed an Amended Plan & Disclosure
Statement.  The Court approved the adequacy of the Debtors'
Disclosure Statement on March 26, 2007.  On May 21, 2007, the
Court confirmed the Debtors' Plan.  The Plan took effect May 31,
2007.  (Northwest Airlines Bankruptcy News; Bankruptcy Creditors'
Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000).   

                         About Delta Air

Based in Atlanta, Georgia, Delta Air Lines Inc. (NYSE:DAL) --
http://www.delta.com/-- is the world's second-largest airline
in terms of passengers carried and the leading U.S. carrier
across the Atlantic, offering daily flights to 328 destinations
in 56 countries on Delta, Song, Delta Shuttle, the Delta
Connection carriers and its worldwide partners.  Delta flies to
Argentina, Australia and the United Kingdom, among others.

The company and 18 affiliates filed for chapter 11 protection on
Sept. 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-17923).
Marshall S. Huebner, Esq., at Davis Polk & Wardwell, represents
the Debtors in their restructuring efforts.  Timothy R. Coleman
at The Blackstone Group L.P. provides the Debtors with financial
advice.  Daniel H. Golden, Esq., and Lisa G. Beckerman, Esq., at
Akin Gump Strauss Hauer & Feld LLP, provide the Official
Committee of Unsecured Creditors with legal advice.  John
McKenna, Jr., at Houlihan Lokey Howard & Zukin Capital and James
S. Feltman at Mesirow Financial Consulting, LLC, serve as the
Committee's financial advisors.

The Debtors filed a chapter 11 plan of reorganization and
disclosure statement explaining that plan on Dec. 19, 2007.  On
Jan. 19, 2007, they filed revisions to the plan and disclosure
statement, and submitted further revisions to the plan on
Feb. 2, 2007.  On Feb. 7, 2007, the Court approved the Debtors'
disclosure statement.  In April 25, 2007, the Court confirmed the
Debtors' plan.  That plan became effective on April 30, 2007.  The
Court entered a final decree closing 17 cases on Sept. 26, 2007.    
(Delta Air Lines Bankruptcy News, Issue No. 101; Bankruptcy
Creditors' Service, Inc., http://bankrupt.com/newsstand/or       
215/945-7000).


DELTA AIR: Severance Payout Takers Increase to 4,000
----------------------------------------------------
As of June 13, 2008, approximately 4,000 Delta workers accepted
the voluntary severance package that Delta Air Lines, Inc. offered
to its workers, The Associated Press reports.

Delta announced its original goal of 2,000 job cuts in March.  As
of May 30, more than 3,000 people took the package.
                                                                                                           
According to Delta spokeswoman Betsy Talton, employees who took
the package are from the mainline airline and Delta's information
technology subsidiary, most of whom will leave the Company in the
fall, The AP says.

Delta will accept all the volunteers, Ms. Talton added.

Delta had offered to its roughly 30,000 eligible employees on
March 18, 2008, the (i) 60-Point Retirement Program for those who
are already eligible for retirement and (ii) the Early Out Program
for frontline, administrative and management employees.

The programs offer a severance payment, travel privileges, and
additional benefits to manage career transitions.  Specifics
differ based on age, retirement eligibility, and years of
service.

      Capacity Reduction and Fare Hikes Necessary, CEO Says

Delta Chief Executive Officer Richard Anderson announced over
CNBC on June 12, that the airline will cut its domestic capacity
by 12% to 13% in the last half of 2008, in an effort to stay on
business amid rising fuel prices, the Atlanta-Journal
Constitution reports.

Capacity reduction "will hit markets like Orlando, Hawaii, Las
Vegas," Mr. Anderson specified.

Delta had informed the public that it would cut domestic capacity
by 9% to 11% during the second half of the year.

While Delta is cutting domestic capacity, it plans to grow its
international flying to about 50% of its total revenue, AJC
notes.

Mr. Anderson added that fares would "have to go up pretty
significantly," to boost industry revenue by 15% to 20% and cover
fuel costs, the report says.

The International Air Transport Association said the price of jet
fuel has nearly doubled from a year ago, reports AJC.

                         About Delta Air

Based in Atlanta, Georgia, Delta Air Lines Inc. (NYSE:DAL) --
http://www.delta.com/-- is the world's second-largest airline
in terms of passengers carried and the leading U.S. carrier
across the Atlantic, offering daily flights to 328 destinations
in 56 countries on Delta, Song, Delta Shuttle, the Delta
Connection carriers and its worldwide partners.  Delta flies to
Argentina, Australia and the United Kingdom, among others.

The company and 18 affiliates filed for chapter 11 protection on
Sept. 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-17923).
Marshall S. Huebner, Esq., at Davis Polk & Wardwell, represents
the Debtors in their restructuring efforts.  Timothy R. Coleman
at The Blackstone Group L.P. provides the Debtors with financial
advice.  Daniel H. Golden, Esq., and Lisa G. Beckerman, Esq., at
Akin Gump Strauss Hauer & Feld LLP, provide the Official
Committee of Unsecured Creditors with legal advice.  John
McKenna, Jr., at Houlihan Lokey Howard & Zukin Capital and James
S. Feltman at Mesirow Financial Consulting, LLC, serve as the
Committee's financial advisors.

The Debtors filed a chapter 11 plan of reorganization and
disclosure statement explaining that plan on Dec. 19, 2007.  On
Jan. 19, 2007, they filed revisions to the plan and disclosure
statement, and submitted further revisions to the plan on
Feb. 2, 2007.  On Feb. 7, 2007, the Court approved the Debtors'
disclosure statement.  In April 25, 2007, the Court confirmed the
Debtors' plan.  That plan became effective on April 30, 2007.  The
Court entered a final decree closing 17 cases on Sept. 26, 2007.    
(Delta Air Lines Bankruptcy News, Issue No. 101; Bankruptcy
Creditors' Service, Inc., http://bankrupt.com/newsstand/or       
215/945-7000).


DELTA AIR: To Axe 13% of Domestic Capacity by Second Half 2008
--------------------------------------------------------------
Delta Air Lines Inc. President and Chief Financial Officer Edward
H. Bastian at the Merrill Lynch Global Transportation Conference  
provided updated guidance on the company's efforts to fight rising
fuel costs and its long-term approach to building a sustainable,
profitable business model.

Proactive initiatives focus on:

    * improving profitability through continued domestic
      capacity rationalization and building a diverse
      international network which includes service to unique and
      emerging markets.  Delta consolidated domestic capacity is
      now expected to be down 13% during the second half of the
      year, an increase from the 10% reduction announced in
      March; international capacity expected to be up 14% for
      the same period;

    * maintaining a strong liquidity position, despite the
      $4 billion impact in 2008 of unprecedented fuel prices;

    * completing the proposed merger with Northwest Airlines to
      build a strong global competitor with increased cost and
      revenue synergies.

"Delta has been a first-mover to aggressively respond to the
challenges facing our industry with domestic capacity cuts,
associated cost reductions, and a focus on preserving liquidity,"
Mr. Bastian said.  "These actions combined with our game-changing
merger with Northwest are positioning Delta for long-term success
as a strong competitor against any airline around the globe."

       Improving Profitability through International Growth
                and Domestic capacity reductions

By successfully realigning its network to rationalize domestic
capacity while expanding globally, Delta's revenue per available
seat mile has improved from 86% of industry average in 2005 to
102% of industry average through the first four months of 2008.  
International flying continues to be a strong component of the
carrier's business plan with service to five continents and 20 new
international routes launched in 2008.  International capacity for
the year is expected to be up 15% to 17% -- in line with previous
guidance.

In response to rising fuel costs, the company is adding to
previously announced plans to reduce domestic capacity by 10% year
over year in the second half this year and now plans for total
domestic capacity reductions of 13% in the second half of 2008.  
As previously announced, Delta plans to remove the equivalent of
15 to 20 mainline and 60 to 70 regional jet aircraft from its
operation by the end of 2008.

While capacity reductions have resulted in some market
cancellations, most are being made through frequency and point-to-
point reductions, as well as seasonal adjustments.  Delta will
continue to monitor the economic and fuel environment and make
additional adjustments as necessary.

"The diversity of Delta's network has provided the financial
balance we need to counteract the soft U.S. economy and tough fuel
environment. International routes continue to be a boon for us as
we carefully manage domestic capacity.  While it's important to
maintain a broad domestic presence for our customers and
employees, as well as to feed international routes, we remain
flexible and will make additional adjustments if needed," said Mr.
Bastian.

Delta in December began adjusting domestic capacity in light of
record fuel costs.  Previously announced route cancellations have
included service between Orlando and cities such as Las Vegas;
Fort Lauderdale, Fla.; and Little Rock, Ark., as well as nonstop
flights between Boston and cities such as Charleston, S.C. and
Greensboro, N.C.

While a small number of additional market cancellations are
expected as fall schedules are finalized, most reductions are
being achieved through frequency reductions and by eliminating a
number of unprofitable routes with particular focus on point-to-
point flights that can more profitably and efficiently be served
via Delta's hubs. Sample cancellations, effective late summer,
include flights between:

    * Orlando, Fla. and Nashville, Tenn.; Key West, Fla.;
      Raleigh-Durham, N.C.; Birmingham, Ala.; Columbus, Ohio;
      Lexington, Ky.; New Orleans, La.; Panama City, Fla.;
      Richmond, Va.; Louisville, Ky.; and Knoxville, Tenn.;

    * Boston and Jacksonville, Fla. and Norfolk, Va.;

    * Las Vegas and Los Angeles; and

    * Pensacola, Fla. and Fort Lauderdale and Tampa, Fla.

As part of Delta's commitment to both provide employees with
flexibility and remove costs associated with capacity reductions,
the airline in March was the first U.S. carrier to announce
voluntary retirement and early out programs for employees. With
more than 4,000 Delta and Delta Technology employees electing to
participate in the programs, the airline is positioned ahead of
the industry to achieve cost reductions associated with capacity
pull downs.

                Expecting Profitable June Quarter

Delta expects a profitable June quarter excluding special items1,
and expectations remain in line with previous guidance.  Despite a
$4 billion increase in fuel costs in 2008, the airline's liquidity
remains strong thanks to a solid operating cash flow, controlled
capital expenditures and aggressive fuel hedge program.  The
airline expects to end 2008 with $3.2 billion in unrestricted
liquidity, down just $600 million from Dec. 31, 2007.

Delta's aggressive, multi-year fuel hedge strategy is expected to
offset nearly $1 billion in fuel cost impact for 2008 and continue
to provide benefits in subsequent years.  The airline's hedge
portfolio through 2010 is currently valued at about $1.5 billion.

               Merger Strengthens Long-Term Outlook

Delta continues to focus on the proposed merger with Northwest
Airlines to create a global airline better positioned for strength
and profitability over the long term with greater customer
preference and a worldwide, geographically balanced network.

"The unique advantages created by the combination of Delta and
Northwest are even more compelling as fuel costs continue to
rise," Mr. Bastian said.

A merger of strength, the airlines will combine best-in-class cost
structures, industry-leading balance sheets and complementary
networks.  With integration planning under way, Delta and
Northwest expect to find opportunities to both reduce one-time
costs and increase synergies. Delta expects the merger to receive
required regulatory approvals by the end of the year.

                         About Delta Air

Based in Atlanta, Georgia, Delta Air Lines Inc. (NYSE:DAL) --
http://www.delta.com/-- is the world's second-largest airline
in terms of passengers carried and the leading U.S. carrier
across the Atlantic, offering daily flights to 328 destinations
in 56 countries on Delta, Song, Delta Shuttle, the Delta
Connection carriers and its worldwide partners.  Delta flies to
Argentina, Australia and the United Kingdom, among others.

The company and 18 affiliates filed for chapter 11 protection on
Sept. 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-17923).
Marshall S. Huebner, Esq., at Davis Polk & Wardwell, represents
the Debtors in their restructuring efforts.  Timothy R. Coleman
at The Blackstone Group L.P. provides the Debtors with financial
advice.  Daniel H. Golden, Esq., and Lisa G. Beckerman, Esq., at
Akin Gump Strauss Hauer & Feld LLP, provide the Official
Committee of Unsecured Creditors with legal advice.  John
McKenna, Jr., at Houlihan Lokey Howard & Zukin Capital and James
S. Feltman at Mesirow Financial Consulting, LLC, serve as the
Committee's financial advisors.

The Debtors filed a chapter 11 plan of reorganization and
disclosure statement explaining that plan on Dec. 19, 2007.  On
Jan. 19, 2007, they filed revisions to the plan and disclosure
statement, and submitted further revisions to the plan on
Feb. 2, 2007.  On Feb. 7, 2007, the Court approved the Debtors'
disclosure statement.  In April 25, 2007, the Court confirmed the
Debtors' plan.  That plan became effective on April 30, 2007.  The
Court entered a final decree closing 17 cases on Sept. 26, 2007.    
(Delta Air Lines Bankruptcy News, Issue No. 101; Bankruptcy
Creditors' Service, Inc., http://bankrupt.com/newsstand/or       
215/945-7000).


DEN-MARK CONSTRUCTION: Wants Wachovia's Reconsider Motion Denied
----------------------------------------------------------------
Den-Mark Construction Inc. and its three debtor-affiliates want
the U.S. Bankruptcy Court for the Eastern District of North
Carolina to deny the emergency request of Wachovia Bank NA for
reconsideration of the Court's oral ruling with respect to the
release prices for 44 Woodlyn Meadows and 83 Arbor Creek.

The Debtors agreed with what Wachovia stated in its motion, but
said that the $3,000 that was paid by the buyer of 44 Woodlyn
Meadows was an earnest money deposit made prior to the sale.  The
Debtors explained that the money was then applied to the purchase
price at the time of the closing.

Den-Mark Homes SC Inc. filed a motion to sell 44 Woodlyn Meadows
free and clear of all liens.  Den-Mark Construction filed a motion
to sell 83 Arbor Creek free and clear of all liens.  Wachovia
asserts a first priority security interest in the two properties.

                        Wachovia's Motion

Wachovia said that at a hearing held on May 19, 2008, the parties
informed the Court that 44 Woodlyn Meadows was going to come up
"short" in the payoff to Wachovia.  The Debtors offered to cover
that shortfall out of the proceeds of 83 Arbor Creek.  The parties
then argued to the Court the release price of 83 Arbor Creek.  
After hearing oral argument, the Court set the release price for
83 Arbor Creek at $230,000.

During a telephone conference with the Court on May 22, 2008, the
Court clarified its ruling from the bench by stating that the
$230,000 release price for 83 Arbor Creek included the shortfall
on 44 Woodlyn Meadows.

As represented at the May 19 hearing, the prepetition payoff for
83 Arbor Creek was $229,484 as of May 19, 2008, with a per diem of
$37.  This amount consisted of $224,000 principal, $2,292 interest
and $191 late charges.  Although Wachovia informed the Debtors
that it would be implementing the default interest rate, Wachovia
has not yet implemented it.  As a result, the payoff of $229,484
does not include the default interest rate.

Hence, no funds from 83 Arbor Creek are being used to make up the
shortfall on 44 Woodlyn Meadows.  The Debtors acknowledge that
Wachovia is oversecured; the bank is entitled to receive
attorneys' fees.  The payoff of $230,000 on 83 Arbor Creek does
not compensate Wachovia for reasonable attorneys' fees.

The sale of 83 Arbor Creek was set to close on May 29, 2008.  
There is about $28,000 of Wachovia's cash collateral going to the
Debtor, which is sufficient to pay the shortfall on 44 Woodlyn
Meadows, and to pay for Wachovia's attorney's fees.

The Court had ordered that the proceeds of 44 Woodlyn Meadows go
to Wachovia.  The sale of 44 Woodlyn Meadows closed on May 20,
2008.

                    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 PROPERTIES: Files Chapter 11 Voluntary Case Summary
------------------------------------------------------------
Debtor: Den-Mark Properties, LLC
        416 U.S. Highway 1, Suite B
        Youngsville, North Carolina 27596

Bankruptcy Case No.: 08-04084

Chapter 11 Petition Date: June 18, 2008

Court: Eastern District of North Carolina (Wilson)

Judge: A. Thomas Small

Debtors' Counsel: Trawick H Stubbs, Jr., Esq.
                   (efile@stubbsperdue.com)
                  Stubbs & Perdue, P.A.
                  P.O. Drawer 1654
                  New Bern, NC 28563
                  Tel: (252) 633-2700
                  Fax: (252) 633-9600

Estimated Assets: $1 million to $10 million

Estimated Debts:  $1 million to $10 million

The Debtor did not file a List of 20 Largest Unsecured Creditors.

                       
DOCUMENT CAPTURE: Posts $480,000 Net Loss in 2008 First Quarter
---------------------------------------------------------------
Document Capture Technologies Inc. reported a net loss of $480,000
on net sales of $2,538,000 for the first quarter ended March 31,
2008, compared with a net loss of $808,000 on net sales of
$4,127,000 in the same period last year.

The company said the decrease in net sales during the three months
ended March 31, 2008, as compared to the three months ended
March 31, 2007 was attributable to the following:

  -- the timing and rescheduling of significant customer orders,
     which resulted in unusually high number of scanners shipped
     during the three months ended March 31, 2007, and an
     unusually low number of scanners shipped during the three
     months ended March 31, 2008.

  -- the overall slowdown of the general economic and market
     conditions in the U.S. economy and the related slowdown of
     information technology (IT) spending.

At March 31, 2008, the company's consolidated balance sheet showed
$4,251,000 in total assets, $3,638,000 in total liabilities, and
$531,000 in total stockholders' equity.

Full-text copies of the company's consolidated financial
statements for the quarter ended March 31, 2008, are available for
free at http://researcharchives.com/t/s?2e49

                       Going Concern Doubt

As reported in the Troubled Company Reporter on March 14, 2008,
Phoenix-based Clancy and Co., PLLC, expressed substantial doubt
about Document Capture Technologies Inc.'s ability to continue as
a going concern after auditing the company's consolidated
financial statements for the year ended Dec. 31, 2007, and 2006.

The auditing firm reported that the company has incurred recurring
net losses in recent years resulting in a substantial accumulated
deficit.

                      About Document Capture

Headquartered in San Jose, Calif., Document Capture Technologies
Inc. (OTC BB: DCMT) -- http://www.docucap.com/-- designs and  
manufactures document capture solutions for OEM customers
worldwide.  The company currently manufactures over 20 proprietary
document capture products and has become one of the world's
largest private-label manufacturers of USB-powered mobile document
scanning devices.  


EDUCATION RESOURCES: Wants to Reject Contracts with RBS Citizens
----------------------------------------------------------------
The Education Resources Institute Inc. seeks authority from the
U.S. Bankruptcy Court for the District of Massachusetts to reject
and terminate its existing loan origination agreements and
guaranty agreements with RBS Citizens N.A., successor-in-interest
to Charter One Bank N.A., Albank, and Citizens Bank of Rhode
Island, Citizens.

The Debtor also asks the Court to approve:

   (a) a settlement between the Debtor and Citizens by which
       Citizen will release certain bankruptcy administrative
       claims in exchange for the Debtor's release of its
       bankruptcy guaranty fees which would otherwise secure
       Citizen's claim; and

   (b) approve a Transition Agreement for the orderly termination
       and wind down of loan programs to minimize adverse
       consequences to qualified applications whose loans are in
       the "pipeline."

According to Gina Lynn Martin, Esq., at Goodwin Procter LLP, in
Boston, Massachusetts, the Contracts are integral components of
certain student loan programs funded by Citizens, and include,
among other agreements:

   -- Loan Origination Agreements by which the Debtor underwrites
      and originates student loans;

   -- Guarantees by which the Debtor guarantees all of Citizens'
      subject student loans to enhance the creditworthiness of
      the loans and to make them more salable and liquid in the
      securities market;

   -- Note Purchase Agreements with The First Marblehead
      Corporation by which FMC purchases, securitizes and sells
      the student loans to special purpose entities; and

   -- various security, servicing and marketing agreements.

A list of the Citizens Agreements is available for free at:

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

Each program guaranty serves as the foundation for the program
LOA and for the Program Note Purchase Agreements.  Under the
program LOAs, the Debtor acts as the agent of Citizens for the
purpose of evaluating loan applications and disbursing student
loans in accordance with the program guidelines and procedures.  
As an integral part of the Loan Programs, the Debtor guarantees
payment of each Program Loan pursuant to the terms and conditions
of the Guarantees between the Debtor and Citizens.

In return for the Debtor's Guarantees of payment of the student
loans, the Debtor receives guaranty fees.  Prior to bankruptcy
filing, on funding of a Program Loan, an initial portion of the
guaranty fees, generally 1.5% of principal, were paid to the
Debtor and became part of the Debtor's general funds, and the
balance of the accrued guaranty fees was deposited into a
segregated account pledged to Citizens to secure the Debtor's
obligations under the Guarantees.

When the Program Loans were securitized and sold, the guaranty
fees held in the Pledged Account would be transferred to Pledged
Accounts held by the special purpose entities.  Ms. Martin tells
the Court that when the credit markets were disrupted in 2007,
FMC stopped securitizing Program Loans; a portion of the Debtor's
revenues dependent on securitization ceased following; the
Debtor's credit rating was downgraded in March 2008; and
ultimately, the Debtor commenced the Chapter 11 case.

Before bankruptcy filing, the Debtor subcontracted the  
origination function to First Marblehead Education Resources Inc.,
but the fees paid to the Debtor under the Citizens Contracts do
not cover FMER's charges to the Debtor of performing the
origination services.  Consequently, the Debtor loses money on
Citizens' loan originations.  Furthermore, since FMC has not been
purchasing and securitizing the Program Loans, a portion of the
Debtor's guaranty fees, which are payable only on securitization
have not been payable to the Debtor.  As a result, the Debtor
advised Citizens that it desired to reject and terminate the
Contracts.

Citizens contends that the Terminated Contracts were automatically
terminated by the Debtor's Chapter 11 filing.  While the Debtor is
not prepared to concede that issue, the Debtor has determined that
it is in its best interest to terminate the RBS Contracts, without
prejudice to the position of Citizens, the Debtor, or any party-
in-interest on the issue of automatic termination, tells the
Court.

The Debtor and Citizens agree that:

   (a) the Debtor's guaranty fees in respect of Pipeline Loans
       have to date been placed in the Pledged Account and will
       be disbursed to Citizens upon approval of the rejection
       motion;

   (b) Citizens will continue to fund Pipeline Loans based on
       qualified applications submitted prior to August 2, 2008,
       or an earlier date as the parties may agree with respect
       to certain loan programs;

   (c) Citizen's alleged postpetition administrative claim for
       Citizens loans originated and guaranteed by the Debtor
       from and after the Petition Date;

   (d) the Debtor will waive and release any and all claims it
       has for postpetition guaranty fees on Pipeline loans and
       Citizens will waive and release any postpetition
       administrative claim on the Guaranty of the Pipeline
       Loans; and

   (e) the released Pipeline Loan guaranty fees will be deemed
       not to be "property of the estate," and no Guaranty will
       apply to the Pipeline Loans and Citizens will have no
       recourse to the Debtor in respect of any Pipeline Loan
       except as provided in the Transition Agreement, which will
       be submitted to the Court after approval of the rejection
       motion.

Citizens also releases and waives (i) all claims for damages
arising from termination and rejection of all Loan Origination
Agreements, but will retain all claims prior to bankruptcy filing
under the Guarantees, and any security agreements and other
Program documents; (ii) all bankruptcy administrative claims on
account of the Debtor's Guaranty of any Pipeline Loan by Citizens;
and (iii) all claims arising from accrued interest charges
credited to Program Loan borrower's account balances under the
Program Loans due to delays in Program Loan disbursements
resulting from certain Program Loan disbursements checks drawn by
the Debtor not having been honored by the Debtor's drawee bank
during the month of April 2008, which waiver will be limited to
the maximum amount of $35,000, with any excess more than $35,000
to be reimbursed by the Debtor to Citizens.

Citizens will continue to deliver to the Debtor information
concerning Program Loans identified as Servicer Data Requirements
in the Guarantees.  The confidentiality provisions of the Program
Agreements will apply to the information.

The Motion does not waive any other claim that the Debtor or
Citizens may have against or with respect to the other, including
any claims for performance of guaranty obligations and
obligations concerning indemnities, warranties, intellectual
property, confidentiality and any claims, provided that any claim
asserted by Citizens will be deemed to be (i) a secured claim to
the extent that claim is secured by the Pledged Accounts pursuant
to the Program Agreements, and (ii) otherwise, a general unsecured
claim.

                      PNC Bank Objects
  
PNC Bank, N.A., objects to the distribution of any amounts held
in a Restricted Account prior to an accounting and reconciliation
of all amounts held in the Restricted Accounts.  PNC Bank notes
that disbursement of funds held in any Restricted Account prior
to an accounting and reconciliation could result in a
misdistribution of funds that would irrevocably harm and
deteriorate PNC'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.

            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)      


EMPIRE LAND: Pachulski Ziehl Approved as Bankruptcy Counsel
-----------------------------------------------------------
The United States Bankruptcy Court for the Central District
of California gave Empire Land LLC and its debtor-affiliates
permission to employ Pachulski Stang Ziehl & Jones LLP as general
bankruptcy counsel.

Pachulski Stang is expected to:

   a) advise the Debtors regarding the requirements of the
      Bankruptcy Code, the Federal Rules of Bankruptcy Procedures,
      the Local Bankruptcy Rules, and the requirements of the
      United States Trustee pertaining to the administration of
      the Debtors' estates;

   b) advise and represent the Debtors concerning the rights and
      remedies of the estate in regard to the assets of the
      estates;

   c) prepare motions, applications, answers, order, memoranda,
      reports and papers in connection with the administration of
      the estates;

   d) protect and preserve the estates by prosecuting and
      defending actions commenced by or against the Debtors or any
      of them;

   e) analyze, and prepare necessary objections to, proofs of  
      claim filed against the estates;

   f) conduct examinations of witnesses, claimants, or adverse
      parties;

   g) represent the Debtors in any proceeding or hearing in the
      Bankruptcy Court;

   h) advise and represent the Debtors in the negotiation,
      formulation, and drafting of any plan of reorganization and
      disclosure statement;

   i) advise and represent the Debtors in connection with
      investigation of potential causes of action against persons
      or entities, including, but not limited to, avoidance
      actions, and the litigation thereof if warranted; and

   j) render such other advice and services as the Debtors may
      require in connection with these Chapter 11 cases.

The firm's professionals and their compensation rates are:

      Professionals              Designations     Hourly Rates
      -------------              ------------     ------------
      Richard M. Pachulski, Esq     Attorney          $815
      James I. Stang, Esq.          Attorney          $775
      Ira D. Kharasch, Esq.         Attorney          $725
      Scota E. McFarland, Esq.      Attorney          $525
      Robert M. Saunders, Esq.      Attorney          $495

James I. Staing, Esq., an attorney of the firm, assures the Court
that the firm does not hold any interest adverse to the Debtors'
estates and their creditors, and is a "disinterested person" as
defined in Section 101(14) of the Bankruptcy Code.

Headquartered in Ontario, California, Empire Land, LLC, dba Empire
Land Development, LLC -- http://www.epinc.com/-- develops   
communities and other land construction projects located in
California and Arizona.  As of March 31, 2008, the company owned
at least 11,800 lost in 14 separate land projects.

The company and seven of its affiliates filed for Chapter 11
protection on April 25, 2008 (Bankr. C.D. Calif. Lead Case No.08-
14592).

James Stang, Esq., at Pachulski Stang Ziehl & Jones, LLP,
represents the Debtors in their restructuring efforts.  The U.S.
Trustee for Region 16 has appointed three creditors to serve on
an Official Committee of Unsecured Creditors in this cases.  The
Committee selected Landau & Berger LLP as its general bankruptcy
counsel.

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


ENERGAS RESOURCES: Posts $42,914 Net Loss in 1st Qtr. Ended April
-----------------------------------------------------------------
Energas Resources Inc. reported a net loss of $42,914 on total
revenue of $120,712 for the first quarter ended April 30, 2008,   
compared with a net loss of $211,898 on total revenue of $138,664  
in the same period ended April 30, 2007.

At April 30, 2008, the company's consolidated balance sheet showed
$3,737,812 in total assets, $455,683 in total liabilities, and
$3,282,129 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?2e41

                       Going Concern Doubt

As reported in the Troubled Company Reporter on May 26, 2008,
Murrell, Hall, McIntosh & Co PLLP, in Oklahoma City, Okla.,
expressed substantial doubt about Energas Resources Inc.'s ability
to continue as a going concern after auditing the company's
consolidated financial statements for the years ended Jan. 31,
2008, and 2007.  The auditing firm pointed to the company's
recurring losses from operations.

The company is in the process of acquiring and developing
petroleum and natural gas properties with adequate production and
reserves to operate profitability.  However, in excess of 41% of
the company's proved reserves are proved not producing or proved
undeveloped and will require substantial funds to bring into
production.

                     About Energas Resources

Based in Oklahoma City, Okla., Energas Resources Inc. (OTC BB:
EGSR) -- http://www.energasresources.com/-- is primarily engaged  
in the operation, development, production, exploration and
acquisition of petroleum and natural gas properties in the
United States through its wholly-owned subsidiary, A.T. Gas
Gathering Systems Inc.  In addition, the company owns and operates
natural gas gathering systems located in Oklahoma, which serve
wells operated by the company for delivery to a mainline
transmission system.  The majority of the company's operations are
maintained and occur through A.T. Gas.


