TCR_Public/080714.mbx          T R O U B L E D   C O M P A N Y   R E P O R T E R

              Monday, July 14, 2008, Vol. 12, No. 166           

                             Headlines

ACCESS PHARMA: Agrees to Merge with MacroChem Corp.
ADASON GROUP: Case Summary & 20 Largest Unsecured Creditors
ADELPHIA COMMS: Inks Stipulation Resolving $18 Mil. ARH Claims
ADELPHIA COMMS: Court OKs $480 Mil. in Professional Fees & Costs
ADVANCED CELL: Sells $1,200,000 Unsecured Convertible Note to JMJ

AMERICAN HOME: To Sell $26.86MM Unencumbered Non-Performing Loans
ASARCO LLC: Court Allows EPA to Do Repairs in Leadville Mine
ASARCO LLC: Judiciary Panel Members Want Careful Study on Vedanta
ASARCO LLC: Strikes CBA in Relation to Sterlite Acquisition
ASHLAND INC: Agrees to Acquire Hercules Inc. for $3.3 Billion

ASHLAND INC: Merger Agreement Cues Moody's Review of Ba1 Rating
BAPTIST HEALTH: Moody's Renews Watchlist on Ba2-Rated Debt
BLUEGREEN CORP: Secures $30MM Line of Credit from Wells Fargo Arm
BOWNE & CO: Acquires Manhattan-Based Capital Systems for $13MM
BRUNSWICK: Deteriorating Marine Industry Cues Moody's Ratings Cut

BUFFETS HOLDINGS: Units Want to Reject 129 Restaurant Leases
CATHOLIC CHURCH: Davenport's Case to Remain Open, Court Rules
CATHOLIC CHURCH: Davenport Files Report on Non-Monetary Activities
CATHOLIC CHURCH: Court to Hear Fairbanks-Continental Feud
CATHOLIC CHURCH: 140 Fairbank Claimants Retain Manly & Stewart
CATHOLIC CHURCH: Final Order Closing Spokane's Case to be Amended

CATHOLIC CHURCH: Court Set July 18 as Portland's Brief Deadline
CATHOLIC CHURCH: Tucson's Capital Campaign Yields $31,200,000
CELLU TISSUE: S&P Holds 'B' Rating After Notes Upsize to $222MM
CHARYS HOLDING: Wants Exclusive Plan Filing Extended Until Aug. 4
CITYSCAPE HOME: Moody's Assigns Underlying Rating of B3 to Notes

CLAIRE'S STORES: Zimmermann Resigns as President for North America
COLONIAL DESIGN: Voluntary Chapter 11 Case Summary
CONTINENTAL AIRLINES: Posts $58MM Pretax Charge for Capacity Cuts
DELTA AIR: Workers Ask Congress to Limit Oil Speculation
DISTRIBUTED ENERGY: U.S. Trustee Forms 3-Member Creditors Panel

DISTRIBUTED ENERGY: Files Schedules of Assets and Liabilities
FANNIE MAE: Fed OKs Lending Plan; Treasury to Up Credit Line
FORD MOTOR: Names Ken Czubay as Head of U.S. Sales and Marketing
FREDDIE MAC: Fed OKs Lending Plan; Treasury to Up Credit Line
GAVILON GROUP: Sold to Ospraie Fund for $2.8 Billion

GAVILON GROUP: Moody's Puts Ba3 Rating After ConAgra Deal
GREEKTOWN CASINO: Committee Taps Clark Hill as Bankruptcy Counsel
GREEKTOWN CASINO: Wants to Employ Kurtzman Carson as Claims Agent
GREY WOLF: Precision to Offer $10/Share if Basic Merger Fails
HERCULES INC: Inks $3.3 Billion Merger Agreement with Ashland Inc.

HERCULES INC: Merger Agreement Cues Moody's Review of Ba2 Rating
H.J. HEINZ: Moody's Assigns Ba1 Rating on Preferred Stock
INDYMAC BANCORP: OTS Closes Bank, Transfers Operations to FDIC
INDYMAC BANCORP: Banking Industry on "Solid Footing," FDIC Says
JIM PALMER: Potential Buyer Reiterates Plan to Acquire Parent

JOHNSTON SHIELD: Case Summary & 20 Largest Unsecured Creditors
JOSEPH CAGNO: Case Summary & 20 Largest Unsecured Creditors
JPMORGAN RV: Poor Performance Cues S&P to Chip Notes Rating to BB+
LINENS N THINGS: AMEX Wants Stay Lifted to End Merchant Agreement
LINENS N THINGS: Says 87 Underperforming Stores Should be Closed

LINENS N THINGS: Court Approves Cole Schotz as Committee Counsel
LINENS N THINGS: Court Approves Increase in Insurance Caps
LINENS N THINGS: Pickering Wants Stay Lifted to End Lease
LION INC: Obtains Shareholders Nod to Sell Assets for $525K Cash
M/I HOMES: Moody's Cuts B1 Corporate Family Rating; Outlook Neg.

MASTR ASSET: S&P Puts Default Ratings on 12 Certificate Classes
MEDICOR LTD: Has Until September 30 to File Chapter 11 Plan
MELBOURNE-UNIV. APARTMENTS: Case Summary & 15 Unsecured Creditors
MERGE HEALTHCARE: Dismisses KPMG LLP as Public Accounting Firm
MERGE HEALTHCARE: Complies with Nasdaq Minimum Bid Price Protocol

MIDWEST AIR: Pilots Predict Bankruptcy After Labor Talks Fail
NATIONAL R.V.: Has Until August 26 to File Chapter 11 Plan
NETBANK INC: Judge Funk Approves Amended Disclosure Statement
NEXCEN BRANDS: Completes Purchase of Bill Blass' Couture Business
NORTHLAKE CDO: Moody's Cuts & Places on Review Notes' Ratings

NORTH MIAMI LAND: Auction of Interest in BLIA Set July 14
NV TELEVISION: Moody's Assigns Corporate Family Rating of B3  
PACE PRODUCT: Case Summary & 14 Largest Unsecured Creditors
PARK CAPITAL: Owner Depletes Investors' Money; Attempts Suicide
PETRA CRE: Fitch Puts $32.5MM 'B' Notes Rating Under Neg. Watch

PILGRIM'S PRIDE: Moody's Cuts Ratings to B1; Outlook is Stable
PROGRESSIVE MOLDED: US Trustee Wants Cases Converted to Chapter 7
PROGRESSIVE MOLDED: Wants Manufacturing Business to be Liquidated
PROGRESSIVE MOLDED: Gets Green Light to Wind-Down Business
PROGRESSIVE MOLDED: Court Orders Restraint to Canadian Employees

QUALITY WAY: Case Summary & 20 Largest Unsecured Creditors
QUEBECOR WORLD: Judge Peck Modifies Management Incentive Plan
QUEBECOR WORLD: Wants Five More KPMG Retention Letters Approved
QUEBECOR WORLD: Printing Agreement with Dex Extended to 2015
QUEBECOR WORLD: Receives Conversion Notices for Series 5 Shares

RELIANT ENERGY: Has Until August 19 to File Chapter 11 Plan
REPUBLIC AIRWAYS: To Slash 500 Jobs Due to Contract Reductions
ROPER INDUSTRIES: S&P Lifts $500MM Shelf Rating to BBB- from BB+
SENSATA TECHNOLOGIES: Moody's Cuts Ratings, Junks Senior Notes
SINGLETON COLES: Case Summary & 20 Largest Unsecured Creditors

SLATE CDO: Portfolio Credit Quality Slide Cues Fitch's Neg. Watch
SPECTRUM BRANDS: Bares Supplemental Info on Pet Biz Sold to Salton
THORNBURG MORTGAGE: Parties Approve Changes to Financing Terms
TRIBUNE CO: DBRS Confirms 'B(low)' Issuer Rating
VESTA INSURANCE: Gaines Trustee Allowed to Transfer Claim Records

VIASYSTEMS INC: Stable Operating Trends Cue S&P's Positive Outlook
VICTORY MEMORIAL: Judge Craig Approves Disclosure Statement
WACHOVIA BANK: S&P Junks Rating on Class RC Certificates
WHITEHAWK CDO: Moody's Withdraws Ratings, Junks Rating on Class C
ZVUE CORP: Inks 3-Month Standstill Pact with YA Global Investments

* S&P Says More Job Losses in June Hint Weakness in Labor Markets
* S&P: Negative Credit Trend Continues for Midstream Energy Cos.
* S&P: Three More Global Entities Moved to Speculative-Grade Slot
* S&P: Credit Markets Woe May Alter Students' Ability to Pay Loan
* S&P: Dull Economic Environment Pressures Leveraged Chem. Cos.

* S&P Says Miss. Economic Base Expands Due to 1992 Gambling Law
* S&P Cuts Ratngs on Certain Tranches from Various Aircraft Trusts
* Most Commercial Property Post "Yellow Scores" in Moody's Report
* Moody's Says FDA's Initiatives Might Strain Medical Device Cos.

* FDIC Says Banking Industry on "Solid Footing" Amid IndyMac Fall

* 3 DLA Piper Lawyers Join McKenna Long's Washington Office

* BOND PRICING: For the Week of July 7 to July 11, 2008

                             *********

ACCESS PHARMA: Agrees to Merge with MacroChem Corp.
---------------------------------------------------
Access Pharmaceuticals Inc. will be acquired by MacroChem
Corporation through the issuance of 2.5 million shares of Access
Pharmaceuticals' common stock.  The acquisition is expected to
close in the third quarter of 2008.

MacroChem's product portfolio includes two clinical stage oncology
products, 4-thio Ara-C, which is a nucleoside analogue licensed
from Southern Research Institute and sodium phenylbutyrate, which
is licensed from the NIH and is partnered with Access
Pharmaceuticals.

"The acquisition of MacroChem brings multiple late-stage clinical
drug candidates into the Access pipeline, some of which are
further along than Access' current assets," Jeffrey B. Davis,
Access' President and CEO, stated.  "We are currently active in
partnering and out-licensing discussions, and MacroChem's
dermatology assets will be added to that partnering effort."  

"The oncology assets are highly synergistic with the oncology
development efforts ongoing at Access, and we look forward to the
opportunity to move them along and monetize those assets through
additional partnering activities," Mr. Davis added.

"With the precarious state of the financial markets adding further
challenges for microcap biopharmaceutical companies, we believe
the strategic combination with Access is a very positive step
forward for the continued development of MacroChem's product
candidates," Robert J. DeLuccia, Chairman of MacroChem
Corporation, stated.  "We are pleased to work with Access to
assure an orderly transition and believe that this is the best
strategy currently available to maximize value for our
shareholders."

                    About MacroChem Corporation
  
Headquartered in Massachusetts, MacroChem Corporation (OTC:MACM)
-- http://www.macrochem.com/-- is a specialty pharmaceutical  
company that develops and seeks to commercialize pharmaceutical
products.  The company's portfolio of product candidates includes
products based on its drug delivery technologies SEPA, MacroDerm
and DermaPass.

                   About Access Pharmaceuticals

Headquartered in Dallas, Texas, Access Pharmaceuticals Inc.
(OTC BB: ACCP.OB) -- http://accesspharma.com/-- is an emerging
biopharmaceutical company developing products for use in the
treatment of cancer, the supportive care of cancer, and other
disease states.  The company's product for the management of oral
mucositis, MuGard(TM) has received marketing clearance by the FDA
as a device.  The company's lead clinical development program for
the drug candidate ProLindac(TM) is in Phase II clinical testing.
Access also has advanced drug delivery technologies including
Cobalamin(TM) mediated oral drug delivery and targeted delivery.

At March 31, 2008, Access Pharmaceuticals reported total assets of
$7.3 million and total liabilities of $8.7 million, resulting in
a total stockholders' deficit of $1.4 million.

                       Going Concern Doubt

On March 31, 2008, Whitley Penn LLP, in Dallas, expressed
substantial doubt about Access Pharmaceuticals 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 pointed to the company's recurring
losses from operations, negative cash flows from operating
activities and an accumulated deficit.


ADASON GROUP: Case Summary & 20 Largest Unsecured Creditors
-----------------------------------------------------------
Debtor: The Adason Group, LLC
        1745 Phoenix Blvd., Ste. 240
        Atlanta, GA 30349

Bankruptcy Case No.: 08-72984

Type of Business: The Debtor provides advertising and consulting
                  services for a variety of industries.

Chapter 11 Petition Date: July 8, 2008

Court: Northern District of Georgia (Atlanta)

Judge: James Massey

Debtor's Counsel: Michael D. Robl, Esq.
                  Thomerson, Spears & Robl, LLC
                  104 Cambridge Ave.
                  Decatur, GA 30030
                  Tel: (404) 373-5153
                  Email: mdrobl@tsrlaw.com
                  http://www.tsrlaw.com/

Total Assets:   $16,000

Total Debts: $2,778,978

A list of the Debtor's largest unsecured creditors is available
for free at http://bankrupt.com/misc/ganb08-72984.pdf


ADELPHIA COMMS: Inks Stipulation Resolving $18 Mil. ARH Claims
--------------------------------------------------------------
Affiliate Relations Holdings, Inc., filed these claims against
Adelphia Communications Corporation and its debtor-affiliates:

  Claim No.  Basis for the Claim               Claim Amount
  ---------  -------------------               ------------
    19581    Arising out of the rejection      $18,812,086,
             of an affiliation agreement       plus
             between Adelphia Communications   unliquidated
             Corp. and ARH's predecessor       amounts from
             -in-interest, Affiliate Sales     ACC as alleged
             and Marketing, Inc. dated         contract
                                               rejection damages

    19830    Alleging that ARH paid            Unliquidated
             commissions to ACC in excess
             of the amount earned by ACC
             under the Affiliation Agreement

ACOM, meanwhile, asserted a claim against ARH for the non-payment
of commissions allegedly due for July 2006 pursuant to the
Affiliation Agreement.

The Debtors subsequently objected to the ARH Claims.

To resolve their claim dispute, the Debtors and ARH entered into
a stipulation, approved by the U.S. Bankruptcy Court for the
Southern District of New York, which provides that:

   a) The ARH Rejection Claim will be reduced to $10,250,000 as
      an allowed ACOM Other Secured Claim.

   b) The ARH Administrative Claim will be allowed for $400,000
      as an administrative priority claim against ACOM.  

   c) The ACOM Commission Claim will be allowed for $900,000.

   d) The ARH Administrative Claim will be paid by offsetting
      it against the ACOM Commission Claim, resulting to
      $500,000 as the net ACOM Commission Claim.

   e) The Net Commission Claim will be paid by reducing the
      initial cash distribution otherwise due to ARH with
      respect to the Allowed Rejection Claim by $500,000.

   f) The Claim Objections will be withdrawn with prejudice and
      the ARH Administrative and the ACOM Commission Claims
      will be deemed satisfied as a result of the offsets.

   g) ARH will receive a distribution on its Rejection Claim
      in: (i) cash; (ii) registered, unrestricted shares of
      Time Warner Cable Class A Common Stock; and (iii) CVV
      units from the Adelphia Recovery Trust, all free and
      clear of liens, claims and encumbrances upon the Court's
        final approval of the Stipulation.

   h) In no event will the initial distribution of cash and
      instructions by ACOM to its transfer agent to issue the
      TWC Stock be made no later than five days from the Final
      Approval Order.   The CVV units will be distributed on
      the next available subsequent distribution date.

   i) The parties will exchange mutual releases.

                      About Adelphia Comms

Based in Coudersport, Pennsylvania, Adelphia Communications
Corporation (OTC: ADELQ) -- http://www.adelphia.com/--
is a cable television company.  Adelphia serves customers in 30
states and Puerto Rico, and offers analog and digital video
services, Internet access and other advanced services over its
broadband networks.  The company and its more than 200
affiliates filed for Chapter 11 protection in the Southern
District of New York on June 25, 2002.  Those cases are jointly
administered under case number 02-41729.  Willkie Farr &
Gallagher represents the Debtors in their restructuring efforts.
PricewaterhouseCoopers serves as the Debtors' financial advisor.
Kasowitz, Benson, Torres & Friedman, LLP, and Klee, Tuchin,
Bogdanoff & Stern LLP represent the Official Committee of
Unsecured Creditors.

Adelphia Cablevision Associates of Radnor, L.P., and 20 of its
affiliates, collectively known as Rigas Manged Entities, are
entities that were previously held or controlled by members of
the Rigas family.  In March 2006, the rights and titles to these
entities were transferred to certain subsidiaries of Adelphia
Cablevision LLC.  The RME Debtors filed for chapter 11
protection on March 31, 2006 (Bankr. S.D.N.Y. Case Nos. 06-10622
through 06-10642).  Their cases are jointly administered under
Adelphia Communications and its debtor-affiliates' chapter 11
cases.

The Bankruptcy Court confirmed the Debtors' Modified Fifth Amended
Joint Chapter 11 Plan of Reorganization on Jan. 5, 2007.  That
plan became effective on Feb. 13, 2007.  (Adelphia Bankruptcy
News, Issue No. 188; Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000).


ADELPHIA COMMS: Court OKs $480 Mil. in Professional Fees & Costs
----------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of New York
directs Adelphia Communications Corp. and its debtor-affiliates to
pay $480,786,953 in final fees and expenses to these professionals
for services rendered during the Debtors' bankruptcy cases:

A. Debtors' Professionals

Professional         Fee Period    Allowed Fees Allowed Expenses
------------         ----------    ------------ ----------------
Pricewaterhouse-     06/26/2002-   $138,243,790     $7,696,607
Coopers LLC          02/13/2007

Wilkie Farr &        06/25/2002-     96,621,892      6,929,839
Gallagher LLP        02/12/2007

Kasowitz Benson      06/25/2002-     51,115,151      2,881,699
Torres Friedman      07/10/2002
LLP

Bragar Wexler &      08/20/2002-     23,737,554        584,046
Morgenstern LLP      02/13/2007

LEGC, LLC            08/01/2003-     21,305,247        784,341
                      02/13/2007

Lazard Freres &      06/25/2002-     19,437,167      1,233,593
Co. LLP              02/13/2007

Sullivan &           06/11/2004-     12,300,554        123,890
Cromwell LLP         02/13/2007

Covington &          06/10/2002      11,874,338
492,236              
Burling              02/13/2007

Jefferson            01/01/2004-     11,440,035      1,425,034
Wells Int'l. Inc.    02/13/2007

Cole Raywid &        05/01/2003-      7,018,474        311,370
Braverman LLP        12/31/2006

Klehr Harrison       07/19/2004-      5,910,863        651,786
Harvey Branzburg     02/13/2007
& Ellers LLP

Munger Tolles        04/27/2004-      4,120,374        134,596
& Olson LLP          02/12/2007

Holme Roberts        05/01/2004-      3,902,750         70,602
& Owen LLP           02/13/2007

Sherman & Howard     02/01/2004-      2,668,010        106,481
                      02/12/2007

Genetelli            12/01/2003-      2,620,608          6,743
Consulting Grp.      02/13/2007

Davis Wright &       06/01/2003-      2,537,605         90,540
Tremaine             02/13/2007

Chicago              07/24/2006-      2,249,995        144,257
Partners             02/13/2007

Duff & Phelps LLC    01/11/2003-      2,099,259         11,647
                      02/13/2007

Holland &            11/01/2004-      1,993,304        247,220
Knight LLP           02/13/2007

Tauber &             07/01/2005-      1,888,565         36,747
Balser P.C.          02/12/2007

Focused              03/01/2004-      1,746,562              0
Business             02/13/2007
Solutions, Inc.

Bond & Pecaro,       08/01/2003-      1,575,039         12,135
Inc.                 02/13/2007

BDO Seidman LLP      07/14/2003-      1,454,430         28,724
                      02/13/2007

Collective           11/04/2002-      1,086,643        112,356
Infrastructure       10/31/2004
Technology, Inc.

TMNG Strategy        07/19/2004-        888,722         19,677
                      08/25/2006

Fisher Sweetbaum     10/01/2005-        744,363         17,458
Levin & Sands        02/13/2007

Grubb & Ellis        02/04/2003-        424,860        104,101
                      02/13/2007

Spencer Stuart       03/01/2003-        312,000         14,782
                      02/13/2007

Dow Lohnes &         08/01/2002-        239,767        239,767
Albertson PLLC       02/28/2006

Bird Marella         09/01/2003-        236,491          5,670
Boxer Wolpert        02/13/2007
Nessim Drooks &
Lincenberg, APC

Kasowitz Benson      06/10/2002-        159,606         14,596
Torres Friedman      07/10/2002
LLP

Heidrick &           11/10/2003-         77,095         21,875
Struggles            05/19/2004

Ernst & Young        11/01/2003-         88,000          4,408
LLP                  02/29/2004                      

Jon Flinker          08/01/2003-         67,826          2,992
                      09/01/2004

Dreier LLP           09/01/2006-         30,581            404
                      02/31/2007

James Martin         09/01/2006-         19,200          1,049
                      02/13/2007

B. Official Committee of Unsecured Creditors' professionals

Professional         Fee Period    Allowed Fees Allowed Expenses
------------         ----------    ------------ ----------------
Greenhill &          07/16/2002-    $14,485,714       $101,563
Co., LLC             02/13/2007

Klee Tuchin          06/25/2002-      2,578,525        166,792
Bogdanoff &          02/13/2007
Stern LLP

Weiser LLP           03/01/2005-      2,431,144         10,850
                      02/13/2007

Neilson Elggren      08/01/2002-      1,990,795        144,404
LLP                  10/31/2005

Quest Turnaround     08/22/2003-        466,363        643,295
Advisors LLC         02/13/2007

Fisher & Phillips    06/01/2006-        134,355          8,907
                      02/13/2007

Hogan & Hartson LLP  07/01/2006-         60,362            625
                      02/13/2007

LECG, LLC            11/01/2005-           24,962           821
                      02/13/2007

C. Equity Committee's Professionals

Professional         Fee Period    Allowed Fees Allowed Expenses
------------         ----------    ------------ ----------------
Hewitt &             06/10/2002-       $327,310         $4,680
Associates,          02/13/2007
LLC

Geoffrey P.          02/01/2003-         56,133              0
Miller               02/12/2007

D. Counsel to certain employees of the Debtors

Professional         Fee Period    Allowed Fees Allowed Expenses
------------         ----------    ------------ ----------------
O'Melveny &          06/25/2002-       $336,846        $12,519
Myers                02/13/2007

The Court also authorized the Reorganized Debtors to pay $383,354
in the aggregate to these professionals as the amounts not
previously paid of the fees and expenses pursuant to the holdback
payment list:

         Professional                          Amount
         ------------                         ---------
         BDO Seidman                           $11,293
         Bird Marella                            3,586
         Bond & Pecaro                           8,588
         Chicago Partners                       47,223
         Cole Raywid                            41,795
         Collective Infrastructure              11,545
         Davis Wright                                -
         Dow Lohnes                                235
         Dreier                                    566
         Ernst & Young                               -
         Genetelli Consulting                   31,065
         Greenhill                             139,714
         Grubb & Ellis                               -
         James Martin                              384
         John Flinker                            1,962
         Lazard                                  3,837
         LECG                                      789
         Neilson Elggren                         1,928
         Sullivan & Cromwell                    79,362

                      About Adelphia Comms

Based in Coudersport, Pennsylvania, Adelphia Communications
Corporation (OTC: ADELQ) -- http://www.adelphia.com/--
is a cable television company.  Adelphia serves customers in 30
states and Puerto Rico, and offers analog and digital video
services, Internet access and other advanced services over its
broadband networks.  The company and its more than 200
affiliates filed for Chapter 11 protection in the Southern
District of New York on June 25, 2002.  Those cases are jointly
administered under case number 02-41729.  Willkie Farr &
Gallagher represents the Debtors in their restructuring efforts.
PricewaterhouseCoopers serves as the Debtors' financial advisor.
Kasowitz, Benson, Torres & Friedman, LLP, and Klee, Tuchin,
Bogdanoff & Stern LLP represent the Official Committee of
Unsecured Creditors.

Adelphia Cablevision Associates of Radnor, L.P., and 20 of its
affiliates, collectively known as Rigas Manged Entities, are
entities that were previously held or controlled by members of
the Rigas family.  In March 2006, the rights and titles to these
entities were transferred to certain subsidiaries of Adelphia
Cablevision LLC.  The RME Debtors filed for chapter 11
protection on March 31, 2006 (Bankr. S.D.N.Y. Case Nos. 06-10622
through 06-10642).  Their cases are jointly administered under
Adelphia Communications and its debtor-affiliates' chapter 11
cases.

The Bankruptcy Court confirmed the Debtors' Modified Fifth Amended
Joint Chapter 11 Plan of Reorganization on Jan. 5, 2007.  That
plan became effective on Feb. 13, 2007.  (Adelphia Bankruptcy
News, Issue No. 188; Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000).


ADVANCED CELL: Sells $1,200,000 Unsecured Convertible Note to JMJ
-----------------------------------------------------------------
Effective Feb. 15, 2008, in exchange for $1,000,000 in the form of
a Secured & Collateralized Promissory Note issued by JMJ Financial
to Advanced Cell Technology, Inc., the company issued and sold an
unsecured convertible note to JMJ Financial in the aggregate
principal amount of $1,200,000 or so much as may be paid towards
the balance of the JMJ Note.  The ACT Note bears interest at the
rate of 10% per annum, and is due by Feb. 15, 2010.  At any time
following the effective date of the ACT Note, the holder may at
its election convert all or part of the ACT Note plus accrued
interest into shares of the company's common stock at the
conversion rate of the lesser of:

     (a) $0.38 per share, or

     (b) 80% of the average of the three lowest trade prices in
         the 20 trading days prior to the conversion.

In connection with the issuance of the ACT Note, the company
entered into a Collateral and Security Agreement, dated Feb. 15,
2008, with JMJ Financial pursuant to which JMJ Financial granted
the company a security interest in certain of its assets securing
the JMJ Note.  The company has drawn down and received these
amounts under the ACT Note:

   * March 17, 2008 - $60,000 for a net purchase price of $50,000
     (reflecting a 16.66% original issue discount)

   * June 17, 2008 - $60,000 for a net purchase price of $50,000
     (reflecting a 16.66% original issue discount)

Pursuant to the Use of Proceeds Agreement entered into in
connection with the issuance of the ACT Note, the company is
required to use the proceeds from the note solely for research and
development dedicated to adult stem cell research.

                       Financial Errors

In mid-May 2008, the company discovered that certain financial
statements of the company did not properly account for discounts
and deferred issuance costs on convertible debentures issued in
2005, 2006 and 2007.  On June 24, 2008, the company's management
and the Audit Committee of its Board of Directors determined that
the consolidated balance sheets, consolidated statements of
stockholders' deficit and related notes to consolidated financial
statements included in the consolidated financial statements and
information contained in the company's Form 10-KSB filed with the
Securities and Exchange Commission on April 18, 2008, for the year
ended Dec. 31, 2007, and the company's Quarterly Reports on Form
10-QSB for the quarterly periods ended March 31, 2007, June 20,
2007, and September 30, 2007 should no longer be relied upon as a
result of such accounting errors.

The company incorrectly amortized discounts and deferred issuance
costs over periods longer than the weighted average life of the
instruments with the result that the discounts and debt issuance
costs should have been charged to interest expense more rapidly
than reported.  The company also incorrectly calculated the
weighted average shares used in calculating basic and diluted
earnings per share for the twelve month period ended December 31,
2007. The actual weighted average shares were approximately 20.2
million higher than reported.

The company's current auditor, Singer Lewak Greenbaum & Goldstein
LLP, has not yet reviewed the matters, and has indicated that it
will do so following review by the auditor of the Company who was
engaged at the time the error occurred.  The company will restate
its consolidated financial statements for the affected period and
amend all periodic reports filed during the affected period.


AMERICAN HOME: To Sell $26.86MM Unencumbered Non-Performing Loans
-----------------------------------------------------------------
American Home Mortgage Investment Corp. and its debtor-affiliates
had named Beltway Capital LLC and Lehman Capital as the successful
bidders for certain non-performing loans subject to security
interests held by Bank of America, N.A., and J.P. Morgan Chase
Bank, N.A.  The winning bidders have agreed to pay over 40% of the
unpaid principal balance of those loans.

Moreover, the Debtors withdrew their request to auction off more
than 80 unencumbered mortgage loans, with an aggregate unpaid
balance of approximately $24,000,000, which non-performing loans
are subject to liens by AH Mortgage Acquisition Co., Inc.

The Debtors, however, have subsequently determined that selling
the Unencumbered Non-Performing Loans to Beltway pursuant to the
terms of the proposed "Loan Sale and Interim Servicing Agreement"
is in the best interest of the bankruptcy estates.  Thus, they
propose to pool and sell 82 Unencumbered Non-Performing Loans
with an aggregate UPB of $26,860,066 as of May 31, 2008, to
Beltway for a purchase price which will be determined on a loan
by loan basis.

Pursuant to Sections 105(a) and 363 of the Bankruptcy Code, and
Rules 2002 and 6004 of the Federal Rules of Bankruptcy Procedure,
the Debtors ask the U.S. Bankruptcy Court for the District of
Delaware to:

    (i) authorize the private sale of the Unencumbered Non-
        Performing Loans to Beltway, or to another party
        submitting a higher or better offer, free and clear of
        liens, claims, encumbrances, and other interests; and

   (ii) approve the terms of the Loan Sale and Interim Servicing
        Agreement.

In their efforts to sell the loans, the Debtors have previously
contacted parties known to have an interest in purchasing the
Non-Performing Loans.  Information relevant to the Non-Performing
Loans was also posted on the Debtors' Intralinks Web site, access
to which was made available within 24 hours to any potential
bidder upon execution of a Non-Disclosure Agreement.

James L. Patton, Jr., Esq., at Young, Conaway, Stargatt & Taylor,
LLP, in Wilmington, Delaware, contends that the private sale of
the Unencumbered Non-Performing Loans to Beltway is appropriate
because based on the previous marketing process of the loans,
Beltway's offer is superior to what the Debtors would obtain
through a formal auction process.  The Debtors believe that their
bankruptcy estates and creditors would benefit from the approval
of the Beltway Sale without the added costs associated with a
public auction, at which the Debtors are not guaranteed the
commitment of Beltway to purchase the Unencumbered Non-Performing
Loans at all, much less at the price to be provided through the
Sale Agreement.

The key terms of the Sale Agreement are:

   (a) The Debtors agree to sell, and the purchaser agrees to
       purchase on a servicing released basis, all of the right,
       title and interest of the Debtors in and to the
       Unencumbered Non-Performing Loans, and the REO Property in
       the mortgage loan package;

   (b) The purchase price based on a blended rate for each
       Unencumbered Non-Performing Loan and each REO Property
       will be 40.25%, multiplied by its Stated Principal
       Balance.  The actual Purchase Price will be calculated
       based on the Purchase Price Percentage applicable to each
       loan multiplied by its Stated Principal Balance;

   (c) The Closing Date will be July 18, 2008;

   (d) The parties acknowledge that the Debtors have not
       delivered the required documents with a lost note
       affidavit.  The Debtors acknowledge that missing required
       documents would be grounds for the Purchaser to refuse to
       purchase a mortgage loan.  The Purchaser, however, agrees
       to purchase each withdrawn loan, despite the Debtors'
       failure to provide the required documents, provided that
       the Purchase Price for each Withdrawn Loan will be held in
       escrow by the Debtors pending delivery of the Required
       Documents to Purchaser;

   (e) On the Closing Date, the amount payable by Purchaser will
       be reduced by an amount equal to a certain Purchase Price
       Adjustment, if any; and

   (f) The Debtors make no representations or warranties with
       respect to any matter relating to the Unencumbered Non-
       Performing Loans or REO Property.  Accordingly, the
       Purchaser will accept the loans and REO Property "AS IS"
       and "WHERE IS".

The Debtors further propose that the deadline for submitting
competing bids will be on July 14, 2008.  If a timely Competing
Bid is received, the Debtors will conduct an auction on July 16,
2008 at 10:00 a.m., Eastern Time, at the offices of their lead
counsel, Young Conaway Stargatt & Taylor, LLP, at 1000 West
Street, 17th Floor, in Wilmington, Delaware 19899.

The Debtors reserve the right to (i) determine at their
discretion, which Competing Bid or offer is the highest or best
offer, and (ii) reject, at any time prior to the approval of an
offer, any offer that the Debtors deems to be inadequate or
insufficient, among other reasons.  The Debtors will have no
obligation to accept or submit for Court approval any bid or
offer presented at the Auction.

At the Debtors' behest, the Court will consider the request on
July 17, 2008, at 2:00 p.m., Eastern Time.  Objection deadline is
on July 14.

                   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. 40; Bankruptcy
Creditors' Service, Inc., Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000).  


ASARCO LLC: Court Allows EPA to Do Repairs in Leadville Mine
------------------------------------------------------------
ASARCO LC and its debtor-affiliates obtained authority from the
U.S. Bankruptcy Court for the Southern District of Texas to enter
into a limited access agreement with the U.S. Government, acting
through the Environmental Protection Agency, that would provide
EPA with limited access to conduct certain work related to the
Leadville Mine Drainage Tunnel, in Lake County, Colorado.

Jack L. Kinzie, Esq., at Baker Botts L.L.P., in Dallas, Texas,
relates that water levels in the mining works and rocks
surrounding the Leadville Site were rising.  The officials and
citizens of the town of Leadville and Lake County were concerned
regarding the possibility of a catastrophic release of water from
the tunnel.  To alleviate those concerns, EPA has requested that
ASARCO grant access to several parcels of land situated in Lake
County.  EPA proposes to reduce water levels by (i) drilling a
well shaft on the Properties to connect to Site and installing
pumps to discharge water out of the Site; and (ii) constructing a
pipeline that will cross over the Properties and will convey
water from the extraction well to a water treatment plant
operated by the Bureau of Reclamation.

Pursuant to the Agreement, ASARCO will grant EPA access to the
Properties for:

   (a) conducting site investigations to determine the  
       feasibility and design for construction of a well to  
       extract water from the Site for purposes of conveying
       water to the Bureau of Reclamation or the Site's water
       treatment plant for treatment;

   (b) drilling, developing, completing, pumping and abandoning
       one groundwater well on the Olathe Placer Claim to
       extract water from the Site for purposes of conveying
       water to the water treatment plant;

   (c) clearing and grubbing sufficient land to pour a concrete
       drill pad and to provide enough space for the drilling on
       the Olathe Placer Claim; and

   (d) installing a buried conveyance pipeline from the
       constructed well to the LMDT water treatment plant.

ASARCO and EPA agreed that EPA will conduct all work with due
care at no expense to ASARCO, and to take all precautions to
avoid damage other than ordinary wear and tear, to the property
and to gates, roads, fences and facilities.  ASARCO or its
representatives will not be liable to EPA or its representatives
for any loss, injury or damage suffered by EPA.  EPA will require
its contractors who work on the property to secure workers'
compensation insurance, commercial general insurance in the
duration of the work, and to name ASARCO as an additional insured
on the policies.

                         About ASARCO LLC

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

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

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

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

ASARCO and its debtor-affiliates have until Aug. 1, 2008 to file a
plan of reorganization.  (ASARCO Bankruptcy News, Issue No. 76;
Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000).


ASARCO LLC: Judiciary Panel Members Want Careful Study on Vedanta
-----------------------------------------------------------------
Two leading U.S. House Judiciary Committee members -- Rep. John
Conyers, Jr., chairman of the House Judiciary Committee and Rep.
Lamar Smith, ranking member of the House Judiciary Committee --  
asked U.S. Attorney General Michael B. Mukasey to have the U.S.
Department of Justice focus its attention on the environmental
records of Vedanta Resources plc, Sterlite Industries Ltd., and
other companies seeking to gain control of U.S. copper miner
ASARCO.

In a letter to Attorney General Mukasey, Conyers and Smith
explain: "We understand that ASARCO is associated with
approximately 100 Superfund sites in the United States.  The media
have reported that ASARCO agreed with the Environmental Protection
Agency in 2003 to set up a $100 million trust fund to help pay the
company's environmental cleanup costs.  It is estimated that
ASARCO's Superfund liabilities may range up to $1 billion.
Recently, ASARCO's board of directors accepted a $2.6 billion
purchase offer from Sterlite Industries (USA) Ltd. to buy
substantially all of the debtor's principal assets, subject
to approval by the U.S. Bankruptcy Court.  We understand that
these assets include ASARCO's facilities in Texas and Arizona.
Sterlite USA will also assume certain of the debtor's liabilities.
The obligations of Sterlite USA under the purchase and sale
agreement are guaranteed by Sterlite Industries (India) Ltd.

Prior to the ASARCO board's acceptance of Sterlite USA's offer,
the bankruptcy court issued an order requiring the board to
consider 'any bidder's and its affiliates' history of compliance
or noncompliance with environmental regulations.'  Sterlite USA's
affiliate, Vedanta, however, is alleged to have a poor
environmental record outside the United States.  There assertedly
have been 'numerous reports that raise serious questions about
Vedanta's history of compliance with EHS -- environmental, health
and safety -- laws and regulations.'  We are not aware of whether
bidders who competed with Sterling USA before ASARCO's board and
their affiliates have environmental records better than, similar
to, or worse than Vedanta's.  Further, we understand that
environmental concerns are implicated, not only by what entity
assumes control of ASARCO's assets, but by such other factors as
delays in the resolution of ASARCO's Chapter 11 case and delays in
plan distributions.  Thus, Vedanta's environmental record is not
the only environmental factor that the Department confronts as it
conducts its representation of the United States in the ASARCO
bankruptcy.

We expect the Department to consider appropriately all of the
environmental considerations posed by ASARCO's case.  Based on
recent events in the matter, however, we are not yet sure that the
Department is adequately doing so.  For example, at a recent
hearing held in the ASARCO case before the United States
Bankruptcy Court, in which the Sterlite USA and Vedanta issues
were presented, an attorney for the Justice Department explained
that 'the environmental laws are less strict abroad so we think
they're of limited value in determining what the record of
compliance would be in the United States."  He added, 'and
given the disparity in the bids we think that it was not a
dispositive disqualifying factor.' This statement may reflect an
attempt to summarize the Department's efforts to assess all of the
relevant environmental factors, but we cannot be sure.

Given the considerable federal liabilities associated with ASARCO
based on its involvement with contaminated sites, and in light of
the above, we believe that Vedanta's environmental track record
overseas, as well as all relevant environmental factors bearing on
the ASARCO bankruptcy, should be carefully studied before the
Department adopts a final position on whether Sterlite USA or any
other bidder should be allowed to acquire ASARCO's assets in the
United States.  In addition, we ask that you explain in writing
the Department's policy with respect to assessing the bona fides
of a potential bidder that may present environmental concerns.  In
particular, we would like to know whether it is the Department's
policy to take into consideration factors beyond the cash value of
an offer and the potential bidder's environmental track record in
the United States and abroad before offering Department support
for the consummation of a sale."

As reported in the Troubled Company Reporter on July 9, 2008, the
Honorable Richard S. Schmidt of the U.S. Bankruptcy Court for
the Southern District of Texas approved, on a final basis, the
bidding procedures governing the auction of substantially all of
ASARCO LLC and its debtor-affiliates' assets to Sterlite
Industries Ltd., or to any entity who'll submit a better or higher
bid.  Sterlite has offered $2,600,000,000 for the Debtors' assets.

                         About ASARCO LLC

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

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

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

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

ASARCO and its debtor-affiliates have until Aug. 1, 2008 to file a
plan of reorganization.  (ASARCO Bankruptcy News, Issue No. 76;
Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000).


ASARCO LLC: Strikes CBA in Relation to Sterlite Acquisition
-----------------------------------------------------------
The unions representing the workers of ASARCO LLC and its debtor-
affiliates, and Sterlite Industries (India) Limited, a subsidiary
of Vedanta Resources plc and a party to an agreement to acquire
substantially all assets of ASARCO, jointly disclosed that they
have reached agreement on the terms of the collective bargaining
agreement that would go into effect once the proposed acquisition
is approved by the bankruptcy court overseeing ASARCO's chapter 11
case.

"We regard our employees as a vitally important part of our
business and are extremely happy to have concluded a mutually
satisfactory agreement with ASARCO's representatives," said Anil
Agarwal, Chairman of Sterlite.  "We look forward to working with
the unions and ASARCO's highly-skilled employees.  Sterlite is
also pleased that it has been granted bid protections by the
bankruptcy judge, which represents another important milestone in
the acquisition process."

"The unions are pleased that an agreement has been reached with
Sterlite.  We believe that Sterlite, with its strong experience in
the copper business, will strengthen ASARCO's operations for the
long term benefit of all stakeholders, including its employees,"
said Terry Bonds, Chairman of the ASARCO Union Negotiating
Committee.

The new collective bargaining agreement, which fully retains all
existing worker benefits, contains terms that are designed to
ensure that ASARCO's operations will be improved and made more
competitive.  There are also strong commitments to ensure that
Sterlite invests in and operates all of ASARCO's existing
operations.  The parties have also agreed that the term of the
current agreement expiring in 2010 will be extended by three years
to 2013.

"This reflects the confidence and commitment of Sterlite and bodes
well for the long term growth of ASARCO," expressed Mr. Joseph
Lapinsky, CEO & President of ASARCO.

In another development advancing Sterlite's proposed acquisition,
the bankruptcy judge presiding over ASARCO's chapter 11 case
approved the bid protections contemplated by the Purchase and Sale
Agreement with ASARCO, which includes, among other things, a
break-up fee of $52 million be payable to Sterlite under certain
circumstances.

                         About ASARCO LLC

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

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

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

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

ASARCO and its debtor-affiliates have until Aug. 1, 2008 to file a
plan of reorganization.  (ASARCO Bankruptcy News, Issue No. 76;
Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000).


ASHLAND INC: Agrees to Acquire Hercules Inc. for $3.3 Billion
-------------------------------------------------------------
Ashland Inc. and Hercules Inc. entered into a definitive merger
agreement under which Ashland would acquire all of the outstanding
shares of Hercules for $18.600 per share in cash and 0.093 of a
share of Ashland common stock for each share of Hercules common
stock.  The total transaction value is approximately $3.3 billion,
or $23.010 per Hercules share based on Ashland's July 10 closing
stock price and including $0.7 billion of net assumed debt.

The merger is conditioned upon, among other things, the approval
of Hercules' shareholders, the receipt of regulatory approvals and
other customary closing conditions.  Assuming the satisfaction of
these conditions, the transaction is expected to close by the end
of calendar 2008.

The cash portion of the consideration will be funded through a
combination of cash on hand and committed debt financing from Bank
of America and Scotia Capital, subject to customary terms and
conditions.  

Ashland plans to use the cash flows of the combined organization
to pay down debt with a goal of attaining investment-grade credit
ratings within two to four years after closing the transaction.

Under the terms of the definitive merger agreement, Hercules would
be required to pay Ashland a fee of $77.5 million under certain
circumstances including if Hercules terminates the merger
agreement to accept a superior offer, and Ashland would be
required to pay Hercules a fee in the same amount if the
transaction is not completed due to a failure to obtain financing
at the time the conditions to the merger have been satisfied.

Upon the transaction's close, Ashland is expected to have pro
forma combined revenue for the 12 months ended March 31, 2008, of
more than $10 billion, including approximately $3.5 billion
generated outside North America.  

For the same period, Ashland expected to generate earnings before
interest, taxes, depreciation and amortization or EBITDA of
$365 million excluding certain items, while Hercules reported
ongoing EBITDA of $392 million excluding certain items.  Specialty
chemicals, which on a pro forma basis represents approximately 75%
of total EBITDA, will serve as Ashland's platform for future
growth.

"The acquisition of Hercules fulfills our objective to become a
leading specialty chemicals company," James J. O'Brien, Ashland
chairman and chief executive officer, said.  "It creates a defined
core for Ashland composed of three specialty chemical businesses
with strong market positions and promising growth potential:
specialty additives and ingredients, paper and water technologies,
and specialty resins."  

"In addition, we expect our financial profile to be enhanced
significantly through reduced earnings volatility, improved
profitability and stronger cash flow generation." Mr. O'Brien
said.

"We are enthusiastic about the opportunity to combine Hercules
with Ashland," Craig A. Rogerson, Hercules president and CEO,
said.  "Our companies share proud and similar histories of nearly
100 years of innovation, dedication and service.  Hercules
shareholders will receive a significant premium over the current
trading price for their shares and, through their ownership of
Ashland shares, the opportunity to participate in the upside
potential of the combined company.  We look forward to working
with Ashland to bring these two great companies together."

The companies stated that in specialty additives and ingredients,
Hercules' Aqualon business is one of the most recognized and
admired specialty chemical brands in the world and brings Ashland
a significant market position in rheology modifiers, which alter
the physical properties of water-based systems.

These additives are used across a range of industries to make
everything from adhesives and paints to foods, pharmaceuticals and
personal care products.  Nearly all of Aqualon's additive products
are water soluble polymers derived from renewable materials.  The
combined company is expected to generate, on a pro forma basis,
approximately one-third of EBITDA from bio-based or renewable
chemistries.

"We will combine the paper and water businesses of each company to
create one paper and water technologies business with annual
revenue of $2 billion," Mr. O'Brien said.  "In particular,
Hercules' leadership position in pulp and paper technologies
bolsters our participation in one of the world's largest water
treatment markets.  The combined businesses will provide the scale
to leverage opportunities in other key water treatment markets
including municipal, industrial and marine.

"The third business within our new core - specialty resins - is
one where Ashland has long enjoyed a strong reputation for
innovation and service. Mr. O'Brien added.  "A broader
international footprint will offer the specialty resins business
expanded growth opportunities in key building and construction
markets, including infrastructure and wind energy.  In addition,
our Distribution and Valvoline businesses provide complementary
capabilities and share similar markets with the specialty chemical
businesses.

Ashland expected to realize annualized run-rate cost savings of at
least $50 million by the third year following the transaction's
close by eliminating redundancies and capturing operational
efficiencies.  In the first year after the transaction's close,
while the combination is dilutive to earnings per share on a
reported basis, it is expected to be significantly accretive to
Ashland's earnings per share excluding merger costs and noncash
depreciation and amortization charges resulting from the
transaction.

"We are extremely impressed with the quality of the Hercules
people and we look forward to welcoming them into the Ashland
family," Mr. O'Brien continued.  "Our companies share a common
desire to live up to our own high expectations, and those of our
customers, shareholders and the communities in which we operate."

"We are also very pleased that John Panichella, president of
Hercules' Aqualon Group, and Paul Raymond, president of Hercules'
Paper Technologies and Ventures Group, have agreed to join Ashland
after the close of the transaction, reporting directly to me,"  
Mr. O'Brien related.  "In addition, we expect to maintain a
significant presence in Wilmington, Delaware, where Hercules is
headquartered."

"An integration team with members from both organizations will
determine how best to utilize the strengths and scale of the
combined company worldwide," Mr. O'Brien concluded.  "We will work
with the Hercules team to ensure a smooth transition."

Citigroup Global Markets Inc. acted as financial advisor and
Squire Sanders & Dempsey LLP acted as legal counsel to Ashland.
Credit Suisse Securities LLC acted as financial advisor and
Wachtell Lipton Rosen & Katz acted as legal counsel to Hercules.

