TCR_Public/080724.mbx          T R O U B L E D   C O M P A N Y   R E P O R T E R

             Thursday, July 24, 2008, Vol. 12, No. 175            

                             Headlines

A21 INC: Amends Employment Agreement with CEO John Ferguson
AINSWORTH LUMBER: Names 7 Members to Post-Recapitalization Board
AIRPLANES PASS-THROUGH: Fitch Holds 'BB' Rating on Cl. A-8 Notes
AMERICHIP INTERNATIONAL: Report for May 31 Quarter to be Delayed
AMPEX CORP: Court Okays Modifications to Plan, D/S Supplement

AMR CORP: Files Quarterly Report for Period Ended June 30
APPLICA PET: Sale Termination Cues Moody's to Withdraw Ratings
APOLLO DRILLING: Inks Securities Purchase Agreement
ASARCO LLC: Wants September 19 Set as Admin. Claims Bar Date
ASARCO LLC: Seeks Appointment of Official Asbestos Committee

ASARCO LLC: Wants Robert Pate as Future Asbestos Claimants Rep.
ASG CONSOLIDATED: Moody's Rates $55MM Discount Notes B3
ATRIUM CORP: Inks Forbearance and Lockup Contracts with Creditors
AVETA INC: Amends Credit Agreement, Repays $50 Million Term Loan
AVIATION CAPITAL: Fitch Puts Two Low-B Ratings Under Neg. Watch

BALLY TECHNOLOGIES: S&P Raises Rating to 'BB'; Off CreditWatch
BAYTEX ENERGY: S&P Upgrades Rating to 'BB-' on Strong Performance
CAPITAL RESERVE: Child Van Wagoner Expresses Going Concern Doubt
CARROLS CORP: S&P Affirms 'B+' Corporate Credit Rating
CDO VI: Moody's Rates $12.3MM Class E Floating Rate Notes Ba2

COMMISSARY OPERATIONS: Files for Bankruptcy in Tennessee
COMMISSARY OPERATIONS: Voluntary Chapter 11 Case Summary
DANKA BUSINESS: Ernst & Young Expresses Going Concern Doubt
DELTA AIR: Edward Bastian Disposes of 18,000 Common Shares
DERECKTOR SHIPYARDS: Bankruptcy Case Won't Affect 250 Workers

DISTRIBUTED ENERGY: Arent Fox Approved as Committee's Counsel
DRIGGS FARMS: Taps Chikol Equities as Consultant
EAGLE CREEK: Waccamaw Bank Presses for Loan Usage Examination
EL PASO CHILE: Has Interim Court Nod to Use Cash Collateral
ENHANCED MORTGAGE-BACKED SECURITIES: Moody's Junks Rating on Notes

ERIK BENHAM: Wants to Employ Vaughn Taus as Counsel
FOCUS ENHANCEMENTS: Rule Violation Prompts Nasdaq to Delist Stocks
FORD MOTOR: Edward Altman's Z-score Model Predicts Bankruptcy
GE COMMERCIAL: S&P Puts Loan Trust Ratings on Watch Negative
GENCORP INC: Files Form S-8 to Register 5MM Shares for Stock Fund

GENERAL MOTOR: Edward Altman's Z-score Model Predicts Bankruptcy
GOLD TOE: Moody's Junks Ratings on Covenant Non-compliance Worry
GREEKTOWN CASINO: Has Court Nod to Assume NRT Corp. Contracts
HARRINGTON HOLDINGS: Moody's Puts Stable Outlook to B2 Ratings
HOMEBANC CORP: Has Until Oct. 6 to Solicit Votes for Ch. 11 Plan

ICTS INTERNATIONAL: Mahoney Cohen Expresses Going Concern Doubt
INTERLINE RESOURCES: HJ & Associates Raises Going Concern Doubt
INTERPUBLIC GROUP: Secures $335 Million Revolving Credit Facility
IPS CORP: S&P Revises Outlook to Neg, Affirms 'B' Credit Rating
JETBLUE AIRWAYS: Moody's Cuts Corporate Family Rating to Caa2

JHT HOLDINGS: Taps Pepper Hamilton as Delaware Counsel
JUNIPER GENERATION: S&P Cuts Rating on $206MM Notes to 'BB-'
LEASE INVESTMENT: Fitch Downgrades Ratings on Five Note Classes
LIBERTAS PREFERRED FUNDING: Moody's Junks Ratings on Eight Notes
MATTHEW LEASING: Case Summary & 20 Largest Unsecured Creditors

MEDICAL: 10th Cir. Affirms Carl Zeiss' Non-Insider Status
MERGE HEALTHCARE: Inks Employment Agreements with Key Officers
MERVYN'S LLC: Cerberus Sold Stake to Sun Last Year, NY Post Says
M FABRIKANT: Bankruptcy Fees and Expenses Total More Than $8 Mil.
MNJ USED CARS: Owner Nazer Haidar to Serve 33 Months in Jail

MRS. FIELDS: Stephen Russo Decides to Terminate Employment
NATIONAL DRY: Gets Initial OK to Use Prudential's Cash Collateral
NATIONAL DRY: Wants Court to Approve Proposed Bidding Procedures
NETWOLVES CORP: Plan Confirmation Hearing to Continue August 20
NEUMANN HOMES: Has Until December 31 to File Chapter 11 Plan

NORTHSTAR NEUROSCIENCE: Liquidation May Yield More Value, Says RCA
NUTRITIONAL SOURCING: Has Until August 1 to File Chapter 11 Plan
OCCULOGIX INC: Restates Annual and Quarterly Financial Reports
ORAGENICS INC: Kirkland Russ Expresses Going Concern Doubt
OSYKA CORP: Judge Isgur Approved Amended Disclosure Statement

PALM HARBOR: Earns $1.6 Million in Fiscal 2009 First Quarter
PARADIGM MEDICAL: Amends Report to Adjust Derivatives & Warrants
PEGASUS AVIATION: Fitch Cuts Ratings to 'CCC/DR2' on Two Classes
PLASTECH ENGINEERED: Wants to Employ Groom Law as Benefits Counsel
PLASTECH ENGINEERED: Wants 503(b)(9) Claims Resolution Rules Set

PRB ENERGY: Michael Purfield Resigns as Chief Operating Officer
PREFERRED VOICE: Losses Prompt Philip Vogel's Going Concern
PROXYMED INC: Files Chapter 11 Petition, DIP and Sale Motions
PROXYMED INC: Case Summary & 20 Largest Unsecured Creditors
RG GLOBAL: McKennon Wilson Expresses Going Concern Doubt

SCOTTISH RE: Ernst & Young Expresses Going Concern Doubt
SEMGROUP ENERGY: Posts $12.9 Million Net Loss for FY 2007
SIMDAG-ROBEL: Partners Face Breach Suit Filed by Donald Trump
SIRIUS SATELLITE: XM Satellite Merger Gets FCC Votes
SIRIUS SATELLITE: Moody's to Review Ratings on Pending Merger

SIRVA INC: Withdrawal of Triple Net's Appeal on DIP Financing OK'd
SOUTHERN LUMBER II: Case Summary & Five Largest Unsec. Creditors
SPECTRUM BRAND: Sale Failure Cues Moody's to Confirm Junk Rating
SPEIGHT FAMILY: Case Summary & Largest Unsecured Creditor
SPHERE DRAKE: PRO Insurance Invokes Chapter 15

SPHERE DRAKE: Chapter 15 Case Summary
STURGIS IRON: Closes Sale of Scrap Yards to Steel Dynamics  
TAHERA DIAMOND: Court Orders C$2 Mil. Reserve for Miners' Liens
TELKONET INC: Promotes Jeff Sobieski to Chief Operating Officer
TELKONET INC: Registers 19.5MM Shares Issued to YA Global

TORRENT ENERGY: Gets Bid Price Non-compliance Notice from Nasdaq
TRIBUNE COMPANY: Moody's Junks Corporate Family Rating to Caa2
TRITON AVIATION: Fitch Keeps 'C/DR6' Ratings on Four Note Classes
TRONOX INC: Lenders Waive Leverage Ratio Financial Covenant
UAL CORP: Reports $2.7 Billion Net Loss in Second Quarter 2008

UAL CORP: Demands Payment of $4.5 Million Damages Under T8 Lease
UAL CORP: Deloitte Audits Statements on Four Incentive Plans
UAL CORP: Ends Some Int'l Flights; Defers Moscow Flight Debut
UAL CORP: Lays Off 485 Jobs From Illinois and Colorado

US AIRWAYS: Moody's Junks Corporate Family Rating; Outlook Neg
US CONCRETE: 'B+' Corporate Credit Rating On CreditWatch Negative
U.S. ENERGY: Has Until August 22 to File Chapter 11 Plan
WASHINGTON MUTUAL: $3.3BB Loss Cues Moody's to Review Ratings
WCI COMMUNITIES: Amends Exchange Offer for $125MM of 4% Sr. Notes

XERIUM TECH: Names CEO Stephen R. Light as Chairman of the Board
XM SATELLITE: Sirius Merger Wins Approval of Two FC Commissioners
ZVUE CORP: Has Until August 1 to Comply with Nasdaq Listing Rules

* Chapter 11 Cases with Assets & Liabilities Below $1,000,000

                             *********

A21 INC: Amends Employment Agreement with CEO John Ferguson
-----------------------------------------------------------
a21 Inc. entered on July 10, 2008, into an amended and restated
employment agreement with John Ferguson, the company's chief
executive officer, pursuant to which Mr. Ferguson will be entitled
to receive, in addition to the compensation specified in his
original employment agreement:

     (i) a special bonus of up to $125,000, in the event that the
         company undergoes a change of control and a greater than
         $9,000,000 reduction in the amount of the company's
         outstanding promissory notes occurs; and

    (ii) an increase in the severance payments to be received in
         the event that Mr. Ferguson is terminated by the company
         without cause after a change in control of the company
         from an amount equal to six (6) months salary, or
         $125,000, to an amount equal to twelve (12) months'
         salary, or $250,000, payable over a period of one year.

                          About a21 Inc.

a21 Inc. (OTC BB: ATWO) -- http://www.a21group.com/-- is an    
online digital content company.  a21, through its subsidiary
SuperStock, with offices in Florida, Iowa, and London, aggregates
visual content from photographers, photography agencies, archives,
libraries, and private collections and licenses the visual content
to its  customers.

As reported in the Troubled Company Reporter on May 22, 2008, a21
Inc.'s consolidated balance sheet at March 31, 2008, showed
$28.6 million in total assets, $30.2 million in total liabilities,
and $553,000 in minority interest, resulting in $2.1 million
capital deficit.

                       Going Concern Doubt

As reported in the Troubled Company Reporter on April 22, 2008,
BDO Seidman LLP, in West Palm Beach, Fla., expressed substantial
doubt about a21 Inc.'s ability to continue as a going concern
after auditing the company's consolidated financial statements for
the year ended Dec. 31, 2007.  The auditing firm pointed to the
company's recurring losses from operations and net capital
deficiency.


AINSWORTH LUMBER: Names 7 Members to Post-Recapitalization Board
----------------------------------------------------------------
Ainsworth Lumber Co. Ltd., in a regulatory filing with the U.S.
Securities and Exchange Commission, disclosed that pursuant to its
recapitalization, these individuals will be appointed to serve on
the company's new Board of Directors:  

    * Robert Chadwick,
    * Jay Gurandiano,
    * Paul Houston,
    * Morley Koffman,
    * John Lacey,
    * Gordon Lancaster, and
    * Jonathan I. Mishkin

Ainsworth said the Recapitalization will become effective pursuant
to the company's Plan of Arrangement.  The current Board of
Directors will be replaced by the New Board on the effective date
of the Recapitalization, which is expected to occur by July 29,
2008.

A schedule of the Proposed New Board Nominees following the
effective date of the Recapitalization is available at no charge
at http://ResearchArchives.com/t/s?2fe4

As reported by the Troubled Company Reporter on June 23, 2008,
Ainsworth Lumber reached an agreement with its major financial
creditors regarding a recapitalization transaction.

The Recapitalization will accomplish a significant de-levering of
Ainsworths balance sheet.  Ainsworths total debt -- consisting of
senior unsecured notes, term loans and equipment and financing
loans -- will be reduced from US$985 million -- or C$1,012 million
-- as at March 31, 2008, to roughly US$521 million or C$536
million, reducing annual interest expense from approximately C$66
million to approximately C$49 million.  Under the
Recapitalization, Ainsworth will also receive a substantial
infusion of cash from the issuance of US$200 million aggregate
principal amount of new notes.

Management believes that the debt reduction and capital infusion
will improve Ainsworth's ability to manage the effects of the
ongoing downturn in the U.S. housing market and its ability to
attract and retain employees, customers and suppliers without
having to pursue other alternatives that could include the sale of
core assets or non-consensual proceedings under creditor
protection legislation.  The successful implementation of the
Recapitalization is expected to be a significant positive step in
assisting the company in stabilizing its operations.  If the
Recapitalization or another alternative transaction to address the
company's liquidity needs is not completed by the end of July
2008, the company may not be able to pay the interest on certain
series of the existing notes when the interest becomes due.

Under the recapitalization, the company's noteholders will
collectively receive 96% of the new common shares and common
shareholders will receive their pro rata share of 4% of the new
common shares and cashless warrants to receive additional new
common shares representing 8% of the new common shares, on a fully
diluted basis, if the company's equity market capitalization
exceeds USD1.2 billion before the expiry of the warrants.

Pursuant to the modifications, the term of the warrants will
expire after five years of the date of the recapitalization and
existing common shareholders as of the effective date of the
recapitalization will be given the right to receive their pro rata
share of 30.2% of the net proceeds received by the company, if
any, from any final adjudication or settlement of certain
litigation and claims against specified third parties.

Ainsworth also delivered to the U.S. Securities and Exchange
Commission copies of various agreements and other documents
related to the Recapitalization:

  -- Noteholder Support Agreement dated June 16, 2008;

  -- Backstop Commitment Letter dated June 16, 2008;

  -- Shareholder Support Agreement for D. Allen Ainsworth, dated
     June 16, 2008;

  -- Shareholder Support Agreement for Catherine E. Ainsworth,
     dated June 16, 2008;

  -- Shareholder Support Agreement for Brian E. Ainsworth, dated
     June 16, 2008;

  -- Shareholder Support Agreement for Grant Forest Products
     Corp., dated June 24, 2008;

  -- Management Proxy Circular, dated June 24, 2008; and

  -- Material Change Report, dated June 27, 2008

Full-text copies of the documents are available at no charge at:

    http://ResearchArchives.com/t/s?2fe9

              Issuance of Rollover Notes Due 2015

Pursuant to the Recapitalization, Ainsworth intends to exchange,
in part, US$150,000,000 aggregate principal amount of the
company's 11% Senior Unsecured Notes due 2015 -- Rollover Notes --
for all of Ainsworth's outstanding:

  * Senior Unsecured Floating Rate Notes due October 1, 2010;
  * 7.25% Senior Unsecured Notes due October 1, 2012;
  * Senior Unsecured Floating Rate Notes due April 1, 2013;
  * 6.75% Senior Unsecured Notes due March 15, 2014; and
  * 6.75% Senior Unsecured Notes due March 15, 2014

Registration of the distribution of the Rollover Notes under the
Securities Act of 1933, as amended, is not required by reason of
the exemption from registration provided by Section 3(a)(10) of
the 1933 Act.

Ainsworth is also offering to qualifying noteholders
US$200,000,000 aggregate principal amount of the company's 11%
Senior Unsecured Notes due 2015 on a private placement basis for
cash.

A full-text copy of the Form T-3 Ainsworth filed with the
Securities and Exchange Commission is available at no charge at:

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

                    About Ainsworth Lumber

Headquartered in Vancouver, British Columbia, Ainsworth Lumber Co.
Ltd. (TSX: ANS) -- http://www.ainsworth.ca/-- is a manufacturer   
of engineered wood products, such as oriented strand board (OSB)
and specialty overlaid plywood.  The company owns six OSB
manufacturing facilities, three in Canada, and three in northern
Minnesota.  

The company also has a 50% ownership interest in an OSB facility
located in High Level, Alberta.  Due to market conditions, the
company is presently operating three OSB facilities in Canada and
one OSB facility in Minnesota.

Ainsworth Lumber Co. Ltd.'s consolidated balance sheet at March
31, 2008, showed C$1.05 billion in total assets and C$1.12 billion
in total liabilities, resulting in a roughly C$75.2 million total
stockholders' deficit.

                          *     *     *

As reported by Troubled Company Reporter on July 1, 2008, Moody's
Investors Service assigned 'Caa3' ratings to Ainsworth Lumber Co.
Ltd.'s proposed new senior unsecured debt and upgraded the
company's corporate family rating to 'Caa2' from 'Ca'.  The
upgrade reflects the company's announcement of a recapitalization
transaction to convert its existing unsecured notes into equity
and new debt, and the issuance of new debt to enhance liquidity.

                     Going Concern Doubt

As reported by Troubled Company Reporter on June 18, 2008,
the company believes that there exists reasonable doubt about the
its ability to continue as a going concern because of the
its current liquidity position and forecasted operating cash
flows and capital requirements for the next 12 months.  

In addition, the decline in demand for OSB in the U.S. residential
housing market and the significant appreciation of the Canadian
dollar against the U.S. dollar led to negative operating margins.   

Under the company's existing long-term and current indebtedness,
over the remainder of 2008 the company must provide for interest
payments of approximately C$62.0 million and principal payments of
C$8.5 million.  Under these circumstances, the company has
significant liquidity risk.


AIRPLANES PASS-THROUGH: Fitch Holds 'BB' Rating on Cl. A-8 Notes
----------------------------------------------------------------
Fitch Ratings has taken these rating actions for Airplanes Pass-
Through Trust as outlined below:

  -- Class A-8 notes affirmed at 'BB';
  -- Class A-9 notes downgraded to 'CCC/DR3' from 'B+';
  -- Class B notes remain at 'C/DR6';
  -- Class C notes remain at 'C/DR6';
  -- Class D notes remain at 'C/DR6'.

Cash flow available to service debt in the Airplanes transaction
has declined over the past year, driven by a significant increase
in monthly expenses, which has further stressed the transaction
structure.  While the class A notes are receiving current interest
payments and partial minimum principal, the reliability of full
principal payment on the class A-9 notes has declined.  The rating
differential between the A-8 and A-9 notes accounts for the fact
that the A-8 is currently receiving the full benefit of class A
principal payments.

In addition, the Airplanes portfolio contains significant
concentrations in older generation, less fuel efficient aircraft
types such as 737 Classics and MD-80s.  These aircraft types are
exposed to potential value and lease rate deterioration resulting
from increased fuel prices, airline capacity reductions, and
bankruptcies in the current environment.

Fitch's analysis incorporated expected cash flow to be available
to the trust over the remaining life of the transaction.  This
expectation is based on several factors including aircraft age,
current portfolio value, potential lease rates, and perceived
liquidity of the portfolio.  Lease rate and portfolio value
expectations have been updated to reflect Fitch's views on certain
aircraft given the aviation market volatility and significantly
elevated fuel prices.

Airplanes originally issued $4.048 billion of notes in March 1996
followed by two refinancing trusts, one in March 1998 and the
other in March 2001.  Airplanes is a trust formed to conduct
limited activities, including the buying, owning, leasing and
selling of commercial jet aircraft. As of March 31, 2008
Airplanes' portfolio consisted of 121 aircraft compared to 193 at
the time of the 2001 refinancing trust due to continuing asset
sales.  Primary servicing is being performed by General Electric
Capital Aviation Services, GECAS (a wholly owned subsidiary of
General Electric Capital Corp.), while the administrative agent
role is being performed by AerCap Aviation Solutions (formerly
Debis AirFinance).


AMERICHIP INTERNATIONAL: Report for May 31 Quarter to be Delayed
----------------------------------------------------------------
Americhip International Inc. disclosed July 15 that it will be
unable to file its report on Form 10-Q for the second quarter
ended May 31, 2008, within the prescribed time because of delays
in completing the preparation of its unaudited financial
statements and its management discussion and analysis.  The
quarterly report will be filed on or before the fifth calendar day
following the prescribed due date.

                  About AmeriChip International

Headquartered in Clinton Township, Mich., AmeriChip International
Inc. (OTC BB: ACHI.OB) -- http://www.americhiplacc.com/-- holds a   
patented technology known as Laser Assisted Chip Control, which
can be used to re-engineer the manufacturing process for
industrial metal machining applications.

According to AmeriChip International, this technology, when
implemented by the customer, will eliminate dangerous ribbon-like
steel chips that tangle around moving tool parts, automation
devices and other components essential to the machine processing
of low to medium grade carbon steels and non-ferrous metal parts.

As reported in the Troubled Company Reporter on May 6, 2008, the
company's consolidated balance sheet at Feb. 29, 2008, showed
$7,329,077 in total assets, $6,987,585 in total liabilities, and
$341,492 in total stockholders' equity.

                     Going Concern Doubt

As reported in the Troubled Company Reporter on March 13, 2008,
Jewett, Schwartz, Wolfe & Associates, in Hollywood, Fla.,  
expressed substantial doubt about Americhip International Inc.'s
ability to continue as a going concern after auditing the
company's consolidated financial statements for the year ended
Nov. 30, 2007.  The auditing firm pointed to the company's  
recurring losses from operations.

At Feb. 29, 2008, the company had an accumulated deficit of
$33,129,549.  This compares with an accumulated deficit of
$32,159,967 at Nov. 30, 2007.


AMPEX CORP: Court Okays Modifications to Plan, D/S Supplement
-------------------------------------------------------------
Ampex Corp. disclosed in a regulatory SEC filing Friday, that on
July 14, 2008, the United States Bankruptcy Court for the Southern
District of New York granted the company and certain of its U.S.
subsidiaries' motion dated July 9, 2008, for an order authorizing,
among other things, certain modifications to their Third Amended
Joint Chapter 11 Plan of Reorganization, and approved a proposed
supplement to the Disclosure Statement relating to the Plan, and
other related relief.  

The Plan was modified, among other things, to revise certain terms
relating to lump sum cash payment elections by holders of
unsecured claims and certain conditions precedent to consummation
of the Plan.  The Supplement contains a summary of the
modifications made to the Plan.  The Debtors plan to distribute
the Plan and Supplement to, and to resolicit the votes of, the
holders of unsecured claims affected by the modifications.

Also on July 9, 2008, the Debtors entered into a Plan Support
Agreement (PSA) with the Official Committee of Unsecured Creditors
in the chapter 11 case.  Under the PSA, the Committee has agreed
to support the Plan and to urge holders of unsecured claims to
vote to accept the Plan, among other things.

A full-text copy of the First Modified Third Amended Joint Chapter  
11 Plan of Reorganization, dated July 9, 2008, is available for
free at http://researcharchives.com/t/s?2fcb

A full-text copy of the Supplement to Disclosure Statement with
Respect to First Modified Third Amended Joint Chapter 11 Plan of
Reorganization, dated July 14, 2008, is available for free at:

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

A full-text copy of the Plan Support Agreement dated as of July 9,
2008, among the Debtors and the Committee is available for free
at http://researcharchives.com/t/s?2fce

Headquartered in Redwood City, California, Ampex Corp. --  
http://www.ampex.com/-- (Nasdaq:AMPX) is a licensor of visual           
information technology.  The company has two business segments:
Recorders segment and Licensing segment.  The Recorders segment
primarily includes the sale and service of data acquisition and
instrumentation recorders (which record data and images rather
than computer information), and to a lesser extent mass data
storage products.  The Licensing segment involves the licensing
of intellectual property to manufacturers of consumer digital
video products through their corporate licensing division.

On March 30, 2008, Ampex Corp. and six affiliates filed for
protection under Chapter 11 of the Bankruptcy Code with the U.S.
Bankruptcy Court for the Southern District of New York (Case
Nos. 08-11094 through 08-11100).  Matthew Allen Feldman, Esq.,
and Rachel C. Strickland, Esq., at Willkie Farr & Gallagher LLP,
represent the Debtors in their restructuring efforts.  The
Debtors have also retained Conway Mackenzie & Dunleavy as their  
financial advisors.  In its schedules of assets and liabilities
filed with the Court, Ampex Corp. disclosed total assets of
$9,770,089 and total debts of $82,488,054.

The Debtors have nine foreign affiliates that are incorporated
in seven countries -- one each in the United Kingdom, Japan,
Belgium, Colombia and Brazil and two each in Germany and Mexico.  
With the exception of the affiliates located in the U.K. and
Japan, none of the other foreign affiliates conduct meaningful
business activity.  As of March 30, 2008, none of the foreign
affiliates have commenced insolvency proceedings.


AMR CORP: Files Quarterly Report for Period Ended June 30
---------------------------------------------------------
AMR Corp. filed on July 17, 2008, its quarterly report on Form
10-Q for the second quarter ended June 30, 2008.

At June 30, 2008, the company's consolidated balance sheet showed
$28.9 billion in total assets, $27.2 billion in total liabilities,
and $1.7 billion in total stockholders' equity.

The company's consolidated balance sheet at June 30, 2008, also
showed strained liquidity with $9.1 billion in total current
assets available to pay $10.6 billion in total current
liabilities.

As reported in the Troubled Company Reporter on July 17, 2008, AMR
Corp., the parent company of American Airlines Inc., reported a
net loss of $1.4 billion for the second quarter of 2008, compared
with net income of $317.0 million for the second quarter of 2007.

Full-text copies of the company's consolidated financial
statements for the quarter ended June 30, 2008, are available for
free at http://researcharchives.com/t/s?2fe2

Headquartered in Forth Worth, Texas, AMR Corporation (NYSE:
AMR) operates with its principal subsidiary, American Airlines
Inc. -- http://www.aa.com/-- a worldwide scheduled passenger   
airline.  At the end of 2006, American provided scheduled jet
service to about 150 destinations throughout North America, the
Caribbean, Latin America, including Brazil, Europe and Asia.  
American is also a scheduled airfreight carrier, providing
freight and mail services to shippers throughout its system.

Its wholly owned subsidiary, AMR Eagle Holding Corp., owns two
regional airlines, American Eagle Airlines Inc. and Executive
Airlines Inc., and does business as "American Eagle."  American
Beacon Advisors Inc., a wholly owned subsidiary of AMR, is
responsible for the investment and oversight of assets of AMR's
U.S. employee benefit plans, as well as AMR's short-term
investments.

                          *     *     *

As reported in the Troubled Company Reporter on July 15, 2008, the
TCR said that Moody's Investors Service placed the debt ratings of
AMR Corp. and its subsidiaries under review for possible
downgrade.  The company has an outstanding B2 corporate family
rating.  The review includes the ratings for certain equipment
trust certificates and enhanced equipment Trust Certificates of
American Airlines, Inc.

                 Likely Bankruptcy Filing This Year

Stockhouse.com has said that AMR Corp. could tumble into chapter
11 bankruptcy this year.  Stockhouse.com, as quoted in a story
that appeared in the Troubled Company Reporter on June 5, 2008,
said that although AMR is the world's largest airline, it is now a
small cap stock, with a market value of only $1.8 billion.  The
report also notes that AMR has $9.3 billion in debt and may not
have the money to cover its debt service as the year passes.

AMR said report of possible bankruptcy filing is unfounded.

The TCR reported on May 26, 2008, that Jamie Baker, an analyst at
J.P. Morgan, said U.S. airline industry stands to post a
collective $7,200,000,000 in operating losses in 2008.  The
results would be wider than an initial forecast of $4,600,000,000
loss, the analyst said.

Mr. Baker, in his research note, said though investors, management
and analysts may talk about airlines acting collectively to reduce
capacity to firm up revenue, the reality is that they are more
likely to dig in and try to outlast each other.

U.S. Airways has the highest risk of bankruptcy, followed by
Northwest Airlines, United Air Lines' parent UAL Corp., AMR Corp.,
JetBlue, Continental Airlines, AirTran, Delta Air Lines, Alaska
Air Lines and Southwest Airlines.


APPLICA PET: Sale Termination Cues Moody's to Withdraw Ratings
--------------------------------------------------------------
Moody's Investors Service withdrew its proposed ratings on Applica
Pet Products (B1 corporate family rating, B2 probability of
default rating, B1 senior secured revolver and B1 senior secured
term loan) assigned on June 24, 2008, following the cancellation
of the sale of United Pet Group by Spectrum Brands due to the
inability by Spectrum Brands to obtain the consent of its senior
lenders.


APOLLO DRILLING: Inks Securities Purchase Agreement
---------------------------------------------------
Apollo Drilling Inc. disclosed in a regulatory SEC filing that on
or about May 2, 2008, Apollo Drilling Inc. entered into a
Securities Purchase Agreement, pursuant to which the company
issued to certain purchasers 150,000 shares of Series A
Convertible Preferred Stock, 8,750,000 restricted shares of the
company's common stock and warrants to purchase 8,750,000 shares
of the company's common stock at an exercise price of $.01.