EVERGREEN INVESTMENTS: Wachovia Affiliate to Liquidate EUBAX Fund
-----------------------------------------------------------------
Evergreen Investments, a subsidiary of Wachovia Corp., disclosed
that the liquidation of Evergreen Ultra Short Opportunities Fund
will occur on or about Thursday, June 26, 2008.

Shareholders of record as of June 18, 2008, will receive a cash
distribution based on a $7.48 per share net asset value calculated
after the close of business on June 18.  

As of June 18, the Fund had total net assets of $403 million.

Effective immediately, shares of the Fund will no longer be
available for purchase by new shareholders.

Wachovia Corp. will provide financing for the liquidation.  

The board of trustees of the Evergreen Funds has approved the plan
to liquidate EUBAX.

                    About Evergreen Investments
    
Evergreen Investments -- http://www1.evergreeninvestments.com/--  
is the brand name under which Wachovia Corporation conducts its
investment management business.  Wachovia Global Asset Management
is the brand name under which Evergreen Investments conducts sales
and distribution business outside of the United States.  Evergreen
serves more than four million individual and institutional
investors through a broad range of investment products.  Evergreen
has 300 investment professionals.

                    About Wachovia Corporation

Based in Charlotte, North Carolina, Wachovia Corporation (NYSE:WB)
-- http://www.wachovia.com/-- is one of the nation's diversified   
financial services companies, with assets of $808.9 billion and
market capitalization of $53.8 billion at March 31, 2008.  

Wachovia provides a broad range of retail banking and brokerage,
asset and wealth management, and corporate and investment banking
products and services to customers through 3,300 retail financial
centers in 21 states from Connecticut to Florida and west to Texas
and California, and nationwide retail brokerage, mortgage lending
and auto finance businesses.  Clients are served in selected
corporate and institutional sectors and through more than 40
international offices.  Its retail brokerage operations under the
Wachovia Securities brand name manage more than $1.1 trillion in
client assets through 18,600 registered representatives in 1,500
offices nationwide.  Online banking is available at wachovia.com;
online brokerage products and services at wachoviasec.com; and
investment products and services at evergreeninvestments.com.

                         *     *     *

As reported by the Troubled Company Reporter on April 14, 2008,
The Walls Street Journal noted that Wachovia's need for additional
capital came two months after it raised $3.5 billion through a
preferred-stock sale.  According to the report, Wachovia's trouble
stemmed from its $25 billion purchase of Golden West Financial
Corp. nearly two years ago.  Golden West's loans -- the vast
majority of which are adjustable-rate mortgages loans -- were
concentrated in California, one of the hardest-hit housing markets
in the U.S.  Wachovia announced that it lost $350 million in the
first quarter due to $2 billion in asset write-downs and $2.1
billion in new provisions against credit losses.  Earnings in the
same period last year was $2.3 billion.


FINDEX.COM INC: Earns $419,121 in First Quarter Ended March 31
--------------------------------------------------------------
Findex.com Inc. reported net income of $419,121 on net revenues of
$611,531 for the first quarter ended March 31, 2008, compared with
a net loss of $5,681 on net revenues of $1,155,493 in the
corresonding period last year.

The decrease in revenues for the three months ended March 31,
2008, was primarily attributed to the sale of the company's  
Membership Plus(R) product line in October 2007.

Primarily as a result of the decrease in revenues, the company's
loss from operations increased to $342,047 for the three months
ended March 31, 2008, from $26,220 during the three months ended
March 31, 2007.

At March 31, 2008, the company's consolidated balance sheet showed
$2,220,429 in total assets, $1,694,465 in total liabilities, and
$525,964 in total stockholders' equity.

The company's consolidated balance sheet at March 31, 2008, also
showed strained liquidity with $1,015,314 in total current assets
available to pay $1,615,353 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?2e45

                       Going Concern Doubt

As of March 31, 2008, the company had a year-to-date loss from
operations of $342,047, and negative working capital of $600,039
and an accumulated deficit of $7,281,368 as of March 31, 2008.  
The company believes these factors raise substantial doubt as to
its ability to continue as a going concern through Dec. 31, 2008.

                      About FindEx.com Inc.

Headquartered in Omaha, Nebraska, FindEx.com Inc. (OTC BB: FIND)
-- http://www.quickverse.com/-- develops, publishes, and  
distributes (through a license agreement) software for churches,
ministries, and other Christian organizations.  Its primary
product is a search application called QuickVerse, which is
designed to facilitate biblical research.  

Other offerings include publishing software for Christian-themed
printed materials; applications that assist pastors in developing
sermons; children's Christian entertainment software; and language
tutorials for Greek and Hebrew.  Investment firm Barron Partners
owns about 60% of FindEx.com.


FORD MOTOR: Tracinda Increases Shareholding to 6.49%
----------------------------------------------------
Kirk Kerkorian on Thursday revealed in a filing with the U.S.
Securities and Exchange Commission that his investment firm,
Tracinda Corp., had boosted its stake in Ford Motor Co.
to 6.49 percent from 5.5 percent.  He now owns 140.8 million
shares of Ford.

On June 13, the firm purchased 20 million shares through a cash
tender offer that paid $8.50 a share.  

On Tuesday, Mr. Kerkorian meet with executive chairman William C.
Ford Jr. and chief executive Alan Mulally.  The move indicates
that the major shareholder stands by the management and its
turnaround strategy, reports say.  Tracinda's regulatory filing,
though, reiterated its prior statement that it might propose
business strategies for Ford and has explored a possible capital
infusion.

Between Monday and Wednesday, Mr. Kerkorian bought another 20.8
million shares at an average of $6.46 per share.  

Despite apparent support of Ford's major shareholder, the
company's shares were down most of the day before surging in the
last half-hour of trading to gain 10 cents, or 1.6 percent and
close at $6.32, the  Detroit Free Press noted.

                        About Ford Motor

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

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

                          *     *     *

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

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

As reported in the Troubled Company Reporter on Nov. 19, 2007,
Moody's Investors Service affirmed the long-term ratings of Ford
Motor Company (B3 Corporate Family Rating, Ba3 senior secured,
Caa1 senior unsecured, and B3 probability of default), but changed
the rating outlook to Stable from Negative and raised the
company's Speculative Grade Liquidity rating to SGL-1 from SGL-3.


FOUNTAIN POWERBOAT: Plan to Cure AMEX Violation Due July 11
-----------------------------------------------------------
Fountain Powerboat Industries Inc. received notice from the
American Stock Exchange that, based on Amex's review of the
company's Quarterly Report on Form 10-Q for the period ended
March 31, 2008, the company is not in compliance with one of
Amex's standards for the continued listing of the company's common
stock as set forth in Part 10 of the Amex company Guide.

Specifically, the notice states that "...the company is not in
compliance with Section 1003(a)(iv) of the company Guide in that
it has sustained losses which are so substantial in relation to
its overall operations or its existing financial resources, or its
financial condition has become so impaired that it appears
questionable, in the opinion of the Exchange, whether such company
will be able to continue operations and meet its obligations as
they mature.

As a result of the circumstances, the notice states that the
company has become subject to Amex's suspension and delisting
procedures set forth in Section 1009 of the company Guide.  

The company must submit a plan to Amex by July 11, 2008,
addressing how it intends to regain compliance with Section
1003(a)(iv) of the company Guide, including specific milestones,
quarterly financial projections and details related to any
strategic initiatives it plans to complete.

Amex's Listings Qualifications Department will evaluate the
company's plan and make a determination as to whether the company
has made a reasonable demonstration of an ability to regain
compliance within the specified timeframe.  If the company's plan
is accepted, it may be able to continue its listing during the
plan period, subject to periodic reviews to determine whether the
company is making progress consistent with the plan.

If the company does not submit a plan, or if any plan it submits
is not accepted by Amex, the company will be subject to delisting
proceedings.  Likewise, even if a plan the company submits is
accepted by Amex, but the company is not in compliance with all
continued listing standards of the company Guide by Dec. 11, 2008,
or if the company does not make progress consistent with the plan
during the plan period, Amex may initiate delisting proceedings.

The company intends to carefully evaluate how it will respond to
Amex's letter, including whether it will be able to submit a plan
with a viable chance of success.  This will require the company to
talk with its lenders and evaluate its expenses and sources of
revenues.

The company reported in a Report on Form 8-K that it has acquired
assets to build Baja boats.  It will evaluate how that new line of
boats and any new business resulting from it will fit in with any
plan it may develop to respond to Amex's notice.  Until the
company's board of directors evaluates the recommendations of the
company's officers with respect to a plan, the company is unable
to make any more definite statement about its intention to submit
a plan or its prospects for submitting an acceptable plan.

            About Fountain Powerboat Industries Inc.

  
Based in Washington, North Carolina, Fountain Powerboat Industries
Inc. (AMEX:FPB) -- http://www.fountainpowerboats.com/-- through  
its wholly owned subsidiary, Fountain Powerboats Inc., designs,
manufactures and sells recreational offshore sport boats, sport
fishing boats and sport cruisers that target a segment of the
recreational powerboat market.  The company sells its boats and
ancillary products through a worldwide network of 32 domestic and
24 international dealers.  It has executive offices and
manufacturing facilities along the Pamlico River in Beaufort
County, North Carolina.

At March 31, 2008, the company's balance sheet showed total assets
of $34,389,629 and total liabilities of $34,627,178, resulting in
a total stockholders' deficit of $237,549.

                        Default and Waiver

As of March 31, 2008, the company was not in compliance with the
covenant setting forth minimum EBITDA.  The minimum EBITDA
required for the three months ended March 31, 2008, is $1,385,694.  
The actual EBITDA reported by the company for that period is
($1,095,646).

Regions Bank has waived their right to remedy the default
resulting from the company's breach of this covenant and issued  
waiver in writing.  This waiver extends to the end of the three
months ending June 30, 2008, at which time covenant compliance
will be determined anew.  If the company is not able to cure the
default or obtain an additional waiver at that time, the lender
has the right to foreclose on substantially all of the company's
assets.


GLOBAL WINE: Owes $5MM to Noteholders, Court Filings Show
---------------------------------------------------------
Celia Lamb of the Sacramento Business Journal reports that
financial records filed by Global Wine Group Inc. in bankruptcy
court show it has issued notes to more than 85 individuals, family
trusts and other small investors.  

It has issued about $3.25 million in unsecured notes that can be
converted to stock, $1.36 million in notes secured by inventory or
production, and $405,000 in unsecured notes that are not
convertible, Ms. Lamb reports.

Most notes are past due or mature this year. Five come due next
year, and the last matures in March 2010, according to the report.

Global has no major bank debts, the report said.

Global Wine Group aka Triad Global Group --
http://www.globalwinegroup.com/-- is based in Woodbridge,  
California.  Court filings show the case was filed as a Chapter 7
involuntary liquidation on Nov. 30, 2007 and was converted to
Chapter 11 on April 1, 20008.  Judge Christopher M. Klein of the
U.S. Bankruptcy Court for the Eastern District of California
presides over the case (no. 07-30279).  The Debtor is represented
by Julia P. Gibbs, Esq.  It reported assets of $1.12 million and
liabilities of $8.67 million in court documents filed May 28,
according to Sacramento Business Journal.


GRAY TELEVISION: Moody's Cuts Credit Facility Rating to B3 from B2
------------------------------------------------------------------
Moody's Investors Service downgraded Gray Television, Inc.'s
Corporate Family Rating to B2 from B1, its Probability of Default
rating from B2 to B3 and its senior secured credit facility
($100 million revolving credit facility and $925 million term loan
facility) to B2 from B1.

All ratings remain under review for further possible downgrade.
Gray's LGD assessments and point estimates are subject to change
upon conclusion of the review.  In addition, Moody's downgraded
the company's speculative grade liquidity rating to SGL-4 from
SGL-3.

The rating downgrades reflect the company's weak operating
performance and a related shift to a weak liquidity profile,
driven mainly by softness in local and national advertising
revenue.  As a result, credit metrics continue to remain weak
relative to both expectations and ratings, with debt-to-EBITDA
leverage of 9.6x for the trailing twelve months ended March 31,
2008.

Ratings remain under review given Moody's concerns regarding the
company's ability to remain in compliance with its financial
leverage maintenance covenant governed by its bank credit
facility, especially when the step-downs occur at the end of June
and again in December 2008.

These ratings were downgraded and remain under review for further
possible downgrade:

Issuer - Gray Television, Inc.

  -- Corporate Family Rating -- to B2 from B1
  -- Probability-of-default rating -- to B3 from B2

  -- $100 million revolving credit facility -- to B2 from B1
     (LGD 3, 34%)

  -- $925 million term loan facility -- to B2 from B1 (LGD 3, 34%)
  -- Speculative grade liquidity rating -- to SGL-4 from SGL-3

Gray Television, Inc., headquartered in Atlanta, Georgia, is a
television broadcaster that owns 36 primary television stations
serving 30 mid-sized markets.  The company's total revenues were
approximately $307 million for year ending Dec. 31, 2007.


GREEKTOWN CASINO: Tribe Head Rallies Confidence on Ch. 11 Filing
----------------------------------------------------------------
In a letter posted in the Web site of the Sault Tribe of Chippewa
Indians on June 4, 2008, Tribal Chairperson Aaron A. Payment
provided updates to tribe members of the recent bankruptcy filing
of Greektown Casino LLC and its debtor-affiliates:

"Collectively and with unity of purpose, the tribal board of
directors will have announced in a mailing that due to unfair and
restrictive financial covenants placed on our tribe at the
Greektown Casino level, we were forced to file for Chapter 11
protection.  This was a very difficult decision that our entire
board made to protect our biggest investment.

Clearly, the debt we inherited from the Bouschor administration
with the $280 million obligation to the Greeks from their $24,000
investment, created a situation where we owed a quarter of a
billion dollars before we even broke ground in Detroit.  Greektown
is profitable if it were not for this arbitrary obligation created
by my predecessor.  Additionally, as quoted from the Michigan
Gaming Control Board (MGCB), my predecessor's rosy projections and
our failure to meet them, is the reason financial covenants were
put in place.  These are the conditions we must meet, but clearly
the regulatory body is holding us to a standard that is not
required of our competitors.  In fact, our credit rating is as
good as Motor City Casino and yet they do not have to abide by
such covenants or be forced to sell.  The difference?  Greektown
Casino is owned by an Indian tribe, our tribe.

     A TIME TO COME TOGETHER
     AS A TRIBE,
     AS A PEOPLE:

Regardless of how we got here, however, Greektown is our largest
investment and now is the time for our entire tribe to pull
together to safeguard our assets.  Filing for Chapter 11 will
prevent the MGCB from forcing us to sell our casino at a loss.  
Ironically, where some have claimed we had a surplus just three
years ago, the truth is that we owed the Greeks $280 million! Both
statements cannot be true.  During my administration, this debt
has been reduced by over $200 million.  Under Chapter 11, we will
be allowed to operate as we currently are and we will be allowed
to finish the construction on our permanent casino.  It will also
allow us the time to pull together our resources, restructure our
operations, and look for alternative financing.  Admittedly,
filing for Chapter 11 is scary but I am advised that many
companies including Kmart have done so—ultimately with positive
end results.

I am confident that we will endure our latest challenge and become
even more efficient and will drive even greater revenues.  Our
U.P. operations have reduced yet another $5 million in operational
costs while we are currently experiencing gaming revenue boost of
16 percent for 17 days in May."

                       About Greektown Casino

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

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

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

When the Debtor filed for protection from its creditors, it listed
consolidated estimated assets and debts of $100 million to $500
million.  (Greektown Casino Bankruptcy News, Issue No. 3;
Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000).


HARMAN INTERNATIONAL: S&P Retains 'BB-' Rating Under Pos. Watch
---------------------------------------------------------------
Standard & Poor's Ratings Services said that its 'BB-' long-term
corporate credit rating on Harman International Industries Inc., a
Washington, D.C.-based audio equipment manufacturer, would remain
on CreditWatch with positive implications, where it was placed on
Oct. 22, 2007.  The CreditWatch reflects the collapse of last
year's proposed merger agreement between Harman, an affiliate of
Kohlberg Kravis Roberts & Co. L.P., and GS Capital Partners.
     
"The CreditWatch positive listing means we could raise the rating
because the company's balance sheet will likely be less leveraged
than it would have been if the merger transaction had proceeded as
originally planned," said Standard & Poor's credit analyst Nancy
Messer.  "Harman has a strong market position and good growth
prospects, and it has historically generated solid free cash
flow," she continued.  But despite Harman's satisfactory business
profile and the fact that the transaction has been canceled, S&P
might not raise the rating back to investment grade because the
company has demonstrated its intention to consider strategic
alternatives that would result in a credit profile inconsistent
with an investment-grade rating.
     
In the first nine months of fiscal 2008, Harman reported much
weaker operating profits year over year because of the soft North
American auto market and slowing consumer spending.  Harman's
sales for nine months ended March 31, 2008, were $3.05 billion, a
15.3% increase year over year, excluding foreign currency
translation, primarily because of increased sales of automotive
audio and infotainment systems to the European original equipment
automotive market (nearly 72% of 2008 total sales as of March 31)
and higher sales of consumer (15%) and professional (13%) products
to distributors.

However, Harman's reported EBITDA margins for the nine months
ended March 31, 2008, decreased by nearly 7 percentage points to
8.3% primarily because of higher warranty and material expenses in
its auto division, in addition to increased competition in the
consumer segment.  Although Harman expects a small margin
improvement in the long term through some of its new contracts in
its infotainment business, it faces significant resistance toward
achieving near-term financial improvement, given the North
American auto market downturn, weak consumer demand in the U.S.,
and the high proportion of research and development expenses to
support product launches.
     
At March 31, 2008, the company had $131 million in cash on the
balance sheet, and Harman generated positive free cash of
$53 million for the nine months ended as of that date because of
reduced investments in working capital, offset by slightly higher
capital expenditures.  Harman's total debt at March 31, 2008, was
$463.1 million.
     
S&P expect to resolve the CreditWatch listing after meeting with
management and reviewing the company's business and financial
prospects, in light of the termination of the merger agreement,
and strategic plans following the appointment of new key senior
executives.


HARTSHORNE CDO: Moody's Junks Rating on $625MM Class A1S Notes
--------------------------------------------------------------
Moody's Investors Service has downgraded ratings of two classes of
notes issued by Hartshorne CDO I, Ltd., and left on review for
possible further downgrade the rating of one of these classes of
notes.  The notes affected by the rating action are:

(1) $16,100,000 Class X Senior Secured Fixed Rate Notes Due 2013

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

(2) $625,000,000 Class A1S Variable Funding Senior Secured
    Floating Rate Notes Due 2047

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

The rating actions reflect deterioration in the credit quality of
the underlying portfolio following the occurrence, as reported by
the Trustee on Nov. 9, 2007, of an event of default caused by a
failure of the Senior Credit Test to be satisfied pursuant Section
5.1(h) of the Indenture dated March 20, 2007.

This event of default is still continuing.  Hartshorne CDO I, Ltd.
is a collateralized debt obligation backed primarily by a
portfolio of RMBS and CDO securities.

As provided in Article V of the Indenture, during the occurrence
and continuance of an Event of Default, holders of certain Notes
may be entitled to direct the Trustee to take particular actions
with respect to the Collateral and the Notes.  In this regard the
Trustee reports that a majority of the Controlling Class has
declared the principal of all of the Notes and the Outstanding
Class A1S Funded Amount to be immediately due and payable.

Furthermore, according to the Trustee, a majority of the
Controlling Class has directed the disposition of the Collateral,
in accordance with relevant provisions of the transaction
documents.

The rating downgrades taken today reflect the increased expected
loss associated with each tranche. Losses are attributed to
diminished credit quality on the underlying portfolio.  The
severity of losses of certain tranches may be different, however,
depending on the timing and outcome of the liquidation.  Because
of this uncertainty, the ratings assigned to the Class X Notes
remain on review for possible further action.


HAWAIIAN AIRLINES: Relations with Pilots Going Sour, ALPA Says
--------------------------------------------------------------
An attempt by management and pilots at Hawaiian Airlines to turn
around a strained and difficult post-bankruptcy relationship
appears to be failing, Air Line Pilots Association, Int'l. said in
a press release published at its site.  After more than a year of
effort to reach a new contract outside of the regular negotiating
process, both sides are still far apart and the pilot group is
rapidly losing patience, according to the Hawaiian Airlines unit
of ALPA.

A failure would likely put pilots and management on a collision
course at a time when both had hoped the airline could quickly
capitalize on the market share left after the demise of Aloha
Airlines and ATA Airlines earlier this year.

"We're frustrated and disappointed with the slow pace of
negotiations," said Capt. Eric Sampson, chairman of ALPA's
Hawaiian Airlines Master Executive Council.  "This is a billion-
dollar airline with huge upside potential, and management's latest
proposal isn't even enough to cover annual cost of living
increases."

When Hawaiian's 2005 contract became amendable in June 2007,
management and union leaders agreed to an expedited process that
featured two sessions of intense, but cooperative bargaining last
year and, more recently, two sessions using the services of a
private mediator.  The latest mediation round ended June 13 with
the two sides still substantially apart on several key issues.

Over the past 18 months ALPA has given Hawaiian significant
contractual relief to enable the airline to capitalize on a number
of major business opportunities, including:

    * allowing Air New Zealand pilots to fly Hawaiian aircraft
      to Auckland in order to save money on heavy maintenance;

    * negotiating new equipment language to enable the company
      to complete the purchase of more than $4 billion worth of
      new, state-of-the-art Airbus aircraft;

    * relaxing contract rules to permit pilots to fly up to FAA
      limits to respond to the shutdown of its two major
      competitors in the mainland-Hawaii and inter-island markets.

Unfortunately, this cooperative initiative has not been
reciprocated by management in contract negotiations, and the year-
long experiment to reach an agreement outside the traditional
bargaining structure appears to be stalled, forcing ALPA to
reconsider whether it should offer any further contract relief
until management moves off its original proposals.

"We have bent over backwards to assist the company almost every
time they have asked us for help, and our reward is absolutely
zero. We wanted to turn a page and start something new with
benefits for both sides, but it seems the company's real plan is
to delay any agreement as long as possible and to milk the status
quo for every cent they can," Mr. Sampson said.

"We are rapidly losing our cooperative attitude," he said.
"Remember, ALPA is just the first of several unions slated for new
contracts.  The others are just now beginning their negotiations,
but if Hawaiian continues its practice of repackaging the same
unsatisfactory proposals over and over, their labor problems will
only multiply when the airline should be thriving."

           About Airline Pilots Association International

Founded in 1931, ALPA -- http://www.alpa.org/-- is the world's  
largest pilots union representing 55,000 pilots at 40 airlines in
the U.S. and Canada, including more than 400 pilots at Hawaiian.

                    About Hawaiian Airlines

Hawaiian Airlines, Inc. -- http://www.hawaiianair.com/-- a   
subsidiary of Hawaiian Holdings Inc. (Amex: HA), provides
passenger air service between the U.S. mainland and Hawaii.  The
company also offers nonstop service to Hawaii from more U.S.
gateway cities than any other airline, as well as service to the
Philippines, Australia, American Samoa, and Tahiti.  Hawaiian also
provides approximately 145 daily jet flights among the Hawaiian
Islands.

The company filed a voluntary petition for reorganization under
Chapter 11 of the United States Bankruptcy Code in the U.S.
Bankruptcy Court for the District of Hawaii (Case No. 03-00827) on
March 21, 2003.  Joshua Gotbaum served as the chapter 11 trustee
for Hawaiian Airlines, Inc.  Mr. Gotbaum was represented by Tom E.
Roesser, Esq., and Katherine G. Leonard, Esq., at Carlsmith Ball
LLP and Bruce Bennett, Esq., Sidney P. Levinson, Esq., Joshua D.
Morse, Esq., and John L. Jones, II, Esq., at Hennigan, Bennett &
Dorman LLP.  The Bankruptcy Court confirmed the Chapter 11
Trustee's Plan of Reorganization on March 10, 2005.  The Plan took
effect on June 2, 2005.


HOMEBANC CORP: Wants Solicitation Deadline Moved to Oct. 6
----------------------------------------------------------
HomeBanc Mortgage Corporation and its debtor-affiliates ask the
United States Bankruptcy Court for the District of Delaware to
extend the period within which they have the exclusive rights to
solicit acceptances for their Joint Consolidated Liquidating
Chapter 11 Plan for an additional 91 days, through and including
October 6, 2008.

The current period expires on July 7, 2008.

Since the Petition Date, the Debtors have been working to wind-
down their operations and liquidate their assets.  The Debtors
have sold all aspects of their mortgage loan servicing business
and have been working to sell remaining loans to third parties,
Joseph M. Barry, Esq., at Young Conaway Stargatt & Taylor, LLP,
in Wilmington, Delaware, relates.

In addition, the Debtors are working through various pending
lawsuits and other issues that affect their ability to consummate
the Plan and make a distribution to creditors, Mr. Barry says.

The hearing to approve the adequacy of the disclosure statement
attached to the Plan has been rescheduled for July 8, 2008, and
depending on certain circumstances, may be continued again,
according to Mr. Barry.

The Debtors cannot begin to solicit acceptances of the Plan until
the Disclosure Statement has been approved.  Thus, the Debtors
need additional time within which to solicit acceptances to the
Plan, Mr. Barry tells the Court.

                        About HomeBanc

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

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

(HomeBanc Bankruptcy News, Issue No. 27; Bankruptcy Creditors'
Services Inc. http://bankrupt.com/newsstand/or 215/945-7000).  


IMC HOME: Moody's Assigns Caa1 Underlying Ratings on Two Classes
----------------------------------------------------------------
Moody's Investors Service has published the underlying ratings on
these notes that are guaranteed by the financial guarantors listed
below.

The underlying ratings reflect the intrinsic credit quality of the
notes in the absence of the guarantee.  The current ratings on
these notes are consistent with Moody's practice of rating insured
securities at the higher of the guarantor's insurance financial
strength rating or any underlying rating that is public.

Complete rating actions are:

Issuer: IMC Home Equity Loan Trust 1994-1

Class Description: Class A-2 Notes

  -- Current Rating: Aaa
  -- Financial Guarantor: Financial Security Assurance Inc. (Aaa)
  -- Underlying Rating: Aaa

Class Description: Class S Notes

  -- Current Rating: Aaa
  -- Financial Guarantor: Financial Security Assurance Inc. (Aaa)
  -- Underlying Rating: Aaa

Issuer: IMC Home Equity Loan Trust 1995-1

Class Description: Class A-2 Notes

  -- Current Rating: Aaa
  -- Financial Guarantor: Financial Security Assurance Inc. (Aaa)
  -- Underlying Rating: B3

Class Description: Class S Notes

  -- Current Rating: Aaa
  -- Financial Guarantor: Financial Security Assurance Inc. (Aaa)
  -- Underlying Rating: B3

Issuer: IMC Home Equity Loan Trust 1995-2

Class Description: Class A-5 Notes

  -- Current Rating: Aaa
  -- Financial Guarantor: Financial Security Assurance Inc. (Aaa)
  -- Underlying Rating: B3

Issuer: IMC Home Equity Loan Trust 1995-3

Class Description: Class A-5 Notes

  -- Current Rating: Aaa
  -- Financial Guarantor: Financial Security Assurance Inc. (Aaa)
  -- Underlying Rating: Aa2

Class Description: Class S-1 Notes

  -- Current Rating: Aaa

  -- Financial Guarantor: Financial Security Assurance Inc. (Aaa)

  -- Underlying Rating: Aa2

Class Description: Class S Notes

  -- Current Rating: Aaa

  -- Financial Guarantor: Financial Security Assurance Inc. (Aaa)

  -- Underlying Rating: Aa2

Issuer: IMC Home Equity Loan Trust 1996-1

Class Description: Class A-7 Notes

  -- Current Rating: Aaa

  -- Financial Guarantor: Financial Security Assurance Inc. (Aaa)

  -- Underlying Rating: Aa2

Class Description: Class S Notes

  -- Current Rating: Aaa

  -- Financial Guarantor: Financial Security Assurance Inc. (Aaa)

  -- Underlying Rating: Aa2

Issuer: IMC Home Equity Loan Trust 1996-3

Class Description: Class A-7 Notes

  -- Current Rating: Aaa

  -- Financial Guarantor: Financial Security Assurance Inc. (Aaa)

  -- Underlying Rating: Aaa

Issuer: IMC Home Equity Loan Trust 1996-4

Class Description: Class A-6 Notes

  -- Current Rating: Aaa

  -- Financial Guarantor: Financial Security Assurance Inc. (Aaa)

  -- Underlying Rating: Aaa

Issuer: IMC Home Equity Loan Trust 1997-1

Class Description: Class A-6 Notes

  -- Current Rating: Aaa, under review for possible downgrade

  -- Financial Guarantor: MBIA Insurance Corporation (Aaa, under
     review for possible downgrade)

  -- Underlying Rating: Aa1

Class Description: Class A-7 Notes

  -- Current Rating: Aaa, under review for possible downgrade

  -- Financial Guarantor: MBIA Insurance Corporation (Aaa, under
     review for possible downgrade)

  -- Underlying Rating: Aa1

Issuer: IMC Home Equity Loan Trust 1997-2

Class Description: Class A-6 Notes

  -- Current Rating: Aaa, under review for possible downgrade

  -- Financial Guarantor: MBIA Insurance Corporation (Aaa, under
     review for possible downgrade)

  -- Underlying Rating: Aa2

Class Description: Class A-7 Notes

  -- Current Rating: Aaa, under review for possible downgrade

  -- Financial Guarantor: MBIA Insurance Corporation (Aaa, under
     review for possible downgrade)

  -- Underlying Rating: Aa2

Issuer: IMC Home Equity Loan Trust 1998-3

Class Description: Class A-7 Notes

  -- Current Rating: Aaa

  -- Financial Guarantor: Financial Security Assurance Inc. (Aaa)

  -- Underlying Rating: Caa1

Class Description: Class A-8 Notes

  -- Current Rating: Aaa

  -- Financial Guarantor: Financial Security Assurance Inc. (Aaa)

  -- Underlying Rating: Caa1

Issuer: IMC Home Equity Loan Trust 1998-7

Class Description: Class A Notes

  -- Current Rating: Aaa

  -- Financial Guarantor: Financial Security Assurance Inc. (Aaa)

  -- Underlying Rating: Baa1


INTEGRETEL INC: Sale of PaymentOne to Cancel $12.8MM Debt
---------------------------------------------------------
Etelcharge.com signed a definitive agreement to acquire
approximately 98% of equity interests in PaymentOne from
PaymentOne's majority shareholder, The Billing Resource, dba
Integretel Inc.