                    About Hercules Incorporated

Based in Wilmington, Delaware, Hercules Incorporated (NYSE: HPC)
-- http://www.herc.com/-- is a manufacturer and marketer of  
specialty chemicals and related services for a range of business,
consumer and industrial applications.  The products of Hercules
are functional and process chemicals used by the paper industry to
improve paper and paperboard performance and manufacturing
process; water-soluble polymers, and specialty resins.  The
markets served by Hercules include pulp and paper; paints and
adhesives; construction materials; food, pharmaceutical and
personal care, and industrial specialties, including oilfield and
general industrial.

                        About Ashland Inc.

Headquartered in Covington, Kentucky, Ashland Inc. (NYSE:ASH) --
http://www.ashland.com/-- is a diversified chemical company that  
consists of four wholly owned divisions: Ashland Performance
Materials, Ashland Distribution, Valvoline and Ashland Water
Technologies.  


ASHLAND INC: Merger Agreement Cues Moody's Review of Ba1 Rating
---------------------------------------------------------------
Moody's Investors Service placed the corporate family, probability
of default and debt ratings of Ashland Inc., which have a Ba1
corporate family rating, under review for a possible downgrade.

This rating action follows the company's statement that it has
entered into an agreement to purchase Hercules Incorporated (Ba1
corporate family rating) in a transaction valued at approximately
$3.3 billion or $23.01 per Hercules share based on Ashland's July
10th closing stock price and including $0.7 billion of net assumed
debt.

Under the terms of the agreement, Ashland will acquire all of the
outstanding stock of Hercules, paying $18.60 in cash and 0.093
shares of Ashland common stock for each common share of Hercules.  
The merger is subject to the approval of Hercules' shareholders as
well as regulatory approvals and other customary closing
conditions.

Moody's expects the cash portion of the consideration will be
financed using a combination of new debt ($2.2 billion) and
existing cash balances ($0.7 billion).  Ashland had cash and
available-for-sale securities (including $254 million of auction
rate securities) totaling $1.175 billion as of March 31, 2008.

Ashland's LGD assessments are not under review and these
assessments and point estimates are subject to change as a
function of the new capital structure of the merged entities.  

While Ashland has almost no debt currently, the acquisition will
result in Ashland taking on a material amount of debt that will
put the current Ba1 corporate family rating under negative
pressure and would likely result in a one notch downgrade in the
corporate family rating to Ba2, provided there is no change in the
purchase price and other deal and financing terms, as disclosed,
and assuming no material changes to the outlook for the merged
company's raw material costs and end markets.

On Review for Possible Downgrade:

Issuer: Ashland Inc.

  -- Corporate Family Rating, Placed on Review for Possible
     Downgrade, currently Ba1

  -- Probability of Default Rating, Placed on Review for Possible
     Downgrade, currently Ba1

  -- Senior Unsecured Medium-Term Note Program, Placed on Review
     for Possible Downgrade, currently Ba1

  -- 6.86% Senior Unsecured Medium Term Notes due May 1, 2009
  -- 7.72% Senior Unsecured Medium Term Notes due July 15, 2013
  -- 8.38% Senior Unsecured Medium Term Notes due April 1, 2015

  -- Senior Unsecured Regular Bond/Debenture, Placed on Review for
     Possible Downgrade, currently Ba1

  -- 8.8% Senior Unsecured Debentures due Nov. 15, 2012

Moody's rating review will consider the nature and structure of
the acquisition financing, as well as focus on the strategic
benefits of the transaction, potential synergies, the cash flow
anticipated from the combined businesses, the combined company's
financial flexibility and liquidity, and how management's long-
term plans will impact the company's credit measures.

Headquartered in Covington, Kentucky, Ashland, Inc. is a
distributor of chemicals and plastics, a manufacturer of specialty
chemicals with a focus on performance materials and water
technologies and, through its Valvoline brand, a marketer of
premium-branded automotive and commercial lubricants.

The Hercules acquisition fits with Ashland's stated strategic
interest in expanding its specialty chemicals businesses after the
divestiture of its minority interest in Marathon Ashland Petroleum
and the Ashland Paving and Construction business in 2005 and 2006,
respectively.

On July 1, 2008, the company purchased the pressure-sensitive
adhesive business and the atmospheric emulsions business from Air
Products for $92 million.  

Ashland Inc. and Sud-Chemie AG disclosed in June 2008 their
intention to form a new 50/50 global joint venture to serve
foundries that will include Ashland's Casting Solutions business
group, the foundry-related businesses of Sud-Chemie and Ashland-
Sudchemie-Kernfest GmbH.  Ashland had revenues of $8.0 billion for
the LTM ended March 31, 2008.


BAPTIST HEALTH: Moody's Renews Watchlist on Ba2-Rated Debt
----------------------------------------------------------
Moody's Investors Service renewed the Watchlist with uncertain
direction for Baptist Health System of East Tennessee Obligated
Group's Ba2 rating assigned to $135 million of outstanding debt
issued by the Health, Educational and Housing Facilities Board of
the County of Knox, Tennessee.

The negative pressures affecting the rating center around the
deteriorating financial performance and financial position of
BHSET.  The positive factors for the rating center around the
recent merger with Catholic Healthcare Partners, the redemption of
the Series 1996 bonds in March, and the potential for future
financial support from CHP and operational improvement as a result
of the merger.  Management continues to evaluating possible ways
to integrate Baptist's debt into CHP's capital structure.

RATED DEBT (debt outstanding as of May 31, 2008)

  -- Series 2002 ($135.0 million outstanding), rated Ba2


BLUEGREEN CORP: Secures $30MM Line of Credit from Wells Fargo Arm
-----------------------------------------------------------------
Bluegreen Corporation renewed its $30 million revolving line of
credit with Wells Fargo Foothill, part of Wells Fargo & Company.

Bluegreen(R) will pledge certain receivables generated by its
Bluegreen Resorts and Bluegreen Communities business segments to
secure borrowings under the facility.  The borrowing period under
the facility ends on Dec. 31, 2009, and the facility matures on
Dec. 31, 2010.

"We are pleased to continue our relationship with Wells Fargo
Foothill," John M. Maloney Jr., president and chief executive
officer, commented.  "This facility provides Bluegreen with
additional liquidity to advance and support our operations."

Headquartered in Boca Raton, Florida, Bluegreen Corporation (NYSE:
BXG) -- http://www.bluegreencorp.com/-- provides Colorful Places  
to Live and Play(R) through two principal operating divisions.  
With over 170,000 owners, Bluegreen Resorts markets a flexible,
real estate-based vacation ownership plan that provides access to
over 40 resorts and an exchange network of over 3,700 resorts and
other vacation experiences such as cruises and hotel stays.  
Bluegreen Communities has sold over 55,000 planned residential and
golf community homesites in 32 states since 1985.  Founded in
1966, Bluegreen employs over 6,000 associates.
        
                         *     *     *

As reported in the Troubled Company Reporter on May 20, 2008,
Moody's assigned a Caa1 rating to Bluegreen Corporation's
$20 million senior unsecured line of credit.  Additionally, the
ratings outlook was revised to negative from stable.  
Concurrently, Moody's affirmed the company's B2 Corporate family
rating and B2 probability of default rating.


BOWNE & CO: Acquires Manhattan-Based Capital Systems for $13MM
--------------------------------------------------------------
Bowne & Co., Inc., a shareholder and marketing communications
service, completed the acquisition of the U.S.-based assets and
operating business of Capital Systems, Inc., a provider of
financial communications based in midtown Manhattan.

Bowne & Co. acquired Capital Systems for approximately
$13 million.  This transaction, which was originally disclosed on
June 26, 2008, is expected to be accretive to the company's 2008
results.

As a result of this transaction, Bowne & Co. is gaining an office
in midtown Manhattan in addition to its current facility in lower
Manhattan, and expects to expand its leadership position in the
New York market.

Capital Systems, Inc. specializes in the creation, filing and
distribution of time-sensitive financial communications by
providing document production services, including composition,
filing, printing, distribution and electronic access.

With 2007 revenue of approximately $48 million, Capital Systems
enables Bowne & Co to further extend its reach into its key
existing verticals: investment management, compliance reporting
and capital markets services.

Capital Systems provides mutual fund quarterly and annual
reporting and disclosure documents, such as SEC filings, proxies
and 10-Ks, as well as capital markets services for equity
offerings, debt deals, securitizations, and mergers and
acquisitions.

                       Acquisitions History

In April 2008, Bowne & Co acquired the digital print business of
Rapid Solutions Group, a subsidiary of Janus Capital Group Inc.  
In February 2008, the company acquired GCom2 Solutions, Inc., a
provider of software products addressing reporting and shareholder
communication needs of Bowne & Co.

                      About Bowne & Co., Inc

Headquartered in New York, New York, Bowne & Co., Inc. (NYSE: BNE)
–- http://www.bowne.com– provides services to help companies  
produce and manage their investor communications, including
regulatory and compliance documents, and also markets business
communications, personalized statements, enrollment books and
sales and marketing collateral.  Bowne & Co operates through two
segments: Financial Communications and Marketing & Business
Communications.

As reported by the Trouble Company Reporter on July 11, 2008,
Standard & Poor's Ratings Services raised its corporate credit and
issue-level ratings on Bowne & Co. Inc.  The corporate credit
rating was raised to 'BB-' from 'B+'.  The rating outlook is
stable.
     
"The ratings upgrade reflects a reassessment of Bowne[ and Co]'s
business profile, taking into account recent acquisitions[...]"
Michael Listner, Standard & Poor's credit analyst, said.


BRUNSWICK: Deteriorating Marine Industry Cues Moody's Ratings Cut
-----------------------------------------------------------------
Moody's Investors Service downgraded the long-term ratings on
Brunswick to Baa3 from Baa2 due to the continuing deterioration of
the U.S. marine industry, which Moody's expect to continue into
the foreseeable future, and Moody's expectation of moderating
growth in the international marine industry.

At the same time, Brunswick's commercial paper rating was
downgraded to Prime-3 from Prime-2.  These rating actions conclude
a review for possible downgrade initiated on July 2, 2008.  The
outlook is negative.

"The downgrade reflects our view that the downturn in the marine
market will continue into the foreseeable future, and is worse
than our previous expectations, as consumer spending continues to
deteriorate due to the ongoing credit market and housing market
crises as well as high energy and food costs," Kevin Cassidy,
senior credit officer at Moody's Investors Service, said.

While Moody's believe that Brunswick will continue to take
appropriate and difficult steps to protect its credit metrics and
liquidity, the marine downturn has expanded into previously strong
markets such as high end yachts and certain pockets outside the
US.

Moody's believes that the company may be tight in its revolving
credit agreement leverage covenant (3x debt/EBITDA) in early 2009
as a result of its restructurings, although we believe that the
company will likely be able to amend this covenant.  Moody's also
feel that the company will likely be able to refinance its
$250 million of notes due in July 2009, assuming the credit
markets do not deteriorate significantly.  

Assuming the company is able to obtain a waiver for its covenant
and is able to refinance its upcoming maturity, Moody's believe
the company has adequate liquidity over the next 12 to 18 months
based on targeted cash balances of around $300 to $400 million,
access to an undrawn unsecured $650 million revolving credit
facility, lack of share repurchases and a modest dividend just
below $55 million.

If the company is not able to refinance its notes, Moody's believe
that the company would likely be able to repay the notes through
revolver borrowings, although its liquidity position would then be
clearly weakened.

The negative rating outlook reflects Moody's expectation that the
US marine market will continue to be weak in the intermediate term
and that such weakness will likely also persist in select
international markets resulting in the likelihood of lower
earnings and revenue over the next few quarters.

Despite Brunswick's improved cost structure from past
restructuring efforts, moderation of its production and increased
geographical diversification, if the weak marine market continues
for a more prolonged period, the company's profitability and
operating cash flow may no longer represent the characteristics of
a Baa3 consumer durable company.

Brunswick's Baa3 rating reflects the fact that its performance is
not expected to significantly improve in the near term and a
$700 million total revenue decrease to around $5 billion is a
possibility.  However, even with this significant reduction, in
order to maintain its investment grade rating the company needs to
amend the financial covenant in its revolving credit facility and
maintain certain credit measures.

In particular, retained cash flow/net adjusted debt below 25% or
free cash flow/adjusted debt in the mid single digits would
pressure the ratings as would operating margins, excluding
restructuring charges, in the low single digits or EBITA/Interest
coverage lower than 2x.

Ratings downgraded include:

  -- Senior unsecured notes to Baa3 from Baa2;
  -- Senior shelf to (P) Baa3 from (P) Baa2;
  -- Preferred shelf to (P) Ba2 from (P) Ba1;
  -- Commercial Paper to Prime-3 from Prime-2

Headquartered in Lake Forest, Illinois, Brunswick manufactures
marine engines, pleasure boats, bowling capital equipment and
fitness equipment, and operates retail bowling centers.  Sales in
the 12 months ended March 2008 approximated $5.6 billion.


BUFFETS HOLDINGS: Units Want to Reject 129 Restaurant Leases
------------------------------------------------------------
Buffets Holdings, Inc., reported that several of its subsidiaries
filed motions with the U.S. Bankruptcy Court for the District of
Delaware seeking authority to reject a master land and building
lease for 129 of the company's restaurants.

The motion also seeks the court's permission to close 127 of these
locations by the end of August 2008.  Two restaurants covered by
the master lease have previously been closed.

The company has already successfully concluded lease negotiations
with landlords for its other restaurant locations.  The company
has sought modifications to the onerous master lease from various
affiliates of Fortress Investment Group LLC, the holders of the
master lease, which would permit some or all of the 127
restaurants to remain open.

While those negotiations have not been productive, the company
continues to explore a consensual resolution. A court hearing for
the lease rejection motion has been scheduled for July 30, 2008.

In its motion, the company describes a number of issues with the
master lease, including above-market rents, mandatory annual rent
increases of 2% or more, and other onerous provisions that provide
little recourse when units perform poorly.

All but seven of the restaurants covered by the master lease in
question operate under the Ryan's or Fire Mountain brand names.
The 127 restaurants collectively have approximately 7,500 full and
part-time employees.

                    About Buffets Holdings

Headquartered in Eagan, Minnesota, Buffets Holdings Inc. --
http://www.buffet.com/-- is the parent company of Buffets,
Inc., which operates 626 restaurants in 39 states, comprised of
615 steak-buffet restaurants and eleven Tahoe Joe's Famous
Steakhouse restaurants, and franchises sixteen steak-buffet
restaurants in six states.  The restaurants are principally
operated under the Old Country Buffet, HomeTown Buffet, Ryan's and
Fire Mountain brands.  Buffets, Inc. employs approximately 37,000
team members and serves approximately 200 million customers
annually.

The company and all of its subsidiaries filed Chapter 11
protection on Jan. 22, 2008 (Bankr. D. Del. Case Nos. 08-10141 to
08-10158).  Joseph M. Barry, Esq., and Pauline K. Morgan, Esq., at
Young Conaway Stargatt & Taylor LLP, represent the Debtors in
their restructuring efforts.  The Debtors selected Epiq Bankruptcy
Solutions LLC as claims and balloting agent.

The U.S Trustee for Region 3 appointed seven creditors to serve on
an Official Committee of Unsecured Creditors.  The Committee
selected Otterbourg Steindler Houston & Rosen PC as counsel.

The Debtors' balance sheet as of Sept. 19, 2007, showed total
assets of $963,538,000 and total liabilities of $1,156,262,000.

As reported in the Troubled Company Reporter on Feb. 26, 2008,
the Court granted on February 22, 2008, final approval of the
Debtors' debtor-in-possession credit facility, consisting of
$85 million of new funding and $200 million carried over from the
company's prepetition credit facility.


CATHOLIC CHURCH: Davenport's Case to Remain Open, Court Rules
-------------------------------------------------------------
Judge Lee Jackwig of the U.S. Bankruptcy Court for the Southern
District of Iowa has granted the Diocese of Davenport's request
to issue a final decree to the extent that the request is meant
to certify the finality of the May 1, 2008 confirmation order,
and to provide notice of the June 9, 2008 effective date.  Judge
Jackwig, however, denied, without prejudice, Davenport's request
to the extent it seeks entry of a final decree closing the
Chapter 11 case.

"That is, in addition to pending and yet to be filed applications
for compensation upon which this Court must rule, the case is not
ready to be closed because the Debtor is required to file reports
on or about May 1, 2009, May 1, 2010 and May 1, 2011 regarding
compliance with the Non-Monetary Undertakings by the Catholic
Entities as provided in Article 24 of the Plan," Judge Jackwig
said.

If the Court finds a report is satisfactory, the Court will
approve the report, says Judge Jackwig.  However, if a report is
not satisfactory, the Court will schedule a hearing to address
the matter.  Judge Jackwig maintained that if and when the Court
approves the third annual report, the Court will include in its
order a date by which the Reorganized Debtor will file a request
for final decree.

The Troubled Company Reporter related on June 25, 2008, that
pursuant to the Diocese of Davenport's confirmed second amended
plan of reorganization, the reorganized debtor asked the Court to
issue a final decree (i) closing its bankruptcy case, and (ii)
continuing the Reorganized Debtor's obligations under the Plan,
including its non-monetary undertakings.

Richard A. Davidson, Esq., at Lane & Waterman LLP, in Davenport,
Iowa, had argued that the plan has been effective since June 9,
2008, and has been substantially consummated.

                    About Diocese of Davenport

The Diocese of Davenport in Iowa filed for chapter 11 protection
(Bankr. S.D. Ia. Case No. 06-02229) on Oct. 10, 2006.  Richard A.
Davidson, Esq., at Lane & Waterman LLP, represents the Davenport
Diocese in its restructuring efforts.  Hamid R. Rafatjoo, Esq.,
and Gillian M. Brown, Esq., at Pachulski Stang Zhiel Young Jones &
Weintraub LLP represent the Official Committee of Unsecured
Creditors.  In its schedules of assets and liabilities, the
Davenport Diocese reported $4,492,809 in assets and $1,650,439 in
liabilities.  The Court approved on April 3, 2008, the Diocese of
Davenport's second amended disclosure statement explaining its
joint plan of reorganization.  The Committee is a proponent to the
plan, which was confirmed on April 30, 2008.  (Catholic Church
Bankruptcy News, Issue No. 128; Bankruptcy Creditors' Service
Inc.; http://bankrupt.com/newsstand/or 215/945-7000).


CATHOLIC CHURCH: Davenport Files Report on Non-Monetary Activities
------------------------------------------------------------------
In compliance with its confirmed second amended plan of
reorganization, the Diocese of Davenport issued a progress report
on its non-monetary undertakings as of June 30, 2008.  

According to The Catholic Messenger, which published the report
on July 3, 2008:

    (1) With respect the public release of the names of
        additional perpetrators, the Diocesan Review Board is
        reviewing cases in detail, including an investigation by
        an independent private investigator, to finalize the
        list.  The process is expected to be completed by the
        fall of 2008;

    (2) When the review of the cases is completed, the list of
        the names of all known perpetrators will be posted on the
        Diocesan Web site;

    (3) Bishop Amos is in the process of scheduling visits to the
        parishes, where abuse occurred or where perpetrators
        served, which will begin in August 2008.  A calendar of
        visits will be provided in The Catholic Messenger one
        month in advance;

    (4) The Diocese has provided contact information for the
        victim assistance coordinator for several years, and will
        continue to provide the information;

    (6) With respect to the Diocese's requirement to publish in
        The Catholic Messenger a statement urging abused persons
        to contact law enforcement, the victim assistance
        coordinator, or health care professional to report abuse,
        the Diocese said it has provided the information for
        several years, and will continue to provide the
        information;

    (7) With regards the bishop's obligation to support a
        complete elimination of all criminal statues of
        limitations for child sexual abuse, the Diocese says the  
        the process is ongoing.  At the current time, the
        legislature is not in session;

    (8) The Diocese has not received any requests from tort
        claimants to speak in a parish, where the abuse occurred;

    (9) The Diocese has not received any requests from tort
        claimants to publish stories of their abuse in The
        Catholic Messenger;

   (10) The Diocese is no longer referring to the tort claims or
        tort claimants as "alleged";

   (11) Bishop Amos has sent letters of apology, when requested,
        and will continue the process;

   (12) All confidentiality agreements involving sex abuse have
        been terminated;

   (13) The Diocese has provided outreach programs for survivors
        of abuse for several years, and will continue to provide
        this in the future;

   (14) The Diocese is continuing to provide safe environment
        programs to clergy, staff, parents and children.  To
        date, thousands of people have been trained;

   (15) The Diocese has clarified a whistle blower policy in the
        Policies Relating to Sexuality and Personal Behavior,
        which can be found at:

        http://ResearchArchives.com/t/s?2f66

   (16) With respect the bishop and all priests' requirement to
        make a written statement that they have not abused any
        minor nor have knowledge of any abuse, written statements
        will be collected in August 2008;

   (17) Plaques stating that abuse will not be tolerated have
        been posted in all Diocesan schools; and

   (18) The Diocese has sent a report to the Apostolic Nuncio for
        action regarding Bishop Lawrence Soens.

Mr. Soens was predominantly accused of abusing boys while working
at Regina High School in Iowa City.  The Diocese's officials have
declined to comment on the content of the Soens Report, says the
Quad-City Times.

Craig Levien, Esq., counsel for certain claimants, also  
questioned the timeline with respect to the posting of the list
of perpetrators, which he said was supposed to be done within a
month after the Effective Date.

"I get calls weekly from survivors asking that the names be
released," Mr. Levien told the Quad-City Times.  "If there are
on-going investigations, that can be released as it comes
available.  It was high on these people's priority list to have
the names released.  Further delay is unacceptable," he added.

                    About Diocese of Davenport

The Diocese of Davenport in Iowa filed for chapter 11 protection
(Bankr. S.D. Ia. Case No. 06-02229) on Oct. 10, 2006.  Richard A.
Davidson, Esq., at Lane & Waterman LLP, represents the Davenport
Diocese in its restructuring efforts.  Hamid R. Rafatjoo, Esq.,
and Gillian M. Brown, Esq., at Pachulski Stang Zhiel Young Jones &
Weintraub LLP represent the Official Committee of Unsecured
Creditors.  In its schedules of assets and liabilities, the
Davenport Diocese reported $4,492,809 in assets and $1,650,439 in
liabilities.  The Court approved on April 3, 2008, the Diocese of
Davenport's second amended disclosure statement explaining its
joint plan of reorganization.  The Committee is a proponent to the
plan, which was confirmed on April 30, 2008.  (Catholic Church
Bankruptcy News, Issue No. 128; Bankruptcy Creditors' Service
Inc.; http://bankrupt.com/newsstand/or 215/945-7000).


CATHOLIC CHURCH: Court to Hear Fairbanks-Continental Feud
---------------------------------------------------------
The U.S. Bankruptcy Court for the District of Alaska lifted the
automatic stay for the limited purpose of allowing the U.S.
District Court for the District of Alaska to hear oral argument
on, and enter a decision regarding, the cross motions for summary
judgment in the pending litigation entitled Continental Insurance
Company vs. Catholic Bishop of Northern Alaska.

                     Coverage Action Argument

The Troubled Company Reporter said on June 25, 2008, that
Continental had asked the Court to lift the automatic stay for the
limited purpose of allowing oral argument in a Coverage Action
to be heard on the cross-motions for summary judgment, and to
allow the District Court to issue its ruling.

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

In response to the objection filed by the Catholic Bishop of
Northern Alaska, Continental told the Court that its request seeks
only limited relief -- that is to allow argument and ruling on its
coverage action's cross-motions for summary judgment that were
fully briefed prior to the filing of the Chapter 11 case.

Brad E. Ambarian, Esq., at Lane Powell PC, in Anchorage, Alaska,
contended that despite the Diocese's efforts to recast the
Coverage Action as a prepetition collection action, no relief is
sought to pursue any prepetition claim against the Diocese.  He
said there is not one mention or reference to any "claim," which
Continental seeks to enforce in its memorandum supporting the
request for summary judgment.  He added that no allegation in the
complaint is made about collecting any claim from the Diocese
except for a one-line provision in Continental's prayer for
relief, which requests an order requiring the Diocese to reimburse
Continental for any sums it has paid for defense costs pursuant to
its reservation of rights.

Many bankruptcy cases are materially affected by disputes over
significant assets, like a contract right, Mr. Ambarian related.  
However, he asserted, that does not mean the Coverage Action is
automatically transmuted into a core proceeding, or that some
possible objection to a claim that has not yet been filed would
transform it into a core proceeding.

                     Judge MacDonald's Memo

In his 9-page memorandum opinion, Judge Donald MacDonald IV held
that the Coverage Action is a non-core, related proceeding under
Section 157(c) of the Judiciary and Judicial Procedures Code.  
"Absent consent of all parties to the case, a bankruptcy court's
determinations on non-core matters are subject to de novo review
by the district court," Judge MacDonald said.

Because Continental does not consent to the Bankruptcy Court's
jurisdiction, Judge MacDonald ruled that the Bankruptcy Court
would be required to submit proposed findings of fact and
conclusions of law to the District Court, which would enter a
final judgment after a de novo review.

"Because the [Coverage Action] is a non-core proceeding, I feel
it is appropriate to grant limited relief from stay so that the
District Court can hear and determine the pending cross motions,"
Judge MacDonald stated.  "I would be limited by [Section] 157(c)
to preparing proposed findings of fact and conclusions of law in
the [Coverage Action], which would then be referred back to the
District Court for a de novo review and entry of final judgment,"
he continued.

Judge MacDonald further held that the Coverage Action, which was
filed to determine whether a contract of insurance exists, must
be resolved first before Continental could even consider whether
or not to file a claim in the bankruptcy case, and before the
Diocese can negotiate, in any meaningful fashion, a plan of
reorganization.

"And while one of the purposes of the automatic stay is to
preserve a level the playing field between the debtor and its
creditors during the pendency of plan negotiations, it is not
appropriate to use the stay as a shield to postpone determination
of an issue which will help define both the extent of the
debtor's assets and the magnitude of its liability," Judge
MacDonald ruled.

Hence, the Coverage Action should be permitted to go forward so
the issue of insurance coverage can be determined, he added.

                    About Diocese of Fairbanks

The Roman Catholic Diocese of Fairbanks in Alaska, aka Catholic
Bishop of Northern Alaska, aka Catholic Diocese of Fairbanks, aka
The Diocese of Fairbanks, aka CBNA -- http://www.cbna.info/--   
filed for chapter 11 bankruptcy on March 1, 2008 (Bankr. D. Alaska
Case No. 08-00110).  Susan G. Boswell, Esq., at Quarles & Brady
LLP represents the Debtor in its restructuring efforts.  Michael
R. Mills, Esq., of Dorsey & Whitney LLP serves as the Debtor's
local counsel and Cook, Schuhmann & Groseclose Inc. as its special
counsel.  Judge Donald MacDonald, IV, of the United States
Bankruptcy Court for the District of Alaska presides over
Fairbanks' Chapter 11 case.  The Debtor's schedules show total
assets of $13,316,864 and total liabilities of $1,838,719.

The church's plans to file its bankruptcy plan and disclosure
statement on July 15, 2008.  Its exclusive plan filing period
expires on Jan. 15, 2009.  (Catholic Church Bankruptcy News, Issue
No. 128; Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000).


CATHOLIC CHURCH: 140 Fairbank Claimants Retain Manly & Stewart
--------------------------------------------------------------
Pursuant to Rule 2019 of the Federal Rules of Bankruptcy
Procedure, John C. Manly, Esq., at Manly & Stewart, in Newport
Beach, California, informs the U.S. Bankruptcy Court for the
District of Alaska that his firm has been retained by 140
survivors of childhood sexual abuse inflicted by agents of the
Catholic Bishop of Northern Alaska, and for most of whom Manly &
Stewart is counsel of record in state court lawsuits against the
Diocese.

As of June 24, 2008, Manly & Stewart represents these claimants,
who have pending lawsuits at the U.S. District Court for the
District of Alaska:

                                          District Court
    Doe pseudonyms                         Case Number
    --------------                         -----------
    John Doe 2 - 7, and 9 - 22            4BE-03-177 CI

    John Doe 23 & 24, 26 & 27             4BE-07-326 CI

    James Doe 1 - 57, 59 - 61, Jean       4BE-04-322 CI
    Doe 1 & 2, and Janet Doe 1 - 3

    Jack Doe 1 - 10, and                  4BE-04-369 CI
    Jackie Doe 1 and 2

    John Doe 1 - 4 and Jane Doe 1         4BE-06-273 CI

    Jane D. Doe                           4BE-07-328 CI

    Jane E. Doe and Jane F. Doe         3AN-07-11176 CI

    June Doe 1 and 2                      4BE-05-290 CI

    June Doe 4                            4BE-07-344 CI

    Jake Doe 1                             4BE-06-45 CI

    Jimmy Doe 1 and 2                    4FA-06-2510 CI

    Jennifer Doe 1                        4BE-07-340 CI

    Jana Doe 2                            4BE-05-354 CI

    Jenny Doe 4                           4BE-06-330 CI

    Jane Doe 2                             2NO-04-83 CI

    Jane Doe 3                             2NO-05-56 CI

    Jane Doe 4                             2NO-05-84 CI

    Jane Doe 5                            2BA-06-139 CI

Mr. Manly says the claims of the abuse claimants are
unliquidated, and the abuse perpetrated against the claimants
began more than one year prior to the filing of the Diocese's
Chapter 11 petition.  He further notes that each of the claimants
either has signed, or is in the process of negotiating
contingency fee retention agreements with Manly & Stewart.

Manly & Stewart has not received any compensation for its work in
representing the claimants in the bankruptcy proceeding, Mr.
Manly tells the Bankruptcy Court.  He assures Judge MacDonald
that neither his firm, nor its individual partners possess any
claims or interests in the Diocese, except to the extent of any
future payments resulting from the contingent fee agreements with
individual claimants.

                    About Diocese of Fairbanks

The Roman Catholic Diocese of Fairbanks in Alaska, aka Catholic
Bishop of Northern Alaska, aka Catholic Diocese of Fairbanks, aka
The Diocese of Fairbanks, aka CBNA -- http://www.cbna.info/--   
filed for chapter 11 bankruptcy on March 1, 2008 (Bankr. D. Alaska
Case No. 08-00110).  Susan G. Boswell, Esq., at Quarles & Brady
LLP represents the Debtor in its restructuring efforts.  Michael
R. Mills, Esq., of Dorsey & Whitney LLP serves as the Debtor's
local counsel and Cook, Schuhmann & Groseclose Inc. as its special
counsel.  Judge Donald MacDonald, IV, of the United States
Bankruptcy Court for the District of Alaska presides over
Fairbanks' Chapter 11 case.  The Debtor's schedules show total
assets of $13,316,864 and total liabilities of $1,838,719.

The church's plans to file its bankruptcy plan and disclosure
statement on July 15, 2008.  Its exclusive plan filing period
expires on Jan. 15, 2009.  (Catholic Church Bankruptcy News, Issue
No. 128; Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000).


CATHOLIC CHURCH: Final Order Closing Spokane's Case to be Amended
-----------------------------------------------------------------
The Diocese of Spokane's Plan Trustee, Gloria Z. Nagler, Esq.,
notified parties-in-interest that an amended order granting the
Reorganized Debtor's request for final decree closing the
bankruptcy case will be filed with the U.S. Bankruptcy Court for
the Eastern District of Washington at Spokane, without further
notice unless a written objection is filed.

Ms. Nagler said the proposed Amended Order is intended to
clarify the effect of the closing of the case upon the continued
operation of the Plan Trust, and administration of the Trust by
the Plan Trustee.  She further noted that the proposed Amended
Order is in accordance with the Diocese's confirmed Plan of
Reorganization, specifically regarding the jurisdiction of the
Court subsequent to closing of the case, and regarding the
finality of the Tort Claims Reviewer's determinations, and the
Plan Trustee's estimates and allocation of Plan Trust Funds.

The Proposed Amended Order provides that:

   1. The Order previously entered by the Court Closing the Case
      is amended to clarify that, with the exception of Allowed
      Future Tort Claims–Extended and Allowed Future Tort Claims–
      Initial, all other Claims which had not been allowed as of
      May 12, 2008, will not be considered or allowed after
      May 12, 2008.

   2. The Plan Trustee is authorized to distribute funds to the
      Claimants and maintain reserves for potential taxes,
      professional fees and indemnity-related matters, without
      maintaining any reserves for additional Claims which were
      not allowed as of May 12, 2008, and which do not qualify as
      Future Tort Claims.  These additional Claims will not be
      funded from the reserves created by the Plan Trustee.

   3. The Court, without re-opening the Case, holds continuing
      jurisdiction over matters related to the Plan Trust
      Agreement including requests for determination of tax
      liability under Section 505 of the Bankruptcy Code,
      pursuant to the Plan.

Deadline for filing objections to the proposed Amended Order is
July 18, 2008.

            Plan Trustee Wants Spokane's Case Reopened

On June 11, 2008, the Troubled Company Reporter said that Ms.
Nagler had asked the Court to reopen the Diocese's bankruptcy
case, which was closed pursuant to a final decree entered by Judge
Patricia C. Williams on May 12, 2008.

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

                    About The Diocese of Spokane

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

The Diocese of Spokane, the Tort Claimants Committee, the Future
Claims Representative, and the Executive Committee of the
Association of Parishes delivered an Amended Plan of
Reorganization, and a Disclosure Statement describing that Plan to
the Court on Feb. 1, 2007.  The Honorable Patricia C. Williams
approved the disclosure statement on March 8, 2007.  On April 24,
2007, the Court confirmed Spokane's second amended joint plan.  
That plan is effective May 31, 2007.  (Catholic Church Bankruptcy
News, Issue No. 128; Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000)


CATHOLIC CHURCH: Court Set July 18 as Portland's Brief Deadline
---------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Oregon granted a
request of the Archdiocese of Portland in Oregon to extend from
June 30, 2008, to July 18, 2008, the deadline for the Debtor to
file a brief on the request by Erin Elson, Esq., regarding issues
pertaining to the protective order issued by the Court on Jan. 14,
2005.

Ms. Olson had told the Court that the Archdiocese of Portland in
Oregon filed a request that largely ignores the procedure
stipulated in 2005.  Ms. Olson noted that the protective order,
which shields the documents of those who have been accused of
abusing minors, allows the removal of protection of the Documents
unless the Archdiocese asks, and the Court rules, not to release
the Documents.

The Archdiocese, instead, seeks an entirely new procedure, Ms.
Olson had related.  If the Court is not inclined to adopt the
Archdiocese's proposed new procedure, Ms. Olson had asked the
Court to consider the Archdiocese's alternative requests.  She had
pointed out that the request to preserve the status quo of the
Protective Order with respect to the Documents, is the only
alternative request that actually complies with the terms of the
Protective Order.

Ms. Olson agreed that the Archdiocese may have until July 18,
2008, to submit its brief, but opposes any extension beyond that
date, Margaret Hoffman, Esq., at Schwabe, Williamson & Wyatt,
P.C., informed Judge Elizabeth L. Perris.

                      Mt. Angel and Friars
                 Have Limited Standing in Dispute

Judge Perris ruled that the Franciscan Friars of California,
Franciscan Friars of Oregon, Inc., and Mt. Angel Abbey's standing
"to participate in the pending dispute over the release of
documents concerning clergy accused of sexual misconduct with
minors is limited to documents originating with those religious
orders."

"To the extent individual accused clergy or their estates wish to
assert objections with respect to documents identified for
release, living clergy must appear individually or through
counsel, and deceased clergy must appear through duly appointed
personal representatives or their counsel," Judge Perris said.

                  About Archdiocese of Portland

The Archdiocese of Portland in Oregon filed for chapter 11
protection (Bankr. Ore. Case No. 04-37154) on July 6, 2004.
Thomas W. Stilley, Esq., and William N. Stiles, Esq., at Sussman
Shank LLP, represent the Portland Archdiocese in its restructuring
efforts.  Albert N. Kennedy, Esq., at Tonkon Torp, LLP, represents
the Official Tort Claimants Committee in Portland, and scores of
abuse victims are represented by other lawyers.  David A. Foraker
serves as the Future Claimants Representative appointed in the
Archdiocese of Portland's Chapter 11 case.  In its Schedules of
Assets and Liabilities filed with the Court on July 30, 2004, the
Portland Archdiocese reports $19,251,558 in assets and
$373,015,566 in liabilities.

The Court approved the Debtor's disclosure statement explaining
its Second Amended Joint Plan of Reorganization on Feb. 27, 2007.
On April 17, 2007, the Court confirmed Portland's 3rd Amended
Plan.  On Sept. 28, 2007, the Court entered a final decree closing
Portland's case.  The case was subsequently reopened at Ms.
Olson's request of further case administration.

The Hon. Elizabeth L. Perris reopened the bankruptcy case of the
Archdiocese of Portland in Oregon for further administration.   
Erin K. Olson, Esq., at the Law Office of Erin Olson, P.C.,
previously asked the Court to reopen the case to resolve certain
issues, including her request to unseal, and file in redacted
form, the documents and accompanying exhibits filed as Docket Nos.
4765 and 4766 in the bankruptcy case.  (Catholic Church Bankruptcy
News, Issue No. 128; Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000).


CATHOLIC CHURCH: Tucson's Capital Campaign Yields $31,200,000
-------------------------------------------------------------
The Diocese of Tucson launched a capital campaign entitled "Our
Faith, Our Hope, Our Future," to collect $28,000,000 to buy new
land for parishes and schools, help retired priests, and
strengthen Catholic schools and religious-education programs,
among other purposes.

Stephanie Innes of the Arizona Daily Star reports that despite
the sluggish economy, the Diocese was able to raise $31,200,000,
and counting, in its first-ever Capital Campaign.  Diocesan
officials are hoping for another $9,000,000 from the Diocese's 46
parishes, which has just began participating in the fundraising
efforts.

The Daily Star says that the average pledge is $3,200.  Some
individuals and families, however, gave more than $1,000,000.

"We were surprised," said the campaign's executive director,
Thomas Q. Smith.  "I attribute it to a couple of things.  One is
that it's never been done before in this diocese, so people
didn't feel like, 'Oh boy, here we go again.'"

Mr. Smith noted that the other factor is Bishop Gerald F.
Kicanas' charisma and enthusiasm for it.  "People have now had
some time with the bishop, and they trust him."

"He makes so many visits around the diocese doing confirmations,
pastoral visits, and holds his town meetings at parishes whenever
there's a pastoral change.  People have had a chance to get to
know him," Mr. Smith told the Daily Star.

The Capital Campaign, which is separately registered as a non-
profit corporation with a board of directors co-chaired by Tucson
auto dealer Jim Click and Bishop Kicanas, replaced this year's
Annual Catholic Appeal, and asked parishioners for pledges over a
three- to five-year period.

According to the Daily Star, the funds raised will be spent on
several projects with these estimates:

   (a) $7,000,000 for buying land for future parishes, schools
       and new church buildings;

   (b) $4,000,000 for increasing retirement benefits for Diocesan
       priests;

   (c) $5,600,000 for assisting parishes with expansion,
       maintenance and ministry needs;

   (d) $4,000,000 for the enhancement for Catholic schools and
       parish religious-education programs;

   (e) $3,400,000 for operating the 26 ministries and charities
       that normally are funded by the Annual Catholic Appeal.
       There was no appeal in 2008;

   (f) $3,000,000 for expanding Catholic Community Services'
       social-service programs; and

   (g) $1,000,000 for the interior renovation of St. Augustine
       Cathedral.

                 About the Diocese of Tucson

The Roman Catholic Church of the Diocese of Tucson filed for
chapter 11 protection (Bankr. D. Ariz. Case No. 04-04721) on
September 20, 2004, and delivered a plan of reorganization to the
Court on the same day.  Susan G. Boswell, Esq., Kasey C. Nye,
Esq., at Quarles & Brady Streich Lang LLP, represent the Tucson
Diocese.  Tucson's Third Amended and Restated Plan of
Reorganization became effective on Sept. 20, 2005.  (Catholic
Church Bankruptcy News, Issue No. 128; Bankruptcy Creditors'
Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000)


CELLU TISSUE: S&P Holds 'B' Rating After Notes Upsize to $222MM
---------------------------------------------------------------
Standard & Poor's Ratings Services affirmed its issue and recovery
ratings on Cellu Tissue Holdings Inc.'s senior secured notes,
following the announcement that the company upsized its 9.75%
senior secured notes to $222 million from $182 million.  The notes
are rated 'B', the same as the corporate credit rating on Cellu
Tissue, with a recovery rating of '4', indicating S&P's
expectation for average recovery (30% to 50%) in the event of a
payment default.  The company issued the notes under the existing
indenture dated March 12, 2004.
     
Cellu Tissue used proceeds from the notes along with an equity
investment by its controlling shareholder, Weston Presidio, to
finance the acquisition of Atlantic Paper & Foil Corp.  As
previously stated in Standard & Poor's bulletin published on
RatingsDirect on July 7, 2008, the acquisition has no impact on
the ratings or outlook of Cellu Tissue.

Ratings List
Cellu Tissue Holdings Inc.
Corporate credit rating                       B/Stable/--
Senior Secured
  $222 million senior secured notes due 2010   B
   Recovery rating                             4


CHARYS HOLDING: Wants Exclusive Plan Filing Extended Until Aug. 4
-----------------------------------------------------------------
Charys Holding Company Inc. and Crochet & Borel Services Inc. ask
the U.S. Bankruptcy Court for the District of Delaware to extend
until Aug. 4, 2008, the exclusive period within which the Debtors
may file a Chapter 11 plan.

The Debtors also ask the Court to extend the exclusive
solicitation period until Oct. 3, 2008.

The exclusive period to file a Chapter 11 plan will expire on
July 15, 2008, and the exclusive period to solicit acceptances of
that plan will expire on Sept. 10, 2008.

The Court will consider the Debtors' motion on Aug. 18, 2008,
11:00 a.m. at 824 Market Street, 6th Floor, Courtroom No. 1,
Wilmington, Delaware.  Objections, if any, are due Aug. 11, 2008,
4:00 p.m.

The Debtors had said that the extension of time will provide
sufficient time to negotiate, propose, confirm and consummate a
consensual Chapter 11 plan.  The Debtors said they have made
significant progress during their Chapter 11 bankruptcy cases.  
They have reached agreements with majority of their creditors and
are in the process of finalizing the agreements, which will be
included into the Chapter 11 plan.

                     About Charys Holding

Headquartered in Atlanta, Georgia, Charys Holding Co., Inc., --
http://www.charys.com/-- provide remediation & reconstruction
and wireless communications & data infrastructure.  The company
and its Crochet & Borel Services, Inc. subsidiary filed for
Chapter 11 protection on Feb. 14, 2008 (Bankr. Del. Case No.08-
10289).  Chun I. Jang, Esq., Mark D. Collins, Esq., and Paul Noble
Heath, Esq., at Richards, Layton & Finger, P.A., represent the
Debtors in their restructuring efforts.  The U.S. Trustee for
Region 3 appointed five creditors to serve on an Official
Committee of Unsecured Creditors.  The Committee selected Morris
Nichols Arsht & Tunnell LLP as Delaware co-counsel.  When the
Debtors filed for protection from their creditors, it listed total
assets of $245,000,000 and total debts of $255,000,000.


CITYSCAPE HOME: Moody's Assigns Underlying Rating of B3 to Notes
----------------------------------------------------------------
Moody's Investors Service published the underlying rating on the
Class A-5 Notes issued by Cityscape Home Equity Loan Trust 1996-2,
and guaranteed by Financial Security Assurance Inc. (Aaa).

The Current Rating is Aaa.  The Underlying Rating is B3.

The underlying rating reflect the intrinsic credit quality of the
notes in the absence of the guarantee. The current rating on the
following notes is 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.


CLAIRE'S STORES: Zimmermann Resigns as President for North America
------------------------------------------------------------------
Claire's Stores, Inc. disclosed that John A. Zimmermann resigned
as President of Claire's North America, effective July 7, 2008,
for personal reasons.

Starting as an executive trainee in 1981 with John Wanamaker, the
Philadelphia, Pennsylvania-based department store, Mr. Zimmermann
went on to hold senior merchandising and executive positions with
retail chains that included Federated Department Stores, The
Children's Place and Bon Marche, Carter Hawley Hale's The Broadway
Stores and Contempo Casuals, as well as Bradlees.

At Zale Corp., as a Corporate Senior Vice President and President
of Zale Canada Company, he led a successful turnaround of the
company.  In his most recent Zale assignment as President, North
America, a 990-store $1.4 billion jewelry retailer with units in
the U.S., Canada and Puerto Rico, he addressed challenging issues
that embraced merchandising, sales, marketing and operational
improvement.

Headquartered in Pembroke Pines, Florida, Claire's Stores Inc.
(NYSE: CLE) -- http://www.clairestores.com/-- is a specialty   
retailer of value-priced jewelry and accessories for girls and
young women through its two store concepts: Claire's and Icing.  
While the latter operates only in North America, Claire's operates
worldwide.  As of May 3, 2008, Claire's Stores, Inc. operated
3,053 stores in North America and Europe.  Claire's Stores Inc.
also operates through its subsidiary, Claire's Nippon Co. Ltd.,
201 stores in Japan as a 50:50 joint venture with AEON Co. Ltd.  
The company also franchises 169 stores in the Middle East, Turkey,
Russia, South Africa, Poland and Guatemala.

                          *     *     *

As reported in the Troubled Company Reporter on May 6, 2008,
Standard & Poor's Ratings Services lowered its corporate credit
rating on Claire's Stores Inc. to 'B-' from 'B'.  At the same
time, S&P lowered the ratings on the company's $1.65 billion
senior secured credit facilities to 'B' from 'B+', its
$600 million senior unsecured notes to 'CCC+' from 'B-', and its
$335 million senior subordinated notes to 'CCC' from 'CCC+'.  The
outlook is negative.


COLONIAL DESIGN: Voluntary Chapter 11 Case Summary
--------------------------------------------------
Debtor: Colonial Design, Inc.
        P.O. Box 1513
        Corinth, MS 38834

Bankruptcy Case No.: 08-12657

Type of Business: The Debtor manufactures miscellaneous products
                  and merchandises including gifts and novelties.

Chapter 11 Petition Date: July 9, 2008

Court: Northern District of Mississippi (Aberdeen)

Debtor's Counsel: Craig M. Geno, Esq.
                  E-mail: cmgeno@harrisgeno.com
                  Harris Jernigan & Geno, PLLC
                  P.O. Box 3380
                  Ridgeland, MS 39158-3380
                  Tel: (601) 427-0048

Estimated Assets:   $500,000 to $1 million

Estimated Debts: $1 million to $10 million

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


CONTINENTAL AIRLINES: Posts $58MM Pretax Charge for Capacity Cuts
-----------------------------------------------------------------
Continental Airlines, Inc. recorded a number of special items
during the second quarter of 2008.  The special gains (losses)
are:

                                                  (in millions)
Operating special charge (pretax)                         $(58)

    Non-operating items (pretax):
      Gain on sale of COPA stock                            78     
      Write down of student
       loan-related auction rate securities                (29)
      Total non-operating gains                             49

    Income taxes:
      Special tax credit                                    28
      Tax effect of special items                            3

    Total special items (after tax)                        $22

The Wall Street Journal's Kathy Shwiff reports that the pretax
charge is in relation to the airline company's capacity reductions
slated for September this year.