Apollo Drilling, Inc. is authorized to issue 15,000,000 shares of
$0.001 par value preferred stock.  The Board of Directors of the
company has designated 150,000 shares of the Preferred Stock as
Series A Preferred Stock, the number of shares designated and
rights of each class are briefly described as follows:

                Series A Convertible Preferred Stock

On May 2, 2008, the company designated 150,000 shares of Preferred
Stock as Series A Convertible Preferred Stock.  The Series A
Preferred Stock is convertible into shares of Common Stock at a
conversion price of $.001.  The Series A Preferred Stock is
redeemable at any time after June 1, 2008, at the sole option of
the holder at a redemption price of $1.35 per share.  Holders of
the Series A Preferred Stock are entitled to receive dividends
annually equal to $0.10 for each share of Series A Preferred Stock
held.  In the event of any voluntary or involuntary liquidation,
dissolution or winding up of the company, the holders of Series A
Preferred Stock then outstanding shall be entitled to be paid out
of the assets of the company available for distribution to its
stockholders, before any payment shall be made to the holders of
Common Stock.  Holders of Series A Preferred Stock are entitled to
one vote for each share of Series A Convertible Preferred Shares
held, are entitled to elect up to two members to the company's
Board of Directors, and, absent such election, are provided
certain voting and veto rights to any vote by the Board of
Directors.  As of May 13, 2008, there were 150,000 shares of
Series A Preferred Stock designated and 150,000 shares of Series A
Preferred Stock issued and outstanding.  No other shares of
Preferred Stock have been designated nor issued.  

The company also disclosed that on May 13, 2008, the company filed
a Certificate of Amendment to its Certificate of Incorporation
with the Secretary of State of Delaware to amend its Certificate
of Incorporation and establish the preferences, limitations and
relative rights of Series A Convertible Stock.  The Series A
Certificate of Amendment became effective upon filing.

A copy of the Securities Purchase Agreement dated May 2, 2008, is
available for free at http://researcharchives.com/t/s?2fdb

The terms of the Series A Preferred Stock are more fully set forth
in the Articles of Amendment dated May 13, 2008, a copy of which
is available for free at http://researcharchives.com/t/s?2fda

                      About Apollo Drilling

Headquartered in Dallas, Apollo Drilling Inc. (OTC: APDR) --
http://www.apollodrillinginc.com/-- is engaged in oil and natural    
gas exploration and production.  The company derives its revenue
primarily from providing oil and natural gas exploration drilling
services.  

As reported in the Troubled Company Reporter on March 25, 2008,
the company's consolidated balance sheet at Sept. 30, 2007, showed
$1,787,914 in total assets, $1,660,419 in total liabilities, and
$127,495 in total stockholders' equity.

                       Going Concern Doubt

De Joya Griffith & Company LLC, in Henderson, Nevada, expressed
substantial doubt about Apollo Drilling Inc.'s ability to continue
as a going concern following its audit of the company's
consolidated financial statements for the year ended Dec. 31,
2006.  The auditing firm pointed to the company's losses from
operations.


ASARCO LLC: Wants September 19 Set as Admin. Claims Bar Date
------------------------------------------------------------
To identify and expeditiously resolve claims for postpetition
administrative expenses, ASARCO LLC and its debtor-affiliates ask
the U.S. Bankruptcy Court for the Southern District of Texas to
set Sept. 19, 2008, as the bar date for filing requests for
payment of administrative expenses, including requests for
payment under Sections 503(b), 365, 507(b) or 1147(e)(2) of the
U.S. Bankruptcy Code, which expenses are accrued and unpaid
through September 19.

The Debtors will serve notice of the Administrative Bar Date
substantially in the form similar to Official Bankruptcy Form No.
10.

The Debtors ask that any holder of an Administrative Expense
Claim that fails to file an Administrative Expense Claim on or
before the Administrative Bar Date (i) be forever barred,
estopped, and permanently enjoined from asserting an
Administrative Expense Claim against the Debtors, their
successors, or their property; and (ii) not be entitled to
receive further notices regarding the Administrative Expense
Claims.

The Administrative Bar Date applies to all postpetition
Administrative Expense Claims or requests for payment by non-
debtor affiliates and insiders of the Debtors, including
Americas Mining Corporation, ASARCO Inc., and ASARCO USA Inc.,
and necessarily includes all claims relating to, or requests for
payment or reimbursement of, tax or tax-related debts arising
prior to or associated with tax periods in whole or in part prior
to the Administrative Bar Date, regardless of whether contingent
or unliquidated as of the date.

The Debtors clarify that the September 19 Bar Date excludes:

   (a) Administrative Claims of one Debtor against another
       Debtor;

   (b) Administrative Claims of professional persons retained
       pursuant to a Court order for compensation of fees and
       reimbursement of expenses and any administrative claims by
       professionals for the United Steelworkers;

   (c) Administrative Claims of the members of the Committees and
       counsel to those members for compensation of fees and
       reimbursement of expenses;

   (d) Claims for postpetition goods or services due and payable
       in the ordinary course of the Debtors' business;

   (e) Administrative Claims of current or former employees or
       labor unions representing those individuals or benefit
       plans to whom contributions are made under a collective
       bargaining agreement, for post-bankruptcy wages,
       compensation, expenses, grievances, medical benefits,
       retirement benefits or any other post-bankruptcy benefits
       under an employee benefit plan of a Debtor or court
       approved retention, severance or recruiting plan,
       including but not limited to any amounts authorized to be
       paid by the Debtors under the order authorizing payment of
       prepetition wages and benefits;

   (f) Administrative Claims previously allowed by Court order;

   (g) Administrative Claims on account of which a motion
       requesting allowance and payment already has been filed in
       the Court, against the Debtors; and

   (h) Administrative Claims held by the U.S. Trustee for
       Region 7, which arise under Section 1930(a)(6) of the
       Judiciary and Judicial Procedure Code.

According to James R. Prince, Esq., at Baker Botts L.L.P., in
Dallas, Texas, establishment of an initial administrative bar
date is necessary to aid the pursuit of confirmation of a plan of
reorganization of the Debtors.  A bar date for administrative
expenses will enable the Debtors to ascertain the value that will
be available for distribution to creditors after payment of
administrative and priority claims, he adds.

                         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. 77;
Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000).


ASARCO LLC: Seeks Appointment of Official Asbestos Committee
------------------------------------------------------------
Pursuant to Sections 1102(a)(2) and 105(a) of the U.S. Bankruptcy
Code, ASARCO LLC and its debtor-affiliates ask the U.S. Bankruptcy
Court for the Southern District of Texas to direct the U.S.
Trustee for Region 7 to appoint an official committee of asbestos
claimants.

The Asbestos Panel will represent the class of creditors with
asbestos-related claims against ASARCO LLC, Lac d'Amiante du
Quebec Ltee, Lake Asbestos of Quebec, Ltd.; LAQ Canada, Ltd.,
CAPCO Pipe Company, Inc., and Cement Asbestos Products Company.

The Official Committee of Unsecured Creditors for the Subsidiary
Debtors already serves in this capacity with respect to creditors
asserting asbestos claims against the Asbestos Debtors.  The
Debtors ask the Court to direct the U.S. Trustee to appoint the
current members of the Asbestos Subsidiary Committee and three
new members, who have direct asbestos-related premises liability
claims against ASARCO, to represent the entire class of asbestos
creditors with asbestos claims against the Debtors.

James R. Prince, Esq., at Baker Botts, LLP, in Dallas, Texas,
stresses that the appointment of an official asbestos committee
is necessary to assure that creditors with asbestos claims
against all of the Debtors have adequate representation during
the negotiation of the terms of a plan of reorganization.

Mr. Prince relates that one of the key elements of the Chapter 11
plan to be proposed by the Debtors will be the protection of an
asbestos claims channeling injunction under Section 524(g).  All
current and future asbestos claims involving the Debtors will be
channeled to a trust, funded by the Debtors or non-debtor
entities, for payment and satisfaction.  To properly establish
the trust, the interests of both current and future asbestos-
related claimants should be assessed and accommodated, Mr. Prince
notes.

It is expected that the official asbestos committee will share
professionals with the Asbestos Subsidiary Committee, Mr. Prince
tells the Court.  The appointment of an official asbestos
committee will expedite the Debtors' journey through Chapter 11
because it will be uniquely well-suited to perform certain tasks
that will benefit the Debtors and their estates, he adds.

                         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. 77;
Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000).


ASARCO LLC: Wants Robert Pate as Future Asbestos Claimants Rep.
---------------------------------------------------------------
ASARCO LLC and its debtor-affiliates request for the appointment
of former judge Robert C. Pate as the legal representative for
future claimants with asbestos-related claims against ASARCO.

The Debtors insist that, to best protect the interest of future
asbestos claims against ASARCO, an FCR for the ASARCO Future
Claims should be appointed.

In connection with prepetition services, Judge Pate received an
initial retainer of $50,000 for ASARCO as security for unpaid fees
and expenses.  The Debtors have agreed to pay Judge Pate based on
his hourly rate of $350 per hour, and reimburse him of necessary
out-of-pocket-expenses.

Judge Pate assures the Court that he is a disinterested person as
the term is defined in Section 101(14) and modified by Section
1107(b), and otherwise qualified to serve as ASARCO FCR.

                         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. 77;
Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000).


ASG CONSOLIDATED: Moody's Rates $55MM Discount Notes B3
-------------------------------------------------------
Moody's Investors Service assigned a rating of B3 to the
$55 million add-on to ASG Consolidated LLC's (ASG) 11.5% senior
discount notes due in 2011.  Moody's also affirmed the company's
existing ratings, including its corporate family rating and
probability of default rating at B1. The rating outlook remains
stable.

Rating assigned:

ASG Consolidated LLC

  -- $55 million add-on to 11.5% senior discount notes due in 2011
     at B3 (LGD5, 85%)

Ratings affirmed:

ASG Consolidated LLC

  -- Corporate family rating at B1
  -- Probability of default rating at B1

Ratings affirmed, LGD and LGD% revised

ASG Consolidated LLC

  -- $196 million (accreted value at maturity) 11.5% senior
     discount notes due 2011 at B3. LGD to LGD5 from LGD6; LGD %
     to 85% from 90%

Ratings affirmed, LGD% revised:

American Seafoods Group LLC

  -- $75 million senior secured revolving credit expiring in 2011
     at Ba3 (LGD3); LGD % to 32% from 39%

  -- Senior secured Term Loan A, Term Loan B-1 and Term Loan B-2
     at Ba3 (LGD3); LGD % to 32% from 39%

Proceeds of the add-on, net of expenses, will be distributed to
members; this distribution is in addition to regular distributions
for taxes and for member enhancement.

The affirmation of the company's other ratings was based on ASG's
stability in operating cash flow, relative to other natural
products processors.  Free cash flow generation before payments to
members is likely to continue because ASG has the ability to raise
prices, as competing proteins become more expensive and as
reductions in 2007 and 2008 in the regulatory-allowed catch for
Pollack reduces potential industry supply.  Thus, cash generation
and profitability will allow for a reduction in leverage following
this large distribution in 2008.  Moody's anticipates that debt to
EBITDA (proforma for unrealized derivatives gains and losses and
impairment charges) in fiscal 2008 will not exceed five times.

ASG's ratings consider the company's relatively small size, its
limited product diversification, the concentration of raw
materials from a single country (the U.S.), and large periodic
distributions to members.  However, the company's market position
is quite solid at over 40% of the catcher-processor Pollock
allocation, and well in excess of the second largest player.  
ASG's raw material supply is fairly stable, as it is provided by
its quota-protected fishing rights.

Headquartered in Seattle, Washington, ASG Consolidated LLC is one
of the world's largest integrated seafood companies, harvesting
and processing primarily Pollock, Pacific whiting and catfish.  
At-sea operations are concentrated in the U.S. Bering Sea.  ASG's
revenues for the twelve months ended March 31, 2008 were
approximately $558 million.


ATRIUM CORP: Inks Forbearance and Lockup Contracts with Creditors
-----------------------------------------------------------------
Atrium Corporation and its key affiliates reached an agreement
with each of their major creditor groups to restructure debt.  
Atrium also has entered into forbearance and lockup agreements
with requisite majorities of the holders of each tranche of
Atrium's funded indebtedness.

The transaction contemplated by these agreements is intended to
restructure Atrium's balance sheet, provide an additional capital
infusion to reduce leverage and consequently improve Atrium's
liquidity position and operations.

As part of the restructuring, holders of a majority of the
11-1/2% Senior Discount Notes due 2012 of Atrium affiliate ACIH
Inc. have agreed not to exercise any remedies on account of
existing defaults, including a missed interest payment, as have
the holders of a majority of Atrium's bank debt, mezzanine debt
and accounts receivable facility, for a forbearance period
extending through the expiration or termination of the transaction
lockup agreements.  The bank lenders and accounts receivable
lenders also have agreed to continue funding Atrium during this
forbearance period.

The restructuring would result in an infusion of $50 million in
new equity, a permanent paydown of approximately $40 million in
debt under Atrium Companies Inc.'s senior credit facility, and an
exchange of the Discount Notes and the $40 million principal
amount of ACI's senior subordinated notes for two new series of
notes to be issued by ACI.

Under the terms of the contemplated restructuring, no cash
interest will be payable on either series of new notes until after
the third anniversary of the consummation of the restructuring.
The restructuring also would eliminate all financial covenants
under ACI's senior credit facility for the first year after the
closing of the transaction and impose only a minimum EBITDA
covenant in following years.

Finally, the restructuring contemplates the payment of increased
rates of interest under the senior credit facility and the new
series of notes, some of which increased interest under the senior
credit facility may be payable in kind.

The restructuring is subject to the satisfaction of various
conditions, including the completion of documentation satisfactory
to the parties and the successful completion of an exchange offer
in which substantially all of the Discount Notes and all of ACI's
senior subordinated notes would be tendered and exchanged for the
new notes.

As a result, no assurance can be given that the proposed
restructuring transaction will be consummated.

                     About Atrium Corporation

Headquartered in Dallas, Texas, Atrium Corporation is a
manufacturer and supplier of residential windows and doors in
North America.  The company has approximately 5,100 employees and
63 manufacturing facilities and distribution centers in 21 states,
Canada and Mexico.


AVETA INC: Amends Credit Agreement, Repays $50 Million Term Loan
----------------------------------------------------------------
Aveta Inc. disclosed that the loan agreement with its lenders
covering credit facilities extended to the company and its
operating subsidiaries, MMM Holdings Inc., NAMM Holdings Inc. and
Preferred Health Management Corporation has been amended.

Under the terms of the amended loan agreement, Aveta and its
subsidiaries made a term loan repayment of $50 million.  The
maturity date on remaining outstanding balances of approximately
$404 million after the repayment will remain unchanged at
August 2011.  

As a result of Aveta's improved financial performance, the company
is in full compliance with all covenants in its amended loan
agreement.

"The successful amendment of our loan agreement despite the
current difficult credit market conditions reflects the continued
strength of our medical management business in California and the
significantly improved operational and financial performance of
our Medicare Advantage business in Puerto Rico," Warren Cole,
chief financial officer of Aveta Inc., said.  "With this
agreement, Aveta and its operating subsidiaries have in place a
sustainable and conservative capital structure and the financial
flexibility to continue our progress in strengthening and growing
the business."

                          About Aveta Inc.

Headquartered in Fort Lee, New Jersey, Aveta Inc. is a for-profit
company that focuses on Medicare Advantage and addresses the
healthcare needs of the chronically ill.  Aveta has operating
subsidiaries in Southern California, Puerto Rico, and Illinois.
Aveta is caring for over 195,000 Medicare beneficiaries.

                           *     *     *

As reported in the Troubled Company Reporter on June 10, 2008,
Standard & Poor's Ratings Services said it raised its counterparty
credit rating on Aveta Inc. to 'CCC+' from 'CCC'.  At the same
time, Standard & Poor's raised its senior secured debt ratings on
MMM Holdings Inc. and NAMM Holdings Inc. to 'CCC+' from 'CCC'.  
The recovery ratings assigned to the credit facility issued
through MMM and NAMM remained unchanged at '4'.  Debt outstanding
through March 31, 2008, consisted of a $455.6 million remaining on
the term loan due August 2011 and a $20 million revolver due
August 2012.  The outlook is positive.


AVIATION CAPITAL: Fitch Puts Two Low-B Ratings Under Neg. Watch
---------------------------------------------------------------
Fitch Ratings takes these rating actions on notes issued by the
Aviation Capital Group Trusts as outlined below:

Aviation Capital Group Trust (ACG I)

These classes are place on Rating Watch Negative:

  -- Class A-1 notes 'BBB+';
  -- Class B-1 notes 'BB+';
  -- Class C-1 notes 'B+'.

This class remains unchanged:
  -- Class D-1 notes 'C/DR6'.

Aviation Capital Group Trust II (ACG II)

This class is placed on Rating Watch Negative:
  -- Class B-1 notes 'A'.

Aviation Capital Group Trust III (ACG III)
  -- Class G-1 notes are affirmed at 'AA-';
  -- Class B-1 notes are affirmed at 'A';
  -- Class C-1 notes are affirmed at 'BBB'.

The Rating Watch Negative designations to ACG I and II reflect
Fitch's view of potential cash flow deterioration in the future.
While cash flow should remain relatively stable in the near term,
Fitch's expectation for future lease revenue generation on certain
portfolio assets has worsened in light of recent aviation market
turmoil.  This is particularly true for older generation, less
fuel efficient aircraft types which are expected to be under
significant pressure in coming years.

Fitch will review available lease data and updated appraisals when
made available in order to better project expected trust cash flow
before resolving the rating watches.

Fitch's analysis incorporated expected cash flow to be available
to the trust over the remaining life of the transaction.  This
expectation is based on several factors including aircraft age,
current portfolio value, potential lease rates, and perceived
liquidity of the portfolio.  Lease rate and portfolio value
expectations have been updated to reflect Fitch's views on certain
aircraft types given recent aviation market volatility.


BALLY TECHNOLOGIES: S&P Raises Rating to 'BB'; Off CreditWatch
--------------------------------------------------------------
Standard & Poor's Ratings Services raised its ratings on Las
Vegas, Nev.-based Bally Technologies Inc.; the corporate credit
rating was raised to 'BB' from 'B+'. The ratings were removed
from CreditWatch, where they were placed with positive
implications Nov. 5, 2007. The rating outlook is stable.

At the same time, we raised the issue-level rating on Bally's
senior secured credit facilities to 'BB+' (one notch higher than
the 'BB' corporate credit rating) and assigned a recovery rating
of '2' to the loans, indicating that lenders can expect
substantial (70% to 90%) recovery in the event of a payment
default.

"The rating upgrade is based on continuing robust operating
performance demonstrated over the past several quarters, coupled
with a significant improvement in credit metrics, which we believe
is sustainable," explained Standard & Poor's credit analyst
Melissa Long. "We expect Bally to continue to post relatively good
operating results over the intermediate term, although that growth
will moderate somewhat in the coming quarters, given economic
weakness, which is affecting the U.S. gaming industry."

The rating on Bally reflects the company's exposure to product
sales volatility, the existence of a much larger and well-
established competitor (International Game Technology), and the
expectation for a moderation in the operating environment during
the next few quarters as a result of slower replacement sales and
economic weakness. These factors are tempered by the company's No.
2 position in the North American gaming equipment market, its
expanding base of gaming devices and systems, and strong credit
measures for the rating, which we expect provide ample cushion in
a slowdown.

For the nine months ended March 31, 2008, Bally reported EBITDA of
$188.2 million, up about 142% year over year. The EBITDA
improvements, along with modest debt repayment, have resulted in
total debt to EBITDA (adjusted for operating leases) and EBITDA
coverage of interest for the 12 months ended March 31, 2008,
improving to 1.2x and 8.9x, respectively. This compares with
3.3x and 3.2x, respectively, for the previous 12-month period. The
credit measures are currently strong for the rating and afford
some flexibility for share repurchases, acquisitions, or a
weakening operating environment.


BAYTEX ENERGY: S&P Upgrades Rating to 'BB-' on Strong Performance
-----------------------------------------------------------------
Standard & Poor's Ratings Services raised its long-term corporate
credit rating on Calgary, Alta.-based Baytex Energy Trust (Baytex
or the trust) to 'BB-' from 'B+', and its subordinated debt rating
to 'B+' from 'B', following a review of the company's current and
prospective business risk and financial risk profiles
The outlook is stable.

"The upgrade reflects the trust's continued strong operating
performance, ability to generate stable profit margins, and
relatively moderate financial policies and continued solid
financial measures for the rating," said Standard
& Poor's credit analyst Jamie Koutsoukis. These factors have
contributed to an overall stronger credit profile. "We also view
the trust's demonstrated ability to largely fund its capital
expenditures and its cash distributions through internally
generated cash flow as a strong credit positive," Ms.
Koutsoukis added.

The ratings on Baytex reflect the company's midsize reserve base,
its concentration of production and regional focus, and the
cyclical nature of the exploration and production industry. These
factors, which hamper the ratings, are tempered by the relatively
low-risk nature of the trust's reserve base, the good development
opportunities associated with Baytex's existing portfolio
of assets, and moderate capital structure for the ratings
category. Standard & Poor's expects that the trust's near-term
business strategy will focus on drill bit-related reserve
replacement as it works to develop its sizable proved undeveloped
and probable reserves.

The stable outlook reflects our expectation that Baytex will
continue to largely pay for its capital spending program and
distributions through internally generated funds, while
maintaining a stable production and reserve profile. The trust's
credit profile continues to strengthen, based on its consistently
strong netbacks and largely internal growth focus, supplemented
with acquisitions. Furthermore, Baytex's cost structure should
allow the trust to withstand some deterioration in profitability
due either to falling hydrocarbon prices or capital expenditure
increases. A positive rating action is possible if the trust can
increase both its product and geographic diversification while
adhering to its existing financial policies.

Alternatively, although unlikely in the near term, we could lower
the ratings if Baytex materially ramps up its spending or
distributions above operating cash flow, while increasing debt
levels.


CAPITAL RESERVE: Child Van Wagoner Expresses Going Concern Doubt
----------------------------------------------------------------
Salt Lake City-based Child, Van Wagoner & Bradshaw raised
substantial doubt about the ability of Capital Reserve Canada
Limited to continue as a going concern after auditing the
company's financial statements for the year ended Dec. 31, 2007.  
The auditor pointed to the company's current cash flow constraints
and accumulated deficit.

As of Dec. 31, 2007, the company has negative working capital of
$101,061, as compared with positive working capital of $314,184 on
Dec. 31, 2006.

The company posted a net loss of $854,288 on total revenues of
$1,021,818 for the year ended Dec. 31, 2007, as compared with a
net loss of $188,745 on total revenues of $1,714,925 in the prior
year.

The decrease in revenues in 2007 can be attributed to a slow-down
in the oil and gas industry in Alberta for that year.  The
increase in revenues for 2006 can be predominantly attributed to
the availability of additional equipment for operations in its
wholly owned subsidiary KCP Innovative Services Ltd. and increased
marketing efforts of management.

For the year ended Dec. 31, 2007, the company incurred operating
losses of $854,288 as compared with operating losses of $188,745
for the fiscal year ended Dec. 31, 2006.  Cost of sales for the
year ended Dec. 31, 2007, decreased to $789,137 from cost of sales
of $846,090 for the year ended Dec. 31, 2006.  This was mainly due
to a corresponding decrease in sales.  Expenses for the year ended
Dec. 31, 2007, remained steady at $1,086,969 as compared with
expenses of $1,057,580 for the year ended Dec. 31, 2006.  Salaries
and benefits decreased to $213,345 in 2007 from $236,671 in 2006.  
General and administrative expenses increased to $637,196 in 2007
from $530,381 in 2006.  This is due to higher administrative costs
and a need to retain management and consulting services to
maintain the public listing.  Amortization decreased to $213,782
in 2007 from $261,042 in 2006.

Because of operating losses of the past two periods, the company's
continuance as a going concern is dependent upon its ability to
obtain adequate financing and to reach profitable levels of
operation.  Management believes actions planned and presently
being taken provides the opportunity for the company to continue
as a going concern.

At Dec. 31, 2007, the company's balance sheet showed $6,460,892 in
total assets, $548,588 in total liabilities, and $5,912,304 in
total stockholders' equity.

The company's consolidated balance sheet at Dec. 31, 2007, showed
strained liquidity with $294,297 in total current assets available
to pay $395,358 in total current liabilities.

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

                       About Capital Reserve

Based in Edmonton, Alberta, Capital Reserve Canada Ltd. (OTC BB:
CRSVF) -- http://capitalreservecanada.com/-- is an oil and gas  
services company.  Through its wholly owned subsidiary, KCP
Innovative Services, Inc., the company provides testing and
development services, measurement of existing wells' productivity,
well abandonment services, and through its proprietary hardware
and software technologies, determination of the profitability of
coal bed methane deposits, which may be developed and sold as
natural gas.  The company has a second wholly owned subsidiary,
Two Hills Environmental, to assist with problem waste from oil &
gas companies, and provide underground storage.


CARROLS CORP: S&P Affirms 'B+' Corporate Credit Rating
------------------------------------------------------
Standard & Poor's Ratings Services revised the outlook on
Syracuse, N.Y.-based Carrols Corp. to negative from stable. We
also affirmed the 'B+' corporate credit rating on the company.

"The outlook revision reflects the fact that we are no longer
comfortable with Carrols' weakening credit metrics," said Standard
& Poor's credit analyst Jackie E. Oberoi, "given the current very
poor environment for restaurant companies." High commodity prices
are leading to margin deterioration and consumers hurt by high
gasoline prices and a weak housing market have been reducing
restaurant spending as evidenced by declining traffic trends. "We
do not expect significant improvement in these factors over the
near term," added Ms. Oberoi, "and therefore are concerned that
Carrols' performance could weaken further, leading to cash flow
protection measures no longer appropriate for the 'B+' rating."


CDO VI: Moody's Rates $12.3MM Class E Floating Rate Notes Ba2
-------------------------------------------------------------
Moody's Investors Service assigned these ratings to Notes issued
by CDO VI:

  -- Aaa to the $344,250,000 Class A Senior Secured Floating Rate
     Notes due 2020;

  -- Aa2 to the $24,525,000 Class B Senior Secured Floating Rate
     Notes due 2020;

  -- A2 to the $19,800,000 Class C Senior Secured Deferrable
     Floating Rate Notes due 2020;

  -- Baa2 to the $12,150,000 Class D Senior Secured Deferrable
     Floating Rate Notes due 2020; and

  -- Ba2 to the $12,375,000 Class E Secured Deferrable Floating
     Rate Notes due 2020.

The Moody's ratings of the Notes address the ultimate cash receipt
of all required interest and principal payments, as provided by
the Notes' governing documents, and are based on the expected loss
posed to Noteholders, relative to the promise of receiving the
present value of such payments.

The ratings reflect the risks due to the diminishment of cash flow
from the underlying portfolio consisting of leveraged loans due to
defaults, the transaction's legal structure and the
characteristics of the underlying assets.

GSO will manage the selection, acquisition and disposition of
collateral on behalf of the Issuer.


COMMISSARY OPERATIONS: Files for Bankruptcy in Tennessee
--------------------------------------------------------
Commissary Operations Inc., a unit of COI Acquisition Co., filed a
voluntary petition under Chapter 11 of the Bankruptcy Code before
the U.S. Bankruptcy Court in Nashville, Tennessee, blaming
declining demand and rising fuel costs, Erik Larson of Bloomberg
News reports.

According to Bloomberg, the company listed assets and debts of
both more than $100 million.  The company filed a list of largest
unsecured creditors, which include Ryder Trans Services asserting
a $2.3 million claim; New City Packing Co., $1.8 million; and
Coca-Cola Co., $1.6 million, the report says.

The company is seeking to obtain up to $22 million in financing
from Bank of America Corp. to fund operational costs as it
restructures, the report relates.  The company owes at least
$17.8 million to the bank, Bloomberg notes.

Bloomberg citing papers filed with the Court, says the company
lost money in May when Roadhouse Grill Inc. started winding down
in bankruptcy court.  The company stated that six other
distribution agreements also were terminated, the report says.

The company tells the Court that it can not file its schedules of
assets and liabilities until Aug. 25, 2008.

Headquartered in Nashville, Tennessee, Commissary Operations Inc.
manufactures and distributes food products and supplies.  The
company provides transportation and custom cleaning services.  Its
clientele include Shoney's, Fifth Quarter Steakhouse, and
Applebee's restaurants.  The company has more than 700 employees.


COMMISSARY OPERATIONS: Voluntary Chapter 11 Case Summary
--------------------------------------------------------
Debtor: Commissary Operations, Inc.
        dba COI Foodservice
        dba Chairman's Choice Foods
        Attn: Glenn B. Rose
        Harwell Howard Hyne Gabbert & Manner, PC
        315 Deaderick St. Ste. 1800
        Nashville, TN 37238
        Tel: (615) 256-0500

Bankruptcy Case No.: 08-06279

Type of Business: The Debtor sells groceries in wholesale.  It
                  also provides food or agriculture organization
                  services, common fund for commodities services,
                  international fund for agricultural development
                  services, food distribution services and food
                  supply services.  See
                  http://www.coifoodservice.com/

Chapter 11 Petition Date: July 22, 2008

Court: Middle District of Tennessee (Nashville)

Judge: Marian F. Harrison

Debtor's Counsel: Barbara Dale Holmes, Esq.
                     Email: bdh@h3gm.com
                  David Phillip Canas, Esq.
                     Email: dpc@h3gm.com
                  Glenn Benton Rose, Esq.
                     Email: gbr@h3gm.com
                  Tracy M. Lujan, Esq.
                     Email: tml@h3gm.com
                  Harwell Howard Hyne Gabbert & Manner, PC
                  315 Deaderick St. Ste. 1800
                  Nashville, TN 37238
                  Tel: (615) 256-0500, (615) 251-1071
                  Fax: (615) 251-1058, (615) 251-1059
                  http://www.h3gm.com/

Estimated Assets: $50,000,000 to $100,000,000

Estimated Debts:  $50,000,000 to $100,000,000

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


DANKA BUSINESS: Ernst & Young Expresses Going Concern Doubt
-----------------------------------------------------------
Ernst & Young LLP in Tampa, Fla., raised substantial doubt about
Danka Business Systems PLC's ability to continue as a going
concern after auditing the company's financial statements for the
year ended March 31, 2008.  The auditing firm stated that the
company has incurred recurring operating losses, has a working
capital deficit and has not complied with certain covenants of
loan agreements with a bank.  In addition, on June 27, 2008, the
company sold its remaining operations to Konica Minolta Business
Solutions U.S.A., Inc.