Under the Equity Acquisition Agreement, Etelcharge.com would
acquire PaymentOne's stake:  

   -- in exchange for Etelcharge.com's agreement to operate
      PaymentOne's business in the ordinary course;

   -- to provide additional capital support to PaymentOne; and

   -- to guarantee certain of Payment One's debts and obligations,
      including accounts payable.

In addition, after the closing, Etelcharge.com has agreed to cause
Payment One to convey to TBR approximately $12.8 million of debt
owed by TBR to PaymentOne, effectively canceling this obligation.

As a closing condition, certain outstanding options for PaymentOne
equity will be canceled and replaced on a formula basis with
Etelcharge.com stock options, while the remaining outstanding
options for PaymentOne equity will be canceled on terms acceptable
to Etelcharge.com and PaymentOne.

In addition, the remaining approximately 2% of outstanding
PaymentOne equity will also be acquired by Etelcharge.com in
exchange for its stock.  

It is anticipated that PaymentOne and TBR will continue to provide
to each other certain shared and support services after the
closing.  

"With the acquisition of PaymentOne, Etelcharge.com gets a mature
company that has billed over $2.5 billion in client transactions
through telco billing," Rob Howe, chairman and chief executive of
Etelcharge.com., stated.  "PaymentOne's estimated annual revenue
of $13 million will establish a significant revenue base for our
company.  The acquisition, if completed, will also give us
nationwide telco coverage, a set of blue-ribbon merchant-
customers, and access to 50 million subscribers who have already
used bill-through-phone-bill services."

"Equally important, we bring into our company a stellar group of
people who are among the most experienced in the industry," said
Mr. Howe.  "We get mature, time-tested systems, significant
intellectual property, and contractual relationships with telco
network operators nationwide, including the top names in the US
telco industry,"

The estimated PaymentOne revenue specified in this release is
based on PaymentOne's unaudited nine month results through
March 31, 2008.

The acquisition is targeted to close in mid- to late-summer 2008,
if approved by the United States Bankruptcy Court for the Northern
District of California (San Jose Division) which has jurisdiction
over TBR under Chapter 11 of the Bankruptcy Code.

The closing is also subject to satisfaction of other customary
closing conditions, well as the provision of certain capital and
capital commitments by Etelcharge.com to PaymentOne.  In addition,
Etelcharge.com may be outbid by another buyer as a part of TBR's
bankruptcy process.

"By combining our new Etelcharge Version 3.0's Electronic Online
Gift Cards and Social Networking with this acquisition,
Etelcharge.com will have established the most versatile and
powerful bill-through-phone-bill platform in the U.S.," Mr. Howe
concluded.

                       About Etelcharge.com

Etelcharge.com (OTCBB: ETLC) -- http://www.Etelcharge.com/-- is a  
Web 2.0 online payment system that provides online shoppers the
ability to charge approved transactions to their telephone bill.  
The Etelcharge.com payment option is also for individuals without
a credit card, or even a bank account.  

                         About PaymentOne

Headquartered in San Jose, California, PaymentOne --
http://www.paymentone.com/-- is an online payment company.  Its  
services for businesses include no-credit-card required billing
and payment services such as bill to phone, electronic check
processing, and micropayment capabilities.  It provides network
operators with methods for billing customers for third-party
digital content as well as other services.  The company also
offers real-time verification of credit information and customer
management.

                       About Integretel Inc.

Integretel -- http://www.integretel.com/-- provides a complete,  
end-to-end solution for telecommunications service providers
seeking to outsource their billing support functions.  
Integretel's service offerings include billing through the local
telephone bill, direct branded invoicing, online billing, major
credit card clearing and direct account debit together with an
array of complementary services such as customer care, validation
& fraud control, pre-pay account management and internet
reporting.

On Sept. 16, 2007, Integretel Inc. filed a voluntary petition to
reorganize under Chapter 11 in the U.S. Bankruptcy Court for the
Northern District of California.


JACOBS ENTERTAINMENT: Moody's Holds Rating, Assigns Neg Outlook
---------------------------------------------------------------
Moody's affirmed all the ratings on Jacobs Entertainment Inc. but
changed the outlook to negative, reflecting market challenges and
expected financial covenant tightness in the near term.

Moody's believes that the combination of the smoking ban affecting
JEI's company's two Colorado properties since Jan. 1, 2008 and the
weak macro-economic conditions, negatively impacting to various
degrees its gaming facilities, could create downward pressures on
EBITDA in the short term.

Since the implementation of the smoking ban, the Black Hawk market
in Colorado posted material revenue declines.  Additionally, the
main gaming markets served by the company, including Colorado, are
impacted by decreasing visitation trends or lower spending per
visit, due to high gas prices and weakening real income.  The
rating agency also believes that the company could have limited
room under a financial covenant in the short term.

Further negative rating pressures are possible, should total
debt/EBITDA, as adjusted by Moody's, exceed 6.5 times.  The
outlook could return to stable if total debt/EBITDA remains in the
5.5-6 times range and the performance of the Colorado properties
normalizes.

These ratings have been affirmed with no change in the LGD
assessments:

  -- B2 corporate family rating
  -- B2 probability of default rating
  -- Ba2 senior secured revolver
  -- Ba2 senior secured term loan
  -- Ba2 senior secured delayed draw term loan
  -- B3 senior unsecured notes

JEI is an owner and operator of gaming and pari-mutuel wagering
facilities with properties located in Colorado, Nevada, Louisiana
and Virginia.  Net revenues for the twelve-month period ended
March 31, 2008 were approximately $352 million.


JOHN REYNEN: U.S. Trustee Amends Creditors' Committee
-----------------------------------------------------
Sara L. Kistler, acting U.S. Trustee for Region 17, amended the
membership of the Official Unsecured Creditors' Committee in the
chapter 11 bankruptcy case of John D. Reynen and Judith M. Reynen.

The Amended Committee is composed of:

   Creditor's                   Unsecured Claim   Est. Amount of
   Name                                           Accept/Reject
   ----------                   ---------------   --------------
   1. IndyMac Bank                  $26,833,087      $26,833,087
      Home Builder Division,
      3465 East Foothill Blvd.
      Pasadena, CA 91107

   2. Guaranty Bank                 $12,433,852       $6,300,000
      8333 Douglas Avenue
      Dallas, TX 75225
      Rep: Clifford D. Ogle
      Tel: (214) 360-1673
      Fax: (214) 360-1940
      (cliff.ogle@guarantybank.com)

   3. California Bank & Trust        $6,740,023
      11622 El Camino Real
      Estate, Suite 200
      San Diego, CA 92130
      Rep: Gary Owens
      Tel: (858) 793-7171
      Fax: (858) 793-7420
      (gary.owens@calbt.com)

   4. Comerica Bank MC 4841         $21,583,959
      333 W. Santa Clara St.
      San Jose, CA 95113
      Rep: Hisashi Takiguchi
      Tel: (408) 556-5872
      Fax: (408) 556-5855
      (htakiguchi@comerica.com)


   5. Lennar Renaissance Inc.       $47,000,000      $65,000,000
      25 Enterprise
      Aliso Viejo, CA 92656
      Rep: Marc Chasman
      Tel: (949) 349-8070
      Fax: (949) 349-0782
      (marc.chasman@lennar.com)

   6. Wells Fargo Bank NA           $29,387,928     $140,000,000
      2030 Main St., Suite 800
      Irvine, CA 92614
      Rep1: Kristen Sandberg
      Tel: (949) 251-4471
      Fax: (949) 851-9533
      (kristen.sandberg@wellsfargo.com)
      Rep2: Pat Mooney
      Tel: (949) 251-4472
      (mooneyp@wellsfargo.com)
      Rep3: Christy S. Peters
      Add: 401 B St., Suite 1100
           San Diego, CA 92101
      Tel: (619) 699-3178
      (peterchs@wellsfargo.com)

   7. Bank of the West             $12,558,139       $29,211,285
      1450 Treat Blvd.
      Walnut Creek, CA 94597
      Rep: Alicia Anderson
      Tel: (925) 975-3927
      Fax: (925) 942-8441
      (alicia.anderson@bankofthewest.com)

                      About John Reynen

Reynen & Bardis Communities Inc. -- http://www.rbcommunities.com/  
-- has more than 35 years of experience in land planning and
homebuilding process relating to community amenities and home
design.  It employs about 180 workers.  The company controls about
23,500 home lots on 9,215 acres of real property in Sacramento.  
The partners of the company are John D. Reynen, an attorney and
developer, and Christo Bardis, a real estate broker.  Messrs.
Reynen and Bardis co-founded the company in 1969.

John D. Reynen and Judith M. Reynen filed for chapter 11
bankruptcy on April 23, 2008, before the U.S. Bankruptcy Court for
the Eastern District of California in Sacramento (Case No. 08-
25145).  Howard S. Nevins, Esq., at Hefner, Stark & Marols, LLP,
in Sacramento.  When the Reynens filed for bankruptcy, they
disclosed $50,000,001 to $100,000,000 in estimated assets, and
$500,000,001 to $1,000,000,000 in estimated debts.


JOHN REYNEN: Court OKs Meyers Firm as Replacement Counsel
---------------------------------------------------------
John D. Reynen and Judith M. Reynen obtained authority from the
U.S. Bankruptcy Court for the Eastern District of California to
employ Meyers Law Group PC as their replacement counsel.

The Debtors originally retained Hefner, Stark & Marois LLP to
represent them in the case.  However, the Debtors related that HSM
discovered possible conflicts of interest regarding its
engagement.  HSM determined that continued representation of the
Debtors would be impractical.  Therefore, the Meyers Firm was
substituted as counsel by stipulation submitted to the Court on
May 1, 2008.

Merle C. Meyers, Esq., is the principal of the Meyers Firm and has
agreed to be primarily responsible in representing the Debtors in
the case, the Debtors asserted.  The Debtors added that the Meyers
Firm will also assign other attorneys of the firm to the case as
necessary.  Mr. Meyers has roughly 30 years of experience
representing trustee, debtors-in-possession and creditors'
committees, the Debtors said.  

The Meyers Firm will be paid at $525 per hour for Mr. Meyers'
services, and $345 per hour for its current associates' services.  
Prior to the bankruptcy filing, the Debtors paid HSM a $500,000
retainer for its fees and expenses.  Once a substitution order is
issued by the Court, HSM is expected to offset the retainer by
about $20,000.  HSM will then transfer the balance of the retainer
to the Meyers Firm.

The Meyers Firm can be reached at:

   Merle C. Meyers, Esq.
   (mmeyers@mlg-pc.com)
   Michele Thompson, Esq.
   (mthompson@mlg-pc.com)
   Meyers Law Group PC
   44 Montgomery Street, Suite 1010
   San Francisco, CA 94104
   Tel: (415) 362-7500
   Fax: (415) 362-7515

                      About John Reynen

Reynen & Bardis Communities Inc. -- http://www.rbcommunities.com/  
-- has more than 35 years of experience in land planning and
homebuilding process relating to community amenities and home
design.  It employs about 180 workers.  The company controls about
23,500 home lots on 9,215 acres of real property in Sacramento.  
The partners of the company are John D. Reynen, an attorney and
developer, and Christo Bardis, a real estate broker.  Messrs.
Reynen and Bardis co-founded the company in 1969.

John D. Reynen and Judith M. Reynen filed for chapter 11
bankruptcy on April 23, 2008, before the U.S. Bankruptcy Court for
the Eastern District of California in Sacramento (Case No. 08-
25145).  Howard S. Nevins, Esq., at Hefner, Stark & Marols, LLP,
in Sacramento.  When the Reynens filed for bankruptcy, they
disclosed $50,000,001 to $100,000,000 in estimated assets, and
$500,000,001 to $1,000,000,000 in estimated debts.


JPMORGAN CHASE: S&P Junks Rating on Class P Certificates
--------------------------------------------------------
Standard & Poor's Ratings Services lowered its rating on the class
P commercial mortgage pass-through certificates from JPMorgan
Chase Commercial Mortgage Securities Corp.'s series 2005-CIBC11.  
Concurrently, S&P affirmed its ratings on 22 other classes from
this series.
     
The downgrade reflects credit deterioration of the pool,
specifically seven loans that have reported debt service coverage
below 1.0x.  In addition, the downgrade reflects anticipated
credit support erosion upon the eventual resolution of one
specially serviced asset.
     
The affirmed ratings reflect credit enhancement levels that
provide adequate support through various stress scenarios.
     
As of the June 12, 2008, remittance report, the collateral pool
consisted of 144 loans with an aggregate trust balance of
$1.747 billion, compared with 145 loans totaling $1.801 billion at
issuance.  The master servicer, Capmark Finance Inc., reported
financial information for 9% of the pool.  Eighty-seven percent of
the servicer-provided information was full-year 2007 data.  There
are seven loans in the pool totaling $31.5 million (2%) with
reported DSCs lower than 1.0x.  

The loans are secured by multifamily, office, and retail
properties with an average balance of $4.5 million and an average
decline in DSC of 47% since issuance.  Standard & Poor's
calculated a weighted average DSC of 1.59x for the pool, up from
1.46x at issuance.  There is one loan with the special servicer,
J.E. Robert Co. Inc., which is also the only delinquent loan in
the pool.  To date, the trust has experienced one loss totaling
$1.1 million.  Details of the specially serviced asset are:
     
Star Suites is a 136-bed student housing property in Tallahassee,
Florida, with a total exposure of $5.2 million, including
servicing advances and interest thereon.  The loan was transferred
to the special servicer in September 2007 due to monetary default
and is now 90-plus-days delinquent.  The property reported a 2006
DSC of 0.93x and is currently 81% occupied.
     
Capmark reported a watchlist of 22 loans ($203.4 million, 12%).  
The Palm Springs Mile loan ($102.7 million, 6%) is the largest
loan on the watchlist and the fourth-largest loan in the pool.  
The loan is secured by a 1,176,383-sq.-ft. retail property in
Hialeah, Florida.  The loan appears on the watchlist because the
property suffered major damage during Hurricane Wilma in October
2005.  The repair work at the property is expected to be completed
by July 2008, and Capmark will remove the loan from the watchlist
when the repairs have been completed.  The property reported a
year-end 2007 DSC of 1.65x and 94% occupancy.  The remaining loans
are on the watchlist primarily because of low occupancy or
declines in DSC since issuance.
     
The top 10 loans have an aggregate outstanding balance of $790.0
million (45%) and a weighted average DSC of 1.73x, up from 1.54x
at issuance.  Standard & Poor's reviewed property inspections
provided by the master servicer for all of the assets underlying
the top 10 exposures, and all the properties were characterized as
"good."
     
The Memorial Office Portfolio is the fifth-largest loan in the
pool, and the credit characteristics of this loan are consistent
with those of an investment-grade obligation.  The loan has a
balance of $76.3 million (4%) and is collateralized by four office
buildings in Houston, Texas, totaling 1,077,239 sq. ft.  For the
year ended Dec. 31, 2007, the DSC was 2.10x and occupancy was 93%.  
Standard & Poor's adjusted net cash flow for this loan is
comparable to its level at issuance.
     
Standard & Poor's stressed the loans on the watchlist and the
other loans with credit issues as part of its analysis.  The
resultant credit enhancement levels support the lowered and
affirmed ratings.
       

                          Rating Lowered

        JPMorgan Chase Commercial Mortgage Securities Corp.
Commercial mortgage pass-through certificates series 2005-CIBC11

                       Rating
                       ------
            Class    To      From    Credit enhancement
            -----    --      ----    ------------------
            P        CCC+    B-             1.35%

                         Ratings Affirmed
     
        JPMorgan Chase Commercial Mortgage Securities Corp.
Commercial mortgage pass-through certificates series 2005-CIBC11
   
                Class    Rating   Credit enhancement
                -----    ------   ------------------
                A-1      AAA            20.55%
                A-2      AAA            20.55%
                A-3      AAA            20.55%
                A-4      AAA            20.55%
                A-SB     AAA            20.55%
                A-1A     AAA            20.55%
                A-JFX    AAA            13.85%
                A-J      AAA            13.85%
                B        AA             11.27%
                C        AA-            10.24%
                D        A               8.70%
                E        A-              7.41%
                F        BBB+            5.99%
                G        BBB             4.96%
                H        BBB-            3.54%
                J        BB+             3.16%
                K        BB              2.64%
                L        BB-             2.25%
                M        B+              2.00%
                N        B               1.74%
                X-1      AAA              N/A
                X-2      AAA              N/A


                      N/A -- Not applicable.


LEAR CORP: Buys 75% of Shares in New Trend's Auto Fabric Business
-----------------------------------------------------------------
Lear Corp. entered into agreements to acquire a 75% share of the
automotive fabric business of New Trend Group Co., Ltd.  Financial
terms of the agreement were not disclosed.

The acquisition of a majority stake in New Trend Group's
automotive fabric business is consistent with Lear's strategy to
selectively increase the level of vertical integration for its
Seating business.  New Trend's seat trim fabric operations provide
Lear an opportunity for low-cost fabric supply to its existing cut
and sew capabilities as well as offering the potential for
incremental sales growth as a fabric supplier to a broad range of
automotive manufacturers.  Other partnerships in the area of seat
trim are presently being evaluated by Lear.

"Following our successful launch of the Aventino(TM) Collection of
premium leather last fall, Lear was looking for additional
opportunities to further vertically integrate seat trim into our
core product portfolio," Lou Salvatore, Lear Senior Vice President
and President of Global Seating Operations, said.  "The production
of additional trim options such as flat-woven materials and knits
provides Lear the opportunity to offer our customers a wider range
of seat trim options and improve overall seating system value."

New Trend is a leading supplier of trim to the China automotive
market as well as an exporter to Europe and the U.S. through its
two automotive textile manufacturing facilities in China.  The
company produces fabric used for seat covers, vehicle headliners
and automotive door panels and carpet for GM, VW, Ford, China
Brilliance, Toyota, Nissan, Hyundai, Chery and Geely vehicles,
predominantly in China.

Although Lear's investment gives it a majority ownership stake and
management control in the New Trend automotive fabric business,
the current management and employees will remain in place to
ensure operational continuity, manufacturing expertise and
existing design/development activities.  Lear will maintain the
New Trend(TM) brand identity, and we will refer to the business as
New Trend(TM) automotive fabric by Lear.

Lear's seat system design, engineering and manufacturing expertise
and global scale strongly complements New Trend's experience in
automotive fabrics and footprint in Asia.  In the initial phase
following acquisition, New Trend will continue to focus on its
core competencies and produce fabrics in China for internal
consumption.  At the same time, Lear will evaluate opportunities
to expand New Trend's facilities and leverage this low-cost source
for export to markets outside of Asia.

"We anticipate growing New Trend's fabric sales multifold over the
next couple years," Mr. Salvatore continued.  "Our consumer
research shows European and Asian suppliers are trending toward
more flat wovens, while North America has a high usage of knits.  
As a result, we see an opportunity to increase our market share in
Asia, and further down the road, successfully launch our fabric
portfolio with North American and European customers."

                       About Lear Corp.

Based in Southfield, Michigan, Lear Corporation (NYSE: LEA) --
http://www.lear.com/-- supplies automotive seating systems,    
electrical distribution systems and electronic products.  Lear's
world-class products are designed, engineered and manufactured by
a diverse team of more than 90,000 employees at 236 facilities in
33 countries.  Lear's headquarters are in Southfield, Michigan.

                            *     *     *

As reported in the Troubled Company Reporter on June 6, 2008,
Standard & Poor's Ratings Services said that Lear Corp.'s
(B+/Stable/--) lower full-year 2008 guidance, which results from
downward revisions to vehicle production in North America and
increased commodity costs, has no immediate impact on the ratings
or outlook on the company.  The current rating and outlook
adequately reflect the challenging operating environment for auto
suppliers in 2008, as S&P incorporated a very difficult 2008 into
our review of Lear late last month.  


LIQUIDATION WORLD: Closes Seven Stores to Rationalize Investment
----------------------------------------------------------------
Liquidation World Inc. will close 7 of its 103 Canadian stores,
including stores in Surrey BC, Aldergrove BC, Merritt BC, Taber
AB, Drumheller AB, Winnipeg MB and Keswick ON.

"We have been scrutinizing every area of our business with the
objective of reducing costs and improving the profitability of our
company," Jonathan Hill, president and CEO commented.  "As part of
this process we have completed an extensive review of our existing
stores and have determined that it is prudent to close a number of
stores in order to rationalize our investment in inventory and
reduce our overall expense commitments."

"In most cases we were able to take advantage of lease expiries,
early lease termination clauses or are terminating month-to-month
lease agreements in order to minimize closure costs," Mr. Hill
continued.  "However, the list does include one landlord initiated
termination to accommodate a pending re-development of the site.
The decision to close stores has been difficult in light of the
tremendous effort that the store teams have made in these
locations to assist the company, however, the closures are a
necessary step toward returning the company to profitability."

The company will be commencing "Going out of Business" sales in
the affected locations in June 2008 and will fully close these
locations once the inventory has been depleted and any remaining
lease obligations have been fulfilled.

As reported in the Troubled Company Reporter on June 9, 2008,
Liquidation World Inc. formed a Special Committee of independent
board members to investigate and evaluate strategic alternatives
available to the Company to increase shareholder value.

The Special Committee is comprised of independent board members
Craig Graham, Chairman, Jeffrey Mandel, and Bob Wiens.

The Special Committee has retained Capital West Partners, an
independent financial advisor, to assist in the process and has
also retained independent legal counsel.

As reported in the TCR on June 9, 2008, according to CBC.ca,
Liquidation World lost $5 million on revenues of $42.2 million in
the second quarter of its current financial year. In the same
quarter of last year, the company lost $3 million on revenue of
$42 million.

The report also mentions that in August, the company announced a
plan to stem losses by closing 16 of its 18 money-losing U.S.
stores and turning the other two into distribution centres.  The
company's shares, trading at the $5 level a year ago, closed
Tuesday at $1.56.

                  About Liquidation World

Liquidation World -- http://www.liquidationworld.com-- liquidates   
consumer merchandise through 106 stores in Canada and the United
States. The Company solves asset recovery problems in a
professional manner for the financial services industry, insurance
companies, manufacturers, wholesalers and other organizations.
Liquidation World is based in Brantford, Ontario and maintains a
number of regional buying offices in Canada and the United States.
The company opened its first store in Calgary, Alberta in 1986,
the company has more than 1,600 employees, is Canada's largest
liquidator.


MATRIX DEVELOPMENT: Section 341(a) Meeting Scheduled For July 15
----------------------------------------------------------------
The U.S. Trustee for Region 18 will convene a meeting of creditors
of Matrix Development on July 15, 2008, at 1:30 p.m., at 620 S.W.
Main Street, Room 223 in Portland, Oregon.

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

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

                         About Matrix

Headquartered on Portland, Oregon, Matrix Development Corp. aka
Legend Homes -- http://www.legendhomes.com-- designs and builds  
homes and condominiums.  The company filed for Chapter 11
protection on June 10, 2008 (Bankr. D. Ore. Case No.08-32798).  
When the Debtor filed for protection against their creditors, it
listed asset and debts between $100 million to $500 million.


MATRIX DEVELOPMENT: Taps Greene & Markley as Bankruptcy Counsel
---------------------------------------------------------------
Matrix Development Corporations asks the Hon. Trish M. Brown of
the United States Bankruptcy Court for the District of Oregon for
permission to employ Greene & Markley P.C. as its general
bankruptcy counsel.

Green Markley will:

   a) consult with the Debtor concerning the administration of the
      case;

   b) advise the Debtor with regards to its rights, powers and
      duties as a debtor in possession;

   c) investigate and, if appropriate, prosecute on behalf of the
      estate claims and causes of action belonging to the estate;

   d) advise the Debtor concerning alternatives for restructuring
      its debts and financial affairs pursuant to a plan or, if
      appropriate, liquidate its assets; and

   e) prepare the bankruptcy schedules, statements and lists
      required to be filed by the Debtor under the Bankruptcy Code
      and applicable procedural rules.

Before its bankruptcy filing, the Debtor paid at least $176,000
retainer to the firm of which $100,427 was used for payment of
services rendered until June 8, 2008.

The firm's professionals and their compensation rates are:

      Professionals             Designations       Hourly Rates
      -------------             ---------------    ------------
      David  A. Foraker, Esq.     Attorney            $400
      Sanford R. Landress, Esq.   Attorney            $300
      Stephen T. Boyke, Esq.      Attorney            $295
      Corri Larsen, Esq.        Legal Assistant       $125

To the best of the Debtor's knowledge, the firm does not represent
any interest adverse to the Debtor's estate or its creditors and
is a "disinterested person" as defined in Section 101(14) of the
Bankruptcy Code.

                          About Matrix

Headquartered on Portland, Oregon, Matrix Development Corp. aka
Legend Homes -- http://www.legendhomes.com-- designs and builds  
homes and condominiums.  The company filed for Chapter 11
protection on June 10, 2008 (Bankr. D. Ore. Case No.08-32798).  
When the Debtor filed for protection against their creditors, it
listed asset and debts between $100 million to $500 million.


MBIA INSURANCE: Moody's Cuts Aaa Financial Strength 5 Notches Down
------------------------------------------------------------------
Moody's Investors Service downgraded to A2, from Aaa, the
insurance financial strength ratings of MBIA Insurance Corporation
and its affiliated insurance operating companies.  In the same
rating action, Moody's also downgraded the surplus note rating of
MBIA Insurance Corporation to Baa1, from Aa2, and the senior debt
rating of the holding company, MBIA, Inc. to Baa2, from Aa3.

The rating action concludes a review for possible downgrade that
was initiated on June 4, 2008, and reflects MBIA's limited
financial flexibility and impaired franchise, as well as the
substantial risk within its portfolio of insured exposures and a
movement toward more aggressive capital management within the
group.

The rating agency said that while the group remains strongly
capitalized, estimated to be consistent with a Aa level rating,
and benefits from substantial embedded earnings in its existing
insurance portfolio, these other business factors led to the lower
rating outcome.

Furthermore, MBIA's insured portfolio remains vulnerable to
further economic deterioration, particularly given the leverage
contained in its sizable portfolio of resecuritization
transactions, including some commercial real estate CDOs.

The outlook for the ratings is negative, reflecting the material
uncertainty about the firm's strategy and the non-negligible
likelihood of further adverse developments in its insurance
portfolios or operations.

As a result of the rating action, the Moody's-rated securities
that are guaranteed or "wrapped" by MBIA are also downgraded to
A2, except those with higher public underlying ratings.

Moody's said that substantial uncertainty about the ultimate
performance of MBIA's mortgage related exposures continues to
adversely affect market perceptions of the firm, greatly impairing
its financial flexibility and ability to write new insurance.  
MBIA has recorded approximately $2.1 billion in cumulative loss
reserves and impairments associated with its mortgage related
portfolio, mostly from second lien mortgage backed securities and
asset-backed CDOs.

Moody's noted that, over the last few months, MBIA has written
little new business, and its financial flexibility has
deteriorated substantially as evidenced by the significant decline
in the company's stock price and high current spreads on its debt
securities, making it extremely difficult to economically address
potential capital shortfalls should markets continue to worsen.

Moody's has re-estimated expected and stress loss projections on
MBIA's insured portfolio, focusing on the company's mortgage-
related exposures as well as other sectors of the portfolio
potentially vulnerable to deterioration in the current
environment.

Based on Moody's revised assessment of the risks in MBIA's
portfolio, estimated stress-case losses would approximate
$13.6 billion at the Aaa threshold and $9.4 billion at the A2
threshold. This compares to Moody's estimate of MBIA's claims
paying resources of approximately $15.1 billion.

Moody's noted that its stress case estimates for MBIA's
residential mortgage-related exposures increased by roughly
$500 million to $5.9 billion, which was largely offset by insured
portfolio amortization since year-end 2007.  Relative to Moody's
1.3x "target" level for capital adequacy, MBIA is currently
$2.6 billion below the Aaa target level and is $2.8 billion above
the A2 target level.

The rating agency noted that MBIA's recent decision to retain at
the holding company the $1.1 billion in proceeds from its most
recent equity offering is indicative of a more aggressive capital
management strategy, and is a negative credit consideration for
the insurance company's rating.

Such decision, however, puts the holding company in a strong
liquidity position, said Moody's, providing additional comfort
about the firm's ability to manage the effect of acceleration and
collateralization in its GIC business triggered by the downgrade.  
MBIA has indicated that the firm does not intend to issue
additional dilutive capital in the current environment and that it
will review its strategic options for redeploying the holding
company funds, including possible stock buybacks.