As disclosed in the Troubled Company Reporter on June 6, 2008,
Continental disclosed, in a letter and employee bulletin,
significant reductions in flying and staffing that are necessary
for the company to further adjust to today's extremely high cost
of fuel.  These actions are among many steps Continental is taking
to respond to record-high fuel prices as the industry faces its
worst crisis since 9/11.  The price of Gulf Coast jet fuel closed
on June 4 at $151.26 -- about 75% higher than what it was a year
ago.  At that price and at its current capacity, its fuel expense
this year would be $2.3 billion more than it was last year.  That
increase alone amounts to about $50,000 per employee.

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

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

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

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

                          *     *     *

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

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

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


DELTA AIR: Workers Ask Congress to Limit Oil Speculation
--------------------------------------------------------
For the past two weeks, employees at Delta Air Lines Inc. and
Northwest Airlines Corporation have together sent more than 20,000
messages to Congressional leaders, urging them to pass legislation
that will limit rampant oil speculation.

Northwest and Delta also joined 10 other airlines -- which are
part of broad business, labor and consumer coalition -- in sending  
e-mail messages to frequent flier databases, asking customers to
join them in fighting the high cost of fuel.  Since the email
campaign was launched yesterday, 300,000 emails have already been
sent by customers to Members of Congress.

The letter-writing campaign is at:

               http://www.StopOilSpeculationNow.com/

              NWA Spurs Campaign to Lower Fuel Prices

NWA president and CEO Doug Steenland criticized financial
speculation in light of the rapid run-up in oil prices in the
final hour of trading and said, "If anybody needed any further
evidence that the oil markets are being directly influenced and
affected by financial speculation, [the] result ends that debate."

He added, "With no single event occurring that would cause supply
to decrease or demand for oil to increase, the price in the last
20 minutes of trading went up about $5 a barrel as a result of
financial players, near the close of trading, coming into the
market and driving up price."

Mr. Steenland, who is also the Chairman of the Board of the Air
Transport Association, recently testified in Congress on this
issue, and added, "[The] result is the poster child of why
Congress needs to take immediate action to change the law and stop
these abuses from adversely affecting the U.S. economy and
consumers."

Over the last year, the price of crude oil has more than doubled.
To help fix these unprecedented oil challenges, Mr. Steenland
favors increasing domestic supply, further oil exploration in the
United States, investing in alternative energy sources, and
conservation.

                     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; Bankruptcy Creditors' Service,
Inc., http://bankrupt.com/newsstand/or 215/945-7000).


DISTRIBUTED ENERGY: U.S. Trustee Forms 3-Member Creditors Panel
---------------------------------------------------------------
Roberta A. DeAngelis, the U.S. Trustee for Region 3, appointed
three creditors to serve on the Official Committee of Unsecured
Creditors for Distributed Energy Systems Corp. and Northern Power
Systems, Inc.

The creditors committee members are:

   1) Delstar Energie Inc.
      Attn: Sebastian Callegher
      12885 Jean Grou
      Montreal, Quebec, H1A 3N6
      Tel: (514) 642-8220
      Fax: (514) 498-9559

   2) Chloride France SA
      Attn: Frederic Chara
      30 Avenue Montgocfier
      Chassieu, France
      Tel: 33-4-78-40-1356
      Fax: 33-78-90-3791

  3) Valley Power Systems, Inc.
     Attn: Jonathan Trott
     425 S. Hacienda Boulevard
     City of Industry, CA 91745
     Tel: (626) 934-6211
     Fax: (626) 934-6200

Official creditors' committees have the right to employ legal
and accounting professionals and financial advisors, at the
Debtors' expense.  They may investigate the Debtors' business and
financial affairs.  Importantly, official committees serve as
fiduciaries to the general population of creditors they represent.  
Those committees will also attempt to negotiate the terms of a
consensual Chapter 11 plan -- almost always subject to the terms
of strict confidentiality agreements with the Debtors and other
core parties-in-interest.  If negotiations break down, the
Committee may ask the Bankruptcy Court to replace management with
an independent trustee.  If the Committee concludes reorganization
of the Debtor is impossible, the Committee will urge the
Bankruptcy Court to convert the Chapter 11 cases to a liquidation
proceeding.

                   About Distributed Energy

Based in Wallingford, Connecticut, Distributed Energy Systems
(Nasdaq: DESC) -- http://www.distributed-energy.com/-- through     
its subsidiaries, engages in the design, development, manufacture,
and sale of on-site hydrogen gas delivery systems worldwide.

Distributed Energy Systems Corp. and its wholly owned subsidiary,
Northern Power systems Inc., filed for Chapter 11 bankruptcy
protection on May 4, 2008 (Bankr. D. Del. Lead Case No. 08-11101).
Robert S. Brady, Esq. and Robert F. Poppiti, Jr., at Young,
Conaway, Stargatt & Taylor represent the Debtors in their
restructuring efforts.  The Debtors selected Epiq Bankruptcy
Solutions LLC as their claims agent.


DISTRIBUTED ENERGY: Files Schedules of Assets and Liabilities
-------------------------------------------------------------
Distributed Energy Systems Corp. and Northern Power Systems, Inc.,
delivered to the United States Bankruptcy Court for the District
of Delaware their schedules of assets and liabilities disclosing:

   Name of Schedule                   Assets      Liabilities
   ----------------                -----------    -----------
   A. Real Property                $ 1,737,150
   B. Personal Property             17,856,237
   C. Property Claimed
      as Exempt
   D. Creditors Holding                           $38,957,087
      Secured Claims
   E. Creditors Holding                               438,434
      Unsecured Priority
      Claims
   F. Creditors Holding                             4,163,192
      Unsecured Nonpriority
      Claims
                                   -----------    -----------
      TOTAL                        $19,593,387    $43,558,713

                   About Distributed Energy

Based in Wallingford, Connecticut, Distributed Energy Systems
(Nasdaq: DESC) -- http://www.distributed-energy.com/-- through     
its subsidiaries, engages in the design, development, manufacture,
and sale of on-site hydrogen gas delivery systems worldwide.

Distributed Energy Systems Corp. and its wholly owned subsidiary,
Northern Power systems Inc., filed for Chapter 11 bankruptcy
protection on May 4, 2008 (Bankr. D. Del. Lead Case No. 08-11101).
Robert S. Brady, Esq. and Robert F. Poppiti, Jr., at Young,
Conaway, Stargatt & Taylor represent the Debtors in their
restructuring efforts.  The Debtors selected Epiq Bankruptcy
Solutions LLC as their claims agent.


FANNIE MAE: Fed OKs Lending Plan; Treasury to Up Credit Line
------------------------------------------------------------
The Board of Governors of the Federal Reserve System granted the
Federal Reserve Bank of New York on Sunday authority to lend to
Fannie Mae and Freddie Mac should such lending prove necessary.  
Any lending would be at the primary credit rate and collateralized
by U.S. government and federal agency securities.  The
authorization is intended to supplement the Treasury's existing
lending authority and to help ensure the ability of Fannie Mae and
Freddie Mac to promote the availability of home mortgage credit
during a period of stress in financial markets.

The Wall Street Journal's James R. Hagerty, Deborah Solomon and
Sudeep Reddy report that the United States Treasury said it plans
to seek approval from Congress for a temporary increase in a long-
standing Treasury line of credit for Fannie and Freddie.

                      Treasury's 3-Part Plan

In a statement on Sunday, Treasury Secretary Henry M. Paulson, Jr.
said that he has consulted in recent days with the Federal
Reserve, the Office of Federal Housing Enterprise Oversight, the
Securities and Exchange Commission, Congressional leaders of both
parties and with the two companies to develop a three-part plan
for immediate action:

   1. As a liquidity backstop, the plan includes a temporary
      increase in the line of credit Fannie and Freddie have
      with Treasury.  Treasury would determine the terms and
      conditions for accessing the line of credit and the
      amount to be drawn.

   2. To ensure Fannie and Freddie have access to sufficient
      capital to continue to serve their mission, the plan
      includes temporary authority for Treasury to purchase
      equity in either of the two GSEs if needed.  Use of
      either the line of credit or the equity investment
      would carry terms and conditions necessary to protect
      the taxpayer.

   3. To protect the financial system from systemic risk going
      forward, the plan strengthens the GSE regulatory reform
      legislation currently moving through Congress by giving
      the Federal Reserve a consultative role in the new GSE
      regulator's process for setting capital requirements and
      other prudential standards.

"The President has asked me to work with Congress to act on this
plan immediately," according to Mr. Paulson.

Mr. Paulson said, "Fannie Mae and Freddie Mac play a central role
in our housing finance system and must continue to do so in their
current form as shareholder-owned companies.  Their support for
the housing market is particularly important as we work through
the current housing correction."

"GSE debt is held by financial institutions around the world.  Its
continued strength is important to maintaining confidence and
stability in our financial system and our financial markets.
Therefore we must take steps to address the current situation as
we move to a stronger regulatory structure."

"I look forward to working closely with the Congressional leaders
to enact this legislation as soon as possible, as one complete
package."

The Wall Street Journal notes that Fannie's and Freddie's lines of
credit are currently capped at $2,250,000,000 each.  The Treasury,
the Journal notes, didn't say to what level they would be
increased.  It's also not clear what role the Fed might play, the
Journal adds.

                         New Housing Bill

WSJ says the Senate late on Friday passed a housing package that
would create a new, stronger regulator for Fannie Mae, Freddie Mac
and the 12 Federal Home Loan Banks.  The House passed a similar
bill in May, but the process since then has been fraught with
unexpected complications, WSJ says.

WSJ says the bill could pick up speed now as lawmakers only need
to resolve a few differences, and potentially add the changes.

Daniel H. Mudd, Fannie Mae's President and CEO, said, "Fannie Mae
appreciates [the Federal Reserve and U.S. Treasury] announcements
and the expressions of support for the GSEs as shareholder-owned
companies that play a critical role in the U.S. housing finance
system.  We are grateful for the leadership of Secretary Paulson
and Chairman Bernanke.  We also look forward to working with
Treasury, OFHEO and Congress on swift passage of the new
legislative proposals, as well as the important initiatives
underway to assist homeowners and help restore stability to the
housing market.  We continue to hold more than adequate capital
reserves and maintain access to liquidity from the capital
markets.  Given the market turmoil, having options to access
provisional sources of liquidity if needed will help to strengthen
overall confidence in the market.  We will continue to do our part
to provide liquidity, stability and affordability to the housing
market now and in the future."

Richard F. Syron, chairman and CEO of Freddie Mac, said, "We are
heartened by [the Federal Reserve and U.S. Treasury] announcement
and the steps outlined by the U.S. Department of the Treasury and
the Federal Reserve Board.  This affirmation of the important role
of the GSEs, and that we should continue to operate as
shareholder-owned companies, should go a long way toward
reassuring world markets that Freddie Mac and Fannie Mae will
continue to support America's homebuyers and renters.  I applaud
Secretary Paulson and Chairman Bernanke for their leadership and
encourage Congress to act quickly to pass the new legislative
proposals."

BankruptcyLaw360 says Freddie Mac and Fannie Mae are not likely to
be nationalized, according to experts.  It has long been assumed
that the U.S. government would step in to bail out Fannie Mae and
Freddie Mac rather than have them file for bankruptcy, but exactly
what steps it would take remain to be seen, according to
BankruptcyLaw360.

             Fannie & Freddie Adequately Capitalized

As reported by the Troubled Company Reporter on July 11, 2008,
James B. Lockhart, director of the Office of Federal Housing
Enterprise Oversight, issued a statement assuring that Fannie Mae
and Freddie Mac are adequately capitalized, after the companies'
stocks tumbled to the lowest in 17 years in New York trading when:

   -- former St. Louis Federal Reserve President William Poole
      said both may need a government bailout; and

   -- UBS AG analysts cut their price target for Freddie Mac
      stock.

Mr. Poole had said:

   1. Freddie Mac owed $5,200,000,000 more than its assets were
      worth in the first quarter, and was insolvent based on fair
      value accounting measures; and

   2. the fair value of Fannie Mae assets fell 66% to
      $12,200,000,000 and may be negative next quarter.

Mr. Lockhart, the TCR related, said Fannie Mae and Freddie Mac
have large liquidity portfolios, access to the debt market and
more than $1,500,000,000,000 in unpledged assets.  Mr. Lockhart
added that OFHEO has been monitoring and continues to monitor
closely Fannie Mae, Freddie Mac and the mortgage and financial
markets.

Bloomberg News' Dawn Kopecki reports that Fannie Mae and Freddie
Mac own or guarantee about half the $12,000,000,000,000 in U.S.
home loans outstanding. Ms. Kopecki, citing Bloomberg data, says
Fannie Mae also has $831,000,000,000 in company bonds outstanding,
while Freddie Mac has $644,000,000,000.

WSJ says Fannie and Freddie own or guarantee about
$5,200,000,000,000 of U.S. home mortgages, nearly half of all
mortgages outstanding:
      _________________________________
     |                                 |
     |  $3,000,000,000,000 Fannie Mae  |
     |_________________________________|
     |  $2,200,000,000,000 Freddie Mac |
     |_________________________________|
     |                                 |
     |                                 |
     |  $6,000,000,000,000 all others  |
     |                                 |
     |                                 |
     |_________________________________|

Chuck Greener, Senior Vice President at Fannie Mae, confirmed on
Friday the GSE's capital adequacy, pointing out that Fannie Mae
raised $7,400,000,000 of additional capital in May, for a total of
more than $14,000,000,000 in new capital since November of 2007.  
"Our capital level is substantially above both our statutory
minimum capital and the OFHEO-required 15 percent surplus over
minimum capital.  In fact, we have more core capital, and a higher
surplus over our regulatory requirement, than at any time in this
company's history," Mr. Greener said.

Mr. Greener also noted that Fannie Mae has access to ample sources
of liquidity, including access to the debt markets.  The company
issued more than $24,000,000,000 in debt last week, including a
$3,000,000,000 Benchmark Notes(R) sale that was oversubscribed.

"Fannie Mae remains well equipped to fulfill our critical role in
the housing finance system, today and in the future.  We will
provide a full financial update and outlook when we report second-
quarter results in early August," Mr. Greener added.

Freddie Mac also confirmed Friday that is adequately capitalized.  
Freddie said it is in the process of finalizing its results, and
it estimates that at June 30, 2008, it will have a substantial
capital cushion above the 20% mandatory target surplus established
by OFHEO and a much greater surplus above the statutory minimum
capital requirement.

Freddie Mac said in a statement it is not under any mandate to
raise capital in the near term.  Freddie also noted that there are
a number of options to manage its capital position.  According to
Freddie, the average rate of run-off on its retained portfolio is
currently about $10,000,000,000 per month, and not replacing that
run-off would free up approximately $250,000,000 of capital per
month.  Over the course of a year, this would free up
approximately $2,500,000,000 to $3,000,000,000 of additional
capital if the run-off rate remains constant, Freddie explained.

Freddie Mac is also could consider reducing its common stock
dividend.  Freddie's current annual common stock dividend is
roughly $650,000,000.

Freddie Mac also indicated that its liquidity position remains
strong as a result of the combination of:

   -- access to the debt markets at attractive spreads; and

   -- an unencumbered agency MBS portfolio of roughly
      $550,000,000,000 which could serve as collateral for
      short-term borrowings.

WSJ also notes that Freddie has announced plans to raise
$5,500,000,000 by selling common and preferred shares, but it is
likely to wait for a calmer market.

                        About Freddie Mac

The Federal Home Loan Mortgage Corporation -- (FHLMC) NYSE: FRE --
commonly known as Freddie Mac, is a stockholder-owned government-
sponsored enterprise authorized to make loans and loan guarantees.  
Freddie Mac was created in 1970 to provide a continuous and low
cost source of credit to finance America's housing.

Freddie Mac conducts its business primarily by buying mortgages
from lenders, packaging the mortgages into securities and selling
the securities -- guaranteed by Freddie Mac -- to investors.  
Mortgage lenders use the proceeds from selling loans to Freddie
Mac to fund new mortgages, constantly replenishing the pool of
funds available for lending to homebuyers and apartment owners.

                         About Fannie Mae

The Federal National Mortgage Association -- (FNMA) (NYSE: FNM) --
commonly known as Fannie Mae, is a shareholder-owned U.S.
government-sponsored enterprise.  Fannie Mae has a federal charter
and operates in America's secondary mortgage market, providing
mortgage bankers and other lenders funds to lend to home buyers at
low rates.

Fannie Mae was created in 1938, under President Franklin D.
Roosevelt, at a time when millions of families could not become
homeowners, or risked losing their homes, for lack of a consistent
supply of mortgage funds across America.  The government
established Fannie Mae to expand the flow of mortgage funds in all
communities, at all times, under all economic conditions, and to
help lower the costs to buy a home.

In 1968, Fannie Mae was re-chartered by the U.S. Congress as a
shareholder-owned company, funded solely with private capital
raised from investors on Wall Street and around the world.

Fannie Mae is the U.S. largest mortgage buyer, according to The
New York Times.


FORD MOTOR: Names Ken Czubay as Head of U.S. Sales and Marketing
----------------------------------------------------------------
Ford Motor Company disclosed the appointment of veteran auto
industry executive and retailer Ken Czubay as vice president of
U.S. Sales and Marketing.

Mr. Czubay, who has 38 years of automotive experience and served
in a variety of management and executive roles at Ford from 1970
to 1983, rejoins the company from his current positions as
president of Southeast Toyota Distributors, LLC, executive vice
president of parent company JM Family Enterprises, Inc., and
president of JM Lexus, the world's largest volume Lexus
dealership.

Mr. Czubay, 59, joins Ford effective July 16 and will oversee the
day-to-day sales and marketing of Ford, Lincoln and Mercury
vehicles in the U.S.  He will report to Jim Farley, Ford group
vice president of Marketing and Communications.

"Having worked closely with Ken over the years, I can tell you
that he's truly one of the top sales executives in the auto
industry with a long track record of success," Mr. Farley said.  
"Ken knows Ford, he knows the auto industry, and has a deep
understanding of dealers and all facets of the retailing side of
the business.  We are fortunate to be bringing in someone with
Ken's unique experience and talent to run U.S. Sales and
Marketing."

Mr. Czubay's day-to-day leadership of U.S. Sales and Marketing
will allow Mr. Farley to work more closely with Derrick Kuzak,
Ford group vice president of Global Product Development, to
accelerate the company's "One Ford" global product vision.  In
addition, Mr. Farley will concentrate on enhancing and clarifying
the Blue Oval's brand image across all markets and oversee the
marketing and communications for a host of new vehicles coming
soon to showrooms.  In the U.S., Mr. Farley and Mr. Czubay will
work together closely on advertising, sales strategies and product
introductions.

"The addition of Ken Czubay will strengthen Ford's leadership team
at a key time for Ford and its dealers," Mark Fields, Ford
president of the Americas, said.  "With Ken joining Jim Farley and
the rest of the team, Ford is well positioned to tackle the
current market challenges and flourish in the future with the
great new vehicles we are bringing to market."

Reporting to Mr. Czubay will be:

   * John Felice, who becomes general marketing manager, Ford,
     Lincoln Mercury.  Mr. Felice, who had been general market
     manager for Ford, is adding Lincoln Mercury marketing to his
     duties.

   * Randy Ortiz, general sales manager, Ford, Lincoln Mercury;

   * Kevin Koswick, director, North American Fleet, Lease and Re-
     marketing Organization; and

   * David Thomas, who was named to an expanded role of director,
     North American Order Management and Sales Planning.

"I am joining Ford for the chance to work with a group of
committed, energized colleagues who are really embracing the
challenge of restoring a great American icon," Mr. Czubay said.  
"Once you have been at Ford, it's always in your blood.  I
couldn't be more excited to be coming home."

Mr. Czubay joined Ford in 1970 as a financial analyst with Ford
Motor Credit Company and went on to work in several positions for
Ford Division and Lincoln Mercury.

In 1983, he joined Nissan North America in California, where he
worked in sales and marketing until 1987, when he took a position
as an executive with the Suburban Collection, a group of auto
dealerships based in Troy, Michigan.  In 1990, Mr. Czubay joined
Deerfield, Florida-based Southeast Toyota Distributors, the
largest independent distributor of Toyota and Scion vehicles in
the world, where he has held several executive positions.

Born in Hamtramck, Michigan, and raised in the Detroit area, Mr.
Czubay graduated from Wayne State University in Detroit with a
bachelor's degree in business administration.  He and his wife,
Jane, have two children.

                        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,
through Ford Japan Limited.

                          *     *     *

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

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

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

Moody's also affirmed Ford Motor Credit Company's B1 senior
unsecured rating, and changed the outlook to Stable from
Negative.  These rating actions follow Ford's announcement of
the details of the newly ratified four-year labor agreement with
the United Auto Workers.



FREDDIE MAC: Fed OKs Lending Plan; Treasury to Up Credit Line
-------------------------------------------------------------
The Board of Governors of the Federal Reserve System granted the
Federal Reserve Bank of New York on Sunday authority to lend to
Fannie Mae and Freddie Mac should such lending prove necessary.  
Any lending would be at the primary credit rate and collateralized
by U.S. government and federal agency securities.  The
authorization is intended to supplement the Treasury's existing
lending authority and to help ensure the ability of Fannie Mae and
Freddie Mac to promote the availability of home mortgage credit
during a period of stress in financial markets.

The Wall Street Journal's James R. Hagerty, Deborah Solomon and
Sudeep Reddy report that the United States Treasury said it plans
to seek approval from Congress for a temporary increase in a long-
standing Treasury line of credit for Fannie and Freddie.

                      Treasury's 3-Part Plan

In a statement on Sunday, Treasury Secretary Henry M. Paulson, Jr.
said that he has consulted in recent days with the Federal
Reserve, the Office of Federal Housing Enterprise Oversight, the
Securities and Exchange Commission, Congressional leaders of both
parties and with the two companies to develop a three-part plan
for immediate action:

   1. As a liquidity backstop, the plan includes a temporary
      increase in the line of credit Fannie and Freddie have
      with Treasury.  Treasury would determine the terms and
      conditions for accessing the line of credit and the
      amount to be drawn.

   2. To ensure Fannie and Freddie have access to sufficient
      capital to continue to serve their mission, the plan
      includes temporary authority for Treasury to purchase
      equity in either of the two GSEs if needed.  Use of
      either the line of credit or the equity investment
      would carry terms and conditions necessary to protect
      the taxpayer.

   3. To protect the financial system from systemic risk going
      forward, the plan strengthens the GSE regulatory reform
      legislation currently moving through Congress by giving
      the Federal Reserve a consultative role in the new GSE
      regulator's process for setting capital requirements and
      other prudential standards.

"The President has asked me to work with Congress to act on this
plan immediately," according to Mr. Paulson.

Mr. Paulson said, "Fannie Mae and Freddie Mac play a central role
in our housing finance system and must continue to do so in their
current form as shareholder-owned companies.  Their support for
the housing market is particularly important as we work through
the current housing correction."

"GSE debt is held by financial institutions around the world.  Its
continued strength is important to maintaining confidence and
stability in our financial system and our financial markets.
Therefore we must take steps to address the current situation as
we move to a stronger regulatory structure."

"I look forward to working closely with the Congressional leaders
to enact this legislation as soon as possible, as one complete
package."

The Wall Street Journal notes that Fannie's and Freddie's lines of
credit are currently capped at $2,250,000,000 each.  The Treasury,
the Journal notes, didn't say to what level they would be
increased.  It's also not clear what role the Fed might play, the
Journal adds.

                         New Housing Bill

WSJ says the Senate late on Friday passed a housing package that
would create a new, stronger regulator for Fannie Mae, Freddie Mac
and the 12 Federal Home Loan Banks.  The House passed a similar
bill in May, but the process since then has been fraught with
unexpected complications, WSJ says.

WSJ says the bill could pick up speed now as lawmakers only need
to resolve a few differences, and potentially add the changes.

Daniel H. Mudd, Fannie Mae's President and CEO, said, "Fannie Mae
appreciates [the Federal Reserve and U.S. Treasury] announcements
and the expressions of support for the GSEs as shareholder-owned
companies that play a critical role in the U.S. housing finance
system.  We are grateful for the leadership of Secretary Paulson
and Chairman Bernanke.  We also look forward to working with
Treasury, OFHEO and Congress on swift passage of the new
legislative proposals, as well as the important initiatives
underway to assist homeowners and help restore stability to the
housing market.  We continue to hold more than adequate capital
reserves and maintain access to liquidity from the capital
markets.  Given the market turmoil, having options to access
provisional sources of liquidity if needed will help to strengthen
overall confidence in the market.  We will continue to do our part
to provide liquidity, stability and affordability to the housing
market now and in the future."

Richard F. Syron, chairman and CEO of Freddie Mac, said, "We are
heartened by [the Federal Reserve and U.S. Treasury] announcement
and the steps outlined by the U.S. Department of the Treasury and
the Federal Reserve Board.  This affirmation of the important role
of the GSEs, and that we should continue to operate as
shareholder-owned companies, should go a long way toward
reassuring world markets that Freddie Mac and Fannie Mae will
continue to support America's homebuyers and renters.  I applaud
Secretary Paulson and Chairman Bernanke for their leadership and
encourage Congress to act quickly to pass the new legislative
proposals."

BankruptcyLaw360 says Freddie Mac and Fannie Mae are not likely to
be nationalized, according to experts.  It has long been assumed
that the U.S. government would step in to bail out Fannie Mae and
Freddie Mac rather than have them file for bankruptcy, but exactly
what steps it would take remain to be seen, according to
BankruptcyLaw360.

             Fannie & Freddie Adequately Capitalized

As reported by the Troubled Company Reporter on July 11, 2008,
James B. Lockhart, director of the Office of Federal Housing
Enterprise Oversight, issued a statement assuring that Fannie Mae
and Freddie Mac are adequately capitalized, after the companies'
stocks tumbled to the lowest in 17 years in New York trading when:

   -- former St. Louis Federal Reserve President William Poole
      said both may need a government bailout; and

   -- UBS AG analysts cut their price target for Freddie Mac
      stock.

Mr. Poole had said:

   1. Freddie Mac owed $5,200,000,000 more than its assets were
      worth in the first quarter, and was insolvent based on fair
      value accounting measures; and

   2. the fair value of Fannie Mae assets fell 66% to
      $12,200,000,000 and may be negative next quarter.

Mr. Lockhart, the TCR related, said Fannie Mae and Freddie Mac
have large liquidity portfolios, access to the debt market and
more than $1,500,000,000,000 in unpledged assets.  Mr. Lockhart
added that OFHEO has been monitoring and continues to monitor
closely Fannie Mae, Freddie Mac and the mortgage and financial
markets.

Bloomberg News' Dawn Kopecki reports that Fannie Mae and Freddie
Mac own or guarantee about half the $12,000,000,000,000 in U.S.
home loans outstanding. Ms. Kopecki, citing Bloomberg data, says
Fannie Mae also has $831,000,000,000 in company bonds outstanding,
while Freddie Mac has $644,000,000,000.

WSJ says Fannie and Freddie own or guarantee about
$5,200,000,000,000 of U.S. home mortgages, nearly half of all
mortgages outstanding:
      _________________________________
     |                                 |
     |  $3,000,000,000,000 Fannie Mae  |
     |_________________________________|
     |  $2,200,000,000,000 Freddie Mac |
     |_________________________________|
     |                                 |
     |                                 |
     |  $6,000,000,000,000 all others  |
     |                                 |
     |                                 |
     |_________________________________|

Chuck Greener, Senior Vice President at Fannie Mae, confirmed on
Friday the GSE's capital adequacy, pointing out that Fannie Mae
raised $7,400,000,000 of additional capital in May, for a total of
more than $14,000,000,000 in new capital since November of 2007.  
"Our capital level is substantially above both our statutory
minimum capital and the OFHEO-required 15 percent surplus over
minimum capital.  In fact, we have more core capital, and a higher
surplus over our regulatory requirement, than at any time in this
company's history," Mr. Greener said.

Mr. Greener also noted that Fannie Mae has access to ample sources
of liquidity, including access to the debt markets.  The company
issued more than $24,000,000,000 in debt last week, including a
$3,000,000,000 Benchmark Notes(R) sale that was oversubscribed.

"Fannie Mae remains well equipped to fulfill our critical role in
the housing finance system, today and in the future.  We will
provide a full financial update and outlook when we report second-
quarter results in early August," Mr. Greener added.

Freddie Mac also confirmed Friday that is adequately capitalized.  
Freddie said it is in the process of finalizing its results, and
it estimates that at June 30, 2008, it will have a substantial
capital cushion above the 20% mandatory target surplus established
by OFHEO and a much greater surplus above the statutory minimum
capital requirement.

Freddie Mac said in a statement it is not under any mandate to
raise capital in the near term.  Freddie also noted that there are
a number of options to manage its capital position.  According to
Freddie, the average rate of run-off on its retained portfolio is
currently about $10,000,000,000 per month, and not replacing that
run-off would free up approximately $250,000,000 of capital per
month.  Over the course of a year, this would free up
approximately $2,500,000,000 to $3,000,000,000 of additional
capital if the run-off rate remains constant, Freddie explained.

Freddie Mac is also could consider reducing its common stock
dividend.  Freddie's current annual common stock dividend is
roughly $650,000,000.

Freddie Mac also indicated that its liquidity position remains
strong as a result of the combination of:

   -- access to the debt markets at attractive spreads; and

   -- an unencumbered agency MBS portfolio of roughly
      $550,000,000,000 which could serve as collateral for
      short-term borrowings.

WSJ also notes that Freddie has announced plans to raise
$5,500,000,000 by selling common and preferred shares, but it is
likely to wait for a calmer market.

                         About Fannie Mae

The Federal National Mortgage Association -- (FNMA) (NYSE: FNM) --
commonly known as Fannie Mae, is a shareholder-owned U.S.
government-sponsored enterprise.  Fannie Mae has a federal charter
and operates in America's secondary mortgage market, providing
mortgage bankers and other lenders funds to lend to home buyers at
low rates.

Fannie Mae was created in 1938, under President Franklin D.
Roosevelt, at a time when millions of families could not become
homeowners, or risked losing their homes, for lack of a consistent
supply of mortgage funds across America.  The government
established Fannie Mae to expand the flow of mortgage funds in all
communities, at all times, under all economic conditions, and to
help lower the costs to buy a home.

In 1968, Fannie Mae was re-chartered by the U.S. Congress as a
shareholder-owned company, funded solely with private capital
raised from investors on Wall Street and around the world.

Fannie Mae is the U.S. largest mortgage buyer, according to The
New York Times.

                        About Freddie Mac

The Federal Home Loan Mortgage Corporation -- (FHLMC) NYSE: FRE --
commonly known as Freddie Mac, is a stockholder-owned government-
sponsored enterprise authorized to make loans and loan guarantees.  
Freddie Mac was created in 1970 to provide a continuous and low
cost source of credit to finance America's housing.

Freddie Mac conducts its business primarily by buying mortgages
from lenders, packaging the mortgages into securities and selling
the securities -- guaranteed by Freddie Mac -- to investors.  
Mortgage lenders use the proceeds from selling loans to Freddie
Mac to fund new mortgages, constantly replenishing the pool of
funds available for lending to homebuyers and apartment owners.


GAVILON GROUP: Sold to Ospraie Fund for $2.8 Billion
----------------------------------------------------
ConAgra Foods, Inc. completed the sale of its commodity trading
and merchandising operations conducted by ConAgra Trade Group.  

ConAgra Trade Group was sold to an investor group led by Ospraie
Special Opportunities Fund, which also includes global growth
investor General Atlantic LLC and a private investment fund
managed by Soros Fund Management LLC.

ConAgra Trade Group was sold for approximately $2.8 billion, net
of transaction costs and subject to post-closing adjustments.  The
final proceeds are higher than originally estimated due to
increases in ConAgra Trade Group's book value, reflecting gains
and additional working capital.

The Ospraie Special Opportunities Fund is an affiliate of Ospraie
Management, a leading investment management firm focused
exclusively on commodities and basic industries with approximately
$9 billion under management.  The sold businesses will now operate
as The Gavilon Group, LLC.

The before tax proceeds from the sale include approximately
$2.2 billion of cash, net of transaction costs, and $550 million
of payment-in-kind debt securities of a newly created holding
company of The Gavilon Group.  The weighted average interest rate
on the debt securities is 10.82%.  The face amount of debt
securities received is higher than originally expected due to the
greater overall transaction proceeds.

ConAgra Foods also received a warrant exercisable for
approximately 5% of the issued common equity of a newly created
Gavilon holding company.  The percentage is slightly lower than
originally expected due to contract terms linking the warrant
percentage to the investor group's level of equity investment.

Ospraie and its co-investors made a greater overall equity
investment in the business, reducing the warrant interest but
creating what the company believes is a stronger capital structure
in relation to the payment-in-kind notes.  Although the purchase
agreement granted ConAgra Foods the right to a portion of The
Gavilon Group's earnings during the remainder of calendar 2008,
the maximum earnings threshold in the applicable profit sharing
formula was reached prior to closing, removing any future benefit
to ConAgra Foods from this provision.

Non-cash consideration received, principally the payment-in-kind
debt securities, will be recorded at fair value to reflect an
appropriate discount based on the features of the securities and
current market conditions.

Also, ConAgra Foods disclosed that its Board of Directors has
authorized a $500 million increase to the company's existing share
buyback program.  Shares are expected to be repurchased
periodically, depending on market conditions, and through open-
market or privately negotiated transactions.  The Board of
Directors has authorized management to engage in an accelerated
share repurchase arrangement, yet to be negotiated.

ConAgra Foods will discuss its capital allocation plans in detail
during its fourth quarter earnings release Thursday, June 26.  The
specifics of the plans are still being developed, but are expected
to include significant application of the after-tax cash proceeds
from the transaction toward share repurchases, and the application
of a significant amount toward reducing interest bearing debt,
primarily commercial paper balances that financed the greater-
than-planned working capital balances at ConAgra Trade Group.

The company expects most of this activity to be completed in the
first half of fiscal 2009 and will update investors on its
progress in its regularly scheduled communications.

Greg Heckman, formerly president of ConAgra Foods' commercial
businesses, is now chief executive of The Gavilon Group which will
remain in its current offices in Omaha.  The Gavilon Group will
conduct grain and byproducts merchandising and fertilizer
distribution, as well as agriculture, energy and other commodity
trading activities, and risk management services.

Rob Sharpe has been named president, Commercial Foods, and will
assume responsibility for leading the remaining commercial
businesses, operated as the company's Food & Ingredients reporting
segment.  He will also serve as executive vice president, External
Affairs, having served as executive vice president, legal and
external affairs.
    
                  About Ospraie Management, LLC

Headquartered in New York City and established in 1999, Ospraie
Management, LLC -- http://www.ospraie.com/-- is an investment  
management firm focused exclusively on commodities and basic
industries that manages over $9 billion in assets together with
its affiliates.

                    About General Atlantic, LLC

Headquartered in Connecticut, General Atalantic, LLC --
www.generalatlantic.com -- is a global growth equity firm
providing capital and strategic support for growth companies.  
Founded in 1980, the company manages approximately $17 billion in
capital and has more than 75 investment professionals based in
Greenwich, New York, Palo Alto, London, Dusseldorf, Hong Kong,
Mumbai and Sao Paulo.

                About ConAgra Foods, Inc.

ConAgra Foods, Inc., (NYSE: CAG)
-- http://www.conagrafoods.com-- is a North American packaged  
food company, serving consumer grocery retailers, as well as
restaurants and other foodservice establishments.  Popular ConAgra
Foods consumer brands include: Banquet, Chef Boyardee, Egg
Beaters, Healthy Choice, Hebrew National, Hunt's, Marie
Callender's, Orville Redenbacher's, PAM and many others.

                   About The Gavilon Group, LLC

The Gavilon Group, LLC -- www.gavilon.com -- provides physical
distribution, merchandising and trading across basic inputs and
outputs, including grains, feed ingredients, fertilizer and energy
products.  The company also provides comprehensive logistical and
risk-management services to customers in the agriculture and
energy markets.


GAVILON GROUP: Moody's Puts Ba3 Rating After ConAgra Deal
---------------------------------------------------------
Moody's Investors Service assigned a Ba3 corporate family rating
to The Gavilon Group, LLC in connection with the $2.6 billion
acquisition of the Trading and Merchandizing operations of ConAgra
Foods Inc. by a group of investors led by Ospraie Special
Opportunities Fund, an affiliate of Ospraie Advisors LP.  Moody's
also assigned a Ba1 rating to the company's $1.75 billion asset
backed revolving credit facility.  The sponsors will utilize a
portion of the ABL ($450-500 million) along with a $550 million
seller note (unsecured debt at Gavilon Intermediate Holdings, LLC,
the parent of Gavilon) and $1.72 billion of cash equity to
purchase these assets from ConAgra.  The ratings outlook is
stable; this is a first time rating for Gavilon.

Moody's assigned these ratings to:

The Gavilon Group, LLC:

  -- Corporate Family Rating, Ba3
  -- Probability of Default Rating, Ba3
  -- $1,750 million Secured Asset-based Lending Facility due 2014,
     Ba1 (LGD 2, 25%)

These ratings are subject to the review of the executed documents.

The Ba3 corporate family rating reflects the company's modest
scale relative to other rated, global companies in the
merchandizing and distribution of agricultural commodities, the
size of its trading and distribution operations for non-
agricultural products, lack of meaningful vertical forward
integration, elevated leverage when incorporating its expected use
of the credit facility and letters of credit, and the lack of
trading history as an independent company owned by a financial
firm.

However, Moody's believes these negatives are offset by the
relatively large equity contribution from the sponsors, unusually
strong credit metrics over the past year, an experienced
management team, a detailed risk management approach, and
incentive compensation for traders that is aligned with the
company's risk management objectives.

Financial metrics are expected to be stronger than for most other
Ba3 CFR companies over the next 12 months (fiscal 2009) due to the
substantial increase in many commodity prices and increased price
volatility.  Hence, the rating outlook is stable.  If prices and
margins remain elevated relative to historic norms on the
merchandizing and distribution business, and the company's risk
management policies and procedures effectively limit the negative
impact of increased volatility over the next two to three years,
there could be upside to the assigned ratings.

However, if commodity price volatility increases the variability
of earnings and cash flow over time, and financial ratios remain
weaker than currently projected, Moody's could reassess the
appropriateness of the Ba3 CFR.

The ratings incorporate the expectation that the sponsor has the
ability, under the ABL facility, to repay the seller note with a
senior secured Term Loan B at Gavilon.  The Term Loan, if issued,
would have a first lien on the fixed assets and a second lien on
the working capital.  

In addition, the ratings assume that the sponsors' cash equity
will remain in the business until it has developed a meaningful
track record of successfully managing its hedging and trading
operations during a period when most of the commodities it
distributes are substantially higher than prices experienced over
the past decade.  Any payment to the sponsors that is not
envisioned by the current ABL agreement would likely have a
negative impact on the ratings.

The senior secured asset-based credit facility is rated Ba1, two
notches above the CFR due to a working capital borrowing base
formula combined with terms and conditions that provide more
onerous restrictions and more timely access to information, if
availability declines below $175 million.  The rating is tempered
by the recent increases in many commodity prices and concern that
future volatility may increase relative to historic norms.  The
$550 million seller note is unsecured and exists at a holding
company one level above Gavilon.

The Gavilon Group, LLC, headquartered in Omaha, Nebraska, is a
global merchandiser and distributor of agricultural commodities,
and has a substantial business involved in the trading and
distribution of non-agricultural products.  Gavilon had gross
sales of almost $18 billion for the LTM ending May 25, 2008.


GREEKTOWN CASINO: Committee Taps Clark Hill as Bankruptcy Counsel
-----------------------------------------------------------------
The Official Committee of Unsecured Creditors in Greektown Casino
LLC and its debtor-affiliates' Chapter 11 cases obtained
permission from the U.S. Bankruptcy Court for the Eastern District
of Michigan to retain Clark Hill Plc as its general counsel.

Gent Culver, chairperson of the Committee, says that it selected
Clark Hill because of the firm's recognized expertise in business
reorganizations and creditors' rights, and its substantial
experience in representing unsecured creditors' committees in
Chapter 11 cases.

As the Committee's general counsel, Clark Hill will:

  (a) advise and consult with the Committee, and consult with the
      Debtors and other parties-in-interest concerning:

      * questions arising from the administration of the Debtors'
        bankruptcy cases,

      * the rights and remedies of the Committee and its
        constituents vis-a-vis the assets of the Debtors'
        bankruptcy estates and the administration of their
        Chapter 11 cases,

      * the formulation of a proposed plan of reorganization, and

      * the claims and interests of secured and unsecured
        creditors, equity holders, and other parties in interest
        in the Debtors' Chapter 11 cases;

  (b) analyze, appear for, prosecute, defend, and represent the
      Committee in contested matters and adversary proceedings
      arising in or related to the Debtors' bankruptcy cases; and

  (c) generally represent the Committee with respect to the
      Debtors' Chapter 11 cases and related proceedings, and to
      assist the Committee with respect to matters under
      Section 1103 of the Bankruptcy Code.

Clark Hill's professionals will be paid at these rates:

      Professional              Hourly Rate
      ------------              -----------
      Members                  $250 to $560
      Senior Attorneys         $235 to $325
      Associates               $160 to $270
      Legal Assistants         $120 to $190   

Robert D. Gordon, Esq., a member of Clark Hill, discloses that he
and Joel D. Applebaum, Esq., are the lead professionals of the
firm who will render services to the Committee.  Mr. Gordon
reports that he will charge $425 per hour for his services, while
Mr. Applebaum will bill $395 per hour.

Mr. Gordon assures the Court that Clark Hill is a "disinterested
person," as that term is defined in Section 101(14) of the U.S.
Bankruptcy Code.

                      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. 7;
Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000).


GREEKTOWN CASINO: Wants to Employ Kurtzman Carson as Claims Agent
-----------------------------------------------------------------
The proposed counsel for Greektown Casino LLC and its debtor-
affiliates, Ryan Heilman, Esq., at Schafer and Weiner, PLLC, in
Bloomfield Hills, Michigan, said the Debtors have identified
hundreds of entities or persons to which notices must be given,
making the employment of an outside claims and noticing agent
necessary in the Debtors' bankruptcy cases.

The Debtors believe that the noticing and receiving, docketing
and maintaining of proofs of claim would impose heavy
administrative and other burdens upon the Court and the Office of
the Clerk of Court.

Mr. Heilman relates that preparing and serving the notices on all
of the Debtors' creditors and parties in interest, and docketing
and maintaining the large number of proofs of claim that may be
filed in their Chapter 11 cases would strain the resources of the
Clerk's Office.

Thus, the Debtors seek authority from the U.S. Bankruptcy Court
for the Eastern District of Michigan to employ and retain Kurtzman
Carson Consultants LLC as their claims, noticing and balloting
agent.

Mr. Heilman notes that Kurtzman is well-qualified to perform
claims processing and the various services to the Debtors because
the firm specializes in providing data processing services to
Chapter 11 debtors in connection with administration and
reconciliation of claims, as well as administration of plan
balloting.

As claims agent, Kurtzman will, among others:

  (a) prepare and serve required notices in the Debtors'
      Chapter 11 cases, which include:

      (1) notice of commencement of the Chapter 11 cases and
          the initial meeting of creditors pursuant to
          Section 341(a) of the Bankruptcy Code;

      (2) notice of the claims bar date, if any;

      (3) notice of objections to claims;
       
      (4) notice of any hearings on a disclosure statement
              and confirmation of a plan of reorganization; and

      (5) other miscellaneous notices to any entities, as the
          Debtors or the Court may deem necessary or appropriate
          for an orderly administration of their Chapter 11
          cases;
     
  (b) prepare for filing with the Court a certificate or
      affidavit of service that includes an alphabetical list of
      persons to whom the mailing;

  (c) receive and record proofs of claim and proofs of interest
      filed;

  (d) create and maintain official claims registers, including
      these information for each proof of claim or proof of
      interest:
  
      (1) the name of the Debtor;

      (2) the name and address of the claimant and any agent, if
          the proof of claim or proof of interest was filed by an
          agent;

      (3) the date received;

      (4) the claim number assigned; and

      (5) the asserted amount and classification of the claim;

  (e) implement necessary security measures to ensure the
      completeness and integrity of the claims registers; and

  (f) transmit to the Clerk's Office a copy of the claims
      registers upon request or at agreed upon intervals.

  (g) perform other administrative and support services related
      to noticing, claims, docketing, solicitation and
      distribution as the Debtors or the Clerk's Office may
      request.

The Debtors further seek the Court's authority to permit Kurtzman
to act as a noticing agent for any official committees that will
be formed in the Debtors' Chapter 11 cases.  In addition, the
Debtors propose that any noticing expenses incurred by an
official committee to become an obligation of the Debtors'
estates.

The Debtors will retain Kurtzman pursuant to the compensation
rates of the Engagement Agreement dated May 28, 2008, between the
Debtors and Kurtzman.

The Debtors will pay a $50,000 retainer to Kurtzman for services
performed and expenses incurred.  The Debtors will also pay
Kurtzman for reasonable expenses for transportation, lodging,
meals, publications, postage and other third-party charges.  If
those expenses aggregate more than $10,000 in any month, Kurtzman
will require an advance payment from the Debtors.

To the best of the Debtors' knowledge, Kurtzman is a
"disinterested person" as that term defined in Section 101(14) of
the Bankruptcy Code, as modified by Section 1107(b), and does not
hold or represent an interest adverse to the Debtors' estates.

In a separate filing with the Court, Leslie K. Berg, Esq., in
behalf of the Office of the United States Trustee for Region 9,  
tell Judge Shapero that the U.S. Trustee gives it consent to the
Debtors' application to employ Kurtzman.

                      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. 8;
Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000).


GREY WOLF: Precision to Offer $10/Share if Basic Merger Fails
-------------------------------------------------------------
Precision Drilling Trust said it will ask Grey Wolf Inc.'s board
of directors to reconsider its $10.00 per share buyout offer if
Grey Wolf shareholders reject a proposed merger with Basic.

Grey Wolf shareholders are set to vote on the merger with Basic
Energy Services Inc. on July 15, 2008.

Precision said its proposal is fully priced and fair to the Grey
Wolf shareholders and provides a superior alternative to a merger
with Basic.  

Grey Wolf has repeatedly spurned Precision's advances, saying the
Basic deal is better for shareholders, Bizjournals said.

In a press statement, Precision said it continues to believe that
the combination of Grey Wolf and Precision represents a long-term
value creation strategy for both Precision and Grey Wolf
securityholders.

In the absence of a determination by the board of directors of
Grey Wolf that Precision's proposal is likely to result in a
superior proposal to Grey Wolf's shareholders as compared to the
alternative offered by the proposed merger with Basic.