The company posted a net loss of $35.7 million on total revenues
of $418.2 million for the year ended March 31, 2008, as compared
with a net loss of $29.2 million on total revenues of
$450.2 million in the prior year.

At March 31, 2008, the Company has net operating losses and
interest carryforwards relating to U.S. operations of
approximately $366.4 million, which will begin to expire if not
used by March 31, 2025.  Additionally, the company's U.S.
operations have an alternative minimum tax credit carryforward of
$3.4 million, which is available indefinitely, and capital loss
carryforwards of $7.9 million.  The company has U.K. net operating
loss carryforwards of around $96.5 million.  All net operating
losses have been offset by a full valuation allowance reflecting
uncertainty as to future realization.

Revenue includes customer purchases of office peripherals;
supplies; software and related support products; professional,
consulting and maintenance services; and leasing arrangements.  
For the fiscal year 2008, the company's revenue decreased by $32.0
million or 7.1% from fiscal year 2007 with retail equipment,
supplies and related sales declining $10.5 million or 5.3% to
$189.6 million.  Retail service revenue declined
$19.0 million or 8.0% to $217.1 million and rental revenue was
down $2.5 million or 17.8% to $11.5 million for fiscal year 2008.

                           Indebtedness

On June 18, 2007, the company's U.S. operating subsidiary, Danka
Office Imaging Company entered into new financing agreements with
GECC pursuant to which Danka Office may borrow up to
$145.0 million including $40.0 million in revolving loans.  
Proceeds from this financing were used in conjunction with the
proceeds of the previously completed sale of the company's
European businesses to redeem the senior notes and the
subordinated notes, to reduce and refinance the company's existing
debt, to pay fees and expenses in connection therewith and for
working capital and general corporate purposes.

The credit agreements governing Danka Office's financing
agreements contain customary financial covenants that the company
must comply with on a quarterly basis relating to its leverage
ratios, fixed charge coverage ratio, cumulative EBITDA and an
annual capital expenditure threshold.

On Nov. 14, 2007, the First Lien Credit Agreement was amended to
extend the Consolidated First Lien Leverage Ratio to 3.7 to 1 from
3.5 to 1 to Dec. 15, 2007, and to increase the applicable interest
rate margin on the term loan by 1%.  The Second Lien Credit
Agreements was amended to increase the applicable interest rate
margin on the term loan by 1%.  On Dec. 14, 2007, the First Lien
Credit Agreement was further amended to extend the Consolidated
First Lien Leverage Ratio of 3.7 to 1 to Jan. 31, 2008, and was
further extended on Jan. 31, 2008, to March 31, 2008.

On March 31, 2008, the First Lien Credit Agreement was amended to
increase the Consolidated First Lien Leverage Ratio to 4.5 to 1
upon the execution of the Share Purchase Agreement with Konica
Minolta Business Solutions U.S.A, Inc.  In addition, the
applicable interest rate margin on the term loan was increased by
1%.  Also on March 31, 2008, the company entered into a fee letter
agreement with General Electric Capital Corporation whereby the
company agreed to pay to GECC a non-refundable amendment fee in
the amount of $2.5 million upon the execution of the Share
Purchase Agreement and a non-refundable ticking fee of $0.1
million per week until the re-payment of the term loan.

As of March 31, 2008, the borrowing base for the revolving credit
facility was $24.3 million and Danka Office had
$20.8 million of borrowings under the revolver.  In addition,
Danka Office had $2.9 million reserved on the revolver for various
letters of credit issued on its behalf.  The borrowing base
fluctuates each month and is generally highest at the end of the
quarter.  The borrowing base is subject to certain multiples of
adjusted EBITDA as more fully described in the credit agreements
and therefore, the cash availability that it has under the
financing arrangements is reliant on the company meeting these
adjusted EBITDA multiples.

The company's liquidity is dependent upon cash on hand, cash
generated from operations and the availability of funding under
the credit agreements with GECC.  The borrowing base under the
GECC credit agreements is limited to certain multiples of the
company's adjusted EBITDA, as described in the agreements.  The
company's availability of financing under the credit agreements is
also dependent upon the satisfaction of a number of other
conditions including meeting leverage and other financial
covenants.  If the company is unable to meet these covenants, GECC
could declare it in default, among other possible courses of
action.  The company is not in compliance with these covenants at
March 31, 2008, and therefore reclassified all its debt with GECC
to current.

Danka Office incurred $6.9 million in debt issuance costs relating
to its new credit facilities with GECC and is amortizing these
costs straight line over the remaining terms of the facilities,
which approximates the effective interest method.  The remaining
balance of the unamortized costs was
$5.4 million at March 31, 2008.

                       Sale of Danka Office

On June 27, 2008, Danka Business Systems PLC completed the sale of
its U.S. operating subsidiary, Danka Office.  Pursuant to the
Stock Purchase Agreement, the company sold its U.S. operations to
Konica Minolta in a sale of all Danka Office's outstanding capital
stock for a purchase price of $240 million in cash, subject to an
upward or downward adjustment of $10 million.  The purchase price
adjustment cannot exceed $10 million.  

In addition, Konica Minolta held back the sum of $10 million from
the amount paid at closing as security for the company's purchase
price adjustment obligations.  About $25 million of the purchase
price paid by Konica Minolta at closing will be held in escrow for
a period of four years following closing to satisfy any and all
claims by Konica Minolta, which may be made under the Stock
Purchase Agreement.  

After the repayment of the company's outstanding indebtedness,
including repayment of around $146 million under its credit
facilities provided by GECC, including additional borrowings of
$15 million since March 31, 2008, and early termination fees and
accrued and unpaid interest of around $6 million, the payment of
certain change-of-control and severance obligations and the fees
and expenses incurred in connection with the sale transaction and
minus the holdback and escrow amounts set forth above, the net
sale proceeds received by the company were approximately
$40 million.  In connection with the sale of Danka Office, the
credit facilities provided by GECC were repaid and terminated.

The company's board of directors is also evaluating the
alternatives available with respect to the net proceeds from the
sale of Danka Office to Konica Minolta -– primarily how such
proceeds may be distributed to Danka shareholders.  

There is no guarantee that any future alternative chosen by the
board will result in any return to holders of Danka's ordinary
shares, including holders of American Depositary Shares.  In
addition, there is no guarantee that the holders of the company's
6.50% senior convertible participating shares will not take action
available to them under applicable law, for example seeking a
winding up of the company, to recover amounts to which they are
entitled pursuant to its articles of association.  Such amounts
exceed the amount of the net proceeds from the sale of Danka
Office.

                           Balance Sheet

Total assets as of March 31, 2008, decreased $194.9 million from
March 31, 2007.  This decrease was due primarily to the use of
cash received on the sale of its European operations during fiscal
year 2007 to repay its outstanding senior and subordinated notes.

In addition, accounts receivable decreased by $6.5 million due to
better collections and lower revenues, and inventory decreased by
$4.5 million due to reduced purchasing resulting from better
forecasting of inventory needs.

Fixed assets decreased $5.7 million due to continuing depreciation
of assets and decreased capital spending during fiscal year 2008.

Total liabilities decreased $159.8 million from March 31, 2007, or
41.1%.  This decrease was due to the payoff of its senior and
subordinated notes offset by a new financing arrangement with
GECC.  In addition, accounts payable and accrued expenses
decreased $33 million due to the payout of restructuring accruals
and professional fees and the paydown of vendor balances.

Working capital decreased $91.4 million or 243.0% from March 31,
2007.  This decrease was the result of decreased restricted cash
balances at March 31, 2008, and the repayment of the company's
outstanding senior and subordinated notes, which were partially
offset by borrowings under its new financing arrangement with
GECC.

At March 31, 2008, the company's balance sheet showed
$222.1 million in total assets, $229.2 million in total
liabilities, and $368.9 in senior convertible participating
shares, resulting in a $375.9 million stockholders' deficit.  

The company's consolidated balance sheet at March 31, 2008, also
showed strained liquidity with $89.3 million in total current
assets available to pay $218.1 million in total current
liabilities.

A full-text copy of the company's 2008 annual report is available
for free at http://ResearchArchives.com/t/s?2fcd

                   About Danka Business Systems

Headquartered in St. Petersburg, Florida, Danka Business Systems
PLC (LON: DNK) -- http://www.danka.com/-- offers document  
solutions including office imaging equipment: digital and color
copiers, digital and color multifunction peripherals printers,
facsimile machines, and software in the United States.

It also provides a range of contract services, including
professional and consulting services, maintenance, supplies,
leasing arrangements, technical support and training, collectively
referred to as Danka Document Services.

The company's revenue is generated from two primary sources: new
retail equipment, supplies and related sales, and service
contracts.  Danka sells Canon products, as well as Kodak, Toshiba
and Hewlett-Packard.

On Aug. 31, 2006, the company sold its subsidiary, Danka
Australasia PTY Limited to Onesource Group Limited.  In January
2007, the company disposed of its European businesses to Ricoh
Europe B.V.


DELTA AIR: Edward Bastian Disposes of 18,000 Common Shares
----------------------------------------------------------
Edward H. Bastian, Delta Air Lines, Inc.'s president and chief
financial officer, disclosed in a regulatory filing with the
Securities and Exchange Commission dated July 18, 2008, that he
disposed of 18,000 shares of Delta common stock at $6.6 per share
on July 17.

Mr. Bastian's shares were sold in open market transactions
through a broker-dealer at prices ranging from $6.59 to $6.63 per
share.  Mr. Bastian undertakes to provide, upon request, details
regarding the number of shares sold at each separate price to the
staff of the SEC, Delta, or a security holder of Delta.

Following the transaction, Mr. Bastian beneficially owned 258,762
shares of common stock.

                         About Delta Air

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

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

The Debtors filed a chapter 11 plan of reorganization and
disclosure statement explaining that plan on Dec. 19, 2007.  On
Jan. 19, 2007, they filed revisions to the plan and disclosure
statement, and submitted further revisions to the plan on
Feb. 2, 2007.  On Feb. 7, 2007, the Court approved the Debtors'
disclosure statement.  In April 25, 2007, the Court confirmed the
Debtors' plan.  That plan became effective on April 30, 2007.  The
Court entered a final decree closing 17 cases on Sept. 26, 2007.    
(Delta Air Lines Bankruptcy News, Issue No. 104; Bankruptcy
Creditors' Service, Inc., http://bankrupt.com/newsstand/or    
215/945-7000).


DERECKTOR SHIPYARDS: Bankruptcy Case Won't Affect 250 Workers
-------------------------------------------------------------
Bankrupt Derecktor Shipyards Connecticut, LLC, said Monday that it
won't terminate its 250 employees at its Bridgeport headquarters,
Rob Varnon of the Connecticut Post reports.

In March 2008, the Planning & Zoning Commission allowed the Debtor
to build three buildings at its 23-acre lot at 837 Seaview Avenue
in Bridgeport, ConnPost says.  In April 2008, the U.S. Maritime
gave the Debtor $863,515 grant for an acquisition of a new welding
equipment, ConnPost adds.

Bridgeport Mayor Bill Finch said he was assured by the Debtor's
officers that the bankruptcy case is meant to resolve a dispute
with an undisclosed customer, ConnPost reveals.  Mayor Finch, who
met with the Debtor's officers Monday, indicated that the
bankruptcy case won't "have any impact" on Derecktor's operations,
ConnPost says.  He added that the city of Bridgeport will continue
to support the Debtor's plan to expand and add 100 jobs, according
to ConnPost.

ConnPost says that the Debtor asked the U.S. Bankruptcy Court for
the District of Connecticut for authority to continue paying
salaries for its 250 employees.

Company president, Paul Derecktor, said that the Debtor is in
settlement talks with its customer over a contract to deliver a
vessel, ConnPost relates.  He said that the dispute couldn't be
resolved outside the bankruptcy process.  Mr. Derecktor added that
the bankruptcy filing will preserve the company's value, ConnPost
reports.

Bridgeport Port Authority executive director, Joseph Riccio, Jr.,
said that Mr. Derecktor assured him the bankruptcy case centered
on the contract under dispute, ConnPost states.  The BPA is the
Debtor's landlord.

                     About Derecktor Shipyards

Bridgeport, Connecticut-based Derecktor Shipyards Connecticut,
LLC, dba Derecktor Shipyards, -- http://www.derecktor.com/--  
builds yachts and commercial vessels.  It also has operations in
New York and Florida.  It delivered a 350-passenger fast ferry for
Bermuda in 2007.  In 2006, the company won deals to build two
large vessels, which are currently under construction.

The Debtor filed its chapter 11 petition on July 18, 2008 (Bankr.
D. Conn. Case No. 08-50643).  Judge Alan H.W. Shiff presides over
the case.  James Berman, Esq., at Zeisler and Zeisler, represents
the Debtor in its restructuring efforts.  The Debtor estimated
assets between $10,000,000 and $50,000,000 and debts between
$10,000,000 and $50,000,000.


DISTRIBUTED ENERGY: Arent Fox Approved as Committee's Counsel
-------------------------------------------------------------
The United States Bankruptcy Court for the District of Delaware
gave the Official Committee of Unsecured Creditors of Distributed
Energy Systems Corp. and Northern Power Systems Inc. permission to
retain Arent Fox LLP as its counsel.

Arent Fox is expected to:

   a) assist, advise and represent the Committee in its
      consultation with the Debtors relative to the administration
      of these Chapter 11 cases;

   b) assist, and advise and represent the Committee in analyzing
      the Debtors' assets and liabilities, investigating the  
      extent and validity of liens and participating in and
      reviewing any proposed assets sales or dispositions;

   c) attend meetings and negotiate with the representative of the
      Debtors;

   d) assist the Committee in the review, analysis and negotiation
      of the disclosure statement describing any plans of
      reorganization.

   e) assist and advise the Committee in its examination and
      analysis of the conduct of the Debtors' affairs;

   f) assist the Committee in the review, analysis, and
      negotiation of any financing or funding agreements;

   g) take all necessary action to protect and preserve the
      interest of the Committee, including, the prosecution of
      actions on its behalf, negotiations concerning all
      litigation in which the Debtors are involved, and review and
      analysis of claims filed against the Debtors' estate;

   h) prepare on behalf of the Committee all necessary motions,
      applications, answers, orders, reports and papers in support
      of positions taken by the Committee;

   i) appear, as appropriate, before the Court, the appellate
      court, and other courts in which matters may be heard and
      protect the interests of the Committee before the Court and
      the U.S. trustee; and

   j) perform all necessary legal services in these cases.

The firm's professionals will bill at these rates:

      Designations               Hourly Rates
      ------------               ------------
      Partners                    $455-$790
      Counsel                     $455-$750
      Associate                   $290-$515
      Paraprofessionals           $145-$260

Andrew I. Silfen, Esq., a partner at firm, assures the Court that
the firm does not hold any interest adverse to the Debtors' estate
and is a "disinterested person" as defined in Section 101(14) of
the Bankruptcy Code.

Mr. Silfen can be reached at:

      Andrew I. Silfen, Esq.
      Arent Fox LLP
      1675 Broadway
      New York, NY 10019
      Tel: (212) 484-3900
      Fax: (212) 484-3990
      http://www.arentfox.com/

                  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.  The U.S. Trustee for Region
3 appointed three creditors to serve on an Official Committee of
Unsecured Creditors.  The Debtors disclosed in its schedules,
assets of $19,593,387 and debts of $43,558,713.


DRIGGS FARMS: Taps Chikol Equities as Consultant
------------------------------------------------
Driggs Farms of Indiana Inc. asks the U.S. Bankruptcy Court for
the Northern District of Indiana for authority to employ Chikol
Equities Inc. to render consultant services during the pendency of
its bankruptcy case.

Chikol Equities will assist the Debtor with the management and
operational support of its business.

Ckikol Equities's professionals bill:

                             Hourly Rate
                             -----------
          Partners              $250
          Senior Associates     $150
          Associates            $125

Clarke Coccari, a consultant with Chikol Equities, assures the
Court that the firm does not represent any interest adverse to the
Debtor or its estate.

As of the petition date, the Debtor or its affiliates had no
unpaid amounts due to Chikol Equities Inc.

Based in Decatur, Ind., Driggs Farms of Indiana Inc. manufactures
frozen desserts & novelties and dairy products.  The company filed
for Chapter 11 protection on June 20, 2008 (N.D. Indiana Case No.
08-11955).  Daniel J. Skekloff, Esq., at Skekloff, Adelsperger &
Kleven, LLP, represents the Debtor in its restructuring efforts.
Rothberg Logan & Warsco LLP is the Commitee of Unsecured
Creditors' proposed counsel.  When the Debtor filed for protection
from its creditors, it listed estimated assets of between $10
million and $50 million and estimated debts of $10 million and
$50 million.


EAGLE CREEK: Waccamaw Bank Presses for Loan Usage Examination
-------------------------------------------------------------
Waccamaw Bank, asked permission from Judge J. Rich Leonard of the
U.S. Bankruptcy Court for the Eastern District of North Carolina
(Wilson) to track how Eagle Creek Subdivision, LLC, its debtor-
affiliates, and their manager, Landcraft Management LLC, use their
loans, The Deal's Carolyn Okomo writes.

The Debtors owe Waccamaw Bank about $14.4 million in prepetition
senior mortgage loans secured by a $14.4 cash collateral, The Deal
notes.

Waccamaw Bank's counsel, Paul Fanning, Esq., at Ward and Smith PA,
said that his client wanted to trace the Debtors' loan proceeds by
reviewing their account statements, checks, insurance policies and
appraisal documents, The Deal states.

The Court has not scheduled a hearing on Waccamaw Bank's probe
request, The Deal relates.

                    First-Day Motions Withdrawn

According to The Deal, Judge Leonard was set to hear the Debtors'
first-day motions, including debtor-in-possession financing motion
and cash collateral motion, on July 15, 2008.  However, the
Debtors withdrew their requests without prejudice, The Deal notes.

The Debtors initially planned to obtain a $5 million revolving DIP
fund from various lenders, The Deal reports.  The DIP agreement
was supposed to prime all liens, excluding Waccamaw Bank.  The DIP
facility earns 20% interest and matures in four years, The Deal
notes.

The Debtors also withdrew their motion to sell some of its
Brunswick County property, The Deal relates.  Based on a separate
motion, the Debtors are privately selling 165 lots to Eastwood
Coastal Carolina LLC for between $49,500 and $56,794 per lot, The
Deal notes.

Judge Leonard directed the Debtors to return to Court to seek
approval to sell each of the lot, The Deal quotes a case
administrator as saying.

                         About Eagle Creek

Charlotte, North Carolina-headquartered Eagle Creek Subdivision,
LLC, and its debtor-affiliates are real estate developers managed
by Landcraft Management LLC.  Eagle Creek owns 489 lots worth
about $24.5 million.  The companies are also known as Landcraft
Properties or Landcraft Communities.  Eagle Creek, Eagles Trace,
LLC, Aumond Glen, LLC, Back Creek Farms Subdivision, LLC, and
Saddlebrook Subdivision, LLC, filed their chapter 11 petition on
June 27, 2008 (Bankr. E.D.N.C. Case Nos. 08-04292 through 08-
04296).  Judge J. Rich Leonard presides over the case.  Trawick H.
Stubbs, Jr., Esq., at Stubbs & Perdue, P.A., represents the
Debtors in their restructuring efforts.  Eagle Creek estimated
assets between $10 million and $50 million and debts between
$10 million to $50 million.


EL PASO CHILE: Has Interim Court Nod to Use Cash Collateral
-----------------------------------------------------------
El Paso Chile Company Inc. and its debtor-affiliate obtained
interim permission from the U.S. Bankruptcy Court for the Western
District of Texas to use the cash collateral of its prepetition
secured lenders:

   1. Sovereign Business Capital asserts a first priority lien
      and security interest in substantially all of the Debtors'
      assets including real property in El Paso, Texas, among
      others, on account of a $2,500,000 promissory note payable
      to Sovereign.  As of the date of bankruptcy, the Debtors
      owed Sovereign approximately $2,539,000 plus accrued unpaid
      interest.

   2. CIT Small Business Lending asserts a first priority lien
      and security interest in an El Paso real property and all
      of its rents, based on a $750,000 promissory note effective
      since September 2003.  The Debtors currently owe CIT not
      less than $645,883 plus unpaid interest.

The Debtors need immediate use of the cash collateral to continue
the operation of their business and to preserve the value of their
estates.

The cash collateral consists of the Debtors' account receivables,
account and contract rights, contracts and proceeds, and other
general intangibles.

The Debtors believe that Sovereign and CIT are oversecured.  The
Debtors, however, informed the Court that at this time the amount
of the equity cushion that exists is uncertain.

In its order, the Court permitted the Debtor to provide adequate
protection to the lenders in the form of valid and perfected liens
on, and security interests in, any and all of the Debtors' rights,
titles, and interests in property and assets.  These liens and
security interests will have the same seniority and priority as
those of the liens that were asserted before the date of
bankruptcy.

Based in El Paso, Texas, El Paso Chile Company Inc. and its
affiliate Desert Pepper Trading Co. -- http://www.elpasochile.com/
-- pack and process food spices, condiments, and drinks.  El Paso
Chile filed for Chapter 11 protection on June 25, 2008 (Bankr.
W.D. Tex. Case Nos. 08-30948 and 08-30949).  Bernard R. Given, II,
Esq., at Beck & Given P.C., represents the Debtors in their
restructuring efforts.  When the Debtors filed for protection from
their creditors, they listed estimated assets of $1 million to
$100 million, and estimated debts of $1 million to $100 million.


ENHANCED MORTGAGE-BACKED SECURITIES: Moody's Junks Rating on Notes
------------------------------------------------------------------
Moody's Investors Service downgraded the ratings of three classes
of notes issued by Enhanced Mortgage-Backed Securities Fund III,
Ltd., a market value CDO issuer.  The rating action is:

$130,000,000 Class A-1 Senior Notes Due August 2008

  -- Current Rating: A2, on review for downgrade
  -- Prior Rating: Aa2, on review for downgrade

$14,000,000 Class A-2 Senior Subordinated Notes Due August 2008

  -- Current Rating: Ba1, on review for downgrade
  -- Prior Rating: Baa2, on review for downgrade

$20,000,000 Class A-3 Subordinated Notes Due August 2008

  -- Current Rating: Caa1, on review for downgrade
  -- Prior Rating: B2, on review for downgrade

The negative rating action reflects continued deterioration in the
credit enhancement levels for the rated notes due to: 1) continued
price declines in the market value of the collateral portfolio in
recent weeks, and 2) increased disparity between the marked-to-
market values of the underlying assets and realized sales prices.  
In addition, Moody's noted that current market turmoil makes asset
valuation highly uncertain.


ERIK BENHAM: Wants to Employ Vaughn Taus as Counsel
---------------------------------------------------
Erik Benham seeks the authority of the U.S. Bankruptcy Court for
the Central District of California to employ Vaughn C. Taus, Esq.,
as counsel, effective June 23, 2008.

The Debtor selected Mr. Taus because of his more than 20 years of
experience with business litigation and transactional matters and
extensive experience representing developers of real property and
debtors holding real property interests.

Mr. Taus will mainly provide legal advice with respect to the
Debtor's powers and duties as a debtor-in-possession and in the
continued operation of his business and management of his
property, as well as perform other necessary legal services
related to his bankruptcy case.

Mr. Taus received a pre-petition retainer in the amount of
$26,225.25 to be applied as initial payment for his pre-petition
representation of Mr. Benham.

Mr. Taus bills at $325 per hour and time for paralegal work at
$100 per hour.

Vaughn C. Taus, Esq., assures the Court that he does not represent
any interest materially adverse to the Debtor of his estate and
has no connection to or interest in any of the creditors of the
estate, or their legal counsel.

Erk Benham, with residence at 309 East Tunnel Street, Santa Maria,
Calif., filed for Chapter 11 on June 24, 2008 (C.D. Calif. Case
No. 08-11432).  When Mr. Benham filed for protection from his
creditors, he listed estimated assets of between $10,000,000 and
$50,000,000, and estimated debts of between $10,000,000 and
$50,000,000.


FOCUS ENHANCEMENTS: Rule Violation Prompts Nasdaq to Delist Stocks
------------------------------------------------------------------
Focus Enhancements Inc. received a staff determination letter from
the NASDAQ Stock Market Inc. stating the company's common stock is
subject to delisting from the NASDAQ Capital Market for not
meeting the market value of publicly held shares requirement for
continued listing.

Focus Enhancements will submit a request by July 28, 2008, for a
hearing with the NASDAQ Listing Qualifications Panel.  This
request will stay the delisting of the company's securities
pending the hearing and determination by the panel.  During this
stay, the company's securities will continue to trade under the
ticker symbol "FCSE" on the NASDAQ board.  There can be no
assurance that the panel will grant the company's request for
continued listing.

"Last week, we completed the acquisition of digital wireless audio
technology that significantly enhances our wireless portfolio,"
Brett Moyer, president and chief executive officer, said.  "This
new technology is just one way we are working diligently to return
the company to compliance.  We look forward to presenting our plan
to achieve compliance and maintain a continued listing."

If the company fails in its efforts to retain its listing on the
Nasdaq Stock Market, its shares may be quoted on the OTC
Electronic Bulletin Board or some other quotation medium, as the
pink sheets, depending on its ability to meet the specific listing
requirements of the specific quotation system and market makers'
willingness to quote the company's shares on either of these
mediums.

On June 20, 2008, the company received notice indicating that it
had failed to comply with Marketplace Rule 4310(c)(3)(B),
310(c)(3)(A) and 4310(c)(3)(C), requiring the company maintain a
market value of listed securities of at least $35,000,000.
Therefore, in accordance with Marketplace Rule 4310(c)(8)(C), the
company was provided until July 16, 2008, to regain compliance
with the Rule.

                   About Focus Enhancements Inc.

Headquartered in Campbell, California, Focus Enhancements Inc.
(NASDAQ: FCSE) -- http://www.Focusinfo.com/-- designs solutions  
in advanced, proprietary video and wireless video technologies.  
The company's Semiconductor Group develops wireless IC chip set
based on WiMedia UWB standard and design well as markets portable
ICs to the video convergence, portable media, navigation systems
and smartphone markets.  The company's System Group develops video
products for the digital media markets, with customers in the
broadcast, video production, digital signage and digital asset
management markets.

                        Going Concern Doubt

The Troubled Company Reporter reported on April 8, 2008, Burr,
Pilger & Mayer LLP in San Jose raised substantial doubt about
Focus Enhancements Inc.'s ability to continue as a going
concern after auditing the company's consolidated financial
statements for the years ended Dec. 31, 2007, and 2006.  The
auditing firm pointed to the company's recurring losses from
operations, net capital deficiency and accumulated deficit.  

At March 31, 2008, the company's balance sheet showed total assets
of $29,726,000 and total liabilities of $30,479,000, resulting in
a stockholders' deficit of $753,000.


FORD MOTOR: Edward Altman's Z-score Model Predicts Bankruptcy
-------------------------------------------------------------
Edward Altman, a finance professor at New York University's
Stern School of Business, sees a 46% chance that General Motors
Corp. and Ford Motor Co. will default within five years, Bloomberg
News' Greg Miles and Caroline Salas report.  Mr. Altman, in 2005,
had said GM had a 47 percent chance of default within five years.

Mr. Altman, who created the Z-score mathematical formula that
measures bankruptcy risk, said in an interview with Bloomberg
Television that his model shows that these companies are "on the
verge of bankruptcy."  Basing on the companies' finances at the
end of the first quarter, the Z-scores for GM and Ford give both a
bond rating equivalent to a CCC ranking, he said, according to the
report.  

"Both are in very serious shape and the markets reflect that," Mr.
Altman said.  GM, though, is in slightly worse condition than
Ford, according to him.  Ford has said it had access to
$40.6 billion in funds as of March 31, including credit lines, the
report noted.

But still, according to Mr. Altman, he "would not put money with
GM right now because the downside is so great relative to the
upside, relative to the yield," according to the report.

"Your downside is probably 60 percent on the debt.  The risk
reward ratio is pretty poor," Mr. Altman said referring to GM.  
The report noted that GM posted a $38.7 billion loss in 2007, the
biggest in its 100-year history, and hasn't posted a profit since
2004.  

GM is fending off rumors that it could file for bankruptcy.  GM
Chief Executive Officer Rick Wagoner has assured that the company
has the ability to raise cash.  

                       About General Motors

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

                       About Ford Motor Co.

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

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

                            *   *   *

As reported in the Troubled Company Reporter on Dec. 12, 2006,
Standard & Poor's Ratings Services affirmed its 'B' bank loan and
'2' recovery ratings on Ford Motor Co.

As reported in the Troubled Company Reporter on Dec. 7, 2006,
Fitch Ratings downgraded Ford Motor Company's senior unsecured
ratings to 'B-/RR5' from 'B/RR4'.