Moody's said that, beyond MBIA's affected mortgage related
exposures, portfolio risks appear to be well contained as
reflected by its core low-risk municipal book and high average
underlying ratings.  Most structured finance sectors outside of
residential mortgage related products are performing well,
although certain exposures, such as some commercial real estate
CDOs, because of their leveraged structure and sector
concentration, may be more sensitive to severe economic or sector
deterioration.

While portfolio losses could increase in a sharp economic
downturn, strong premium accretion, investment earnings and
portfolio amortization should help to offset any resulting impact
on capital adequacy.  Moody's noted, however, that downward rating
pressure could occur if MBIA's capital position eroded through the
extraction of capital or due to further increases in projected
stress loss estimates.

Moody's will continue to evaluate MBIA's ratings in the context of
the future performance of the company's mortgage-related exposures
relative to expectations and resulting capital adequacy levels, as
well as changes to the company's strategic and capital management
plans as a single-A rated company.

In February, MBIA announced a long-term strategic objective of
separating its municipal insurance, structured insurance and asset
management businesses into distinct legal entities.  Moody's said
that management's recent decision to retain at the holding company
the $1.1 billion in proceeds from its latest equity raise suggests
that the firm is contemplating a more accelerated timeframe for
such transformation.

LIST OF RATING ACTIONS

These ratings have been downgraded:

  -- MBIA Insurance Corporation -- insurance financial strength to
     A2 from Aaa, and surplus notes to Baa1 from Aa2;

  -- MBIA Insurance Corporation of Illinois -- insurance financial
     strength to A2 from Aaa;

  -- Capital Markets Assurance Corporation -- insurance financial
     strength to A2 from Aaa;

  -- MBIA UK Insurance Limited -- insurance financial strength to
     A2 from Aaa;

  -- MBIA Assurance S.A. -- insurance financial strength to A2
     from Aaa;

  -- MBIA Mexico S.A. de C.V.'s -- insurance financial strength to
     A2 from Aaa (the firm's Aaa.mx -- national scale rating -- is   
     affirmed);

  -- MBIA Inc. -- senior unsecured debt to Baa2 from Aa3,
     provisional senior debt to (P) Baa2 from (P) Aa3, provisional    
     subordinated debt to (P) Baa3 from (P) A1, and provisional  
     preferred stock to (P) Ba1 from (P) A2;

  -- North Castle Custodial Trusts I-VIII -- contingent capital
     securities to Baa2 from Aa3;

Established in 1974, MBIA provides financial guarantees to issuers
in the municipal and structured finance markets in the United
States, as well as internationally.  MBIA also offers various
complementary services, such as investment management and
municipal investment contracts.


MDRECOVERY INC: Repossesses Saratoga Lab from Creditors
-----------------------------------------------------
James Schlett of Schenectady Gazette (N.Y.) reports that
MDRecovery Inc. received a reestablishment order for its
laboratory in a former Schuylerville (Saratoga) high school on
June 13 after filing for Chapter 11 bankruptcy on June 9.  A group
of creditors allegedly seized the property last August, according
to the report.

The reestablishment order came four days before the state Health
Department was scheduled to conduct a proficiency test. The
inspection could prove to be crucial to Saratoga Labs' status as a
state-licensed lab and its viability as a business, according to
the report.  It is not clear whether the Health Department
conducted its scheduled inspection at Saratoga Labs, the report
said.

The bankruptcy also led to U.S. District Court Judge David Homer
staying a civil suit filed against MDR President Frederick Marden
in July.  The suit was filed by a group of investors led by Arrow
Financial Corp. Director Kenneth Hopper, claiming he mismanaged
his company and breached his fiduciary duties.  

According to the report, the investors last year alleged MDR was
in default of a series of loans totaling $1.5 million.  As a
result of the default, the investors demanded that MDR return
certain assets, including a patent, equipment, two bank notes,
corporate books and internal accounting documents.

The company is based in Boston, Massachusetts.  It filed for
bankruptcy with the U.S. Bankruptcy Court for District of
Massachusetts (Case No.: 08-14214.  Schulyer Labs Inc. also filed
bankruptcy with the same court.  When MDRecovery filed for Chapter
11 protection, it listed assets and debts of both $1 million to
$10 million.


MIDON RESTAURANT: Case Summary & 20 Largest Unsecured Creditors
---------------------------------------------------------------
Debtor: Midon Restaurant Corp.
        dba Old Chicago
        7 Sheperds Needle
        Wynantskill, NY 12198

Bankruptcy Case No.: 08-11852

Chapter 11 Petition Date: June 9, 2008

Court: Northern District of New York (Albany)

Debtor's Counsel: Francis J. Brennan
                  Nolan & Heller LLP
                  39 North Pearl Street
                  Albany, NY 12207
                  Tel (518) 449-3300
                  Email fbrennan@nolanandheller.com

Estimated Assets: Less than $50,000

Estimated Debts: $1 million to $10 million

A copy of the Debtor's petition is available for free at
http://bankrupt.com/misc/nynb08-11852.pdf


MIRABILIS VENTURES: Section 341(a) Meeting Scheduled for June 23
----------------------------------------------------------------
The U.S. Trustee for Region 21 will convene a meeting of creditors
of Mirabilis Ventures Inc. and its debtor-affiliates on June 23,
2008, 9:00 a.m., at the 6th Floor, Suite 600, 135 West Central
Boulevard, in Orlando, Florida.

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

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

Orlando, Florida-based Mirabilis Ventures Inc., together with two
of its affiliates, filed for Chapter 11 protection on May 27, 2008
(Bankr. M.D. Fla. Lead Case No. 08-04327).  Elizabeth A. Green,
Esq., at Latham Shuker Eden & Beaudine LLP, represents the Debtors
in their restructuring efforts.  When the Debtors filed for
protection from their creditors, they listed estimated assets and
debts of $50 million to $100 million.


MIRABILIS VENTURES: Seeks to Employ Yoakum as Forensic Accountant
-----------------------------------------------------------------
Mirabilis Ventures Inc. and its debtor-affiliates ask permission
from the U.S. Bankruptcy Court for the Middle District of Florida
to employ Steven L. Yoakum P.A. as their forensic accountant.

Court documents did not reveal the firm's specific services to be
rendered to the Debtors.  The firm will charge the Debtor an
hourly rate of $195 for its services.

Steven L. Yoakum assures the Court that his firm is disinterested
as that term is defined in Section 101(14) of the U.S. Bankruptcy
Code.

Orlando, Florida-based Mirabilis Ventures Inc., together with two
of its affiliates, filed for Chapter 11 protection on May 27, 2008
(Bankr. M.D. Fla. Lead Case No. 08-04327).  Elizabeth A. Green,
Esq., at Latham Shuker Eden & Beaudine LLP, represents the Debtors
in their restructuring efforts.  When the Debtors filed for
protection from their creditors, they listed estimated assets and
debts of $50 million to $100 million.


MISTER S INC: Case Summary & 20 Largest Unsecured Creditors
-----------------------------------------------------------
Debtor: Mister S, Incorporated
        4501 E. 49th St.
        Los Angeles, CA 90058
        dba
        Maxton Manufacturing

Bankruptcy Case No.: 08-18723

Type of Business: The Debtor provides floral supplies, polyester
                  trees, floral trade artificial trees, artificial
                  plants and trees, and artificial flower
                  arrangements.

Chapter 11 Petition Date: June 18, 2008

Court: Central District Of California (Los Angeles)

Judge: Sheri Bluebond

Debtor's Counsel: M. Jonathan Hayes, Esq.
                  Email: jhayes@polarisnet.net
                  21800 Oxnard St., Ste. 840
                  Woodland Hills, CA 91367
                  Tel: (818) 710-3656
                  Fax: (818) 710-3659

Estimated Assets:        Less than $50,000

Estimated Debts: $1 million to $10 million

A copy of Mister S, Inc.'s petition is available for free at:

      http://bankrupt.com/misc/cacb08-18723.pdf


MKP CBO: Moody's Junks Rating on $94.5 Million Class A-2 Notes
--------------------------------------------------------------
Moody's Investors Service has downgraded the ratings of five
classes of notes issued by MKP CBO V, Ltd., and left on review for
possible further downgrade one of these ratings, as:

Class Description: $94,500,000 Class A-2 Second Priority Senior
Secured Floating Rate Notes Due 2046

  -- Prior Rating: B3, on review for possible downgrade
  -- Current Rating: Caa2, on review for possible downgrade

Class Description: $56,000,000 Class B Third Priority Senior
Secured Floating Rate Notes Due 2046

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

Class Description: $10,500,000 Class C Mezzanine Secured
Deferrable Floating Rate Notes Due 2046

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

Class Description: $7,000,000 Class D Mezzanine Secured Deferrable
Floating Rate Notes Due 2046

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

Class Description: $19,250,000 Class E Mezzanine Secured
Deferrable Floating Rate Notes Due 2046

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

MKP CBO V, Ltd. is a collateralized debt obligation backed
primarily by a portfolio of structured finance securities.  The
rating actions taken reflect continuing deterioration in the
credit quality of the underlying portfolio and the occurrence as
reported by the Trustee on June 5, 2008, of an event of default.

The event of default was caused by a failure on the Measurement
Date of the Class A/B Overcollateralization Ratio to be equal to
or greater than 100%, as set forth in Section 5.1(i) of the
Indenture dated as of Dec. 8, 2005.  That event of default is
continuing.

As provided in Article V of the Indenture during the occurrence
and continuance of an Event of Default, certain parties to the
transaction may be entitled to direct the Trustee to take
particular actions with respect to the Collateral and the Secured
Notes.  The rating actions taken today reflect the increased
expected loss associated with tranches of the transaction.

Losses are attributed to diminished credit quality on the
underlying portfolio.  The severity of losses of certain tranches
may be different, however, depending on the timing and choice of
remedy to be pursued following the default event.  Because of this
uncertainty, the ratings assigned to Class A-2 remain on review
for possible further action.


NATIONAL LAMPOON: April 30 Balance Sheet Upside-Down by $3,750,368
------------------------------------------------------------------
National Lampoon Inc.'s consolidated balance sheet at April 30,
2008, showed $9,863,945 in total assets, total liabilities of
$9,352,364, and accrued dividents payable in common stock of
$4,261,949, resulting in a $3,750,368 total stockholders' deficit.

At April 30, 2008, the company's consolidated balance sheet also
showed strained liquidity with $1,884,961 in total current assets
available to pay $9,352,364 in total current liabilities.

The company reported net income of $97,744 on total revenues of
$2,635,930 for the third quarter ended April 30, 2008, compared
with a net loss of $1,161,315 on total revenues of $813,917 in the
corresponding period ended April 30, 2007.

The increase in net income for the three months ended April 30,
2008, resulted primarily from an increase of $1,542,588 in
licensing and distribution revenues from the release of National
Lampoon's Bagboy and four other titles, as well as an increase in
production revenues of $265,828 and advertising and promotion
revenues of $233,630, offset by a decrease in publishing revenues
of $220,033.

                 Nine Months Ended April 30, 2008

For the nine months ended April 30, 2008, the company had a net
loss of $1,918,546, as compared to a net loss of $1,170,667 for
the nine months ended April 30, 2007.

Total revenues decreased to $3,946,731 during the nine months
ended April 30, 2008, from $5,931,078 during the smae period ended
April 30, 2007.

Licensing and publishing revenues decreased 44% to $2,251,877
during the nine months ended April 30, 2008, compared to
$4,086,367 for the nine months ended April 30, 2007.  Advertising
and promotion revenues decreased 36% to $1,159,195 during the nine
months ended April 30, 2008, compared to $1,800,211 for the nine
months ended April 30, 2007.

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?2e44

                       Going Concern Doubt

Weinberg & company P.A., in Los Angeles, epxressed substantial
doubt about National Lampoon Inc.'s ability to continue as a going
concern after auditing the company's consolidated financial
statements for the year ended July 31, 2007.  The auditing firm
pointed to the company's working capital deficiency of $7,196,255
and accumulated deficit of $41,257,284 as of July 31, 2007, and a
net loss of $2,504,170 for the year ended July 31, 2007.

The company had a net loss of $1,918,546 for the nine months ended
April 30, 2008.  The company also had a negative working capital
of $7,467,403 and shareholders' deficiency of $3,750,368 at
April 30, 2008.

                      About National Lampoon

Based in West Hollywood, California, National Lampoon Inc.
(AMEX: NLN) -- http://www.nationallampoon.com/-- is active in a   
broad array of media and entertainment segments.  These include
feature films, television programming, online and interactive
entertainment, home video, audio, and book publishing.  The
company also owns interests in all major National Lampoon
properties, including National Lampoon's Animal House, the
National Lampoon Vacation series and National Lampoon's Van
Wilder.  


NORTHWEST AIRLINES: Talks on Joint Pilot Deal to Last a Week
------------------------------------------------------------
Negotiations on a joint pilot contract covering Delta Air Lines,
Inc. and Northwest Airlines Corp. pilots were said to have started
on July 18, 2008, according to a message from the Northwest pilots
union to its members, the Atlanta-Journal Constitution reports.

AJC says the "round-the-clock" negotiations on a joint pilot
contract for Delta and Northwest's proposed merger are planned to
last seven days in New York, or until middle of next week.

As previously reported, Delta's pilots ratified in May 2008, a
Letter of Agreement 19 with Delta management, which modifies the
current Pilot Working Agreement and will take effect upon the
completion of the Delta-Northwest merger.  Among other things,
the modifications include granting Delta pilots a 3.5% equity
stake in the combined company and annual pay raises of 5% in
2009, and 4% in 2010 to 2012.

The concessions do not cover Northwest pilots.

Prior to the ratification, particularly during the earlier months
of the merger talks, Delta's and Northwest's pilot unions tried,
but failed, to reach an agreement on a joint labor contract and a
plan for merging their seniority lists.  Essentially, seniority
determines pilots' work schedules and pay levels.

Northwest pilots clamor for, among other things, pay parity
immediately upon the merger's close, the report says.

    Delta Pilots Union Leader Expects No Concession Request,
           Believes Joint Contract Will Be Reached

In an interview with AJC, Delta pilots union chairman Lee Moak
disclosed that he doesn't think that record-high fuel prices will
force Delta to ask for pilot concessions as it proceeds with its
acquisition of Northwest.

"But at some point, something is going to have to give.  I don't
think it's going to be labor concessions.  I think it's going to
be rational ticket pricing to cover our cost," Mr. Moak said.

Mr. Moak reiterated that the Delta pilots union aims to reach a
joint contract and seniority list integration agreement with
Northwest pilots before the carriers' merger completes.

"The contract could be done relatively quickly.  It's just a
matter of the parties coming together," Mr. Moak told AJC.

"I'm confident we're going to get a deal done (by the close of
the merger)," Moak said.  "But if there isn't a deal done, we'll
continue to work on it."

The merger is expected to happen by the end of 2008, subject to
regulators' and shareholders' approval.

                         About Delta Air

Based in Atlanta, Georgia, Delta Air Lines Inc. (NYSE:DAL) --
http://www.delta.com/-- is the world's second-largest airline
in terms of passengers carried and the leading U.S. carrier
across the Atlantic, offering daily flights to 328 destinations
in 56 countries on Delta, Song, Delta Shuttle, the Delta
Connection carriers and its worldwide partners.  Delta flies to
Argentina, Australia and the United Kingdom, among others.

The company and 18 affiliates filed for chapter 11 protection on
Sept. 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-17923).
Marshall S. Huebner, Esq., at Davis Polk & Wardwell, represents
the Debtors in their restructuring efforts.  Timothy R. Coleman
at The Blackstone Group L.P. provides the Debtors with financial
advice.  Daniel H. Golden, Esq., and Lisa G. Beckerman, Esq., at
Akin Gump Strauss Hauer & Feld LLP, provide the Official
Committee of Unsecured Creditors with legal advice.  John
McKenna, Jr., at Houlihan Lokey Howard & Zukin Capital and James
S. Feltman at Mesirow Financial Consulting, LLC, serve as the
Committee's financial advisors.

The Debtors filed a chapter 11 plan of reorganization and
disclosure statement explaining that plan on Dec. 19, 2007.  On
Jan. 19, 2007, they filed revisions to the plan and disclosure
statement, and submitted further revisions to the plan on
Feb. 2, 2007.  On Feb. 7, 2007, the Court approved the Debtors'
disclosure statement.  In April 25, 2007, the Court confirmed the
Debtors' plan.  That plan became effective on April 30, 2007.  The
Court entered a final decree closing 17 cases on Sept. 26, 2007.    
(Delta Air Lines Bankruptcy News, Issue No. 101; Bankruptcy
Creditors' Service, Inc., http://bankrupt.com/newsstand/or       
215/945-7000).


                    About Northwest Airlines

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

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

When the Debtors filed for bankruptcy, they listed $14.4 billion
in total assets and $17.9 billion in total debts.  On Jan. 12,
2007 the Debtors filed with the Court their Chapter 11 Plan.  On
Feb. 15, 2007, they Debtors filed an Amended Plan & Disclosure
Statement.  The Court approved the adequacy of the Debtors'
Disclosure Statement on March 26, 2007.  On May 21, 2007, the
Court confirmed the Debtors' Plan.  The Plan took effect May 31,
2007.  (Northwest Airlines Bankruptcy News; Bankruptcy Creditors'
Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000).


NORTHWEST AIRLINES: High Fuel Prices Cue Further Capacity Cuts
--------------------------------------------------------------
Northwest Airlines Corporation disclosed further capacity
reductions for the fourth quarter of 2008 in response to high cost
of fuel.

Mr. Steenland said, "In response to these extraordinary fuel
costs, we are taking prudent actions to reduce our capacity and
right-size the airline.  This will allow us to better match our
capacity to customer demand as airfares, by necessity, must
increase."

               4th Quarter '08 Capacity Reductions

Northwest will reduce its system mainline domestic and
international capacity in the fourth quarter of 2008 by 8.5% to
9.5% versus the fourth quarter of 2007.  This includes the
reductions previously announced in April.

Mr. Steenland added, "No domestic station closures are planned as
a result of these capacity reductions. Instead, we will pare
unprofitable flying while maintaining the scope and presence of
our network."

The airline has not yet finalized the specific employee impacts
related to the reduced flying. However, for the resulting
headcount reductions, NWA will first look to voluntary separation
programs such as early-outs.

                         Fleet reductions

As a result of the reduced capacity, Northwest is removing a
combination of 14 B757s and Airbus narrowbody aircraft from the
fleet.

In addition, the DC-9 fleet will be reduced from 94 aircraft at
the start of 2008 to 61 aircraft (20 DC9-30s and 41 DC9-40s/50s)
by year-end.

Northwest also accelerated the retirement of three freighter
aircraft from its cargo operation.

                       Revenue Enhancements

On the revenue side, Mr. Steenland said the carrier is also
continuing to take actions to improve revenues with added fuel
surcharges, fare and fee increases.  In May, Northwest began
collecting fees for two or more checked bags.

                   Merger is Stronger than Ever

"When we first contemplated a merger with Delta, as oil was
approaching $100 a barrel, we knew this was the right deal with
the right partner.  Now, with oil above $130 a barrel, the case
for the merger, with its resulting synergies, is stronger than
ever," said Mr. Steenland, as he detailed the unique advantages of
the Northwest-Delta merger in the context of record breaking oil
prices.

    * The merger-related synergies will improve the financial
      ability of Northwest and Delta to meet the challenge
      presented by the fuel crisis and better position the
      combined carrier for long-term strength and profitability.

    * This is a transaction that is facilitated by best-in-class
      cost structures; one that will create an industry-leading
      balance sheet in any operating environment.

    * The transaction will create a worldwide, geographically
      balanced network – which will enhance customer preference
      and make the combined carrier more competitive.

    * This is a merger of choice by the two strongest network
      carriers.  The two carriers have already begun planning
      for a smooth and rapid integration in order to promptly
      capture and potentially exceed the synergies projected
      when the two carriers announced the deal.

                    About Northwest Airlines

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

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

When the Debtors filed for bankruptcy, they listed $14.4 billion
in total assets and $17.9 billion in total debts.  On Jan. 12,
2007 the Debtors filed with the Court their Chapter 11 Plan.  On
Feb. 15, 2007, they Debtors filed an Amended Plan & Disclosure
Statement.  The Court approved the adequacy of the Debtors'
Disclosure Statement on March 26, 2007.  On May 21, 2007, the
Court confirmed the Debtors' Plan.  The Plan took effect May 31,
2007.  (Northwest Airlines Bankruptcy News; Bankruptcy Creditors'
Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000).   


NUANCE COMMS: Fitch Holds 'B+' Rating; Changes Outlook to Stable
----------------------------------------------------------------
Standard & Poor's Ratings Services revised its outlook on
Burlington, Massachusetts-based Nuance Communications Inc. to
stable from positive.  At the same time, the corporate credit
rating was affirmed at 'B+'.
     
"The outlook revision primarily reflects the company's ongoing
growth initiatives, executed through frequent acquisitions, and
corresponding sustained debt leverage exceeding the 4.5x-area,"
said Standard & Poor's credit analyst Clay Ching.  "Despite
Nuance's history of successfully integrating acquired companies,
we no longer expect the company to delever below the 4.0x level
over the next year, which would have been supportive of a higher
rating."
     
Nuance's adjusted EBITDA margins are solid, nearing the low-30%
area.  As of March 31, 2008, pro forma operating lease-adjusted
total debt to EBITDA was about 4.7x. Given the company's
acquisitive growth strategy, a sustained, material reduction in
leverage in the near-to-intermediate term to below 4.0x is
unlikely.  However, the rating is supported by Nuance's expanding
market position and S&P's expectation that the company will
continue to successfully integrate acquisitions and achieve EBITDA
growth.
     
Nuance is a global provider of speech recognition software and
imaging solutions and related services.


OCHOA POULTRY: Case Summary & Eight Largest Unsecured Creditors
---------------------------------------------------------------
Debtor: Ochoa Poultry Farms, Inc.
        P.O. BOX 11593
        San Juan, PR 00922

Bankruptcy Case No.: 08-03906

Chapter 11 Petition Date: June 18, 2008

Court: District of Puerto Rico (Old San Juan)

Debtor's Counsel: Jose Ramon Cintron, Esq.
                  Email: jrcintron@prtc.net
                  605 Calle Condado Ste. 602
                  San Juan, PR 00907
                  Tel: (787) 725-4027
                  Fax: (787) 725-1709

Total Assets: $5,814,100

Total Debts:  $1,832,353

A copy of Ochoa Poultry Farms, Inc.'s petition is available for
free at:

      http://bankrupt.com/misc/prb08-03906.pdf


OMER BEAIRD: Case Summary & 13 Largest Unsecured Creditors
----------------------------------------------------------
Debtor: Omer Beaird
        14 Snow Court
        Orinda, CA 94563

Bankruptcy Case No.: 08-42942

Chapter 11 Petition Date: June 10, 2008

Court: Northern District of California (Oakland)

Judge: Leslie J. Tchaikovsky

Debtor's Counsel: Daniel J. Guthrie
                  Law Offices of Daniel J. Guthrie
                  126 Ewing Terrace
                  San Francisco, CA 94118
                  Tel: (415) 776-9478
                  E-mail: guthrielaw@sbcglobal.net

Estimated Assets: $1 million to $10 million

Estimated Debts: $1 million to $10 million

A copy of the Debtor's petition is available for free at
http://bankrupt.com/misc/canb08-42942.pdf


OMNOVA SOLUTIONS: Weaker Margins Prompt Moody's Stable Outlook
--------------------------------------------------------------
Moody's Investors Service changed the rating outlook for OMNOVA
Solutions Inc. to stable from positive and affirmed its corporate
family and other ratings.  The change in outlook reflects the
recent weaker margins and higher leverage of the company and
industry conditions that are not supportive of a ratings upgrade.
These summarizes the affirmed ratings:

OMNOVA Solutions Inc.

Ratings affirmed:

  -- Corporate family rating -- B2
  -- Probability of default rating -- B2
  -- $150mm Gtd Sr Sec Term Loan B due 2014 -- B2 (LGD4, 52%) from
     B2 (LGD3, 48%)

The move in the outlook to stable from positive reflects the
recent decline in gross margins and lackluster cash flow of OMNOVA
primarily due to elevated raw material, energy and transportation
costs that the company has not been able to fully pass through to
its customers on a timely basis.

Since the rating outlook was moved to positive in Nov. 2006,
OMNOVA has taken steps to reduce interest expense through debt
reduction and refinancing high coupon debt (in May 2007) and to
reduce selling, general and administrative costs.

However, the positive impact of this expense reduction has been
largely offset by a decline in gross margins, and cash flows have
been further impacted by the use of cash for working capital
purposes.

Despite certain successful efforts by OMNOVA to raise prices to
offset high raw material and energy costs, it is uncertain if the
company will get adequate relief from cost pressures over the next
year.  Also, Moody's expects that OMNOVA will continue to
experience difficult economic conditions for the balance of 2008
and into 2009 in key end markets such as the US housing market.

As a result, it is expected that industry conditions and OMNOVA's
credit metrics will not be supportive of an upgrade of the
corporate family rating in the near-term.

The stable outlook reflects Moody's expectation that the company
will maintain adequate liquidity as a result of some success in
maintaining or improving its margins and generating modest free
cash flow.  However, the rating could come under pressure if
OMNOVA was not able to generate adequate margins and credit
metrics supportive of the rating.

OMNOVA manufactures decorative and functional surfaces, emulsion
polymers and specialty chemicals.  The company operates in two
business segments, Decorative Products (approximately 36% of
FY2007 consolidated net sales), which makes commercial wall
coverings, coated fabrics and decorative laminates, and
Performance Chemicals (approximately 64% of FY 2007 consolidated
net sales), which offerings include binders, coatings and
adhesives for the paper and carpet industries.

OMNOVA is the second-largest producer of styrene butadiene latex
in North America.  Headquartered in Fairlawn, Ohio, OMNOVA was
formed when it was spun-off from GenCorp in 1999.  Revenues were
$803 million for the LTM ended May 31, 2008.


PARMALAT SPA: Settles with UBS, Credit Suisse for U$548MM
---------------------------------------------------------
UBS AG and Credit Suisse Group AG, Switzerland's two largest
banks, have settled with Parmalat S.p.A. for almost
EUR357,000,000 -- or US$548,000,000 -- to resolve all legal
claims in connection with their role in Parmalat's bankruptcy,
published reports said.

A court in Milan, Italy, had commenced trial against UBS -- as
well as Citigroup Inc., Deutsche Bank AG, and Morgan Stanley --
for market rigging that led to Parmalat's collapse in December
2003.

"The settlement will have a negligible effect on UBS's earnings
in view of the provisions previously established by UBS in
connection with these matters," UBS told Bloomberg News in an e-
mailed statement, Andrew Davis reported.  The bank will pay
EUR184,000,000 to Parmalat, Mr. Davis said.

Credit Suisse said that it "has at all times acted properly in
its dealings with the Parmalat Group and was unaware of
Parmalat's insolvency at the time of entering into any
transactions."  According to Mr. Davis, Credit Suisse will pay
Parmalat EUR172,500,000.

                   Parmalat's News Release

Parmalat SpA said it has settled all pending disputes with Credit
Suisse (including the late-filing of credits and actions to
contest claims and also the renouncing of the right to file
unsecured claims ex article 70, paragraph 2, of the Bankruptcy
Law) in relation to the period prior to the Parmalat Group being
declared insolvent in December 2003.

In accordance with the agreement Parmalat waives all current or
potential revocatory and damages actions which might be filed
against Credit Suisse.

In accordance with the agreement Credit Suisse will pay a total of
EUR172,500,000 of which EUR1,500,000 is destined for the companies
of the Parmalat Group that are not party to the Proposal of
Composition with Creditors.

Credit Suisse definitively retains full ownership of 17,041,813
Parmalat SpA shares already assigned to it.

                    Credit Suisse's Statement

Credit Suisse said it is pleased to confirm that an agreement has
been reached with the Parmalat Group to settle all claims between
the parties in Italy. The agreement settles all revocatory and
damages claims in Italy involving Credit Suisse and its affiliates
and the Parmalat Group.

Credit Suisse said it has at all times acted properly in its
dealings with the Parmalat Group and was unaware of Parmalat's
insolvency at the time of entering into any transactions with
Parmalat prior to the commencement of the Extraordinary
Administration of the Parmalat Group.

Under the agreement, Credit Suisse will pay EUR172,500,000
in full and final settlement of all claims without admission of
liability.  Credit Suisse will keep all shares it received in the
Extraordinary Administration of the Parmalat Group.

Credit Suisse provides its clients with private banking,
investment banking and asset management services worldwide.  
Credit Suisse is active in over 50 countries and employs
approximately 49,000 people.  Its parent company, Credit Suisse
Group, is a leading global financial services company
headquartered in Zurich.  Credit Suisse Group's registered shares
(CSGN) are listed in Switzerland and, in the form of American
Depositary Shares (CS), in New York.

On the Net: http://www.credit-suisse.com/

                        UBS's News Release

Parmalat and UBS UBS confirms the settlement of all actions filed
by companies of the Parmalat Group in Extraordinary Administration
and by Parmalat S.p.A. against UBS Limited and UBS AG on the terms
announced in the media release issued by Parmalat S.p.A.  UBS has
committed to pay a total of approximately EUR 150 million for the
claw back claim and EUR 35 million for the damages claims to
Parmalat S.p.A. and the Extraordinary Commissioner pursuant to
the terms of the settlement.

The settlement will have a negligible effect on UBS's
earnings in view of the provisions previously established by UBS
in connection with these matters.