Precision is unable to engage Grey Wolf in negotiations and
discussions in relation to its proposal as Grey Wolf is precluded
from doing so under the terms of its merger agreement with Basic.

According to Bizjournals, reports from proxy advisory firms are
split over the proposed Grey Wolf-Basic Energy merger.   
RiskMetrics and Glass Lewis recommend Grey Wolf investors vote
against the proposed merger with Basic Energy, while Proxy
Governance Inc. and Egan-Jones suggest that the Basic Energy deal
must be supported by shareholders.

                 About Precision Drilling Trust

Precision Drilling Trust (NYSE:PDS and TSX:PD.UN) is an
unincorporated open-ended investment trust established under the
laws of the Province of Alberta, Canada.

                         About Grey Wolf

Headquartered in Houston, Texas, Grey Wolf Inc. (AMEX: GW) --
http://www.gwdrilling.com/-- provides turnkey and contract oil
and gas land drilling services in the best natural gas producing
regions in the United States with a current drilling rig fleet of
121, which will increase to 123 with the expected addition of two
new rigs in 2008.

                          *     *     *

Grey Wolf continues to carry Moody's Investors Service Ba3
corporate family rating which was placed on July 31, 2006.  The
outlook is stable.


HERCULES INC: Inks $3.3 Billion Merger Agreement with Ashland Inc.
------------------------------------------------------------------
Hercules Inc. and Ashland Inc. entered into a definitive merger
agreement under which Ashland would acquire all of the outstanding
shares of Hercules for $18.600 per share in cash and 0.093 of a
share of Ashland common stock for each share of Hercules common
stock.  The total transaction value is approximately $3.3 billion,
or $23.010 per Hercules share based on Ashland's July 10 closing
stock price and including $0.7 billion of net assumed debt.

The merger is conditioned upon, among other things, the approval
of Hercules' shareholders, the receipt of regulatory approvals and
other customary closing conditions.  Assuming the satisfaction of
these conditions, the transaction is expected to close by the end
of calendar 2008.

The cash portion of the consideration will be funded through a
combination of cash on hand and committed debt financing from Bank
of America and Scotia Capital, subject to customary terms and
conditions.  

Ashland plans to use the cash flows of the combined organization
to pay down debt with a goal of attaining investment-grade credit
ratings within two to four years after closing the transaction.

Under the terms of the definitive merger agreement, Hercules would
be required to pay Ashland a fee of $77.5 million under certain
circumstances including if Hercules terminates the merger
agreement to accept a superior offer, and Ashland would be
required to pay Hercules a fee in the same amount if the
transaction is not completed due to a failure to obtain financing
at the time the conditions to the merger have been satisfied.

Upon the transaction's close, Ashland is expected to have pro
forma combined revenue for the 12 months ended March 31, 2008, of
more than $10 billion, including approximately $3.5 billion
generated outside North America.  

For the same period, Ashland expected to generate earnings before
interest, taxes, depreciation and amortization or EBITDA of
$365 million excluding certain items, while Hercules reported
ongoing EBITDA of $392 million excluding certain items.  Specialty
chemicals, which on a pro forma basis represents approximately 75%
of total EBITDA, will serve as Ashland's platform for future
growth.

"The acquisition of Hercules fulfills our objective to become a
leading specialty chemicals company," James J. O'Brien, Ashland
chairman and chief executive officer, said.  "It creates a defined
core for Ashland composed of three specialty chemical businesses
with strong market positions and promising growth potential:
specialty additives and ingredients, paper and water technologies,
and specialty resins."  

"In addition, we expect our financial profile to be enhanced
significantly through reduced earnings volatility, improved
profitability and stronger cash flow generation." Mr. O'Brien
said.

"We are enthusiastic about the opportunity to combine Hercules
with Ashland," Craig A. Rogerson, Hercules president and CEO,
said.  "Our companies share proud and similar histories of nearly
100 years of innovation, dedication and service.  Hercules
shareholders will receive a significant premium over the current
trading price for their shares and, through their ownership of
Ashland shares, the opportunity to participate in the upside
potential of the combined company.  We look forward to working
with Ashland to bring these two great companies together."

The companies stated that in specialty additives and ingredients,
Hercules' Aqualon business is one of the most recognized and
admired specialty chemical brands in the world and brings Ashland
a significant market position in rheology modifiers, which alter
the physical properties of water-based systems.

These additives are used across a range of industries to make
everything from adhesives and paints to foods, pharmaceuticals and
personal care products.  Nearly all of Aqualon's additive products
are water soluble polymers derived from renewable materials.  The
combined company is expected to generate, on a pro forma basis,
approximately one-third of EBITDA from bio-based or renewable
chemistries.

"We will combine the paper and water businesses of each company to
create one paper and water technologies business with annual
revenue of $2 billion," Mr. O'Brien said.  "In particular,
Hercules' leadership position in pulp and paper technologies
bolsters our participation in one of the world's largest water
treatment markets.  The combined businesses will provide the scale
to leverage opportunities in other key water treatment markets
including municipal, industrial and marine.

"The third business within our new core - specialty resins - is
one where Ashland has long enjoyed a strong reputation for
innovation and service. Mr. O'Brien added.  "A broader
international footprint will offer the specialty resins business
expanded growth opportunities in key building and construction
markets, including infrastructure and wind energy.  In addition,
our Distribution and Valvoline businesses provide complementary
capabilities and share similar markets with the specialty chemical
businesses.

Ashland expected to realize annualized run-rate cost savings of at
least $50 million by the third year following the transaction's
close by eliminating redundancies and capturing operational
efficiencies.  In the first year after the transaction's close,
while the combination is dilutive to earnings per share on a
reported basis, it is expected to be significantly accretive to
Ashland's earnings per share excluding merger costs and noncash
depreciation and amortization charges resulting from the
transaction.

"We are extremely impressed with the quality of the Hercules
people and we look forward to welcoming them into the Ashland
family," Mr. O'Brien continued.  "Our companies share a common
desire to live up to our own high expectations, and those of our
customers, shareholders and the communities in which we operate."

"We are also very pleased that John Panichella, president of
Hercules' Aqualon Group, and Paul Raymond, president of Hercules'
Paper Technologies and Ventures Group, have agreed to join Ashland
after the close of the transaction, reporting directly to me,"  
Mr. O'Brien related.  "In addition, we expect to maintain a
significant presence in Wilmington, Delaware, where Hercules is
headquartered."

"An integration team with members from both organizations will
determine how best to utilize the strengths and scale of the
combined company worldwide," Mr. O'Brien concluded.  "We will work
with the Hercules team to ensure a smooth transition."

Citigroup Global Markets Inc. acted as financial advisor and
Squire Sanders & Dempsey LLP acted as legal counsel to Ashland.
Credit Suisse Securities LLC acted as financial advisor and
Wachtell Lipton Rosen & Katz acted as legal counsel to Hercules.

                        About Ashland Inc.

Headquartered in Covington, Kentucky, Ashland Inc. (NYSE:ASH) --
http://www.ashland.com/-- is a diversified chemical company that  
consists of four wholly owned divisions: Ashland Performance
Materials, Ashland Distribution, Valvoline and Ashland Water
Technologies.  

                    About Hercules Incorporated

Based in Wilmington, Delaware, Hercules Incorporated (NYSE: HPC)
-- http://www.herc.com/-- is a manufacturer and marketer of  
specialty chemicals and related services for a range of business,
consumer and industrial applications.  The products of Hercules
are functional and process chemicals used by the paper industry to
improve paper and paperboard performance and manufacturing
process; water-soluble polymers, and specialty resins.  The
markets served by Hercules include pulp and paper; paints and
adhesives; construction materials; food, pharmaceutical and
personal care, and industrial specialties, including oilfield and
general industrial.


HERCULES INC: Merger Agreement Cues Moody's Review of Ba2 Rating
----------------------------------------------------------------
Moody's Investors Service placed the Ba1 corporate family rating
and other debt ratings of Hercules, Inc. under review for possible
downgrade.  

The reviews are prompted by the statement that the Boards of
Ashland, Inc. and Hercules approved a definitive merger agreement
under which Ashland would acquire all of the outstanding shares of
Hercules in the form of $18.60 per share in cash and 0.093 of a
share of Ashland common stock for each share of Hercules stock.

The total transaction value would be approximately $3.3 billion,
or $23.01 per Hercules share based on Ashland's July 10 closing
stock price and including $0.7 billion of net assumed debt.  
Ashland will be the surviving entity in the merger.  Hercules' LGD
assessments are not under review and these assessments and point
estimates are subject to change as a function of the new capital
structure of the merged entities.

Moody's expects all of the Hercules debt to be refinanced as a
result of the merger with the exception of the 6.5% junior
subordinated deferrable interest debentures due 2029.

While Ashland has almost no debt currently, the acquisition will
result in the merged companies taking on a material amount of debt
that will put the current Ashland Ba1 corporate family rating
under negative pressure and would likely result in a one notch
downgrade in the corporate family rating to Ba2, provided there is
no change in the purchase price and other deal and financing
terms, as disclosed, and assuming no material changes to the
outlook for the merged companies raw material costs and end
markets.

Upon the transaction's close, Ashland/Hercules will have pro forma
combined revenue for the 12 months ended March 31, 2008, of more
than $10 billion and earnings before interest, taxes, depreciation
and amortization of $757 million excluding certain items.

The merger is conditioned upon, among other things, the approval
of Hercules' shareholders, the receipt of regulatory approvals and
other customary closing conditions.  Assuming the satisfaction of
these conditions, the transaction is expected to close by the end
of calendar 2008.

Moody's rating review will consider the nature and structure of
the acquisition financing, as well as focus on the strategic
benefits of the transaction, potential synergies, the cash flow
anticipated from the combined businesses, the combined company's
financial flexibility and liquidity and how management's long-term
plans will impact the company's credit measures.

Ratings placed on review for possible downgrade:

Hercules, Inc.

  -- Corporate Family Rating, Ba1
  -- Probability of Default Rating, Ba1
  -- Senior Secured Bank Credit Facility, Baa2, 15% - LGD2
  -- Senior Secured Regular Bond/Debenture, Baa2, 15% - LGD2
  -- Senior Unsecured Regular Bond/Debenture, Ba1, 62% LGD4
  -- Junior Subord. Regular Bond/Debenture, Ba2, 92% - LGD6
  -- Subord. Conv./Exch. Bond/Debenture, Ba2, 92% - LGD6

Outlook Actions:

  -- Outlook, Changed To Rating Under Review From Positive

Hercules Incorporated is a global supplier of specialty chemicals
and related services for the paper, paint, consumer products,
construction materials and energy markets.  

Hercules operates through two business segments the Paper
Technologies and Ventures segment and the Aqualon Group and owns a
minority interest in FiberVisions, a maker of polyolefin staple
fibers, fibers, and yarn as well as polypropylene fibers for the
use in such products as personal care, diapers, and wipes.  The
company had revenues of $2.2 billion for the LTM ended March 31,
2008.


H.J. HEINZ: Moody's Assigns Ba1 Rating on Preferred Stock
---------------------------------------------------------
Moody's Investors Service assigned a Baa2 rating to $500 million
of five-year senior unsecured notes issued by H.J. Heinz Company
and a Ba1 rating to $350 million of series B cumulative preferred
stock issued by H.J. Heinz Finance Company.

Moody's also affirmed the existing Baa2 long term debt rating, Ba1
preferred stock rating, and Prime-2 short term debt rating of
Heinz and its subsidiaries.  The rating outlook is stable.

The senior notes pay a coupon of 5.35% and mature on July 15,
2013.  Heinz intends to use the proceeds from the senior notes
primarily to repay outstanding commercial paper and other
indebtedness.  In the fourth quarter, Heinz issued commercial
paper to fund the redemption of $300 million of senior unsecured
notes that matured March 15, 2008.

The $350 million series B cumulative preferred stock pay an 8%
dividend and is mandatorily redeemable on July 15, 2013.  The
proceeds will be used primarily to refinance the maturing
$325 million 6.226% series A cumulative preferred stock due July
15, 2008, and to repay other indebtedness.  Following this
redemption, Moody's will withdraw the ratings on the series A
cumulative preferred stock.

Ratings assigned:

H.J. Heinz Company

  -- $500 million senior unsecured notes due 2013 at Baa2

H.J. Heinz Finance Company

  -- $350 million series B preferred stock at Ba1

Ratings affirmed:

H.J. Heinz Company

  -- Senior unsecured debt at Baa2

H.J. Heinz Finance Company

  -- Senior unsecured debt at Baa2 under full guarantee of H.J.
     Heinz Company

  -- Preferred stock at Ba1

H.J. Heinz Finance UK PLC

  -- Senior unsecured debt at Baa2 under full guarantee of H.J.
     Heinz Company

H.J. Heinz Company

  -- Short term debt at Prime-2

H.J. Heinz Finance Company

  -- Short term debt at Prime-2 under full guarantee of H.J. Heinz
     Company

H.J. Heinz B.V.

  -- Short term debt at Prime-2 under full guarantee of H.J. Heinz
     Company

H.J. Heinz Finance UK PLC

  -- Short term debt at Prime-2 under full guarantee of H.J. Heinz
     Company

H.J. Heinz Company of Canada Limited

  -- Short term debt at Prime-2 under full guarantee of H.J. Heinz
     Company

Headquartered in Pittsburgh, Pennsylvania and founded in 1869, H.
J. Heinz Company is a marketer and producer of branded foods in
ketchup, condiments, sauces, meals, soups, seafood, snacks and
infant foods.  Key brands include Heinz® Ketchup, sauces, soups,
beans, pasta and infant foods, Ore-Ida® French Fries and roasted
potatoes, Boston Market® and Smart Ones® meals and Plasmon® baby
food.  Heinz's 50 companies have number-one or number-two brands
in 200 countries.


INDYMAC BANCORP: OTS Closes Bank, Transfers Operations to FDIC
--------------------------------------------------------------
The Office of Thrift Supervision closed Friday the $32,000,000,000
IndyMac Bank, F.S.B., headquartered in Pasadena, California, and
transferred operations to the Federal Deposit Insurance
Corporation.

A successor institution, IndyMac Federal Bank, FSB, will open for
business Monday and be run by the FDIC.  Depositors will have no
access to banking services online and by telephone this weekend,
but will continue to have access to their funds this weekend by
ATM, through other debit card transactions and by writing checks.  
Online banking and phone banking services will be available again
on Monday.

The OTS has determined that under the current institution, IndyMac
Bank, is unlikely to be able to meet continued depositors' demands
in the normal course of business and is therefore in an unsafe and
unsound condition.  The immediate cause of the closing was a
deposit run that began and continued after the public release of a
June 26 letter to the OTS and the FDIC from Senator Charles
Schumer of New York.  The letter expressed concerns about
IndyMac's viability.  In the following 11 business days,
depositors withdrew more than $1,300,000,000 from their accounts.

"This institution failed [] due to a liquidity crisis," OTS
Director John Reich said.  "Although this institution was already
in distress, I am troubled by any interference in the regulatory
process."

                     Above Normal Withdrawals

As reported by the Troubled Company Reporter on July 9, 2008,
IndyMac Bancorp Inc. said Tuesday that its banking unit has been
experiencing above normal cash withdrawals since Sen. Schumer
questioned its ability to survive the housing crisis.  Sen.
Schumer chairs the Congress's Joint Economic Committee.

Reuters' Jonathan Stempel and Jennifer Martinez reported that U.S.
regulators are concerned because more than $17,000,000,000 of the
bank's deposits carry federal insurance.  The FDIC has
$52,800,000,000 in its insurance fund to cover bank failures.

The FDIC in a statement said IndyMac Bank had total assets of
$32,010,000,000 and total deposits of $19,060,000,000 as of March
31, 2008.  At the time of closing, FDIC said IndyMac Bank had
about $1,000,000,000 of potentially uninsured deposits held by
roughly 10,000 depositors.  The FDIC will begin contacting
customers with uninsured deposits to arrange an appointment with
an FDIC claims agent by Monday.  Customers can contact the FDIC
for an appointment using toll-free number.  The FDIC will pay
uninsured depositors an advance dividend equal to 50% of the
uninsured amount.

Based on preliminary analysis, the estimated cost of the
resolution to the Deposit Insurance Fund is between $4,000,000,000
and $8,000,000,000.

According to the TCR, IndyMac disclosed it was "working with
regulators on a new business plan after losing $896 million in the
nine months to March 31."

Reuters added that IndyMac has set in motion a plan to eliminate
3,800 jobs, or 53% of its workforce, and stop offering most home
loans.  It has also projected a loss in the second quarter larger
than the $184,200,000 loss it posted for January to March.

According to the Reuters story, Prospect Mortgage, a Northbrook,
Illinois-based affiliate of private equity fund Sterling Partners,
said it agreed to buy more than 60 IndyMac retail mortgage
branches, which employ 750 people, for an undisclosed price.

TheStreet.com adds that "without raising money, which the company
said it has been unsuccessful in doing, or selling significant
pieces of business, IndyMac will have a difficult time surviving
the next several quarters."

Also on July 9, the TCR said IndyMac signed an agreement with
Prospect Mortgage to sell the majority of its retail mortgage
branches.  Terms of the transaction were not disclosed.  The
transaction, the TCR said, encompasses roughly 750 employees along
with more than 60 branch offices which will be re-branded as
Prospect Mortgage.  John Johnston and Ron Bergum will remain in
leadership roles with the retail branch group and report to Mark
Filler, CEO of Prospect Mortgage.

                       Largest Bank Failure

The OTS said in a news statement that IndyMac is the largest OTS-
regulated thrift ever to fail and, according to FDIC data, the
second largest financial institution to close in U.S. history.

IndyMac Bank is the fifth FDIC-insured failure of the year.  The
last FDIC-insured failure in California was the Southern Pacific
Bank, Torrance, on February 7, 2003.

The Wall Street Journal's Damian Paletta and David Enrich state
that IndyMac is the third-largest bank failure in U.S. history.  
According to Messrs. Paletta and Enrich, Continental Illinois
National Bank & Trust Co., which failed in 1984, topped that list
with $40,000,000,000 in assets.  American Savings & Loan
Association of Stockton, Calif., in 1988, is second.

Banks that failed this year, according to FDIC data, are:

   Bank Name                                   Closing Date
   ---------                                   ------------
   IndyMac Bank, Pasadena, CA                  July 11, 2008
   First Integrity Bank, NA, Staples, MN       May 30, 2008
   ANB Financial, NA, Bentonville, AR          May 9, 2008
   Hume Bank, Hume, MO March 7, 2008           July 1, 2008
   Douglass National Bank, Kansas City, MO     January 25, 2008

The OTS said IndyMac had been in a precarious financial situation
that was caused, in part, by an unprecedented stress in the
residential real estate market, combined with the evaporation of
the non-agency secondary mortgage market in August of 2007.  The
OTS had significant concerns with the bank's funding strategy, had
directed appropriate changes and was finalizing a new set of
enforcement actions to address its numerous problems.

As a result of an OTS examination that began in January 2008, the
OTS deemed IndyMac to be in troubled condition.  An overwhelming
majority of problem institutions are able to successfully modify
their operations and business plans, work closely with their
regulator and eventually return to a healthy condition.

IndyMac had reacted to market conditions and OTS concerns in
November 2007 by changing its operations and business plan to
build a foundation for recovery.  IndyMac was actively seeking to
arrange a significant capital infusion or find a buyer.  The
recent release of the senator's letter undermined the public
confidence essential for a financial institution and took away the
time IndyMac needed to pursue a recovery.

                           Receivership

With no viable alternatives and insufficient liquidity, IndyMac
was placed into receivership.  The OTS has appointed the FDIC as
conservator of the newly chartered successor institution and will
transfer most of the assets and liabilities of IndyMac to the new
thrift.  The FDIC will operate IndyMac Federal Bank to maximize
the value of the institution for a future sale and to maintain
banking services in the communities formerly served by IndyMac
Bank.

Depositors' accounts at IndyMac are insured by the FDIC\u2019s
Deposit Insurance Fund up to the statutory limits.  Customer
questions regarding the institution, including questions about
federal deposit insurance coverage, should be directed to the FDIC
at 1 (866) 806-5919.  This toll-free number will be available
during these hours:

     Friday, July 11   - 3:00 to 9:00 p.m.,
PDT                          
     Saturday, July 12 - 8:00 a.m. to 8:00 p.m., PDT
     Sunday, July 13   - 8:00 a.m. to 6:00 p.m., PDT
     Thereafter: 8:00 a.m. to 8:00 p.m., PDT

                            About OTS

The Office of Thrift Supervision, an office of the Department of
the Treasury, regulates and supervises the nation's thrift
industry.  OTS's mission is to ensure the safety and soundness of,
and compliance with consumer protection laws by, thrift
institutions, and to support their role as home mortgage lenders
and providers of other community credit and financial services.  
OTS also oversees the activities and operations of thrift holding
companies that own or control thrift institutions.  Copies of OTS
news releases and other documents are available at the OTS web
page at http://www.ots.treas.gov

                            About FDIC

Congress created the Federal Deposit Insurance Corporation in 1933
to restore public confidence in the nation's banking system.  The
FDIC insures deposits at the nation's 8,494 banks and savings
associations and it promotes the safety and soundness of these
institutions by identifying, monitoring and addressing risks to
which they are exposed.  On the Net: http://www.fdic.gov/

                       About Indymac Bancorp

Headquartered in Pasadena, California, IndyMac Bancorp Inc.
(NYSE:IMB) -- http://www.indymacbank.com/-- is the holding  
company for IndyMac Bank FSB, a hybrid thrift/mortgage bank that
originates mortgages in all 50 states of the United States.  
Indymac Bank provides financing for the acquisition, development,
and improvement of single-family homes.  Indymac also provides
financing secured by single-family homes and other banking
products to facilitate consumers' personal financial goals.  
IndyMac specialized in making and selling so-called Alt-A mortgage
loans, a category of loans to consumers more credit worthy than
subprime borrowers but typically without the complete
documentation of income or assets necessary to receive a prime-
rate loan.  The company facilitates the acquisition, development,
and improvement of single-family homes through the electronic
mortgage information and transaction system platform that
automates underwriting, risk-based pricing and rate locking via
the internet at the point of sale.  Indymac Bank offers mortgage
products and services that are tailored to meet the needs of both
consumers and mortgage professionals.  Indymac operates through
two segments -- mortgage banking and thrift.

The company was ranked the ninth-largest U.S. mortgage lender in
2007 in terms of loan volume, The Wall Street Journal says, citing
trade publication Inside Mortgage Finance.

                          *     *     *

As reported by the Troubled Company Reporter on July 11, 2008,
Standard & Poor's Ratings Services lowered its rating on Indymac
Bancorp and its subsidiaries, including lowering the counterparty
credit rating on Indymac, to 'CCC/C' from 'B/C'.  "We took this
action because we believe that Indymac's weakened financial
profile and exposure to deteriorating housing markets leaves its
creditworthiness severely impaired," said Standard & Poor's credit
analyst Robert B. Hoban, Jr.

On July 9, the TCR said Fitch Ratings downgraded the long-term
Issuer Default Ratings of Indymac Bancorp to 'CC' from 'B-'; and
the long-term Issuer Default Ratings of Indymac Bank FSB to 'CCC'
from 'B'.  The downgrade follows IMB's disclosure that, according
to its regulators, the bank is no longer 'well capitalized'.  
Concurrent with this rating action, Fitch has removed all ratings
from Rating Watch Negative.  The Rating Outlook is Negative for
IMB.


INDYMAC BANCORP: Banking Industry on "Solid Footing," FDIC Says
---------------------------------------------------------------
Sheila C. Bair, chairman of the Federal Deposit Insurance
Corporation, said the United States' banking system remains on a
solid footing through the guarantees provided by FDIC insurance.

Ms. Bair issued the statement after the federal government's
seizure of IndyMac Bank, F.S.B.  On Friday, the Office of Thrift
Supervision closed the $32,000,000,000 IndyMac Bank, headquartered
in Pasadena, California, and transferred operations to the FDIC.

The FDIC has created IndyMac Federal Bank, FSB, a conservatorship
to continue to provide banking services in communities served by
the former IndyMac Bank.

A story on the seizure of IndyMac Bank appears in today's Troubled
Company Reporter.

Ms. Bair said, "Over the past weekend, I have seen news reports
which have fairly and accurately reported on the conversion of
Indy Mac Bank into a conservatorship operated by the FDIC. I have
also seen inaccurate and inflammatory reporting which could well
cause needless, unnecessary worry and angst among bank depositors
throughout the country."

IndyMac's conversion has been largely a non-event, according to
Ms. Bair, with respect to insured depositors.  She explained that
the more than 200,000 customers of IndyMac with deposits of
$18,000,000,000 are fully protected.

"It's important to keep in mind that the small percentage of
uninsured are still covered for their insured amounts and half of
their uninsured money," Ms. Bair said.  "As assets of IndyMac are
sold, they may receive even more.  They have had continued access
to their funds through ATMs, debit cards, and writing checks over
the weekend, and on Monday morning, it will be business as usual."

"All bank depositors should understand that their insured deposits
are safe."

The Wall Street Journal's Robin Sidel, David Enrich and Jonathan
Karp relate that the seizure of IndyMac Bank is deepening worries
among executives, regulators and consumers about the U.S. banking
industry, which is in a tightening bind following a long run of
prosperity.  The Journal says banks and thrifts are struggling
against a rising tide of bad loans, and it is becoming
increasingly clear that some lenders won't be able to dig their
way out.

While fewer banks are expected to fail than the 834 that went
under from 1990 to 1992, it will likely take several years for
battered financial institutions to work through their bad loans
and replenish their depleted capital, the Journal says.

According to Ms. Bair, IndyMac is only one of 8,494 depository
institutions operating throughout the country and represents only
0.2% of banking industry assets.

"The overwhelming majority of banks in this country are safe and
sound.  The chance that your own bank will be taken over by the
FDIC is extremely remote.  And if that does happen, you will
continue to have virtually uninterrupted access to your insured
deposits," Ms. Bair said.

"All bank depositors should also understand that they can have
insurance coverage in excess of the basic limits of $100,000 per
institution, with an additional $250,000 per institution for IRAs.  
For instance, subject to certain conditions, single and joint
accounts are separately insured, and revocable trusts generally
provide $100,000 of coverage per beneficiary.  If you have any
questions about whether your deposits are insured, we encourage
you to consult with your bank or contact our deposit insurance
specialists at 1-877-ASK-FDIC. If you find that you are not fully
insured, it may be possible to restructure your accounts to bring
your deposits below the insured limits.  But first get the facts
before making any changes in your accounts or banking
relationships."

Ms. Bair added that industry-funded reserves are strong and our
insurance guarantee is backed by the full faith and credit of the
United State Government, and that no bank depositor has ever lost
a penny of insured deposits.

                            About FDIC

Congress created the Federal Deposit Insurance Corporation in 1933
to restore public confidence in the nation's banking system.  The
FDIC insures deposits at the nation's 8,494 banks and savings
associations and it promotes the safety and soundness of these
institutions by identifying, monitoring and addressing risks to
which they are exposed.  On the Net: http://www.fdic.gov/

                       About Indymac Bancorp

Headquartered in Pasadena, California, IndyMac Bancorp Inc.
(NYSE:IMB) -- http://www.indymacbank.com/-- is the holding  
company for IndyMac Bank FSB, a hybrid thrift/mortgage bank that
originates mortgages in all 50 states of the United States.  
Indymac Bank provides financing for the acquisition, development,
and improvement of single-family homes.  Indymac also provides
financing secured by single-family homes and other banking
products to facilitate consumers' personal financial goals.  
IndyMac specialized in making and selling so-called Alt-A mortgage
loans, a category of loans to consumers more credit worthy than
subprime borrowers but typically without the complete
documentation of income or assets necessary to receive a prime-
rate loan.  The company facilitates the acquisition, development,
and improvement of single-family homes through the electronic
mortgage information and transaction system platform that
automates underwriting, risk-based pricing and rate locking via
the internet at the point of sale.  Indymac Bank offers mortgage
products and services that are tailored to meet the needs of both
consumers and mortgage professionals.  Indymac operates through
two segments -- mortgage banking and thrift.

The company was ranked the ninth-largest U.S. mortgage lender in
2007 in terms of loan volume, The Wall Street Journal says, citing
trade publication Inside Mortgage Finance.

                          *     *     *

As reported by the Troubled Company Reporter on July 11, 2008,
Standard & Poor's Ratings Services lowered its rating on Indymac
Bancorp and its subsidiaries, including lowering the counterparty
credit rating on Indymac, to 'CCC/C' from 'B/C'.  "We took this
action because we believe that Indymac's weakened financial
profile and exposure to deteriorating housing markets leaves its
creditworthiness severely impaired," said Standard & Poor's credit
analyst Robert B. Hoban, Jr.

On July 9, the TCR said Fitch Ratings downgraded the long-term
Issuer Default Ratings of Indymac Bancorp to 'CC' from 'B-'; and
the long-term Issuer Default Ratings of Indymac Bank FSB to 'CCC'
from 'B'.  The downgrade follows IMB's disclosure that, according
to its regulators, the bank is no longer 'well capitalized'.  
Concurrent with this rating action, Fitch has removed all ratings
from Rating Watch Negative.  The Rating Outlook is Negative for
IMB.


JIM PALMER: Potential Buyer Reiterates Plan to Acquire Parent
-------------------------------------------------------------
ActionView International Inc., the potential buyer of Jim Palmer
Trucking Inc., reiterated its intention to acquire the company,
regardless of a Chapter 11 bankruptcy protection filing by
entities related to Jim Palmer Trucking.

On July 10, 2008, Jim Palmer Equipment Inc. and Jim Palmer
Equipment II LLC filed for bankruptcy protection with the United
States Bankruptcy Court, District of Montana.  It has been
reported that Jim Palmer Trucking Inc. will also file for Chapter
11 bankruptcy protection.

In a statement, Actionview related that in May 2008, it disclosed
a letter of intent to acquire Jim Palmer Trucking.

"The financial information we received in our early due diligence
on Jim Palmer Trucking does not appear to be consistent with their
true financial condition at that time," Steven R. Peacock,
ActionView International CEO, commented.  

"We have been in communication with both the company and its
representatives and will continue to monitor the situation as it
develops, especially as it relates to the capital that was loaned
to Jim Palmer Trucking as part of the proposed acquisition
transaction with ActionView International," Mr. Peacock continued.

"As we work to protect the interests of the company and its
shareholders related to the Jim Palmer Trucking situation, we will
turn our attention to alternative acquisition opportunities for
ActionView International," Mr. Peacock added.  

"Our focus is to deliver the best possible acquisition candidate
for ActionView shareholders, and we do have additional companies
targeted in the event that a transaction with Jim Palmer Trucking
did not close,"  Mr. Peacock stated.  "We expect to disclose the
next steps in our acquisition strategy soon as possible."   

The letter of intent between ActionView International and Jim
Palmer Trucking Inc. provided the framework for a subsequent
anticipated definitive agreement under which ActionView
International would acquire all of the issued and outstanding
shares of Jim Palmer Trucking in exchange for a majority
percentage of ActionView.

The details of the proposed share exchange were to be included in
the definitive agreement.

The letter of intent outlined additional due diligence, audit work
and other terms that were to be fulfilled to proceed to definitive
agreement and to subsequently effect a close of the transaction.

               About ActionView International Inc.

Based in Vancouver, British Columbia, ActionView International
Inc. (OTCBB: AVWI) -- http://www.actionviewinternational.com/--  
through ActionView, its wholly owned subsidiary, is engaged in the
business of designing, marketing and manufacturing proprietary
illuminated, programmable, motion billboard signs for use in
airports, mass transit stations, shopping malls, and other high
traffic locations to reach people on-the-go with targeted
messaging.  

                    About Jim Palmer Trucking

Headquartered in Missoula, Montana, Jim Palmer Trucking Inc. --
http://www.jimpalmertrucking.com/-- offers truckload  
transportation of temperature-controlled cargo.  The company
operates throughout the US from terminals in Missoula, Montana;
Salina, Kansas; and Tampa.

Jim Palmer Equipment Inc's line of business is truck rental and
leasing.


JOHNSTON SHIELD: Case Summary & 20 Largest Unsecured Creditors
--------------------------------------------------------------
Lead Debtor: Johnston Shield, Inc.
             dba Ideal Automotive Group
             dba Ideal Suzuki
             dba Wildcat Mitsubishi
             dba Ideal Cars
             dba Ideal Mitsubishi
             Attn: Franklin D. Dodge
             Ryan Rapp & Underwood, PLC
             3101 N. Central Ave. Ste. 1500
             Phoenix, AZ 85012
             Tel: (602) 280-1000

Bankruptcy Case No.: 08-08474

Debtor-affiliate filing a separate Chapter 11 petition:

        Entity                                     Case No.
        ------                                     --------
        Johnston-Shield Properties, LLC            08-08490

Chapter 11 Petition Date: July 10, 2008

Court: District of Arizona (Phoenix)

Judge: Eileen W. Hollowell

Debtors' Counsel: Franklin D. Dodge, Esq.
                     Email: tdodge@rwrplc.com
                  Ryan Rapp & Underwood, P.L.C.
                  3101 N. Central Ave., Ste. 1500
                  Phoenix, AZ 85012
                  Tel: (602) 280-1000
                  Fax: (602) 728-0422
                  http://www.rwrplc.com/

Johnston Shield, Inc's Financial Condition:

Estimated Assets: $1,000,000 to $100,000,000

Estimated Debts:  $1,000,000 to $100,000,000

A. A copy of Johnston Shield, Inc.'s list of 20 largest unsecured
   creditors is available for free at:

      http://bankrupt.com/misc/azb08-08474.pdf

A. Johnston-Shield Properties, LLC does not have any creditors who
   are not insiders.


JOSEPH CAGNO: Case Summary & 20 Largest Unsecured Creditors
-----------------------------------------------------------
Debtor: Joseph Michael Cagno
        5206 Nice Court
        San Jose, CA 95138

Bankruptcy Case No.: 08-53608

Chapter 11 Petition Date: July 9, 2008

Court: Northern District of California (San Jose)

Judge: Roger L. Efremsky

Debtor's Counsel: Michael W. Malter, Esq.
                  Email: michael@bindermalter.com
                  Law Offices of Binder and Malter
                  2775 Park Ave.
                  Santa Clara, CA 95050
                  Tel: (408) 295-1700
                  http://bindermalter.com/

Estimated Assets: $1 million to $10 million

Estimated Debts:  $1 million to $10 million

A list of the Debtor's largest unsecured creditors is available
for free at http://bankrupt.com/misc/canb08-53608.pdf


JPMORGAN RV: Poor Performance Cues S&P to Chip Notes Rating to BB+
------------------------------------------------------------------
Standard & Poor's Ratings Services lowered its rating on the class
A-2 notes from JPMorgan RV Marine Trust 2004-A to 'BB+' from
'BBB+'.
     
The downgrade reflects the worse-than-expected performance of the
underlying recreational vehicle and marine retail installment sale
contracts collateralizing this transaction, as displayed in the
high levels of losses and delinquencies.
     
As of the June 2008 distribution date, the transaction had a pool
factor of 27.7% and experienced cumulative net losses of 6.8%,
which is almost on par with our original expected base-case
cumulative net losses of 7.0% of the original pool balance.  In
addition, 2.8% of the current pool balance was 60 days or more
past due, and 6.14% of the current pool balance was 30 days or
more past due.  Although the required total enhancement percentage
is at its target of 11% of the current pool balance, it is
insufficient to cover expected remaining losses at its current
rating level.  S&P expect this transaction to experience base-case
cumulative remaining net losses of 9.5% of the current principal
loan balance.

This transaction benefits from an unconditional, irrevocable
financial guarantee insurance policy issued by Financial Guaranty
Insurance Co., currently rated 'BB/Watch Neg'.  The 'BB+' rating
is based on the creditworthiness of the underlying RV and marine
assets and not on the FGIC guarantee.  
     
Standard & Poor's expects that the remaining credit support will
be sufficient to support the notes at the lowered rating level.


LINENS N THINGS: AMEX Wants Stay Lifted to End Merchant Agreement
-----------------------------------------------------------------
In December 30, 2005, American Express Incentive Services,
L.L.C., and Debtor LNT Services, Inc., entered into a U.S.
Merchant Agreement with LNT Services, pursuant to which, the
Debtor became a select participating merchant in certain stored
value card programs administered by American Express.

In the Card Program, the stored value cards (i) are either pre-
paid predenominated or reloadable type "reward cards" that are
issued to individuals in rewards or incentive programs, and (ii)
can be used at various select retailers participating in the Card
Program, including the Debtor's Linens 'N Things stores.

Pursuant to the Merchant Agreement, (i) the Debtor is required to
pay American Express a 12% commission on the amount of the stored
value cards that are redeemed at the Debtor's stores within 30
days upon receipt of an invoice, and (ii) each party will have
the option to terminate the agreement at any time without cause,
by providing a 90-day notice to the other party.

William E. Chipman, Jr., Esq., at Edwards Angell Palmer & Dodge
LLP, in Wilmington, Delaware, informs the United States
Bankruptcy Court for the District of Delaware that American
Express "has every intention of terminating the Merchant
Agreement."  He asserts that American Express is not seeking to
force the Debtor to assume the Merchant Agreement and cure
defaults.  American Express merely desires to exercise its equal
rights under the Merchant Agreement to terminate the agreement
without fault of either party to the contract, he explains.

Prior to the Petition Date, the Debtor was in breach of the
Merchant Agreement by failing to make payment to American Express
as required in the Merchant Agreement, Mr. Chipman tells the
Court.  As of the Petition Date, the Debtor owed American Express
$61,564 in earned and unpaid commissions, and $9,400 for
advertising sales.  He adds that since the Petition Date, the
Debtor has continued to accept payments from the stored value
cards, but has failed to make payment to American Express.

Mr. Chipman contends, among other reasons, that it is not
equitable to permit the Debtor to continue to enjoy the benefits
of having American Express' cardholding customers directed to the
Linens 'N Things stores to redeem the stored value cards, and for
the Debtor to benefit by those redemptions, and then fail to
compensate American Express as required under the Merchant
Agreement.

Accordingly, pursuant to Sections 362(d) and 365(d)(2) of the
Bankruptcy Code, American Express asks the Court:

   -- for relief from the automatic stay to allow American
      Express to terminate the Merchant Agreement; or

   -- in the alternative, to compel the Debtor to reject the
      Merchant Agreement.

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

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

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

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

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

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

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

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


LINENS N THINGS: Says 87 Underperforming Stores Should be Closed
----------------------------------------------------------------
Linens 'n Things and its debtor-affiliates continues to identify
underperforming stores they intend to close through additional
store closing or similar themed sales.  The Debtors believe that
around 87 more stores should be closed to maximize their
profitability, and ensure a successful reorganization.  The
Debtors, however, are still in the process of finalizing the list
of closing stores.

The proposed Store Closing Sales will dramatically reduce their
administrative costs associated with the underperforming Closing
Stores, are customary in Chapter 11 reorganizations, and are
designed to provide the maximum value to the bankruptcy estates,
Mark D. Collins, Esq., at Richards, Layton & Finger P.A., in
Wilmington, Delaware, tells the United States Bankruptcy Court for
the District of Delaware.  He adds the proceeds of the Store
Closing Sales will benefit the Debtors' estates by reducing the
Debtors' secured debt.

To maximize the value of the (i) inventory and merchandise to be
included in the Store Closing Sales, and (ii) owned furniture,
fixtures and equipment in the Closing Stores, the Debtors intend
to obtain assistance from certain liquidation firms.  Mr. Collins
relates that prior to the Petition Date, the Debtors have
obtained signed confidentiality agreements from, and provided
substantial due diligence materials to, the Liquidation Firms.

Through Asset Disposition Advisors, LLC, the Debtors will
circulate a "Summary Request for Proposal," together with an
Agency Agreement, to each of the Liquidation Firms, and will
request that initial bids to act as the Debtors' agent to conduct
the Store Closing Sales be submitted by July 21, 2008.

The Debtors intend to select and negotiate a "stalking horse" bid
from one of the Liquidation Firms' initial bids, and to execute a
"stalking horse" agency agreement.  In the event that a Stalking
Horse Bidder is chosen, the Debtors will seek approval of bid
protections for the Stalking Horse Bidder at a hearing scheduled
for July 24, 2008.

To ensure that the process is thorough and the best price is
obtained, and to allow creditors to have input in the process,
the Debtors will subject the Stalking Horse Agreement to higher
or better offers, and will seek approval to provide the Stalking
Horse Bidder with a break-up fee and expense reimbursement.

By this motion, the Debtors seek the entry of two orders:

   (1) a procedures order, which:

       * approves proposed auction procedures;

       * sets the time, date, and place of the auction;

       * approves the form of notice of the Auction and notice of
         the Store Closing Sales; and

       * sets a sale hearing on July 30, 2008, at 10:00 a.m.; and

   (2) an approval order, which:

       * authorizes the closure of the Closing Stores;

       * authorizes the Debtors to conduct the Store Closing
         Sales free and clear of liens;

       * allows the Debtors to enter into Agency Agreement;
         and

       * waives the Debtors' compliance with state and local
         laws, and lease provisions restricting the Store Closing
         Sales.

                  Proposed Store Closing Sales

The Debtors propose to commence the Store Closing Sales promptly
following the Sale Hearing to stem the losses resulting from the
continued operation of the Closing Stores.  The Debtors also seek
authority to enter into an Agency Agreement to allow the
Successful Bidder to serve as the Debtors' agent in conducting
the Store Closing Sales.

The Store Closing Sales should commence immediately so the
Closing Stores will not lose money, and will not drain the
Debtors' liquidity, Mr. Collins contends.  He notes the sooner
the Liquidation Assets are liquidated, and the Closing Stores'
leases are either sold or rejected, the sooner the strain on the
Debtors' liquidity will be mitigated.  He points out that delays
in the liquidation process could cause the inventory in the
Closing Stores to become unbalanced or out of "season", thus,
reducing the value of the Merchandise.

                   Proposed Auction Procedures

The Debtors ask the Court to approve these Auction Procedures:

   -- Beginning in July 2008, the Debtors will provide the
      Liquidation Firms access to various financial data and
      other relevant information in connection with the Closing
      Stores;

   -- Within two business days after Procedures Order's entry,
      the Debtors will serve the notice on the Auction and Store
      Closing Sales on certain notice parties, which include
      official committees, Office of the U.S. Trustee and all
      Potential Bidders;

   -- Prior to forming a joint venture between two or more
      Potential Bidders, the Potential Bidders must obtain prior
      written approval from the Debtors;

   -- The Court will hold a subsequent hearing on July 24 to
      consider approval of bid protections to any identified
      Stalking Horse Bidder;

   -- Bid Deadline is on July 21 at 4:00 p.m., Eastern Time;

   -- Bids must be unconditional and not contingent upon any
      event.  All Bids are irrevocable until seven days after the
      Sale Hearing;

   -- A proposed bid must be based on the terms and conditions of
      the form of Agency Agreement.  To the extent the Debtors
      have entered into a Stalking Horse Agreement, all proposed
      bids will be based upon the terms and conditions of the
      Stalking Horse Agreement and will be, at a minimum, for an
      amount higher than or equal to the sum of the Guaranteed
      Amount, plus the minimum initial overbid, provided for
      under the Stalking Horse Agreement; and

   -- The Auction will be conducted on July 28, 2008 at 11:00
      a.m., at the offices of the Debtors' counsel, Richards,
      Layton & Finger, P.A., at One Rodney Square, 920 North King
      Street, in Wilmington, Delaware 19801.

The Debtors request that the Sale Hearing be held on July 30 at
10:00 a.m., Eastern Time.  Objection deadline is on July 23.

                      The Agency Agreement

The use of a uniform Agency Agreement, upon which the initial
bids, as well as bids at the Auction will be based, will enable
the Debtors and other parties-in-interest to easily compare and
contrast any differing terms of the Bids made by the Liquidation
Firms, Mr. Collins says.

Among the material terms of the Agency Agreement are:

   -- As a guaranty of Agent's performance under the Agency
      Agreement, the Agent will guarantee that the Debtors will
      recover a fixed percentage of the cost value of the
      merchandise included in the sale;

   -- From the commencement of the sale through its termination,
      Agent will be unconditionally responsible for all expenses
      incurred in conducting the sale, which expenses may be
      funded and paid from the sale proceeds;

   -- The Agent would receive a fee, calculated based upon a
      fixed percentage of the Merchandise cost value.  The Agent
      would also be entitled to retain all Sale Proceeds after
      reimbursement of sale expenses, and payment to the Debtors
      of any recovery amount, which is the excess amounts from
      Sale Proceeds that will be shared by the Debtors and the
      Agent after taking out the Guaranteed Amount, Sale
      expenses, and the Agent's base fee;

   -- On the commencement of the sale, the Agent will wire to the
      Debtors a substantial portion of the estimated Guaranteed
      Amount, and secure the remaining portion of the estimated
      Guaranteed Amount with a letter of credit.  The Agent will
      also collateralize its obligation to reimburse the Debtors
      for sale expenses by posting a letter of credit in an
      amount equal to three weeks estimated Expenses to be
      incurred by the Debtors; and

   -- The Guaranteed Amount was conditioned upon there being an
      agreed upon minimum amount of Merchandise at cost value
      included in the Sale.  To the extent that the aggregate
      cost value of the Merchandise is less than the Merchandise
      Threshold, then the Guaranty Percentage will be adjusted
      downward in accordance with a mutually agreed upon
      schedule.

The Debtors reserve th right to amend or otherwise change the
terms of the Agency Agreement in a manner as the Debtors deem to
be in their best interests after consultation with General
Electric Capital Corporation, as agent for the prepetition
lenders and DIP lender.

Under Rules 2002(a) and (c) of the Federal Rules of Bankruptcy
Procedure, the Debtors are required to notify their creditors of
the Auction and the Sale.  Hence, the Debtors ask Judge
Christopher Sontchi to approve, and deemed adequate and
sufficient, their proposed Store Closing Sales Notice.

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

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

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

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

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

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

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

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


LINENS N THINGS: Court Approves Cole Schotz as Committee Counsel
----------------------------------------------------------------
The United States Bankruptcy Court for the District of Delaware
approved the retention of Cole, Schotz, Meisel, Forman & Leonard,
P.A., as the Delaware and conflicts counsel of the Official
Committee of Unsecured Creditors of Linens 'n Things and its
debtor-affiliates in connection with the Debtors' request for
postpetition financing.

Richard DePaul, executive Committee member, said that Cole Schotz
has been selected by the Committee because the members and
associates of the firm possess extensive knowledge and
considerable expertise in the fields of bankruptcy, insolvency,
reorganizations, debtors' and creditors' rights, debt
restructuring and corporate reorganizations, among others.

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

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

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

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

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

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

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

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

LINENS N THINGS: Court Approves Increase in Insurance Caps
----------------------------------------------------------
The United States Bankruptcy Court for the District of Delaware
approved the request of Linens 'n Things and its debtor-affiliates
to increase the Workers' Compensation Cap from $1,025,000 to
$11,925,000, and the General Liability Cap from $75,000 to
$350,000.