As reported in the Troubled Company Reporter on Dec. 6, 2006,
Moody's Investors Service assigned a Caa1, LGD4, 62% rating to
Ford Motor Company's $3-billion of senior convertible notes due
2036.

  
GE COMMERCIAL: S&P Puts Loan Trust Ratings on Watch Negative
------------------------------------------------------------
Standard & Poor's Ratings Services placed its ratings on nine
classes of notes issued by GE Commercial Loan Trust's series 2006-
1, 2006-2, and 2006-3 on CreditWatch with negative implications.
iT also affirmed our ratings on nine classes from these series.
The affected deals are cash flow arbitrage collateralized loan
obligation (CLO) transactions (see list).  

The negative CreditWatch placements reflect losses the
transactions experienced after triggering their "required sale
assets" provisions. The triggers occurred when the market value of
some of the collateral breached predetermined limits specified for
each series, which then required the sale of such collateral at
prevailing market rates. All three series sold some of that
collateral at a loss during the past two quarters, which led to
deterioration in the available credit support.

Standard & Poor's will review the results of current cash flow
runs generated for all classes of notes in the three transactions
to determine the level of future defaults the rated notes can
withstand under various stressed default timing and interest rate
scenarios, while still paying all of the interest and principal
due on the notes. We will compare the results of these cash flow
runs with the projected default performance of the performing
assets in the collateral pools to determine whether the ratings
currently assigned to the notes remain consistent with the credit
enhancement available.

Standard & Poor's notes that the July 21, 2008, trustee report for
all three series included a proposal to amend the "required sale
assets" provisions.

RATINGS PLACED ON CREDITWATCH NEGATIVE

GE Commercial Loan Trust Series 2006-1
                    Rating              Balance (mil. $)
Class        To              From      Original    Current*
B            A/Watch Neg     A           80.753      43.413
C            BBB/Watch Neg   BBB         32.123      17.269
Pref Trust   BB/Watch Neg    BB          37.477      20.419

GE Commercial Loan Trust Series 2006-2
                 Rating                  Balance (mil. $)
Class       To              From      Original    Current*
C           A/Watch Neg     A           56.697      26.136
D           BBB-/Watch Neg  BBB-        47.526      21.908
Pref Trust  BB/Watch Neg    BB           8.337       3.922

GE Commercial Loan Trust Series 2006-3
                  Rating                  Balance (mil. $)
Class       To               From      Original    Current*
C           A/Watch Neg      A           64.695      40.140
D           BBB-/Watch Neg   BBB-        44.789      27.789
Pref Trust  BB/Watch Neg     BB          14.431       9.037

RATINGS AFFIRMED

GE Commercial Loan Trust Series 2006-1
                     Balance (mil. $)
Class     Rating   Original       Current*
A-1       AAA       319.000         41.558
A-2       AAA       281.007        281.007
A-PT      AAA       100.000         53.760


GE Commercial Loan Trust Series 2006-2
                       Balance (mil. $)
Class     Rating   Original       Current*
A-1       AAA       358.526          7.968
A-2       AAA       291.823        291.823
B         AA         30.849         14.220
   
GE Commercial Loan Trust Series 2006-3
                       Balance (mil. $)
Class     Rating   Original       Current*
A-1       AAA       433.467        135.035
A-2       AAA       352.822        352.822
B         AA         36.826         22.849

*Current balances are after July 21, 2008, payment date.

TRANSACTION INFORMATION

Asset manager:     GE Commercial Financial Service
Trustee:           Wells Fargo
Transaction type:  Cash flow arbitrage CLO


GENCORP INC: Files Form S-8 to Register 5MM Shares for Stock Fund
-----------------------------------------------------------------
GenCorp Inc. filed with the U.S. Securities and Exchange
Commission a Registration Statement on Form S-8 for the purpose of
registering an additional 5,000,000 shares of the company's common
stock, par value $0.10 per share, issued in the GenCorp Stock Fund
pursuant to the GenCorp Retirement Savings Plan.

GenCorp disclosed that the proposed maximum offering price per
share is $7.44; and the proposed maximum aggregate offering price
is $37,200,000.

A full-text copy of the Form S-8 filed by the company is available
at no charge at:

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

                          About GenCorp

Headquartered in Rancho Cordova, Calif., GenCorp Inc. (NYSE: GY)
-- http://www.GenCorp.com/-- is a leading technology-based   
manufacturer of aerospace and defense products and systems with a
real estate segment that includes activities related to the
entitlement, sale and leasing of the company's excess real estate
assets.

As reported by the Troubled Company Reporter on July 7, 2008, at
May 31, 2008, the company's consolidated balance sheet showed
$994.0 million in total assets, $1.0 billion in total liabilities,
and $9.5 million in redeemable common stock, resulting in
shareholders' deficit of $33.4 million.

                           *     *     *

As reported in the Troubled Company Reporter on March 13, 2008,
Standard & Poor's Ratings Services affirmed its ratings, including
the 'B+' corporate credit rating, on GenCorp Inc.  At the same
time, the outlook was revised to negative from stable.


GENERAL MOTOR: Edward Altman's Z-score Model Predicts Bankruptcy
----------------------------------------------------------------
Edward Altman, a finance professor at New York University's
Stern School of Business, sees a 46% chance that General Motors
Corp. and Ford Motor Co. will default within five years, Bloomberg
News' Greg Miles and Caroline Salas report.  Mr. Altman, in 2005,
had said GM had a 47 percent chance of default within five years.

Mr. Altman, who created the Z-score mathematical formula that
measures bankruptcy risk, said in an interview with Bloomberg
Television that his model shows that these companies are "on the
verge of bankruptcy."  Basing on the companies' finances at the
end of the first quarter, the Z-scores for GM and Ford give both a
bond rating equivalent to a CCC ranking, he said, according to the
report.  

"Both are in very serious shape and the markets reflect that," Mr.
Altman said.  GM, though, is in slightly worse condition than
Ford, according to him.  Ford has said it had access to
$40.6 billion in funds as of March 31, including credit lines, the
report noted.

But still, according to Mr. Altman, he "would not put money with
GM right now because the downside is so great relative to the
upside, relative to the yield," according to the report.

"Your downside is probably 60 percent on the debt.  The risk
reward ratio is pretty poor," Mr. Altman said referring to GM.  
The report noted that GM posted a $38.7 billion loss in 2007, the
biggest in its 100-year history, and hasn't posted a profit since
2004.  

GM is fending off rumors that it could file for bankruptcy.  GM
Chief Executive Officer Rick Wagoner has assured that the company
has the ability to raise cash.  

                       About Ford Motor Co.

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

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

                       About General Motors

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

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

General Motors Latin America, Africa and Middle East, with
headquarters in Miramar, Florida, is one of GM's four regional
business units.  GM LAAM employs approximately 37,000 people in
18 countries and has manufacturing facilities in Argentina,
Brazil, Colombia, Ecuador, Egypt, Kenya, South Africa and
Venezuela.  GM LAAM markets vehicles under the Buick,
Cadillac, Chevrolet, GMC, Hummer, Isuzu, Opel, Saab and
Suzuki brands.

                          *     *     *

As reported in the Troubled Company Reporter on June 24, 2008,
DBRS has placed the ratings of General Motors Corporation and
General Motors of Canada Limited Under Review with Negative
Implications.  The rating action reflects the structural
deterioration of the company's operations in North America brought
on by high oil prices and a slowing U.S. economy.

Standard & Poor's Ratings Services is placing its corporate credit
ratings on the three U.S. automakers, General Motors Corp., Ford
Motor Co., and Chrysler LLC, on CreditWatch with negative
implications, citing the need to evaluate the financial damage
being inflicted by deteriorating U.S. industry conditions--largely
as a result of high gasoline prices.  Included in the CreditWatch
placement are the finance units Ford Motor Credit Co. and
DaimlerChrysler Financial Services Americas LLC, as well as GM's
49%-owned finance affiliate GMAC LLC.

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


GOLD TOE: Moody's Junks Ratings on Covenant Non-compliance Worry
----------------------------------------------------------------
Moody's Investors Service downgraded the debt ratings of Gold Toe
Moretz Holdings Corp. (GTM), including its corporate family rating
to Caa2 from B3, the probability of default rating to Caa3 from
Caa1, the first lien revolver and term loan facilities to Caa1
from B1, and the $105 million second lien term loan to Ca from
Caa2.  The ratings outlook is negative.

The downgrades reflect Moody's concern that GTM may not be in
compliance with financial covenants contained in its credit
facilities as of June 30, 2008, and that negotiations with
lenders, if necessary, could be difficult in this challenging
credit environment.  While continuing to recognize above-average
retention of enterprise value in distress, Moody's assessment of
GTM's weakened liquidity profile and capital structure in this
challenged environment is reflected in the downgrade of the
probability of default rating to Caa3 from Caa1.

GTM's weak operating performance stems mainly from soft economic
conditions in the U.S., which has caused retail customers to
adjust inventory levels down due to lower foot traffic.  
Meanwhile, GTM's liquidity has weakened due to negative free cash
flow on higher inventory levels, potential covenant violations,
limited availability under the $50 million revolving credit
facility, and modest cash on the balance sheet.

The negative ratings outlook reflects the heightened probability
of default due to GTM's weak liquidity, high leverage, and
expectation for a continued-challenging retail environment.  The
ratings would be further downgraded should liquidity erode
further, through cash usage, covenant violations and difficulty
negotiating a cure.  The outlook could be stabilized should the
company comfortably comply with, or successfully amend, financial
covenants, while returning to sustained positive free cash flow
generation.

Ratings downgraded:

Gold Toe Moretz Holdings Corp.

  -- Corporate Family Rating to Caa2 from B3
  -- Probability of Default Rating to Caa3 from Caa1

  -- First lien revolver and term loan facility to Caa1 (LGD 2,
     22%) from B1 (LGD 2, 22%)

  -- Second lien term loan facility to Ca (LGD 4, 69%) from Caa2
     (LGD 4, 69%)

Headquartered in Whitsett, North Carolina, Gold Toe Moretz
Holdings Corp. is a leading manufacturer, marketer and distributor
of socks in the U.S. with revenue approaching $330 million for the
LTM period ending March 31, 2008.  The company primarily
manufactures product under the "Gold Toe" brand name, as well as
other owned brands such as "AURO" and "gt" lines sold exclusively
at Target and Wal-Mart, respectively, licenses including "New
Balance" and 'Under Armor," and private label brands.


GREEKTOWN CASINO: Has Court Nod to Assume NRT Corp. Contracts
-------------------------------------------------------------
Greektown Casino LLC and its debtor-affiliates obtained authority
from the U.S. Bankruptcy Court for the Eastern District of
Michigan to assume contracts with NRT Technology Corp. relating to
the use of cash and ticketing machines.

The Debtors relate that their casinos use modern slot machines
and other video gaming devices that do not accept coins.  
Instead, those slot machines and video gaming devices accept
tickets.  The patrons then insert their cash into a cash and
ticketing machine and receive a ticket of equal value.

The Debtors are currently parties to various contracts with NRT,
whereby NRT agree to supply and maintain certain cash and
ticketing machines used in the Debtors' business operations.

The Debtors' proposed counsel, Michael E. Baum, Esq., at Schafer
and Weiner, PLLC, in Bloomfield Hills, Michigan, relates that the
Debtors' contracts with NRT include:

   (a) A Hardware Maintenance Support Agreement dated May 10,
       2005, in which NRT agrees to maintain and repair the cash
       and ticketing machines located at the Debtors' casino;

   (b) A Software License and Software Support Agreement dated
       May 10, 2005, in which NRT Agrees to maintain, update and
       support software used in the cash and ticketing machine
       operation;

   (c) A Purchase Agreement Order No. 18012 dated March 12, 2008,
       which was for the acquisition of eight new cash and
       ticketing machines; and

   (d) A Lease Agreement for two cash and ticketing machines,
       which has been extended by addendums through August 31,
       2008, and requiring monthly lease payments of $1,500.

Under the Contracts, the Debtors owe these amounts to NRT:

        Contract                                Amount
        --------                                ------
        Hardware & Software Agreement
         for 05/27/08 to 05/26/09              $169,057
         for 05/26/08 to 09/06/08                 3,365

        Purchase Agreement                      299,791

        Lease Agreement                           9,000

Without the use of the cash and ticketing machines, the Debtors'
slot machines and video gaming devices will become practically
useless and their revenue generation ability will be severely
impaired, Mr. Baum contends.

Accordingly, the Debtors seek the Court's authority to assume the
NRT Contracts pursuant to Sections 105(a), 363, and 365 of the
U.S. Bankruptcy Code.

The Debtors propose to assume the Contracts under these terms:

   (a) NRT will accept the Debtors' offer to assume and cure the
       $169,057 Current Amount of the Hardware and Software
       Agreements;

   (b) The 2007 Charges of $3,365 under the Hardware and Software
       Agreements will remain a general unsecured claim;

   (c) NRT will accept the Debtors' offer to assume the Purchase
       Agreement and to pay 10 equal installments of $29,979 in
       relation to that Agreement.  The Purchase Agreement will
       be considered assumed only after the last of the 10
       monthly payments of $29,979 has been made.
              
   (d) NRT will accept the Debtors' proposal to assume the Lease
       Agreement, which will only be considered assumed after the
       last of the remaining 10 monthly payments has been made.

The Debtors' assumption of the NRT Contracts is necessary and
urgent because locating an alternative vendor for NRT would be a
cumbersome and time consuming operation for the Debtors, Mr. Baum
asserts.  There would certainly be a lapse of time between when
NRT would remove its machines and the new vendor would install
its machines, he says.  There would also be significant lost
revenue during the changeover as well as the lost man hours
devoted to locating and contracting with an alternative vendor of
the same quality.  

The Debtors add that they hope to pay all vendors in full through
a Chapter 11 plan and they do not want to incur the cost of
rejection damages.

                      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).


HARRINGTON HOLDINGS: Moody's Puts Stable Outlook to B2 Ratings
--------------------------------------------------------------
Moody's Investors Service affirmed Harrington Holdings, Inc. B2
corporate family rating, and revised its ratings outlook to stable
from negative.  The outlook revision reflects the company's
favorable earnings growth that has resulted in a meaningful
decline in leverage from the initial pro forma levels that
followed its recapitization by The Jordan Company, L.P.'s in early
2007.  The outlook revision also reflects the company's
conservative posture with respect to acquisitions since the
recapitalization and Moody's expectation that this will continue,
although recognizing that acquisitions remain an ongoing risk.  
The outlook revision is also supported by the company's good
liquidity, with an undrawn revolving credit facility and good
cushion under the financial covenants governing its credit
facilities.

The stable outlook reflects Moody's expectation that Harrington
will continue to organically grow its earnings and use excess cash
flow for debt reduction.  The stable outlook also reflects Moody's
expectation that the company will not engage in any material debt
funded acquisitions over the near-term.

These ratings were affirmed:

  -- Corporate family rating at B2;
  -- Probability-of-default rating at B2;

  -- $45 million senior secured revolving credit facility due 2013
     at B1 (LGD3, 42%). Point estimate revised from (LGD3, 41%);

  -- $174 million first lien senior secured term loan due 2014 at
     B1 (LGD3, 42%). Point estimate revised from (LGD3, 41%);

  -- $50 million second lien senior secured term loan due 2014 at
     Caa1 (LGD6, 90%). Point estimate revised from (LGD5, 89%).

Harrington's B2 corporate family rating considers its small size
and moderately high leverage that limit financial flexibility.  
These concerns are partially mitigated by historically steady
operating cash flow generation, the retention of key management
post-acquisition, healthy diversification with respect to both
products and payors, and entrenched relationships with its
customers.

The revision to the LGD rates reflects an increased level of
priority trade claims in the capital structure.

Headquartered in Cleveland, Ohio, Harrington Holdings, Inc. is a
leading marketer and distributor of medical supplies and equipment
in the U.S.


HOMEBANC CORP: Has Until Oct. 6 to Solicit Votes for Ch. 11 Plan
----------------------------------------------------------------
The United States Bankruptcy Court for the District of Delaware
extended exclusive rights of HomeBanc Mortgage Corporation and
its debtor-affiliates to solicit acceptances for their Joint
Consolidated Liquidating Chapter 11 Plan for an additional 91
days, through and including Oct. 6, 2008.

As reported in the Troubled Company Reporter on June 20, 2008,
since the Debtors' bankruptcy filing, the Debtors have been
working to wind-down their operations and liquidate their assets.  
The Debtors have sold all aspects of their mortgage loan servicing
business and have been working to sell remaining loans to third
parties, Joseph M. Barry, Esq., at Young Conaway Stargatt &
Taylor, LLP, in Wilmington, Delaware, related.

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

The hearing to consider the disclosure statement for the Debtors'  
Joint Consolidated Liquidating Chapter 11 Plan has been adjourned
until Aug. 12, 2008.

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

As reported in the Troubled Company Reporter on May 7, 2008, the
Debtors filed with the Court their joint consolidated liquidating
plan and accompanying disclosure statement, dated April 30, 2008.

Under the plan, at least $5,000,000 will be available for
distribution to various creditors.  A liquidating agent will be
appointed to, among other things, (i) make distributions to
holders of allowed claims, (ii) continue to pursue and commence
various causes of action post-confirmation, and (iii) prosecute
any necessary objections to administrative, priority or secured
claims that are filed.

A full-text copy of the Plan is available for free at
http://ResearchArchives.com/t/s?2b85  

A full-text copy of the Disclosure Statement is available for
free at http://ResearchArchives.com/t/s?2b86  

                        About HomeBanc

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

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

(HomeBanc Bankruptcy News, Issue No. 28; Bankruptcy Creditors'
Services Inc. http://bankrupt.com/newsstand/or 215/945-7000).

  
ICTS INTERNATIONAL: Mahoney Cohen Expresses Going Concern Doubt
---------------------------------------------------------------
Mahoney Cohen & Company, CPA, P.C., raised substantial doubt about
the ability of ICTS International N.V. to continue as a going
concern after auditing the company's financial statements for the
year ended Dec. 31, 2007.  

Mahoney Cohen pointed out that the company has suffered recurring
losses from operations, net working capital and stockholders'
deficit.  The auditing firm also added that the company's U.S.
subsidiary is in default of its loan covenants and is subject to
potential contingencies.

Mahoney Cohen also stated that the company's significant
litigation relates to the Sept. 11, 2001, terrorist attacks in the
United States, and the company's insurance carriers have canceled
all its war risk policies.  In addition, the company is involved
in other potential contingencies including a dispute between the
company and the United States Transportation Security
Administration, with respect to the basis of calculation of
payments for security services rendered by the company in 2002, in
respect of which, the TSA might be claiming refund of material
amounts.

The company posted a total comprehensive loss of $1,981,000 on
total revenues of $64,780,000 for the year ended Dec. 31, 2007, as
compared with a total comprehensive loss of $14,365,000 on total
revenues of $60,791,000 in the prior year.

                 Losses of Associated Companies

The company's share in losses of associated companies during 2007
totaled $2,500,000 compared with $132,000 in 2006.  The company
had 50% in the partnership ICTS Netherlands Airport Services VOF.  
The partnership had one contract with Schiphol airport in
Amsterdam, which was to terminate on Feb. 1, 2008.  The
partnership is in the process of liquidation during 2008.  During
2007, ICTS recognized losses of $2,200,000, which included an
impairment of $332,000, compared with profit of $1,300,000 in
2006.  The company recognized losses of $284,000 in 2007 from its
investment in Inksure Technologies, Inc., compared with the
$1,400,000 losses in 2006.

ICTS's loss from continuing operations in 2007 was $8,000,000
compared with $9,800,000 in 2006.  ICTS's profit from discontinued
operations in 2007 totaled $5,400,000 compared with a loss of
$4,200,000 in 2006.

The company had net cash used in operating activities of
$3,600,000 and $7,600,000 in 2007 and 2006, respectively.  At Dec.
31, 2007, the company had negative equity and a working capital
deficit of $11,700,000.  If the company does not achieve new
service contracts and profitability, its viability will be in
question and its share price will likely decline.

                           Balance sheet

At Dec. 31, 2007, the company's balance sheet showed $27,103,000
in total assets and $47,713,000 in total liabilities, resulting in
a $20,610,000 stockholders' deficit.  

The company's consolidated balance sheet at Dec. 31, 2007, also
showed strained liquidity with $18,644,000 in total current assets
available to pay $30,305,000 in total current liabilities.

A full-text copy of the company's 2007 annual report is available
for free at http://ResearchArchives.com/t/s?2fc0/  

                 Significant Events in Operations

One major event in 2001 and early 2002 significantly changed the
company's business operations: the passage of the Aviation and
Transportation Security Act, or TSA, by the United States Congress
in response to the terrorist attacks on September 11, 2001,
pursuant to which the Federal Government through the TSA took over
aviation security services in the U.S. in November 2002.  As a
result of this event, the company had limited aviation security
operations in the U.S.

In February 2002, the company entered into an aviation security
services contract with the TSA to continue to provide aviation
security services in all of the company's current airport
locations until the earlier of either the completed transition of
these security services on an airport by airport basis to the U.S.
Federal Government or November 2002.

In connection with payments made by the TSA to Huntleigh USA
Corporation, a wholly owned subsidiary of the company, for
aviation security services provided in 2002, the Defense Contract
Management Agency has indicated that it believed that Huntleigh
should not have been paid on a fixed price basis as believed by
Huntleigh, but on an actual costs plus, what the TSA would
consider a reasonable profit.  On that later basis, Huntleigh may
be required to repay to the TSA the difference between such amount
and the actual amounts paid to it.  Huntleigh, however, has
various claims for additional amounts it considers are due to it
for the services provided to the TSA.

If the TSA will claim such difference from Huntleigh and will
prevail in all of its contentions, and none of Huntleigh's claims
will be recognized, then the company may suffer a loss in an
amount of about $59,000,000.  The company is engaged in litigation
with the FAA/TSA.  The company has made no provisions with respect
to these potential claims.

Huntleigh USA's main business was providing airport security
services to airlines and airports but as a result of the creation
of the TSA and the requirement that the TSA take over airport
security, Huntleigh has lost its principal business.  Huntleigh
has sued the U.S. Government for the "Taking" of its business and
to protect its rights under the Fifth Amendment of the U.S.
Constitution.  Huntleigh sought to recover the going concern value
of the lost business.  The suit was brought in the U.S. Court of
Federal Claims.  The Court has decided against the company.  The
company appealed this decision, and the U.S. Court of Appeals for
the Federal Circuit affirmed the lower court's ruling against the
company.

                    Potential Liability Claims

As a result of the September 11 terrorist attacks, numerous
lawsuits also have been commenced against the company and the
company's U.S. subsidiary.  The cases arise out of airport
security services provided for United Flight 175 out of Logan
Airport in Boston, Mass., which crashed into the World Trade
Center.  In addition to the present claims, additional claims may
be asserted.  The outcome of these or additional cases is
uncertain.  If there is an adverse outcome with respect to any of
these claims, which is not covered by insurance, then there may be
a significant adverse impact on the company.

                         Company Strategy

The company's success will be dependent upon its ability to change
its business strategy.  As part of its new business strategy, the
company intends to develop technological solutions and systems for
the aviation security industry, develop or acquire security
activities other than aviation security, and seek other revenue
producing businesses and business opportunities.

                     About ICTS International

ICTS International N.V. -- http://www.icts-tech.com/-- has  
interests in a variety of businesses and ventures.  Its current
principal activity consists of providing manpower-based aviation
security services in the Netherlands and non-security related
manpower-based general aviation services in the U.S.A.  Its other
activities consist primarily of the development of integrated
technological solutions designed for enhancing processing time of
passengers at airports and other gateways and the establishment
and operation of motion-based entertainment theaters in the U.S.A.


INTERLINE RESOURCES: HJ & Associates Raises Going Concern Doubt
---------------------------------------------------------------
Salt Lake City-based HJ & Associates, LLC, raised substantial
doubt about the ability of Interline Resources Corporation to
continue as a going concern after auditing the company's financial
statements for the year ended Dec. 31, 2007.  

The auditor reported that the company suspended a substantial
portion of its operations in 2002 and subsequently has not
generated revenues sufficient to cover its operation costs.  As a
result, the company, on a consolidated basis, has a stockholders'
deficit and an accumulated deficit of $12,505,643 at Dec. 31,
2007,

The company has had limited operations since a fire destroyed its
Well Draw Gas Plant in June 2002.  Since the fire, the company has
focused on finding financing to rebuild the Well Draw Plant and on
settling litigation matters related to the fire.

Management has obtained working capital primarily from debt
financing and from the sale of idle property and equipment.  The
company is in the process of arranging other debt and equity
financing with other sources.  In addition, the company has formed
the NorthCut Refining LLC and arranged financing to rebuild and
operate its Well Draw Gas plant facility.  The company anticipates
NorthCut will commence commercial operations in the next few
months, and the company anticipates that its share of management
fees and cash distributions from NorthCut, after related debt
obligations have been satisfied, will contribute significantly to
the working capital of the company.  

                            Financials

The company posted a net loss of $42,121,590 on total revenues of
$62,069 for the year ended Dec. 31, 2007, as compared with a net
loss of $668,759 on total revenues of $335,503 in the prior year.

At Dec. 31, 2007, the company's balance sheet showed $9,167,446 in
total assets and $11,608,717 in total liabilities, resulting in a
$2,441,271 stockholders' deficit.  

The company's consolidated balance sheet at Dec. 31, 2007, also
showed strained liquidity with $301,172 in total current assets
available to pay $1,246,934 in total current liabilities.

A full-text copy of the company's 2007 annual report is available
for free at http://ResearchArchives.com/t/s?2fb7  

                      NorthCut Refining LLC

NorthCut Refining LLC was formed in July 2007 as a Wyoming limited
liability company.  Interline Resources contributed the Well Draw
facility, including land, fixtures, equipment and all operating
permits, receiving a 75% member interest in NorthCut.  The parties
who arranged financing for construction of the project received a
25% interest in NorthCut (PCG Midstream, LLC, 5% and NorthCut
Holdings, LLC, 20%).  Interline Resources is designated as manger,
however, until the construction loan is repaid.  PCG Midstream
acts as a co-interim manger.

NorthCut is the borrower and Private Capital Group, Inc., is the
lender under the Construction Loan Agreement.  NorthCut pledged
all of its assets as collateral for the loan.  Interline Resources
executed a Guaranty Agreement and a Security Agreement,
guaranteeing repayment of the loan, and pledging all of the assets
of the company.  The Promissory Note carries an interest rate of
24% per year due on Aug. 1, 2009.  The Operating Agreement
provides that 75% of the Available Cash each month will be paid to
reduce the loan amount.  Interline Resources receives the
remaining 25% of available cash, and the funding group receives no
distributions until after the loan has been paid back.

NorthCut and Interline Resources executed a Management Services
Agreement.  Interline Resources will act as manager of the Plant
for a term of fifty years.  Under the agreement, Interline
Resources will provide management, supervisory, and other general
services to NorthCut and the plant, and supervise and direct all
aspects of the day-to-day operation of the plant.  During the
construction phase of the plant, Interline Resources receives a
management fee of $87,000 per month for six months.  Once in
operation, Interline Resources receives a monthly operating fee of
$40,000.

Until the construction loan is repaid, all profits and losses are
allocated 100% to Interline Resources.

                       Well Draw Gas plant

The natural gas gathering system was built and connected to the
Well Draw Gas plant in 1973 and consists of nearly 60 miles high
pressure discharge line, 120 miles of low pressure gathering lines
and 90 miles of low pressure fuel return lines and associated
valves, tanks, fittings and other appurtenant equipment.  When
Interline Resources purchased the Well Draw Gas plant in 1990, the
sale included the gathering system.  The system covers an area of
around 70 by 40 miles.

In 2006, the company sold around 19 miles of high-pressure
discharge line for $175,000.  The company currently owns 41 miles
high-pressure discharge line; 120 miles of low pressure gathering
lines; and 90 miles of low-pressure fuel return lines and
associated valves, tanks, fittings and other appurtenant
equipment.  There is currently no gas being transported in the
system.  Because the system is in an area where the original wells
connected to the system are depleted, or have been connected to
other pipelines, the system has only a limited present value.  
Unless additional wells are drilled in the company's gathering
area, the company has no prospects of operating its gas system and
receiving revenues from the gas system.

                    About Interline Resources

Interline Resources Corporation (Other OTC: IRCE.PK) --
http://www.interlineresources.com/-- along with its subsidiaries  
Interline Energy Services, Inc., and Interline Hydrocarbons, Inc.,
operates in two segments: Oil and Gas and Used Oil Technology.  
The O&G segment engages in natural gas gathering and processing,
crude oil gathering, fractionation, marketing of natural gas
liquids, and oil and gas production.  The gas is processed and
fractionated into its constituent natural gas liquid products and
remaining residue gas.  Residue gas is sold into a major
interstate pipeline and the natural gas liquid products are sold
to both end users and other major refineries for further
refinement.  The UOT segment refines various types of used oils.  
The company's marketing efforts extend to a worldwide market.


INTERPUBLIC GROUP: Secures $335 Million Revolving Credit Facility
-----------------------------------------------------------------
The Interpublic Group of Companies Inc. entered into a three-year
revolving credit facility with a syndicate of banks.  The facility
provides for borrowings of up to $335 million, of which
$200 million is available for the issuance of letters of credit.