                      About Parmalat

Headquartered in Milan, Italy, Parmalat S.p.A.
-- http://www.parmalat.net/-- sells nameplate milk products
that can be stored at room temperature for months.  It also has
about 40 brand product lines, which include yogurt, cheese,
butter, cakes and cookies, breads, pizza, snack foods and
vegetable sauces, soups and juices.

The company's U.S. operations filed for chapter 11 protection on
Feb. 24, 2004 (Bankr. S.D.N.Y. Case No. 04-11139).  Gary
Holtzer, Esq., and Marcia L. Goldstein, Esq., at Weil Gotshal &
Manges LLP, represent the Debtors.  When the U.S. Debtors filed
for bankruptcy protection, they reported more than
US$200 million in assets and debts.  The U.S. Debtors emerged
from bankruptcy on April 13, 2005.

Parmalat S.p.A. and its Italian affiliates filed separate
petitions for Extraordinary Administration before the Italian
Ministry of Productive Activities and the Civil and Criminal
District Court of the City of Parma, Italy on Dec. 24, 2003.
Dr. Enrico Bondi was appointed Extraordinary Commissioner in
each of the cases.

On June 22, 2004, Dr. Bondi filed a Sec. 304 Petition, Case No.
04-14268, in the United States Bankruptcy Court for the Southern
District of New York.

Three Cayman Islands-based special-purpose vehicles created by
Parmalat were placed under separate winding up petitions before
the Grand Court of the Cayman Islands in January 2004.  Gordon I.
MacRae and James Cleaver of Kroll (Cayman) Ltd. serve as
liquidators in the cases of Dairy Holdings Ltd., Parmalat Capital
Finance Ltd., and Food Holdings Ltd.  On Jan. 20, 2004, the
Liquidators filed Sec. 304 petitions, Case No. 04-10362, in the
United States Bankruptcy Court for the Southern District of New
York on behalf of Parmalat Finance, et al.  Gregory M. Petrick,
Esq., at Cadwalader, Wickersham & Taft LLP, and Richard I. Janvey,
Esq., at Janvey, Gordon, Herlands Randolph, represent the Finance
Companies in the Sec. 304 case.

The Honorable Robert D. Drain presides over the Parmalat Debtors'
U.S. cases.  On June 21, 2007, the U.S. Court granted Parmalat
permanent injunction.


PASA FUNDING: Moody's Withdraws B3 Rating on $2.81 Billion Notes
----------------------------------------------------------------
Moody's Investors Service has withdrawn the rating of one class of
notes issued by PASA Funding 2007, Ltd.  The note affected by the
rating action is:

Class Description: Up to $2,810,000,000 aggregate Principal
Component of Class A-1B Notes

  -- Prior Rating: B3, on review with future direction uncertain
  -- Current Rating: WR

PASA Funding 2007, Ltd. is a collateralized debt obligation backed
primarily by a portfolio of RMBS securities and CDO securities.  
The transaction experienced an event of default under Section
5.1(h) of the Indenture.

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

In this regard, the Trustee has been directed to proceed with the
sale and liquidation of the Collateral in accordance with the
Indenture.  The Trustee notified Moody's that it sold all the
Collateral and made a distribution applying the proceeds of the
liquidation in accordance with the priority of payments set forth
in the Indenture.

The Issuer has the right following the Closing Date of the
transaction under certain circumstances to issue the Class A-1B
Notes as a Class of term Notes in a redemption or refinancing of
all of a portion of the Class A-1A Notes.

The circumstances calling for the issuance of the Class A-1B Notes
are no longer possible as the transaction has completed the
process of liquidation.  Accordingly, Moody's believes it is
appropriate to withdraw the rating assigned to this Class of
Notes.


PICCADILLY CAFETERIAS: Must Pay Stamp Taxes, High Court Says
------------------------------------------------------------
The United States Supreme Court ruled Monday that Piccadilly
Cafeterias, Inc., may not rely on Sec. 1146(a) of the Bankruptcy
Code to avoid Florida stamp taxes.  The High Court, in a 7-2
decision, held that Sec. 1146(a) affords a stamp-tax exemption
only to transfers made pursuant to a Chapter 11 plan that has been
confirmed.

After Piccadilly declared bankruptcy under Chapter 11, but before
its plan was submitted to the U.S. Bankruptcy Court for the
Southern District of Florida, the Bankruptcy Court authorized
Piccadilly to sell its assets to Yucaipa Cos., for about $80
million.

As part of the sale, the Bankruptcy Court approved the Debtors'
settlement agreement with creditors, and granted the Debtors an
exemption under Sec. 1146(a), which provides a tax-stamp exemption
for any asset transfer "under a plan confirmed under section
1129."

Piccadilly filed its Chapter 11 plan afterwards.  The Plan
provides for the distribution of the sale proceeds in a manner
consistent with the settlement agreement.

Before the Bankruptcy Court confirmed the plan, Florida Department
of Revenue filed an objection, seeking a declaration that the
$39,200 in stamp taxes it had assessed on certain of Piccadilly's
transferred assets fell outside Sec. 1146(a)'s exemption because
the transfer had not been "under a plan confirmed" under Chapter
11.

In October 2004, the Bankruptcy Court confirmed the plan.  On
cross-motions for summary judgment on the stamp-tax  issue, the
Bankruptcy Court granted summary judgment in favor of Piccadilly,
reasoning that the sale of substantially all Piccadilly's assets
was a transfer " ‘under' " its confirmed plan because the sale was
necessary to consummate the plan.  The U.S. District Court for the
Southern District of Florida upheld the decision on the ground
that Sec. 1146(a), in certain circumstances, affords a stamp-tax
exemption even when a transfer occurs prior to confirmation.

The U.S. Court of Appeals for the Eleventh Circuit affirmed,
holding that Sec. 1146(a)'s exemption applies to preconfirmation
transfers necessary to the consummation of a confirmed Chapter 11
plan, provided there is some nexus between the transfers and the
plan; that Sec. 1146(a)'s text was ambiguous and should be
interpreted consistent with the principle that a remedial statute
should be construed liberally; and that this interpretation better
accounted for the practicalities of Chapter 11 cases because a
debtor may need to transfer assets to induce relevant parties to
endorse a proposed plan's confirmation.

The matter was argued before the Supreme Court in March 2008.

Florida argues that "plan confirmed" denotes a plan confirmed in
the past, and that "under" should be read to mean "with the
authorization of" or "inferior or subordinate" to the confirmed
plan.

Piccadilly counters that the provision does not unambiguously
impose a temporal requirement, contending that had Congress
intended "plan confirmed" to mean "confirmed plan," it would have
used that language, and that "under" is as easily read to mean "in
accordance with."

In a 30-page slip opinion, the Supreme Court held that, While both
sides present credible interpretations, Florida's is the better
one.  The High Court held that Congress could have used more
precise language and thus removed all ambiguity, but the two
readings are not equally plausible.  Piccadilly's interpretation,
the Supreme Court said, places greater strain on the statutory
text than Florida's simpler construction.  And Piccadilly's
emphasis on the distinction between "plan confirmed" and
"confirmed plan" is unavailing because Sec. 1146(a) specifies not
only that a transfer be "under a plan," but also that the plan be
confirmed pursuant to Sec. 1129.

A full-text copy of the Supreme Court's slip opinion dated June
16, 2008, is available at no charge at:

http://www.supremecourtus.gov/opinions/07pdf/07-312.pdf


PRC LLC: Addresses BofA, et al.'s Confirmation Objections
---------------------------------------------------------
PRC LLC and its debtor-affiliates argue that each of the
confirmation objections asserted by Bank of America, N.A.,
IAC/InteractiveCorp, BGTX Project, L.P., A&E Partners Holding,
LLC, A&E Partners Holding I, LLC and Sally Duran wrongly construes
their Chapter 11 Reorganizational Plan.

Alfredo R. Perez, Esq., at Weil, Gotshal & Manges LLP, in
Houston, Texas, summarizes the Debtors' position on the
previously filed confirmation objections:

Objector     Objector's Argument          Debtors' Position
--------     -------------------          -----------------
Bank of      Argues that the              Nothing in Section 1129
America      classification under the     of the Bankruptcy Code
              Plan violate Section         requires plan
              1122(a) of the Bankruptcy    proponents to resolve
              Code because it does         all claim disputes in
              not automatically allow      order to confirm a
              BofA's proof of claim under  plan.  BofA's disputed
              a prepetition hedge          claims will be
              agreement.                   addressed during the
                                           administration of all
                                           other disputed claims.

BGTX Project Argues that Plan is not      The evidence at the
              feasible because the         confirmation hearing
              Debtors have not proven      will show that the
              that they have sufficient    Debtors have ample
              funds to satisfy             liquidity to pay their
              Administrative Expense       Plan obligations and
              Claims.                      ordinary course
                                           expenses.  Moreover,
                                           the releases provided
                                           in consideration of the
                                           board's prepetition
                                           services to the estates
                                           are consistent with
                                           releases approved by
                                           court in the District
                                           of Southern New York
                                           and the Second Circuit.  

IAC          Asserts that the Plan        Nothing in Section
              violates the prohibition     1123(a)(4) requires the
              on unequal treatment of      Debtors to relinquish
              claims within a single       waive or release
              class because the Debtors    claims that belong to
              have elected not to waive    the estate with
              valuable preference claims   respect to any
              against IAC.                 creditor.

Sally Duran  Contends that the Debtors    Ms. Duran's prepetition
              should separately classify   lawsuit is the
              her claim and treat it as    antithesis of an
              an administrative priority   administrative expense
              expense.                     and it is well
                                           established that Chap.
                                           11 debtors have broad
                                           discretion to classify
                                           prepetition claims for
                                           damages in a class of
                                           other unsecured claims
                                           against the estate.

                           About PRC LLC

Founded in 1982 and based in Fort Lauderdale, Florida, PRC, LLC --
http://www.prcnet.com/-- is a leading provider of customer   
management solutions.  PRC markets its services to brand-focused,
Fortune 500 U.S. corporations and delivers these services through
a global network of call centers in the U.S., Philippines, India,
and the Dominican Republic.

PRC is the sole member of each of PRC B2B, LLC, and Precision
Response of Pennsylvania, LLC, and the sole shareholder of Access
Direct Telemarketing, Inc., each of which is a debtor and debtor-
in-possession in PRC's joint Chapter 11 cases.

Panther/DCP Intermediate Holdings, LLC, is the sole member of
PRC.

PRC, together with its operating subsidiaries PRC B2B, Access
Direct, and PRC PA, is a leading provider of complex,
consultative, outsourced services in the Customer Care and Sales
& Marketing segments of the business process outsourcing
industry.  Since 1982, the company has acquired and grown
customer relationships for some of the world's largest and most
brand-focused corporations in the financial services, media,
telecommunications, transportation, and retail industries.

The company and four of its affiliates filed for Chapter 11
protection on Jan. 23, 2008 (Bankr. S.D.N.Y. Lead Case No. 08-
10239).  Alfredo R. Perez, Esq., at Weil, Gotshal & Manges, LLP,
represents the Debtors in their restructuring efforts.  The
Debtors chose Stephen Dube, at CXO LLC, as their restructuring and
turnaround advisor.  Additionally, Evercore Group LLC provides
investment and financial counsel to the Debtors.

The Debtors' consolidated financial condition as of Dec. 31, 2007
showed total assets of $354,000,000 and total debts of
$261,000,000.

The Debtors submitted to the Court a Chapter 11 Plan of
Reorganization on Feb. 12, 2008.  (PRC LLC Bankruptcy News, Issue
No. 15; Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000)


QUEBECOR WORLD: Quebec Court Acknowledges Aircraft Sale Approval
----------------------------------------------------------------
The Honorable Justice Robert Mongeon of the Quebec Superior Court
of Justice recognizes the decision entered by Judge James Peck of
the U.S. Bankruptcy Court for the Southern District of New York
authorizing Quebecor Printing Aviation Inc., to sell the
Challenger Aircraft to Key Equipment Finance Canada Ltd.

As reported in the Troubled Company Reporter on May 19, 2008,
pursuant to a lease intended as security dated Feb. 6, 2004,
Quebecor Printing Aviation Inc. leased one Bombardier CL-600-2B16
(Variant 604) "Challenger" aircraft and two General Electric CF34-
3B engines from Wachovia Financial Services, Inc.  Quebecor World
was the guarantor of QPA's obligations under the aircraft
lease.

On April 4, 2008, QPA provided Wachovia with written notice of
its intent to exercise an early termination option under the
aircraft lease and purchase the aircraft on the next scheduled
payment date, May 6, 2008.

The Debtors actively marketed the Aircraft and have entered into a
sale agreement.  The Debtors obtained an appraisal from
Aeronautical Systems Inc., which estimated the retail market value
of the Aircraft to be $20,450,000.  The Debtors also received an
appraisal prepared by Aviation Management Consulting, Inc., for
Quebecor Media Inc., a related party that had evidenced an
interest in purchasing the aircraft, indicating a current market
value of the aircraft of $19,900,000.  The Debtors also solicited
offers from other potential purchasers of the Aircraft.  QMI
ultimately made the highest offer to purchase the Aircraft,
submitting an offer of $20,300,000 on Feb. 12, 2008, which offer
resulted in the sale agreement.

A full-text copy of Aircraft Sales Agreement is available for
free at http://ResearchArchives.com/t/s?2c6c

                       About Quebecor World

Based in Montreal, Quebec, Quebecor World Inc. (TSX: IQW) (NYSE:
IQW), -- http://www.quebecorworldinc.com/-- provides market
solutions, including marketing and advertising activities, well
as print solutions to retailers, branded goods companies,
catalogers and to publishers of magazines, books and other
printed media.  It has 127 printing and related facilities
located in North America, Europe, Latin America and Asia.  In
the United States, it has 82 facilities in 30 states, and is
engaged in the printing of books, magazines, directories, retail
inserts, catalogs and direct mail.

The company has operations in Mexico, Brazil, Colombia, Chile,
Peru, Argentina and the British Virgin Islands.

Quebecor World and 53 of its subsidiaries, including those in
Canada, filed a petition under the Companies' Creditors
Arrangement Act before the Superior Court of Quebec, Commercial
Division, in Montreal, Canada, on Jan. 20, 2008.  The Honorable
Justice Robert Mongeon oversees the CCAA case.  Francois-David
Pare, Esq., at Ogilvy Renault, LLP, represents the Company in
the CCAA case.  Ernst & Young Inc. was appointed as Monitor.

On Jan. 21, 2008, Quebecor World (USA) Inc., its U.S.
subsidiary, along with other U.S. affiliates, filed for chapter
11 bankruptcy on Jan. 21, 2008 (Bankr. S.D.N.Y Lead Case No. 08-
10152).  Anthony D. Boccanfuso, Esq., at Arnold & Porter LLP
represents the Debtors in their restructuring efforts.   The
Official Committee of Unsecured Creditors is represented by Akin
Gump Strauss Hauer & Feld LLP.

Based in Corby, Northamptonshire, Quebecor World PLC --
http://www.quebecorworldplc.com/-- is the U.K. subsidiary of
Quebecor World Inc. that specializes in web offset magazines,
catalogues and specialty print products for marketing and
advertising campaigns.  The company employs around 290 people.
Quebecor PLC was placed into administration with Ian Best and
David Duggins of Ernst & Young LLP appointed as joint
administrators effective Jan. 28, 2008.

As of Sept. 30, 2007, Quebecor World's unaudited consolidated
balance sheet showed total assets of $5,554,900,000, total
liabilities of $3,964,800,000, preferred shares of $175,900,000,
and total shareholders' equity of $1,414,200,000.

The company has until Sept. 30, 2008, to file a plan of
reorganization in the Chapter 11 case.  The Debtors' CCAA stay
has been extended to July 25, 2008.  (Quebecor World Bankruptcy
News, Issue No. 18; Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000)

                           *     *     *

As reported in the Troubled Company Reporter-Europe on Feb. 13,
2008 Moody's Investors Service assigned a Ba2 rating to the
$400 million super priority senior secured revolving term loan
facility of Quebecor World Inc. as a Debtor-in-Possession.  The
related $600 million super priority senior secured term loan
was rated Ba3 (together, the DIP facilities).  The RTL's better
asset value coverage relative to the TL accounts for the
ratings' differential.


QUEBECOR WORLD: Wants to Assume Deals with Three Entities
---------------------------------------------------------
Quebecor World Inc. and its debtor-affiliates asks the U.S.
Bankruptcy Court for the Southern District of New York to allow
them to assume certain contracts.

A. R.D. Manufacturing

The Debtors asked the Court to approve a long-term extension
contract with R.D. Manufacturing Corporation, under which the
Debtors will print certain number of books and magazines for RDM
for four and a half years commencing, nunc pro tunc to Jan. 1,
2008, until June 30, 2012.

The Agreement may also be extended or shortened under certain
specified conditions, Michael J. Canning, Esq., at Arnold &
Porter LLP, in New York, related.  RDM is a subsidiary of The
Readers Digest, Association, Inc.

Mr. Canning said the Agreement will provide the Debtors with
substantial revenue and earnings.  He said the terms of the
Agreement are confidential and will be disclosed to a limited
number of parties-in-interest, including the Official Committee
of Unsecured Creditors, the Ad Hoc Group of Noteholders, the
Administrative Agent for the Debtors' Prepetition Lenders, and
the Court.

B. Daily News

Quebecor World (USA) Inc., and Daily News, L.P., entered into
printing agreement, dated Nov. 10, 2003, modified the Agreement on
Dec. 1, 2006.  The Agreement expires on Dec. 31, 2009.

Under the Agreement, QWUSA provides printing services for Daily
News' New York Vue magazine.  QWUSA also performs, provides and
supplies all labor, supervision, equipment, utilities,
facilities, production materials, plate making, press work,
binding, packing, loading and all other work necessary to
complete the printing, manufacturing, readying for shipping of
New York Vue, and the actual delivery of the magazine to Daily
News' inserting coordinator.

Mr. Canning stated that the Debtors are the sole source of all of
Daily News' printing requirements for New York Vue, and have
performed the work for 10 years generating in excess of $1,500,000
sales per year.

Likewise, Daily News depends on the Debtors to provide all their
printing requirements for New York Vue.  Accordingly, Mr. Canning
contended that, for the Debtors to maintain their market share in
the weekly magazine insert business sector, and to maintain the
confidence of Daily News as a large and valued customer that is
dependent on the Debtors as its sole source of printing services
for New York Vue, the Debtors have a strong business interest in
assuming the Printing Agreement.

Accordingly, the Debtors sought the Court's authority to assume
the Daily News Agreement.

Mr. Canning said neither party is in default under the Agreement
and the Debtors do not have any cure payments to satisfy in
connection with the assumption of the Agreement.  He added that
the assumption of the Agreement will provide both parties with
additional assurance that their relationship will continue as
contemplated by the Agreement.

Mr. Canning said specific terms of the Agreement are confidential
business terms, thus copies of the Agreement will be available
for a limited number of parties-in-interest including the
Official Committee of Unsecured Creditors, the Ad Hoc Group of
Noteholders, the Administrative Agent for the Debtors'
Prepetition Lenders, and the Court.

C. Circuit City Stores

Quebecor World (USA), Inc., and Circuit City Stores, Inc., are
parties to a prepetition printing agreement, which has been
modified on several occasions before the bankruptcy filing.  The
Agreement will expire on Feb. 28, 2010.

Under the Agreement, QWUSA provides Circuit City with printing
services for its retail insert program.  Retail inserts are
printed for distribution on a weekly basis at the Debtors'
facilities in Pittsburg, California; Riverside, California;
Nashville, Tennessee; Winchester, Virginia; and Taunton,
Massachusetts.  

QWUSA also provides all labor, equipment, utilities, facilities
and materials necessary to complete the printing work, as well as
other production services and preparation for mailing and
delivery of the retail inserts, direct mail catalogs, and gift
guides.

The Debtors and Circuit City agreed on the terms of a letter of
agreement, dated June 9, 2008, to further amend the Agreement to
address Circuit City's current printing needs and to set terms on
which the Debtors may obtain future additional printing volume.

By this motion, the Debtors seek the Court's authority to assume
the Circuit City Agreement, as amended.

Mr. Canning stated that the Debtors have provided printing
services to Circuit City since 2001 and the Agreement has given
the Debtors $15,000,000 in net sales per year.  Likewise, Mr.
Canning said Circuit City depends on the Debtors to provide
substantially all of its retail insert and gift guide printing
requirements.  

To the extent that Circuit City does not currently utilize the
Debtors for certain of its printing requirements, the Debtors
believe that assumption of the Printing Agreement will facilitate
their ability to obtain additional business from Circuit City in
the future, Mr. Canning contended.

Mr. Canning told the Court that neither party is in default
under the Agreement and that the Debtors do not have any cure
payments to satisfy in connection with the assumption of the
Agreement.

                       About Quebecor World

Based in Montreal, Quebec, Quebecor World Inc. (TSX: IQW) (NYSE:
IQW), -- http://www.quebecorworldinc.com/-- provides market
solutions, including marketing and advertising activities, well
as print solutions to retailers, branded goods companies,
catalogers and to publishers of magazines, books and other
printed media.  It has 127 printing and related facilities
located in North America, Europe, Latin America and Asia.  In
the United States, it has 82 facilities in 30 states, and is
engaged in the printing of books, magazines, directories, retail
inserts, catalogs and direct mail.

The company has operations in Mexico, Brazil, Colombia, Chile,
Peru, Argentina and the British Virgin Islands.

Quebecor World and 53 of its subsidiaries, including those in
Canada, filed a petition under the Companies' Creditors
Arrangement Act before the Superior Court of Quebec, Commercial
Division, in Montreal, Canada, on Jan. 20, 2008.  The Honorable
Justice Robert Mongeon oversees the CCAA case.  Francois-David
Pare, Esq., at Ogilvy Renault, LLP, represents the Company in
the CCAA case.  Ernst & Young Inc. was appointed as Monitor.

On Jan. 21, 2008, Quebecor World (USA) Inc., its U.S.
subsidiary, along with other U.S. affiliates, filed for chapter
11 bankruptcy on Jan. 21, 2008 (Bankr. S.D.N.Y Lead Case No. 08-
10152).  Anthony D. Boccanfuso, Esq., at Arnold & Porter LLP
represents the Debtors in their restructuring efforts.   The
Official Committee of Unsecured Creditors is represented by Akin
Gump Strauss Hauer & Feld LLP.

Based in Corby, Northamptonshire, Quebecor World PLC --
http://www.quebecorworldplc.com/-- is the U.K. subsidiary of
Quebecor World Inc. that specializes in web offset magazines,
catalogues and specialty print products for marketing and
advertising campaigns.  The company employs around 290 people.
Quebecor PLC was placed into administration with Ian Best and
David Duggins of Ernst & Young LLP appointed as joint
administrators effective Jan. 28, 2008.

As of Sept. 30, 2007, Quebecor World's unaudited consolidated
balance sheet showed total assets of $5,554,900,000, total
liabilities of $3,964,800,000, preferred shares of $175,900,000,
and total shareholders' equity of $1,414,200,000.

The company has until Sept. 30, 2008, to file a plan of
reorganization in the Chapter 11 case.  The Debtors' CCAA stay
has been extended to July 25, 2008.  (Quebecor World Bankruptcy
News, Issue No. 18; Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000)

                           *     *     *

As reported in the Troubled Company Reporter-Europe on Feb. 13,
2008 Moody's Investors Service assigned a Ba2 rating to the
$400 million super priority senior secured revolving term loan
facility of Quebecor World Inc. as a Debtor-in-Possession.  The
related $600 million super priority senior secured term loan
was rated Ba3 (together, the DIP facilities).  The RTL's better
asset value coverage relative to the TL accounts for the
ratings' differential.


QUEENS SEAPORT: Trustee Defends Settlement with Mr. Prevratil
-------------------------------------------------------------
Paul Eakins of the Press-Telegraph (Cal.) reports that Howard
Ehrenberg, bankruptcy trustee of Queen's Seaport Development Inc.,
former owner of Queen Mary, fired back Tuesday at City of Long
Beach, California officials who have taken legal action to oppose
a settlement in the case.

Mr. Ehrenberg defended a settlement he had reached with Joseph
Prevratil, owner of Queen's Seaport.

As reported by the Troubled Company Reporter on June 12, 2008,
Judge Vincent Zurzolo of the U.S. Bankruptcy Court for the Central
District of California is scheduled to hear the matter on June 24,
2008.  The City requested the Court to grant it a 45-day
discovery.

The dispute arose from an allegation that Mr. Prevratil received
$8 million in salaries and benefits sometime in 2000 through 2007
from Queen's Seaport and the RMS Foundation, a non-profit
organization that runs The Queen Mary ship for seven years.  
Reportedly, part of the money paid to Mr. Prevratil included about
$100,000 supposedly for the Debtor's acquisition and maintenance
of a Hawaiian condominium around 2002 and 2004.

According to the report, to settle the matter, Prevratil agreed to
sell a Hawaiian condo, that is now valued at more than $1 million.  
But the City Attorney's Office had filed a motion saying that a
city audit that, according to officials, indicates the city is
owed more money.

In response to the objection Mr. Ehrenberg said, "I have
thoroughly considered all of the elements, and the settlement is
in the best interest of the bankruptcy estate."

According to him, since Queen's Seaport went bankrupt, $43 million
has been paid out to creditors, including $9 million to the city,
and that less than $5 million is still owed to creditors,
including $4.1 million to Long Beach.

He added that the debt owed will still be reduced because Mr.
Prevratil and former Queen's Seaport Chief Financial Officer
Howard Bell have agreed to waive their claims as creditors.  He
also said that the case, if pursued further, could cost more in
legal fees than would be recovered.

In a deposition, Mr. Ehrenberg estimates additional legal fees
could run $300,000 to $500,000 or more, according to the report.

                       About Queen's Seaport

Headquartered in Long Beach, California, Queen's Seaport
Development Inc. -- http://www.queenmary.com/-- operates the       
Queen Mary ocean liner, various attractions and a hotel.  The
company filed for chapter 11 protection on March 15, 2005
(Bankr. C.D. Calif. Case No. 05-15175).  Joseph A. Eisenberg,
Esq., at Jeffer Mangles Butler & Marmaro LLP represented the
Debtor.  Ira Benjamin Katz serves as counsel to unsecured
creditors.  On April 12, 2006, the Court appointed Howard M.
Ehrenberg as the Debtor's chapter 11 trustee.  Mr. Ehrenberg is
represented by Larry D. Simons, Esq., at SulmeyerKupetz PC in Los
Angeles, California.  When the Debtor filed for protection from
its creditors, it listed estimated assets and debts of $10 million
to $50 million.


REXAIR LLC: S&P Lifts Rating to B from B- on $139.5MM Sr. Facility
------------------------------------------------------------------
Standard & Poor's Ratings Services raised the rating on Troy,
Michigan-based Rexair LLC's $139.5 million senior secured facility
to 'B' from 'B-' and revised the recovery rating to '3',
indicating expectations of meaningful recovery (50%-70%) in the
event of a payment default, from '5'.  In addition, S&P revised
the outlook on the company to stable from negative and affirmed
the 'B' corporate credit rating.  As of March 31, 2008, Rexair had
about $104 million in adjusted debt.
     
Rexair is a leading manufacturer of premium household canister
vacuum-cleaning systems.  The outlook revision reflects the
company's improved credit-protection measures as a result of
positive revenue growth through volume and price increases, its
ability to stabilize operating margins amid rising raw material
costs, and debt repayment, all of which contributed to improved
financial covenant cushion levels.
     
The ratings on Rexair reflect the risks of direct-sales
distribution, the discretionary nature of the company's products,
and its narrow business focus, small size, and moderately
leveraged financial profile.
     
Rexair, founded in 1935, sells its products through a network of
independent global distributors, with about 40.5% of its sales
from the U.S.
     
The outlook on Rexair is stable.  The company has continued to
generate free cash flow, apply excess cash to debt reduction, and
has above-average credit-protection measures for the rating.  As a
result, the company restored sufficient cushion on its financial
covenants.  While the company's sales growth may moderate due to
the weak economy over the near term, S&P estimate that leverage
would not expand more than 3.5x (the current leverage covenant
level, which decreases to 3x as of Dec. 31, 2008) unless revenues
decline by nearly 5% and EBITDA margins fall by more than 200
basis points.
     
"Standard & Poor's could revise the outlook to negative if the
company's operating performance materially deteriorates and causes
leverage to approach 3.5x," noted Standard & Poor's credit analyst
Bea Chiem.  "Given the company's small size and niche position, a
positive outlook revision is unlikely over the near term," she
continued.


RIVER ELKS: Case Summary & 11 Largest Unsecured Creditors
---------------------------------------------------------
Debtor: River Elks, LLC
        P.O. Box 6216
        Scottsdale, AZ 85261

Bankruptcy Case No.: 08-07340

Type of Business: The Debtor is a real estate developer.