The Debtors initially requested a $1,025,000 cap for workers'
compensation policies and $75,000 for general liability insurance
policies in order to provide themselves with limited authority to
make prepetition payments while they decided if they should allow
Insurers to draw down on the Letters of Credit in order to
satisfy any prepetition obligations due and owing to Insurers.

The Court also authorized the Debtors to continue their (i)
Directors and Officers Insurance Policy, along with related
excess and run-off coverage, (ii) Employment Practices Insurance
program, and (iii) their Fiduciary Liability Insurance program in
the ordinary course of business, and to pay prepetition amounts
due to the insurance programs up to a maximum of $250,000 in
aggregate.

The Court further authorized the Debtors to continue their
programs on Blanket Crime Insurance, Special Crime Insurance,
Foreign Liability Insurance and Marine Cargo Insurance in the
ordinary course up to a maximum of $75,000 in aggregate.  The
Debtors may had to also pay any insurance brokerage fees.

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

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

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

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

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

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

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

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


LINENS N THINGS: Pickering Wants Stay Lifted to End Lease
---------------------------------------------------------
Pickering Commercial Property LLC owns the commercial real
property, upon which Linens-n-Things store No. 524 is located, in
Issaquah, Washington.  Pickering leases the Issaquah Store's
space to LNT West, Inc., pursuant to a Lease Agreement dated as
of October 3, 1996.  The initial term of the Lease runs in 2012.  
Under the Lease, rent is presently owing in an annual amount of
$581,827, and is payable, together with any other charges, in
monthly installments due on the first day of each month.

While applicable law may have permitted LNT West to continue to
occupy the Issaquah Store during the month of May 2008, without
actually having made the payment due on May 1, LNT West was
unqualifiedly obligated, under Section 365(d)(3) of the
Bankruptcy  Code, to make the payment due under the Lease on
June 1, 2008, asserts Lisa C. McLaughlin, Esq., at Phillips,
Goldman & Spence, P.A., in Wilmington, Delaware.

Ms. McLaughlin says LNT West did not make the June payment when
due, and instead, after a lengthy series of exchanges between the
parties, a June-related payment of $51,733 was only received on
July 2, which is a full month after the payment was due.  She
notes that the Debtor has asserted that the delay was due to
logistical complications.  However, she argues, the payment check
is dated June 20, 2008, which is nearly three weeks after the
payment was due, and five days after the cure period had expired
under the Lease.

Aside from the fact that the Debtor did not make the effort to
timely pay the June rent, Ms. McLaughlin also points out that the
payment, when finally received, did not include a required
insurance reimbursement payment of $8,137, despite Pickering's
repeated notifications that the amount was due.  Moreover, she
notes, the Debtor again failed to make the required payment for
July.

By this motion, Pickering asks the United States Bankruptcy Court
for the District of Delaware for relief from the automatic stay to
permit it to immediately terminate the Lease, and exercise any
other remedies available to it.

Under the circumstances, Pickering believes that relief from
stay, for "cause," is appropriate to protect Pickering from the
Debtor's apparent disregard for its obligation to "timely
perform" all of its postpetition "obligations" under the Lease.

Alternatively, Pickering asks the Court to modify the stay to
permit it to proceed immediately in the future with the exercise
of its rights under the Lease, and under applicable non-
bankruptcy law, if the Debtor should again fail to timely perform
payments or other obligations.

"Given what seems to be the [Debtor's] disinclination thus far to
make timely payments, this Court should give to Pickering, right
now, some comfort, in the form of an order prospectively lifting
the automatic stay, that it will be in a position to enforce its
contractual rights against the Tenant should the Tenant continue
to ignore its post-petition contractual and statutory obligations
to Pickering," Ms. McLaughlin argues.

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

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

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

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

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

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

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

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


LION INC: Obtains Shareholders Nod to Sell Assets for $525K Cash
----------------------------------------------------------------
LION Inc. shareholders approved the sale of substantially all of
the assets of LION to Beanstalk Networks dba OpenClose(R) for
$525,000 in cash, pursuant to an asset purchase agreement between
Beanstalk Networks Acquisition LLC and LION.  

On May 12, 2008, LION Inc. entered into an asset purchase
agreement with a unit of Beanstalk Networks.  Under the terms of
the agreement, OpenClose will purchase and continue to operate
LION's remaining business segment, which includes the business
related to its Precision family of products and its retail
websites business.  OpenClose will assume all current LION
customer agreements.

LION's Precision LPX products consists of a loan pricing engine, a
database of industry leading lenders' loan programs and pricing
information, web enabled tools and other transactional services
designed to enable large lenders to originate, price, and lock
loans.  

LION's Precision Access and Precision Lion Broker product suites,
which are based on the Precision LPX technology platform, are
aimed at medium-sized lenders and individual brokers.  Precision
Lion Broker gives subscribing brokers access to LION's known,
proprietary business-to business Internet portal, LION Broker fks
LION Pro.  

The transaction also includes the assets related to LION's retail
website business which designs, develops and hosts retail websites
for more than 1,200 mortgage lenders, origination companies, and
individual mortgage brokers.

As a result of this approval, LION expects that the sale will be
consummated shortly in accordance with the terms of the agreement.

Also at the meeting, LION's shareholders approved the voluntary
dissolution and liquidation of LION pursuant to a plan of complete
dissolution and liquidation.  

LION expects to dissolve and commence the winding-up process soon
as practicable after the consummation of the asset sale to
Beanstalk.  LION expects that trading of its common stock on the
OTC Bulletin Board will cease, and that its stock transfer books
will be closed, concurrently with dissolution of the company.

                          About LION Inc.

Headquartered in Gig Harbour, Washington, LION Inc. (OTCBB:LINN)
-- http://www.lionmts.com/-- provides software and services that  
enable mortgage loan brokers and lenders to increase their
productivity in originating single family residential mortgage
loans.  

                    About OpenClose Solutions

Headquartered in West Palm Beach, Florida, OpenClose Solutions --
http://www.openclose.comor http://www.decisionassist.com/-- is  
in the mortgage software solutions since its inception in 1999.  
The company's Web-based, end-to-end mortgage lending platform,
OpenClose(R), and loan pricing engine and automated underwriting
software, DecisionAssist(TM), can be customized to any lender's
workflow, business model or terminology.
For more information, visit the company's Web sites at.


M/I HOMES: Moody's Cuts B1 Corporate Family Rating; Outlook Neg.
----------------------------------------------------------------
Moody's lowered the ratings of M/I Homes, including its corporate
family rating, to B2 from B1, senior unsecured notes, to B3 from
B1, and preferred stock, to Caa2 from B3.  At the same time
Moody's assigned a SGL-3 speculative grade liquidity rating.  The
ratings outlook remains negative.

The downgrade was prompted by:

  -- Moody's expectation that the company's pre-impairment
     operating earnings will be negative in 2008;

  -- the relatively large impairment charges taken since the
     beginning of the housing downturn and the potential for
     additional impairments;

  -- the possibility that the company will be unable to reduce
     costs fast enough relative to its revenue pressure, and

  -- the company's large exposure to particularly weak markets
     that may inhibit profitable inventory reduction over the
     intermediate term.

The negative outlook reflects Moody's expectation that the
homebuilding market will continue to deteriorate in 2008 and,
thus, the company's operating and credit metrics are likely to
remain under pressure.

The outlook also takes into consideration that M/I Homes derives a
significant proportion of its revenues and operating income from
markets that are extremely weak including Florida and the Midwest.  
Debt leverage exceeding 60% could result in a further ratings
downgrade.

The widened notching of the company's preferred notes rating
reflects low expected levels of recovery in a default scenario
particularly given the further weakening of the homebuilding
business and the potential for a mandatory dividend deferral
should losses mount.

Additionally, the company's fixed assets are mostly in markets
that are likely to undergo significant haircuts in the event of
default.  The SGL-3 rating reflects the company's average
liquidity profile over the next 12 months.

The ratings acknowledge the company's historically conservative
and disciplined growth strategy and a management that has been
proactively pursuing cost reduction opportunities.

Going forward, the company's outlook and ratings could stabilize
if the company's operating margin improved meaningfully, if
headroom under its covenants widened significantly, and if the
company were to become strongly free cash flow positive on an LTM
basis and on a projected basis from ongoing operations.

These rating actions were taken:

  -- Corporate family rating downgraded to B2 from B1;
  -- Probability of default rating downgraded to B2 from B1;

  -- Senior unsecured debt ratings downgraded to B3 (LGD4, 60%)
     from B1 (LGD4, 51%);

  -- Preferred stock downgraded to Caa2 (LGD6, 99%) from B3 (LGD6,
     94%);

  -- Speculative Grade Liquidity Rating, assigned SGL-3.

Headquartered in Columbus, Ohio and begun in 1976, M/I Homes, Inc.
sells homes under the trade names M/I Homes and Showcase Homes,
with homebuilding operations located in Columbus and Cincinnati,
Ohio; Indianapolis, Indiana; Chicago, Illinois; Tampa and Orlando,
Florida; Charlotte and Raleigh, North Carolina; and the Virginia
and Maryland suburbs of Washington, D.C.  Homebuilding revenues
for the trailing 12 months ended March 31, 2008 were $956 million.


MASTR ASSET: S&P Puts Default Ratings on 12 Certificate Classes
---------------------------------------------------------------
Standard & Poor's Ratings Services lowered its ratings to 'D' on
12 classes of mortgage pass-through certificates from MASTR Asset
Backed Securities Trust's series 2006-HE1, 2006-HE2, 2006-HE3,
2006-WMC1, 2006-WMC2, 2006-WMC3, 2006-WMC4, and 2006-FRE2.  In
addition, S&P lowered its rating on class M-9 from series 2006-
WMC1 to 'CC' from 'CCC'.
     
The downgrades reflect the deteriorating performance of the
collateral pools as monthly net losses continue to significantly
outpace monthly excess interest cash flows, resulting in the
complete write-down of the overcollateralization for these deals.
     
As of the June 2008 distribution period, cumulative realized
losses ranged from 4.71% (series 2006-HE2) to 7.67% (2006-WMC2) of
the original principal balances, and total delinquencies ranged
from 39.13% (2006-WMC4) to 59.05% (2006-FRE2) of the current
principal balances.  These transactions have outstanding pool
factors ranging from approximately 43.24% (2006-HE1) to 77.22%
(2006-WMC4).

S&P downgraded the classes because, as of the June 2008 remittance
period, the affected classes had incurred realized losses as
follows (series; class; realized loss):
     -- 2006-HE1; M-10; $3,561,881;
     -- 2006-HE2; M-10; $134,232;
     -- 2006-HE2; M-11; $3,272,806;
     -- 2006-HE3; M-9; $1,732,314;
     -- 2006-HE3; M-10; $1,043,869;
     -- 2006-WMC1; M-10; $2,948,323;
     -- 2006-WMC2; M-8; $4,758,952;
     -- 2006-WMC3; M-7; $3,288,119;
     -- 2006-WMC4; M-8; $5,795,454;
     -- 2006-WMC4; M-9; $1,602,364;
     -- 2006-FRE2; M-9; $1,998,933; and
     -- 2006-FRE2; M-10; $2,907,847;

Subordination, O/C, and excess interest cash flow provide credit
support for these deals.  The collateral originally consisted of
subprime fixed- and adjustable-rate mortgage loans secured by one-
to four-family residential properties.


                         Ratings Lowered

               MASTR Asset Backed Securities Trust
               Mortgage pass-through certificates

                                          Rating
                                          ------
           Series     Class         To             From
           ------     -----         --             ----
           2006-HE1   M-10          D              CC
           2006-HE2   M-10          D              CC
           2006-HE2   M-11          D              CC
           2006-HE3   M-9           D              CC
           2006-HE3   M-10          D              CC
           2006-WMC1  M-9           CC             CCC
           2006-WMC1  M-10          D              CC
           2006-WMC2  M-8           D              CC
           2006-WMC3  M-7           D              CC
           2006-WMC4  M-8           D              CC
           2006-WMC4  M-9           D              CC
           2006-FRE2  M-9           D              CC
           2006-FRE2  M-10          D              CC


MEDICOR LTD: Has Until September 30 to File Chapter 11 Plan
-----------------------------------------------------------
The Hon. Mary F. Walrath of the United States Bankruptcy for the
District of Delaware extended the exclusive period of MediCor Ltd.
and its debtor-affiliates to:

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

   b) solicit acceptances of that plan until Dec. 1, 2008.

After due deliberation, Judge Walrath held that the request for  
extension is in the best interest of the Debtors and their
estates.

On May 30, 2008, the Debtor and certain of their non-debtor
subsidiaries -- Eurosilicone SAS, Biosil Limited and Nagor Limited
-- closed the sale of substantially all of their assets to Global
Consolidated Aesthetics (US) Corp., and other related entities for
$51.5 million in total.

The requested extension will permit the Debtors to complete the
consummation of the sale.  The proceeds of the sale will pay costs
and expenses, claims of creditors and advances made under the
Debtors' loan facility, as reported in the Troubled Company
Reporter on April 29, 2008.

As reported in the TCR on July 9, 2007, the Debtor obtained up to
$1.5 million in pospetition financing from its senior secured
lender including Silver Oak Capital LLC and HFTP Investment LLC.  
In February 2008, the Court approved the Debtor's request to
increase their DIP facility to $7 million.

                         About MediCor

Based in North Las Vegas, Nevada, MediCor Ltd. --
http://www.medicorltd.com/-- manufactures and markets
products          
primarily for aesthetic, plastic and reconstructive surgery and
dermatology markets.

The company and seven of its affiliates filed for chapter 11
protection on June 29, 2007 (Bankr. D. Del. Case No. 07-10877) to
effectuate the orderly marketing and sale of their business.  
Kenneth A. Rosen, Esq., Jeffrey D. Prol, Esq., and Jeffrey A.
Kramer, Esq., at Lowenstein Sandler PC represent the Debtors in
their restructuring efforts.  Dennis A. Meloro, Esq., and Victoria
Watson Counihan, Esq., at Greenberg Traurig, LLP, acts as the
Debtors' Delaware counsel.  The Debtors engaged Alvarez & Marsal
North America LLC as their restructuring advisor.  David W.
Carickhoff, Jr., Esq., and Jason W. Staib, Esq., at Blank Rome LLP
serve as the Official Committee of Unsecured Creditor's counsel.  
In its schedules of assets and debts filed with the Court, Medicor
disclosed total assets of $96,553,019, and total debts of
$158,137,507.


MELBOURNE-UNIV. APARTMENTS: Case Summary & 15 Unsecured Creditors
-----------------------------------------------------------------
Debtor: Melbourne-University Apartments II, LLC
        590 W. 84th Street
        Hialeah, FL 33014

Bankruptcy Case No.: 08-19404

Type of Business: The Debtor is in the real estate business.

Chapter 11 Petition Date: July 8, 2008

Court: Southern District of Florida (Miami)

Judge: Robert A. Mark

Debtor's Counsel: Gary M. Murphree, Esq.
                  Email: jlh@murphree-law.com
                  142A Beacom Blvd.
                  Miami, FL 33135
                  Tel: (786) 431-1611
                  Fax: (786) 431-1612
                  http://murphree-law.com/

Estimated Assets: $1 million to $10 million

Estimated Debts:  $1 million to $10 million

A list of the Debtor's largest unsecured creditors is available
for free at http://bankrupt.com/misc/flsb08-19404.pdf


MERGE HEALTHCARE: Dismisses KPMG LLP as Public Accounting Firm
--------------------------------------------------------------
The Audit Committee of the Board of Directors of Merge Healthcare
Incorporated dismissed KPMG LLP as the company's independent
registered public accounting firm.  This action followed a process
undertaken by the Audit Committee.

During the company's fiscal years ended Dec. 31, 2006 and Dec. 31,
2007, the company has not had any disagreements with KPMG on any
matter of accounting principles or practices, financial statement
disclosure, or auditing scope or procedure, which disagreements,
if not resolved to KPMG's satisfaction, would have caused KPMG to
make reference in connection with its opinion to the subject
matter of the disagreement.

In KPMG's report on the company's consolidated financial
statements as of and for the fiscal year ended Dec. 31, 2006, KPMG
identified material weaknesses in the company's internal control
over financial reporting as of Dec. 31, 2006 relating to the
Company's control environment, revenue recognition, accounting for
income taxes, accounting for business combinations and
implementation of a new accounting system.  Such material
weaknesses caused KPMG to opine that the company had not
maintained effective internal control over financial reporting as
of Dec. 31, 2006, based on criteria established in Internal
Control – Integrated Framework issued by the Committee of
Sponsoring Organizations of the Treadway Commission.

In addition, the material weaknesses related to revenue
recognition, accounting for income taxes and accounting for
business combinations resulted in errors in the company's
consolidated financial statements, which required the company to
restate its consolidated financial statements as of Dec. 31, 2006
and 2005 and for each of the years in the three-year period ended
December 31, 2006 in a Form 10-K/A that the company filed with the
Securities Exchange Commission on Dec. 28, 2007.

In KPMG's report on the company's consolidated financial
statements as of and for the fiscal year ended Dec. 31, 2007, KPMG
identified a material weakness related to the Company's accounting
for income taxes, which caused KPMG to opine that the company had
not maintained effective internal control over financial reporting
as of Dec. 31, 2007, based on criteria established in Internal
Control – Integrated Framework issued by the Committee of
Sponsoring Organizations of the Treadway Commission.

KPMG's report on the company's consolidated financial statements
as of and for the fiscal year ended Dec. 31, 2007, noted that the
company's financial statements were prepared assuming that the
company will continue as a going concern.  KPMG stated that, as
discussed in Note 1 to the consolidated financial statements, the
company suffered recurring losses from operations and negative
cash flows that raise substantial doubt about the company's
ability to continue as a going concern and noted that the
consolidated financial statements do not include any adjustments
that might result from the outcome of this uncertainty.

KPMG's report on the company's consolidated financial statements
as of and for the year ended Dec. 31, 2006 stated the company
adopted the provisions of Statement of Financial Accounting
Standards No. 123 (revised 2004), Share-Based Payment, effective
January 1, 2006.

Based in Milwaukee, Wisconsin, Merge Healthcare Incorporated
(Nasdaq: MRGE; TSX: MRG) -- http://www.mergehealthcare.com/-- is      
a developer of medical imaging and clinical software applications
and developmental tools.  The company develops medical imaging
software solutions that support end-to-end business and clinical
workflow for radiology department and specialty practices, imaging
centers and hospitals.

                       Possible Bankruptcy

As reported in the Troubled Company Reporter on May 16, 2008, if
adequate funds are not available or are not available on
acceptable terms, the company will likely not be able to fund its
new teleradiology business, take advantage of unanticipated
opportunities, develop or enhance services or products, respond to
competitive pressures, or continue as a going concern beyond
June 30, 2008, and may have to seek bankruptcy protection.

                        Going Concern Doubt

As reported in the Troubled Company Reporter on April 29, 2008,
KPMG LLP in Chicago expressed substantial doubt about Merge
Healthcare Incorporated's ability to continue as a going concern
after auditing the company's consolidated financial statements for
the year ended Dec. 31, 2007.  The auditing firm pointed to the
company's recurring losses from operations and negative cash
flows.

The company says it has generated losses from operations over the
past nine consecutive quarters and the company currently has no
credit facility.  As a result, the company is currently completely
dependent on available cash and operating cash flow to meet its
capital needs.


MERGE HEALTHCARE: Complies with Nasdaq Minimum Bid Price Protocol
-----------------------------------------------------------------
Merge Healthcare Incorporated received notification from the
NASDAQ Stock Market that the company had regained compliance with
NASDAQ Marketplace Rule 4450(a)(5) and that NASDAQ now considers
the matter closed.

On April 3, 2008, the company was notified April 2, 2008, that it
was not in compliance with the "Minimum Bid Price Rule" because
shares of its common stock had closed at a per share bid price of
less than $1.00 for 30 consecutive business days.  At that time,
in accordance with Marketplace Rule 4450(e)(2), the company was
provided with 180 calendar days, or until Sept. 29, 2008, to
regain compliance.  Since then, the company's common stock
maintained a closing bid price at $1.00 or greater for at least 10
consecutive business days.

                  Securities Purchase Agreement

On July 1, 2008, Merge Healthcare Incorporated, certain of its
subsidiaries and Merrick RIS, LLC entered into an amendment to
that certain Securities Purchase Agreement, dated May 21, 2008,
which amendment will become effective if the company's
shareholders at the annual meeting scheduled for Aug. 19, 2008
approve a certain proposal appointing the members of the company's
Board of Directors.  Pursuant to the amendment, the parties agreed
to delete Section 4(l) of the Purchase Agreement, which would
result in (i) Merrick giving up its contractual right to nominate
persons to the company's Board and (ii) Merrick no longer being
obligated to vote for the slate of directors nominated by the
Company.

A full-text copy of the Amendment is available for free at
http://ResearchArchives.com/t/s?2f67

                       About Merge Healthcare

Based in Milwaukee, Wisconsin, Merge Healthcare Incorporated
(Nasdaq: MRGE; TSX: MRG) -- http://www.mergehealthcare.com/-- is      
a developer of medical imaging and clinical software applications
and developmental tools.  The company develops medical imaging
software solutions that support end-to-end business and clinical
workflow for radiology department and specialty practices, imaging
centers and hospitals.

                       Possible Bankruptcy

As reported in the Troubled Company Reporter on May 16, 2008, if
adequate funds are not available or are not available on
acceptable terms, the company will likely not be able to fund its
new teleradiology business, take advantage of unanticipated
opportunities, develop or enhance services or products, respond to
competitive pressures, or continue as a going concern beyond
June 30, 2008, and may have to seek bankruptcy protection.

                        Going Concern Doubt

As reported in the Troubled Company Reporter on April 29, 2008,
KPMG LLP in Chicago expressed substantial doubt about Merge
Healthcare Incorporated's ability to continue as a going concern
after auditing the company's consolidated financial statements for
the year ended Dec. 31, 2007.  The auditing firm pointed to the
company's recurring losses from operations and negative cash
flows.

The company says it has generated losses from operations over the
past nine consecutive quarters and the company currently has no
credit facility.  As a result, the company is currently completely
dependent on available cash and operating cash flow to meet its
capital needs.


MIDWEST AIR: Pilots Predict Bankruptcy After Labor Talks Fail
-------------------------------------------------------------
After failing to strike collective bargaining agreement with the
management of Midwest Airlines, the carrier's pilots are saying
the company is planning to file for bankruptcy, reports say.

The pilots say Midwest was not bargaining in good faith, and that
the carrier is eyeing a better deal through a bankruptcy filing.  
Midwest downplayed the accusations, saying the talks are
continuing, contrary to what the union says.

According to AHN News, a bankruptcy filing would enable Midwest to
negotiate new labor contracts with its union, and re-negotiate
debt with its lenders and creditors.  Pilots say the move will
cost them "several millions of dollars" in wages and benefits.

As reported by the Troubled Company Reporter on June 27, 2008,
Jay Schnedorf, chairman of the Air Line Pilots Association's
Midwest chapter, said that Midwest Air Group Inc. plans to reduce
its fleet and workforce under a 30-day restructuring in order to
prevent a bankruptcy filing.  Reports say that the airline is
scrambling to raise funds as profits dwindle due to rising fuel
prices.

Mr. Schnedorf said that about 200 of the 400 Midwest pilots will
lose their jobs under the restructuring, the Milwaukee Journal
Sentinel reported.  About 35 pilots are due for retrenchment next
month under a previously disclosed restructuring, Sentinel said.

Midwest will also slash half of its 400 flight attendants,
Sentinel says, citing Dory Klein, head of of Midwest Association
of Flight Attendants.

Vaughn Cordle of Airline Forecasts LLC stated that other workers
will also be affected by the restructuring, including ground crew,
Milwaukee Journal Sentinel reports.

                        About Midwest Air

Oak Creek, Wisconsin-based Midwest Air Group Inc. --
http://www.midwestairlines.com/-- is a holding company of Midwest    
Airlines, Inc.  Midwest Airlines operates a passenger jet airline
that serves destinations throughout the United States from
Milwaukee, Wisconsin and Kansas City, Missouri.  Skyway Airlines,
Inc., dba Midwest Connect, is a wholly owned subsidiary of Midwest
Airlines and serves as the regional airline for the company.  
Midwest Airlines and Midwest Connect constitute the company's
segments.  It has three principal product offerings: Midwest
Airlines Signature Service, Midwest Airlines Saver Service and
Midwest Connect regional service. As of Dec. 31, 2006, Midwest
Airlines Signature Service operated in 20 cities in the United
States, and Midwest Airlines Saver Service operated in 10 cities.  
Midwest Connect builds feeder traffic and provides regional
scheduled passenger service to cities primarily in the Midwest.  
Its subsidiaries provide aircraft charter services, transport air
freight and mail.  The company has a total of more than 3,000
workers.

As of Sept. 30, 2007, Midwest Air Group listed total assets of
$395,615,000, total liabilities of $331,810,000, and total
stockholders' equity of $63,805,000.


NATIONAL R.V.: Has Until August 26 to File Chapter 11 Plan
----------------------------------------------------------
The United States Bankruptcy Court for the Central District of
California further extended the exclusive periods of National R.V.
Holdings Inc. and National R.V. Inc. to:

   a) file a Chapter 11 plan until Aug. 26, 2008, and

   b) solicit acceptances of that plan until Oct. 25, 2008.

As reported in the Troubled Company Reporter on June 25, 2008, the
Debtors said that the are presently drafting a consensual joint
Chapter 11 plan that will resolve intercompany claims and allocate
assets and liabilities of the Debtors to ensure that the interest
of all of the Debtors' creditors are adequately represented.  Los
Angeles-based Kaye Scholer LLP represents the subcommittee of the
Debtors' board of directors to address the intercompany issues.

During their Chapter 11 cases, the Debtors have generated roughly
$22 million following the liquidation of substantially all of
their assets, including the sale of at least 175 recreational
vehicles to Dennis Dillon RV LLC for $13.9 million.

                       About National R.V.

Headquartered in Perris, California, National R.V. Holdings
Inc. (Pink Sheets: NRVH) -- http://www.nrvh.com/-- through its         
wholly owned subsidiary, National RV Inc., produces motorized
recreational vehicles.  National RV designs, manufactures and
markets Class A gas and diesel motorhomes under model names Surf
Side, Sea Breeze, Dolphin, Tropi-Cal, Pacifica and Tradewinds.

The companies filed for Chapter 11 protection on Nov. 30, 2007
(Bankr. C.D. Calif. Lead Case No. 07-17937).  David Guess, Esq.,
at Klee Tuchin Bogdanoff & Stern LLP, represents the Debtors in
their restructuring efforts.  The Debtors selected OMNI Management
Group LLC as their claim, notice and balloting agent.  The U.S.
Trustee of Region 16 appointed seven creditors to serve on an
Official Committee of Unsecured Creditors in this case.  Pachulski
Stang Ziehl & Jones LLP represents the Committee.

When the Debtors filed for protection from their creditors, they
listed total assets of $54,442,000 and total debts of $30,128,000.


NETBANK INC: Judge Funk Approves Amended Disclosure Statement
-------------------------------------------------------------
The Hon. Jerry A. Funk of the United States Bankruptcy Court for
the Middle District of Florida approved an amended disclosure
statement explaining an amended Chapter 11 plan of liquidation
filed by NetBank, Inc., on July 9, 2008.  He held that the amended
disclosure statement contains adequate information within the
meaning of Section 1125 of the Bankruptcy Code.

Judge Funk will convene a hearing on Sept. 10, 2008, at 9:30 a.m.,
at 300 North Hogan St., 4th floor in Courtroom 4D in Jacksonville,
Florida, to consider confirmation of the Debtor's amended
liquidation plan.  Objections, if any, are due Sept. 2, 2008.

Judge Funk also approved the Debtor's proposed procedures for
solicitation and tabulation of votes.  Deadline for voting on the
amended plan is Aug. 29, 2008, at 4:00 p.m.  All ballots must be
delivered at:

   NetBank Ballot Processing Center
   c/o Kurztman Carson Consultants LLC
   2335 Alaska Avenue
   El Segundo, CA 90245

Under the Plan, all assets of the Debtor will be liquidated and
the proceeds will be paid to creditors.  Katz of GGG Inc., the
appointed chief restructuring officer of the Debtor, has partially
liquidated the Debtor's assets.

As of the Plan's effective date, the Debtor estimates the value of
its assets at between $7.2 million and $7.9 million exclusive of
projected recoveries from avoidance actions, other causes of
action and tax refunds, if any.  Furthermore, the Debtor projects
a $7,000,000 in cash -- including proceeds of its remaining assets
real estate and cash held by MG Reinsurance Company after its
liquidation.

Clifford Zucker at J.H. Cohn LLP in New York, will serve as
liquidating supervisor to wind-down the estate assets and
distribute proceeds to creditors.

                Treatment of Interests and Claims

All administrative claims will be paid in full on the Plan's
effective date.

Holders of allowed secured claims will be satisfied after the
estate received the gross proceeds of any sale.  Secured creditors
and their claims are:

   i) Iron Mountain -- $34,249, secured by materials stored
      in its warehouse;

  ii) Dvual County Tax Collector -- $40,676, secured by
      personal property; and

iii) Liberty Mutual Insurance Company, secured by letter of
      credit.

Holders of senior unsecured claims, and general unsecured claims
will be entitled to receive pro rata share of their respective
claims.

Holders of subordinated unsecured claims, Trust Preferred Claims,
and securities claims will not receive any distribution from the
Debtor.

Holders of existing stock will not retain their interest but will
receive distribution based upon the interest held as of the plan's
confirmation date, from the proceeds of the liquidation after all
valid claims are paid in full.

The Debtor has 52.98 million shares outstanding, par value $1, and
traded publicly on the "pink sheets."  It was originally traded on
the NASDAQ but was delisted before the Debtor filed for
bankruptcy.

A full-text copy of the amended disclosure statement is available
for free at http://ResearchArchives.com/t/s?2f62

A full-text copy of the amended Chapter 11 plan of liquidation is
available for free at http://ResearchArchives.com/t/s?2f63

                        About NetBank

Headquartered in Jacksonville, Florida, NetBank Inc. --
http://www.netbank.com/-- is a financial holding company of
Netbank, the United States' oldest Internet bank serving retail
and business customers in all 50 states.  NetBank Inc. does retail
banking, mortgage banking, business finance, and providing ATM and
merchant processing services.

The company filed for Chapter 11 protection on Sept. 28, 2007
(Bankr. M.D. Fla. Case No. 07-04295).  Alan M. Weiss, Esq., at
Holland & Knight LLP.  The U.S. Trustee for Region 21 appointed
six creditors to serve on an Official Committee of Unsecured
Creditors of the Debtor's case.  Rogers Towers and Kilpatrick
Stockton LLP represent the Committee in this case.  As of
Sept. 25, 2007, the Debtor listed total assets at $87,213,942
and total debts at $42,245,857.


NEXCEN BRANDS: Completes Purchase of Bill Blass' Couture Business
-----------------------------------------------------------------
NexCen Brands Inc. disclosed that through its subsidiary NexCen
Fixed Asset Company LLC, it completed a purchase agreement with
Michael Groveman and Carly Andrews Inc. to acquire Bill Blass Ltd.
LLC, which owns and operates the Bill Blass couture business
pursuant to a royalty-free license from the company.

"Bill Blass continues to be a very important and highly regarded
brand in fashion," Robert W. D'Loren, CEO of NexCen Brands, said.
"Our acquisition of Bill Blass Couture provides the company with
greater control of the future of the overall Bill Blass brand.  As
we continue to explore strategic alternatives, including the sale
of our Bill Blass brand, we believe that owning Bill Blass Couture
will maximize the potential sale value of the overall business."

The purchase price paid at closing was comprised of nominal
consideration and the company's assumption of approximately
$425,000 in net liabilities, excluding amounts owed by Bill Blass
Couture to the company.

The company has been providing financial assistance to the Bill
Blass Couture business since the beginning of 2008.  In the first
quarter of 2008, the company loaned approximately $950,000 to Bill
Blass Couture to support marketing expenses.

After the closing, the company expects to eliminate Bill Blass
Couture's obligations to repay this amount.  Additionally, prior
to closing, Bill Blass Couture is permitted to pay up to $25,000
to Mr. Groveman from its existing cash reserves in exchange for
Mr. Groveman agreeing to provide transitional consulting services
to Bill Blass Couture for up to 45 days after closing.

As part of the acquisition, Bill Blass Couture terminated its
employment agreement with Mr. Groveman and Mr. Groveman was
released from his agreement not to compete with the Bill Blass
couture business for three years after the company's $54 million
acquisition of Bill Blass in February 2007.

                        About Bill Blass

Headquartered in New York City, Bill Blass Ltd. LLC --
http://www.billblass.com/-- makes tailored men's and women's  
clothing.  The company also has  30 licenses for items as
furniture, eyewear, and accessories.

                   About NexCen Brands

Nexcen Brands Inc. (NASDAQ: NEXC) -- http://www.nexcenbrands.com/   
-- acquires and manages global brands, generating revenue through
licensing and franchising. We currently own and license the Bill
Blass and Waverly brands, as well as seven franchised brands. Two
franchised brands -- The Athlete's Foot and Shoebox New York --
sell retail footwear and accessories.  Five are quick-service
restaurants -- Marble Slab Creamery, MaggieMoo's, Pretzel Time,
Pretzelmaker, and Great American Cookies.

The company licenses and franchises its brands to a network of
leading retailers, manufacturers and franchisees that generate
$1.3 billion in retail sales in more than 50 countries around the
world. The franchisees operate approximately 1,900 franchised
stores. Franchisee support and training is provided at NexCen
University, a state-of-the-art facility located in Atlanta.

                          *     *    *

A. Substantial Doubt

As reported by the Troubled company Reporter on May 21, 2008,
based on information that is now known, the company believes that
there is substantial doubt about its ability to continue as a
going concern, and pending completion of an independent review,
that this substantial doubt also may have existed at the time the
company filed its 2007 10-K.  The audit committee of the company's
Board of Directors has retained independent counsel to conduct an
independent review of the situation.

The company has concluded that its 2007 financial statements
should no longer be relied upon and no reliance should be placed
upon KPMG's audit report dated March 20, 2008, or its report dated
March 20, 2008 on the effectiveness of internal control over
financial reporting as of Dec. 31, 2007, as contained in the
company's 2007 10-K.

B. Strategic Alternative Review

NexCen also announced that it is actively exploring all strategic
alternatives to enhance its liquidity, including potential capital
market transactions, the possible sale of one or more of its
businesses, and discussions with the company's lender.  In
addition, the company will take immediate steps to reduce
operating expenses.


NORTHLAKE CDO: Moody's Cuts & Places on Review Notes' Ratings
-------------------------------------------------------------
Moody's Investors Service downgraded and left on review for
further possible downgrade the ratings on these notes issued by
NorthLake CDO I, Limited:

Class Description: $174,000,000 Class I-MM Floating Rate Notes Due
2033

  -- Prior Rating: Aa3
  -- Current Rating: A2, on review for possible downgrade

Class Description: $56,000,000 Class I-A Floating Rate Notes Due
2033

  -- Prior Rating: Ba3
  -- Current Rating: B3, on review for possible downgrade

Moody's has also withdrawn the short-term ratings on these notes:

Class Description: $174,000,000 Class I-MM Floating Rate Notes Due
2033

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

According to Moody's, the rating actions reflect increased
deterioration in the credit quality of the underlying portfolio.  
Also according to Moody's, the Prime-1 ratings assigned to the
Class I-MM Notes were based on the existence of a put agreement
provided by a Prime-1 rated third party.

The notes have been re-issued but with the put provider as both
the investor and the put counterparty.  Where the put provider is
also the holder of the notes, it is Moody's view that the put
agreement ceases to be relevant.  Accordingly, Moody's has
withdrawn its short-term ratings on these notes.


NORTH MIAMI LAND: Auction of Interest in BLIA Set July 14
---------------------------------------------------------
Madeleine LLC will conduct a public auction of a collateral
comprised of an undivided 99% limited partnership interest and
100% general partnership interest of North Miami Land Holdings,
Ltd. in BLIA Developers Ltd., on July 14, 2008, at 11:00 a.m.,
EDT, at the offices of Orrick, Herrington & Sutcliffe at 666 Fifth
Avenue in New York.

North Miami and Madeleine are parties to certain loan and security
agreement dated July 6, 2006, and pledge and security agreement  
dated July 6, 2006.  Events of default under the agreements are
active.

Parties are entitled to an accounting of the unpaid indebtedness
secured by the collateral.  Madeleine's Chris Shiermbock can be
reached at (212) 909-1303.

Headquartered in Deerfield Beach, Flordia, North Miami Land
Holdings Ltd. is located at 321 E. Hillsboro Boulevard.  The
company was incorporated on Nov. 27, 2002.


NV TELEVISION: Moody's Assigns Corporate Family Rating of B3  
------------------------------------------------------------
Moody's Investors Service assigned a B3 Corporate Family Rating
and a B3 Probability of Default Rating to NV Broadcasting, LLC.  
In addition, Moody's assigned a B1 rating to New Vision's
$215 million senior secured first lien credit facilities
($20 million revolver and $195 term loan) and a Caa2 rating to its
$100 million senior secured second lien term loan.

Moody's also assigned a B1 rating to Parkin Broadcasting, LLC's
$45 senior secured first lien credit facilities ($5 million
revolver and $40 million term loan).  The rating outlook is
stable.  This is the first time that Moody's has assigned ratings
to NV Broadcasting, LLC.

Parkin, an independently owned entity, has joint sales and shared
service agreements with subsidiaries of NV Television, LLC, the
parent of New Vision.  In addition, New Vision and Parkin's credit
facilities have cross guarantees, cross collateral and cross
defaults.  NV Television, LLC's financial statements include the
accounts of Parkin.  Moody's therefore evaluates New Vision and
Parkin on a consolidated basis.

Ratings/assessments assigned:

NV Broadcasting, LLC

  -- Corporate Family Rating -- B3
  -- Probability-of-default rating -- B3

  -- $20 million Senior Secured First Lien Revolving Credit
     Facility -- B1 (LGD 3, 30%)

  -- $195 million Senior Secured First Lien Term Loan Facility --
     B1 (LGD 3, 30%)

  -- $100 million Senior Secured Second Lien Term Loan Facility --
     Caa2 (LGD 5, 80%)

The outlook is stable.

Parkin Broadcasting, LLC

  -- $5 million Senior Secured First Lien Revolving Credit  
     Facility -- B1 (LGD 3, 30%)

  -- $40 million Senior Secured First Lien Term Loan Facility --
     B1 (LGD 3, 30%)

New Vision's ratings reflect the company's significant debt-to-
EBITDA leverage of 10.7x based on pro-forma EBITDA, excluding the
make-well contribution, for the trailing 12 months ended March 31,
2008 and incorporating Moody's standard adjustments, modest free
cash flow relative to debt, modest scale and weakness in recent
operating performance.

The ratings also incorporate New Vision's revenue concentration
risk, likelihood of future tuck-in acquisitions and the risks
related thereto, limited covenant cushion, the inherent
cyclicality of the advertising business and the increasing
business risk associated with declining broadcast television
audience trends and increasing cross-media competition for
advertising spending.

New Vision's ratings are supported by its considerable presence in
the top 100 markets, significant proportion of relatively stable
local advertising revenues, diverse network affiliations and
potential revenue and cash flow upside from new revenue streams
including retransmission consent fees.

In addition, Moody's believes that the makewell agreement whereby
the equity sponsor contributes 50% of the corporate overhead until
leverage falls below 6.0x is a credit positive and benefits the
company's cash flow.

Headquartered in Los Angeles, California, NV Broadcasting, LLC,
owns and operates 12 major affiliated broadcast television
stations and two CW and two MyTV affiliated broadcast stations in
8 markets.  The company has also disclosed the establishment of
KBNZ as the CBS network affiliate serving the Bend,Oregon market.  
The company's pro-forma 2007 net revenue was approximately
$109 million.


PACE PRODUCT: Case Summary & 14 Largest Unsecured Creditors
-----------------------------------------------------------
Debtor: Pace Product Solutions, Inc.
        304 E. 78th Street, Apt. 5F
        New York, NY 10021

Bankruptcy Case No.: 08-12666

Type of Business: The Debtor sells muffler and exhaust systems.

Chapter 11 Petition Date: July 10, 2008

Court: Southern District of New York (Manhattan)

Debtor's Counsel: Daniel M. Katzner, Esq.
                  Email: danielkatzner@yahoo.com
                  1025 Longwood Ave.
                  Bronx, NY 10459
                  Tel: (718) 589-3999
                  Fax: (718) 893-3647

Estimated Assets: $1 million to $10 million

Estimated Debts:  $1 million to $10 million

A list of the Debtor's largest unsecured creditors is available
for free at http://bankrupt.com/misc/nysb08-12666.pdf


PARK CAPITAL: Owner Depletes Investors' Money; Attempts Suicide
---------------------------------------------------------------
Michael Jinyong Park, owner of Park Capital Management Group,
tried to commit suicide a week after telling investors in a letter
that their funds are gone, Naomi Snyder at Tennessean reports.  
Mr. Park is currently under treatment at Vanderbilt University
Medical Center, Tennessean says.  The stockbroker, found Wednesday
at his Davidson County home with a cut to his wrist and a stab
wound to his abdomen, was rushed to the hospital, based on the
report.

The report states that at a time when the stock market was
failing, investors were promised a 20% annual return by the
seemingly smart and successful stockbroker who rides a Mercedes
and a Porsche.

Michael Siriyutwatana, 37 and owner Royal Thai restaurants in
Nashville, had entrusted his retirement fund to Mr. Park,
Tennessean notes.  Mr. Siriyutwatana said that Mr. Park was
friendly and charismatic.  The stockbroker also assured him that
his money were invested on stock options.  Mr. Siriyutwatana
received regular account statements from real brokerage, 1st
Discount Brokerage, Tennessean says.  Mr. Siriyutwatana also
issued checks to Park Capital, which isn't listed at The Financial
Industry Regulatory Authority, Tennessean states.

In his letter, Mr. Park informed investors that their account with
Park Capital "has no current liquid value," Tennessean relates.  
Mr. Park apologized to his investors and said that funds with 1st
Discount is still available, Tennessean notes.  He added that he
intends to talk to them and explain.

Tennessean says that both Mr. Park and 1st Discount were
unavailable to comment on the news.  The Vanderbilt hospital
refused to give update on the stockbroker's condition.

John McLemore, Esq., Mr. Park's counsel, said that he probably
will request for the suspension of his client's bankruptcy case
due to the suicide attempt, Tennessean says.

Will Cheek III, Esq., and Bill Norton, Esq., were asked to
represent various investors who are owed from $40,000 to more than
$1 million, Tennessean notes.

Michael Jinyong Park, together with his wife and two children,
lives at 133 Woodward Hills Place in Brentwood, Tennessee on a
$1.7 million home.  He owns Park Capital Management Group.  He
currently faces various complaints with the FINRA.  He was barred
from selling securities in 2000 after being accused of violating
securities laws.  FINRA said that in 1998, Edward Jones fired him,
and in 2000, Raymond James Financial also fired him.


PETRA CRE: Fitch Puts $32.5MM 'B' Notes Rating Under Neg. Watch
---------------------------------------------------------------
Fitch Ratings has placed these seven classes of Petra CRE CDO
2007-1, Ltd./Corp. on Rating Watch Negative:

  -- $25.5 million class D notes 'A';
  -- $22 million class E 'A-';
  -- $33 million class F 'BBB+';
  -- $20 million class G 'BBB';
  -- $26.5 million class H 'BBB-';
  -- $42.5 million class J 'BB';
  -- $32.5 million class K 'B'.

The actions are due to an increase in the percentage of assets of
concern to 16.1% from 5.2% at last review, which resulted in
failures of the Fitch property value decline stress scenarios for
classes D through K.  The collateral manager's contribution of
$50 million of debt (5.0%) from its subsidiary, Petra Fund REIT
Corp., to the collateralized debt obligation portfolio in May 2008
triggered Fitch's review.  Despite the pool's credit deterioration
from the contributed asset and the declining performance of two
mortgage assets (5.9%) within the pool, the Class A-1, A-2, B, and
C notes are not placed on RWN because the transaction maintains an
adequate reinvestment cushion and passes Fitch's property value
decline stress scenarios for the ratings assigned to those
respective classes.

The asset manager has expressed its intention to substitute
collateral such that the portfolio stays within its collateral
quality tests and passes Fitch's stress testing scenarios at the
existing rating levels.

Petra 2007-1 is a revolving commercial real estate cash flow CDO
that closed on June 27, 2007.  The portfolio is selected and
monitored by Petra Capital Management LLC.  Petra 2007-1 has a
six-year reinvestment period during which, if all reinvestment
criteria are satisfied, principal proceeds may be used to invest
in substitute collateral.  The reinvestment period ends June 2013.  
Petra 2007-1 became effective on March 23, 2008.

As of the June 25, 2008 trustee report, the as-is poolwide
expected loss has increased to 39.875% from 36.125% at the
effective date.  As a result of the aforementioned portfolio
changes and based on the current PEL covenant of 44.125%, the CDO
has below average reinvestment flexibility with 4.250% of cushion.  
The higher as-is PEL is attributed to the addition of the Petra
REIT debt to the portfolio, the declining performance of a
portfolio of casino properties (0.9%), and a multifamily property
(5.0%) that had only a partial interest payment by the borrower
last month.

The Petra REIT debt was the only asset added to the CDO since the
effective date.  This asset is a floating rate obligation with a
spread of 1,100 basis points over 1-month LIBOR.  As of April 30,
2008, Petra held 53 real estate positions including one commercial
mortgage-backed security.  39 of the positions are loans
contributed to the CDO.  Of the 14 assets that are not contributed
to the CDO, seven assets are pledged to repurchase facilities.
Fitch is concerned with the limited number of unencumbered assets
held by Petra REIT, four of which are deemed assets of concern by
Fitch.  These four assets of concern are two B-notes secured by
the land at the former Drake Hotel site in Manhattan and the
equity in and B-note secured by the Westin Aruba.

Further, a significant portion of Petra REIT's cash and cash
equivalents are committed to future funding obligations for assets
in the CDO.  Petra REIT and its affiliates also own the below
investment grade notes and preferred shares of this CDO, which
presents concentration risk to the pool.  Fitch is concerned with
the potential conflicts of interest of having debt that is
affiliated with the collateral asset manager contributed to the
CDO.  As such, Fitch assumed 100% expected loss in its CREL
Surveyor model and 0% recovery in its corresponding stress test
analysis for the Petra REIT debt.

Since last review, two CRE loan positions have become loans of
concern. One of the B-notes within the CDO is secured by a
portfolio of three casino resorts located in Atlantic City, New
Jersey and Tunica, Mississippi.  This portfolio recently reported
a significant decline in operating performance.  Fitch has updated
its analysis to reflect the portfolio's decreased cash flow and
increased volatility.  Fitch is also concerned with a whole loan
secured by a multifamily property located in Tempe, Arizona.  The
property, which is undergoing capital improvements, is subject to
seasonality issues due to its student tenancy.  As such, lease-up
is expected to be slow over the summer months.  The borrower made
only a partial interest payment last month, and is expected to
come out-of-pocket in order to make debt service payments until
August 2008.