The facility allows Interpublic to increase the aggregate
commitment to a maximum amount of $485 million if lenders agree to
the additional commitments.  Interpublic may borrow and may
request the issuance of letters of credit in U.S. Dollars and
other currencies.  Interpublic may use the proceeds of advances
under the credit facility for general corporate purposes.  The
credit agreement will expire on July 18, 2011.

Citibank N.A., acted as administrative agent for the lenders,
JPMorgan Chase Bank N.A., acted as syndication agent, HSBC Bank
USA, National Association and ING Capital LLC acted as co-
documentation agents, and Citigroup Global Markets Inc. and J.P.
Morgan Securities Inc. acted as joint lead arrangers and joint
book managers.

A full-text copy of of the credit agreement is available for free
at http://ResearchArchives.com/t/s?2fdc

            About Interpublic Group of Companies Inc.

New York-based, Interpublic Group of Companies Inc. (NYSE: IPG)
-- http://www.interpublic.com/-- is one of the world's leading       
organizations of advertising agencies and marketing services
companies.  Major global brands include Draftfcb, FutureBrand,
GolinHarris International, Initiative, Jack Morton Worldwide, Lowe
Worldwide, MAGNA Global, McCann Erickson, Momentum, MRM Worldwide,
Octagon, Universal McCann and Weber Shandwick.  Leading domestic
brands include Campbell-Ewald, Carmichael Lynch, Deutsch, Hill
Holliday, Mullen, The Martin Agency and R/GA.

                          *     *     *

As reported in the Troubled company Reporter on July 23, 2008,
Fitch Ratings assigned a 'BB+' rating to the Interpublic Group of
Companies' $335 million three year revolving credit facility.  The
rating outlook remains Positive.


IPS CORP: S&P Revises Outlook to Neg, Affirms 'B' Credit Rating
---------------------------------------------------------------
Standard & Poor's Ratings Services revised its outlook on IPS
Corp. to negative from stable. All ratings, including the 'B'
corporate credit rating, were affirmed.

The outlook revision reflects our increasing concerns about the
impact weakening commercial construction activity, the current
housing downturn, and other recessionary pressures will have on
IPS' end-market demand and operating performance over the next
several quarters," said Standard & Poor's credit analyst Thomas
Nadramia. "As a result, IPS' credit measures are likely to
weaken during this period."

In addition, the company faces more restrictive covenants under
its existing bank facility credit agreement over the next several
quarters, with its net debt to EBITDA covenant stepping down to
below 7x at Sept. 30, 2008, and again to below 6x at Sept. 30,
2009. A weakening in operating performance could result in a
deterioration of the cushion relative to this covenant and
could constrain access to its currently unutilized $20 million
revolving credit facility.

The ratings on Compton, Calif.-based IPS reflect its small revenue
base, product concentration, exposure to cyclical construction end
markets, high debt leverage, and modest free cash flow generation.
The ratings also reflect the company's leading market shares in
its niche markets and good operating margins.


JETBLUE AIRWAYS: Moody's Cuts Corporate Family Rating to Caa2
--------------------------------------------------------------
Moody's Investors Service downgraded the Corporate Family and
Probability of Default Ratings of JetBlue Airways Corp. to Caa2
from Caa1, as well as the ratings of its outstanding corporate
debt instruments and certain Enhanced Equipment Trust Certificates
(EETC).  The outlook is negative.

"The rating actions reflect Moody's expectation that the difficult
operating environment affecting the airline industry will cause
further erosion of JetBlue's financial metrics and that despite
recent success in strengthening liquidity, the company will
continue to face significant near term cash losses," George
Godlin, a Moody's analyst, said.

JetBlue reported a $21 million operating profit for the 2nd
quarter of 2008, which was down over 70% from prior year results.  
Like most airlines, JetBlue's operations have been adversely
affected by a weakening economic environment and persistently high
fuel costs.  Although fuel costs have moderated recently, they are
likely to remain high and these challenging conditions are likely
to continue, particularly as the industry enters the seasonally
weak fall and winter months, and operating losses could erode the
company's liquidity profile at a time when it faces meaningful
calls on cash for debt maturities.

Although JetBlue has historically had a low cost business model,
its unit costs have increased over time due to the incremental
expense associated with the operation of a large, complex route
network, the addition of a second aircraft type to its fleet, and
the effects of higher maintenance costs as its fleet has aged.  
The company has pursued several initiatives, including slowing
capacity growth, cost cutting initiatives and deferrals of
scheduled aircraft deliveries, which are likely to slow the
company's cash burn.  Further capacity reductions are expected
after the summer months through a combination of aircraft sales,
lower utilization, and discontinuing the operation of unprofitable
routes.  Even with the initiatives being taken, a combination of
deteriorating economic conditions and sustained high fuel costs
are likely to place continued stress on the company's operating
performance over the coming months.

Moody's notes that JetBlue has worked aggressively to support its
liquidity profile.  Over the last several months the company has
received an equity investment of approximately $300 million from
Lufthansa, received $165 million of net proceeds from a new
convertible debt placement, and raised additional funds from the
sale of aircraft.  As well, the company's utilization of pre-
delivery deposits associated with aircraft deferrals has allowed
it to reduce capital spending by approximately $40 million in
2008.  These transactions contributed to the increased reported
cash balance of $846 million (excluding $397 million of investment
securities) at June 30, 2008.  Yet the company's redemption of a
$175 million in convertible notes that were substantially put back
to the company under terms of its indenture in early July has
subsequently reduced cash balances.  The company's liquidity could
become increasingly constrained if industry current conditions,
including high fuel costs and weakening demand, result in further
cash operating losses.

As part of its recent earnings statement, the company stated that
it has obtained a new $110 million line of credit, deferred the
deliveries of 10 Embraer 190 aircraft and secured financing for
all of its 2009 Airbus A320 and 3 of its E190 aircraft deliveries.  
As well, the company is working on a number of other initiatives
which if successful could improve near term liquidity.  While
these initiatives are viewed as helpful they are not seen as
materially improving the company's near term liquidity profile;
the aircraft deferrals are primarily in later years (2011 to 2016)
and the new line of credit is only a one year facility that is
secured by a portion of the company's portfolio of investment
securities.

The rating actions on the EETCs consider the rating downgrade of
the underlying Corporate Family Rating, the continuing
availability of liquidity facilities to meet interest payments for
18 months in the event of a JetBlue default, and the asset values
of the aircraft which secure the various EETCs.  Although the
recovery for junior classes of any EETCs is generally more
uncertain as they hold a first loss position, Moody's has not
changed its view of the relative recovery on JetBlue's EETCs
because of still-favorable trends for the Airbus A320 aircraft
that collateralize the pass through certificates.  The ratings on
the senior tranches of the Series 2004-1 and 2004-2 Pass Through
Certificates, and the 2006 spare parts financing reflect that they
are supported by policies issued by a monoline insurance company.

The negative outlook reflects Moody's expectation of continued
deterioration in JetBlue's key credit metrics, such as interest
coverage and leverage during 2008, due primarily to high fuel
costs and a weakening economic environment.  Unless demand
improves and fuel cost pressures abate, the company could see a
continued deterioration in financial performance.

JetBlue's rating could be lowered if persistent cash operating
losses or other cash uses further erode the company's liquidity
profile.

The company's rating outlook could be stabilized with sustained
increases to revenues or reduced non-fuel costs, or a sustained
decline in fuel costs that increases cash from operations and
enables the company to satisfy maturing debt and capital spending
requirements from existing cash reserves and cash from operations.

Downgrades:

Issuer: JetBlue Airways Corp.

  -- Probability of Default Rating, Downgraded to Caa2 from Caa1
  -- Corporate Family Rating, Downgraded to Caa2 from Caa1

Series 2004-2 Pass Through Certificates

  -- Class C Certificates, Downgraded to B3 from B2

Series SP Pass Through Certificates

  -- Class B1, Downgraded to B3 from B2

  -- Senior Unsecured Conv./Exch. Bond/Debenture, Downgraded to Ca
     from Caa3

Issuer: New York City Industrial Development Agcy, NY

  -- Senior Unsecured Revenue Bonds, Downgraded to Ca from Caa3

Withdrawals:

Issuer: JetBlue Airways Corp.

  -- Senior Unsecured Conv./Exch. Bond/Debenture, Withdrawn,
     previously rated Caa3

Headquartered in Forest Hills, New York, JetBlue Airways Corp.
operates a low-cost, point-to-point airline from a hub in New
York.


JHT HOLDINGS: Taps Pepper Hamilton as Delaware Counsel
------------------------------------------------------
JHT Holdings Inc. and its debtor-affiliates ask the United States
Bankruptcy Court for the District of Delaware for permission to
employ Pepper Hamilton LLP as their Delaware Counsel.

Pepper Hamilton will:

   a) assist co-counsel in representing the Debtors;

   b) advise the Debtors with respect to their rights, powers and
      duties as debtor-in-possession in the continued management
      and operation of their business and properties;

   c) attend meetings and negotiating with representative of
      creditors and other parties-in-interest;

   d) advise and consult the Debtors and co-counsel regarding the
      conduct of the case, including all of the legal and
      administrative of operating in Chapter 11;

   e) advise the Debtors and co-counsel on matters relating to the
      evaluation of the assumption, rejection or assignment of
      unexpired leases and executory contracts;

   f) take all necessary action to protect and preserve the
      Debtors' estates, including the prosecution of actions on
      their behalf, the defense of any actions commences against
      those estates, negotiations concerning all litigation in
      which the Debtors may be involved and objections to claims
      filed against the estates;

   g) advise the Debtors and co-counsel with respect to the sale
      of the Debtors' assets;

   h) assist co-counsel negotiating and preparing the Debtors'
      plan of reorganization, disclosure statement and all related
      agreements and documents and taking any necessary action on
      behalf of the Debtors to obtain confirmation of the plan;

   i) appear before the Court, any appellate courts, and the
      Office of the U.S. Trustee, and protecting the interest of
      the Debtors' estates before the Court and the Office of the
      U.S. Trustee; and

   j) perform all other necessary legal services and providing all
      other necessary legal advice to the Debtors in connection
      with these Chapter 11 cases to bring the Debtors' Chapter 11
      cases to a conclusion.

Pepper Hamilton received in the aggregate amount of $75,000 pre-
filing retainer.

The firm's professionals will bill at these rates:

      Designation                 Hourly Rates
      -----------                 ------------
      Partners                     $450-$695
      Associates                   $240-$345
      Legal Assistants             $190-$205

David B. Stratton, Esq., a partner at firm, assures the Court that
the firm does not hold any interest adverse to the Debtors'
estates and is a "disinterested person" as defined in Section
101(14) of the Bankruptcy Code.

Mr. Stratton can be reached at:

      David B. Stratton, Esq.
      Pepper Hamilton LLP
      1313 Market Street, Hercules Plaza, Suite 5100
      Wilmington, Delaware 19801
      Tel: (302) 777-6500
      Fax: (302) 421-8390
      http://www.pepperlaw.com/

Headquartered in Kenosha, Wisconsin, JHT Holdings Inc. --
http://www.jhtholdings.com/-- provide over-the-road    
transportation of various types of motor vehicles, including
commercial trucks and cars.  The company and 16 of its affiliates
filed for Chapter 11 protection on June 24, 2008 (Bankr. D. Del.
Lead Case No.08-11267).  David B. Stratton, Esq., and Evelyn J.
Meltzer, Esq., at Pepper Hamilton, LLP, represent the Debtors
in their restructuring efforts.  When the Debtors filed for
protection against their creditors, they listed assets and debts
between $100 million to $500 million.


JUNIPER GENERATION: S&P Cuts Rating on $206MM Notes to 'BB-'
------------------------------------------------------------
Standard & Poor's Ratings Services lowered its rating to 'BB-'
from 'BBB-' on Juniper Generation LLC's $206 million senior
secured notes due 2014. The recovery rating is '1', indicating the
expectation of very high (90% to 100%) recovery in the event of
a default. The outlook is stable.

"The lowered ratings follow the anticipated enactment of new short
run avoided cost (SRAC) pricing that will lower energy payments to
the company," said Standard & Poor's credit analyst Terrence
Marshall.  

While Juniper's capacity payments and management fee were expected
to cover all fixed operating expenses and debt service, the
potential for negative energy margin has been increased by the
variability in energy payment pricing. Since Juniper's offtaker
contract amendment expired in June 2006, the pricing of energy
payments floats on a monthly basis and is tied to the monthly
natural gas price at the Malin hub according to the SRAC formula
established by the California Public Utilities Commission (CPUC).

Following the outcome of the CPUC's recent changes to the SRAC
formula, the heat rate assumption upon which the SRAC pricing for
energy payments is based will result in a reduction of the price
paid for the energy produced by the Juniper project. These changes
have not yet gone into effect, but are expected to be enacted
sometime in late 2008.

Juniper is a holding company with ownership interests in nine gas-
fired cogeneration projects. Juniper is a special-purpose entity
owned by ArcLight Energy Partners Fund II LLC (90% ownership) and
Delta Power Co. LLC (10%). The projects sell power primarily to
Pacific Gas & Electric Co. (BBB+/Stable/A-2) under long-term,
standard-offer service contracts. Juniper's nine separate projects
provide significant operational diversity.


LEASE INVESTMENT: Fitch Downgrades Ratings on Five Note Classes
---------------------------------------------------------------
Fitch Ratings has taken these rating actions for Lease Investment
Flight Trust aircraft securitization as outlined below:

  -- Class A-1 notes downgraded to 'B' from 'BB';
  -- Class A-2 notes downgraded to 'B' from 'BB';
  -- Class A-3 notes downgraded to 'BB' from 'BBB-';
  -- Class B-1 notes downgraded to 'C/DR6' from 'CC/DR5';
  -- Class B-2 notes downgraded to 'C/DR6' from 'CC/DR5';
  -- Class C-1 notes remain at 'C/DR6';
  -- Class C-2 notes remain at 'C/DR6';
  -- Class D-1 notes remain at 'C/DR6';
  -- Class D-2 notes remain at 'C/DR6'.

Cash flow available to service debt in the LIFT transaction has
declined steadily over the past three years.  Due to the
combination of reductions in available collections and periodic
spikes in expenses, cash liquidity for classes B, C, and D have
been completely exhausted, resulting in interest shortfalls for
each of those classes.  Given the reductions in cash flow, it
appears unlikely that class B notes will receive future interest
payments.  Furthermore, the class A cash liquidity was drawn upon
for the first time on the January 2008 payment date in order to
pay scheduled class A interest.  

However, class A liquidity was restored on the March 2008 payment
date.  Class A continues to pay partial minimum principal
payments; however, as available cash flow continues to decline,
the reliability of full principal payment on the class A notes
also declines.  Compounding these concerns is the LIFT portfolio's
concentrations in older generation, less fuel efficient aircraft
types such as the Boeing 737-300 and -400 (Classics) and McDonnell
Douglas MD-80 series aircraft.  These and other aircraft types are
exposed to potential value and lease rate deterioration stemming
from fuel price volatility and the resulting airline capacity
reductions and bankruptcies.

Fitch's analysis incorporated expected cash flow to be available
to the trust over the remaining life of the transaction.  This
expectation is based on several factors including aircraft age,
current portfolio value, potential lease rates, and perceived
liquidity of the portfolio.  Lease rate and portfolio value
expectations have been updated to reflect Fitch's views on certain
aircraft types given recent aviation market volatility.

LIFT is a Delaware business trust formed to conduct limited
activities, including the issuance of debt, and the buying,
owning, leasing and selling of commercial jet aircraft.  LIFT
originally issued $1.4 billion of rated notes in June 2001.
Primary servicing on LIFT's aircraft is being performed by GE
Capital Aviation Services, wholly owned by General Electric
Corporation while the administrative agent role is being performed
by Phoenix American Financial Services, Inc.


LIBERTAS PREFERRED FUNDING: Moody's Junks Ratings on Eight Notes
----------------------------------------------------------------
Moody's Investors Service downgraded ratings of eight classes of
notes issued by and one swap entered into by Libertas Preferred
Funding III, Ltd.  The rating actions are:

Class Description: $633,000,000 Class I Supersenior Swap

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

Class Description: $27,000,000 Class I-J Senior Floating Rate
Notes Due April 2047

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

Class Description: $108,000,000 Class II Senior Floating Rate
Notes Due April 2047

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

Class Description: $120,000,000 Class III Senior Floating Rate
Notes Due April 2047

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

Class Description: $118,000,000 Class IV Senior Floating Rate
Notes Due April 2047

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

Class Description: $10,000,000 Class V Mezzanine Floating Rate
Deferrable Notes Due April 2047

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

Class Description: $45,000,000 Class VI Mezzanine Floating Rate
Deferrable Notes Due April 2047

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

Class Description: $55,000,000 Class VII Mezzanine Floating Rate
Deferrable Notes Due April 2047

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

Class Description: $24,000,000 Class VIII Mezzanine Floating Rate
Deferrable Notes Due April 2047

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

The transaction experienced, as reported by the Trustee, an event
of default on July 1, 2008 caused by a failure of the Senior
Overcollateralization Ratio to be greater than or equal to 101 per
cent, as described in Section 5.1(i) of the Indenture dated March
22, 2007.  This event of default is still continuing.  Libertas
Preferred Funding III, Ltd. is a collateralized debt obligation
backed primarily by a portfolio of synthetic securities in the
form of credit default swaps.  Reference obligations for the
credit default swaps are RMBS and CDO securities.

As provided in Article V of the Indenture during the occurrence
and continuance of an Event of Default, certain parties to the
transaction may be entitled to direct the Trustee to take
particular actions with respect to the Collateral Debt Securities
and the Notes.  In this regard the Trustee reports that the
Supersenior Swap Counterparty and the Controlling Class directed
the Trustee to accelerate the maturity of the Rated Notes and sell
and liquidate the Collateral, in accordance with relevant
provisions of the transaction documents.

The rating downgrades taken reflect the increased expected loss
associated with each tranche.  Losses are attributed to diminished
credit quality on the underlying portfolio.


MATTHEW LEASING: Case Summary & 20 Largest Unsecured Creditors
--------------------------------------------------------------
Debtor: Matthew Leasing Ltd.
        30 Hopper Street
        Westbury, NY 11590

Bankruptcy Case No.: 08-73898

Debtor-affiliates filing separate Chapter 11 petitions:

        Entity                                     Case No.
        ------                                     --------
Conva-Aids Incorporated                            08-73902
Swalm Street LLC                                   08-73903
Medigas LLC                                        08-73905
Metropolitan Gas Technologies LLC                  08-73907
Ruddy Family LLC                                   08-73908

Type of Business: The Debtors provide health care services.

Chapter 11 Petition Date: July 22, 2008

Court: Eastern District of New York (Central Islip)

Judge: Robert E. Grossman

Debtors' Counsel: Anthony F. Giuliano, Esq.
                   (afg@pryormandelup.com)
                  Pryor & Mandelup LLP
                  675 Old Country Road
                  Westbury, NY 11590
                  Tel: (516) 997-0999
                  Fax: (516) 333-7333
                  http://pryormandelup.com/

Estimated Assets: Less than $50,000

Estimated Debts:  $10 million to $50 million

A. A list of Matthew's largest unsecured creditors is available
   for free at:

            http://bankrupt.com/misc/nyeb08-73898.pdf

B. A list of Conva-Aids' largest unsecured creditors is available
   for free at:

            http://bankrupt.com/misc/nyeb08-73902.pdf

C. A list of Swalm's largest unsecured creditors is available
   for free at:

            http://bankrupt.com/misc/nyeb08-73903.pdf

D. A list of Medigas' largest unsecured creditors is available   
   for free at:

            http://bankrupt.com/misc/nyeb08-73905.pdf

E. A list of Metropolitan's largest unsecured creditors is
   available for free at:

            http://bankrupt.com/misc/nyeb08-73907.pdf

F. A list of Ruddy's largest unsecured creditors is available for
   free at:

            http://bankrupt.com/misc/nyeb08-73908.pdf


MEDICAL: 10th Cir. Affirms Carl Zeiss' Non-Insider Status
------------------------------------------------------------
The U.S. Court of Appeals for the Tenth Circuit affirmed a ruling
by the bankruptcy appellate panel holding that Carl Zeiss Meditec
AG was not a "non-statutory insider" of Debtor U.S. Medical, Inc.
for the purposes of 11 U.S.C. Sec. 547(b)(4)(B).

The ruling was made by Circuit Judges Paul J. Kelly and Timothy M.
Tymkovich and the Hon. Gregory K. Frizzell of the U.S. District
Court for the Northern District of Oklahoma, sitting by
designation.

In a 21-page decision penned by Judge Kelly, the Circuit Court
pointed out that the legislative history pertaining to the
definition of "insider" clearly states that "[a]n insider is one
who has a sufficiently close relationship with the debtor that his
conduct is made subject to closer scrutiny than those dealing at
arms [sic] length with the debtor."  The Circuit Court held that a
creditor may only be a non-statutory insider of a debtor when the
creditor's transaction of business with the debtor is not at arm's
length.  According to the Tenth Circuit, Congress has conclusively
found that statutory insiders do not have interests "independent"
of their debtors whereas parties held to be operating at arm's
length necessarily do.

                       Carl Zeiss Agreement

U.S. Medical distributed new and used medical equipment through
the Internet.  U.S. Medical entered into a distribution agreement
with Carl Zeiss, a German producer of surgical equipment and
aesthetic lasers, on June 13, 2000.  Under the deal, U.S. Medical
served as Carl Zeiss' exclusive distributor in North America and
Carl Zeiss became the Debtor's sole laser manufacturer.  The
agreement also provided that Carl Zeiss had the right to appoint a
member of the Debtor's board of directors.

Under a separate stock-purchase agreement, Carl Zeiss acquired a
10.6% equity interest in the Debtor for $2,000,000 in cash and a
$2,000,000 inventory-purchase credit.  In addition, Carl Zeiss
retained an unexercised warrant for 80,000 additional shares of
the Debtor.

The distribution and stock-purchase agreements formed the basis of
a "strategic alliance" between the companies.

Dr. Bernard Seitz, the CEO of Carl Zeiss, was appointed to the
Debtor's board in accordance with the stock-purchase agreement.  
The stock-purchase agreement provided for the payment of a
financial penalty by the Debtor to Carl Zeiss if Dr. Seitz were
removed from the board.  Dr. Seitz received only a stock-option
package in the Debtor -- which he never exercised -- as
compensation for his service.  Dr. Seitz attended every board
meeting, either in person or by phone, and had access to all of
the Debtor's financial information but did not participate in any
vote concerning payment to Carl Zeiss.  All day-to-day business
between the Debtor and Carl Zeiss was handled by Carl Zeiss' Chief
Financial Officer Michael Dettlebacher.

                         Avoidance Action

After experiencing financial difficulties, the Debtor voluntarily
filed for Chapter 7 bankruptcy on June 24, 2002.  In an adversary
proceeding, Glen R. Anstine, the Chapter 7 Trustee appointed to
oversee the liquidation of the Debtor's estate, sought to avoid
certain transfers made between 90 days and one year before the
bankruptcy petition date, claiming that Carl Zeiss was an
"insider."

Within this period, Carl Zeiss received sporadic payments and some
inventory returns.  Carl Zeiss lost its entire investment in the
Debtor and was owed approximately $1,000,000 when the bankruptcy
petition was filed.

After a trial on March 7, 2006, the bankruptcy court held that
Carl Zeiss was a "non-statutory insider" pursuant to 11 U.S.C.
Sec. 101(31) because of the "extreme closeness" between the Debtor
and Carl Zeiss.

According to the Tenth Circuit, the bankruptcy court reached this
conclusion even though it also specifically found no evidence that
Dr. Seitz, as Carl Zeiss' representative, controlled, sought to
control, or exercised any undue influence on the Debtor; rather,
Dr. Seitz was sensitive to "potential conflicts of interest" and
both Dr. Seitz and the Debtor's senior management "attended to the
kinds of formalities one would expect to see in dealings between
third parties at arm's length."  Likewise, the bankruptcy court
found no evidence that Carl Zeiss' 10% share of the Debtor allowed
Carl Zeiss to control or attempt to exercise any undue influence
on Debtor.

The bankruptcy court denied leave for an interlocutory appeal to
the district court.

The parties stipulated to a judgment of $147,307 in the Trustee's
favor if Carl Zeiss were ultimately ruled to be a non-statutory
insider, and Carl Zeiss preserved its right to appeal.  The
bankruptcy court entered its final judgment on August 7, 2006.

Carl Zeiss then appealed to the BAP.  On appeal, the BAP reversed,
holding that "not every creditor-debtor relationship attended by a
degree of personal interaction between the parties rises to the
level of an insider relationship," and that "closeness alone does
not give rise to insider status."  The BAP entered its judgment on
June 12, 2007.

The Chapter 7 Trustee elevated the matter before the Tenth
Circuit.

                      10th Circuit's Ruling

The Chapter 7 Trustee argues that the bankruptcy court was correct
-- and the BAP was wrong -- because the closeness of a
relationship between a creditor and a debtor alone is enough to
support a finding that a creditor is a non-statutory insider of a
debtor pursuant to 11 U.S.C. Sec. 101(31).  According to the
Trustee, a showing that the creditor exerted control or undue
influence over the debtor or that the creditor engaged in less-
than-arm's-length transactions with the debtor is not required.

Carl Zeiss contends that the bankruptcy court's decision was
incorrect because a trustee's demonstration of a creditor's
control, undue influence, or transactions at less than arm's
length is essential for a finding that a creditor is a non-
statutory insider of a debtor.  A close relationship alone, Carl
Zeiss contends, is not enough to confer insider status.

According to the Tenth Circuit, because the bankruptcy court held
that "[t]he extreme closeness of the relationship" between the two
"is determinative," without any finding that the transactions
between Carl Zeiss and the Debtor were not at arm's length or that
there was undue influence or control by Carl Zeiss, it erred in
holding that Carl Zeiss was a non-statutory insider of the Debtor.

Although the Chapter 7 Trustee is correct that an absence of
actual control does not rule out non-statutory-insider status,
that does not resolve the issue, the Circuit Court said, pointing
out that the bankruptcy court necessarily had to determine that
Carl Zeiss did not actually control the Debtor to rule that it was
a non-statutory, rather than a statutory, insider.  "Actual
control," the Circuit Court held, is the ability of the creditor
to "unqualifiably dictate corporate policy and the disposition of
corporate assets," or the "legal right or ability to exercise
control over a corporate entity."  

"Such actual control is obviously not present [in U.S. Medical's
case]," the Circuit Court said.

A full-text copy of the Circuit Court's opinion is available at no
charge at:

     http://www.ca10.uscourts.gov/opinions/07/07-1259.pdf


MERGE HEALTHCARE: Inks Employment Agreements with Key Officers
--------------------------------------------------------------
Merge Healthcare Incorporated entered into written employment
letter agreements on July 15, 2008, with Justin C. Dearborn,
Steven M. Oreskovich and Nancy J. Koenig, and on July 8, 2008,
with Antonia Wells in connection with their appointments on June
4, 2008, as executive officers.

Mr. Dearborn accepted the position of chief executive officer,
while Mr. Oreskovich accepted the position of chief financial
officer.  

Ms. Koenig accepted the position of president of Merge Fusion and
Ms. Wells accepted the position of president, Merge OEM.

Under the terms of their compensation arrangements, Mr. Dearborn
receives an annual base salary of $250,000 and is eligible for a
target annual bonus equal to his annual base salary; Mr.
Oreskovich receives an annual base salary of $200,000 and is
eligible for a target annual bonus equal to 50% of his annual base
salary; and each of Ms. Koenig and Ms. Wells receives an annual
base salary of $200,000 and is eligible for a target annual bonus
equal to her annual base salary.  In addition, in connection with
their appointment as executive officers of the company, the
company granted Mr. Dearborn, Mr. Oreskovich, Ms. Koenig and Ms.
Wells options to purchase 400,000, 200,000, 200,000 and 200,000
shares, respectively, of the company's common stock at a per share
price equal to $0.68, the closing price on the date of grant.

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.


MERVYN'S LLC: Cerberus Sold Stake to Sun Last Year, NY Post Says
----------------------------------------------------------------
The New York Post's James Covert reports that Cerberus Capital
Management has sold its stake in Mervyn's LLC in a previously
undisclosed transaction late last year to Florida-based investment
firm, Sun Capital Partners.

A Cerberus spokesman, The Post says, said the buyout firm now only
owns a 15% interest in the real-estate company that leases space
to Mervyn's.

As reported by the Troubled Company Reporter on July 22, 2008, The
Wall Street Journal's Peter Lattman said the private-equity owners
wouldn't stand to take much of a financial hit in a Mervyn's
liquidation.  Mr. Lattman explained that when the owners bought
the company they structured the deal as two separate transactions
-- one for the retailer and a second one for the retailer's real
estate.  The real-estate arm leased many of the stores to Mervyn's
and has sold and leased certain properties to other retailers; and
through sale-leaseback transactions and the appreciation of real-
estate values over the past several years, the buyers have more
than doubled their money on the real-estate investment, and
profits have far exceeded losses on the retailer.

Since 2004, Mervyn's private-equity owners have shut many stores,
WSJ says.

Executives at Mervyn's in recent days have been trying to persuade
vendors to continue shipping merchandise for the back-to-school
season.  Mervyn's lender, CIT Group Inc., stopped providing
financing in the spring, causing the retainer's vendors to get
nervous and begin withholding shipments.  The Post also relates
that GMAC, another Mervyn's lender, has stopped financing
deliveries; and Sun Capital also has declined to give Mervyn's an
equity infusion.