Chapter 11 Petition Date: June 18, 2008

Court: District of Arizona (Phoenix)

Judge: Charles G. Case II

Debtor's Counsel: Joel F. Newell, Esq.
                  Email: j.newell@cplawfirm.com
                  Carmichael & Powell, P.C.
                  7301 N. 16th St.
                  Phoenix, AZ 85020
                  Tel: (602) 861-0777
                  Fax: (602) 870-0296
                  http://www.cplawfirm.com

Total Assets: $12,580,050

Total Debts:   $9,053,589

Debtor's 11 Largest Unsecured Creditors:

   Entity                      Claim Amount
   ------                      ------------
Roof USA                       $196,018
3401 W. Adams St.
Phoenix, AZ 85009

Westcor Framing, Inc.          $69,385
5900 Emerald Ave.
Las Vegas, NV 89122

Total Look Interiors           $58,542
2856 E. Fort Lowell
Tucson, AZ 85716

Westar Kitchen & Bath          $57,318

Mark Wright Heating & Cooling, $44,782
LLC

Cable Solutions                $43,872

Arizona Wholesale Supply       $30,149

Van Horn Carpet & Accent       $17,357
Flooring

Pella Windows                  $16,246

Masco                          $4,088

Western States                 $3,832


ROCKVALE INC: Case Summary & 17 Largest Unsecured Creditors
-----------------------------------------------------------
Debtor: Rockvale, Inc.
        Carr. 165, Km. 10.7
        Toa Alta, Puerto Rico 00954

Bankruptcy Case No.: 08-03903

Chapter 11 Petition Date: June 18, 2008

Court: District of Puerto Rico (Old San Juan)

Debtors' Counsel: Alexis Fuentes Hernandez, Esq.
                   (afuentes1@msn.com)
                  P.O. Box 9022726
                  San Juan, Puerto Rico 00902-2726
                  Tel: (787) 607-3436

Estimated Assets: $1,129,737

Estimated Debts:  $1,258,870

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

           http://bankrupt.com/misc/prb08-03903.pdf


ROPER INDUSTRIES: Moody's Reviews All Ratings for Possible Upgrade
------------------------------------------------------------------
Moody's Investors Service placed all ratings of Roper Industries,
Inc. under review for possible upgrade, including the company's
Ba1 corporate family and senior secured credit rating.  

The review follows a period of sustained revenue growth, margin
improvement and cash flow generation which has increasingly come
from diversified business lines through a number of well executed
acquisitions, leading to key credit metrics that are currently
supportive of a higher rating.  The complete list of ratings
affected is noted below.

The ratings review will focus on 1) the potential for Roper's
diverse portfolio of businesses to continue to realize strong
organic operating results given the challenging economic
conditions in the U.S., 2) Roper's acquisition strategy and how it
may further alter the company's business profile, 3) the
likelihood for the company's relatively conservative capital
structure to be maintained for the foreseeable future, and 4)
Moody's expectations for how Roper's debt capital structure and
liquidity profile may evolve with its improving credit profile and
in support of ongoing acquisitions.

On Review for Possible Upgrade:

Issuer: Roper Industries, Inc.

  -- Probability of Default Rating, Placed on Review for Possible
     Upgrade, currently Ba1

  -- Corporate Family Rating, Placed on Review for Possible
     Upgrade, currently Ba1

  -- Senior Subordinated Conv./Exch. Bond/Debenture, Placed on
     Review for Possible Upgrade, currently Ba2, 92 - LGD6

  -- Senior Secured Bank Credit Facility, Placed on Review for
     Possible Upgrade, currently Ba1, 39 - LGD3

Outlook Actions:

Issuer: Roper Industries, Inc.

  -- Outlook, Changed To Rating Under Review From Positive

Roper Industries, Inc., headquartered in Sarasota, Florida, is a
globally diversified manufacturing company.  Trailing twelve month
revenues totaled roughly $2.2 billion.


SHARPER IMAGE: Proposes Incentive Plan for Wind-Down Team
---------------------------------------------------------
After the Petition Date, the U.S. Bankruptcy Court for the
District of Delaware authorized the sale of substantially all of
the assets of The Sharper Image Corp. to a joint venture among
Gordon Brothers Retail Partners, LLC, GB Brands, LLC, Hilco
Merchant Resources, LLC, and Hilco Consumer Capital, LLC.  The
Hilco/GB Joint Venture subsequently commenced the store closing
sales at the Debtor's stores.

John H. Strock, Esq., at Womble Carlyle Sandridge & Rice, PLLC,
in Wilmington, Delaware, tells the Court that the Debtor and the
Hilco/GB Joint Venture continue to work together to meet their  
post-closing obligations.  The Debtor's obligations include its
provision for those administrative employees, which are necessary
to manage store closing sales, maintain the corporate office
until the wind-down begins, and assist with the transfer of
assets and asset-related information.

Certain of the Administrative Employees have exclusive knowledge
and familiarity with asset-related information that must be
transferred to the Hilco/GB Joint Venture as part of the sale,
like the Debtor's intellectual property and its customer lists,
Mr. Strock says.  Loss of those Employees can result in the
Debtor's inability to quickly transfer information prior to the
wind-down, he adds.

In addition, the Debtor, in consultation with the Statutory
Creditors' Committee, has determined that a key group of five
employees are essential to a successful wind-down.  The five
employees are:

   * Rebecca L. Roedell, chief financial officer and executive
     vice-president;

   * Kevin Palmer, vice-president of finance and control;

   * Christy Reichert, accounts payable manager;

   * Jesusa Arcilla, assistant supervisor for sales audits; and

   * Rafael Rey, senior tax manager.

The Debtor selected the Wind-Down Team because of their knowledge
and first-hand familiarity with the company's business
operations.  However, in addition to their ordinary course
duties, the Wind-Down Team will assume additional
responsibilities related to the Wind-Down.

According to Mr. Strock, since the sale to the Hilco/GB Joint
Venture does not contemplate a reorganization of the Debtor's
retail business operations, it must focus on effectuating an
organized, efficient and expedited wind-down of the Chapter 11
case.  The Debtor determined that an incentive pay to the
Administrative Employees and the Wind-Down Team is required to
ensure that they are sufficiently motivated and adequately
compensated.  Mr. Strock asserts that absent the Incentive Plan,
the Administrative Employees and the Wind-Down Team may not
perform at their best levels, jeopardizing the value that might
accrue to the benefit of the Debtor and its stakeholders.

Mr. Strock notes that in order to receive any incentive pay under
the Incentive Plan, the Administrative Employees and the Wind-
Down Team will be required to execute a full release in favor of
the Debtor, including a waiver for any severance pay.

Mr. Strock maintains that the Incentive Plan is in the best
interests of the Debtor's estate and its stakeholders.  Pursuant
to Sections 105(a), 363(b), and 503 of the Bankruptcy Code, the
Incentive Plan should be approved, authorizing the Debtor to pay:

    (i) $695,000 in the aggregate to the Administrative
        Employees, in connection with the store closing sales;
        and

   (ii) $435,000 in the aggregate to the Wind-Down Team, in
        connection with the wind-down of the Debtor's bankruptcy
        case.

Moreover, under the Incentive Plan, Ms. Roedell will receive
$150,000, as an initial amount for managing the Debtor's
transition from the store closings to the wind-down.  Ms. Roedell
will be responsible for the inventory reconciliation process,
determining additional employment terminations, attending omnibus
hearings and other hearings as necessary, and the closure of the
operations and records used in the Retail Business Operations.  
Following a successful transition, Ms. Roedell will be entitled
to $100,000, for managing the Debtor's cash flow, coordinating
the sale of remaining assets, assisting its professionals in the
development of a proposed plan of liquidation, and supervising
the claims reconciliation process.

Mr. Strock assures the Court that the Incentive Plan is neither a
retention plan nor in the nature of severance.  The Debtor has
determined, in its reasonable business judgment, that the
Incentive Plan will motivate the Administrative Employees and
Wind-Down Team to perform at their highest and best levels
despite the expected effect that the closure of the Retail
Business Operations will have on employee morale.

Mr. Strock concedes that the total amounts of incentive pay
proposed is relatively modest compared to the significant cost of
recruiting, hiring and training replacement employees and
executives; the size of the Debtor's estate; and the importance
of the employees to the wind-down efforts.

The Debtor also seeks to file under seal unredacted exhibits and  
supporting papers to the Motion.

The Debtor tells the Court that the exhibits contains highly
confidential and personal information regarding the employees
identified in the documents.  The interests of those individuals
in protecting their personal and private information
substantially outweighs the general public interest in public
disclosure of all case-related information, Mr. Strock says.

                      U.S. Trustee Responds

Roberta A. DeAngelis, Acting United States Trustee for Region 3,
asserts that the request to seal exhibits and supporting papers  
is procedurally improper.  Ms. DeAngelis says that any party
seeking to file documents under seal must file a motion to that
effect.

Ms. DeAngelis notes that the documents to be filed under seal
"must be placed in a prominently marked envelope with a cover
sheet attached containing the caption, related docket number of
the motion to file under seal, title of the document to be filed
under seal and the legend 'DOCUMENTS TO BE KEPT UNDER SEAL' in
bold print."

Ms. DeAngelis reserves the right to be heard on the substance of
the Incentive Plan Motion.

                        Landlords Object

Davis Street Land Company of Tennessee, L.L.C., and Gardens SPE
II LLC oppose the Incentive Plan Motion, to the extent that their
administrative claims against the Debtor are not paid.

William A. Hazeltine, Esq., at Sullivan Hazeltine Allinson LLC,
in Wilmington, Delaware, relates that prior to the Petition Date,
the Debtor entered into separate non-residential property leases
with Davis and Gardens.  To date, the Debtor has not paid the
Landlords the stub rent for its obligations on the Leases.  
Moreover, the Debtor has not indicated whether the Leases will be
assumed, assumed and assigned, or rejected.  The stub rent, which
continues to accrue under the Leases, is an administrative
expense of the Debtor's estate, Mr. Hazeltine maintains.

According to Mr. Hazeltine, the Landlords should not be required
to wait for the payment of their administrative claims while the
employees are paid currently.  Additionally, Mr. Hazeltine says
that the Incentive Plan Motion is unclear and should explicitly
state whether the employees are entitled to duplicative bonuses,
and that the Wind-Down Team's incentive is not an impermissible
management retention bonus.

                  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
US$251,500,000 and total debts of US$199,000,000.  
(Sharper Image Bankruptcy News, Issue No. 15; Bankruptcy
Creditors' Service, Inc., http://bankrupt.com/newsstand/or      
215/945-7000)


SHARPER IMAGE: Hearing on Plan Filing Extension Motion Set June 24
------------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware rescheduled
the hearing to consider the motion of The Sharper Image Corp. to
extend the exclusive plan proposal period to June 24, 2008, at
2:00 p.m.  Objections are due on June 23.

By application of Rule 9006-2 of the Local Rules of Bankruptcy
Practice and Procedures of the United States Bankruptcy Court for
the District of Delaware, the Exclusive Plan Proposal Period is
automatically extended until the conclusion of the hearing.

The Debtors' exclusive period to file a plan expired on June 18,
2008.  

                 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
US$251,500,000 and total debts of US$199,000,000.  
(Sharper Image Bankruptcy News, Issue No. 15; Bankruptcy
Creditors' Service, Inc., http://bankrupt.com/newsstand/or      
215/945-7000)


SHARPER IMAGE: To Delay Filing of 1st Quarter 2008 Report
---------------------------------------------------------
Rebecca L. Roedell, executive vice president and chief financial
officer of The Sharper Image Corp., informs the Securities and
Exchange Commission that the company will not be able to file its
quarterly report on Form 10-Q for the quarter ended April 30,
2008 in a timely manner.

According to Ms. Roedell, the principal reason for the delay in
filing the Form 10-Q relates to Sharper Image's bankruptcy filing
on February 19, 2008.

The company relates that on June 5, 2008, it consummated the sale
of substantially all of its assets to a joint venture of Gordon
Brothers Retail Partners, LLC, GB Brands, LLC, Hilco Merchant
Resources, LLC, and Hilco Consumer Capital, LLC.  The company is
in the process of liquidating its remaining assets and winding
down its operations.

Ms. Roedell discloses that Sharper Image did not file its Annual
Report on Form 10-K for the fiscal year ended January 31, 2008.

                  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
US$251,500,000 and total debts of US$199,000,000.  
(Sharper Image Bankruptcy News, Issue No. 14; Bankruptcy
Creditors' Service, Inc., http://bankrupt.com/newsstand/or      
215/945-7000)


SMART ENERGY: March 31 Balance Sheet Upside-Down by $537,110
------------------------------------------------------------
Smart Energy Solutions Inc.'s consolidated balance sheet at
March 31, 2008, showed $1,390,734 in total assets and $1,927,844
in total liabilities, resulting in a $537,110 total stockholders'
deficit.

At March 31, 2008, the company's consolidated balance sheet also
showed strained liquidity with $1,307,218 in total current assets
available to pay $1,927,844 in total current liabilities.

The company reported a net loss of $751,603 on revenues of
$397,345 for the first quarter ended March 31, 2008, compared with
a net loss of $1,944,328 on revenues of $637,822 in the same
period last year.

The decrease in revenues primarily reflects delays in receipt of
purchase orders from key distributors and orders for private label
products that are not carried in inventory and needed to be
manufactured.

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?2e3f

                       Going Concern Doubt

As reported in the Troubled Company Reporter on April 22, 2008,
Chisholm, Bierwolf & Nilson, LLC, in Bountiful, Utah, expressed  
substantial doubt about Smart Energy Solutions 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.

Chisholm Bierwolf pointed to the company's substantial losses from
operations, negative working capital, negative cash flows from
operations, and limited sales of its product.

                        About Smart Energy

Based in Pompton Plains, N.J., Smart Energy Solutions, Inc.
(OTC BB: SMGY) -- http://www.smgy.net/-- is the sole owner of the  
Battery Brain line of diverse vehicle and marine accessory
products.


SOTHEBY'S: Moody's Affirms Ratings After $200MM Notes Issuance
--------------------------------------------------------------
Moody's Investors Service affirmed Sotheby's ratings following the
company's 8-K filing announcement that it issued $200 million of
convertible senior notes due 2013, $50 million higher than the
amount initially rated on June 9, 2008.

The affirmation considers that the increase in the convertible
debt offering will not materially alter Sotheby's financial
profile.  Pro forma debt/EBITDA is still expected to remain well
below 5 times, Moody's stated leverage target that could trigger a
negative rating action.

On June 9, 2008, Moody's assigned a Ba3 rating to Sotheby's new
3.12% senior convertible notes due 2013.  A Ba3 rating was also
assigned to company's new $150 million 7.75% senior unsecured
notes due 2015.  Sotheby's Ba2 Corporate Family Rating, Ba2
Probability of Default rating, and stable ratings outlook were
affirmed.

While the larger convertible debt offering did not impact
Sotheby's ratings, it did result in a minor change to the point
estimates of both the senior unsecured notes due 2015 and the
convertible senior notes due 2013, to LGD 5, 82% from LGD 5, 84%.

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


SPARE BACKUP: March 31 Balance Sheet Upside-Down by $2,392,151
--------------------------------------------------------------
Spare Backup Inc.'s consolidated balance sheet at March 31, 2008,
showed $1,611,653 in total assets and $4,003,804 in total
liabilities, resulting in a $2,392,151 total stockholders'
deficit.

At March 31, 2008, the company's consolidated balance sheet also
showed strained liquidity with $25,455 in total current assets
available to pay $3,978,088 in total current liabilities.

The company reported a net loss of $3,403,723 on net revenues of
$203,060 forthe first quarter ended March 31, 2008, compared with
a net loss of $19,054,167 on net revenues of $20,942 in the same
period last year.

Results for the first quarter ended March 31, 2007, included an
expense of $13,966,577 associated with the change in fair value of
derivative liabilities as a result of the application of EITF
Issue No. 00-19 to the company's financial statements.  The
company did not have a comparable other expense during the three
months ended March 31, 2008.

Full-text copies of the company's consolidated financial
statements for the quarter ended March 31, 2008, are available for
free at http://researcharchives.com/t/s?2e4a

                       Going Concern Doubt

Sherb & Co. LLP, in Boca Raton, Florida, expressed substantial
doubt about Spare Backup 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 had net losses, cash
used in operations and a working capital deficit of $26,084,897,
$8,527,867 and $2,634,060 respectively, for the year ended
Dec. 31, 2007.

The company has generated minimal revenue since its inception on
June 12, 2002, and has incurred net losses of $3,403,723 during
the three months ended March 31, 2008.

                        About Spare Backup

Based in Palm Desert, Calif., Spare Backup Inc. (OTC BB: SPBU)
-- http://www.sparebackup.com/-- sells on-line backup solutions  
software and services to individuals, business professionals,
small office and home office companies, and small to medium sized
businesses.


SPEEDWAY MOTORSPORTS: Aggressive Stance Prompts S&P's Neg. Watch
----------------------------------------------------------------
Standard & Poor's Ratings Services placed its ratings for Concord,
North Carolina-based Speedway Motorsports Inc., including the
'BB+' corporate credit rating, on CreditWatch with negative
implications, indicating the possibility of a downward rating
action over the near term.
     
"The CreditWatch listing is based on Speedway Motorsports' more
aggressive stance on financial policy and debt leverage, and our
discomfort with the narrowing margin of covenant compliance for a
'BB+' rating," explained Standard & Poor's credit analyst Andy
Liu.
     
The proposed acquisition of Kentucky Speedway LLC would push the
company's total debt to EBITDA greater than Standard & Poor's
original target of 3x for the current 'BB+' corporate credit
rating.  Given S&P's belief that the probability of a Sprint Cup
date at Kentucky Speedway in the 2009 season is relatively low,
debt leverage is unlikely to decrease meaningfully over the near
term.  NASCAR had indicated that the schedule for the 2009 season
will likely need to be set by late summer or early fall, and the
acquisition is expected to close in the third or fourth quarter.

Furthermore, the acquisition would meaningfully narrow the margin
of bank covenant compliance, hampering Speedway Motorsports'
access to its revolving credit facility.  The company had cash and
cash equivalents of $163 million at March 31, 2008, which should
be adequate for normal operating needs.
     
S&P will meet with the management of Speedway Motorsports to
discuss in greater detail its plans for Kentucky Speedway, its
strategy for securing a Sprint Cup date for Kentucky Speedway,
possible future acquisitions, and the company's financial policy
before resolving the CreditWatch listing.  In addition, S&P will
be reconsidering the debt-to-EBITDA target for the rating.


SWIFT TRANSPORTATION: Moody's Cuts PD & CF Ratings to B3 from B2
----------------------------------------------------------------
Moody's Investors Service has lowered the ratings of Swift
Transportation Co., 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 April 2007
acquisition of the company by Saint Acquisition Corporation, an
entity wholly owned by Swift's co-founder and CEO Jerry Moyes.

As a result, the company's credit metrics and liquidity profile
have deteriorated below levels anticipated when Moody's assigned
the original rating to Swift in April 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, "as the
trucking sector faces a continued weak operating environment,
heavily levered operators such as Swift will likely continue to
encounter difficulty with regards to its profitability and
financial flexibility."  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.  Although the company is compliant with
leverage and interest coverage ratios as of March 31, 2008, the
room under these covenants is currently slim and will remain quite
tight through 2008, particularly as prescribed covenant limits
become more rigorous over the next few quarters.

Moody's estimates that compliance with these financial covenants
over the near term will rely on the company's ability to restore
revenue growth and improve margins.  While Moody's expects that
the company will remain compliant over this period, the lack of
cushion to covenants could potentially restrict Swift in its
access to the sizeable revolving credit facility.

Covenant restrictions notwithstanding, the company had
approximately $280 million available under the revolver as of
March 31, 2008.  Swift 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.

Moody's assesses Swift's overall liquidity profile to be adequate,
as moderate cash balances and expected operating cash flows will
likely cover much of the company's capital expenditure needs
(after proceeds from equipment disposal).  The company plans to
finance a significant portion of its 2008 equipment purchases
through capital leases, which alleviates the need for the company
to draw in its revolving credit facility.

Swift faces no material debt maturities until 2012, and only
moderate 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 weakness in the
trucking markets amplifies the company's risk profile over the
near term.

The ratings on Swift's second lien notes have been lowered one
notch, to Caa2, in line with the downgrade of the Corporate Family
Rating.  The first lien credit facility, however, remains B1, or
two notches above the Corporate Family Rating.

The reason for the additional notching assigned to the first lien
facilities is the repayment of a portion of this class of debt in
2007, primarily through uses of proceeds from Swift's accounts
receivable securitization facility, which improves the implied
recovery of first lien debt relative to the entire waterfall of
liabilities assumed in Moody's Loss Given Default analysis.

The negative outlook reflects concern over the near term about the
company's liquidity condition, particularly if the company were to
lose access to the credit facility due to covenant restrictions.

The ratings could be downgraded if net cash usage results in a
material reduction in cash balances before full access to the
entire availability under the revolver could be restored.  This
could leave the company constrained on sources of liquidity at its
disposal to cover unanticipated 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 full revolver available, with no material reduction in cash
balances.

These ratings have been downgraded:

Issuer: Swift Transportation Co., Inc.

  -- Probability of Default Rating, Downgraded to B3 from B2

  -- Corporate Family Rating, Downgraded to B3 from B2

  -- Senior Secured Regular Bond/Debenture, Downgraded to Caa2
    (LGD5, 84%) from Caa1

These ratings have been affirmed and LGD Assessments revised:

Issuer: Swift Transportation Co., Inc.

  -- Senior Secured Bank Credit Facility, B1 (LGD3, 32%)

Outlook Actions:

Issuer: Swift Transportation Co., Inc.

  -- Outlook, Changed To Negative From Stable

Swift Transportation Co, Inc., headquartered in Phoenix, Arizona,
is the largest provider of truckload transportation services in
the United States, with line-haul, dedicated and inter-modal
freight services.


TABS 2006-6: Moody's Chips Ca Ratings on Eight Note Classes to C
----------------------------------------------------------------
Moody's Investors Service has downgraded ratings of eight classes
of notes issued by TABS 2006-6, Ltd.  The notes affected by the
rating action are:

Class Description: $950,000,000 Class A1S Variable Funding Senior
Secured Floating Rate Notes Due 2047

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

Class Description: $175,000,000 Class A1J Senior Secured Floating
Rate Notes Due 2047

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

Class Description: $140,000,000 Class A2 Senior Secured Floating
Rate Notes Due 2047

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

Class Description: $60,000,000 Class A3 Secured Deferrable
Interest Floating Rate Notes Due 2047

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

Class Description: $30,000,000 Class B1 Mezzanine Secured
Deferrable Interest Floating Rate Notes Due 2047

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

Class Description: $40,000,000 Class B2 Mezzanine Secured
Deferrable Interest Floating Rate Notes Due 2047

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

Class Description: $22,500,000 Class B3 Mezzanine Secured
Deferrable Interest Floating Rate Notes Due 2047

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

Class Description: $22,500,000 Class C Mezzanine Secured
Deferrable Interest Floating Rate Notes due 2047

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

The transaction experienced , as reported by the Trustee on
Nov. 16, 2007, an event of default caused by a failure of the
Senior Credit Test to be satisfied, as described in Section 5.1(h)
of the Indenture dated Nov. 16, 2006.  This event of default is
still continuing.

TABS 2006-6, Ltd. is a hybrid collateralized debt obligation
backed primarily by a portfolio of RMBS securities CDO securities
and synthetic securities in the form of credit default swaps.  
Reference obligations for the credit default swaps are RMBS and
CDO securities.

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

In this regard the Trustee reports that a majority of the
Controlling Class directed the Trustee to declare the outstanding
Class A1S Funded Amount as well as the principal of and accrued
and unpaid interest on the Notes to be immediately due and
payable.

Furthermore, according to the Trustee, a majority of the
Controlling Class directed the Trustee to commence the process of
the sale and liquidation of the Collateral in accordance with
relevant provisions of the transaction documents.

The rating downgrades taken reflect the increased expected loss
associated with each tranche.  Losses are attributed to diminished
credit quality on the underlying portfolio.


THORNBURG MORTGAGE: Gets SEC Subpoenas, Financial Woes Continue
---------------------------------------------------------------
In its Form 10Q filed with the Securities and Exchange Commission,
Thornburg Mortgage Inc. admitted that it has been significantly
and negatively impacted by the events and conditions impacting the
broader mortgage loan market.  The company said that the broader
mortgage market, including prime mortgage-backed securities and
prime mortgage loans, has been adversely affected by weakening
house prices, increasing rates of delinquencies and defaults on
mortgage loans, and rating agency downgrades of mortgage-backed
securities which in turn has led to fewer sources of, and
significantly reduced levels of, liquidity available to finance
the company's operations.  These events have adversely affected
the company despite the fact that the credit performance of its
ARM Assets remains excellent, the company said.

                        Subpoenas from SEC

By a letter dated April 4, 2008, the company said it received a
notice from the SEC that it is conducting an investigation
relating to the restatement of its Consolidated Financial
Statements for fiscal year 2007, margin calls that the company
received, or which were threatened, pursuant to its:

   -- Reverse Repurchase Agreements and related disclosures, and

   -- valuation, impairment and disclosures concerning the
      accounting treatment for the company's mortgage-backed
      securities addressed in the restatement.

The SEC's notice states that it has not determined that any
violations of the securities laws have occurred.  The SEC
subsequently served with company with subpoenas on April 24, 2008,
and May 23, 2008 for documents related to the investigation
described in the April 4, 2008 letter.  The company said it has
provided the SEC with documents responsive to the April 24 and
May 23 subpoenas and continues to supplement those document
productions.  The company further said it is cooperating with the
SEC on a voluntary basis in its investigation.

        Warning of Inability to Continue as a Going Concern

The company warned that it may not be able to continue as a going
concern.  The realization of assets and the satisfaction of
liabilities in the normal course of business are dependent on,
among other things, the company's available liquidity and the
continued availability of financing for its ARM Assets.

                  Default and Liquidity Problems

As of March 6, 2008, the company did not have enough liquid assets
to satisfy margin calls approximating $610 million.

By March 12, 2008, the company had received notices of events of
default -- all of which were subsequently cured -- from five
different reverse repurchase agreement counterparties, with an
aggregate amount of $1.8 billion in outstanding obligations to
these counterparties -- all of which have been subsequently cured.

                        Override Agreement

On March 17, 2008, the company entered into a 364-day Override
Agreement with five of its remaining Reverse Repurchase Agreement
and Forward Auction Agreement counterparties.  Pursuant to the
Override Agreement, haircuts for MBS were specified, the spread to
LIBOR of the financing was fixed, margin requirements for the
company's Reverse Repurchase Agreements were reduced and the
counterparties' right to invoke further margin calls was suspended
for 364 days subject to several conditions, one of the most
significant of which was that the company raise $1 billion in new
capital.

With the Override Agreement in place, the company completed a
Financing Transaction through the private placement of an
aggregate of up to $1.35 billion in principal amount of Senior
Subordinated Notes, Initial Warrants, Escrow Warrants and
Additional Warrants and participations in a Principal
Participation Agreement on March 31, 2008.  Of the $1.35 billion
amount, $200.0 million is currently held in escrow and is not
recorded in the accompanying Consolidated Balance Sheets.  The
rate of interest payable on the Senior Subordinated Notes, the
termination of the Principal Participation Agreement and the
issuance of additional Senior Subordinated Notes in exchange for
the $200.0 million of escrowed funds are dependent upon these
events:

  (1) shareholder approval of a charter amendment to increase
      the number of authorized shares of capital stock from
      500 million to 4 billion shares by June 15, 2008, and

  (2) completion of a successful Tender Offer for at least 90%
      of the total outstanding shares of Preferred Stock (which
      is equivalent to 90% of the aggregate liquidation
      preference of all outstanding shares of Preferred Stock)
      and at least 66-2/3% of the outstanding shares of each
      series of Preferred Stock (which is equivalent to 66-2/3%
      of the aggregate liquidation preference of the outstanding
      shares of each series of Preferred Stock) by June 30, 2008.
      Completion of a successful Tender Offer requires approval
      from the holders of the company's voting stock and each
      series of Preferred Stock of an amendment to the company's
      charter to modify the terms of each series of Preferred
      Stock to eliminate certain rights of the Preferred Stock,
      and

  (3) issuance of Additional Warrants to the investors under the
      Principal Participation Agreement and to the investors that
      contributed the $200.0 million in escrowed funds by June 30,
      2008.

                   Delay in Common Stock Resale

As a result of the delay in completing the accounting and
valuation of the Financing Transaction, and the resulting delay in
the filing of the company's Form 10-Q for the quarter ended March
31, 2008, there has been a corresponding delay in filing with the
SEC the documents necessary to allow for the resale of these
Common Stock shares that have already been issued as a result of
the exercise of the Initial Warrants and the Override Warrants and
to commence the Tender Offer.  Therefore the Tender Offer will not
be completed by June 30, 2008.  

The company expects to file a resale prospectus with the SEC
shortly after filing its Form 10-Q for the quarter ended March 31,
2008, for 215,566,548 shares of Common Stock issued upon exercise
of the Initial Warrants and Override Warrants.

The company is seeking amendments and consents to the extension of
the escrow and the deadline for successfully completing the Tender
Offer until Sept. 30, 2008.  The company may not be able to obtain
the required amendments and consents or successfully complete the
Tender Offer.

The company believes that the satisfaction of the Escrow Release
Conditions is vital for the company to resume normalized business
operations.  The uncertainty as to the outcome of these events,
the available sources of liquidity and the availability of
financing for certain of the company's ARM Assets subsequent to
the term of the Override Agreement continue to raise substantial
doubt about the company's ability to continue as a going concern
for the foreseeable future.

                     About Thornburg Mortgage

Based in Santa Fe, New Mexico, Thornburg Mortgage Inc. (NYSE: TMA)
-- http://www.thornburgmortgage.com/-- is a single-family         
residential mortgage lender focused principally on prime and
super-prime borrowers seeking jumbo and super-jumbo adjustable-
rate mortgages.  It originates, acquires, and retains investments
in adjustable and variable rate mortgage assets.  Its ARM assets
comprise of purchased ARM assets and ARM loans, including
traditional ARM assets and hybrid ARM assets.