The overcollateralization and interest coverage ratios of all
classes have remained above their covenants as of the June 2008
trustee report.  The Class OC tests have improved since last
review, however, the F/G/H OC test result (124.74%) is tight
compared to its covenant (120.00%) considering 16.1% of the
portfolio consists of Fitch assets of concern.  Should the OC
ratio decline below 120.00%, interest will be diverted from the
below investment grade notes and preferred shares in order to
redeem the Class A-1 notes and subordinate classes sequentially
until the OC test is satisfied.  Any diversion in cash flow from
the subordinate notes and preference shares will result in stress
to the Petra REIT debt asset.

Fitch expects to resolve the Rating Watch Negative status of the
class D, E, F, G, H, J, and K notes within 90 days of this action.
Resolution will be based on the pool composition at that time.


PILGRIM'S PRIDE: Moody's Cuts Ratings to B1; Outlook is Stable
--------------------------------------------------------------
Moody's Investors Service downgraded the ratings of Pilgrim's
Pride Corporation, including the company's corporate family rating
and probability of default rating to B1 from Ba3.  The rating
outlook is stable.  This rating action concludes the review for
possible downgrade begun on April 16, 2008.

Ratings downgraded:

  -- Corporate family rating to B1 from Ba3
  -- Probability of default rating to B1 from Ba3

  -- $400 million 7.625% senior notes due 2015 to B3 (LGD5,84%)
     from B1 (LGD5,76%)

  -- $250 million senior subordinated notes due in 2017 and
     $5.1 million (original $100 million) senior subordinated
     notes due 2013 to B3 (LGD6,94%) from B2 (LGD6,94%)

The downgrade is based on Moody's expectation that margins, cash
flow and credit metrics will significantly erode in fiscal 2008
due to high feed grain prices.  Before the June run-up in corn
prices, Pilgrim's Pride had anticipated that its fiscal 2008 feed
grain costs would rise by more than $800 million over the prior
fiscal year.  This was in addition to 2007's feed grain cost
increase of approximately $600 million.

In response to this inflationary economic environment, the company
announced a 5% reduction in weekly chicken processing during the
second half of fiscal 2008 and the closure of 6 of its 13 U.S.
distribution centers.  Pilgrim's Pride has also achieved synergies
of $210 million through March 2008 from the Gold Kist acquisition.

These efforts, however, are unlikely to prevent a material
reduction in near term operating profitability and cash flow,
which combined render key credit metrics for the company to levels
more consistent with revised ratings.

The downgrades in the debt instruments incorporate the generally
larger balance of priority trade payables--which are senior to the
senior unsecured debt--now that the company includes the
operations of Gold Kist, and Moody's expectation for potentially
higher average balances under the company's revolving credit
facilities.

Liquidity management has been a credit positive.  In May 2008, the
company sold 7.5 million common shares for net proceeds of
approximately $177 million, which was applied to debt reduction,
and in April 2008 amended financial covenants through the end of
fiscal 2009.

Committed multi-year domestic credit facilities include a
$550 million revolving credit facility expiring in September 2011,
a $300 million revolving credit facility expiring in 2013 and a
$300 million receivables securitization facility expiring in 2012.  
The largest annual long-term debt repayment obligation over the
next five years is a manageable $54.7 million in fiscal 2013.

Headquartered in Pittsburg, Texas, Pilgrim's Pride Corporation is
the world's largest chicken company.  Sales for the 12 months
ended March 29, 2008 exceeded $8.4 billion.


PROGRESSIVE MOLDED: US Trustee Wants Cases Converted to Chapter 7
-----------------------------------------------------------------
Roberta A. DeAngelis, the Acting United States Trustee for Region
3, asks the Court to convert Progressive Molded Products, Inc. and
its debtor-affiliates' Chapter 11 cases to Chapter 7.

Section 1112(b)(1) of the Bankruptcy Code, as amended by the
Bankruptcy Abuse Prevention and Consumer Protection Act of 2005,
expressly provides that, upon request by a party, the Court may
convert a Chapter 11 case to Chapter 7 for "cause".

Ms. DeAngelis asserts cause exists for the conversion of the
cases.  She avers the Debtors' estate should be liquidated under
Chapter 7 because of the substantial or continuing losses to the
estate and the absence of a reasonable likelihood of
rehabilitation of the Debtors.

The Debtors, Ms. DeAngelis notes, have said they will commence a
wind-down of their operations and have indicated that they only
have funds available to pay some of their ongoing expenses for a
short period.

In the absence of operating revenues to support these costs, the
liquidation process will cause a continuing loss, Ms. DeAngelis
asserts.  Although the Debtors possess certain assets to be
liquidated in the future, it does not appear if they intend to
operate or sell their businesses, she explains.

If the Debtors' cases linger in Chapter 11, administrative costs
will continue to accrue, Ms. DeAngelis warns.  "The Debtors'
resources are thin and, if they are not already, the Debtors will
be administratively insolvent in the near future.  If this case
remains in Chapter 11, then the best interests of creditors are
not being served."

Ms. DeAngelis contends the best alternative is to convert to
Chapter 7 now so that a proper and orderly liquidation can be
accomplished and the bankruptcy cases can be expeditiously
administered without incurring substantial administration costs.

The hearing on the U.S. Trustee's proposal has yet to be
scheduled.

                     About Progressive Molded

Ontario, Canada-based Progressive Molded Products Inc. -- designs
and manufactures component parts for General Motors Corp., Ford
Motor Company and Chrysler, LLC.  Its interior automotive
subsystems are used for the "Big Three" automakers' top-selling
platforms, including lightweight trucks, SUVs, mini-vans, cross-
over vehicles, and passenger cars.  

The company and three of its affiliates filed for creditor
protection under Chapter 11 of the U.S. Bankruptcy Code before the
United States Bankruptcy Court for the District of Delaware on
June 20, 2008 (Lead Case No. 08-11253).  Kelley A. Cornish, Esq.
and Brian S. Hermann, Esq. at Paul, Weiss, Rifkind Wharton &
Garrison LLP and Pauline K. Morgan, Esq., Joseph M. Barry, Esq.,
and Donald J. Bowman, Jr., Esq. at Young, Conaway, Stargatt &
Taylor represent the Debtors in their restructuring efforts.

The Progressive Molded Products entities also commenced parallel
restructuring proceedings under the Companies' Creditors
Arrangement Act before the Ontario Superior Court of Justice
(Commercial List) on June 20.  Sheryl E. Seigel, Esq. and Alex A.
Ilchenko, Esq. at Lang Michener LLP are their solicitors.  Alex F.
Morrison at Ernst & Young, Inc., has been appointed CCAA monitor
and Kevin J. Zych, Esq. at Bennett Jones LLP serves as his
solicitor.


PROGRESSIVE MOLDED: Wants Manufacturing Business to be Liquidated
-----------------------------------------------------------------
Progressive Molded Products, Inc. and its debtor-affiliates, say
they have no realistic choice but to commence an orderly wind-down
of their operations, after major customers General Motors Corp.,
Ford Motor Company and Chrysler LLC opted to move their business
to other suppliers.

In 2007, the company generated 90% of its annual sales revenues
from GM, Ford and Chrysler.

On behalf of the Debtors, Pauline K. Morgan, Esq., at Young
Conaway Stargatt & Taylor, LLP, in Wilmington, Delaware, relates
that with estimated revenue of $540,000,000 in 2008 and historic
growth in market share, the Debtors' business was viable but for
an unsustainably high prepetition debt load.  In order to
restructure their balance sheet, the Debtors engaged in  
negotiations with their principal stakeholders Chapter 11
proceedings and filed for Chapter 11.

According to Ms. Morgan, the Debtors' prepetition lenders have
been extremely supportive of Progressive's ongoing restructuring
efforts.  Notwithstanding that the parties have made progress in
the negotiations, the Debtors' major customers have opted to move  
their business elsewhere and have initiated proceedings before
the U.S. Bankruptcy Court for the District of Delaware and the
Ontario Superior Court of Justice (Commercial List) to remove
tooling from the Debtors' facilities.

On June 27, 2008, General Motors Corp. and Chrysler Corp. LLC
filed separate motions with the Ontario Court seeking
modification of the stay of proceedings imposed by the Initial
CCAA Order to permit to repossess molds, dies, fixtures used by
the Debtors to manufacture component parts.  Ford followed suit
two days later.

The Canadian Court at the June 27 hearing granted limited relief
to GM, Ford and Chrysler to obtain access to the Debtors'
facilities over the ensuing weekend for purposes of assessing
their Tooling in preparation for removing the Tooling in the event
the Canadian Court granted the requested stay relief.

After negotiations, the Debtors have agreed to terms of a wind-
down of their operations and the return of the tooling with GM
and Ford, Ms. Morgan relates.  In exchange for the return of
their tooling, Ford and GM have agreed to:

   (a) fund a portion of the Debtors' winding-down and other
       costs in connection with the transitioning of their
       business;

   (b) pay all prepetition accounts payable due to the Debtors,
       subject to certain allowed set-offs and other agreed
       deductions (including for the transition costs) and
       holdbacks;

   (c) pay all postpetition accounts payable due to the Debtors
       on net 10-day terms, subject to certain allowed set-offs;
       and

   (d) purchase all usable and merchantable material and finished
       goods inventory related to their production.

Each of GM and Ford will make separate payments of $2,000,000 to
the Debtors to satisfy certain wind-down costs incurred through
July 11, 2008.  Ford will pay in advance for all incremental
costs, above the costs of wind-down, associated with producing
parts for Ford through July 31, 2008.

GM and Ford will also fund $1,000,000 into escrow to cover any
disputes regarding (i) the usability or merchantability of
inventory, (ii) the quality of any packaging or (iii) the price
to be paid for inventory, packaging, secondary tooling or
machinery equipment.

Progressive also agreed to work with GM and Ford and permit the
use of its operating assets for them to transition their business
in an orderly fashion.  Progressive will also cooperate with the
delivery of any tooling, machinery and equipment owned the
Customers.

The Senior Prepetition Lenders consent the Debtors' agreements
with Ford and GM.

                     About Progressive Molded

Ontario, Canada-based Progressive Molded Products Inc. -- designs
and manufactures component parts for General Motors Corp., Ford
Motor Company and Chrysler, LLC.  Its interior automotive
subsystems are used for the "Big Three" automakers' top-selling
platforms, including lightweight trucks, SUVs, mini-vans, cross-
over vehicles, and passenger cars.  

The company and three of its affiliates filed for creditor
protection under Chapter 11 of the U.S. Bankruptcy Code before the
United States Bankruptcy Court for the District of Delaware on
June 20, 2008 (Lead Case No. 08-11253).  Kelley A. Cornish, Esq.
and Brian S. Hermann, Esq. at Paul, Weiss, Rifkind Wharton &
Garrison LLP and Pauline K. Morgan, Esq., Joseph M. Barry, Esq.,
and Donald J. Bowman, Jr., Esq. at Young, Conaway, Stargatt &
Taylor represent the Debtors in their restructuring efforts.

The Progressive Molded Products entities also commenced parallel
restructuring proceedings under the Companies' Creditors
Arrangement Act before the Ontario Superior Court of Justice
(Commercial List) on June 20.  Sheryl E. Seigel, Esq. and Alex A.
Ilchenko, Esq. at Lang Michener LLP are their solicitors.  Alex F.
Morrison at Ernst & Young, Inc., has been appointed CCAA monitor
and Kevin J. Zych, Esq. at Bennett Jones LLP serves as his
solicitor.


PROGRESSIVE MOLDED: Gets Green Light to Wind-Down Business
----------------------------------------------------------
The Honorable Justice Morawetz of the Ontario Superior Court of
Justice (Commercial List), and Judge Kevin Carey of the U.S.
Bankruptcy Court for the District of Delaware have authorized
Progressive Molded Products, Inc., and its affiliates to wind-
down their business, in accordance with an agreement reached by
the Debtors with General Motors Corp. and Ford Motor Company

Judge Morawetz, on June 30, entered an order allowing the
Debtors, known as "applicants" in proceedings under The
Companies' Creditors Arrangement Act in Canada, to (i) conduct
and orderly wind down of their operations, pursuant to the terms
of the GM and Ford Term Sheets and (ii) cooperate with their
customers to transition certain of their business to other
suppliers.

The GM and Ford Term Sheets provide for these terms:

    1. The Debtors will not purchase raw materials or produce
       parts for GM (or any customer other than Ford) after
       July 1, 2008;
  
    2. GM and Ford will be authorized to remove tooling in which
       they claim ownership and other tangible personal property
       from the Debtors' facilities;

    3. GM and Ford will fund certain wind-down costs of the
       Debtors until July 11, 2008; and

    4. The Debtors will continue to produce parts for Ford after
       June 30, 2008, provided that Ford pays in advance for all
       incremental costs (above the costs of wind-down)
       associated with producing parts for Ford to July 31, 2008.

The Ontario Court also authorized the Applicants to sell the
tangible personal property and to release the tools located in
Canada in accordance with the Term Sheets.  Judge Morawetz has
ordered the Debtors' CCAA monitor, Ernst & Young, Inc., to
supervise the removal of tangible personal property and tooling
from the Applicants' facilities in Canada.

Judge Morawetz ordered that payments to be paid by the Customers
to the Applicants pursuant to the Term Sheets on account of their
pre-filing or post-filing accounts receivable will not be sued to
pay:

   (a) the costs of producing parts for Ford;

   (b) the costs of the Applicants and the Monitor incurred in
       connection with the inspection of the Applicants' assets
       by the Customers between June 27 and June 30; and

   (c) the costs of the removal of tangible personal property and
       tooling pursuant to the Term Sheets.

The Ontario Court ordered that GM and Ford will pay the
Inspection Costs and their rights to seek contribution and
indemnity, if any, from Chrysler are preserved.

Judge Kevin Carey noted that his order approving the Term Sheets
and approving the return of tooling is without prejudice to
parties to assert an ownership interest in the assets removed,
sold or otherwise transferred or to challenge the reasonableness
of the consideration paid for the assets sold or transferred.

                     About Progressive Molded

Ontario, Canada-based Progressive Molded Products Inc. -- designs
and manufactures component parts for General Motors Corp., Ford
Motor Company and Chrysler, LLC.  Its interior automotive
subsystems are used for the "Big Three" automakers' top-selling
platforms, including lightweight trucks, SUVs, mini-vans, cross-
over vehicles, and passenger cars.  

The company and three of its affiliates filed for creditor
protection under Chapter 11 of the U.S. Bankruptcy Code before the
United States Bankruptcy Court for the District of Delaware on
June 20, 2008 (Lead Case No. 08-11253).  Kelley A. Cornish, Esq.
and Brian S. Hermann, Esq. at Paul, Weiss, Rifkind Wharton &
Garrison LLP and Pauline K. Morgan, Esq., Joseph M. Barry, Esq.,
and Donald J. Bowman, Jr., Esq. at Young, Conaway, Stargatt &
Taylor represent the Debtors in their restructuring efforts.

The Progressive Molded Products entities also commenced parallel
restructuring proceedings under the Companies' Creditors
Arrangement Act before the Ontario Superior Court of Justice
(Commercial List) on June 20.  Sheryl E. Seigel, Esq. and Alex A.
Ilchenko, Esq. at Lang Michener LLP are their solicitors.  Alex F.
Morrison at Ernst & Young, Inc., has been appointed CCAA monitor
and Kevin J. Zych, Esq. at Bennett Jones LLP serves as his
solicitor.


PROGRESSIVE MOLDED: Court Orders Restraint to Canadian Employees
----------------------------------------------------------------
Progressive Moulded Products, Ltd., and its debtor-affiliates,
sought and obtained from the Honorable Madame Justice Frank of the
Ontario Superior Court of Justice (Commercial List), an order and
warrant restraining their employees, their agents, servants and
persons acting under their instructions from:

   (a) impeding, obstructing or delaying the access or egress of
       any person or vehicle, including cars, trucks, trailers or
       other vehicle of any kind at any entrance or exit from the
       premises, or in the vicinity of the premises, or
       interfering with vehicles on any public roadway attempting
       to gain access to, or egress from, the premises, by any
       means;

   (b) from trespassing onto, or causing damage to any of the
       premises or property of the Applicants or suppliers,
       customers, contractors or employees located at the
       premises;

   (c) from disturbing, interrupting or attempting to disturb or
       interrupt the applicant's lawful use and enjoyment of the
       premises and property;

   (d) from causing a nuisance within 500 meters of the premises;

   (e) from intimidating or unlawfully threatening the freedom of
       the Applicants, their employees, servants, agents,
       contractors and their customers, and the Monitor;

   (f) from wrongfully and without lawful authority inducing,
       counseling or procuring a breach or breaches of contracts
       and attempting to interfere with the performance of a
       contract or contracts between the applicants and other
       persons; and

   (g) from ordering, aiding abetting, counseling, procuring or
       encouraging in any matter whatsoever, either directly or
       indirectly, any persons to commit any prohibited acts
       aforementioned.

The Applicants or Debtors' facilities in Canada are located at:

    -- 21 Graniteridge Road, Vaughan, Ontario,
    -- 9010 Keele Street, Vaughan, Ontario,
    -- 9020 Keele Street, Vaughan, Ontario,
    -- 9024 Keele Street, Vaughan, Ontario,
    -- 9030 Keele Street, Vaughan, Ontario,
    -- 9040 Keele Street, Vaughan, Ontario,
    -- 3280 Langstaff Road, Vaughan, Ontario,
    -- 20 Vaughan Valley Blvd., Vaughan, Ontario,
    -- 370 Caldari Road, Vaughan, Ontario, and
    -- 61 Royal Group Crescent, Vaughan, Ontario.

The Ontario Court has directed York Regional Police, sheriffs or
any judicial officers to render all assistance which the
Applicants may request for the purpose of enforcing the order and
warrant.

At the Applicants' behest, the Ontario Court has also directed
the Sheriff of the Judicial District of York Region to enforce
its order by removing from the premises any person contravening
its provisions, subject to the discretion of the police acting
reasonably with respect to the timing and means.

                     About Progressive Molded

Ontario, Canada-based Progressive Molded Products Inc. -- designs
and manufactures component parts for General Motors Corp., Ford
Motor Company and Chrysler, LLC.  Its interior automotive
subsystems are used for the "Big Three" automakers' top-selling
platforms, including lightweight trucks, SUVs, mini-vans, cross-
over vehicles, and passenger cars.  

The company and three of its affiliates filed for creditor
protection under Chapter 11 of the U.S. Bankruptcy Code before the
United States Bankruptcy Court for the District of Delaware on
June 20, 2008 (Lead Case No. 08-11253).  Kelley A. Cornish, Esq.
and Brian S. Hermann, Esq. at Paul, Weiss, Rifkind Wharton &
Garrison LLP and Pauline K. Morgan, Esq., Joseph M. Barry, Esq.,
and Donald J. Bowman, Jr., Esq. at Young, Conaway, Stargatt &
Taylor represent the Debtors in their restructuring efforts.

The Progressive Molded Products entities also commenced parallel
restructuring proceedings under the Companies' Creditors
Arrangement Act before the Ontario Superior Court of Justice
(Commercial List) on June 20.  Sheryl E. Seigel, Esq. and Alex A.
Ilchenko, Esq. at Lang Michener LLP are their solicitors.  Alex F.
Morrison at Ernst & Young, Inc., has been appointed CCAA monitor
and Kevin J. Zych, Esq. at Bennett Jones LLP serves as his
solicitor.


QUALITY WAY: Case Summary & 20 Largest Unsecured Creditors
----------------------------------------------------------
Debtor: Quality Way Products, LLC
        Brian Mann, Jr.
        5346 Ray Rd.
        Linden, MI 48451

Bankruptcy Case No.: 08-32807

Type of Business: The Debtor is engaged in the manufacture of
                  support columns.  See  
                  http://www.qualitywayproducts.com/

Chapter 11 Petition Date: July 9, 2008

Court: Eastern District of Michigan (Flint)

Judge: Daniel S. Opperman.Flint

Debtor's Counsel: Keith A. Schofner, Esq.
                  Email: kaschofner@lambertleser.com
                  916 Washington Ave., Ste. 309
                  Bay City, MI 48708
                  Tel: (989) 893-3518
                  Fax: (989) 894-2232
                  http://lambertleser.com/

Total Assets:  $200,000

Total Debts: $1,100,000

A list of the Debtor's largest unsecured creditors is available
for free at http://bankrupt.com/misc/mieb08-32807.pdf


QUEBECOR WORLD: Judge Peck Modifies Management Incentive Plan
-------------------------------------------------------------
Judge James M. Peck of the U.S. Bankruptcy Court for the Southern
District of New York authorized Quebecor World Inc. and its
debtor-affiliates to implement and continue the Management
Incentive Compensation Plan and the Plant Based Incentive Plan.  

Judge Peck, however, modified the MICP to provide that:

   (a) With respect to the payment of 50% of the enhanced portion
       of the MICP for 2008 otherwise payable upon meeting the
       criteria provided in a report by Towers Perrin, which
       was filed under seal.  The amount will only be payable
       to the participants in the event that Quebecor World,
       Inc., files its annual financial report for the fiscal
       year ending Dec. 31, 2008, with the Canadian Securities
       Regulatory Authorities on March 31, 2009;

   (b) The 2009 EBITDA targets to be used to determine a
       participant's award under the 2009 MICP will remain
       subject to the review and approval of the Official
       Committee of Unsecured Creditors on July 31, 2008;
       provided, that, in the event, the Committee fails to
       approve the 2009 EBITDA targets before July 31, 2008,
       the targets will be determined by the Court upon
       subsequent request by the Debtors; and

   (c) With respect to the payment of the enhanced portion of the
       MICP for 2009 payable to the participants provided in the
       Towers Perrin Report, the payment will be made upon the
       later of (i) Sept 30, 2009, and (ii) the filing of the
       Debtors' plan of reorganization.

"This is an incentive plan construct that has historical
resonance in the company.  The people to be benefited have
expected this in pre-bankruptcy years and have even more of a
need to be ensured these incentives will be in place now,"  
Bloomberg News quoted Judge Peck as saying.  

Judge Peck, according to Bloomberg, determined that the payments
proposed by "wouldn't violate a 2005 change in the Bankruptcy
Code that was meant to discourage high bonuses to managers who
oversaw companies before they filed for bankruptcy."

The Debtors estimate that the MICP will cost between $14,000,000
and $41,900,000, and will benefit 250 employees.  The PBIP, on
the other hand, is estimated to cost $9,600,000, and will affect
340 participants.

The Honorable Justice Robert Mongeon of the Quebec Superior Court
of Justice, the judge overseeing Quebecor Worlds' reorganization
proceedings under the Canadian Companies' Creditors Arrangement
Act, also authorized the CCAA Applicants to implement and
continue the Incentive Plans.  Judge Mongeon rules that tax
authorities are not prevented from obtaining information
regarding the exact content of the Incentive Plans, the names of
the eligible employees, and the payment amount to be made to each
employee.

Ernst & Young, Inc., the Court-appointed monitor of the CCAA
Applicants' proceedings, told Judge Mongeon that it has reviewed
the details of the Incentive Plans and believes that the Plans
provide reasonable compensation in the Applicants' current
situation.  Accordingly, the Monitor said it supports the
Applicants' request to adopt the Incentive Plans.

                 Motion to Pay $203,403 in Bonuses

The Court previously authorized the Debtors to pay their
employees for wages and salaries they earned prepetition, and
honor other prepetition employee-related obligation, which does
not exceed $10,950 per employee.

The Debtors have determined that they owe 23 employees bonuses
aggregating $203,403, pursuant to the terms and conditions of
each of the employees' prepetition employment contracts.  Thee
payments are owed to the employees as prepetition signing bonuses
offered to certain new hires or to employees asked to relocate,
Michael J. Canning, Esq., at Arnold & Porter LLP, New York,
relates.

Accordingly, the Debtors seek the Court's authority to pay the
bonuses.

Mr. Canning says the Debtors need to pay the bonuses to minimize
the personal hardship that the affected employees will suffer if
they are not paid when due, and to maintain the morale of the
Debtors' workforce by adhering to the payment terms provided for
under employment contracts entered into prepetition with the
affected employees.

                       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 Debtors have 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. 20; Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000)


QUEBECOR WORLD: Wants Five More KPMG Retention Letters Approved
---------------------------------------------------------------
Quebecor World Inc. and its debtor-affiliates notified the U.S.
Bankruptcy Court for the Southern District of New York that they
have recently entered into five additional engagement letters with
KPMG LLP (U.S.).  The Debtors sought the Court's approval of the
additional engagement letters, nunc pro tunc to May 22, 2008.

The letters contemplate that, in addition to the tax compliance
and consulting services, KPMG US will also provide these services:

   (a) preparation of a tax opinion letter concerning the
       deductibility of interest on outstanding indebtedness for
       U.S. federal income tax purposes taking into account
       certain refinancing and recapitalization transactions in
       2007;

   (b) preparation of a tax opinion letter concerning the U.S.
       federal income tax implications with respect to a cross
       border leasing arrangement;

   (c) preparation of a tax opinion letter with respect to the
       2007 reorganization of the Debtors' "reverse hybrid"
       financing structure;

   (d) providing tax advice with respect to the U.S. federal
       income tax consequences of alternative potential
       reorganizations of the Debtors' Mexican affiliates; and

   (e) providing tax consulting services with respect to the U.S.
       federal income tax consequences of the Debtors'
       restructuring of a portion of their debts.

The Debtors will pay KPMG US based on these hourly rates:

      Washington National Tax Partner             $730
      International Corporate Services Partner    $715
      ICS Tax Managing Director                   $670
      WNT Senior Manager                          $655
      ICS Senior Manager                          $610
      ICS Manager                                 $490
      ICS Senior Associate                        $325
      ICS Associate                               $245
      ICS Intern                                  $145

Michael Lawler, a partner at KPMG (US), maintained that his firm
is a "disinterested person" as the term is defined in Section
101(14) of the Bankruptcy Code, and that it does not represent
any interest adverse to the Debtors or their estates.

                       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 Debtors have 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. 20; Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000)


QUEBECOR WORLD: Printing Agreement with Dex Extended to 2015
------------------------------------------------------------
Quebecor World Inc. signed an extended and expanded multi-year
agreement with Dex Media Inc.  Under this expanded agreement
Quebecor World will extend by one year to 2015 its existing
directory printing agreement covering Dex directories in
fourteen Western and Central states.

In addition, the contract expands the products to be manufactured
by Quebecor World for Dex Media.  These value added products offer
advertisers creative, nontraditional ways of addressing the end
consumer.  Incremental sales are forecast at more than $25 million
over the term of the agreement.  Quebecor World will supply Dex
Media from its Loveland, CO. plant and from its network of North
American directory facilities.

"Dex Media is one of America's leading directory publishers," said
Jacques Mallette, President and CEO Quebecor World.  "Quebecor
World is pleased to expand our relationship with them."

Kevin J. Clarke, President of Quebecor World's Publishing Services
Group commented, "Dex Media and Quebecor World have worked
together successfully for many years.  This agreement to produce
more of their valued added products is a true win-win opportunity.  
We are delighted to work together to support such new innovation
in the directory marketplace."

           Assumption of Amended Printing Deal with Dex

As reported in The Troubled Company Reporter on July 2, 2008, the
Debtors obtained permission from the U.S. Bankruptcy Court for the
Southern District of New York to amend and assume an agreement it
entered with Dex Media Inc.

The TCR on June 24, 2008, said that Debtor Quebecor World (USA)
Inc., and Dex Media are parties to a master agreement for printing
services, dated March 31, 2005.  The printing agreement provides
for QWUSA to print telephone directories for Dex through Dec. 31,
2014.  Sales volume of the printing agreement was estimated at
about $200,000,000, Michael J. Canning, Esq., at Arnold & Porter
LLP, in New York, related.

                       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 Debtors have 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. 20; Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000)


QUEBECOR WORLD: Receives Conversion Notices for Series 5 Shares
---------------------------------------------------------------
Quebecor World Inc. received notices in respect of 744,124 of its
remaining 2,507,153 issued and outstanding Series 5 Cumulative
Redeemable First Preferred Shares (TSX: IQW.PR.C) requesting
conversion into the company's Subordinate Voting Shares (TSX:
IQW).

In accordance with the provisions governing the Series 5 Preferred
Shares, registered holders of the shares are entitled to convert
all or any number of their Series 5 Preferred Shares into a number
of Subordinate Voting Shares effective as of Sept. 1, 2008,
provided the holders gave notice of their intention to convert at
least 65 days prior to the Conversion Date.  The Series 5
Preferred Shares are convertible into that number of the company's
Subordinate Voting Shares determined by dividing C$25.00 together
with all accrued and unpaid dividends on the shares up to Aug. 31,
2008 by the greater of (i) C$2.00 and (ii) 95% of the weighted
average trading price of the Series 5 Preferred Shares on the
Toronto Stock Exchange during the period of 20 trading days ending
on Aug. 28, 2008.

The next conversion date on which registered holders of the
Series 5 Preferred Shares will be entitled to convert all or any
number of such shares into Subordinate Voting Shares is Dec. 1,
2008, and notices of conversion in respect thereof must be
deposited with the company's transfer agent, Computershare
Investor Services Inc., on or before Sept. 26, 2008.

                       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 Debtors have 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. 20; Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000)


RELIANT ENERGY: Has Until August 19 to File Chapter 11 Plan
-----------------------------------------------------------
The United States Bankruptcy Court for the District of Delaware
extended the exclusive periods of Reliant Energy Channelview LP
and its debtor-affiliates to:

   a) file a Chapter 11 plan until Aug. 19, 2008, and

   b) solicit acceptances of that plan until Oct. 20, 2008.

Global Infrastructure Partners and FORTISTAR have completed the
purchase of the Channelview cogeneration facility, a 830-megawatt
natural gas-fired power plant located in Texas, from affiliates of
the Debtors for $500 million plus certain adjustments.

Kelson Energy Inc. offered $468 million for the power plant, which
was expected to pay all creditors 100%, leaving some for the
owners, as reported in the Troubled Company Reporter on March 26,
2008.

The requested extension of time will allow the Debtors to complete
the consummation of sale of substantially all of their assets.  
The sale is expected to provide sufficient funds to pay all of
their creditors in full and significant recovery for equity.

After the closing of the sale, the Debtor will negotiate and
formulate a consensual Chapter 11 plan.

                    About Reliant Energy

Based in Houston, Reliant Energy Channelview L.P. owns a power
plant located near Houston, and is an indirect wholly owned
subsidiary of Reliant Energy Inc. -- http://www.reliant.com/--
The company and its three affiliates, Reliant Energy Channelview
(Texas) LLC, Reliant Energy Channelview (Delaware) LLC, and
Reliant Energy Services Channelview LLC filed for chapter 11
protection on Aug. 20, 2007 (Bankr. D. Del. Lead Case No.
07-11160).  Jason M. Madron, Esq., Lee E. Kaufman, Esq., Mark D.
Collins, Esq., Paul Noble Heath, Esq., Richards, Robert J. Stearn
Jr., Esq., at Layton & Finger P.A., and Timothy P. Cairns,
Pachulski Stang Ziehl & Jones represent the Debtors.  The U.S.
Trustee for Region 3 appointed an Official Committee of Unsecured
Creditors in these cases.  David B. Stratton, Esq., and Evelyn J.
Meltzer, Esq., at Pepper Hamiltion LLP, represent the Committee.  
When the Debtors filed for protection from their creditors,
they listed total assets of $362,000,000 and total debts of
$342,000,000.

                            *     *     *

AS reported in the Troubled Company Reporter on June 5, 2008,
Standard & Poor's Ratings Services raised the corporate credit
rating of Reliant Energy Inc., and its subsidiaries Orion Power
Holdings Inc. and Reliant Energy Mid-Atlantic Power Holdings LLC
to 'BB-' from 'B'.  S&P also raised the rating on Reliant's
secured debt facilities, consisting of the $500 million secured
revolver, $250 million synthetic LOC facility, and $667 million
outstanding senior secured notes, to 'BB+' from 'BB-' and affirmed
the recovery rating on these facilities at '1', indicating a very
high expectation (90% to 100%) for recovery of principal in a
payment default scenario.


REPUBLIC AIRWAYS: To Slash 500 Jobs Due to Contract Reductions
--------------------------------------------------------------
Republic Airways Holdings said it plans to reduce its workforce by
approximately 500 employees or 10% of its total number of
employees.  This action is in response to changing market
conditions and expected reductions in its small jet contract
flying.

The staff reductions will take place over the next several months.
The company believes a portion of the reduction will occur through
normal attrition.

"These reductions reflect our response to the actions our network
partners are taking to reduce the size of their domestic hub
operations in light of sustained, high fuel prices," Bryan
Bedford, chairman, president and CEO of Republic Airways, said.

"The combined impacts of fewer aircraft flying and lower
utilization rates on our smaller jet aircraft are leaving us with
no choice but to adjust our business to current market
conditions," Mr. Bedford added.  "We regret having to make this
difficult decision and we will continue working hard to grow our
business with larger capacity aircraft and get our people back to
work as soon as possible."

The Wall Street Journal said that United Air Lines Inc.'s decision
to end an agreement with them has resulted to the determination of
Republic's Chautauqua Airlines Inc. unit to remove seven aircraft
by December 2009.

WSJ added that Frontier Airlines Inc. has also initiated to scrap
its code-sharing agreement with Republic since Frontier bankruptcy
filing in April.

Its shares fell 1.8% in after-hours trading, they fell 3.8% to
close at $7.78 on July 11, WSJ indicated.

                  About Republic Airways Holdings

Based in Indianapolis, Indiana, Republic Airways Holdings (NASDAQ:
RJET) -- http://www.republicairways.com/-- is an airline holding  
company that owns Chautauqua Airlines, Republic Airlines and
Shuttle America.  The airlines offer scheduled passenger service
on approximately 1,300 flights daily to 117 cities in 34 states,
Canada, Mexico and Jamaica through airline services agreements
with six U.S. airlines.  All of the airlines' flights are operated
under their airline partner brand, such as AmericanConnection,
Continental Express, Delta Connection, United Express and US
Airways Express.  The airlines currently employ approximately
5,000 aviation professionals and operate 227 regional jets.


ROPER INDUSTRIES: S&P Lifts $500MM Shelf Rating to BBB- from BB+
----------------------------------------------------------------
Standard & Poor's Ratings Services raised its preliminary senior
unsecured rating on Roper Industries Inc.'s (BBB-/Stable/--)
$500 million shelf filed under SEC rule 415 on Oct. 24, 2004, to
'BBB-' from 'BB+'.
      
"The action follows Roper's closing on a $1.1 billion unsecured
credit facility, consisting of a 2-year $350 million term loan and
a five-year $750 million revolving credit facility, which replaced
the company's existing secured credit facility that was due in
2009," said Standard & Poor's credit analyst John Sico.  The
senior unsecured preliminary ratings had been subordinated to the
company's secured credit facility.  S&P have withdrawn the ratings
on the secured credit facility because it has been retired.
     
The ratings on Roper Industries Inc., a diversified manufacturer
of industrial products, reflect the company's satisfactory
business profile, which is marked by leading positions in
profitable niche markets, and by its broad product, end-market,
and geographic diversity.  However, the company is acquisitive,
which exposes it to integration risk.

Ratings List

Roper Industries Inc.
  Corporate Credit Rating         BBB-/Stable/--

Ratings Withdrawn
                                  To             From
                                  --             ----
Roper Industries Inc.
  $955 Mil. Term Ln
      Bank Ln Due 2009            NR             BBB-
  $400 Mil. Revolv. Credit
      Fac Bank Ln Due 2009        NR             BBB-

Ratings Raised
  $500 Mil. Sr Unsecd Shelf     BBB- (prelim)   BB+ (prelim)


SENSATA TECHNOLOGIES: Moody's Cuts Ratings, Junks Senior Notes
--------------------------------------------------------------
Moody's Investors Service lowered the ratings of Sensata
Technologies B.V. corporate family rating to B3 from B2;
probability of default to B3 from B2; senior secured credit
facility to B1 from Ba3; senior unsecured notes to Caa1 from B3;
and senior subordinated notes to Caa2 from Caa1.

These rating actions reflect the company's sustained high leverage
levels and modest debt service metrics, and the potential for
weaker economic trends to further pressure the company's operating
performance over the coming year.  The company's speculative grade
liquidity rating remains at SGL-2.  The outlook is changed to
stable from negative.

The downgrade of the company's corporate family rating to B3 from
B2 reflects the lack of deleveraging as the company continues to
face challenging economic environments.  Key leverage metrics
through the 12 months of March 31, 2008 were: debt/EBITDA near
9.0x times and EBITA/interest of 1.2 times.  The high leverage
results from the initial acquisition of Sensata by Bain Capital,
LLC in April 2006 augmented by a series of debt-financed
acquisitions since then.  

Moody's had expected some level of debt repayment beyond mandatory
term loan amortization, which would have partially offset some of
the negative impact from foreign exchange translation on the
company's euro-denominated debt.  The strong euro relative to the
U.S. dollar is resulting in higher debt balances on Sensata's
consolidated balance sheet adding to the high leverage.

This leveraged capital structure could hinder the company's
financial flexibility as some of the company's end markets face    
increasing economic pressures.

Additionally, the slowing U.S. economy is negatively impacting the
domestic housing market, a key source of revenue for its controls
business.  While a significant portion of Sensata's business is
derived from sensors used on automobiles, the company is less
affected by declining auto sales than traditional auto parts
suppliers because of the increasing content of electronics on
vehicles.

These weaknesses are balanced against the company's good
liquidity, global presence, and growing exposure to several other
end markets including aerospace and telecommunications.

The stable outlook reflects Sensata's good liquidity and ability
to generate free cash flow as it faces a slowing U.S. economy,
which is negatively impacting some of its key end markets.

These ratings/assessments were affected by this action:

  -- Corporate family rating lowered to B3 from B2;
  -- Probability of default rating lowered to B3 from B2;

  -- Senior secured credit facility downgraded to B1 (LGD2, 28%)
     from Ba3 (LGD2, 29%);

  -- $450 million senior unsecured notes due 2014 downgraded to    
     Caa1 (LGD5, 73%) from B3 (LGD5, 75%); and,

  -- EUR245 million senior subordinate notes due 2016 downgraded
     to Caa2 (LGD6, 90%) from Caa1 (LGD6, 91%).

  -- The company's speculative grade liquidity rating of SGL-2 is
     unchanged.

Headquartered in Attleboro, Massachusetts and incorporated under
the laws of The Netherlands, Sensata Technologies B.V. designs and
manufactures sensors and electronic controls.  Sensata is a global
designer, manufacturer, and marketer of customized and engineered
sensors and control products.  Revenues for the 12 months ended
March 31, 2008 totaled about $1.5 billion.


SINGLETON COLES: Case Summary & 20 Largest Unsecured Creditors
--------------------------------------------------------------
Debtors: Singleton Curtis Coles
         Kymberle Rochelle Coles
         aka Kymberle Rochelle Kolen-Coles
         aka Kym Rochelle Kolen-Coles
         13403 Marburg Lane
         Upper Marlboro, MD 20772

Bankruptcy Case No.: 08-18925

Chapter 11 Petition Date: July 9, 2008

Court: District of Maryland (Greenbelt)

Judge: Thomas J. Catliota

Debtors' Counsel: Brett Weiss, Esq.
                  Email: Brett@BankruptcyLawMaryland.com
                  Brett Weiss P.C.
                  18200 Littlebrooke Drive
                  Olney, MD 20832
                  Tel: (301) 924-4400
                  Fax: (301) 570-3025
                  http://www.bankruptcylawmaryland.com/

Total Assets: $1,055,501

Total Debts:  $1,609,197

A copy of Singleton Curtis Coles and Kymberle Rochelle Coles'
petition with a list of its largest unsecured creditors is
available for free at:

      http://bankrupt.com/misc/mdb08-18925.pdf


SLATE CDO: Portfolio Credit Quality Slide Cues Fitch's Neg. Watch
-----------------------------------------------------------------
Fitch Ratings has placed these classes of Slate CDO 2007-1,
Ltd./LLC on Rating Watch Negative:

  -- $27,800,000 class A3 secured deferrable interest floating-
     rate notes 'A';

  -- $18,000,000 class B1 secured deferrable interest floating-
     rate notes 'BBB';

  -- $13,500,000 class B2 secured deferrable interest floating-
     rate notes 'BBB-';

  -- $11,200,000 class B3 secured deferrable interest floating-
     rate notes 'BB+';

  -- $5,300,000 class C mezzanine deferrable interest floating-
     rate notes 'BB'.

The placement of the classes on Rating Watch Negative reflects the
decline in the portfolio credit quality resulting from Fitch's
downgrades of 11 tranches from seven CMBS B-Piece
Resecuritizations (13.6% of the collateral pool).

Slate CDO 2007-1 represents a hybrid collateralized debt
obligation transaction that combines the use of synthetic and cash
assets, as well as unfunded and funded liabilities.  Slate CDO
2007-1 has a $270 million initially unfunded super-senior
liquidity facility, and has issued approximately $330 million of
funded notes and funded preference shares and has invested in a
$600 million portfolio of combined synthetic and cash securities.  
The portfolio consists of 55% credit default swaps, primarily
referencing commercial mortgage-backed securities and CMBS B-Piece
Resecuritizations, as well as 45% cash CMBS, commercial real
estate CDO cash securities, and cash CMBS B-Piece
Resecuritizations.  The collateral was selected and is monitored
by Petra Capital Management LLC.

The initial ratings were based on the quality of the portfolio
assets which had a maximum Fitch weighted average rating of
'BBB/BBB-', the credit enhancement provided by support from the
preference shares, the excess spread, the reserve account, and the
protection incorporated within the structure.  After accounting
for the downgrades to approximately 13.6% of the collateral, which
are CMBS B-Piece Resecuritizations, the asset quality of the
portfolio is now 'BBB-/BB+' and no longer supports the ratings for
the classes placed on Rating Watch Negative.

The ratings of the class A-1SA, A-1SB (together the class A-1S
notes), A-1J, and class A-2 notes address the likelihood that
investors will receive full and timely payments of interest, as
well as the stated balance of principal, by the stated maturity
date pursuant to the governing documents.  The ratings of the
class A3, B1, B2, B3, and C1 notes address the likelihood that
investors will receive ultimate interest payments, as well as the
stated balance of principal, by the stated maturity date in
accordance with the governing documents.

Fitch is reviewing its Structured Finance CDO approach and will
comment separately on any changes and potential rating impact at a
later date.  The resolution of this Rating Watch Negative action
will reflect the current portfolio as well as the structural
features of the transactions and will follow the release of
Fitch's revised SF CDO rating criteria.


SPECTRUM BRANDS: Bares Supplemental Info on Pet Biz Sold to Salton
------------------------------------------------------------------
In connection with the sale of its global pet business to Salton
Inc., Spectrum Brands Inc. is disclosing certain information
concerning the pet business.  

As disclosed in the Troubled Company Reporter on May 22, 2008,
Spectrum Brands signed a definitive agreement with Salton and
its subsidiary, Applica Pet Products LLC, for the sale of its
global pet business for $692.5 million in cash and an aggregate
principal amount of the company's subordinated debt securities
equal to $222.5 million less an amount equal to accrued and unpaid
interest on such subordinated debt securities since the dates of
the last interest payments thereon, which, depending on when the
closing occurs, could be an amount of up to approximately
$6.5 million.

A full-text copy of the Supplemental Regulation FD Disclosure of
Spectrum Brands, Inc., dated July 1, 2008, is available for free
at http://ResearchArchives.com/t/s?2f61

The Troubled Company Reporter reported on July 1, 2008, that
Spectrum Brands has not been successful in its attempt to secure
the consent of its senior lenders necessary to complete the sale
of its pet supply business.

The company continues to believe that the sale of its global pet
business to Salton Inc. and its subsidiary, Applica Pet, upon the
negotiated terms is in the best interests of the company and its
shareholders, well as its other constituencies.  

The definitive purchase agreement continues in full force and
effect, and the company intends to comply with its obligations
thereunder in order to satisfy the conditions necessary to
consummate the sale of its global pet supply business.

                       About Salton Inc.

Headquartered in Lake Forest, Illinois, Salton Inc. (NYSE:SFP) --
http://www.saltoninc.com/-- designs, markets and distributes      
branded, high-quality small appliances, home decor and personal
care products.  Its product mix includes a range of small kitchen
and home appliances, electronics for the home, time products,
lighting products, picture frames and personal care and wellness
products.

                      About Spectrum Brands

Headquartered in Atlanta, Georgia, Spectrum Brands Inc. (NYSE:
SPC) -- http://www.spectrumbrands.com/-- is a supplier of        
consumer batteries, lawn and garden care products, specialty pet
supplies, shaving and grooming products, household insect control
products, personal care products and portable lighting.

                       *     *     *

As disclosed in the Troubled Company Reporter on May 26, 2008,
Moody's Investors Service placed the Caa1 corporate family rating
and Caa1 probability of default rating of Spectrum Brands under
review following the announcement that Spectrum has entered into a
definitive agreement to sell its Global Pet business to Applica
Pet Products, a subsidiary of Salton, Inc., for over $900 million.

As reported in the TCR on May 23, 2008, following the announcement
that Spectrum Brands has signed a definitive agreement with
Salton, Inc. for the sale of its Global Pet Business for
approximately $692.5 million in cash and an aggregate principal
amount of Spectrum's subordinated debt securities equal to
$222.5 million, Fitch affirms Spectrum Brands, Inc. ratings as
Issuer Default Rating at 'CCC'; $1 billion term loan B at 'B/RR1';
$225 million ABL at 'B/RR1'; EUR350 million term loan at 'B/RR1';
$700 million 7.4% senior sub note at 'CCC-/RR5'; $2.9 million 8.5%
senior sub note at 'CCC-/RR5'; and $347 million 11.25% variable
rate toggle senior sub note at 'CCC-/RR5'.  The Rating Outlook is
Negative.

Standard & Poor's Ratings Services placed its ratings on Atlanta-
based Spectrum Brands Inc., including the 'CCC+' long-term
corporate credit rating, on CreditWatch with positive
implications.  The CreditWatch status indicates that S&P could
either raise or affirm the ratings following the completion of its
review.  Approximately $2.6 billion of debt was outstanding as of
March 30, 2008.


THORNBURG MORTGAGE: Parties Approve Changes to Financing Terms
--------------------------------------------------------------
Thornburg Mortgage Inc. disclosed that a majority of the
participants in the principal participation agreement component of
company's financing transaction approved an amendment to change
the requirement that the tender offer for the preferred stock
result in the tender of at least 90% of the aggregate liquidation
preference of the company's outstanding preferred stock.

On July 1, 2008, Thornburg Mortgage disclosed that a majority of
the participants in the company's principal participation
agreement approved an extension of the deadline to complete the
preferred stock tender offer to Sept. 30, 2008.