Mervyn's major suppliers include Levi Strauss.

Sources told The Post Mervyn's is likely to file for Chapter 11
bankruptcy protection by early next week and possibly sooner.  The
Wall Street Journal said if management's effort fails, Mervyn's
could be forced to file for bankruptcy protection as soon as this
month and shut down.

The Post says Mervyn's in recent weeks has withheld payments to
suppliers as a result of slumping sales.  

The Post, citing sources, adds that the company is now in talks to
obtain outside financing, including a debtor-in-possession loan to
restart the flow of goods to its stores in the event of a
bankruptcy filing.

Mervyns LLC -- http://www.mervyns.com/-- operates more than 177  
stores in seven states, providing a mix of top national brands and
exclusive private labels.  Mervyns stores have an average of
80,000 retail square feet, smaller than most other mid-tier
retailers and easier to shop, and are located primarily in
regional malls, community shopping centers, and freestanding
sites.

Cerberus Capital Management and Sun Capital Partners, along with
three other partners -- including real-estate investor Lubert-
Adler -- bought Mervyn's from Target Corp. in 2004 for
$1,200,000,000.  Cerberus, et al., put up about $400,000,000 in
equity and financed the rest.


M FABRIKANT: Bankruptcy Fees and Expenses Total More Than $8 Mil.
-----------------------------------------------------------------
The professionals involved in the chapter 11 bankruptcy case of M.
Fabrikant & Sons, Inc. and Fabrikant-Leer International, Ltd.
filed applications for fees and expenses of more than $8 million,
Diamond Intelligence reports.  More than half of these amounts
have been paid, the report says.

The U.S. Bankruptcy Court in the Southern District of New York
will hear the Debtors' application at a later date to consider
approval of the professionals' fees and expenses, Diamond
Intelligence relates.

Based on the report, the fees and expenses asked by each firm for
the period November 2006 through May 22, 2008 are:

   Name of                            Total Amounts Requested
   Applicant                          Fees           Expenses
   ---------                          -----------------------
   Troutman Sanders LLP               $3,354,514      $36,894
   (Debtors' Counsel)

   Peter J. Solomon Company            1,188,626       15,346
   (Debtors' Financial Advisor)

   Schain Leifer Guralnick               175,062            4
   (Debtors' Accountants)

   Moses & Singer LLP                  1,896,882      153,779
   (Committee's Counsel)

   Halperin Battaglia Raicht, LLP        340,459        9,012
   (Committee's Conflicts Counsel)

   Consensus Advisors LLC              1,107,272       36,675

   Union Bank of Israel                        0        2,859
   (Committee Member)
                                      -----------------------
   TOTAL                              $8,062,816     $254,573

According to Bankruptcy Law 360, the Debtors' crisis manager and
restructuring adviser, Getzler Henrich & Associates LLC, were paid
$5.1 million for at least 18 months of service.  The firm filed
its fee application Monday, July 21, 2008, Bankruptcy Law adds.

                        About M. Fabrikant

Based in New York City, M. Fabrikant & Sons, Inc. --
http://www.fabrikant.com/-- sells diamonds and jewelries.  The
company and its affiliate, Fabrikant-Leer International Ltd.,
filed for chapter 11 protection on Nov. 17, 2006 (Bankr. S.D.N.Y.
Lead Case No. 06-12737).  Mitchel H. Perkiel, Esq., Lee W.
Stremba, Esq., and Paul H. Deutch, Esq., at Troutman Sanders LLP
represent the Debtors in their restructuring efforts.  Alan Kolod,
Esq., Lawrence L. Ginsberg, Esq., and Christopher J. Caruso, Esq.,
at Moses & Singer LLP serve as counsel to the Official Committee
of Unsecured Creditors.  The Debtors' schedules show $225,612,204
in assets and $70,443,195 in liabilities.


MNJ USED CARS: Owner Nazer Haidar to Serve 33 Months in Jail
------------------------------------------------------------
MNJ Used Cars owner, Nazer Ali Haidar, 48, was sentenced Monday,
July 21, 2008, to serve 33 months in prison for bankruptcy fraud,
the Wichita Business Journal reports.

As reported by the Troubled Company Reporter on Feb. 26, 2008, Mr.
Haidar was set to be sentenced May 7, for up to five years
imprisonment plus $250,000 fine.  Mr. Haidar was charged by a
federal jury of falsifying statements submitted in bankruptcy
proceeding and of committing bankruptcy fraud.

Richard Wieland, U.S. Trustee for Kansas, Oklahoma, and New
Mexico, stated that the "criminal bankruptcy fraud threatens the
integrity of the bankruptcy system."  He added that the efforts of
the U.S. Attorney's office and the Federal Bureau of Investigation
helped fight "abuse in the bankruptcy system."

Mr. Haidar sought protection under chapter 7 of the U.S.
Bankruptcy Code on Sept. 23, 2002, listing $5,100 in total assets
and $211,278 in total debts.

Based on court evidence, Mr. Haidar kept a personal checking
account at Commerce Bank during bankruptcy and transferred money
to his wife and brother from his business account.  In addition,
that during August 2001 to August 2002 Mr. Haidar bought plane
tickets, jewelries, and other items using his credit cards, which
increased his debt to above $125,000.

MNJ Used Cars is headquartered in Wichita, Kansas and owned by
Nazer Ali Haidar.


MRS. FIELDS: Stephen Russo Decides to Terminate Employment
----------------------------------------------------------
Stephen Russo, a director and the president and chief executive
officer of Mrs. Fields Famous Brands, LLC, delivered on July 10,
2008, a letter to the company stating that he was terminating his
employment with the company.

In his letter, Mr. Russo has asserted that his termination is with
"Good Reason" and that accordingly he was entitled to immediate
payment of all salary, bonuses, and benefits accruing to the date
of termination, specified severance payments, and a portion of the
bonus payable with respect to calendar year 2008.  The Notice of
Termination does not address whether he also has terminated his
positions as a manager of the company and as a manager or
director, employee and officer of subsidiaries of the company.  
However, the company believes that Mr. Russo's status as an
employee and officer of the company were terminated automatically
be reason of his termination as an employee of the company and the
company believes that it was likely Mr. Russo's intention that his
termination also be deemed to have constituted a resignation as a
manager of the company and a director or manager of its
subsidiaries.

The company's Board of Managers has not yet met to review the
Notice of Termination and has not made any determinations as to
either the Notice of Termination or as to whether it will seek to
fill the position of president or chief executive officer on
either an interim or permanent basis.

                        About Mrs. Fields  

Mrs. Fields Famous Brands LLC -- http://www.mrsfields.com/--    
is a well established franchisor in the premium snack food
industry, featuring Mrs. Fields(R) and TCBY(R) as the company's
core brands.  As of March 29, 2008, the company's franchise
systems operated through a network of 1,278 retail concept
locations throughout the United States and in 21 foreign
countries.

                       Going Concern Doubt

As reported in the Troubled Company Reporter on April 18, 2008,
KPMG LLP, in Salt Lake City, expressed substantial doubt about  
Mrs. Fields Famous Brands LLC's ability to continue as a going
concern after auditing the company's consolidated financial
statements for the year ended Dec. 29, 2007.  The auditing firm
pointed to the company's recurring net losses, negative cash flows
from, and net member's deficit at Dec. 29, 2007.

As reported in the Troubled Company Reporter on May 20, 2008,
Mrs. Fields Famous Brands LLC's consolidated balance sheet at
March 29, 2008, showed $147.2 million in total assets and
$247.2 million in total liabilities, resulting in a $100.0 million
member's deficit.


NATIONAL DRY: Gets Initial OK to Use Prudential's Cash Collateral
-----------------------------------------------------------------
The United States Bankruptcy Court for the District of Delaware
authorized National Dry Cleaners Inc. and its debtor-affiliates to
use cash collateral of The Prudential Company of America, until
Oct. 8, 2008, on an interim basis.

The cash collateral will be used to pay for expenses including
employee payroll and other benefits, rents, and costs related to
the Debtors' business operations.

"The access of Prudential's cash collateral will be sufficient to
fund their operations in the short term," Joel A. Waite, Esq., at
Young Conaway Stargatt & Taylor LLP.  "The Debtors are presently
in talks with Prudential about providing postpetition financing,"
Mr. Waite notes.

The Debtors entered into a securities purchase and revolving
credit agreement dated April 21, 1999, with Prudential.  On April
21, 2001, the Debtors defaulted under the terms of the agreement
when they failed to make a principal payment when it came due and
violated certain financial covenants under the credit agreement.

In Sept. 30, 2001, the Debtors agreed to enter into a
recapitalization agreement with Prudential to:

   i) extend the period for the payments of the amounts owed to
      Prudential; and

  ii) to cure the existing defaults under the credit agreement.  

The credit agreement, in turn, was terminated.

The recapitalization agreement contains certain senior note and
revolving credit, and subordinated note agreements.

A. The senior note agreement is comprised of:

   a) a 10.91 senior secured Term A note of $16,000,000 due Nov.
      30, 2008;

   b) a senior floating rate secured Term B note of $6,000,000 due
      Nov. 30, 2008; and

   c) a senior floating rate secured revolving credit note of
      $3,900,000 due Nov. 30, 2008.

B. The subordinated note agreement is comprised of a 11% senior
   secured subordinated note of $11,500,000 due Nov. 30, 2008.

The Debtor has prepared a cash collateral budget from July 11,
2008, to Oct. 8, 2008.  A full-text copy of the Debtors' cash
collateral budget is available for free at:

               http://ResearchArchives.com/t/s?2fe0

There is a $250,000 carve-out for payment to professional employed
by the Debtors, and a $50,000 carve-out for payment to
professionals retained by the committee.

As adequate protection, the lender will be granted replacement
liens on all property and assets of the Debtors.  Furthermore, the
lender will have priority claim over all other administrative
claims.


NATIONAL DRY: Wants Court to Approve Proposed Bidding Procedures
----------------------------------------------------------------
National Dry Cleaners Inc. and its debtor-affiliates ask the
United States Bankruptcy Court for the District of Delaware to
approve proposed bidding procedures for the sale of certain of its
assets free and clear of liens and interest, subject to
competitive bidding and auction.

A hearing is set today, July 24, 2008, at 3:00 p.m., to consider
approval of the Debtors' proposed sale procedures.

The deadline for submitting offers by qualified bidder has yet to
be determined.  Bidders are requested to deliver a minimum good
faith deposit of 10% of the purchase price under the asset
purchase and sale agreement.

The sale is expected to close by Sept. 15, 2008.  The closing of
the deal will take place at the Offices of Young Conaway Stargatt
& Taylor, LLP.

As reported in the Troubled Company Reporter on July 11, 2008, the
Debtors retained Hilco Corporate Finance LLC and Hilco Real Estate
LLC to assist in the sale of the Debtors' business assets.

A full-text copy of the asset purchase and sale agreement is
available for free at:

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

A full-text copy of the Debtors' sale bidding procedures is
available for free at:

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

Separately, the Debtors ask the Court to approve an executive
incentive plan dated July 2, 2008, to pay the Debtors' chief
executive officer Kevin Lyng and chief financial officer David
Erickson in connection with the sale, subject to standard and
withholding deductions.

Under the plan, the Debtors' officials are expected to receive:

A. Kevin Lyng

   -- 4.5% of the first $3 million in consideration received and
      7% of any excess consideration received from a sale of the
      assets of the Kansas City market;

   -- 4.5% of the first $2.4 million in consideration received and
      7% of any excess consideration from a sale of the assets of
      the Florida Market; and

   -- 7% of the consideration received from the sale of assets of
      any other market region of the Debtors.

B. David Erikson

   -- 2.25% of the first $3 million in consideration received and
      3.5% of any excess consideration received from a sale of the
      assets of the Kansas City market;

   -- 2.25% of the first $2.4 million in consideration received
      and 3.5% of any excess consideration from a sale of the
      assets of the Florida Market; and

   -- 3.5% of the consideration received from the sale of assets
      of any other market region of the Debtors.

Furthermore, payments will not exceed $350,000 for Mr. Lyng and
$160,000 for Mr. Erikson under the incentive plan.

A hearing is set for Aug. 6, 2008, at 12:00 noon, to consider
approval of the Debtors' proposed incentive plan.  Objections, if
any, are due July 30, 2008, by 4:00 p.m.

A full-text copy of the Debtors' executive incentive plan is
available for free at:

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

                 About National Dry Cleaners Inc.

Headquartered in Phoenix, Arizona, National Dry Cleaners Inc. --
http://www.alphillips.com/and http://www.pridecleaners.com/--
aka Delia's Cleaners Inc. operates more than 300 dry cleaning
stores across the nation.  The enterprise employs over 1,500
people.  As of June 30, 2008, NDCI operated 231 dry cleaning
stores and 6 central dry cleaning and laundry plants in nine
states.  Of the dry cleaning stores, 164 are drop stores, meaning
that the stores do not have dry cleaning or laundry equipment on
site, and 67 dry cleaning stores have the necessary equipment to
perform dry cleaning and laundry services on-site.

The Debtor and its debtor-affiliates filed for separate Chapter 11
protection on July 7, 2008, (Bankr. D. Del. Case No.: 08-11382 to
08-11393)  Joel A. Waite, Esq., Joseph M. Barry, Esq., Matthew
Barry Lunn, Esq. at Young, Conaway, Stargatt & Taylor represent
the Debtors in their  restructuring efforts.  The Debtors listed
estimated assets of $10 million to $50 million and estimated debts
of $10 million to $50 million.


NETWOLVES CORP: Plan Confirmation Hearing to Continue August 20
---------------------------------------------------------------
The United States Bankruptcy Court for the Middle District of
Florida will continue a hearing to consider confirmation of
NetWolves Corporation's proposed joint plan of reorganization on
Aug. 20, 2008.

The plan confirmation hearing commenced on June 24, 2008, and was  
continued on July 15.

The proposed amended plan will include, among other things, the
cancellation of all outstanding shares of the Debtor's common
stock and serial preferred stock. It is intended that the
terms and conditions  of this plan will be provided  to the
Debtor's equity holders and creditors on or about July 25, 2008.

                       Overview of the Plan

The plan contemplates the potential substantive consolidation of
the Debtors' estates for purposes of voting and for distributions
under the plan.  NetWolves may seek prior to or at confirmation to
substantively consolidate its Estate with those of its affiliated
Debtors pursuant to Section 105 of the Bankruptcy Code and
applicable law.  The Debtors believe substantive consolidation
will benefit all holders of claims and interests by:

   (i) essentially eliminating the myriad of intercompany claims
       (and administrative expense claims among the Debtors) that
       will otherwise be difficult, if not impossible, to
       accurately reconcile, and

  (ii) providing a more equitable distribution to all holders of
       claims and Interests under the plan.

                         Terms of the Plan

The Debtors will be reorganized pursuant to the plan and will
continue in operation, achieving the objectives of chapter 11 for
the benefit of their creditors, customers, suppliers, and
employees.

Generally, Administrative Claims, Priority Tax Claims, and Other
Priority Claims will be fully paid in cash as and when required by
the Bankruptcy Code, unless otherwise agreed by the Holders of
the claims.

Telecommunications Providers holding Allowed Cure Claims receive
cash payments in the full amount of the claims over a thirty-
month period following the effective date, or as may otherwise be
determined by the Bankruptcy Court or agreement of the parties.

Secured Claims will have the allowed amount of the claims treated
under the plan as General Unsecured Claims, unless the holder can
conclusively demonstrate the existence of a valid, enforceable
perfected Lien, which claim will be treated as a Secured Claim
under the Plan and the Bankruptcy Code.

Holders of Unsecured Claims will receive (i) cash, (ii) new common
stock, (iii) a combination of cash and new common stock, or (iv)
the right to elect whether their respective claim(s) are satisfied
through distributions of cash or new common stock, based upon the
relative positions of the respective classes.

Existing Holders of NetWolves Common Stock will retain a diluted
Interest in NetWolves through a reverse stock split of existing
common stock and the issuance of the new common stock under the
plan to the holders of allowed claims.  NetWolves estimates that
existing common stockholders will retain approximately 5% of
Reorganized NetWolves on a fully diluted basis, subject to the
final Reorganization Value of the Reorganized Debtors.  However,
all other existing Old Stock Rights of NetWolves will be
cancelled, except as specifically provided in the Plan.

The Reorganized Debtors will obtain exit financing to support
payments required to be made under the plan, repay any DIP
financing, pay transaction costs, and fund working capital and
general corporate purposes of the Reorganized Debtors following
their emergence from bankruptcy.

The Troubled Company Reporter reported on May 9, 2008, that the
Hon. Paul M. Glenn approved the disclosure statement for a second
amended joint plan of reorganization of the Debtors.  A full-text
copy of the second amended joint disclosure statement is available
for free at http://bankrupt.com/misc/Netwolves

                         About NetWolves

Based in Tampa, Florida, NetWolves Corporation (Pink Sheets: WOLV)
-- http://www.netwolves.com/-- provides telecommunications and       
Internet-managed services to more than 1,000 customers through its
neutral FCC-licensed carrier.  Some of NetWolves' customers
include General Electric, University of Florida, McLane
Company, JoAnn Stores and Marchon Eyewear.

The company and three of its affiliates filed for Chapter 11
protection on May 21, 2007 (Bankr. M.D. Fla. Case Nos. 07-04186
through 07-04196).  David S. Jennis, Esq., at Jennis Bowen &
Brundage, P.L., represent the Debtors in their restructuring
efforts.  When the Debtors filed for protection from their
creditors, it listed total assets of $8,847,572 and total
liabilities of $7,637,029.


NEUMANN HOMES: Has Until December 31 to File Chapter 11 Plan
------------------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of Illinois
extended the deadline by which Neumann Homes Inc. and its debtor-
affiliates must file their Chapter 11 plan, through and including
Dec. 31, 2008, and the deadline by which the Debtors must solicit
acceptances of that plan through and including March 31, 2009.

George Panagakis, Esq., at Skadden, Arps, Slate, Meagher & Flom
LLP, in Chicago, Illinois, explained that the Debtors are still
in the process of implementing a sale for their remaining real
properties and resolving the issues concerning those properties
with certain creditors.

The Debtors related that they are also in ongoing negotiations
with Bank of America about the disposition of the properties
financed by the Bank, and have yet to resolve the trade claims
concerning their developed properties.

"The Debtors anticipate that they will be in a better position to
file a plan upon the completion of such processes and, thus,
require additional time to implement their strategies and
formulate a plan," Mr. Panagakis said.

Headquartered in Warrenville, Illinois, Neumann Homes Inc. --
http://www.neumannhomes.com/-- develops and builds residential
real estate throughout the Midwest and West US.  The company is
active in the Chicago area, southeastern Wisconsin, Colorado, and
Michigan.  The company have built more than 11,000 homes in some
150 residential communities.  The company offer formal business
training to employees through classes, seminars, and computer-
based training.

The company filed for Chapter 11 protection on Nov. 1, 2007
(Bankr. N.D. Ill. Case No. 07-20412).  George Panagakis, Esq., at
Skadded, Arps, Slate, Meagher & Flom L.L.P., was selected by the
Debtors to represent them in these cases.  The Official Committee
of Unsecured Creditors has selected Paul, Hastings, Janofsky &
Walker LLP, as its counsel in these bankruptcy proceeding.  When
the Debtors filed for protection against its creditors, they
listed assets and debts of more than $100 million.

(Neumann Bankruptcy News; Bankruptcy Creditors' Services Inc.
http://bankrupt.com/newsstand/or 215/945-7000)


NORTHSTAR NEUROSCIENCE: Liquidation May Yield More Value, Says RCA
------------------------------------------------------------------
RA Capital Advisors wanted medical research company Northstar
Neuroscience to liquidate or sell itself after Northstar's stock
value slid down due to a failed research venture, The Seattle
Times reports.

In a letter to Northstar's board of directors, RA Capital, its
largest shareholder, pressed the company to lay-off a sizeable
part of its workforce and halt all operations, while it tries to
find a buyer for the company, relates the Times.  In the
alternative, the company might have to liquidate and split its
cash-on-hand -- which is worth $73 million as of March 31 -- to
its shareholders.

Northstar's market capitalization during the same period was
$49 million.  The company's value plunged after its research on
motion-improvement for stroke survivors failed in a trial early
this year, the Times says.  This led the company to focus on other
medical ventures.

"Our objective is to gain sufficient clinical data by the end of
next year to validate one or more of our therapies," the Times
quotes CEO John Bowers as saying.

However, RA Capital had other concerns.  "Now is not the time for
half-measures," RA Capital said in the letter.  "This would
clearly be in the best interest of the stockholders of the company
in light of the prices at which the company's stock has been
trading since January 2008," asserted RA Capital.

Based in Seattle, Washington, Northstar Neuroscience --
http://www.northstarneuro.com/-- is pioneering the development of  
cortical stimulation therapies.  The company is working with
healthcare partners to develop clinical applications from the
science of neurostimulation.  Its solutions are tuned to the
individual needs of patients -- offering greater hope for the
renewal and recovery from neurological injury, disorder or disease
-- enabling them to regain their quality of life.  Northstar's
Renova(TM) Cortical Stimulation System is an investigational
device that is in clinical trials for several indications,
including major depressive disorder, stroke motor recovery and
tinnitus.


NUTRITIONAL SOURCING: Has Until August 1 to File Chapter 11 Plan
----------------------------------------------------------------
The Hon. Peter J. Walsh of the U.S. Bankruptcy Court for the
District of Delaware extended the exclusive periods of Nutritional
Sourcing Corporation and its debtor-affiliates to:

   a) file a Chapter 11 plan of liquidation until Aug. 1, 2008,
      and

   b) solicit acceptances of that plan until Oct. 31, 2008.

Judge Walsh granted the Debtors' requested extension of time
provided that the plan is acceptable to the Official Committee of
Unsecured Creditors.

The extension of time will allow the Debtors to file a consensual
Chapter 11 plan of liquidation and, to the extent possible,
complete the sale of their largest remaining assets, Blockbuster
Inc. franchise and its attendant real property leases.  To recall,
the Debtors have completed the sale of substantially all their
Pueblo's De Diego Assets to Supermercados Maximo Inc. for
$29,500,000.

The Debtors have provided on Feb. 5, 2008, to Committee an initial
draft of the plan, as amended on May 7, 2008.  The Committee
notified the Debtors that it needs more time to evaluate the
Debtors' amended plan term sheet.

As reported in the Troubled Company Reporter on July 7, 2008, the
Court conditionally extended the Debtors' exclusive period to file
a Chapter 11 plan until July 21, 2008.  It was extended on grounds
that the Committee will not file any competing plan by July 18,
2008.

                   About Nutritional Sourcing

Based in Pompano, Florida, Nutritional Sourcing Corp., fdba Pueblo
Xtra International, Inc. -- http://www.puebloxtra.com/-- owns and
operates supermarkets and video rental shops in Puerto Rico and
the US Virgin Islands.  The company and two affiliates, Pueblo
International, L.L.C., and F.L.B.N., L.L.C., filed for chapter 11
protection on Aug. 3, 2007 (Bankr. D. Del. Case Nos. 07-11038
through 07-11040).  Kay Scholer LLC represents the Debtors in
their restructuring efforts.  Pepper Hamilton LLP serves as their
Delaware counsel.  The U.S. Trustee for Region 3 appointed eight
creditors to serve on an Official Committee of Unsecured
Creditors.  Skadden, Arps, Slate, Meagher & Flom LLP represent
the Official Committee of Unsecured Creditors.  The company has
disclosed $130.8 million in assets and debt totaling $266.5
million with the Court.


OCCULOGIX INC: Restates Annual and Quarterly Financial Reports
--------------------------------------------------------------
OccuLogix Inc. filed restated unaudited consolidated financial
statements for the quarter ended March 31, 2008, and restated
audited consolidated financial statements for the financial years
ended Dec. 31, 2007 and Dec. 31, 2006.   

The company does not intend to file its unaudited consolidated
financial statements for any of the first three quarters of the
financial year ended Dec. 31, 2007.  The restatements were made in
order to correct the manner in which OccuLogix has been
consolidating OcuSense since Nov. 30, 2006, the date on which
OccuLogix acquired its majority ownership interest in OcuSense
which consists of voting preferred stock.  The restatements did
not result in a decline to total assets in any of the periods
restated.

Since the date of the acquisition, OccuLogix has consolidated
OcuSense on the basis of a voting control model.  OccuLogix has
determined that, as a result of a voting agreement between
OccuLogix and certain founding stockholders of OcuSense, OccuLogix
is not able to exercise voting control as contemplated in ARB 51
consolidated financial statements and FAS 94 consolidation of all
majority-owned subsidiaries.  However, OccuLogix believes that
OcuSense constitutes a variable interest entity as defined under
FIN 46(R) Consolidation of Variable Interest Entities.  Under FIN
46(R), consolidation is based on variable interests, rather than
on voting interests.  OccuLogix believes that it would have been
required to consolidate OcuSense under the variable interest model
as OccuLogix would absorb the majority of the expected losses of
OcuSense.

While the company anticipates that it will continue to consolidate
OcuSense, the initial measurement of the related assets,
liabilities and non-controlling interest under FIN 46(R) differs
from what had been reported by OccuLogix using a voting control
model.  The impact of these differences have been reflected in the
restated financial statements.

The restatements affect the reported intangible assets, deferred
tax, non-controlling interest, equity balances and reported net
loss.  The restatements do not impact the company's cash position
for any of the affected periods.

The impact on reported net loss was an increase in the loss to
$69,829,983, from the reported loss of $68,139,314, an increase of
2.5% for the year ended Dec. 31, 2007 and an increase in the loss
to $82,221,897, from the reported loss of $82,184,503 an increase
of 0.05% for the year ended Dec. 31, 2006.

The impact on reported net loss was a decrease in the loss to
$2,277,075 from the reported loss of $2,943,500, a decrease in the
loss of 22.6% for the three months ended March 31, 2008 and an
increase in the loss to $4,585,762, from the previously reported
loss of $4,272,744, an increase in the loss of 7.3% for the three
months ended March 31, 2007.

On May 20, 2008, OccuLogix filed a preliminary proxy statement to
solicit the proxies of its stockholders for a number of proposed
transactions, including, among others, the acquisition by
OccuLogix of the minority ownership interest in OcuSense that it
does not already own.  The company's preliminary proxy statement
is the subject of review by the U.S. Securities and Exchange
Commission.  After the completion of this review, the company will
file and mail its final proxy statement.

A full-text copy of the restated annual report is available for
free at http://ResearchArchives.com/t/s?2fcf

A full-text copy of the restated financial statements for the
quarter ended March 31, 2008, is available for free at
http://ResearchArchives.com/t/s?2fd0

                       About OccuLogix Inc.

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

                      Going Concern Doubt

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


ORAGENICS INC: Kirkland Russ Expresses Going Concern Doubt
----------------------------------------------------------
Kirkland Russ Murphy & Tapp, PA, in Clearwater, Fla., raised
substantial doubt about the ability of Oragenics, Inc., to
continue as a going concern after auditing the company's financial
statements for the year ended Dec. 31, 2007.  The auditing firm
pointed to the company's recurring operating losses, negative
operating cash flows and accumulated deficit.

The company posted a net loss of $2,311,712 on total revenues of
$133,088 for the year ended Dec. 31, 2007, as compared with a net
loss of $2,935,719 on total revenues of $66,176 in the prior year.

As of Dec. 31, 2007, Oragenics had an accumulated deficit of
$13,970,793.  Cash used in operations for the year ended Dec. 31,
2007, was $1,913,760 and cash flow from operations was negative
throughout 2007.  The company expects to incur substantial
expenditures to further develop each of its technologies.  The
company believes the working capital at Dec. 31, 2007, will be
insufficient to meet the business objectives as presently
structured.

Management recognizes that the company must generate additional
capital resources or consider modifying its technology development
plans to enable it to continue as a going concern.  Management's
plans include seeking financing, alliances or other partnership
agreements with entities interested in the company's technologies,
or other business transactions that would generate sufficient
resources to assure continuation of its operations and research
and development programs.

At Dec. 31, 2007, the company's balance sheet showed $1,151,377 in
total assets, $331,494 in total liabilities, and $819,883 in total
stockholders' equity.  

The company's consolidated balance sheet at Dec. 31, 2007, showed
strained liquidity with $592,028 in total current assets available
to pay $331,494 in total current liabilities.

A full-text copy of the company's 2007 annual report is available
for free at http://ResearchArchives.com/t/s?2fb6

                          About Oragenics

Oragenics, Inc. (AMEX: ONI) -- http://www.oragenics.com/--  
formerly known as Oragen, Inc., operates as an early-stage
biotechnology company in the United States.  It primarily focuses
on developing technologies associated with oral health, broad-
spectrum antibiotics, and other general health benefits.  The
company develops SMaRT Replacement Therapy, which is a painless
topical treatment for protection against tooth decay; and Mutacin
1140, an antibiotic with anti-microbial activity against gram-
positive bacteria, including methicillin-resistant and vancomycin-
resistant Staphylococcus aureus.  The company was founded in 1996
and is based in Alachua, Florida.


OSYKA CORP: Judge Isgur Approved Amended Disclosure Statement
-------------------------------------------------------------
The Hon. Marvin Isgur of the United States Bankruptcy Court for
the Southern District of Texas approved an amended disclosure
statement dated July 18, 2008, explaining an amended joint Chapter
11 plan of reorganization. of Osyka Corp.  Judge Isgur held that
the Debtors' amended disclosure statement contains adequate
information within the meaning of Section 1125 of the Bankruptcy
Code.