At Dec. 31, 2007, the company's consolidated balance sheet showed
$36.5 billion in total assets, $34.5 billion in total liabilities,
and $2.00 billion in total stockholders' equity.

                          *     *     *

As reported in the Troubled Company Reporter on March 10, 2008,
Moody's Investors Service downgraded to Ca from Caa2 the senior
unsecured debt, and to C from Ca the preferred stock ratings of
Thornburg Mortgage, Inc.  Thornburg's Ca unsecured
debt rating remains under review for possible downgrade.  The
downgrades were in response to Thornburg's announcement that
cross-defaults have been triggered under all of the REIT's
repurchase agreements and secured loan agreements.  Reverse
repurchase agreements represent a key source of funding for the
company.

The TCR said on March 10 that Standard & Poor's Ratings Services
lowered its issue ratings on Thornburg Mortgage Inc.'s senior
unsecured debt to 'CC' from 'CCC+' and preferred stock to 'C' from
'CCC-'.  Both issue ratings will remain on CreditWatch negative,
where they were  placed on March 3, 2008.  The counterparty credit
rating remains on selective default.  Given Thornburg's limited
financial resources, S&P believes the risk of default has
increased further.

The TCR also said on March 10 that, given Thornburg Mortgage,
Inc.'s weakening credit profile stemming from defaults under the
company's reverse repurchase agreements, Fitch has downgraded the
Debtors' four ratings -- Issuer Default Rating to 'RD' from 'CCC';
-- Senior unsecured notes to 'C/RR6' from 'CCC-/RR5'; -- Unsecured
subordinate notes to 'C/RR6' from 'CC/RR6'; and -- Preferred stock
to 'C/RR6' from 'CC/RR6'.


THORNBURG MORTGAGE: S&P Puts Default Rating on Preferred Stock
--------------------------------------------------------------
Standard & Poor's Ratings Services lowered its issue ratings on
Thornburg Mortgage Inc.'s preferred stock to 'D' from 'C'.  The
counterparty credit rating remains on selective default.
     
Thornburg has amended the original terms of each series of
preferred stock to, among other things, make dividends
noncumulative.  This change in terms qualifies as a default under
our criteria.  In addition, Thornburg has announced that it did
not have sufficient liquidity to make its last scheduled preferred
stock dividend payment.


TRICADIA CDO: Moody's Downgrades Ratings on Seven Classes of Notes
------------------------------------------------------------------
Moody's Investors Service has downgraded the ratings of seven
classes of notes issued by Tricadia CDO 2007-8, Ltd.  The notes
affected by the rating actions are:

Class Description: $328,000,000 Class A-1VF Variable Funding
Senior Secured Floating Rate Notes Due 2052

  -- Prior Rating: B3, on review direction uncertain
  -- Current Rating: C

Class Description: $7,700,000 Class A-X Notes Due 2014

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

Class Description: $65,000,000 Class A-2 Senior Secured Floating
Rate Notes Due 2052

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

Class Description: $43,000,000 Class B Senior Secured Floating
Rate Notes Due 2052

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

Class Description: $25,000,000 Class C Secured Floating Rate
Deferrable Notes Due 2052

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

Class Description: $19,000,000 Class D Secured Floating Rate
Deferrable Notes Due 2052

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

Class Description: $7,200,000 Class E Secured Floating Rate
Deferrable Notes Due 2052

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

Tricadia CDO 2007-8, Ltd. is a collateralized debt obligation
backed primarily by a portfolio of structured finance securities.  
The transaction experienced an event of default under the
Indenture.  The event of default is continuing.

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

In this regard, Moody's has been notified by the Trustee that
holders of a majority of the Controlling Class, a majority of the
Class A Notes and the CDS Counterparty directed the Trustee to
proceed with the disposition of all of the Collateral in
accordance with the Indenture.

The Trustee also notified Moody's that it has disposed of all of
the Collateral and made a final distribution, applying the
proceeds of the liquidation in accordance with applicable
provisions of the Indenture.

The rating actions taken reflect the changes in severity of loss
associated with certain tranches and reflect the final liquidation
distribution.


TRIPLE-S MANAGEMENT: A.M. Best Adjusts ICR to bb+ to Fit Standard
-----------------------------------------------------------------
A.M. Best Co. has affirmed the financial strength rating of
B++(Good) and issuer credit ratings of "bbb+" of Triple-S, Inc.
and Triple-S Vida, Inc.  Additionally, A.M. Best has affirmed the
debt rating of "bbb" on $50 million 6.30% senior unsecured notes
due 2019 of TSI.

A.M. Best also has adjusted the ICR to "bb+" from "bbb-" of the
holding company, Triple-S Management Corporation.  The adjustment
of the ICR at TSM is not due to any changes in the financial
fundamentals of the organization, but was taken in order to align
and conform TSM's rating to A.M. Best's standard notching of three
between the operating insurer and the related holding company.  
The outlook for all ratings is stable.  All companies are
domiciled in San Juan, PR.

These rating actions reflect TSI's blue brand strength in Puerto
Rico, its market share and the improvement in its capital
position.  TSI benefits from strong brand name recognition in its
market and has the largest share of all managed care companies
operating in the Puerto Rico market.  However, its market share
has slightly declined over the last several years as competitors
have positioned themselves in the Medicare markets.  The level of
risk-based capital at TSI has improved to over 600% of authorized
control level at year-end 2007 from 520% at year-end 2006.  
Additionally, the debt-to-capital ratio at TSM has improved to
26.7% at the end of March 2008 from 35% at year-end 2006.

Offsetting these positive rating factors is TSI's concentration in
earnings from government sponsored programs.  A large portion of
TSI's revenues are generated from the Medicare and Health Reform
businesses, which are susceptible to federal and state government
regulations.  The overall dependence on Medicare and Reform may
challenge TSI's earnings in the future, should there be a change
in funding for Medicare Advantage or delays in rate increases for
health reform.

In addition, TSM has low debt service capacity with earnings
before interest & taxes interest coverage less than six times
earnings, although its access to the capital markets has been
greatly enhanced since the initial public offering in December
2007.  Interest coverage below six times is considered low for the
managed care industry, which is the primary driver of earnings for
TSM. Debt-to-capital levels have been tempered in 2007 partially
due to the initial public offering.  However any significant
issuance of debt may push debt-to-capital levels above 30%, which
is a level considered high when compared to its peers.


TYSON FOODS: Promotes Dennis Leatherby to Chief Financial Officer
-----------------------------------------------------------------
Dennis Leatherby has been promoted to executive vice president and
chief financial officer of Tyson Foods, Inc.

In his new position, Mr. Leatherby will report directly to Tyson
President and CEO Richard L. Bond, and will oversee the company's
worldwide finance and accounting functions. This includes
representing Tyson on financial matters involving investors,
auditors and financial regulatory entities.

Mr. Leatherby, who is 48 years old, brings more than 25 years of
finance experience to the job, including more than 18 years with
Tyson. After working in the banking industry for just over seven
years, he joined Tyson Foods in 1990 as assistant treasurer. He
has since held several other finance-related management positions
in the company, most recently serving as Tyson's senior vice
president of finance and treasurer. He has played an active role
in Tyson acquisitions, has been a lead contact with ratings
agencies and banks and has also previously served as Tyson's
interim chief financial officer.

"[Mr. Leatherby] has clearly demonstrated he has the skills and
leadership abilities to handle this important position in the
company," Mr. Bond said. "We look forward to his involvement and
input in a wide range of areas, from strategic planning and
acquisitions to our relationship with banks and investors."

A native of Overland Park, Kansas, Mr. Leatherby has a degree in
finance and accounting from Kansas State University. He has served
on the local Salvation Army Advisory Board and currently holds
several leadership positions at his church.

Mr. Leatherby replaces Wade Miquelon, who has accepted the
position of chief financial officer for Walgreens.

Headquartered in Springdale, Arkansas, Tyson Foods Inc. (NYSE:TSN)
-- http://www.tysonfoods.com/-- is a processor and marketer of
chicken, beef, and pork. The company makes a wide variety of
protein-based and prepared food products at its 123 processing
plants. Tyson has approximately 114,000 Team Members employed at
more than 300 facilities and offices in 26 states and 80
countries.

Tyson's U.S. beef plants are located in Amarillo, Texas; Dakota
City, Nebraska; Denison, Iowa; Finney County, Kansas; Joslin,
Illinois, Lexington, Nebraska and Pasco, Washington. The
company also has a beef complex in Canada, and is involved in a
vertically integrated beef operation in Argentina.

                         * * *

As reported in the Troubled Company Reporter on April 7, 2008,
Moody's Investors Service confirmed Tyson Foods, Inc.'s corporate
family rating and probability of default rating at Ba1. Moody's
said the rating outlook remains negative.


UAL CORP: Wants ReGen's Cure Claim Immediately Disallowed
---------------------------------------------------------
ReGen Capital I, Inc. asserted that a cure claim held by AT&T
Corp. and assigned to ReGen must be paid by UAL Corporation and
its debtor-affiliates.  In response, the Debtors point out that
under their plan of reorganization, they have a unilateral right
to reject contracts, without paying anything, if they don't want
to pay the amount required to cure.

Michael B. Slade, Esq., at Kirkland & Ellis LLP, in Chicago,
Illinois, informs the U.S. Bankruptcy Court for the Northern
District of Illinois that the Debtors have rejected the AT&T
contracts, making any litigation superfluous.  "Rejection of
all of the assumed AT&T prepetition contracts renders any dispute
regarding the cure claim moot," he says.

According to Mr. Slade, the Debtors believe that most if not all
of ReGen's claim for a real-dollar "cure" is baseless.  The
Debtors also know that completing the investigation will require
them to incur significant amounts of legal fees and a substantial
distraction of their business personnel, he adds.  

In light of these, the Debtors ask the Court to disallow ReGen's
Cure Claim immediately.

                          ReGen Responds

ReGen contends that the Debtors cannot evade the payment of the
Cure Claim by arguing that they can now revoke their prior
assumption of the assumed contracts and instead reject them.  
"The Plan does not provide for the revocation of the prior
assumption of executory contracts," Peter J. Roberts, Esq., at
Shaw Gussis Fishman Glantz Wolfson & Towbin LLC, in Chicago,
Illinois, argues.  "Rather, the plain language contained in the
Debtors' Plan permits only the post-assumption rejection of
assumed contracts."

Mr. Roberts points out that before resorting to their rejection
strategy, the Debtors had already admitted that they knew both
(i) the precise amount of ReGen's Claim as reflected in their own
books and records -- $4,898,7283, and (ii) which particular
debtor owed it.

Mr. Roberts points out that it is undisputed that the Debtors
listed no less than 10 different contracts with AT&T.  There is
no evidence that AT&T provided any services to the Debtors
outside the scope of these written agreements, Mr. Roberts tells
Judge Wedoff.  Yet, the Debtors contend that all of the business
giving rise to ReGen's valid prepetition claim of nearly
$4,900,000 was somehow unrelated to the underlying contracts that
the Debtors assumed through the Plan.

Moreover, the Debtors have not asserted that any of the contracts
it now seeks to reject actually remain executory.  Contracts that
do not qualify as "executory contracts" cannot be rejected, Mr.
Roberts asserts.

            ReGen Insists Cure Amount Worth $4,272,555

As reported by the Troubled Company Reporter on May 6, 2008,
ReGen Capital I, Inc., holds a cure claim against UAL and its
debtor-affiliates -- Claim No. 45042 -- as assignee of AT&T Corp.,
which was party to 10 executory contracts that the Debtors assumed
under their confirmed Plan of Reorganization.

The Debtors have already stipulated to the allowed amount of the
Claim before they sought to assume the 10 contracts with AT&T,
but they never stated what amount they would have to pay in
connection with their assumption of the 10 executory contracts,
ReGen's attorney, Peter J. Roberts, Esq., at Shaw Gussis Fishman
Glantz Wolfson & Towbin LLC, in Chicago, Illinois, relates.

                      About UAL Corporation

Based in Chicago, Illinois, UAL Corporation (NASDAQ: UAUA)
-- http://www.united.com/-- is the holding company for United
Airlines, Inc.  United Airlines is the world's second largest
air carrier.  The airline flies to Brazil, Korea and Germany.

The company filed for chapter 11 protection on Dec. 9, 2002
(Bankr. N.D. Ill. Case No. 02-48191).  James H.M. Sprayregen,
Esq., Marc Kieselstein, Esq., David R. Seligman, Esq., and
Steven R. Kotarba, Esq., at Kirkland & Ellis, represented the
Debtors in their restructuring efforts.  Fruman Jacobson, Esq.,
at Sonnenschein Nath & Rosenthal LLP represented the Official
Committee of Unsecured Creditors before the Committee was
dissolved when the Debtors emerged from bankruptcy.

Judge Eugene R. Wedoff confirmed the Debtors' Second Amended
Plan on Jan. 20, 2006.  The company emerged from bankruptcy
protection on Feb. 1, 2006.

(United Airlines Bankruptcy News, Issue No. 158; Bankruptcy
Creditors' Service Inc., http://bankrupt.com/newsstand/or    
215/945-7000)

                        *     *     *

As reported in the Troubled Company Reporter on May 3, 2007,
Fitch Ratings has affirmed the Issuer Default Ratings of UAL
Corp. and its principal operating subsidiary United Airlines
Inc. at B-.


UAL CORP: Fails to Support Objections to Claims, MassPort Says
--------------------------------------------------------------
UAL Corporation and its debtor-affiliates, Massachusetts Port
Authority, and Bank One Trust Company, NA, are parties to a loan
and trust agreement dated Nov. 15, 1999.

In compliance with the claims bar date, MassPort timely filed two
claims on May 9, 2003, one of which is Claim No. 45060, James M.
McArdle, Esq., at Scott & Kraus, L.L.C., in Chicago, Illinois,
stated.  The Claim is an unsecured claim for $1,870,502,
asserting administrative fees that MassPort was entitled to under
the Trust Agreement, Mr. McArdle told the U.S. Bankruptcy Court
for the Northern District of Illinois.

In about early 2007, a representative of the Debtors and MassPort
agreed to reduce the Claim amount -- and eventually resolve the
Claim -- by applying a 13% to 14% discount rate, Mr. McArdle
explains.  However, discussions on the value of the claim ceased
when the Debtors' representative left his post.

Against this backdrop, MassPort asks the Court to overrule the
Debtors' Objection for failure to provide sufficient factual or
legal support for their allegations.

                       Debtors' Objections

The Debtors object to two claims on the grounds that the claims
are not reflected in the Debtors' books and records, and the
creditors have not supplied documentation that would support the
Debtors' liability.

Accordingly, the Debtors ask the Court to expunge the two No-
Liability Claims, aggregating $3,579,302.  The Claims are:

   Claimant                            Claim No.         Amount
   --------                            ---------         ------
   Massachusetts Port Authority          45060       $1,870,502
   Timothy Hafer                         33007        1,708,800

                      About UAL Corporation

Based in Chicago, Illinois, UAL Corporation (NASDAQ: UAUA)
-- http://www.united.com/-- is the holding company for United
Airlines, Inc.  United Airlines is the world's second largest
air carrier.  The airline flies to Brazil, Korea and Germany.

The company filed for chapter 11 protection on Dec. 9, 2002
(Bankr. N.D. Ill. Case No. 02-48191).  James H.M. Sprayregen,
Esq., Marc Kieselstein, Esq., David R. Seligman, Esq., and
Steven R. Kotarba, Esq., at Kirkland & Ellis, represented the
Debtors in their restructuring efforts.  Fruman Jacobson, Esq.,
at Sonnenschein Nath & Rosenthal LLP represented the Official
Committee of Unsecured Creditors before the Committee was
dissolved when the Debtors emerged from bankruptcy.

Judge Eugene R. Wedoff confirmed the Debtors' Second Amended
Plan on Jan. 20, 2006.  The company emerged from bankruptcy
protection on Feb. 1, 2006.

(United Airlines Bankruptcy News, Issue No. 158; Bankruptcy
Creditors' Service Inc., http://bankrupt.com/newsstand/or    
215/945-7000)

                        *     *     *

As reported in the Troubled Company Reporter on May 3, 2007,
Fitch Ratings has affirmed the Issuer Default Ratings of UAL
Corp. and its principal operating subsidiary United Airlines
Inc. at B-.


UNITED AMERICAN CORP: Earns $65,881 in 2008 First Quarter
---------------------------------------------------------
United American Corp. reported net income of $65,881 on sales of
$2,720,272 for the first quarter ended March 31, 2008, compared
with net income of $30,672 in the same period last year.

The decrease in revenue for the three months ended March 31, 2008,
when compared to the same reporting period in the prior year is
primarily attributable to a decrease in sales of VoIP termination
services in the company's brokered international telecom routes.

The increase in net income during the three months ended March 31,
2008, was primarily attributable to a decrease in operating
expenses, as well as a decrease in interest expense.

At March 31, 2008, the company's consolidated balance sheet showed
$3,440,856 in total assets, $2,705,913 in total liabilities, and
$734,943 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?2e48

                       Going Concern Doubt

The company believes that conditions exist which cast substantial
doubt about the company's ability to continue as a going concern
for a reasonable period.

Prior to March 31, 2008, the company had incurred significant net
losses, and accumulated a deficit of $4,683,891 through March 31,
2008.

Despite the recent positive net incomes and the company being
successful in establishing distribution channels in Africa and
generating significant revenue growth in the year, the company
said that there is no guarantee that the company will be able to
continue to grow, raise enough capital or generate revenues to
sustain its operations.

                   About United American Corp.

Based in Mount St-Hilaire Quebec, Canada,United American Corp.
(OTC BB: USMA) -- http://www.unitedamericancorp.com/-- through  
American United Corporation (AUC) is engaged in providing voice
over Internet protocol (VoIP) solutions.  The wholly owned
subsidiary of the company is 3894517 Canada Inc.  


VERDIER PLANTATION: Files Schedules of Assets and Liabilities
-------------------------------------------------------------
Verdier Plantation LLC and Verdier Townhome LLC delivered to
the United States Bankruptcy Court for the District of South
California its schedules of assets and liabilities disclosing:

   Name of Schedule                   Assets      Liabilities
   ----------------                -----------    -----------
   A. Real Property                $78,235,000
   B. Personal Property                 27,344
   C. Property Claimed
      as Exempt
   D. Creditors Holding                           $14,391,883
      Secured Claims
   E. Creditors Holding                                66,485
      Unsecured Priority
      Claims
   F. Creditors Holding                               241,950
      Unsecured Nonpriority
      Claims
                                   -----------    -----------
      TOTAL                        $78,262,344    $14,700,328

Headquartered in Bluffon, South Carolina, Verdier Plantation LLC
-- http://www.verdierplantation.com/-- develops and maintains  
real estate property.  The company and its affiliate, Verdier
Townhome LLC, filed for Chapter 11 protection on May 30, 2008
(Bankr. D. S.C. Lead Case No.08-03201).


VERDIER PLANTATION: Wants Court to Approve Levy Firm as Attorney
----------------------------------------------------------------
Verdier Plantation LLC and Verdier Townhome LLC ask the United
States Bankruptcy Court for the District of South Carolina for
permission to employ Levy Law Firm as their attorney.

Levy Firm will:

   a) provide the Debtors legal advice with respect to its powers
      and duties as debtor in the management and disposition of
      its property;

   b) prepare on the Debtor's behalf such applications, motions,
      pleadings, objections, memoranda, briefs, orders, reports
      and other legal papers as may be necessary or appropriate in
      this case;

   c) provide the Debtor legal advice and assistance in the
      development of a plan of reorganization, a disclosure
      statement, and other pleadings and documents relating to the
      disposition of assets and the payment and treatment of
      claims against the bankruptcy estate; and

   d) provide the Debtor legal advice on various matters that may
      arise in these cases.

The firm's professionals and their compensation rates are:

      Professionals           Designations      Hourly Rates
      -------------           ------------      ------------
      R. Geoffrey Levy, Esq.    Attorney           $350
      Susan M. Levy, Esq.       Attorney           $200
      Robin C. Osborne, Esq.    Paralegal          $120

To the best of the Debtors' knowledge, the firm does not hold any
interest adverse to the Debtors' estate and their creditors, and
is a "disinterested person" as defined in Section 101(14) of the
Bankruptcy Code.

Headquartered in Bluffon, South Carolina, Verdier Plantation LLC
-- http://www.verdierplantation.com/-- develops and maintains  
real estate property.  The company and its affiliate, Verdier
Townhome LLC, filed for Chapter 11 protection on May 30, 2008
(Bankr. D. S.C. Lead Case No.08-03201).  In its schedules, the
Debtor disclosed $78,262,344 in assets and $14,700,328 in
liabilities.


VISTEON CORP: Completes $344 Million Offer of 8.25% Notes due 2010
------------------------------------------------------------------
Visteon Corporation disclosed the expiration of its tender offer
for up to $344,000,000 in aggregate principal amount of its 8.25%
notes due August 2010 and contemporaneous pricing of $206,386,000
in aggregate principal amount of new 12.25% senior notes due 2016.

As reported in the Troubled Company Reporter on May 26, 2008,
Visteon Corporation commenced a tender offer for up to
$344 million of its 8.25% notes due August 2010.  

Visteon received tenders through the Automated Tender Offer
Program from Eligible Holders of approximately 77.10% or
$424,029,000 of the $550,000,000 of the aggregate principal amount
of its 8.25% Senior Notes due 2010 as of 11:59 p.m., New York City
time, on June 16, 2008.

The Tender Offer was made upon the terms and subject to conditions
set forth in the offer to purchase and the related letter of
transmittal, each dated May 19, 2008.  Pursuant to the terms and
conditions, in addition to tendering through ATOP, each Eligible
Holder was required to send a validly completed and executed
letter of transmittal to the Depositary.

The New Notes are senior unsecured obligations of Visteon
Corporation and will be guaranteed by certain of its U.S.
subsidiaries.  The New Notes mature on Dec. 31, 2016, and will
bear interest at a rate per annum equal to 12.25%.

The New Notes include a put option pursuant to which a holder can
require Visteon to repurchase all or a portion of such holder's
New Notes on Dec. 31, 2013, at 100% of the principal amount
thereof plus accrued and unpaid interest to such date.

All or a portion of the New Notes can be redeemed by Visteon: a)
prior to Dec. 31, 2013, at par plus a make-whole premium; and b)
on or after Dec. 31, 2013, at specified redemption prices, plus in
each case accrued and unpaid interest, including, if applicable,
liquidated damages on the principal amount of New Notes being
redeemed.  The notes were issued at a price of 91.621 to yield
14.50%.

Visteon has satisfied all of the conditions to the Tender Offer
and has accepted for purchase Old Notes on a pro rata basis with a
pro ration factor of approximately 81.14%.  Visteon has made the
corresponding reductions to the amount of New Notes required to be
purchased by each Eligible Holder in accordance with the terms of
the offer to purchase.  The settlement date for both the Tender
Offer and the offering of the New Notes was expected on June 18,
2008.  There was no update on the settlement as of press time.

Each Eligible Holder who tendered Old Notes in the Tender Offer
was required, as a condition to such Eligible Holder's
participation in the Tender Offer, to purchase a principal amount
of Visteon's New Notes equal to 60% of the aggregate principal
amount of Old Notes purchased from such Eligible Holder pursuant
to the Tender Offer.

The Tender Offer and offering of New Notes were made only to
holders of the Old Notes that are qualified institutional buyers
and institutional accredited investors inside the United States,
and to certain non-U.S. investors located outside the United
States.

The total consideration for each $1,000 principal amount of Old
Notes validly tendered and not validly withdrawn prior to Early
Tender Deadline is $978.30, which includes an early tender payment
of $40 per $1,000 principal amount of Old Notes tendered.

Only Eligible Holders who validly tendered and did not validly
withdraw Old Notes and committed to purchase the applicable amount
of New Notes on or prior to Early Tender Deadline are eligible to
receive the Total Consideration for the Notes purchased in the
Tender Offer.

Eligible Holders who validly tendered their Old Notes and
committed to purchase the applicable amount of New Notes after the
Early Tender Date and on or prior to the Expiration Date will be
eligible to receive an amount, paid in cash, equal to the Total
Consideration less the $40 Early Tender Payment per $1,000
principal amount of Old Notes tendered.

                    About Visteon Corporation

Headquartered in Van Buren Township, Michigan, Visteon Corporation
(NYSE: VC) -- http://www.visteon.com/-- is an automotive supplier   
that designs, engineers and manufactures innovative climate,
interior, electronic and lighting products for vehicle
manufacturers, and also provides a range of products and services
to aftermarket customers.  The company also has corporate offices
in Shanghai, China; and Kerpen, Germany; the company has
facilities in 26 countries and employs approximately 40,000
people.

Visteon Corporation's balance sheet at March 31, 2008, showed
total assets of $7.2 billion and total liabilities of $7.3 billion
resulting in a total shareholders' deficit of about $136 million.

                           *     *     *

Fitch Ratings has affirmed Visteon Corporation's ratings as: (i)
issuer default rating (IDR) at 'CCC'; (ii) senior secured bank
facilities at 'B/RR1'; and (iii) unsecured notes at 'CC/RR6'.
Fitch has also assigned a rating of 'CC/RR6' to Visteon's new
12.25% senior unsecured notes being issued as part of the
company's debt exchange offer. The ratings cover approximately
$2.8 billion in debt.  The rating outlook is negative.


VOICE MOBILITY: March 31 Balance Sheet Upside-Down by $11,106,952
-----------------------------------------------------------------
Voice Mobility International Inc.'s consolidated balance sheet at
March 31, 2008, showed $1,579,475 in total assets and $12,686,427
in total liabilities, resulting in a $11,106,952 total
stockholders' deficit.

The company reported a net loss of $981,645 on sales of $85,370
for the first quarter ended March 31, 2008, compared with a net
loss of $759,231 on sales of $42,319 in the same period last year.

Sales for the three-month period ended March 31, 2008, were from
support services provided to Avaya, the company's channel partner,
product license sales, hardware and software product sales and
installation and training services.  Sales for the three-month
period ended March 31, 2007, were from support services provided
to Avaya and product license sales.

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?2e47  

                       Going Concern Doubt

Ernst & Young LLP, in Vancouver, Canada, expressed substantial
doubt about Voice Mobility International 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 net losses and stockholders' deficiency.

                       About Voice Mobility

Based in Burnaby, British Columbia, Canada, Voice Mobility
International Inc. (TSX: VMY, OTC BB: VMII and FWB: VMY)
-- http://www.voicemobility.com/-- is engaged in the development  
and sales and marketing of enhanced messaging software through its
wholly owned operating subsidiaries, Voice Mobility Inc. and Voice
Mobility (US) Inc.  The company's enhanced messaging software
suite will allow for legacy voice-mail replacement and incremental
offerings such as real time call connect, voice-mail to e-mail,
and fax to e-mail services.  These unified communication services
are facilitated by the creation of a single personal digital
mailbox that can receive any type of communication regardless of
its incoming format or medium. The company's principal geographic
markets include North America, Europe and Asia.


WHITEHALL JEWELERS: In Search of Financing, Warns of Bankruptcy
---------------------------------------------------------------
Whitehall Jewelers, Inc., a wholly owned subsidiary of Whitehall
Jewelers Holdings, Inc., received on June 11, 2008, a default
notice from Fabrikant Receivables, LLC with respect to an
Unsecured Term Promissory Note dated April 20, 2007 issued by WJI
to M. Fabrikant & Sons, Inc. in the aggregate principal amount of
$3,061,726.18 and additional unsecured trade debt in the aggregate
principal amount of $1,561,810.33 (before certain disputed
offsets).

            Defaults on M. Fabrikant Note, Debt

This notice relates to the occurrence of a default arising from
WJI's failure to pay the principal and interest owing under the
Fabrikant Note and the Fabrikant Debt at maturity. Under the terms
of the Fabrikant Note, WJI's failure to make such payments
constitutes an event of default if not cured within 10 days after
WJI's receipt of the notice. An event of default entitles
Fabrikant to declare the Fabrikant Note to be due and payable upon
demand. Additionally, from and after the date of any event of
default under the Fabrikant Note, the principal amount of this
note and all accrued and unpaid interest will bear interest at a
rate per annum of 8% (instead of 6%). While the Fabrikant Debt is
not evidenced by a promissory note, the notice implies that the
Fabrikant Debt should be governed by the same terms as the
Fabrikant Note.

          Default on Promissory Note to Rosy Blue

On June 11, 2008, WJI also received a default notice from Rosy
Blue, Inc. with respect to an Unsecured Term Promissory Note dated
April 20, 2007 issued by WJI to Rosy Blue in the principal amount
of $2,073,346.45. This notice relates to WJI's failure to pay when
due certain invoices of Rosy Blue, Inc. in an aggregate amount of
$81,405.11. These invoices were due in late May 2008 and early
June 2008. Under the terms of the Rosy Blue Note, the Company's
failure to pay such invoices constitutes an event of default if
the Company fails to pay these invoices within ten days after
receipt of the notice. If this event of default is neither cured
nor waived within such ten-day period, the principal amount of the
Rosy Blue Note will be payable upon demand prior to its maturity
date, which had been extended to March 31, 2009. From and after
the date of any event of default under the Rosy Blue Note, the
principal amount of this note and all accrued and unpaid interest
will bear interest at a rate per annum of 8% (instead of 6%).

                  Other Extended Notes

As of June 13, 2008, WJI had an aggregate principal amount of
approximately $13.5 million of trade debt evidenced by other
unsecured term promissory notes that have been amended by a Note
Extension Agreement between WJI and its other inventory suppliers
(Other Extended Notes). The terms of the Other Extended Notes
limit the aggregate principal amount that WJI is permitted to
repay to holders of unsecured term promissory notes prior to March
31, 2009, to the extent such payments are not made on a pro-rata
basis to the holders of the Other Extended Notes. If WJI pays any
amount in excess of such limit, it would constitute an event of
default.