In addition, holders of approximately 93% of the contributions to
the Escrow Agreement established to partially satisfy the cash
consideration for the tender offer agreed to retain their funds in
escrow until the extended deadline.

In addition, the principal participation agreement, the purchase
agreement and the Escrow Agreement the company entered into in
connection with the March 31, 2008, financing transaction were
amended to reflect the extension of the deadline by which the
company must successfully complete the tender offer.

To complete the tender offer, the company must instead complete a
tender of at least 66-2/3% of the aggregate liquidation preference
of each series of its outstanding preferred stock.

Under the terms of the tender offer, for each share of Thornburg
Mortgage Series C, D, E and F Preferred Stock that is validly
tendered and accepted upon expiration of the tender offer, the
holder will receive $5.00 in cash and approximately 3.5 shares of
common stock.

Upon the completion of the tender offer, the annual interest rate
on the company's Senior Subordinated Secured Notes due 2015 will
be lowered from 18% to 12%, resulting in savings of approximately
$69 million per year in interest payments until maturity or until
the company's senior subordinated secured notes are earlier
redeemed or repurchased.

Additionally, the completion of the tender offer will result in
the termination of the Principal Participation Agreement, thereby
allowing the company to retain the monthly principal payments on
the mortgage backed securities collateralizing its reverse
repurchase agreement borrowings once the Override Agreement
terminates in March 2009, after deducting payments due under those
reverse repurchase agreements.

                  About Thornburg Mortgage Inc.

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 June 27, 2008,
Moody's Investors Service affirmed Ca and C senior debt and
preferred stock ratings, respectively of Thornburg Mortgage Inc.
Thornburg's Ca debt rating remains under review for possible
downgrade.

Moody's said that Thornburg's efforts to raise capital to avoid
default under its repo agreements have resulted in the
reconfiguration of its balance sheet with adverse impact on its
debt and preferred equity holders.


TRIBUNE CO: DBRS Confirms 'B(low)' Issuer Rating
------------------------------------------------
DBRS has confirmed the Issuer Rating of Tribune Company's at
B(low).  Additionally, DBRS has assigned recovery ratings to
Tribunes specific debt securities and adjusted some of its
instrument ratings.  The trends on the Issuer Rating and
instrument ratings are now Negative.  These recovery ratings and
the resulting instrument ratings are based on DBRSs new Leveraged
Finance Rating Methodology.

The rating action follows DBRSs initial rating action on January
10, 2008 that coincided with Tribunes announcement in late
December 2007 that it had closed its privatization to its employee
stock option program and Sam Zell.  The privatization valued
Tribunes equity at $8.5 billion, for a total enterprise value of
approximately $13.2 billion.

DBRS notes that Tribunes Issuer Rating of B(low) is based on a
highly leveraged newspaper and broadcasting company that has
experienced both structural and cyclical pressure in its newspaper
operations in recent years.  The Negative trend reflects a
continued weakening in its publishing operations, liquidity
concerns including a sizable maturity profile over the next three
years and some uncertainty on the timing of its asset sales.

>From a business-risk perspective, DBRS notes that Tribune
continues to experience pressure in its Publishing operations, as
a sharp decline in advertising lineage and pricing and ongoing
circulation erosion continues to more than offset its cost-cutting
initiatives.  This has caused further EBITDA pressure in the
latest 12 month period, to below $1.1 billion.

Under new management, DBRS notes that Tribune in attempting to
manage its segments despite some cyclical and structural
pressures.  In Publishing, the Company is transforming the way it
sells advertising and has focused on reducing both its content
creation and production costs.  In Broadcasting & Entertainment,
the company's new management is attempting to drive advertising
revenue growth while minimizing the increases in content costs.
DBRS expects current trends to continue in Publishing (66% of
total EBITDA) while its Broadcast/Entertainment segment should
remain relatively stable with election and Olympic advertising
benefits in 2008 likely offsetting advertising pressure due to the
weakened U.S. economy.

DBRS notes that leverage at Tribune is high at 11.13 times net
debt-to-EBITDA at March 31, 2008. Furthermore, DBRS notes that the
Company has $2.4 billion in debt that matures during the next
three years (with $1 billion maturing in 2008) and will need to
cut its capex levels in 2008 in order to be free cash flow
breakeven.  While the Company has announced a sale of its Newsday
publication, which will generate $612 million of proceeds, the
timing of its other planned asset sales is uncertain.  DBRS has
estimated that the company could generate $1.3 billion in proceeds
in 2008 from the sale of Newsday, the Chicago Cubs and its 25%
stake in Comcast SportsNet should these transactions close in a
timely fashion. (The Company is also likely to consider other
asset sales and has announced it is in the process of establishing
an asset-based commercial paper program for around $250 million
that will help with liquidity.)

While these sales would help to resolve its near-term debt
maturities, the loss in EBITDA and pressure on its remaining
operations is expected to mitigate significant improvement in its
key credit metrics in 2008 and 2009.

DBRS has assigned Tribunes Secured Bank Debt a Recovery Rating of
RR2 and an instrument rating of B(high), which is two notches
above Tribunes B(low) Issuer Rating.  This reflects the
substantial recovery prospects as a result of (1) overall asset
coverage of roughly 79% under a stressed default scenario; (2) a
senior guarantee and a pledge of the Companys operating assets and
(3) secured leverage of 8.30 times gross debt to EBITDA at March
31, 2008 versus total gross debt to EBITDA of 11.35 times.

DBRS notes that while the next three levels of debt may rank
differently from a legal perspective in terms of their position in
a bankruptcy, DBRSs analysis suggests that even in an optimistic
default scenario, all three of the levels would expect to receive
negligible repayment, if any.

The Unsecured Bridge/Notes, while not secured, benefit from a
subordinated guarantee from the operating subsidiaries and have
been assigned a Recovery Rating of RR6.  This is given the fact
that under a stressed default scenario, this debt would expect
poor recovery prospects with all of the value pledged to the
Secured Bank Debt.  As a result, the instrument rating on this
debt is CCC, two notches below the Issuer Rating.

DBRS has assigned a Recovery Rating of RR6 to Tribunes MTNs and
Debentures (roughly $1.4 billion) given their poor prospects for
recovery.  While this debt is secured by a pledge of the shares of
the operating companies of Tribune, this debt does not benefit
from a guarantee from these subsidiaries and therefore ranks
behind more than $10.5 billion of secured and guaranteed debt.  As
such, this debt has been assigned an instrument rating of CCC, two
notches below the Issuer Rating.

Finally, DBRS has assigned a recovery rating of RR6 to Tribunes
subordinated debt instruments (PHONES) as these would only be
entitled to receive a distribution of assets under a restructuring
once payments owed to senior debtors are paid in full.  As such,
DBRS has assigned an instrument rating of CCC to these securities,
two notches below the Issuer Rating.


VESTA INSURANCE: Gaines Trustee Allowed to Transfer Claim Records
-----------------------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of Alabama
granted Kevin O'Halloran, in his capacity as Plan Trustee for J.
Gordon Gaines, Inc.'s Plan of Liquidation, the authority to
transfer records of three pending claims against Gaines to Vesta
Insurance Group, Inc.:

   Claimant                         Claim No.   Claim Amount
   --------                         ---------   ------------
   Crowe Chizek and Company LLC       160           $289,342
   Madison Stearns, Inc.               30             82,807
   EMB America, LLC                    20             46,005

The proposed Claim Transfers, according to Mr. O'Halloran, are
without prejudice to the rights of Lloyd Whitaker, the Plan
Trustee for Vesta, to object to the Claims on grounds other than
the Claims (i) being untimely filed in Vesta's bankruptcy case,
or (ii) are rightfully claims against Gaines rather than Vesta.

Mr. O'Halloran says Madison Stearns' and Crowe Chizek's Claims
were withdrawn from Gaines' bankruptcy case in February 2008;
while EMB America agreed to withdraw its Claim, pursuant to an
agreement with the Gaines Plan Trustee.

Mr. O'Halloran disclosed that the Claimholders have agreed:

   (a) to the proposed Claim Transfers without prejudice to the
       rights of Mr. Whitaker to object to the claims on grounds
       other than certain excluded defenses; and

   (b) that they have no claims in the Gaines Case.

The Claims need only be reflected as of record as pending claims
in Vesta's bankruptcy case, Mr. O'Halloran said.

               About Vesta Insurance

Headquartered in Birmingham, Alabama, Vesta Insurance Group, Inc.
(Other OTC: VTAI.PK) -- http://www.vesta.com/-- is a holding
company for a group of insurance companies that primarily offer
property insurance in targeted states.

Wyatt R. Haskell, Luther S. Pate, UV, and Costa Brava Partnership
III, L.P., filed an involuntary chapter 7 petition against the
company on July 18, 2006 (Bankr. N.D. Ala. Case No. 06-02517).
The case was converted to a voluntary chapter 11 case on Aug. 8,
2006 (Bankr. N.D. Ala. Case No. 06-02517).  Eric W. Anderson,
Esq., at Parker Hudson Rainer & Dobbs, LLP, represents the Debtor.
R. Scott Williams, Esq., at Haskell Slaughter Young & Rediker,
LLC, represents the petitioning creditors.  In its schedules of
assets and liabilities, Vesta listed $14,919,938 in total assets
and $214,278,847 in total liabilities.

J. Gordon Gaines Inc. is a Vesta Insurance-owned unit that
manages the company's numerous insurance subsidiaries and employs
the headquarters workers.  The company filed for chapter 11
protection on Aug. 7, 2006 (Bankr. N.D. Ala. Case No. 06-02808).
Eric W. Anderson, Esq., at Parker Hudson Rainer & Dobbs, LLP,
represent the Debtor in its restructuring efforts.   In its
schedules of assets and liabilities, Gaines listed $19,818,094 in
total assets and $16,046,237 in total liabilities.

On Aug. 1, 2006, the District Court of Travis County, Texas
entered an order appointing the Texas Commissioner of Insurance
as Liquidator of Vesta Insurance's Texas-domiciled subsidiaries:
Vesta Fire Insurance Corporation; The Shelby Insurance Company;
Shelby Casualty Insurance Corporation; Texas Select Lloyds
Insurance Company; and Select Insurance Services, Inc.

Florida Select Insurance Agency Inc., an affiliate, filed for
chapter 11 protection on April 24, 2007 (Bankr. N.D. Ala. Case No.
07-01849).  Rufus Dorsey, IV, Esq., at Parker Hudson Rainer &
Dobbs LLP, represents Florida Select.  The Court confirmed FSIA's
plan on March 24, 2008.  (Vesta Bankruptcy News, Issue No. 38;
Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000)      


VIASYSTEMS INC: Stable Operating Trends Cue S&P's Positive Outlook
------------------------------------------------------------------
Standard & Poor's Ratings Services revised its outlook on St.
Louis-based Viasystems Inc. to positive from stable.  The
corporate credit rating and the issue-level rating on Viasystems'
subordinated notes were affirmed at 'B+'.
     
"The outlook revision follows a period of stable operating trends
and low leverage for the rating, combined with the resumption of
moderate growth in the business," said Standard & Poor's credit
analyst Lucy Patricola.
     
The rating on Viasystems reflects the company's position in the
highly fragmented and competitive printed circuit board
manufacturing market, volatile end markets, and negative
discretionary cash flows resulting from expanded capital spending.  
These partly are offset by the company's low-cost manufacturing
locations, its leading original equipment manufacturer customer
base across a number of end markets, and leverage that is low for
the rating.  Viasystems manufactures PCBs, and, to a lesser
extent, is an electronics manufacturing services provider.  
Trailing 12-month sales were $735 million as of March 31, 2008;
$200 million of rated debt is outstanding.
     
Viasystems provides complex, multi-layered boards in low-cost
geographies.  Still, the majority of Asian-based demand is for
lower-technology boards.  The company has achieved some diversity
in end markets with automotive representing 38% of sales.  
Telecommunications and computer markets also account for about 38%
of sales with the balance sold into emerging PCB markets of
Industrial, Instrumentation, Medical, and Consumer.  Still, many
of these markets are subject to cyclicality.  Standard & Poor's
believes customer concentration remains a concern, with the top
three customers accounting for 43% of revenues as of Dec. 31,
2007.


VICTORY MEMORIAL: Judge Craig Approves Disclosure Statement
-----------------------------------------------------------
The Hon. Carla A. Craig of the United States Bankruptcy Court for
the Eastern District of New York approved a disclosure statement
explaining a Chapter 11 plan of reorganization filed by Victory
Memorial Hospital and its debtor-affiliates on May 15, 2008.  She
held that the disclosure statement contains adequate information
within the meaning of Section 1125 of the Bankruptcy Code.

Judge Craig will convene a hearing on Aug. 14, 2008, at 3:00 p.m.,
Eastern Time, to consider confirmation of the Debtors' Chapter 11
plan.  The hearing will take place at 271 Cadman Plaza East in
Brooklyn, New York.  Objections, if any, are due Aug. 8, 2008.

The Court also approved the procedures the Debtors proposed
for the solicitation and tabulation of plan votes.  Deadline for
voting on the plan is Aug. 8, 2008, at 5:00 p.m., Eastern Time.

                       Overview of the Plan

The Plan contemplates the liquidation of substantial assets of the
Debtors and the payment in full of all allowed secured claims and
allowed unsecured priority claims.

On the Plan's effective date, the Debtors will assign all account
receivable valued at $9.5 million to the liquidating trust.  The
proceeds of the accounts receivables will be available for the
liquidating trust for distribution under the
Plan.                             

The Plan enables the Debtors to pursue avoidance and other actions
in an aggregate amount of at least $14 million.  Accordingly, the
Debtors will assign to the liquidating trust the exclusive right
to commence and to continue the prosecution of all pending
avoidance and other actions.

                            Asset Sale

The Debtors agree to sell the main campus and acquired business,
which consists of their skilled nursing facility and long-term
home health program, to Dervaal LLC for $44.9 million.  The
proceeds of the sale will be used to pay the allowed Dormitory
Authority of the State of New York (DASNY) Bond claim at closing
of the sale, which is expected to occur by Sept. 30, 2008.  The
remaining balance of the proceeds will be transferred to the
liquidating trust.

On June 4, 2008, Dervaal assigned all interests and rights to
Sunset LG Realty LLC.  Chaim Sieger will serve as operation of SNF
and LTHHCP, as part of the deal.  At the closing of the sale, St.
Jerome Health Services Corporation dba Holy Family Home, who
intended to purchase the Debtors' assets for $40 million in cash,
will be paid $400,000 break-up fee from the proceeds of the sale.

                          HEAL IV Award

New York Department of Health has committed to provide $25 million
HEAL IV Award to the Debtors to finance their closure pursuant
to the Berger Recommendations that require the closure of the
Debtors' acute-care facility by June 30, 2008, and the
continuation of their skilled nursing, ambulatory, and home
health care programs.

The plan classifies interests against and liens in the Debtors in
seven classes.  The classification of interests and claims are:

                Treatment of Claims and Interests

                  Type of                          Estimated
   Class          Claims           Treatment       Amount
   -----          -------          ---------       ---------
   unclassified   administrative                   $12,000,000  
                  claims

     1            secured tax      unimpaired      $0

     2            DASNY Bond       unimpaired      $19,776,000
                  claims

     3            secured lender   unimpaired      $14,105,000
                  claims

     4            other secured    unimpaired      $5,800,000
                  claims

     5            unsecured        unimpaired      $200,000
                  priority claims

     6            unsecured        impaired        $49,696,000
                  nonpriority
                  claims

     7            subordinated     impaired        $0
                  claims

A full-text copy of the Disclosure Statement is available for free
at http://ResearchArchives.com/t/s?2c24

A full-text copy of the Chapter 11 Plan of Reorganization is
available for free at http://ResearchArchives.com/t/s?2c25

                    About Victory Memorial

Based in Brooklyn, New York, Victory Memorial Hospital is a
non-profit, full service acute care voluntary hospital with
approximately 241 beds and a skilled nursing unit with 150 beds.
Victory Hospital provides a full range of medical services with a
focus on community care and a program of community outreach to the
Brooklyn community.  Victory Ambulance Services, Inc. a for-profit
subsidiary, provides Victory Hospital with ambulance services.
Victory Pharmacy, Inc., a for-profit subsidiary, does not have
any employees or assets.

The company and its two-subsidiaries filed for chapter 11
protection on Nov. 15, 2006 (Bankr. S.D.N.Y. Case Nos. 06-44387
through 06-44389).  Timothy W. Walsh, Esq., and Jeremy R. Johnson,
Esq., at DLA Piper US LLP, represent the Debtors.  Craig E.
Freeman, Esq., and Martin G Bunin, Esq., at Alston & Bird LLP,
represent the Official Committee of Unsecured Creditors.  When the
Debtors filed for protection from their creditors, they listed
assets and debts between $1 million and $100 million.


WACHOVIA BANK: S&P Junks Rating on Class RC Certificates
--------------------------------------------------------
Standard & Poor's Ratings Services lowered its ratings on three
classes of commercial mortgage pass-through certificates from
Wachovia Bank Commercial Mortgage Trust's series 2004-WHALE4.

Concurrently, S&P affirmed its 'AAA' rating on class X-1 from the
same transaction.
     
The downgrades reflect Standard & Poor's analysis of the remaining
loan in the pool.
     
As of the June 16, 2008, remittance report, the trust collateral
consisted of one floating-rate, interest-only, mortgage loan
indexed to one-month LIBOR.  The pooled trust balance has declined
94% since issuance to $65.6 million.
     
The remaining loan in the pool, Ritz-Carlton-New Orleans, has a
whole-loan balance of $87.5 million that consists of a pooled
trust balance of $65.6 million, a nonpooled trust balance of
$2.0 million that provides the sole source of cash flow for the
class RC certificate, and a $19.9 million junior participation
interest that is held outside the trust.  The loan is secured by
the fee interest in the 527-room Ritz-Carlton Hotel and the 230-
room Iberville Suites, both located in New Orleans, Louisiana.  
The master servicer, Wachovia Bank N.A., reported a debt service
coverage of 2.61x for the 12 months ended Dec. 31, 2007, and 62%
occupancy as of April 2008.  The servicer's DSC calculation
includes approximately $15.9 million in business interruption
insurance income.  Wachovia does not expect additional BII
income.  Excluding the BII income, the net cash flow is negative.
     
The collateral properties, which sustained significant damage from
Hurricane Katrina, were closed for construction and renovation in
late 2005.  The Ritz-Carlton Hotel reopened in December 2006, and
the Iberville Suites reopened in April 2007.  Standard & Poor's
revalued the properties using the borrower's operating statements
for the trailing-12-months ended April 2008 and 2008 budget.  The
slow recovery of the New Orleans economy had a negative impact on
the hotels' operating performance.  S&P's current valuation no
longer supports the investment-grade ratings.  The loan is
scheduled to mature in April 2009 and has no extension options
remaining.


                          Ratings Lowered
   
             Wachovia Bank Commercial Mortgage Trust
Commercial mortgage pass-through certificates series 2004-WHALE4

                        Rating
                        ------
         Class      To         From    Credit enhancement
         -----      --         ----    ------------------
         J          B          BBB+          48.21%
         K          B-         BBB-           N/A
         RC         CCC-       BB             N/A
  
                         Rating Affirmed
   
              Wachovia Bank Commercial Mortgage Trust
Commercial mortgage pass-through certificates series 2004-WHALE4

            Class          Rating   Credit enhancement
            -----          ------   ------------------
            X-1            AAA             N/A
   

                      N/A -- Not applicable.


WHITEHAWK CDO: Moody's Withdraws Ratings, Junks Rating on Class C
-----------------------------------------------------------------
Moody's Investors Service withdrew its short-term ratings on these
notes issued by Whitehawk CDO Funding, Ltd.:

Class Description: Up to $870,000,000 Class A-1 MM Money Market
Floating Rate Notes

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

According to Moody's, the Prime-1 ratings assigned to the Class A-
1 MM Notes were based on the existence of a put agreement provided
by a Prime-1 rated third party.  The notes have been re-issued
with the put provider as both the investor and the put
counterparty.

Where the put provider is also the holder of the notes, it is
Moody's view that the put agreement ceases to be relevant.  
Accordingly, Moody's has withdrawn its short-term ratings on these
notes.

Moody's also downgraded and placed on further possible review for
downgrade these notes:

Class Description: $67,000,000 Class A-2 Floating Rate Interest
Notes Due 203[9]

  -- Prior Rating: Aaa
  -- Current Rating: Aa1, on review for possible downgrade

Class Description: $35,000,000 Class B Floating Rate Interest
Notes Due 203[9]

  -- Prior Rating: Aa2, on review for possible downgrade
  -- Current Rating: A3, on review for possible downgrade

Class Description: $6,000,000 Class C Floating Rate Deferrable
Interest Notes Due 2039

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

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


ZVUE CORP: Inks 3-Month Standstill Pact with YA Global Investments
------------------------------------------------------------------
ZVUE Corporation reached a three-month standstill agreement with
YA Global Investments effective through Sept. 30, 2008.

Under terms of the agreement, ZVUE will release $1.50 million of
cash held in a restricted escrow account toward partial redemption
of the convertible debenture executed Oct. 31, 2007.

In consideration of the payment, YA Global will defer the payment
of the July, August & September 2008, monthly installment amounts
and agree to certain trading restrictions.  The $1.50 million
payment will be applied first as a reduction of the accrued
interest of approximately $260,000 as of July 1, 2008, then as
payment of the outstanding principal amount of approximately
$1.25 million.

In addition to agreeing to defer payments, YA Global agreed that
during the standstill period, neither it nor its affiliates will
sell shares of the company's common stock:

   1) at prices less than $0.30 per share; or

   2) in excess of 18% of the aggregate daily trading volume of
      the common stock, at prices of between $0.30 and $0.50.

The agreement provides no limitation on sales of common stock at
prices of greater than $0.50 per share. Should YA Global breach
the trading limitations, then the trading restriction and payment
deferral would be extended for an additional period of one or more
months, depending on the extent of such breach.

YA Global has also agreed to increase the limit for separate
asset-based financing related to the company's product business to
$2.50 million from $500,000.

                      About ZVUE Corporation

ZVUE Corporation, formerly HandHeld Entertainment Inc. (NASDAQ:
ZVUE) -- http://www.zvue.com/-- is a digital entertainment    
company.  Its ZVUE Network is among the companies providing user-
generated video online.  ZVUE(TM) personal media players are mass-
market priced and available for purchase online and in Wal-Mart
and InMotion stores throughout the U.S. and online.

                       Going Concern Doubt

March 24, 2008, Salberg & Company P.A., in Boca Raton, Florida,
expressed substantial doubt about Handheld Entertainment Inc. nka.
Zvue Corp.'s ability to continue as a going concern after auditing
the company's consolidated financial statements for the year ended
Dec. 31, 2007.  The auditing firm reported that the company has a
net loss of $18,188,833, gross margin of $730,102 and net cash
used in operations of $12,156,127 an accumulated deficit of
$41,218,007.


* S&P Says More Job Losses in June Hint Weakness in Labor Markets
-----------------------------------------------------------------
More job losses this June give further indication of the weakness
of the labor market, which confirms our belief that the economy is
in recession, said Standard & Poor's Senior Economist Beth Ann
Bovino in a Web cast.
     
This increased recession risk will also worry the Fed, giving them
reason to stay on the sidelines near term.  The Federal Reserve is
expected to stay on hold for the rest of the year.  The Fed will
want to see the impact of the tax rebate checks as well as the
effect of the 325 basis points in rate cuts they have already
made.  Because the rebate checks are being spent, S&P expect no
more rate cuts.  S&P do not expect the Fed to raise rates until it
is clear the recession risk is passed.
     

* S&P: Negative Credit Trend Continues for Midstream Energy Cos.
----------------------------------------------------------------
High commodity prices and robust cash margins have helped boost
financial performance for U.S. midstream energy companies in the
first half of 2008, but the negative credit trend continued,
according to a report published by Standard & poor's ratings
services titled "Industry Report Card: Despite High Commodity
Prices, U.S. Midstream Energy Sector's Credit Retains Negative
Trend In First Half."
     
Despite strong earnings, the boon of strong commodity markets
raises questions concerning how companies will deploy this
incremental cash flow.  Massive increases in construction costs
(especially steel) are offsetting the profits resulting from
higher-than-expected natural gas and crude oil prices.
     
This is raising the risk profile of capital spending programs
throughout the sector and dampening return estimates from the
numerous capital projects underway.  Despite these pressures, more
companies are electing to use higher-than-forecast cash flows to
repurchase shares or increase dividends to shareholders, which may
raise the financial risks at times when overall leverage in the
sector is increasing.
     
In the first half, the credit landscape for the midstream sector
retained a negative bias, with the ratio of negative rating
actions (including outlook, CreditWatch, and rating changes) to
positive rating actions declining to 1.5 from the 2.0 ratio
observed during the second half of 2007.
     
"Although there were fewer negative rating actions through the
first half, the outlook on the sector is becoming more negative as
increased capital spending, higher leverage, cost overruns, and
negative free cash flow slow balance-sheet improvement in the near
term," said Standard & Poor's credit analyst Michael Messer.


* S&P: Three More Global Entities Moved to Speculative-Grade Slot
-----------------------------------------------------------------
Globally, three more entities moved to speculative-grade territory
since S&P's last report, pushing the tally for the year to date to
19, said an article published by Standard & Poor's.  The article,
which is titled "Global Potential Fallen Angels (Premium)," says
the affected rated debt of $67.85 billion is already more than 50%
of the total debt $131.29 billion affected all of last year.
     
"The current count of 43 issuers is two fewer than last month's
count but is higher than both last July's count as well the
trailing-12-month average, "said Diane Vazza, head of Standard &
Poor's Global Fixed Income Research Group.  Sectors poised to lead
fallen-angel incidence include utilities with seven entities,
forest products and building materials with six, and consumer
products with five.


* S&P: Credit Markets Woe May Alter Students' Ability to Pay Loan
-----------------------------------------------------------------
As a particularly high number of students head off to college this
fall, there are concerns that problems in the U.S. credit markets
might affect students' ability to repay their loans, Standard &
Poor's Ratings Services said in a report.
      
"Potential problems include a higher rate of student loan defaults
nationwide, students with fair or even good credit records
experiencing difficulty in getting private loans, and less-endowed
institutions seeing their budgets squeezed," said Standard &
Poor's credit analyst Bobbi Gajwani.
     
The student loan market breaks down into two areas: federally
guaranteed loans and private loans.  The current turmoil has been
in the making since last year due to a combination of auction bond
market failures, government subsidy cuts, lenders exiting the
market, and a weakening economy, specifically the devaluation of
home equity.
      
"Heading into the fall, the federal loan program appears to have
passed the worst of the crisis as a result of legislative actions,
but we expect difficulties to increase in the private loan
market," said Ms. Gajwani, in the article, "Watch For Student Loan
Disruption In Fall 2008," published on RatingsDirect.


* S&P: Dull Economic Environment Pressures Leveraged Chem. Cos.
---------------------------------------------------------------
A lackluster economic environment and unrelenting raw material
pressures are conspiring to challenge many aggressively leveraged
chemical companies, according to an industry report card published
titled "North American Chemicals Credit Quality Remains Under
Siege."
     
In addition to record-high prices for oil and natural gas, key
inputs for this industry, North American chemical companies have
been battling weak economic growth in the domestic economy, dismal
conditions for end markets such as autos and residential
construction, and the risk of margin compression from higher raw
material and freight costs.
     
"Although the median rating for the 71 chemical companies we rate
has held at 'BB-', negative actions continue to outpace upgrades
and the percentage of negative outlooks has increased to a more
pessimistic 24% of total coverage," said Standard & Poor's credit
analyst Kyle Loughlin.  The percentage of issuers with negative
outlooks has risen over the recent quarter and suggests a higher
risk of additional downgrades.
     
But what is more revealing is that most investment-grade companies
are holding up well with only 15% of outlooks pointing negative.  
In other words, S&P expect many of these companies to continue to
record satisfactory operating results this year and to perform in
line with rating expectations.  This suggests that most of the
pressure remains within the speculative-grade area, where negative
outlooks are at 31%.  These issuers typically have much less
flexibility to ride out difficult market conditions, and face
intensified pressure from the adversity in the credit markets.


* S&P Says Miss. Economic Base Expands Due to 1992 Gambling Law
---------------------------------------------------------------
Mississippi's economic base has expanded over the years with an
estimated 70,200 jobs created due to the state's legalization of
gambling in 1992, according to the report, "State Review:
Mississippi," released by Standard & Poor's Ratings Services.
     
"The industry's future in Mississippi, however, had been uncertain
due to the extensive damage caused by Katrina and competition from
other states; but the state's aggressiveness in calling a special
session to address concerns over rebuilding has spurred rapid
reconstruction," said Standard & Poor's credit analyst Paul Jasin.
     
The report also discusses the spillover effects of the gaming
industry, efforts by state officials to attract new business and
improve the educational system, and Mississippi's low wealth and
income indicators.


* S&P Cuts Ratngs on Certain Tranches from Various Aircraft Trusts
------------------------------------------------------------------
Standard & Poor's Ratings Services lowered its ratings on selected
tranches from various aircraft securitizations issued between 1999
and 2003.  The ratings remain on CreditWatch with negative
implications.  In addition, S&P raised its rating on one class and
removed it from CreditWatch positive.  Lastly, S&P placed an
additional rating on CreditWatch negative.
     
The downgrades primarily reflect the effects of an unprecedented
rapid increase in fuel prices, older aircrafts that are less fuel
efficient than the current generation of planes, and a slowing
global economy.  Although the overall global market for aircraft
remains fairly good, supported by strong demand from Asia and the
Middle East, very high fuel prices are beginning to cut into
airline profits, or in some regions (such as North America), cause
substantial losses for the airlines.  

This, in turn, is causing airlines to accelerate retirement of
aircraft models first introduced in the 1980s, such as B737
"classics" (B737-300, -400, and -500) and the MD80 series.  These
models form a substantial portion of the aircrafts in the
securitizations S&P reviewed, and it believe future cash flows
generated by them could decline further.  S&P upgraded class A-2
from Embarcadero Aircraft Securitization Trust's series 2000-1
because it expect this security to be repaid in the near term
because of its position in the priority of payments, despite the
declining cash flow generated by planes in that securitization.
     
Because the conditions in the airline industry are rapidly
changing, Standard & Poor's will continue to monitor the affected
transactions and resolve the CreditWatch placements upon further
evaluation of market conditions.  

        Ratings Lowered and Remaining on Creditwatch Negative

                            AerCo Ltd.

                                      Rating
                                      ------
              Class          To                  From
              -----          --                  ----
              A-3            BBB-/Watch Neg      BBB/Watch
Neg                 
              A-4            A-/Watch Neg        A/Watch Neg         

                   Aviation Capital Group Trust
                           Series 2000-1

                                    Rating
                                    ------
              Class         To                    From
              -----         --                    ----
              A-1           BB/Watch Neg          BBB/Watch Neg       
              B-1           B+/Watch Neg          BB-/Watch Neg       
              C-1           B-/Watch Neg          B/Watch Neg         

                  Aviation Capital Group Trust II
                          Series 2003-1

                                         Rating
                                         ------
              Class             To                    From
              -----             --                    ----
              B-1               BBB+/Watch Neg        A/Watch
Neg         

                   Lease Investment Flight Trust
                           Series 2001-1

                                    Rating
                                    ------
              Class        To                    From
              -----        --                    ----
              A-1          B+/Watch Neg          BB+/Watch Neg       
              A-2          B+/Watch Neg          BB+/Watch Neg       
              A-3          BBB/Watch Neg         A/Watch Neg         

                       Aircraft Finance Trust
                           Series 1999-1      

                                   Rating
                                   ------
              Class        To                From
              -----        --                ----
              A-1          B/Watch Neg       B+/Watch Neg

              Embarcadero Aircraft Securitization Trust
                              Series 2000-1

                                   Rating
                                   ------
              Class        To                   From
              -----        --                   ----
              A-1          B/Watch Neg          BB/Watch Neg

        Rating Raised and Removed from Creditwatch Positive

             Embarcadero Aircraft Securitization Trust
                           Series 2000-1

                                     Rating
                                     ------
              Class        To                    From
              -----        --                    ----
              A-2          BBB-/Stable           BB/Watch Pos

              Rating Placed on Creditwatch Negative

                      Aircraft Finance Trust
                           Series 1999-1      

                                   Rating
                                   ------
              Class        To                    From
              -----        --                    ----
              A-2          BBB+/Watch Neg        BBB+/Stable

             Rating Remaining on Creditwatch Negative

                   Aviation Capital Group Trust
                           Series 2000-1

                                    Rating
                                    ------
              Class         To                    From
              -----         --                    ----
              D-1           CCC/Watch Neg         CCC/Watch Neg       


* Most Commercial Property Post "Yellow Scores" in Moody's Report
-----------------------------------------------------------------
All but one of the seven commercial property types measured in
Moody's Investors Service Red-Yellow-Green(R) report posted lower
scores in the second quarter of 2008, as the real estate markets
that support U.S. commercial backed securities continued to
soften.  All but two property types now have "yellow" scores,
indicating that they are neither particularly strong nor weak.

Moody's Red-Yellow-Green report scores markets on a scale of 0
(weak) to 100 (strong) and describes them in traffic light colors,
with scores of 0-33 identified as red, 34-66 as yellow, and 67-100
as green.

                    Sector by Sector Analysis

Neighborhood and community shopping centers continued to show
stability last quarter, maintaining a score of 82, one of the two
green scores.

However, retail is one sector that needs to be watched as a weaker
economy combined with rising food and energy prices pressure
consumer dollars, which may put strain on some shopping centers,
says Moody's.

During the first quarter, the multifamily sector lost three
points, yet also remained solidly within green territory at 78.  
Although nearly 75% of all multifamily markets declined in score,
45 of the 60 markets are still green.

Offices in central business districts, or CBDs, slipped into
yellow territory at 64.  Moody's says expected demand growth
declined at the same time that supply picked up a bit, leading to
a wider supply-demand mismatch.  Four of the largest ten markets
are green, while the remaining six are yellow.

The suburban office sector dropped four points to 38, the weakest
score of any sector.  Expected demand growth deteriorated further
and is now negative, Moody's reports.  Two of the top ten markets
are red, while the remaining eight are yellow.

The industrial sector shed two points this quarter, dropping to a
composite score of 64, in yellow territory, as vacancy increased
slightly.

The report suggests substantial weakening in both the full-service
and limited-service hotel sectors in particular.  Full service
hotels dropped a significant 16 points during the quarter, down
from 59 to 43, as limited-service hotels declined 9 points from 62
to 53.

                   Metropolitan Market Analysis

The overall commercial real estate composite score for the U.S. is
64, a drop of five points from last quarter.  Moody's notes that
the two largest markets supporting commercial mortgage backed
securities continue to show strength, as New York tied Honolulu
for the highest market score at 79 and Los Angeles was next at 75.

The scores of the top 10 cities found most frequently in CMBS,
based on dollar volume, with the previous quarter's score in
parenthesis, are: New York 79 (78), Los Angeles 75 (80), San
Francisco 68 (72), Philadelphia 66 (70), Houston 65 (71), Miami 58
(59), Washington DC 55 (60), Atlanta 54 (59), Dallas 51 (54), and
Chicago 50 (56).

The five best markets in the U.S. are: New York 79 (78), Honolulu
79 (77), Los Angeles 75 (80), Oklahoma City 73 (75), and Long
Island, NY 73 (77).

The five worst markets in the U.S. are: Jacksonville 30 (27),
Phoenix 32 (37), Trenton 38 (43), Las Vegas 38 (48), and Austin 43
(48).


* Moody's Says FDA's Initiatives Might Strain Medical Device Cos.
-----------------------------------------------------------------
The Food and Drug Administration's postmarket initiatives could
create future ratings pressure on medical device companies,
depending on what safety issues the new monitoring efforts
uncover, says Moody's Investors Service.

"The increased scrutiny could lead to greater volatility in sales
and profitability for some medical device companies down the
road," Diana Lee, Moody's vice president and senior credit
officer, said.  The initiatives could also lead to a prolonged
downturn in credit fundamentals.

As part of a broader post-market surveillance program, the FDA
introduced the "Sentinel" initiative in May to help monitor the
safety of medical devices as well as drugs approved for sale in
the U.S.  Although products are studied in clinical trials before
they enter the market, side effects and safety issues often don't
emerge until the products hit the general population.  This
enhanced data monitoring system—-along with a greater focus on
post-market studies—-should help uncover safety issues more
quickly.

Publicity about safety concerns as well as the immediate access of
the public to the information could create "headline" risk and
have a disruptive effect on sales of medical devices, Moody's
said.

"If more negative reports on medical devices emerge, the
government's post-market monitoring efforts would be more of a
risk than a benefit for the sector over the next several years,"  
Ms. Lee said.

Manufacturers of more-technologically advanced devices such as
drug-eluting stents could be more vulnerable, especially if they
have been the focus of safety concerns in the past, says Moody's.

"Because device manufacturers must bear the expense of postmarket
studies, we believe that these companies will need to focus on
making R&D dollars go further," Ms. Lee said.  "If the laboratory
or discovery portion of R&D gets squeezed, innovation could suffer
and margins would be eroded for companies that do not attempt to
offset the cost of post-market studies."

Longer term, the effort could promote greater consumer confidence
if the FDA is able to uncover safety issues earlier and head off
potential problems with medical devices through its postmarket
initiatives.


* FDIC Says Banking Industry on "Solid Footing" Amid IndyMac Fall
-----------------------------------------------------------------
Sheila C. Bair, chairman of the Federal Deposit Insurance
Corporation, said the United States' banking system remains on a
solid footing through the guarantees provided by FDIC insurance.

Ms. Bair issued the statement after the federal government's
seizure of IndyMac Bank, F.S.B.  On Friday, the Office of Thrift
Supervision closed the $32,000,000,000 IndyMac Bank, headquartered
in Pasadena, California, and transferred operations to the FDIC.

The FDIC has created IndyMac Federal Bank, FSB, a conservatorship
to continue to provide banking services in communities served by
the former IndyMac Bank.

A story on the seizure of IndyMac Bank appears in today's Troubled
Company Reporter.

Ms. Bair said, "Over the past weekend, I have seen news reports
which have fairly and accurately reported on the conversion of
Indy Mac Bank into a conservatorship operated by the FDIC. I have
also seen inaccurate and inflammatory reporting which could well
cause needless, unnecessary worry and angst among bank depositors
throughout the country."

IndyMac's conversion has been largely a non-event, according to
Ms. Bair, with respect to insured depositors.  She explained that
the more than 200,000 customers of IndyMac with deposits of
$18,000,000,000 are fully protected.

"It's important to keep in mind that the small percentage of
uninsured are still covered for their insured amounts and half of
their uninsured money," Ms. Bair said.  "As assets of IndyMac are
sold, they may receive even more.  They have had continued access
to their funds through ATMs, debit cards, and writing checks over
the weekend, and on Monday morning, it will be business as usual."

"All bank depositors should understand that their insured deposits
are safe."

The Wall Street Journal's Robin Sidel, David Enrich and Jonathan
Karp relate that the seizure of IndyMac Bank is deepening worries
among executives, regulators and consumers about the U.S. banking
industry, which is in a tightening bind following a long run of
prosperity.  The Journal says banks and thrifts are struggling
against a rising tide of bad loans, and it is becoming
increasingly clear that some lenders won't be able to dig their
way out.

While fewer banks are expected to fail than the 834 that went
under from 1990 to 1992, it will likely take several years for
battered financial institutions to work through their bad loans
and replenish their depleted capital, the Journal says.

According to Ms. Bair, IndyMac is only one of 8,494 depository
institutions operating throughout the country and represents only
0.2% of banking industry assets.

The OTS said in a news statement that IndyMac is the largest OTS-
regulated thrift ever to fail and, according to FDIC data, the
second largest financial institution to close in U.S. history.

IndyMac Bank is the fifth FDIC-insured failure of the year.  The
last FDIC-insured failure in California was the Southern Pacific
Bank, Torrance, on February 7, 2003.

The Wall Street Journal's Damian Paletta and David Enrich state
that IndyMac is the third-largest bank failure in U.S. history.  
According to Messrs. Paletta and Enrich, Continental Illinois
National Bank & Trust Co., which failed in 1984, topped that list
with $40,000,000,000 in assets.  American Savings & Loan
Association of Stockton, Calif., in 1988, is second.

Banks that failed this year, according to FDIC data, are:

   Bank Name                                   Closing Date
   ---------                                   ------------
   IndyMac Bank, Pasadena, CA                  July 11, 2008
   First Integrity Bank, NA, Staples, MN       May 30, 2008
   ANB Financial, NA, Bentonville, AR          May 9, 2008
   Hume Bank, Hume, MO  March 7, 2008          July 1, 2008
   Douglass National Bank, Kansas City, MO     January 25, 2008

"The overwhelming majority of banks in this country are safe and
sound.  The chance that your own bank will be taken over by the
FDIC is extremely remote.  And if that does happen, you will
continue to have virtually uninterrupted access to your insured
deposits," Ms. Bair said.

"All bank depositors should also understand that they can have
insurance coverage in excess of the basic limits of $100,000 per
institution, with an additional $250,000 per institution for IRAs.  
For instance, subject to certain conditions, single and joint
accounts are separately insured, and revocable trusts generally
provide $100,000 of coverage per beneficiary.  If you have any
questions about whether your deposits are insured, we encourage
you to consult with your bank or contact our deposit insurance
specialists at 1-877-ASK-FDIC. If you find that you are not fully
insured, it may be possible to restructure your accounts to bring
your deposits below the insured limits.  But first get the facts
before making any changes in your accounts or banking
relationships."

Ms. Bair added that industry-funded reserves are strong and our
insurance guarantee is backed by the full faith and credit of the
United State Government, and that no bank depositor has ever lost
a penny of insured deposits.

                       About Indymac Bancorp

Headquartered in Pasadena, California, IndyMac Bancorp Inc.
(NYSE:IMB) -- http://www.indymacbank.com/-- is the holding  
company for IndyMac Bank FSB, a hybrid thrift/mortgage bank that
originates mortgages in all 50 states of the United States.  
Indymac Bank provides financing for the acquisition, development,
and improvement of single-family homes.  Indymac also provides
financing secured by single-family homes and other banking
products to facilitate consumers' personal financial goals.  
IndyMac specialized in making and selling so-called Alt-A mortgage
loans, a category of loans to consumers more credit worthy than
subprime borrowers but typically without the complete
documentation of income or assets necessary to receive a prime-
rate loan.  The company facilitates the acquisition, development,
and improvement of single-family homes through the electronic
mortgage information and transaction system platform that
automates underwriting, risk-based pricing and rate locking via
the internet at the point of sale.  Indymac Bank offers mortgage
products and services that are tailored to meet the needs of both
consumers and mortgage professionals.  Indymac operates through
two segments -- mortgage banking and thrift.

The company was ranked the ninth-largest U.S. mortgage lender in
2007 in terms of loan volume, The Wall Street Journal says, citing
trade publication Inside Mortgage Finance.

                            About FDIC

Congress created the Federal Deposit Insurance Corporation in 1933
to restore public confidence in the nation's banking system.  The
FDIC insures deposits at the nation's 8,494 banks and savings
associations and it promotes the safety and soundness of these
institutions by identifying, monitoring and addressing risks to
which they are exposed.  On the Net: http://www.fdic.gov/


* 3 DLA Piper Lawyers Join McKenna Long's Washington Office
-----------------------------------------------------------
McKenna Long & Aldridge LLP (MLA) said John G. McJunkin, Daniel
J. Carrigan and J. David Folds have joined the Firm's Bankruptcy
practice in the Washington office.  The group previously
practiced at DLA Piper.

"We are pleased to have John, Dan and David join McKenna Long &
Aldridge," said Jeff Haidet, MLA Chairman.  "With their
recognized accomplishments in bankruptcy and commercial litigation
cases, John, Dan, and David are a valuable addition to the Firm's
national Bankruptcy practice."

"Adding bankruptcy expertise to our commercial litigation
practice in Washington on the heels of adding it in New York,
augments our nationwide presence and  allows us to support our
clients' needs anywhere in the country," said Tami Azorsky,
Co-Chair of the Litigation practice.

McJunkin's practice focuses on business bankruptcies and
commercial litigation.  He works extensively with creditors in
protecting their rights during workouts, litigation,
foreclosures, and bankruptcy.  On behalf of his clients,
McJunkin regularly coordinates bankruptcy representation and
litigation in jurisdictions across the nation.  He received his
J.D. from the University of Cincinnati, where he was elected to
the Order of the Barristers, and his B.A., summa cum laude, from
Hampden -- Sydney College, where he was elected Phi Beta Kappa.

"McKenna Long & Aldridge provides a perfect platform to better
serve our existing clients," said John McJunkin, one of the new
partners.  "The geographic scope of the firm will enable us to
continue to provide national services to our clients while being
able to provide bankruptcy and related commercial litigation
assistance to MLA's clients in the Mid-Atlantic region.  The
depth and breadth of MLA's bankruptcy team was a very important
factor in our decision to join the firm."

Carrigan has engaged in a diversified practice that has included
the representation of creditors and debtors in bankruptcy
proceedings, as well as the liquidators, receivers, and
rehabilitators of insolvent insurance companies in the
investigation and prosecution of civil fraud and other actions.  
More recently, his practice has focused upon the area of
deepening insolvency, and the defense of D&O, legal and
consulting malpractice cases arising from corporate failures.  
He received his J.D. from Georgetown University Law Center and
his B.A., cum laude, from Georgetown University, where he was
elected Phi Beta Kappa.

Folds focuses his practice on business bankruptcies and
commercial litigation.  He represents financial institutions,
landlords, franchisors, trade creditors, purchasers of assets,
and other entities in all aspects of bankruptcy proceedings.  
He also represents international and domestic companies in a
wide variety of commercial and contract disputes in state and
federal courts.  Folds received his J.D. from the University of
North Carolina at Chapel Hill, his M.S. from the London School
of Economics and Political Science, and his B.A. from University
of the South.

"It is extremely exciting to add John, David, and Dan to our
existing team given the increased demand for our services from
our clients," said Gary Marsh,  Chair of the Bankruptcy and
Creditor's Rights practice at MLA.

The Bankruptcy, Creditor's Rights and Insolvency-Related
Litigation Group of McKenna Long & Aldridge LLP focuses its
practice on the many issues arising out of corporate and
business-related insolvencies.  The experienced attorneys in
the Group are regularly retained to represent Secured Creditors,
Trustees, Examiners, Debtors, Committees and other parties-in-
interest in large and complex Bankruptcy Cases throughout the
United States.  The Firm's experience is not limited to any
particular industry and has included representations in the
real estate, health care, telecommunications manufacturing,
technology, securities, construction, retail, financial
institutions, and textile areas.