A plan confirmation hearing is set for Aug. 20, 2008, at 1:30
p.m., Central Daylight Time.  Objections, if any, are due Aug. 18,
2008.

Judge Isgur also approved the procedures of the Debtors proposed
for the solicitation and tabulation of the amended plan votes.  
Deadline for voting on the amended plan is Aug. 18, 2008.

                      Overview of the Plan

The plan contemplates the reduction of the Debtors' overall debt
and payment obligations by at least $82 million associated with
corporate liabilities in order to realign their capital structure.  
The plan further provides more liquidity to the Debtors to
continue to operate their business as a viable economic entity.

Moreover, the plan is proposed in connection to a settlement
agreement with J. Aron & Company and Texas Capital Bank, which
provides the allocation of a minimum "purchase price" of at least
$67,000,000.

A full-text copy of the Settlement Agreement is available for free
at:

              http://ResearchArchives.com/t/s?2a74   

On July 10, 2008, Legado Resources LLC purchased all of the
Debtors' assets for $77,000,000, free and clear of liens and
interests.  The sale is expected to close by Aug. 29, 2008.

A full-text copy of the asset purchase agreement dated July 16,
2008, is available for free at:

              http://ResearchArchives.com/t/s?2fd8

The plan classifies claims against and interest in the Debtors in
nine classes.  The classification of treatments of claims and
interests are:

               Treatment of Claims and Interests

              Type                          Estimated   Estimated
Class         of Claims        Treatment    Amount      Recovery
-----         ---------        ---------    ---------   ---------
unclassified  administrative                $986,425    100%
               claims

unclassified  priority tax                  $1,148      100%
               claims

A             allowed other    unimpaired   $0          100%
               priority claims

B             other secured    impaired     $0          100%           
               claims

C             allowed          unimpaired   $500,000    100%      
               prepetition
               bank credit
               agreement
               claims

D             allowed          impaired     $61,246,978 100%
               prepetition
               junior credit
               agreement
               claims

E             allowed ISDA     impaired     $21,113,672 100%
               claims

F             warrants         impaired     $722,104    0%

G             allowed          impaired     $972,120    100%
               general
               unsecured
               claims

H             allowed          impaired     $1,500,000  0%
               intercompany
               claims

I             allowed equity   unimpaired               100%
               interests

The plan indicates that each estimated recovery is projected
on assumption that the Debtors' total cash balances and cash
collateral account on the plan's effective date exceeds
$3,800,000, and that Class G claims do not surpass the Debtors'
estimated amount of $974,120.  As of June 13, 2008, the Debtors
have $4,719,873 in cash.

Class A allowed other priority claims will be paid in full in cash
in an amount equal to the allowed priority claims after the
distribution date.  All allowed other priority claims, which are
not due and payable by the plan's effective date, will be paid
by the Debtors in the ordinary course of business.

Unless agreed to a different treatment, each holder of Class B
other secured claims will be paid in full, either (i) cash in the
amount equal to 100% of the unpaid amount of the allowed other
secured claim, (ii) the proceeds oft he sale of the collateral
securing the claim, (iii) the collateral securing claim, (iv) a
note with annual periodic cash payments of at least four years,
(v) treatment that leaves unaltered the legal, equitable, and
contractual rights to the holder is entitled, or (vi) other
distribution as necessary to satisfy the requirements of the
U.S. Bankruptcy Code.

Holders of class E ISDA and class D allowed prepetition junior
credit agreement claims are entitled to get their pro rata share
of (i) 100% of equity in the reorganized Debtors and (ii) all of
the excess cash collateral at least $200,000.  However, in the
event the Debtor consummate a sale to another party,  holders
will receive a pro rata share of (i) the applicable portion of
the purchase price, (ii) 50% of excess cash collateral from
$500,000 to $1,000,000, if any, and (iii) 10% of excess cash
collateral at least $1 million, if any.  The ISDA claim arose
under a certain agreement dated May 10, 2006, entered between
the Debtors' and J. Aron.

Each holder of class G allowed general unsecured claims will
get its pro rata share of (i) $200,000 in excess cash collateral
and (ii) 50% of the net recovery, receive from the BIP Holdings
LLC litigation, if any, after all allowed claims are paid.  The
BIP litigation is the causes of action arose out of the
assignment of two sale and conveyance in 2006, between the
Debtors and BIP, with respect to the sale of certain oil and
gas leases and real property.

Holders of class H allowed intercompany claims and class F warrant
will not receive any distribution under the plan.  All warrants
will be extinguished as of the plan's effective date.

Class I allowed equity interests of the Debtors will not be
modified or impaired, unless Debtors and any interest holder
agreed to in writing.

A full-text copy of the amended disclosure statement is available
for free at:

               http://ResearchArchives.com/t/s?2fd6

A full-text copy of the amended joint Chapter 11 plan of
reorganization is available for free at

               http://ResearchArchives.com/t/s?2fd7

                    About Osyka Corporation

Headquartered in Houston, Texas, Osyka Corporation --
http://www.osyka.com/-- is an oil and gas company.  The company        
filed for Chapter 11 protection on March 3, 2008 (Bankr. S.D. Tex.
Case No.08-31467).   H. Rey Stroube, III, Esq., represents the
Debtor in its restructuring efforts.  No Official Committee of
Unsecured Creditors has been appointed in this case to date.

As reported in the Troubled Company Reporter on June 18, 2008,
the Debtors' summary of schedules showed total assets of
$109,754,313 and total debts of $83,792,755.


PALM HARBOR: Earns $1.6 Million in Fiscal 2009 First Quarter
------------------------------------------------------------
Palm Harbor Homes Inc. reported last week financial results for
the first quarter ended June 27, 2008.

Net income for the first quarter of fiscal 2009 totaled
$1.6 million, compared with a net loss of $4.3 million a year ago.  
The results for the first quarter include a pre-tax gain of
$4.4 million on the repurchase of convertible senior notes.

Net sales for the first quarter totaled $130.0 million compared
with $143.3 million in the year-earlier period.  Palm Harbor
reported operating income of $778,000 for the first quarter
compared with an operating loss of $2.6 million in the same period
last year.

Larry Keener, chairman and chief executive officer of Palm Harbor
Homes Inc., said, "We are pleased with our progress during the
first quarter as a result of our recent restructuring and
consolidation actions.  Based on these financial results, our
operational breakeven point has been lowered by over $100 million
in annual revenues compared to the same period last year.  In
addition, our selling, general and administrative costs have been
reduced by an annualized rate of approximately $23 million
compared with the first quarter of fiscal 2008.  We are especially
pleased with performance of our new commercial division, which
added $9.2 million in revenue for the first quarter and has an
additional $9.0 million already under contract for the second and
third quarters.

"While these results are encouraging, we also recognize we have
more work to do as we continue to face tough industry headwinds,
eroding consumer confidence and skyrocketing material costs.  Our
return to sustainable profitability in this environment requires
not only our lowered operating costs and breakeven level, but also
the aggressive pursuit of key revenue growth initiatives.  We have
expanded our product lines at both ends of the pricing spectrum to
broaden our customer reach in both the manufactured housing and
modular markets we serve.  We are intensifying our promotional and
advertising efforts, with a strong focus on Internet marketing,
which has proven to be a cost-effective channel to reach new
customers and generate sales leads.  As a result of these
initiatives, same store sales increased by approximately five
percent during the quarter.

"Additionally, we are working to improve our referral business by
reducing completion times for construction of our modular
products.  Our diverse product line allows us to meet the needs of
an array of homebuyers and we continue to look for new target
markets.  We have identified new distribution channels for modular
products in the commercial, military and multi-family markets,
each of which promise to be important new growth opportunities for
Palm Harbor.  Finally, we are working to increase the scope of our
financial services divisions, both Standard Casualty Insurance and
CountryPlace Mortgage, which continue to be profitable businesses
for the company," Keener concluded.

Kelly Tacke, executive vice president and chief financial officer
of Palm Harbor Homes Inc., commented, "Along with our strategic
initiatives, we have been intensely focused on actions that have
significantly strengthened our balance sheet.  During the first
quarter, CPM sold approximately $51.3 million of its warehoused
portfolio of chattel and mortgage loans.  Notably, these loans
were sold at book value without incurring a loss.  We also
renegotiated our floor plan facility with our current lender and
extended the facility until March 2011.  We believe our ability to
complete these transactions on favorable terms is especially
noteworthy in light of extremely difficult credit market
conditions and demonstrates the market's confidence in Palm
Harbor's business model and financial strength.

"Additionally, we took advantage of the current investment
opportunities in the bond market.  We utilized approximately
$6.3 million of our cash to retire approximately $10.8 million of
our convertible senior notes to maximize our return on capital.
Above all, we are focused on improving our financial performance
and delivering greater value to our shareholders in fiscal 2009,"
added Tacke.

At June 27, 2008, the company's consolidated balance sheet showed
$502.8 million in total assets, $374.3 million in total
liabilities, and $128.5 million in total stockholders' equity.

                        About Palm Harbor

Headquartered in Dallas, Palm Harbor Homes Inc. (Nasdaq: PHHM)
-- http://www.palmharbor.com/-- is one of the nation's leading   
manufacturers and marketers of multi-section manufactured homes.
The company markets nationwide through vertically integrated
operations, encompassing manufacturing, marketing, financing and
insurance.

                          *     *     *

Palm Harbor Homes Inc.'s fiscal 2008 results continue to be
affected by worsening conditions in the manufactured housing
industry.  In addition, the company sees no signs of recovery for
the factory-built housing industry in the near term.

Prior to the fiscal 2009 first quarter ended June 27, 2008, the
company had seven (7) consecutive quarterly net losses beginning
the second quarter ended Sept. 29, 2006.  

This concludes the Troubled Company Reporter's coverage of Palm
Harbor Homes Inc. until facts and circumstances, if any, emerge
that demonstrate financial or operational strain or difficulty at
a level sufficient to warrant renewed coverage.


PARADIGM MEDICAL: Amends Report to Adjust Derivatives & Warrants
----------------------------------------------------------------
Paradigm Medical Industries, Inc., filed with the U.S. Securities
and Exchange Commission on July 15, 2008, Amendment No. 2 on its
Form 10-KSB for the year ended Dec. 31, 2007.  

With this filing, the company's consolidated financial statements
have been restated to correct the errors reported in the company's
accounting for the embedded derivatives and warrants issued in
connection with the company's convertible notes in the balance
sheets and the statements of operations for the years ended Dec.
31, 2006, and 2005, and quarterly financial statements for the
quarter ended March 31, June 30, and Sept. 30, 2007, and 2006,
respectively.

In an updated letter dated May 18, 2008, Chisholm, Bierwolf &
Nilson LLC raised substantial doubt about the ability of Paradigm
Medical Industries, Inc., to continue as a going concern after it
audited the company's financial statements for the year ended Dec.
31, 2007.  The auditor pointed to the company's working capital
deficit and recurring operating losses.

Historically, the company has not demonstrated the ability to
generate sufficient cash flows from operations to satisfy its
liabilities and sustain operations, and the company has incurred
significant losses from operations.

The company posted a net loss of $1,731,000 on total sales of
$1,872,000 for the year ended Dec. 31, 2007, as compared with a
restated net loss of $1,198,000 on restated total sales of
$2,195,000 in the prior year.

At Dec. 31, 2007, the company's balance sheet showed $2,174,000 in
total assets and $4,314,000 in total liabilities, resulting in a
$2,140,000 stockholders' deficit.  

The company's consolidated balance sheet at Dec. 31, 2007, also
showed $1,819,000 in total current assets available to pay
$1,060,000 in total current liabilities.

A full-text copy of the company's 2007 annual report is available
for free at http://ResearchArchives.com/t/s?2fc8

                      About Paradigm Medical

Headquartered in Salt Lake City, Paradigm Medical Industries Inc.
(OTC BB: PMED) -- http://www.paradigm-medical.com/-- develops,  
manufactures, and markets diagnostic and surgical equipment for
the ophthalmic market.

The company specializes in powerful, easy-to-use, value-driven
equipment capable of providing the experienced practitioner
exceptional value while being affordable for doctors starting new
practices or opening up satellite offices.


PEGASUS AVIATION: Fitch Cuts Ratings to 'CCC/DR2' on Two Classes
----------------------------------------------------------------
Fitch Ratings has taken these rating actions on the three Pegasus
Aviation Lease Securitization Trusts:

Pegasus Aviation Lease Securitization (PALS I)

  -- Class A-1 notes remain at 'CC/DR4';
  -- Class A-2 notes remain at 'CC/DR4';
  -- Class B notes remain at 'C/DR6';
  -- Class C notes remain at 'C/DR6';
  -- Class D notes remain at 'C/DR6'.

Pegasus Aviation Lease Securitization II (PALS II)

  -- Class A-1 notes downgraded to 'CCC/DR2' from 'B-/DR2';
  -- Class A-2 notes downgraded to 'CCC/DR3' from 'B-/DR2';
  -- Class B notes remain at 'C/DR6';
  -- Class C notes remain at 'C/DR6';
  -- Class D notes remain at 'C/DR6'.

Pegasus Aviation Lease Securitization III (PALS III)

  -- Class A-1 notes affirmed at 'B/DR2';
  -- Class A-2 notes affirmed at 'B/DR2';
  -- Class A-3 notes affirmed at 'B/DR2';
  -- Class B-1 notes remain at 'C/DR6';
  -- Class B-2 notes remain at 'C/DR6';
  -- Class C-1 notes remain at 'C/DR6';
  -- Class C-2 notes remain at 'C/DR6';
  -- Class D-1 notes remain at 'C/DR6'.

Cash flow available to service debt in the PALS II transaction has
continued to steadily decline over the past two years.  The
decline in monthly collections combined with increased expenses in
recent months has further stressed the transaction structure.
While the class A notes are receiving current interest payments,
total monthly collections were insufficient to pay minimum
principal to the class A notes on the March, May, and June 2008
payment dates.  As available cash flow continues to decrease, the
reliability of full principal payment on the class A notes also
declines.  The DR-Rating differential between the A-1 and A-2
notes reflects the differing amortization schedules between the
two classes.  Class A-1 is currently receiving the full benefit of
class A principal payments.

In addition, the PALS II portfolio contains significant
concentrations in older generation, less fuel efficient aircraft
types such as 757-200s and MD-80s.  These aircraft types are
exposed to potential value and lease rate deterioration resulting
from increased fuel prices, airline capacity reductions, and
bankruptcies in the current environment.

Fitch's analysis incorporated expected cash flow to be available
to the trust over the remaining life of the transaction.  This
expectation is based on several factors including aircraft age,
current portfolio value, potential lease rates, and perceived
liquidity of the portfolio.  Lease rate and portfolio value
expectations have been updated to reflect Fitch's views on certain
aircraft given the aviation market volatility and significantly
elevated fuel prices.

PALS I and PALS III were affirmed as they were found to have
credit support consistent with their current ratings.


PLASTECH ENGINEERED: Wants to Employ Groom Law as Benefits Counsel
------------------------------------------------------------------
Plastech Engineered Products Inc. and its debtor-affiliates seek
authority from the U.S. Bankruptcy Court for the Eastern District
of Michigan to employ Groom Law Group, Chartered, as their
employee benefits counsel, nunc pro tunc to June 27, 2008.

According to the Debtors, Groom Law is particularly well-suited
to serve as employee benefits counsel to address matters where
expertise in employee benefits law is invaluable.  

"The firm is the largest employee benefits specialty firm in the
country and possesses nationally recognized expertise on the
intersection between employee benefits law and insolvency
matters," the Debtors note.

Pursuant to its employment, Groom Law is expected to:

   (a) provide legal advice concerning the Debtors' employee
       benefits plans, including application of the Employee
       Retirement Income Security Act of 1974, as amended, and
       relevant provisions of the Internal Revenue Code;

   (b) represent the Debtors on information inquiries,
       investigations, or proceedings brought by the (i) Pension
       Benefit Guaranty Corporation, (ii) the Department of
       Labor, or the (iii) Internal Revenue Service -- the three
       federal agencies with regulatory authority over the
       Debtors' employee benefit plans;

   (c) attend meetings and negotiate with representatives of the
       employees in administering the employee benefits plans;
       
   (d) appear, on the Debtors' behalf, before the Bankruptcy
       Court, any appellate court, and the United States Trustee
       on matters relating to the Debtors' employee benefits
       plan; and

The Debtors assert that the firm's services are necessary to
enable them to maximize the value of their estates.  Groom Law,
whose services are unique to the Debtors, will also coordinate
its efforts with the other bankruptcy professionals employed in
these cases to avoid duplication of work, the Debtors assure the
Court.

Groom Law's standard hourly rates range from $325 to $800, which
will vary with the professional's years of experience,
specialization, and level of professional attainment, Gary M.
Ford, a partner at Groom Law says.  Specifically, Mr. Ford's
hourly rate is $800, and $675 per hour is billed for the services
of fellow professional, Mr. Lonie Hassel.  The Debtors agree to
reimburse the firm for necessary and actual expenses incurred in
the conduct of its services.  

Mr. Ford relates that his firm has received, or anticipates
receipt of a $50,000 security retainer, which it intends to apply
for professional services compensation in these Chapter 11 cases
subject to the Court's approval.  

Mr. Ford further relates, based on conflicts search conducted,
that his firm is a "disinterested person" as the term is defined
in Section 101(14) of the Bankruptcy Code, and as required by
Section 327(a) of the Bankruptcy Code.

                     About Plastech Engineered

Based in Dearborn, Michigan, Plastech Engineered Products, Inc. --
http://www.plastecheng.com/-- is full-service automotive
supplier of interior, exterior and underhood components.  It
designs and manufactures blow-molded and injection-molded plastic
products primarily for the automotive industry.  Plastech's
products include automotive interior trim, underhood components,
bumper and other exterior components, and cockpit modules.  
Plastech's major customers are General Motors, Ford Motor Company,
and Toyota, as well as Johnson Controls, Inc.

Plastech is a privately held company and is the largest family-
owned company in the state of Michigan.  The company is certified
as a Minority Business Enterprise by the state of Michigan.  
Plastech maintains more than 35 manufacturing facilities in the
midwestern and southern United States.  The company's products are
sold through an in-house sales force.

The company and eight of its affiliates filed for Chapter 11
protection on Feb. 1, 2008 (Bankr. E.D. Mich. Lead Case No. 08-
42417).  Gregg M. Galardi, Esq., at Skadden Arps Slate Meagher &
Flom LLP, and Deborah L. Fish, Esq., at Allard & Fish, P.C.,
represent the Debtors in their restructuring efforts.  The Debtors
chose Jones Day as their special corporate and litigation counsel.  
Lazard Freres & Co. LLC serves as the Debtors' investment bankers,
while Conway, MacKenzie & Dunleavy provide financial advisory
services.  The Debtors also employed Donlin, Recano & Company as
their claims and noticing agent.

Joel D. Applebaum, Esq., at Clark Hill PLC, represents the
Official Committee of Unsecured Creditors.

As of Dec. 31, 2006, the company's books and records
reflected assets totaling $729,000,000 and total liabilities of
$695,000,000.  (Plastech Bankruptcy News, Issue No. 28; Bankruptcy
Creditors' Service, Inc., http://bankrupt.com/newsstand/or
215/945-7000)


PLASTECH ENGINEERED: Wants 503(b)(9) Claims Resolution Rules Set
----------------------------------------------------------------
Plastech Engineered Products Inc. and is debtor-affiliates ask the
U.S. Bankruptcy Court for the Southern District of Michigan to
approve their proposed 503(b)(9) claims resolution procedures
pertaining to the handling of administrative claims.

Pursuant to a Court ruling on claims filed under Section
503(b)(9) of the U.S. Bankruptcy Code in the Debtors' Chapter 11
cases, these deadlines are in place:

       Jul. 29, 2008    Debtors' deadline to review, analyze and
                        object to Section 503(b)(9) Claims.

       Aug. 16, 2008    Date by which Sec. 503(b)(9)
                        Claimholders must respond to Objections.

       Aug. 21, 2008    Scheduled omnibus hearing on timely-filed
                        503(b)(9) Claims.

The Debtors' limited financial wherewithal, coupled with the
uncertainty of the course of their Chapter 11 cases, and volume
of administrative claims filed against their estates prompted
them to seek the entry of a 503(b)(9) Bar Date Motion, which the
Court approved on April 18, 2008, relates Gregg M. Galardi, Esq.,
at Skadden, Arps, Slate, Meagher & Flom LLP, in Wilmington,
Delaware.

The Debtors relate they have approximately 1,600 claims totaling
nearly $29,000,000 in liquidated 503(b)(9) Claims.  The Section
503(b)(9) Order, if not amended and supplemented, would require
them to file all of their 503(b)(9) Claims Objections by July 29,
2008.  Consequently, the Claimants holding objected to 503(b)(9)
Claims would have to respond to any objection by August 16, 2008,
and the Court would be required to hold a hearing on the
objections at the August 21, 2008 omnibus hearing in the Chapter
11 cases.

The expedited time frame, which was once necessary, could
substantially prejudice the Debtors' estates and other parties-
in-interest, Mr. Galardi tells the Court.  According to him, the
present procedures would impose an impossible burden upon the
Court given that the Debtors expect to object to a significant
number of claims, aside from claims involving novel legal issues
and significant factual disputes, he asserts.

                Debtors Propose 503(b)(9) Claims
                     Resolution Procedures

To allow efficient and orderly determination of the allowance or
disallowance of 503(b)(9) Claims in their Chapter 11 cases, the
Debtors propose these procedures:

A. General Provisions

   (1) To the extent of any inconsistency between these 503(b)(9)
       Claims Resolution Procedures and Rule 3007 of the Federal
       Rules of Bankruptcy Procedure and any local rule regarding
       objections to Claims, the 503(b)(9) Claims Resolution
       Procedures will govern.

   (2) Every 503(b)(9) Claim Objection will be designated as
       either an "Omnibus Objection" or a "Substantive
       Objection".  A particular 503(b)(9) Claim may, however, be    
       subject to both a Substantive and an Omnibus Objection.

   (3) A 503(b)(9) Claim Objection will be filed with a Notice of
       Hearing on the Objection, which will be mailed or  
       delivered to the Claimant at least 30 days prior to the
       Hearing date.

   (4) A Claimant must file a response to the Section 503(b)(9)
       Claims Objection within 10 days before the Hearing.

   (5) Omnibus Objections will be numbered consecutively
       regardless of the basis -- i.e., First Omnibus Objection
       (duplicate), Second Omnibus (wrong debtor).  Substantive
       Objections to multiple 503(b)(9) Claims will be similarly
       designated.

   (6) Pursuant to Rule 3007(c) of the Federal Rules of
       Bankruptcy Procedure, Omnibus Objections and Substantive
       Objections may contain claims not to exceed 200 claims.

B. Omnibus Objections

   (1) A Section 503(b)(9) Objection is an Omnibus Objection if
       it is:

       (a) A duplicate 503(b)(9) Claim

       (b) A 503(b)(9) Claim filed in the wrong Debtors' case

       (c) An amended or superseded 503(b)(9) Claim

       (d) A late filed 503(b)(9) Claim

       (e) A 503(b)(9) Claim that has been or will be released or   
           satisfied during the case in accordance with the
           Bankruptcy Code, applicable rules, or a Court order

       (f) A 503(b)(9) Claim that does not otherwise comply with
           the requirements in the 503(b)(9) Order

       (g) A 503(b)(9) Claim based on something other than the  
           sale of goods to the Debtors in the ordinary course of
           business

       (h) A 503(b)(9) Claim for value in excess of value of the
           goods received by a Debtor within the 20 days before
           the Petition Date, and

       (i) A 503(b)9) Claim that does not have a basis in the
           debtor's books and records and did not include or
           attach sufficient information or documentation to
           constitute prima facie evidence of the validity and
           amount of the claim.  Otherwise, the Objection will be
           deemed Substantive.

   (2) Any Objection under subsection (1)(i) above must be
       supported by an affidavit stating that the affiant has
       reviewed the 503(b)(9) Claim and all supporting
       information and documentation, made reasonable efforts to
       research the 503(b)(9) Claim on the debtor's books and
       records and believes the documentation does not provide
       prima facie evidence of the validity and amount of the
       claim;

   (3) Any Objection that is not an Omnibus Objection will be
       deemed a Substantive Objection.

C. Substantive Objections

   (1) A Substantive Objection to a 503(b)(9) Claim will include
       all substantive grounds for objecting to the claim.

   (2) A Substantive Objection to a 503(b)(9) Claim may be
       amended once without leave of Court or written consent of
       the Claimant within 20 days from filing of a related
       response by the Claimant.  In all other instances, a
       Substantive Objection may only be amended with leave of
       the Court or written consent of the Claimant.

   (3) A 503(b)(9) Substantive Claim Objection may include
       an objection to a claim under Section 502(d) of the
       Bankruptcy Code.

   (4) A 503(b)(9) Substantive Claim Objection that includes a
       demand for relief of a kind specified in Rule 7001 of the
       Federal Rules of Bankruptcy Procedure, including one that
       contains a Section 502(d) Objection, may be included in an
       adversary proceeding.

D. Hearings

   (1) Hearings on objections to 503(b)(9) Claims may be
       scheduled on the regularly scheduled omnibus hearing dates
       in the Debtors' Chapter 11 cases.  The Court may, in its
       discretion, reschedule the hearing on a claim which will
       require substantial time to present argument or evidence.

   (2) Any party-in-interest to a Substantive Objection may
       request for a separate hearing on its Objection at a date
       and time convenient for the Court and the parties.

E. Objection Deadlines And Notice of Possible Section 502(d)
   Objections

   (1) The Debtors must file and serve all Omnibus Objections to
       the 503(b)(9) Claims on or before September 15, 2008.

   (2) The Debtors must file and serve all Substantive Objections
       to a 503(b)(9) Claim on or before the later of:

       (a) a day that is 60 days after the effective date of any
           confirmed plan of reorganization;

       (b) a day that is 30 days after the entry of a final order
           overruling all or the last pending Omnibus Objection
           to the 503(b)(9) Claim; and
  
       (c) other date as the Court may direct as the Substantive
           Objection Deadline.

   (3) The Debtors must provide notice to any Claimant who has
       asserted a 503(b)(9) Claim to which the Debtors believe
       they will or might be filing a Section 502(d) Objection
       within 10 days prior to the confirmation hearing on any
       plan of reorganization, provided, that the Debtors will
       not be required to provide a Section 502(d) Objection
       Notice to any Claimant holding a 503(b)(9) Claim that has
       either been disallowed or is the subject of a pending
       Omnibus or Substantive Objection.  

   (4) Nothing in the Procedures will shorten any applicable
       statute of limitation or repose or any other limitation
       periods for asserting claims or causes of action against
       the Claimants or defenses or set-offs against any
       503(b)(9) Claim.  The setting of the 503(b)(9) Claims
       Objection Deadlines is without prejudice to the rights of      
       parties-in-interest to seek to extend or shorten the
       Objection Deadlines, or oppose any request for similar
       relief, upon showing of cause.

The Debtors assert that the proposed Resolution Procedures is
appropriate due to (i) limited personnel devoted to the
management and wind-down of their estates, including the analysis
of Section 503(b)(9) Claims, and (ii) threshold legal issues
concerning the interpretation of Section 503(b)(9) that the Court
may be called upon.  Also, the proposed procedures will amend
certain unnecessary shortened notices and response provisions,
where the Claimants will not be prejudiced, they maintain.

Thus, the Debtors seek to:

   (i) extend the 503(b)(9) Objection Deadline from July 29 to
       July 31, 2008.  

  (ii) amend the Section 503(b)(9) Order to modify deadlines
       contained therein, and

(iii) establish the proposed Claims Resolution Procedures
       determining the allowance or disallowance of Section
       503(b)(9) Claims.

The Court will convene on July 28, 2008, at 2:00 p.m. (Eastern),
on shortened notice, to consider the Debtors' request.  
Objections to the motion must be filed by July 24, 2008.

                     About Plastech Engineered

Based in Dearborn, Michigan, Plastech Engineered Products, Inc. --
http://www.plastecheng.com/-- is full-service automotive
supplier of interior, exterior and underhood components.  It
designs and manufactures blow-molded and injection-molded plastic
products primarily for the automotive industry.  Plastech's
products include automotive interior trim, underhood components,
bumper and other exterior components, and cockpit modules.  
Plastech's major customers are General Motors, Ford Motor Company,
and Toyota, as well as Johnson Controls, Inc.

Plastech is a privately held company and is the largest family-
owned company in the state of Michigan.  The company is certified
as a Minority Business Enterprise by the state of Michigan.  
Plastech maintains more than 35 manufacturing facilities in the
midwestern and southern United States.  The company's products are
sold through an in-house sales force.

The company and eight of its affiliates filed for Chapter 11
protection on Feb. 1, 2008 (Bankr. E.D. Mich. Lead Case No. 08-
42417).  Gregg M. Galardi, Esq., at Skadden Arps Slate Meagher &
Flom LLP, and Deborah L. Fish, Esq., at Allard & Fish, P.C.,
represent the Debtors in their restructuring efforts.  The Debtors
chose Jones Day as their special corporate and litigation counsel.  
Lazard Freres & Co. LLC serves as the Debtors' investment bankers,
while Conway, MacKenzie & Dunleavy provide financial advisory
services.  The Debtors also employed Donlin, Recano & Company as
their claims and noticing agent.