                   Cross-default Provision

The Company could not pay in full the principal amount outstanding
under the Fabrikant Note, the Fabrikant Debt and/or the Rosy Blue
Note prior to March 31, 2009 without triggering this type of event
of default under the Other Extended Notes. From and after the date
of any event of default under the Other Extended Notes, the
principal amount of these notes and all accrued and unpaid
interest will bear interest at a rate per annum of 8% (instead of
6%).

The failure of WJI to pay at maturity, or within any applicable
grace period, any principal amount in excess of $1.0 million or
the failure of WJI to observe or perform any material term of an
agreement evidencing debt in excess of $1.0 million that would
permit an acceleration of the maturity of such debt would give
rise to an event of default under the Third Amended and Restated
Credit Agreement, dated as of February 20, 2007, by and among
Whitehall Jewelers, Inc., LaSalle Bank National Association, as
administrative and collateral agent for the banks party thereto,
the Banks, Bank of America N.A. and Wells Fargo Retail Finance,
LLC, as managing agents, as further amended to date.

As a result of this cross-default provision, an event of default
would arise under the Senior Credit Agreement if WJI fails to cure
its defaults with respect to the Fabrikant Note, the Fabrikant
Debt and the Rosy Blue Note or any events defaults that may arise
with respect to the Other Extended Notes. Additionally, a cross-
default under the Term Loan Credit Agreement would also constitute
an event of default under the Senior Credit Agreement. WJI's
indebtedness under the Senior Credit Agreement is guaranteed by
the Company and secured by a senior lien on substantially all of
the assets of the Company and WJI. On June 13, 2008, WJI had
approximately $64.5 million of outstanding borrowings under the
Senior Credit Agreement. If an event of default arises under the
Senior Credit

Agreement, the administrative agent may exercise the remedies
available to the lenders under this agreement, including causing
all outstanding indebtedness thereunder to accelerate and become
due. Additionally, the collateral agent could proceed against the
collateral securing WJI's indebtedness, which includes
substantially all of the Company's and WJI's assets.

The failure of WJI to pay at maturity, or within any applicable
grace period, any principal amount in excess of $1.0 million or
the failure of WJI to observe or perform any material term of an
agreement evidencing debt in excess of $1.0 million that would
permit an acceleration of the maturity of such debt would give
rise to an event of default under the Term Loan Credit Agreement,
dated as of January 18, 2008, by and among Whitehall Jewelers,
Inc., as borrowers, the lending institutions from time to time
party thereto, and PWJ Lending II LLC, as administrative agent and
collateral agent for the agents and lenders, as amended to date.

As a result of this cross-default provision, an event of default
would arise under the Term Loan Credit Agreement if WJI fails to
cure its defaults with respect to the Fabrikant Note, the
Fabrikant Debt and the Rosy Blue Note or any events defaults that
may arise with respect to the Other Extended Notes. Additionally,
a cross-default under the Senior Credit Agreement would also
constitute an event of default under the Term Loan Credit
Agreement.

On June 13, 2008, WJI had $40 million of outstanding borrowings
under the Term Loan Credit Agreement. WJI's indebtedness under the
Term Loan Credit Agreement is guaranteed by the Company and
secured by a junior lien on substantially all of the assets of the
Company and WJI. If an event of default arises under the Term Loan
Credit Agreement, PWJ Lending II LLC, as sole lender under that
agreement, may exercise its remedies thereunder, including causing
all outstanding indebtedness thereunder to accelerate and become
due. Additionally, PWJ Lending II LLC could proceed against the
collateral securing WJI's indebtedness, which includes
substantially all of the Company's and WJI's assets.

           Directors and Certain Officers Leave

Daniel Platt resigned as a Director of the Company effective June
10, 2008. His resignation is not due to any disagreement with the
Company or any matter relating to the Company's operations,
policies or practices.

         Vendors Demand Additional Payment Assurances

Subsequent to the filing of the Company's Form 10-K on May 16,
2008, many of the Company's vendors have requested additional
payment assurances or accelerated payment terms before shipping
additional merchandise to the Company. Furthermore, these vendors
have indicated that they would not be willing to continue to
provide merchandise to the Company on a consignment basis without
similar additional payment assurances or accelerated payment
terms. If the Company is unable to provide such additional payment
assurances or does not agree to such accelerated payment terms,
the Company will likely be unable to maintain its inventory
levels, which would have a material adverse effect on its results
of operations or financial condition.

On or about May 29, 2008, PWJ Lending II LLC, which is currently
the sole lender under the Term Loan Credit Agreement, communicated
to the Company that it would exercise its discretion to not lend
any additional funds to WJI under the Term Loan Credit Agreement
at this time.

Additionally, WJI received a letter dated May 30, 2008 from the
administrative agent for the Senior Credit Agreement notifying it
that the administrative agent implemented a $5 million
availability reserve effective as of May 30, 2008. The
administrative agent has discretion under the Senior Credit
Agreement to implement reserves from time to time. The
implementation of this reserve results in a corresponding
reduction in liquidity of $5 million under the Senior Credit
Agreement. On June 13, 2008, WJI had $64.5 million of outstanding
borrowings under the revolving credit facility provided pursuant
to the Senior Credit Agreement as well as $5.4 million in
outstanding letters of credit under this agreement. Taking the new
reserve, outstanding borrowings and letters of credit into
account, the borrowing availability under the Senior Credit
Agreement was approximately $3.1 million as of the close of
business on June 13, 2008, as determined by the borrowing base
formula.

As a result of these developments, the Company is facing
significant challenges in meeting its ongoing liquidity
requirements. Based on the Company's cash on hand as well as
current and anticipated cash flow from operations, the current
borrowing availability under the Senior Credit Agreement is not
adequate to meet the Company's working capital and capital
expenditure needs beyond the end of June 2008. Therefore, the
Company needs additional financing in the near term to fund its
working capital and capital expenditure needs. The Company is
actively considering various financing options and may seek
protection under the Federal Bankruptcy Code.

              About Whitehall Jewelers Holdings

Whitehall Jewelers Holdings, Inc., formerly known as BTHC VII,
Inc., completed the 2007 Merger and became the ultimate parent
company of Whitehall Jewelers, Inc. and now owns and operates a
jewelry business. Whitehall is a wholly-owned subsidiary of
Whitehall Jewelers Holdings, Inc.

Since the holdings does not operate a business since November
2004, when it emerged from bankruptcy, until the Merger, the
description of its business is principally a description of the
business of WJI, its wholly owned subsidiary.

The holdings' consolidated balance sheet as at Feb. 2, 2008 showed
$184,829,000 in assets, $157,375,000 in liabilities and
$27,454,000 stockholders equity.


WHITEHALL JEWELERS: PWJ Agrees to Raise Loan Commitment to $50MM
----------------------------------------------------------------
Whitehall Jewelers, Inc., a wholly-owned subsidiary of Whitehall
Jewelers Holdings, Inc., entered into a First Amendment to Term
Loan Credit Agreement, dated as of April 30, 2008, with PWJ
Lending II LLC, as administrative and collateral agent and as a
lender.

This agreement amends the Term Loan Credit Agreement, dated as of
January 18, 2008, by and among the Company and PWJ Lending II LLC,
as administrative agent and collateral agent, and the lending
institutions from time to time party thereto. The First Amendment
increases the aggregate lending commitment under the Term Loan
Credit Agreement from $35 million to $50 million. The proceeds
from any additional borrowings under the Term Loan Credit
Agreement, as amended, will be used for working capital and
general corporate purposes. The Company is fully and
unconditionally guaranteeing all borrowings by WJI under the Term
Loan Credit Agreement, as amended.

On May 1, 2008, WJI borrowed an additional $5 million under the
Term Loan Credit Agreement, as amended. As of May 1, 2008, WJI had
borrowed an aggregate principal amount of $40 million under this
credit agreement and may borrow up to an additional $10 million
under the Term Loan Credit Agreement at any time before May 2,
2009 (unless the Term Loan Credit Agreement is terminated
earlier). If the Company requests any such additional borrowings,
funding will be in the lender's sole and absolute discretion. Any
additional borrowings under this credit agreement may be made in
one or more draws, with each draw not to be less than $2.5
million.

PWJ Lending II LLC is entitled to a fee equal to two percent of
any additional principal amount borrowed pursuant to the First
Amendment. PWJ Lending II LLC is an affiliate of Prentice Capital
Management, LP, which is the manager of PWJ Funding, LLC and PWJ
Lending LLC. As such, Prentice Capital may be deemed to have
voting control and investment discretion over securities owned by
PWJ Funding, LLC and PWJ Lending LLC, which beneficially own a
total of 29,509,399 shares, which represents more than a majority
of the Company's outstanding shares of common stock. Additionally,
two of the Company's five directors are affiliated with Prentice
Capital.

              About Whitehall Jewelers Holdings

Whitehall Jewelers Holdings, Inc., formerly known as BTHC VII,
Inc., completed the 2007 Merger and became the ultimate parent
company of Whitehall Jewelers, Inc. and now owns and operates a
jewelry business. Whitehall is a wholly-owned subsidiary of
Whitehall Jewelers Holdings, Inc.

Since the holdings does not operate a business since November
2004, when it emerged from bankruptcy, until the Merger, the
description of its business is principally a description of the
business of WJI, its wholly owned subsidiary.

The holdings' consolidated balance sheet as at Feb. 2, 2008 showed
$184,829,000 in assets, $157,375,000 in liabilities and
$27,454,000 stockholders equity.


WINDY CITY: Case Summary & Largest Unsecured Creditor
-----------------------------------------------------
Debtor: Windy City Group, LLC
        26853 N. 117th Place
        Scottsdale, AZ 85262

Bankruptcy Case No.: 08-07274

Chapter 11 Petition Date: June 18, 2008

Court: District of Arizona (Phoenix)

Debtor's Counsel: Tim Coker, Esq.
                  Email: timcoker@cox.net
                  Coker Law Office
                  408 E. Southern Ave., Ste. 102
                  Tempe, AZ 85282-5200
                  Tel: (602) 258-2611
                  Fax: (602) 258-2664

Estimated Assets: $10 million to $50 million

Estimated Debts:  $10 million to $50 million

Debtor's Largest Unsecured Creditor:

   Entity                      Nature of Claim       Claim Amount
   ------                      ---------------       ------------
Stearns Bank Arizona           30.47 acres of raw    $4,250,000
9225 E. Shea Blvd.             land in Carefree,
85260                          Arizona


WYOMING ETHANOL: Files for Bankruptcy in Wyoming
------------------------------------------------
Wyoming Ethanol along with two affiliates filed for bankruptcy
protection under Chapter 11 of the U.S. Bankruptcy Code before the
U.S. Bankruptcy Court for the District of Wyoming, listing total
assets of $29.6 million and total debts of $28.7 million, Steven
Church of Bloomberg News reports.

Wyoming Ethanol will tell the Court in a later filing the reason
why it sought for protection, Mr. Church relates.

On Dec. 17, 2007, Wyoming Ethanol's parent company, Renova
Energy Plc, suspended construction of ethanol production facility
and waste-to-energy power plant in Heyburn, Idaho, due to cost
overruns.  The plants were owned by a Wyoming Ethanol unit,
according to papers filed with the Court.

According to Renova Energy, its attempt to raise additional
funding to complete the projects have been adversely affected by
the present conditions in the credit and equity markets, and high
raw materials costs.  The projects will cost approximately
$60.1 million in the aggregate, which is comprised of
$45.2 million for the ethanol plant and $14.9 million for the
power plant.

London-based Renova Energy did not file for bankruptcy, Mr. Church
notes.

Wyoming Ethanol operates ethanol plants in Wyoming and Idaho, and
distributes ethanol to gasoline retailers and distributors.


WYOMING ETHANOL: Voluntary Chapter 11 Case Summary
--------------------------------------------------
Debtor: Wyoming Ethanol, LLC
        950 West Bannock St., Ste. 500
        Boise, ID 83702

Bankruptcy Case No.: 08-20345

Debtor-affiliates filing separate Chapter 11 petitions:

        Entity                                     Case No.
        ------                                     --------
        Renova Energy (ID), LLC                    08-20346
        Renova Energy, Inc.                        08-20347

Type of business:  The Debtors manufacture ethyl and ethanol
                   alcohol.  They are all subsidiaries of Renova
                   Energy PLC, a UK-based renewable fuel company.  
                   See http://www.renova-energy.com/

Chapter 11 Petition Date: June 19, 2008

Court: District of Wyoming (Cheyenne)

Judge: Peter J. McNiff

Debtor's Counsel: Paul Hunter, Esq.
                  E-mail: attypaulhunter@prodigy.net
                  2616 Central Ave.
                  Cheyenne, WY 82001
                  Tel: (307) 637-0212

Wyoming Ethanol, LLC's Financial Condition:

Estimated Assets: $10 million to $50 million

Estimated Debts:  $10 million to $50 million

The Debtors did not file lists of their largest unsecured
creditors.


* Fitch Thinks US Agribusiness Cos. Face High Risk of Credit Fall
-----------------------------------------------------------------
Fitch Ratings believes that U.S. packaged food and agribusiness
companies face increased risk of credit deterioration as commodity
prices soar, according to a special report.

'No company that operates along the food chain is immune from or
hasn't felt the effects of high agricultural commodity costs,'
said Wesley Moultrie, Senior Director, Fitch Ratings.  
'Additionally, energy prices are also pressuring the operating
segments of these companies.'

The agribusiness segment is experiencing strong market conditions
globally, although rising earnings have been overshadowed from a
credit perspective by weak cash flow from operations.  Fitch's
primary concern for agribusiness remains the mounting working
capital usage that has led to prolonged negative free cash flow.

'Additional negative rating actions may occur if a decline in debt
usage to finance working capital does not occur over the near
term,' said Judi Rossetti, Director, Fitch Ratings.  'Capital
expenditures may require some restraint to maintain current
ratings, and the use of equity or proceeds from the sale of non-
core assets to fund a portion of working capital needs would be
viewed positively.'

Ratings for most packaged food companies are expected to remain
stable in the near term.  However, margin erosion, combined with
more aggressive financial policies such as debt-financed share
repurchases or acquisitions, could lead to negative rating
actions.  In contrast, protein processors are much more heavily
affected by rising grain costs than packaged food companies due to
the high percentage of feed costs required to produce protein
products.  Furthermore, there is the risk that cost-conscious
consumers will shift more towards private-label products as food
price increases are passed along to consumers.

Fitch notes also that recent stormy weather in the Midwest has led
to further price spikes for agricultural commodities, particularly
corn and soybeans.  The price of corn is up approximately 24% and
soybeans are up approximately 13% since the end of May.


* S&P Thinks Canadian Municipalities Can Pull Through Tough Times
-----------------------------------------------------------------
There may be chilly times ahead, but Standard & Poor's Ratings
Services believes Canadian municipalities should be able pull
through.
     
"Overall, the resilient Canadian economy, municipalities' adequate
financial strength, the support form the senior levels of
government, and good planning should ensure that Canadian
municipalities weather the developing storm," Standard & Poor's
credit analyst Yousaf Siddique said in a report.
     
The report, entitled "Canadian Municipalities Should Withstand The
Developing Economic Cold Front," says there's no doubt that
Canadian municipalities will be affected as the U.S.--Canada's
biggest trading partner--faces tough times ahead.  In addition to
the effects of the strong Canadian dollar on trade
competitiveness, softening U.S. demand will dampen exports.  The
slowdown, as well as the strong Canadian dollar, will affect most
those municipalities with heavy exposure to manufacturing or a
reliance on crossborder spending.
     
Still, S&P believe there won't be widespread deterioration in the
credit quality of the rated municipalities.  S&P are keeping an
eye on potential problems, such as lower tax revenues and rising
debt.


* FDIC Chair Suggests Supervision of Failing Investment Banks
-------------------------------------------------------------
Federal Deposit Insurance Corp. chairman Sheila Bair spoke to the
Exchequer Club of Washington D.C. on June 18, 2008.  She explained
"why the FDIC is spending time worrying about what then seemed
such a low probability event as the failure of a large bank."

She recalled her speech a year ago and commented that "[s]ince
then, the [Financial Services Authority] has taken over Northern
Rock [in the U.K.] after announcing it would protect all
depositors to prevent a bank run and the Fed has intervened to
prevent the bankruptcy of Bear Stearns.  The failure of a large
bank remains highly unlikely."

                 Update on FDIC Readiness Efforts

The FDIC's Board adopted a final rule to modernize the claims
process.  The rule reflects the comments received on several
proposed rulemakings on the claims process issued over the past
few years.  It also reflects extensive talks FDIC held with
industry representatives.

The rule requires that large banks have the ability, in the event
of failure, to do several things.  They must be able to place
holds on a fraction of large deposit accounts, produce depositor
data for the FDIC in a standard format, and automatically debit
uninsured deposit accounts so that they will share losses with the
FDIC.

This approach should give most depositors uninterrupted access to
virtually all their funds, thus diminishing the likelihood that
liquidity problems for individuals and businesses will lead to
disruption in the financial system.  To complement the industry's
efforts, we have been extensively modernizing our computer systems
and expanding our ability to categorize large numbers of claims in
a very short time -- one to two days.

Ms. Bair said she also expects that the Board will soon consider
an NPR on qualified financial contracts, which include derivatives
and some other financial contracts.  When a bank fails, the FDIC
has only one business day to decide how to treat the bank's QFCs.  
The FDIC is also considering on whether all banks should be held
to some minimum recordkeeping requirements on their derivatives
portfolios.

                The Evolution of "Too Big To Fail"

Ms. Bair recalled describing a year ago about the evolution of
"too-big-to-fail" for commercial banks and the two events that
served as the book ends for how the U.S. has approached the
tradeoff between stability and moral hazard -- the resolution of
Continental Illinois in 1984 and the passage of the FDIC
Improvement Act of 1991, known as FDICIA.

"The resolution of Continental Illinois was a turning point for
the FDIC, just as Northern Rock and Bear Stearns appear to be for
the FSA and the Fed.  In Continental Illinois, the FDIC provided
open bank assistance and protected more than just insured
deposits, but there were some key differences," she said.

At the time, the FDIC had the statutory authority to act as
receiver for a failed bank, and the deposit insurance fund-built
by industry contributions-was available for open bank assistance.
However, the FDIC still maintained a credible threat of closing
the bank.  Although shareholders had to approve the transaction,
their interests were greatly reduced and subject to potential
elimination.

After Continental, in response to concerns about disparate
treatment of large and small banks, the FDIC used its discretion
to resolve failures in ways that protected most, if not all
creditors.

In 1987, the FDIC received bridge bank authority.  Bridge banks
allow the operations of a bank to continue under FDIC management
without requiring shareholder approval.  In 1991 Congress sought
to further reduce costs and the potential for moral hazard by
requiring that the FDIC always use the least costly method of
resolving a failed bank.

                         Investment Banks

According to Ms. Bair, Northern Rock and Bear Stearns raise new
questions about how to strike the right balance between stability
and containing systemic risk, on the one hand, and containing
moral hazard and protecting the federal safety net, on the other.

The handling of Bear Stearns kept the institution open, preserved
some shareholder value, and protected all other creditors.  It
also extended the federal safety net by providing discount window
liquidity support and an express credit guarantee of $29 billion.
In the case of Continental, the shareholders were eventually wiped
out and the management was removed.

"Should we view the extension as a one-time event or as permanent?
In my view, it is almost impossible to go back," she commented.

"[I]t makes sense to extend some form of greater prudential
regulation to investment banks as well as a process or protocol
for dealing with a systemically significant investment bank
approaching failure.  The government cannot be put in the position
of having to simply write a blank check when these institutions
get into trouble," she asserted.

At a minimum, there should be greater parity between commercial
banks and investment banks over how they manage risk, liquidity
and capital, Ms. Bair said.  "There should be a Prompt Corrective
Action-like mechanism with mandatory triggers for supervisory
intervention and, if necessary, closure if capital is not
restored. While many cite Bear Stearns and Northern Rock as
liquidity failures, they were both over-leveraged.  Greater
capital improves access to liquidity."

"However, this is not meant as criticism of the Fed," she
explained.  "There is a playbook for the failure of a commercial
bank, even a systemically important one, but there isn't any for
the failure of an investment bank. The Fed had to invent one on
the fly.  The Fed was in essentially the same boat as the FSA,
which had no ready mechanism for handling the failure of Northern
Rock. Lack of a playbook was part of the reason the UK had to
protect all depositors and nationalize the bank."

            Receivership Process for Investment Banks

"[W]e need predefined rules to handle potential failures," she
stressed.  "I believe that we need a special receivership process
for investment banks that is outside the bankruptcy process, just
as it is for commercial banks and thrifts. The reason goes back to
the public versus private interest."

"The bankruptcy process focuses on protecting creditors.  When the
public interest is at stake, as it would be here, we need a
process to protect it.  This process must achieve two central
goals.  First, it should minimize any public loss and impose
losses first on shareholders and general creditors.  Second, it
must allow continuation of any systemically significant
operations."

She maintained her suggestion that the FDIC's authority to act as
receiver and to set up a bridge bank to maintain key functions and
sell assets offers a good model.  "A temporary bridge bank allows
the government to prevent a disorderly collapse by preserving
systemically significant functions.  It enables losses to be
imposed on market players who should be at risk, such as
shareholders.  It also creates the possibility of multiple bidders
for the bank and its assets, which can reduce losses."

"The authorities that the FDIC has are a good model, but there are
still many open issues," Ms. Bair said.  "In an intervention,
access to liquidity and a method for bearing losses are
necessities."

She raised another question of whether all investment banks would
be subject to the receivership process.  According to her, many
commentators suggest that only systemically important investment
banks are of concern, but determining how and when a decision is
to be made on whether a potential failure poses a systemic risk is
not simple.

"The systemic risk determination process for banks is complex and
is made only when failure threatens.  It requires a two-thirds
majority of both the Boards of the FDIC and the Federal Reserve,
as well as the approval of the Secretary of the Treasury, who must
first consult with the President."

Ms. Bair said that at a minimum it would seem that investment
banks qualifying for access to the discount window should be
subject to heightened prudential supervision.

"The treatment of creditors and shareholders in receivership also
poses issues," she continued.  "For commercial banks, as I
mentioned, the least cost test generally imposes losses on classes
of creditors and on shareholders, thereby maintaining market
discipline and reducing resolution costs."

"But in a systemic risk situation, the least cost test can be
relaxed.  However, my assumption is that even if a systemic risk
determination were made for an insured depository institution,
shareholders would take a complete loss and general creditors
would at least take significant hair cuts.  We will need to decide
whether the rules for paying claimants in an investment bank
receivership should be the same."

She said that they've found that the inter-relationships between
the institution, its parent and other affiliates within the
holding company could potentially complicate an orderly
receivership.  "The same situation would hold true for investment
banks. Congress may want to also consider addressing this issue,"
she suggested.

"I doubt there would be many volunteers to be the receiver.  For
that job -- there would probably be a stampede for the exit.  
Running a bridge bank, as the FDIC has done on several occasions,
is a thankless job.  Nevertheless -- while I'm agnostic about how
this is handled for investment banks -- housing all receivership
and resolution responsibility in a single federal agency may make
sense.  It would ensure that expertise is at the ready.  Also,
large banks and investment banks have many interrelationships with
each other, including counterparty exposures.  This again argues
for putting all resolution authority in a single agency."

A full-text copy of the statement can be obtained at no cost at
http://www.fdic.gov/news/news/speeches/chairman/spjun1808.html

                          About FDIC

The Federal Deposit Insurance Corporation -- http://www.fdic.gov/
-- preserves and promotes public confidence in the U.S. financial
system by insuring deposits in banks and thrift institutions for
at least $100,000; by identifying, monitoring and addressing risks
to the deposit insurance funds; and by limiting the effect on the
economy and the financial system when a bank or thrift institution
fails.

An independent agency of the federal government, the FDIC was
created in 1933 in response to the thousands of bank failures that
occurred in the 1920s and early 1930s.  Since the start of FDIC
insurance on Jan. 1, 1934, no depositor has lost a single cent of
insured funds as a result of a failure.

The FDIC receives no Congressional appropriations -- it is funded
by premiums that banks and thrift institutions pay for deposit
insurance coverage and from earnings on investments in U.S.
Treasury securities.  With an insurance fund totaling more than
$49 billion, the FDIC insures more than $3 trillion of deposits in
U.S. banks and thrifts -- deposits in virtually every bank and
thrift in the country.


* Reznick Group Fortifies Practice with Palladium Pacific Merger
----------------------------------------------------------------
Reznick Group entered a new strategic partnership with Palladium
Pacific to provide real estate lenders, investors, builders and
developers with a solution for REO, workout, and special asset
management services.

The strategic alliance is designed to help clients move quickly
and efficiently in evaluating their assets and optimizing asset
value.  Together, Reznick Group and Palladium will offer its
innovative Value Optimization Analysis program - a concise but
comprehensive analysis that compares value and risk data for each
liquidation alternative.

Reznick Group can also provide bankruptcy navigation, tax advice,
due diligence, strategic planning, forensic and compliance audits,
benchmark and milestone tracking, what-if analysis, site
maintenance and security, foreclosure and deed-in-lieu processing,
special purpose entity reporting and records management, as
required.

"This alliance brings together the two key sets of experts needed
to successfully provide the full range of financial advisory and
workout services to troubled assets or development projects during
these volatile economic times," Scott Farb, Reznick Group's Los
Angeles office managing principal and member of the firm's
National Commercial Real Estate Practice, said.  With Palladium's
full range of asset evaluation, management, and liquidation
services, they are the perfect fit for us."

"Reznick Group brings unparalleled knowledge, skills and resources
to bear in optimizing the value of residential and commercial
assets anywhere in the United States", Jim Hibbert, Palladium
Pacific managing principal, said.  "Over the past several years
we've enjoyed a successful relationship teaming up with Reznick
Group in servicing troubled assets, and we look forward to
leveraging off of that success in our new joint venture."

                        About Reznick Group

Headquartered in Bethesda, Maryland Reznick Group --
http://www.reznickgroup.com–- fka Reznick Fedder & Silverman is a  
Certified Public Accounting Firm and a professional corporation.  
The company provides accounting, tax and business advisory
services.  The company serves clients from a broad spectrum of
industries.  It focuses on real estate; it also targets business
owners and clients in such fields as lending, health care,
government, and not-for-profit agencies.  Subsidiaries and
affiliates are active in commercial real estate and services to
investors in tax-credit properties.  Founded in 1977, the company
maintains two offices in California--in Los Angeles and
Sacramento--and eight others in Atlanta, Georgia; Austin, Texas;
Baltimore and Bethesda, Maryland; Birmingham, Alabama; Charlotte,
North Carolina; Chicago, Illinois; and Tysons Corner, Virginia.



* BOOK REVIEW: Corporate Players: Designs for Working and
                       Winning Together
---------------------------------------------------------
Author:     Robert W. Keidel
Publisher:  Beard Books
Paperback:  276 pages
List Price: $34.95

Order your personal copy at
http://amazon.com/exec/obidos/ASIN/1587982587/internetbankrupt

In American business, the metaphor of the sports team is commonly
used for business groups of all sizes -- from ad hoc teams of a
few members that deal with temporary problems to groups of
executive managers who are responsible for long-term corporate
survival and the profitability of an entire organization.

The sports team is a favored metaphor because sports bring
individuals with different talents and different responsibilities
together to perform a particular activity and pursue a common
objective.  Within its framework, sports also allow for the
outstanding performance of particular individuals and recognition
of that performance.  The sports tem metaphor has become so common
in business and so routinely applied to business teams of all
sorts and sizes that little thought is usually given to its
specifics.

Corporate Players -- Designs for Working and Winning Together
takes a close look at what makes a sports team function
effectively and win.  The author then applies these observations
to develop a plan for those in the corporate world to be as
successful as those in the sports world.  While a reprint of a
1988 book, the lessons in this book are timeless.

Keidel identifies three main types of teams found in business:
autonomy, control and cooperation.  The author relates each to a
particular type of sports team: autonomy for baseball, control for
football and cooperation for basketball.  A chart compares
differences among the three with respect to organizational
strategy, organizational structure, and organizational style.  

For instance, the organizational strategy for autonomy in base
ball is "adding value through star performers"; while the
organizational strategy for cooperation in basketball is
"innovating by combining resources in novel ways."

With a sharp analytic eye and decades of experience in different
aspects of business, including academic and government positions,
Keidel delves into the specifics of business groups as sports
teams.  

A fundamental point often overlooked by businesspersons is that
teams in different sports are different in significant ways.  An
understanding of these differences is crucial for executives,
managers, and consultants who are responsible for conceptualizing
a team in relation to a particular business matter and then
bringing together a team of individuals.  

As such, executives, managers and consultants have roles similar
to a general manager and coach of a sports team.  In some case,
they may also have the role of a player on the team.

This chart and other aids, together with the author's engaging
commentary and enlightening analyses, will help business leaders
select the right personnel, assemble a team capable of performing
the task at hand, and then coordinate all of the players to
accomplish the desired objective.

Robert W. Keidel has a Ph.D. from Wharton, and has also been a
Senior Fellow at this top business school.  An author of three
other books and many articles, he teaches courses in business
strategy, technology, and organization at Drexel University's
Lebow College of Business.  Robert Keidel Associates is his
business consulting firm.

                             *********

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.

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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.  Raphael M. Palomino, 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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