* BOND PRICING: For the Week of July 7 to July 11, 2008
-------------------------------------------------------

Issuer                        Coupon   Maturity   Price
------                        ------   --------   -----
ABC RAIL PRODUCT              10.500%   01/15/04       0
ABC RAIL PRODUCT              10.500%   12/31/04     100
ABITIBI-CONS FIN               7.875%   08/01/09      75
ADVANTA CAP TR                 8.990%   12/17/26      68
AIRTRAN HOLDINGS               7.000%   07/01/23      71
ALERIS INTL INC               10.000%   12/15/16      73
ALESCO FINANCIAL               7.625%   05/15/27      59
ALION SCIENCE                 10.250%   02/01/15      71
ALLEGIANCE TEL                11.750%   02/15/08       7
ALLEGIANCE TEL                12.875%   05/15/08       7
AM AIRLN EQ TRST              10.680%   03/04/13      65
AM AIRLN PT TRST               7.377%   05/23/19      69
AM AIRLN PT TRST               8.390%   01/02/17      73
AM AIRLN PT TRST               9.730%   09/29/14      72
AMBAC INC                      5.950%   12/05/35      49
AMBAC INC                      6.150%   02/07/87      26
AMBAC INC                      7.500%   05/01/23      66
AMBASSADORS INTL               3.750%   04/15/27      53
AMD                            6.000%   05/01/15      71
AMD                            6.000%   05/01/15    N.A.
AMER & FORGN PWR               5.000%   03/01/30      52
AMER COLOR GRAPH              10.000%   06/15/10      35
AMER TISSUE INC               12.500%   07/15/06       0
AMERICREDIT CORP               0.750%   09/15/11      71
AMERICREDIT CORP               2.125%   09/15/13      67
AMES TRUE TEMPER              10.000%   07/15/12      69
AMR CORP                       9.000%   08/01/12      72
AMR CORP                       9.000%   09/15/16      67
AMR CORP                       9.750%   08/15/21      70
AMR CORP                       9.880%   06/15/20      61
AMR CORP                      10.000%   04/15/21      65
AMR CORP                      10.150%   05/15/20      68
AMR CORP                      10.200%   03/15/20      74
ANTIGENICS                     5.250%   02/01/25      45
ASHTON WOODS USA               9.500%   10/01/15      57
ASPECT MEDICAL                 2.500%   06/15/14      57
ASPECT MEDICAL                 2.500%   06/15/14    N.A.
ASSURED GUARANTY               6.400%   12/15/66      74
AT HOME CORP                   4.750%   12/15/06       0
ATHEROGENICS INC               1.500%   02/01/12      10
ATHEROGENICS INC               4.500%   03/01/11      11
AVENTINE RENEW                10.000%   04/01/17      73
BALLY TOTAL FITN              13.000%   07/15/11      68
BANK NEW ENGLAND               8.750%   04/01/99       7
BANK NEW ENGLAND               9.500%   02/15/96     100
BANK NEW ENGLAND               9.875%   09/15/99       7
BANKUNITED CAP                 3.125%   03/01/34      42
BBN CORP                       6.000%   04/01/12       0
BEARINGPOINT INC               3.100%   12/15/24      41
BEARINGPOINT INC               4.100%   12/15/24      38
BELL MICROPRODUC               3.750%   03/05/24      70
BON-TON DEPT STR              10.250%   03/15/14      75
BORDEN INC                     7.875%   02/15/23      47
BORDEN INC                     8.375%   04/15/16      56
BORDEN INC                     9.200%   03/15/21      57
BORLAND SOFTWARE               2.750%   02/15/12      69
BOWATER INC                    6.500%   06/15/13      66
BOWATER INC                    9.375%   12/15/21      69
BOWATER INC                    9.500%   10/15/12      63
BRODER BROS CO                11.250%   10/15/10      68
BUDGET GROUP INC               9.125%   04/01/06       0
BUFFALO THUNDER                9.375%   12/15/14    N.A.
BUFFETS INC                   12.500%   11/01/14       3
BURLINGTON NORTH               3.200%   01/01/45      50
CAPITALSOURCE                  3.500%   07/15/34      70
CAPMARK FINL GRP               6.300%   05/10/17      73
CCH I LLC                      9.920%   04/01/14      72
CCH I LLC                     10.000%   05/15/14      70
CCH I LLC                     11.125%   01/15/14      72
CD RADIO INC                   8.750%   09/29/09       5
CHARMING SHOPPES               1.125%   05/01/14      64
CHARTER COMM HLD              10.000%   05/15/11      70
CHARTER COMM HLD              11.125%   01/15/11      70
CHARTER COMM HLD              11.750%   05/15/11      67
CHARTER COMM LP                6.500%   10/01/27      60
CHENIERE ENERGY                2.250%   08/01/12      54
CHIC EAST ILL RR               5.000%   01/01/54      61
CHS ELECTRONICS                9.875%   04/15/05     100
CIT GROUP INC                  4.950%   02/15/15      70
CIT GROUP INC                  5.050%   09/15/14      68
CIT GROUP INC                  5.500%   08/15/13      71
CIT GROUP INC                  5.800%   12/15/16      68
CIT GROUP INC                  5.900%   03/15/22      70
CIT GROUP INC                  5.950%   02/15/22      69
CIT GROUP INC                  5.950%   09/15/16      69
CIT GROUP INC                  6.000%   05/15/22      69
CIT GROUP INC                  6.000%   11/15/16      70
CIT GROUP INC                  6.050%   09/15/16      70
CIT GROUP INC                  6.100%   03/15/67      55
CIT GROUP INC                  6.150%   05/15/16      72
CIT GROUP INC                  6.150%   09/15/21      68
CIT GROUP INC                  6.250%   01/15/13      72
CIT GROUP INC                  6.250%   01/15/13      75
CIT GROUP INC                  6.250%   09/15/21      68
CIT GROUP INC                  6.250%   11/15/17      74
CIT GROUP INC                  6.250%   11/15/21      73
CIT GROUP INC                  6.500%   03/15/11      72
CITIZENS UTIL CO               7.000%   11/01/25      77
CLAIRE'S STORES                9.250%   06/01/15      68
CLAIRE'S STORES                9.625%   06/01/15      59
CLAIRE'S STORES               10.500%   06/01/17      54
CLEAR CHANNEL                  4.900%   05/15/15      63
CLEAR CHANNEL                  5.000%   03/15/12      76
CLEAR CHANNEL                  5.500%   09/15/14      66
CLEAR CHANNEL                  5.500%   12/15/16      60
CLEAR CHANNEL                  5.750%   01/15/13      72
CLEAR CHANNEL                  6.875%   06/15/18      64
CLEAR CHANNEL                  7.250%   10/15/27      59
CMP SUSQUEHANNA                9.875%   05/15/14      72
COGENT COMMUNICA               1.000%   06/15/27      67
COLLINS & AIKMAN              10.750%   12/31/11       0
COLOR TILE INC                10.750%   12/15/01     100
COLUMBIA/HCA                   7.050%   12/01/27      78
COLUMBIA/HCA                   7.500%   11/15/95      71
COMERICA CAP TR                6.576%   02/20/37      69
COMPUCREDIT                    3.625%   05/30/25      50
COMPUCREDIT                    5.875%   11/30/35      43
CONEXANT SYSTEMS               4.000%   03/01/26      76
CONSTAR INTL                  11.000%   12/01/12      56
CONTL AIRLINES                 8.750%   12/01/11      70
COUNTRYWIDE FINL               5.250%   05/11/20      64
COUNTRYWIDE FINL               5.250%   05/27/20      67
COUNTRYWIDE FINL               5.750%   01/24/31      64
COUNTRYWIDE FINL               5.800%   01/27/31      64
COUNTRYWIDE FINL               6.000%   02/08/36      65
COUNTRYWIDE FINL               6.000%   03/16/26      67
COUNTRYWIDE FINL               6.000%   03/23/21      68
COUNTRYWIDE FINL               6.000%   04/06/21      72
COUNTRYWIDE FINL               6.000%   04/13/21      66
COUNTRYWIDE FINL               6.000%   11/14/35      65
COUNTRYWIDE FINL               6.000%   11/22/30      66
COUNTRYWIDE FINL               6.000%   12/14/35      66
COUNTRYWIDE FINL               6.125%   04/26/21      69
COUNTRYWIDE FINL               6.300%   04/28/36      67
COUNTRYWIDE HOME               5.000%   05/16/13      75
COUNTRYWIDE HOME               5.500%   05/16/18      68
COUNTRYWIDE HOME               5.900%   01/24/18      72
COUNTRYWIDE HOME               6.000%   01/24/18      74
COUNTRYWIDE HOME               6.000%   05/16/23      65
COUNTRYWIDE HOME               6.000%   07/23/29      68
COUNTRYWIDE HOME               6.150%   06/25/29      71
COUNTRYWIDE HOME               6.200%   07/16/29      66
CV THERAPEUTICS                3.250%   08/16/13      75
DECODE GENETICS                3.500%   04/15/11      39
DELPHI CORP                    6.500%   08/15/13      42
DELPHI CORP                    8.250%   10/15/33      10
DELTA AIR LINES                8.000%   12/01/15      57
DELTA AIR LINES                9.875%   04/30/08    N.A.
DELTA AIR LINES               10.500%   04/30/16    N.A.
DELTA MILLS INC                9.625%   09/01/07      10
DENDREON CORP                  4.750%   06/15/14      73
DILLARD DEPT STR               7.750%   05/15/27      80
DILLARD DEPT STR               7.750%   07/15/26      75
DILLARDS INC                   7.000%   12/01/28      71
DOWNEY FINANCIAL               6.500%   07/01/14      69
DURA OPERATING                 8.625%   04/15/12      11
DURA OPERATING                 9.000%   05/01/09       0
EDDIE BAUER HLDG               5.250%   04/01/14      71
EPIX MEDICAL INC               3.000%   06/15/24      61
EQUISTAR CHEMICA               7.550%   02/15/26      71
EVEREST RE HLDGS               6.600%   05/15/37      75
EXODUS COMM INC                4.750%   07/15/08       0
FAMILY GOLF CTRS               5.750%   10/15/04       0
FEDDERS NORTH AM               9.875%   03/01/14       5
FIN SEC ASSUR                  6.400%   12/15/66      74
FINLAY FINE JWLY               8.375%   06/01/12      41
FINOVA GROUP                   7.500%   11/15/09      12
FIRST DATA CORP                4.500%   06/15/10      74
FIRST DATA CORP                4.700%   08/01/13      50
FIRST DATA CORP                4.850%   10/01/14      48
FIRST DATA CORP                4.950%   06/15/15      49
FIRST DATA CORP                5.625%   11/01/11      74
FIVE STAR QUALIT               3.750%   10/15/26      73
FONTAINEBLEAU LA              10.250%   06/15/15      71
FORD HOLDINGS                  9.300%   03/01/30      78
FORD HOLDINGS                  9.375%   03/01/20      81
FORD MOTOR CO                  6.375%   02/01/29      60
FORD MOTOR CO                  6.500%   08/01/18      66
FORD MOTOR CO                  6.625%   02/15/28      58
FORD MOTOR CO                  6.625%   10/01/28      59
FORD MOTOR CO                  7.125%   11/15/25      60
FORD MOTOR CO                  7.400%   11/01/46      60
FORD MOTOR CO                  7.450%   07/16/31      67
FORD MOTOR CO                  7.500%   08/01/26      63
FORD MOTOR CO                  7.700%   05/15/97      65
FORD MOTOR CO                  7.750%   06/15/43      59
FORD MOTOR CO                  8.875%   01/15/22      70
FORD MOTOR CO                  8.900%   01/15/32      73
FORD MOTOR CRED                5.650%   01/21/14      74
FORD MOTOR CRED                5.750%   01/21/14      72
FORD MOTOR CRED                5.750%   02/20/14      74
FORD MOTOR CRED                5.750%   02/20/14      75
FORD MOTOR CRED                5.900%   02/20/14      74
FORD MOTOR CRED                6.000%   01/20/15      72
FORD MOTOR CRED                6.000%   01/21/14      73
FORD MOTOR CRED                6.000%   03/20/14      71
FORD MOTOR CRED                6.000%   03/20/14      72
FORD MOTOR CRED                6.000%   03/20/14      74
FORD MOTOR CRED                6.000%   11/20/14      73
FORD MOTOR CRED                6.000%   11/20/14      74
FORD MOTOR CRED                6.050%   02/20/14      76
FORD MOTOR CRED                6.050%   02/20/15      70
FORD MOTOR CRED                6.050%   03/20/14      74
FORD MOTOR CRED                6.050%   04/21/14      70
FORD MOTOR CRED                6.050%   12/22/14      71
FORD MOTOR CRED                6.050%   12/22/14      75
FORD MOTOR CRED                6.100%   02/20/15      71
FORD MOTOR CRED                6.150%   01/20/15      73
FORD MOTOR CRED                6.150%   12/22/14      72
FORD MOTOR CRED                6.200%   03/20/15      69
FORD MOTOR CRED                6.250%   01/20/15      70
FORD MOTOR CRED                6.250%   03/20/15      74
FORD MOTOR CRED                6.250%   04/21/14      68
FORD MOTOR CRED                6.250%   12/20/13      74
FORD MOTOR CRED                6.250%   12/20/13      75
FORD MOTOR CRED                6.300%   05/20/14      73
FORD MOTOR CRED                6.300%   05/20/14      73
FORD MOTOR CRED                6.350%   04/21/14      74
FORD MOTOR CRED                6.500%   03/20/15      71
FORD MOTOR CRED                6.500%   12/20/13      74
FORD MOTOR CRED                6.650%   06/20/14      75
FORD MOTOR CRED                6.650%   10/21/13      75
FORD MOTOR CRED                6.750%   06/20/14      75
FORD MOTOR CRED                6.800%   03/20/15      74
FORD MOTOR CRED                6.800%   06/20/14      71
FORD MOTOR CRED                7.250%   07/20/17      68
FORD MOTOR CRED                7.250%   07/20/17      72
FORD MOTOR CRED                7.350%   09/15/15      75
FORD MOTOR CRED                7.400%   08/21/17      73
FORD MOTOR CRED                7.500%   08/20/32      68
FRANKLIN BANK                  4.000%   05/01/27      33
FRONTIER AIRLINE               5.000%   12/15/25      23
GENERAL MOTORS                 6.750%   05/01/28      53
GENERAL MOTORS                 7.375%   05/23/48      62
GENERAL MOTORS                 7.400%   09/01/25      61
GENERAL MOTORS                 7.700%   04/15/16      73
GENERAL MOTORS                 8.100%   06/15/24      65
GENERAL MOTORS                 8.250%   07/15/23      71
GENERAL MOTORS                 8.375%   07/15/33      67
GENERAL MOTORS                 8.800%   03/01/21      76
GENERAL MOTORS                 9.400%   07/15/21      77
GEORGIA GULF CRP              10.750%   10/15/16      70
GLOBAL HEALTH SC              11.000%   05/01/08       0
GLOBALSTAR INC                 5.750%   04/01/28      72
GMAC                           5.250%   01/15/14      66
GMAC                           5.350%   01/15/14      71
GMAC                           5.700%   06/15/13      68
GMAC                           5.700%   10/15/13      70
GMAC                           5.700%   12/15/13      68
GMAC                           5.750%   01/15/14      69
GMAC                           5.850%   05/15/13      73
GMAC                           5.850%   06/15/13      67
GMAC                           5.850%   06/15/13      69
GMAC                           5.850%   06/15/13      73
GMAC                           5.900%   01/15/19      55
GMAC                           5.900%   01/15/19      57
GMAC                           5.900%   02/15/19      59
GMAC                           5.900%   10/15/19      63
GMAC                           5.900%   12/15/13      66
GMAC                           5.900%   12/15/13      66
GMAC                           6.000%   02/15/19      56
GMAC                           6.000%   02/15/19      58
GMAC                           6.000%   02/15/19      62
GMAC                           6.000%   03/15/19      56
GMAC                           6.000%   03/15/19      56
GMAC                           6.000%   03/15/19      58
GMAC                           6.000%   03/15/19      59
GMAC                           6.000%   03/15/19      59
GMAC                           6.000%   04/15/19      58
GMAC                           6.000%   07/15/13      73
GMAC                           6.000%   09/15/19      56
GMAC                           6.000%   09/15/19      57
GMAC                           6.000%   11/15/13      68
GMAC                           6.000%   12/15/13      71
GMAC                           6.050%   08/15/19      56
GMAC                           6.050%   08/15/19      60
GMAC                           6.050%   10/15/19      56
GMAC                           6.100%   05/15/13      72
GMAC                           6.100%   09/15/19      56
GMAC                           6.100%   11/15/13      70
GMAC                           6.125%   10/15/19      57
GMAC                           6.150%   08/15/19      64
GMAC                           6.150%   09/15/13      67
GMAC                           6.150%   09/15/19      57
GMAC                           6.150%   10/15/19      57
GMAC                           6.150%   11/15/13      73
GMAC                           6.150%   12/15/13      69
GMAC                           6.200%   04/15/19      60
GMAC                           6.200%   11/15/13      71
GMAC                           6.250%   01/15/19      60
GMAC                           6.250%   03/15/13      74
GMAC                           6.250%   04/15/19      60
GMAC                           6.250%   05/15/19      57
GMAC                           6.250%   07/15/13      70
GMAC                           6.250%   07/15/19      57
GMAC                           6.250%   10/15/13      71
GMAC                           6.250%   11/15/13      71
GMAC                           6.250%   12/15/18      65
GMAC                           6.300%   08/15/19      60
GMAC                           6.300%   08/15/19      61
GMAC                           6.300%   10/15/13      74
GMAC                           6.300%   11/15/13      68
GMAC                           6.350%   04/15/19      57
GMAC                           6.350%   05/15/13      69
GMAC                           6.350%   07/15/19      59
GMAC                           6.350%   07/15/19      60
GMAC                           6.375%   01/15/14      66
GMAC                           6.375%   08/01/13      74
GMAC                           6.400%   11/15/19      57
GMAC                           6.400%   11/15/19      59
GMAC                           6.400%   12/15/18      58
GMAC                           6.450%   02/15/13      72
GMAC                           6.500%   01/15/20      58
GMAC                           6.500%   02/15/20      66
GMAC                           6.500%   03/15/13      72
GMAC                           6.500%   05/15/13      73
GMAC                           6.500%   05/15/19      58
GMAC                           6.500%   06/15/13      77
GMAC                           6.500%   06/15/18      59
GMAC                           6.500%   08/15/13      72
GMAC                           6.500%   11/15/13      73
GMAC                           6.500%   11/15/18      60
GMAC                           6.500%   12/15/18      62
GMAC                           6.500%   12/15/18      62
GMAC                           6.550%   12/15/19      63
GMAC                           6.600%   05/15/18      59
GMAC                           6.600%   06/15/19      58
GMAC                           6.600%   06/15/19      59
GMAC                           6.600%   08/15/16      60
GMAC                           6.650%   02/15/20      61
GMAC                           6.650%   06/15/18      58
GMAC                           6.650%   10/15/18      59
GMAC                           6.650%   10/15/18      59
GMAC                           6.700%   05/15/14      70
GMAC                           6.700%   05/15/14      73
GMAC                           6.700%   06/15/14      74
GMAC                           6.700%   06/15/18      56
GMAC                           6.700%   06/15/18      59
GMAC                           6.700%   06/15/19      65
GMAC                           6.700%   08/15/16      65
GMAC                           6.700%   11/15/18      58
GMAC                           6.700%   12/15/19      61
GMAC                           6.750%   03/15/18      61
GMAC                           6.750%   03/15/20      65
GMAC                           6.750%   04/15/13      74
GMAC                           6.750%   05/15/19      56
GMAC                           6.750%   05/15/19      63
GMAC                           6.750%   06/15/14      67
GMAC                           6.750%   06/15/17      63
GMAC                           6.750%   06/15/19      61
GMAC                           6.750%   06/15/19      62
GMAC                           6.750%   07/15/16      67
GMAC                           6.750%   07/15/18      60
GMAC                           6.750%   08/15/16      71
GMAC                           6.750%   09/15/16      69
GMAC                           6.750%   09/15/18      61
GMAC                           6.750%   10/15/18      59
GMAC                           6.750%   11/15/18      63
GMAC                           6.750%   12/01/14      77
GMAC                           6.800%   02/15/13      72
GMAC                           6.800%   04/15/13      75
GMAC                           6.800%   09/15/18      60
GMAC                           6.800%   10/15/18      66
GMAC                           6.850%   05/15/18      60
GMAC                           6.875%   04/15/13      71
GMAC                           6.875%   07/15/18      67
GMAC                           6.875%   08/15/16      64
GMAC                           6.900%   06/15/17      60
GMAC                           6.900%   07/15/18      64
GMAC                           6.900%   08/15/18      61
GMAC                           6.950%   06/15/17      60
GMAC                           7.000%   01/15/13      74
GMAC                           7.000%   02/15/18      60
GMAC                           7.000%   02/15/18      60
GMAC                           7.000%   02/15/18      64
GMAC                           7.000%   02/15/21      63
GMAC                           7.000%   03/15/18      65
GMAC                           7.000%   05/15/18      61
GMAC                           7.000%   06/15/17      65
GMAC                           7.000%   06/15/22      64
GMAC                           7.000%   07/15/17      61
GMAC                           7.000%   08/15/18      65
GMAC                           7.000%   09/15/18      62
GMAC                           7.000%   09/15/21      60
GMAC                           7.000%   09/15/21      67
GMAC                           7.000%   11/15/23      64
GMAC                           7.000%   11/15/24      58
GMAC                           7.000%   11/15/24      60
GMAC                           7.000%   11/15/24      62
GMAC                           7.050%   03/15/18      60
GMAC                           7.050%   03/15/18      63
GMAC                           7.050%   04/15/18      59
GMAC                           7.125%   10/15/17      62
GMAC                           7.150%   01/15/25      65
GMAC                           7.150%   03/15/25      67
GMAC                           7.150%   09/15/18      65
GMAC                           7.200%   10/15/17      60
GMAC                           7.200%   10/15/17      67
GMAC                           7.250%   01/15/18      63
GMAC                           7.250%   01/15/25      56
GMAC                           7.250%   02/15/25      64
GMAC                           7.250%   03/15/25      60
GMAC                           7.250%   04/15/18      62
GMAC                           7.250%   04/15/18      63
GMAC                           7.250%   08/15/18      62
GMAC                           7.250%   08/15/18      70
GMAC                           7.250%   09/15/17      60
GMAC                           7.250%   09/15/17      62
GMAC                           7.250%   09/15/17      64
GMAC                           7.250%   09/15/17      66
GMAC                           7.250%   09/15/18      65
GMAC                           7.300%   01/15/18      66
GMAC                           7.300%   01/15/18      71
GMAC                           7.300%   12/15/17      62
GMAC                           7.350%   04/15/18      62
GMAC                           7.375%   04/15/18      66
GMAC                           7.375%   11/15/16      64
GMAC                           7.400%   12/15/17      63
GMAC                           7.500%   03/15/25      67
GMAC                           7.500%   08/15/17      66
GMAC                           7.500%   11/15/16      69
GMAC                           7.500%   11/15/17      68
GMAC                           7.500%   11/15/17      69
GMAC                           7.500%   12/15/17      67
GMAC                           7.500%   12/15/17      74
GMAC                           7.750%   10/15/17      66
GMAC                           8.000%   03/15/25      71
GMAC                           8.000%   10/15/17      70
GMAC                           8.000%   11/15/17      69
GMAC                           9.000%   07/15/20      77
GOLDEN BOOKS PUB              10.750%   12/31/04       0
GRANCARE INC                   9.375%   09/15/05       0
GULF STATES STL               13.500%   04/15/03     100
HARRAHS OPER CO                5.375%   12/15/13      65
HARRAHS OPER CO                5.625%   06/01/15      58
HARRAHS OPER CO                5.750%   10/01/17      55
HARRAHS OPER CO                6.500%   06/01/16      60
HAWAIIAN TELCOM                9.750%   05/01/13      40
HAWAIIAN TELCOM               12.500%   05/01/15      26
HEADWATERS INC                 2.500%   02/01/14      68
HEADWATERS INC                 2.500%   02/01/14      71
HERBST GAMING                  7.000%   11/15/14      22
HERBST GAMING                  8.125%   06/01/12      24
HERCULES INC                   6.500%   06/30/29      75
HERTZ CORP                     7.000%   01/15/28      75
HILTON HOTELS                  7.500%   12/15/17      74
HINES NURSERIES               10.250%   10/01/11      58
HUB INTL HOLDING              10.250%   06/15/15      75
HUMAN GENOME                   2.250%   08/15/12      74
HUNTINGTON CAPIT               6.650%   05/15/37      69
IDEARC INC                     8.000%   11/15/16      72
INDALEX HOLD                  11.500%   02/01/14      55
ION MEDIA                     11.000%   07/31/13      24
IRIDIUM LLC/CAP               10.875%   07/15/05       0
IRIDIUM LLC/CAP               11.250%   07/15/05       1
IRIDIUM LLC/CAP               13.000%   07/15/05       1
IRIDIUM LLC/CAP               14.000%   07/15/05       0
ISOLAGEN INC                   3.500%   11/01/24      15
JAZZ TECHNOLOGIE               8.000%   12/31/11      69
JB POINDEXTER                  8.750%   03/15/14      73
JETBLUE AIRWAYS                3.750%   03/15/35      70
JONES APPAREL                  6.125%   11/15/34      70
JPMORGAN CHASE                 9.500%   09/29/08      70
JPMORGAN CHASE                10.000%   07/31/08      70
JPMORGAN CHASE                12.000%   07/31/08      36
K HOVNANIAN ENTR               6.250%   01/15/15      69
K HOVNANIAN ENTR               6.250%   01/15/16      68
K HOVNANIAN ENTR               6.375%   12/15/14      69
K HOVNANIAN ENTR               6.500%   01/15/14      69
K HOVNANIAN ENTR               7.500%   05/15/16      69
K HOVNANIAN ENTR               7.750%   05/15/13      67
K HOVNANIAN ENTR               8.875%   04/01/12      76
K MART FUNDING                 8.800%   07/01/10       1
KAISER ALUMINUM               12.750%   02/01/03       5
KELLSTROM INDS                 5.750%   10/15/02       0
KELLWOOD CO                    7.625%   10/15/17      66
KEMET CORP                     2.250%   11/15/26      69
KEMET CORP                     2.250%   11/15/26      70
KEYSTONE AUTO OP               9.750%   11/01/13      64
KIMBALL HILL INC              10.500%   12/15/12       2
KMART 95-K1 PT                 8.990%   07/05/10    N.A.
KMART 95-K2 PT                 9.780%   01/05/20    N.A.
KMART 95-K4 PT                 9.350%   01/02/20       0
KNIGHT RIDDER                  4.625%   11/01/14      70
KNIGHT RIDDER                  5.750%   09/01/17      69
KNIGHT RIDDER                  6.875%   03/15/29      64
KNIGHT RIDDER                  7.150%   11/01/27      66
KRATON POLYMERS                8.125%   01/15/14      64
LAZYDAYS RV                   11.750%   05/15/12      73
LEHMAN BROS HLDG               4.800%   06/24/23      72
LEHMAN BROS HLDG               5.000%   05/28/23      78
LEHMAN BROS HLDG               5.450%   02/22/30      72
LEHMAN BROS HLDG               5.500%   04/15/23      79
LEHMAN BROS HLDG               5.500%   08/02/30      73
LEHMAN BROS HLDG               5.550%   01/25/30      75
LEHMAN BROS HLDG               5.600%   03/02/29      76
LEHMAN BROS HLDG               5.625%   03/15/30      73
LEHMAN BROS HLDG               5.700%   04/13/29      77
LEHMAN BROS HLDG               5.750%   12/16/28      70
LEHMAN BROS HLDG               5.750%   12/23/28      77
LEHMAN CAP VII                 5.857%      N.A.       72
LEINER HEALTH                 11.000%   06/01/12       2
LIBERTY MEDIA                  3.250%   03/15/31      67
LIBERTY MEDIA                  3.500%   01/15/31      54
LIBERTY MEDIA                  3.750%   02/15/30      56
LIBERTY MEDIA                  4.000%   11/15/29      56
LIFECARE HOLDING               9.250%   08/15/13      61
LIFETIME BRANDS                4.750%   07/15/11      72
LUCENT TECH                    6.500%   01/15/28      76
MAGNA ENTERTAINM               7.250%   12/15/09      51
MAGNA ENTERTAINM               8.550%   06/15/10      53
MAJESTIC STAR                  9.750%   01/15/11      34
MANNKIND CORP                  3.750%   12/15/13      53
MASONITE CORP                 11.000%   04/06/15      67
MBIA INC                       6.625%   10/01/28      68
MBIA INC                       7.000%   12/15/25      77
MEDIANEWS GROUP                6.375%   04/01/14      46
MEDIANEWS GROUP                6.875%   10/01/13      48
MERIX CORP                     4.000%   05/15/13      53
MERRILL LYNCH                  8.100%   06/04/09    N.A.
MERRILL LYNCH                 10.000%   03/06/09    N.A.
MERRILL LYNCH                 11.000%   04/28/09    N.A.
MERRILL LYNCH                 12.000%   03/26/10    N.A.
METALDYNE CORP                10.000%   11/01/13      56
METALDYNE CORP                11.000%   06/15/12      27
MILLENNIUM AMER                7.625%   11/15/26      58
MISSOURI PAC RR                5.000%   01/01/45      68
MOA HOSPITALITY                8.000%   10/15/07      75
MOMENTIVE PERFOR              11.500%   12/01/16      75
MORGAN STANLEY                10.000%   04/20/09    N.A.
MORGAN STANLEY                10.000%   05/20/09    N.A.
MORRIS PUBLISH                 7.000%   08/01/13      60
MOTOROLA INC                   5.220%   10/01/97      54
MOVIE GALLERY                 11.000%   05/01/12      30
MRS FIELDS                     9.000%   03/15/11      62
NATL FINANCIAL                 0.750%   02/01/12      71
NATL STEEL CORP                8.375%   08/01/06       0
NEFF CORP                     10.000%   06/01/15      45
NEKTAR THERAPEUT               3.250%   09/28/12      74
NELNET INC                     7.400%   09/29/36      67
NETWORK EQUIPMNT               3.750%   12/15/14      66
NEW ORL GRT N RR               5.000%   07/01/32      60
NEW PLAN EXCEL                 7.500%   07/30/29      67
NEW PLAN REALTY                6.900%   02/15/28      68
NEW PLAN REALTY                6.900%   02/15/28      68
NEW PLAN REALTY                7.650%   11/02/26      69
NEW PLAN REALTY                7.680%   11/02/26      65
NEW PLAN REALTY                7.970%   08/14/26      68
NEWARK GROUP INC               9.750%   03/15/14      75
NORTEK INC                     8.500%   09/01/14      70
NORTH ATL TRADNG               9.250%   03/01/12      62
NORTHERN PAC RY                3.000%   01/01/47      54
NORTHERN PAC RY                3.000%   01/01/47      75
NORTHERN TEL CAP               7.875%   06/15/26      70
NORTHWESTERN CRP               7.960%   12/21/26       4
NORTHWST STL&WIR               9.500%   06/15/01       0
NTK HOLDINGS INC               0.000%   03/01/14      53
NUTRITIONAL SRC               10.125%   08/01/09      13
NUVEEN INVEST                  5.500%   09/15/15      73
OAKWOOD HOMES                  7.875%   03/01/04       0
OAKWOOD HOMES                  8.125%   03/01/09       0
OMNICARE INC                   3.250%   12/15/35      72
OSCIENT PHARM                  3.500%   04/15/11      41
OSI RESTAURANT                10.000%   06/15/15      70
OUTBOARD MARINE                9.125%   04/15/17       7
OUTBOARD MARINE               10.750%   06/01/08      10
PAC-WEST TELECOM              13.500%   02/01/09       2
PACKAGING DYNAMI              10.000%   05/01/16      67
PALM HARBOR                    3.250%   05/15/24      59
PANTRY INC                     3.000%   11/15/12      70
PEGASUS SATELLIT               9.750%   12/01/06       0
PEGASUS SATELLIT              12.500%   08/01/07       0
PENHALL INTL                  12.000%   08/01/14      75
PIERRE FOODS INC               9.875%   07/15/12      29
PIXELWORKS INC                 1.750%   05/15/24      70
PLY GEM INDS                   9.000%   02/15/12      66
POPE & TALBOT                  8.375%   06/01/13       4
POPE & TALBOT                  8.375%   06/01/13      14
PORTOLA PACKAGIN               8.250%   02/01/12      58
POWERWAVE TECH                 1.875%   11/15/24      71
POWERWAVE TECH                 3.875%   10/01/27      73
POWERWAVE TECH                 3.875%   10/01/27      74
PRIMUS TELECOM                 3.750%   09/15/10      45
PRIMUS TELECOM                 5.000%   06/30/09      61
PRIMUS TELECOM                 8.000%   01/15/14      37
PROPEX FABRICS                10.000%   12/01/12       1
QUALITY DISTRIBU               9.000%   11/15/10      65
RADIAN GROUP                   5.375%   06/15/15      78
RADIAN GROUP                   5.625%   02/15/13      77
RAFAELLA APPAREL              11.250%   06/15/11      53
RAIT FINANCIAL                 6.875%   04/15/27      55
REALOGY CORP                  10.500%   04/15/14      76
REALOGY CORP                  12.375%   04/15/15      55
REALTY INCOME                  5.875%   03/15/35      71
REGIONS FIN TR                 6.625%   05/15/47      73
RENTECH INC                    4.000%   04/15/13      51
RESIDENTIAL CAP                8.000%   02/22/11      48
RESIDENTIAL CAP                8.375%   06/30/10      53
RESIDENTIAL CAP                8.500%   04/17/13      50
RESIDENTIAL CAP                8.500%   06/01/12      54
RESIDENTIAL CAP                8.875%   06/30/15      50
RESTAURANT CO                 10.000%   10/01/13      67
RH DONNELLEY                   6.875%   01/15/13      67
RH DONNELLEY                   6.875%   01/15/13      67
RH DONNELLEY                   6.875%   01/15/13      67
RH DONNELLEY                   8.875%   01/15/16      65
RH DONNELLEY                   8.875%   10/15/17      67
RICKEL HOME CNTR              13.500%   12/15/01       0
RITE AID CORP                  6.875%   08/15/13      70
RITE AID CORP                  6.875%   12/15/28      53
RITE AID CORP                  7.700%   02/15/27      59
RJ TOWER CORP                 12.000%   06/01/13       1
ROTECH HEALTHCA                9.500%   04/01/12      78
SEARS ROEBUCK AC               6.500%   12/01/28      75
SEARS ROEBUCK AC               6.750%   01/15/28      77
SEARS ROEBUCK AC               7.000%   06/01/32      68
SEARS ROEBUCK AC               7.500%   10/15/27      71
SERVICEMASTER CO               7.100%   03/01/18      54
SERVICEMASTER CO               7.250%   03/01/38      57
SERVICEMASTER CO               7.450%   08/15/27      48
SIX FLAGS INC                  4.500%   05/15/15      56
SIX FLAGS INC                  8.875%   02/01/10      88
SIX FLAGS INC                  9.625%   06/01/14      60
SIX FLAGS INC                  9.750%   04/15/13      65
SLM CORP                       4.800%   12/15/28      65
SLM CORP                       5.000%   06/15/19      66
SLM CORP                       5.000%   06/15/28      74
SLM CORP                       5.000%   09/15/15      72
SLM CORP                       5.000%   12/15/28      54
SLM CORP                       5.050%   03/15/23      59
SLM CORP                       5.150%   06/15/19      69
SLM CORP                       5.150%   12/15/28      69
SLM CORP                       5.190%   04/24/19      68
SLM CORP                       5.200%   03/15/28      62
SLM CORP                       5.200%   12/15/20    N.A.
SLM CORP                       5.250%   03/15/19      73
SLM CORP                       5.250%   03/15/28      70
SLM CORP                       5.250%   06/15/20      66
SLM CORP                       5.250%   06/15/28      57
SLM CORP                       5.250%   12/15/28      69
SLM CORP                       5.300%   09/15/30      63
SLM CORP                       5.350%   06/15/25      63
SLM CORP                       5.400%   03/15/19      74
SLM CORP                       5.400%   03/15/23      73
SLM CORP                       5.400%   06/15/30      60
SLM CORP                       5.450%   03/15/23      58
SLM CORP                       5.450%   03/15/28      72
SLM CORP                       5.450%   06/15/28      65
SLM CORP                       5.450%   06/15/28      67
SLM CORP                       5.450%   12/15/20      72
SLM CORP                       5.500%   03/15/19      74
SLM CORP                       5.500%   03/15/30      62
SLM CORP                       5.500%   03/15/30      64
SLM CORP                       5.500%   06/15/19      74
SLM CORP                       5.500%   06/15/28      62
SLM CORP                       5.500%   06/15/29      63
SLM CORP                       5.500%   06/15/29      63
SLM CORP                       5.500%   06/15/29      63
SLM CORP                       5.500%   09/15/19      62
SLM CORP                       5.500%   12/15/30      64
SLM CORP                       5.550%   03/15/18      72
SLM CORP                       5.550%   06/15/25      65
SLM CORP                       5.550%   06/15/28      72
SLM CORP                       5.600%   03/15/18      72
SLM CORP                       5.600%   03/15/22      68
SLM CORP                       5.600%   03/15/24      62
SLM CORP                       5.600%   03/15/29      59
SLM CORP                       5.600%   03/15/29      64
SLM CORP                       5.600%   06/15/18      72
SLM CORP                       5.600%   12/15/28      70
SLM CORP                       5.600%   12/15/29      57
SLM CORP                       5.600%   12/15/29      63
SLM CORP                       5.625%   01/25/25      65
SLM CORP                       5.625%   08/01/33      73
SLM CORP                       5.650%   03/15/18      70
SLM CORP                       5.650%   03/15/29      65
SLM CORP                       5.650%   03/15/29      74
SLM CORP                       5.650%   03/15/30      64
SLM CORP                       5.650%   03/15/32      62
SLM CORP                       5.650%   06/15/22      69
SLM CORP                       5.650%   06/15/22      70
SLM CORP                       5.650%   06/15/30      59
SLM CORP                       5.650%   09/15/30      65
SLM CORP                       5.650%   12/15/29      63
SLM CORP                       5.650%   12/15/29      64
SLM CORP                       5.650%   12/15/29      66
SLM CORP                       5.700%   03/15/29      61
SLM CORP                       5.700%   03/15/29      65
SLM CORP                       5.700%   03/15/29      66
SLM CORP                       5.700%   03/15/30      66
SLM CORP                       5.700%   03/15/32      65
SLM CORP                       5.700%   06/15/30      63
SLM CORP                       5.700%   12/15/29      62
SLM CORP                       5.750%   03/15/29      63
SLM CORP                       5.750%   03/15/29      65
SLM CORP                       5.750%   03/15/29      67
SLM CORP                       5.750%   03/15/29      72
SLM CORP                       5.750%   03/15/30      64
SLM CORP                       5.750%   03/15/30      67
SLM CORP                       5.750%   06/15/29      58
SLM CORP                       5.750%   06/15/29      65
SLM CORP                       5.750%   06/15/32      64
SLM CORP                       5.750%   06/15/32      64
SLM CORP                       5.750%   09/15/29      63
SLM CORP                       5.750%   12/15/29      62
SLM CORP                       5.750%   12/15/29      64
SLM CORP                       5.750%   12/15/29      64
SLM CORP                       5.750%   12/15/29      65
SLM CORP                       5.800%   03/15/32      64
SLM CORP                       5.800%   03/15/32      66
SLM CORP                       5.800%   03/15/32      66
SLM CORP                       5.800%   12/15/28      64
SLM CORP                       5.850%   03/15/32      58
SLM CORP                       5.850%   03/15/32      59
SLM CORP                       5.850%   03/15/32      66
SLM CORP                       5.850%   06/15/32      66
SLM CORP                       5.850%   06/15/32      66
SLM CORP                       5.850%   09/15/29      64
SLM CORP                       5.850%   09/15/29      66
SLM CORP                       5.850%   12/15/31      63
SLM CORP                       5.900%   09/15/19      73
SLM CORP                       6.000%   03/15/27      68
SLM CORP                       6.000%   03/15/29      67
SLM CORP                       6.000%   03/15/37      62
SLM CORP                       6.000%   03/15/37      66
SLM CORP                       6.000%   03/15/37      66
SLM CORP                       6.000%   06/15/19      73
SLM CORP                       6.000%   06/15/21      69
SLM CORP                       6.000%   06/15/21      70
SLM CORP                       6.000%   06/15/26      66
SLM CORP                       6.000%   06/15/26      68
SLM CORP                       6.000%   06/15/29      60
SLM CORP                       6.000%   06/15/29      62
SLM CORP                       6.000%   06/15/29      67
SLM CORP                       6.000%   06/15/31      65
SLM CORP                       6.000%   06/15/31      67
SLM CORP                       6.000%   09/15/19      74
SLM CORP                       6.000%   09/15/19      75
SLM CORP                       6.000%   09/15/29      65
SLM CORP                       6.000%   09/15/29      66
SLM CORP                       6.000%   09/15/29      66
SLM CORP                       6.000%   09/15/29      67
SLM CORP                       6.000%   09/15/29      67
SLM CORP                       6.000%   12/15/26      68
SLM CORP                       6.000%   12/15/26      68
SLM CORP                       6.000%   12/15/26      75
SLM CORP                       6.000%   12/15/28      61
SLM CORP                       6.000%   12/15/28      65
SLM CORP                       6.000%   12/15/28      70
SLM CORP                       6.000%   12/15/31      65
SLM CORP                       6.000%   12/15/31      67
SLM CORP                       6.000%   12/15/31      67
SLM CORP                       6.000%   12/15/31      68
SLM CORP                       6.050%   12/15/26      67
SLM CORP                       6.050%   12/15/31      67
SLM CORP                       6.100%   12/15/31      66
SLM CORP                       6.150%   03/10/21      75
SLM CORP                       6.150%   06/15/21      68
SLM CORP                       6.150%   06/15/21      71
SLM CORP                       6.150%   09/15/29      66
SLM CORP                       6.150%   09/15/29      68
SLM CORP                       6.200%   12/15/31      67
SLM CORP                       6.250%   06/15/29      68
SLM CORP                       6.250%   06/15/29      68
SLM CORP                       6.250%   09/15/29      67
SLM CORP                       6.250%   09/15/29      68
SLM CORP                       6.250%   09/15/31      68
SLM CORP                       6.350%   09/15/31      67
SLM CORP                       6.350%   09/15/31      68
SLM CORP                       6.400%   09/15/31      62
SLM CORP                       6.450%   09/15/31      69
SLM CORP                       6.500%   09/15/31      69
SLM CORP                       6.850%   07/07/36      73
SPANSION LLC                   2.250%   06/15/16      49
SPANSION LLC                  11.250%   01/15/16      66
SPECIAL DEVICES               11.375%   12/15/08    N.A.
SPECTRUM BRANDS                7.375%   02/01/15      73
SPHERIS INC                   11.000%   12/15/12      83
SPINNAKER INDS                10.750%   10/15/06       0
STANDARD PACIFIC               9.250%   04/15/12      78
STANDRD PAC CORP               6.000%   10/01/12      71
STANLEY-MARTIN                 9.750%   08/15/15      45
STATION CASINOS                6.500%   02/01/14      63
STATION CASINOS                6.625%   03/15/18      59
STATION CASINOS                6.875%   03/01/16      60
SUNTRUST PFD CAP               5.853%       N.A.      74
SWIFT TRANS CO                12.500%   05/15/17      41
TELIGENT INC                  11.500%   03/01/08       0
TELIGENT INC                  11.500%   12/01/07       0
TENET HEALTHCARE               6.875%   11/15/31      75
THERAVANCE INC                 3.000%   01/15/15      76
TIMES MIRROR CO                6.610%   09/15/27      37
TIMES MIRROR CO                7.250%   03/01/13      39
TIMES MIRROR CO                7.250%   11/15/96      32
TIMES MIRROR CO                7.500%   07/01/23      41
TOUSA INC                      7.500%   01/15/15      10
TOUSA INC                      7.500%   03/15/11       9
TOUSA INC                      9.000%   07/01/10      55
TOUSA INC                      9.000%   07/01/10      62
TOUSA INC                     10.375%   07/01/12      11
TOYS R US                      7.375%   10/15/18      78
TRANS-LUX CORP                 8.250%   03/01/12      56
TRANSMERIDIAN EX              12.000%   12/15/10      61
TRIBUNE CO                     4.875%   08/15/10      62
TRIBUNE CO                     5.250%   08/15/15      44
TRUE TEMPER                    8.375%   09/15/11      65
TRUMP ENTERTNMNT               8.500%   06/01/15      68
TXU CORP                       6.500%   11/15/24      77
TXU CORP                       6.550%   11/15/34      75
UAL 1991 TRUST                10.020%   03/22/14      48
UAL 1995 TRUST                 9.020%   04/19/12      40
UAL 1995 TRUST                 9.560%   10/19/18      45
UAL CORP                       4.500%   06/30/21      52
UAL CORP                       4.500%   06/30/21      56
UAL CORP                       5.000%   02/01/21      50
UNIVERSAL STAND                8.250%   02/01/06       0
US AIR INC                    10.750%   01/15/49       0
US AIR INC                    10.900%   01/01/49       0
US AIRWAYS GROUP               7.000%   09/30/20      70
VENTURE HLDGS                  9.500%   07/01/05       0
VENTURE HLDGS                 11.000%   06/01/07       0
VERASUN ENERGY                 9.375%   06/01/17      68
VERENIUM CORP                  5.500%   04/01/27      41
VERTIS INC                    10.875%   06/15/09      46
VESTA INSUR GRP                8.750%   07/15/25       2
VICORP RESTAURNT              10.500%   04/15/11      15
VION PHARM INC                 7.750%   02/15/12      53
VIRGIN RIVER CAS               9.000%   01/15/12      72
VISTEON CORP                   7.000%   03/10/14      66
WASH MUTUAL PFD                6.534%       N.A.      59
WASH MUTUAL PFD                6.665%       N.A.      62
WASH MUTUAL PFD                6.895%       N.A.      60
WCI COMMUNITIES                4.000%   08/05/23      63
WCI COMMUNITIES                6.625%   03/15/15      41
WCI COMMUNITIES                7.875%   10/01/13      40
WCI COMMUNITIES                9.125%   05/01/12      44
WCI STEEL ACQUIS               8.000%   05/01/16      64
WEBSTER CAPITAL                7.650%   06/15/37      67
WERNER HOLDINGS               10.000%   11/15/07       0
WILLIAM LYON                   7.500%   02/15/14      61
WILLIAM LYON                   7.625%   12/15/12      57
WILLIAM LYON                  10.750%   04/01/13      68
WIMAR OP LLC/FIN               9.625%   12/15/14      56
WINSTAR COMM INC              10.000%   03/15/08       0
WINSTAR COMM INC              14.750%   04/15/10       0
WITCO CORP                     6.875%   02/01/26      70
YOUNG BROADCSTNG               8.750%   01/15/14      58
YOUNG BROADCSTNG              10.000%   03/01/11      67

                             *********

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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