Joel D. Applebaum, Esq., at Clark Hill PLC, represents the
Official Committee of Unsecured Creditors.

As of Dec. 31, 2006, the company's books and records
reflected assets totaling $729,000,000 and total liabilities of
$695,000,000.  (Plastech Bankruptcy News, Issue No. 28; Bankruptcy
Creditors' Service, Inc., http://bankrupt.com/newsstand/or
215/945-7000)


PRB ENERGY: Michael Purfield Resigns as Chief Operating Officer
---------------------------------------------------------------
Effective July 11, 2008, Michael C. Purfield resigned as the chief
operating officer of PRB Energy, Inc.

                       About PRB Energy

Headquartered in Denver, PRB Energy Inc. fka PRB Gas
Transportation Inc. -- http://www.prbenergy.com/-- operates
as          
independent energy companies engaged in the acquisition,
exploitation, development and production of natural gas and
oil.  In addition, the company and its affiliates provide gas
gathering, processing and compression services for properties it
operates and for third-party producers.  They conduct business
activities in Wyoming, Colorado and Nebraska.

The Debtor filed for chapter 11 protection on March 5, 2008
(Bankr. D. Co. Case No. 08-12658) together with two affiliates,
PRB Oil & Gas Inc. (Case No. 08-12661) and PRB Gathering Inc. (08-
12663).  James T. Markus, Esq., at Block, Markus & Williams LLC
represents the Debtors in their restructuring efforts.  The U.S.
Trustee for Region 19 has appointed creditors to serve on an
Official Committee of Unsecured Creditors.  Daniel J. Garfield,
Esq., at Brownstein Hyatt Farber Schreck, P.C., represents the
Committee in these cases.

Debtors listed assets between $50 million and $100 million and
liabilities between $10 million and $50 million.

As reported in the Troubled Company Reporter on July 18, 2008, PRB
Energy Inc. and its debtor-affiliates asked the United States
Bankruptcy Court for the District of Colorado to extend their
exclusive periods to:file a Chapter 11 plan until Oct. 2, 2008,
and solicit acceptances of that plan until Dec. 1, 2008.

The Debtors' initial exclusive period to file a plan expired on
July 3, 2008.


PREFERRED VOICE: Losses Prompt Philip Vogel's Going Concern
-----------------------------------------------------------
Philip Vogel & Co. PC raised substantial doubt about the ability
of Preferred Voice, Inc., to continue as a going concern after
auditing the company's financial statements for the year ended
March 31, 2008.  The auditor pointed to the company's recurring
losses from operations.

The company has negative cash flows from operations of $130,777
and $870,524 for the years ended March 31, 2008, and 2007,
respectively.

The company posted a net loss of $747,816 on net sales of
$3,541,586 for the year ended March 31, 2008, as compared with a
net loss of $1,346,293 on net sales of $1,254,634 in the prior
year.

Management projects working capital needs to be approximately
$1,560,000 over the next twelve months for corporate overhead and
equipment purchases to continue to deploy services to carrier
customers.  Management believes that current cash and cash
equivalents and cash that may be generated from operations will be
sufficient to meet these anticipated capital requirements and to
finance marketing initiatives for the next twelve months.  Such
projections have been based on revenue trends from current
customers and customers, which are already under contract
utilizing the revenue rates that have been experienced over the
past six months with currently installed customers and projected
cash requirements to support installation, sales and marketing,
and general overhead.  However, any projections of future cash
requirements and cash flows are subject to substantial
uncertainty.  If the company's operating projections are not
realized, it may be forced to raise additional capital through the
issuance of new shares, the exercise of outstanding warrants, or
reduction of current overhead.

At March 31, 2008, the company's balance sheet showed $1,344,579
in total assets and 2,355,676 in total liabilities, resulting in a
$1,011,097 stockholders' deficit.  

The company's consolidated balance sheet at March 31, 2008, also
showed strained liquidity with $1,014,425 in total current assets
available to pay $1,326,664 in total current liabilities.

A full-text copy of the company's 2008 annual report is available
for free at http://ResearchArchives.com/t/s?2fc7

                       About Preferred Voice

Headquartered in Dallas, Preferred Voice Inc. (OTC BB: PRFV.OB) --
http://www.preferredvoice.com/-- provides a host of integrated  
voice-driven products and services.  The company's Global
Application Platform lets telecommunications providers offer
enhanced services such as ring tones and games, voice-activated
dialing, and conferencing.  The product also includes a subscriber
Web interface and supports billing and provisioning functions.


PROXYMED INC: Files Chapter 11 Petition, DIP and Sale Motions
-------------------------------------------------------------
ProxyMed Inc., dba MedAvant Healthcare Solutions, filed on
July 23, 2008, a voluntary petition for reorganization under
chapter 11 of the U.S. Bankruptcy Code with the U.S. Bankruptcy
Court for the District of Delaware.

ProxyMed also filed a debtor-in-possession financing commitment of
$8.1 million by its senior lender Laurus Master Fund, Ltd., of
which $2.9 million represents new credit availability to support
the Debtor's business operations during the Chapter 11 case.

In addition to the filing, the Debtor has filed a motion to sell
its assets to a private equity firm, Marlin Equity, under section
363 of the Bankruptcy Code, subject to higher and better bids at
an auction sale expected to be conducted in 8 weeks to 10 weeks.

"During the past year we have divested our non-core business lines
in order to focus on our electronic data interchange business with
the goal of improving our operating efficiencies," said Peter
Fleming, MedAvant interim Chief Executive Officer.  "Our objective
now is to align our financial structure with our new business
structure and bring in a partner to invest capital toward the
growth of our company.  We believe this financial assistance will
enable us to move through this process as quickly as possible and
so we may resume our focus on building a new, stronger company."
The debtor-in-possession financing commitment from Laurus Master
Fund, Ltd. is expected to provide the necessary liquidity to
enable the Company to continue doing business as usual during the
Chapter 11 process.

The Debtor has also filed a series of motions with the Bankruptcy
Court to assure the continuity and stability of the business,
including the payment of wages, the continuation of benefit and
rebate programs, and the payment of certain critical vendors.
MedAvant expects operations to continue as usual throughout this
process.

The Debtor is represented in the bankruptcy filing by Michael P.
Richman, Esq., at Foley & Lardner LLP, and Michael Nestor, Esq.,
at Young, Conaway, Stargatt & Taylor.

                Receipt of Nasdaq Delisting Notice

MedAvant said that on July 16, 2008 it received notice from the
Nasdaq Stock Market of the failure of its common stock to maintain
a minimum bid price of $1.00 per share for thirty (30) consecutive
trading days, as required by Nasdaq Marketplace Rule 4450(a)(5).

If at anytime before Jan. 12, 2009, the minimum bid price for the  
company's common stock closes at $1.00 per share or more for 10
consecutive trading days, Nasdaq will notify it in writing that
its compliance with the rule has been restored.  Otherwise, Nasdaq
will provide written notification of delisting of the company's
securities from the Nasdaq Global Market.

The company previously received a letter from Nasdaq on April 22,
2008, that notified the company that it had not maintained the
minimum value of publicly held shares of $15,000,000 required for
continued listing on the Nasdaq Global Market, as set forth in
Marketplace Rule 4450(b)(3), or the MVPHS Rule.  The company had
until July 21, 2008, to regain compliance with the MVPHS Rule.

                   Sale of Lab Services to ETSec

MedAvant has closed the sale of its Laboratory services business  
to ETSec, pursuant to an asset purchase agreement between ET Labs,
Inc., ETSec, Inc., ProxyMed Lab Services, LLC, and ProxyMed, Inc..

The transaction includes all products and services of MedAvant's
Lab business, including the ongoing support of more than 50,000
deployed remote printers and devices.  The sale also includes
Pilot, MedAvant's proprietary patented technology that enables the
remote delivery of lab results to providers, and Fleet Management
System, which provides real-time status information and
unparalleled remote printer management and support.

"We have been focused for the past year on divesting our non-core
businesses," said Peter Fleming, MedAvant Interim Chief Executive
Officer.  "These divestitures allow us the renewed ability to
focus exclusively on building our EDI (Electronic Data
Interchange) business which is our core competency.  We continue
to expand our payer and provider connectivity which [now] includes
nearly 1,400 payers and more than 200,000 providers nationwide.  
With our real-time Phoenix platform, we can seamlessly link any
payer to any provider in the nation in order to allow the
transparent exchange of administrative, financial and clinical
information.  This capability, performed in a real-time
environment, puts us at the forefront of our industry and allows
us to offer our EDI customers greater efficiencies, fast payment,
and improved clinical outcomes."

Cain Brothers & Company, LLC acted as exclusive financial advisor
to MedAvant for this transaction.  Foley & Lardner LLP acted as
legal counsel to MedAvant in this transaction.

A full-text copy of the asset purchase agreement between ProxyMed
and ETSec is available for free at:

               http://ResearchArchives.com/t/s?2ff4

          Termination of L. Harding as President and COO

On May 22, 2008, the company entered into a second amendment to a
certain employment agreement, dated March 29, 2001, with Lonnie
Hardin as company president and chief operating officer), as
amended on March 8, 2005.  The amendment sets forth, among other
things, certain changes to the severance benefits due to Mr.
Hardin upon a constructive termination following a change of
control in the company.

Upon the constructive termination, if Mr. Hardin executes a full,
complete, and satisfactory release of any and all claims against
the company, Mr. Hardin will receive: (i) 12 months of his base
salary as of the date of termination; plus (ii) any and all
accrued paid time off not already taken; plus (iii) a pro rata
portion of any bonus that would have been paid to Mr. Hardin under
any bonus plan of the company; plus (iv) the vesting of any and
all unvested options as of the effective date of the change of
control of the company.

In addition, pursuant to the amendment, Mr. Hardin will no longer
be subject to the non-competition covenant originally set forth in
the employment agreement and a non-competition covenant will be
deleted in its entirety from the employment agreement and will no
longer be of any further force or effect.

A full-text copy of an amendment to the employment agreement with
Mr. Hardin is available for free at:

               http://ResearchArchives.com/t/s?2ff5

                 Cross-Default Notice from Laurus

On May 14, 2008, the company received notice from its senior
secured lender, Laurus Master Fund, Ltd., that a cross-default had
occurred under a security and purchase agreement, dated Dec. 7,
2005, between the company and Laurus, as amended to date, and the
related revolving credit facility.

The cross-default occurred upon the company's failure to pay
interest in the amount of $131,370 on subordinated 4% convertible
promissory notes issued to the former shareholders of MedUnite, as
part of the consideration paid in the company's acquisition of
MedUnite.  The interest was due and payable on April 1, 2008,
subject to a 30-day grace period.  In addition, Laurus notified
the company that it was taking no immediate action with respect to
this cross-default but would reserve all rights and remedies
available to Laurus under the loan agreement.

The company's failure to pay the interest on the MedUnite Notes
due and payable on April 1, 2008, subject to the 30-day grace
period, constitutes a separate event of default under the MedUnite
Notes.  This event of default under the MedUnite Notes was
previously disclosed in the company's Quarterly Report on Form 10-
Q, filed with the U.S. Securities and Exchange Commission on
May 15, 2008, as amended on May 20.

                           About ETSec

ETSec is an enterprise security company that is 100% focused on
providing clients with the proven strategies, solutions, and
services they need to protect vital technical assets against
potential security threats. Our expertise in providing a wide
range of clients with security solutions and services has given us
an appreciation for the economic constraints and real security
threats that today's companies face. To help clients cope with
these challenges, we take a holistic — yet practical — approach to
enterprise security, helping clients stay ahead of near-term
threats, while driving toward a longer-term plan to minimize risk.
For more information, visit http://www.etsec.com.

                      About ProxyMed/MedAvant

MedAvant Healthcare Solutions (NASDAQ: PILL) --
http://www.medavanthealth.com/-- is a trade name of ProxyMed,  
Inc.   It is a national connectivity network that connects payers
with providers in a real-time environment for the purpose of
transparently messaging administrative, financial and clinical
information in order to lower total administrative costs, improve
payer, provider and member relationships, and to ultimately
improve clinical outcomes.

As of March 31, 2008, the ProxyMed listed $15.9 million in assets,
$28.2 million in liabilities and $12.3 million in stockholders'
deficit.


PROXYMED INC: Case Summary & 20 Largest Unsecured Creditors
-----------------------------------------------------------
Lead Debtor: ProxyMed Transaction Services, Inc.
             fka MedUnite, Inc.
             aka WPJ, Inc.
             1854 Shackleford Ct., Ste. 200
             Norcross, GA 30093

Bankruptcy Case No.: 08-11551

Debtor-affiliates filing separate Chapter 11 petitions:

        Entity                                     Case No.
        ------                                     --------
        ProxyMed, Inc.                             08-11553
        ProxyMed Lab Services, L.L.C.              08-11554

Type of Business: The Debtors are information technology companies
                  that facilitate the exchange of medical claim
                  and clinical information among doctors,
                  hospitals, medical laboratories, and insurance
                  payers.  See http://www.medavanthealth.com

Chapter 11 Petition Date: July 23, 2008

Court: District of Delaware (Delaware)

Judge: Brendan Linehan Shannon

Debtors' Counsel: Kara Hammond Coyle, Esq.
                     Email: bankfilings@ycst.com
                  Michael R. Nestor, Esq.
                     Email: bankfilings@ycst.com
                  Young Conaway Stargatt & Taylor, L.L.P.
                  1000 West St., 17th Fl., Brandywine Bldg.
                  Wilmington, DE 19801, 19899
                  Tel: (302) 571-6600
                  Fax: (302) 571-1253
                  http://www.ycst.com/

The Debtors indicated $40,655,000 in total consolidated assets and
$47,640,000 in total consolidated debts as of December 31, 2007.  
In its petition, ProxyMed Transaction Services, Inc. indicated
$10,000,0000 in estimated assets and $10,000,000 in estimated
debts.

Debtors' Consolidated List of 20 Largest Unsecured Creditors:

   Entity                      Nature of Claim       Claim Amount
   ------                      ---------------       ------------
Coalition America, Inc.        net working capital   $4,068,269
Attn: Officer, General or      adjustment resale of
Managing Agent                 containment division
2 Concourse Pkwy., Ste. 300
Atlanta, GA 30328
Fax: (404) 250-4933

WellPoint Health Networks      notes                 $3,200,000
Attn: Officer, General or
Managing Agent
P.O. Box 4173
Woodland Hills, CA 91365-4173
Fax: (818) 234-9966

UnitedHealth Group             notes                 $2,800,000
Attn: Officer, General or
Managing Agent
2918 Hermann St.
Milwaukee, WI 53207
Fax: (800) 842-1109

McKesson Corp.                 notes                 $2,300,000
Attn: Officer, General or
Managing Agent
5995 Winward Pkwy.
Alpharetta, GA 30005
Fax: (404) 728-3944

Aetna, Inc.                    notes                 $1,600,000
Attn: Officer, General or
Managing Agent
151 Farmington Ave.
Hartford, CT 06156
Fax: (860) 754-9122

CIGNA Corp.                    notes                 $1,600,000
Attn: Officer, General or
Managing Agent
900 Cottage Grove Rd.
Hartford, CT 06152
Fax: (860) 726-7573

Health Net, Inc.               notes                 $1,600,000
Attn: Officer, General or
Managing Agent
21281 Burbank Blvd. B3
Woodland Hills, CA 91367
Fax: (818) 676-6992

Enclarity                      consulting services   $170,625
                               & trade debtor

Oracle Corp.                   software & trade debt $150,474

Microsoft Licensing G.P.       software & trade debt $137,600

Hitachi Data Systems           IT & trade debt       $108,091

Vaco Atlanta, L.L.C.           consulting services   $96,227
                               & trade debtor

Ppoone                         IT & trade debt       $94,100

Comsys Services, L.L.C.        IT & trade debt       $93,047

McKesson Information Solutions Vendor Communications $92,125
                               & trade debt

United Healthcare Insurance    trade debt            $75,796
Co.

Bowne of Atlanta, Inc.         public & trade debt   $68,543

Curtis, Mallet-Prevost, Colt   legal & trade debt    $66,453
& Mosle, L.L.P.

CIT TECH#450-4822017-000       IT & trade debt       $63,559

UHY LLP, MI                    consulting services   $57,030
                               & trade debt


RG GLOBAL: McKennon Wilson Expresses Going Concern Doubt
--------------------------------------------------------
McKennon Wilson & Morgan LLP raised substantial doubt about the
ability of RG Global Lifestyles, Inc., to continue as a going
concern after auditing the company's financial statements for the
year ended March 31, 2008.  The auditor reported that the company
has incurred losses, has used cash in operating activities and has
a significant accumulated deficit.

During the year ended March 31, 2008, the company incurred an
operating loss before income taxes of $3,888,465 and used cash
from operations of $2,054,306.  As of March 31, 2008, the company
had a working capital deficit of $2,639,892.

The company posted a net loss of $3,844,562 on total revenues of
$981,218 for the year ended March 31, 2008, as compared with a net
loss of $23,970,031 on total revenues of $89,326 in the prior
year.

The company is dependent upon its ability to obtain equity and
debt financing and ultimately achieving profitable operations from
the development of its business segments.  During the year ended
March 31, 2008, the company funded operations through debt and
equity offerings.  

Subsequent to the year-end, the company raised an additional
$394,000 through the sales of common stock.  Currently, the
company does not have any commitments or assurances for additional
capital.

However, subsequent to March 31, 2008, the company commenced
production under the water treatment contract with a customer.  In
addition, the company is currently in negotiations for the
construction of additional water treatment facilities for this
customer.  There can be no assurance that the revenue from these
contracts will be sufficient for the company to achieve
profitability in its operations, and it is possible that
additional equity or debt financing may be required for the
company to continue as a going concern.  The company estimates it
has current cash reserves sufficient to fund operations through
the second quarter of fiscal 2009.

At March 31, 2008, the company's balance sheet showed $7,758,187
in total assets, $2,958,937 in total liabilities, and $4,799,250
in total stockholders' equity.  

The company's consolidated balance sheet at March 31, 2008, showed
strained liquidity with $249,045 in total current assets available
to pay $2,888,937 in total current liabilities.

A full-text copy of the company's 2007 annual report is available
for free at http://ResearchArchives.com/t/s?2fc6

                         About RG Global

Headquartered in Rancho Santa Margarita, Calif., RG Global
Lifestyles Inc. (OTC BB: RGBL) -- http://www.rgglife.com/--  
develops and markets water purification and wastewater treatment
products and technologies as well as bottled beverages.  Its
Catalyx Fluid Solutions division focuses on the sale and lease of
its Catalyx(R) proprietary wastewater treatment technology for
energy production and industrial applications.  RG's OC Energy(TM)
subsidiary manufactures and distributes bottled energy drinks and
oxygenated water under the OC Energy brand.  The Aquair(TM)
subsidiary is the exclusive distributor of licensed atmospheric
water generators that produce purified water from air.


SCOTTISH RE: Ernst & Young Expresses Going Concern Doubt
--------------------------------------------------------
Ernst & Young LLP raised substantial doubt about the ability of
Scottish Re Group Limited to continue as a going concern after
auditing the company's financial statements for the year ended
Dec. 31, 2007.  The auditing firm pointed to the company's net
loss for the year ended Dec. 31, 2007, accumulated deficit of
$1,042,400,000 as of Dec. 31, 2007, and the company's
deteriorating financial performance and worsening liquidity and
collateral position.

The company posted a net loss of $895,742,000 on total revenues of
$1,505,373,000 for the year ended Dec. 31, 2007, as compared with
a net loss of $366,714,000 on total revenues of $2,429,500,000 in
the prior year.

                      Management's Statement

As a result of declines in the fair value of its invested assets,
which contain a significant concentration of sub-prime and Alt-A
residential mortgage-backed securities, the company has
experienced deteriorating financial performance and a worsening
liquidity and collateral position.

The continuing deterioration in the market for sub-prime and Alt-A
securities through the first half of 2008 has compounded the
considerable financial challenges and uncertainties faced by the
company.

In addition to causing significant impairment charges and reported
losses, these adverse market conditions have impacted the value of
underlying collateral used to secure the company's life
reinsurance obligations and statutory reserves for its operating
units.

Any reserve credit shortfalls arising from a decline in the value
of collateral places increased demand on the company's available
capital and liquidity.

The impairment charges and associated decline in the company's
consolidated shareholders equity will also result in the failure
to meet minimum net worth covenants for the HSBC II and Clearwater
Re collateral finance facilities.

The company had recently executed forbearance agreements with the
counterparties under these facilities who have agreed to forbear
taking action until Dec. 15, 2008, in return for certain economic
and non-economic terms.

Such terms have placed additional constraints on the company's
available capital and liquidity.  The company's liquidity is
insufficient to fund its needs beyond the short term and, without
additional sources of capital or the successful completion of
strategic actions, is currently projected to be exhausted by the
first quarter of 2009.

                          Recent Events

The company has faced a number of significant challenges during
the latter part of 2007 and continuing into 2008, which have
required the company to change its strategic focus.  These
challenges have included:
  
-- The continuing deterioration in the U.S. residential
   housing market in general and the market for sub-prime and
   Alt-A residential mortgage-backed securities specifically.
   These conditions have had, and will likely continue to have,
   a material adverse effect on the value of the company's
   consolidated investment portfolio and capital and liquidity
   position;
  
-- The negative outlooks placed on its financial strength
   ratings by each of the rating agencies in November 2007,
   followed by the ratings action taken by Standard & Poors
   in early 2008 lowering the financial strength ratings of the
   company's operating subsidiaries from "BB+" to "BB" and
   placing the ratings on CreditWatch with negative
   implications, as well as the subsequent ratings downgrades
   and negative outlooks placed on its financial strength
   ratings by other rating agencies, with the resulting material
   negative impact on its ability to achieve its previous goal
   of attaining an "A-" or better rating by the middle of 2009;
   and

-- The material negative impact of ratings declines and negative
   outlooks by rating agencies on the company's ability to grow
   its life reinsurance businesses and maintain its core
   competitive capabilities.

                        Company's Strategy

On January 21, 2008, the company's board of directors established
a special committee to evaluate the alternatives developed by
management.  On Feb. 22, 2008, management announced the
unanimously adopted business strategy recommended by the special
committee.  

The strategy consists of:

-- the disposal of its non-core assets or lines of business,
   including the Life Reinsurance International Segment and the
   Wealth Management business;

-- the development, through strategic alliances or other means,
   of opportunities to maximize the value of its core
   competitive capabilities within the Life Reinsurance North
   America Segment, including mortality assessment and treaty
   administration; and

-- rationalization of the company's cost structure to preserve
   capital and liquidity.  

The company has changed its strategic focus and initiated a number
of actions to preserve capital and mitigate growing liquidity
demands.  The company had ceased writing new reinsurance treaties
and notified existing clients that it will not be accepting new
risks on existing treaties.  

The company have also taken steps to reduce its operating expenses
including reducing staffing levels.  The company is also actively
pursuing the sale of its Life Reinsurance North America Segment
and recently entered into definitive agreements for the sale of
its Life Reinsurance International Segment and Wealth Management
business.  

The company also continues to pursue the restructuring of certain
of its collateral financing facilities and potential alternatives
to these facilities to alleviate the collateral requirements of
its reinsurance operating subsidiaries.

If the company fails in reaching a definitive agreement for the
sale of its Life Insurance North America Segment by Dec. 15, 2008,
the company will continue to follow a run-off strategy and will
need to obtain additional forbearance from the relevant
counterparties to Clearwater Re and HSBC II; find alternative
collateral support for Clearwater Re and HSBC II or raise
additional capital.  If the company fails to successfully execute
on these actions, its insurance operating subsidiaries may become
insolvent and the company may need to seek bankruptcy protection.

                          Balance Sheet

At Dec. 31, 2007, the company's balance sheet showed
$12,821,063,000 in total assets, $11,909,454,000 in total
liabilities, $9,025,000 in minority interest, $555,857,000 in
convertible cumulative preferred shares, and $346,727,000 in total
stockholders' equity.  

A full-text copy of the company's 2007 annual report is available
for free at http://ResearchArchives.com/t/s?2fc3

                        About Scottish Re

Scottish Re Group Ltd. -- http://www.scottishre.com/-- is a  
global life reinsurance specialist.  Scottish Re has operating
businesses in Bermuda, Grand Cayman, Guernsey, Ireland, the United
Kingdom, United States, and Singapore.  Its flagship operating
subsidiaries include Scottish Annuity & Life Insurance
Company (Cayman) Ltd. and Scottish Re (US), Inc.  Scottish Re
Capital Markets, Inc., a member of Scottish Re Group Ltd., is a
registered broker dealer that specializes in securitization of
life insurance assets and liabilities.

As reported in the Troubled Company Reporter-Latin America on June
17, 2008, Moody's Investors Service placed on review with
direction uncertain Scottish Re Group Ltd.'s senior unsecured
shelf of (P)Caa1, subordinate shelf of (P)Caa2, junior subordinate
shelf of (P)Caa2, preferred stock of Caa3, and preferred stock
shelf of (P)Caa3.  Moody's had previously placed the ratings on
review for possible downgrade.


SEMGROUP ENERGY: Posts $12.9 Million Net Loss for FY 2007
---------------------------------------------------------
Semgroup Energy Partners, L.P., posted a net loss of
$12.9 million on total revenues of $74.6 million for the year
ended Dec. 31, 2007, as compared with a net loss of
$35.9 million on total revenues of $28.8 million for the year
ended Dec. 31, 2006.

                      Results of Operations

Service revenues were $74.6 million for the year ended Dec. 31,
2007, compared with $28.8 million for the year ended Dec. 31,
2006, an increase of $45.8 million, or 159%.  Terminalling and
storage revenues increased by $15.7 million to $24.8 million for
the year ended Dec. 31, 2007, compared with $9.1 million for the
year ended Dec. 31, 2006, primarily due to revenues generated
under the Throughput Agreement subsequent to the closing of the
company's initial public offering.  The company's predecessor
historically did not account for these services, including its
gathering and transportation services, which were provided on an
inter-company basis.

The company's gathering and transportation services revenue
increased by $30.0 million to $49.8 million for year ended
Dec. 31, 2007, compared with $19.8 million for the year ended Dec.
31, 2006.

Operating expenses include salary and wage expenses and related
taxes and depreciation and amortization expenses.  Operating
expenses increased by $15.6 million, or 30%, to $67.2 million for
the year ended Dec. 31, 2007, compared with $51.6 million for the
year ended Dec. 31, 2006.  Terminalling and storage operating
expenses increased by $0.4 million to $4.9 million for the year
ended Dec. 31, 2007, compared with $4.5 million for the year ended
Dec. 31, 2006.

The company's gathering and transportation operating expenses
increased by $15.2 million to $62.3 million for the year ended
Dec. 31, 2007.  Around $5.3 million of this increase in operating
expenses was due to its acquisition of Big Tex Crude Oil Company
on June 30, 2006.  Included in operating expenses for the year
ended Dec. 31, 2007, are $1.6 million in costs associated with the
clean up of a crude oil leak that occurred in the year ended Dec.
31, 2007, in relation to a 35-mile pipeline located in Conroe,
Tex.  

The company's parent sold this gathering line on April 30, 2007,
and the company's parent has assumed any future obligations
associated with the aforementioned leak.  The company's repair and
maintenance expenses increased by $2.3 million to
$8.2 million for the year ended Dec. 31, 2007, compared with $5.9
million for the year ended Dec. 31, 2006, of which
$0.9 million was related to the Big Tex acquisition.  The
additional increase in repair and maintenance expenses was due
primarily to the timing of routine maintenance in its gathering
and transportation segment.

In addition, the company's fuel expenses increased by
$2.0 million to $9.6 million for the year ended Dec. 31, 2007,
compared with $7.6 million for the year ended Dec. 31, 2006, of
which $0.6 million was related to the Big Tex acquisition.  

The additional increase in its fuel costs is attributable to the
increase in number of transport trucks the company operated for
the respective periods, the rising price of diesel fuel during the
comparative periods and a fire at a refinery located in western
Texas that resulted in the company's transporting
0.7 million barrels of crude oil to alternative locations, which
were a greater distance from the barrels' respective points of
origination than the refinery that normally receives those
barrels. The Throughput Agreement provides for a fuel surcharge,
recorded in revenue, which offsets increases in fuel expenses
related to either rising diesel prices or force majeure events
such as the refinery fire that impacted its operations during the
year ended Dec. 31, 2007.

Interest expense represents interest on capital lease obligations
and long-term borrowings under the company's revolving credit
facility.  Interest expense increased by
$4.6 million to $6.6 million for the year ended Dec. 31, 2007,
compared with $2.0 million for the year ended Dec. 31, 2006.  The
increase was due to an increase in the average long-term
borrowings during the year ended Dec. 31, 2007, compared with the
year ended Dec. 31, 2006, which accounted for around
$2.4 million of the total increase in interest expense, and is a
reflection of borrowings under its new revolving credit facility.  
In addition, during the third quarter of 2007, the company entered
into two, interest-rate swap agreements, the fair value accounting
for which resulted in $2.2 million in interest expense for the
year then ended.

              Cash Flows and Capital Expenditures

Net cash used in operating activities was $0.6 million for the
year ended Dec. 31, 2007, as compared with $25.8 million for the
year ended Dec. 31, 2006.  This decrease in net cash used in
operating activities is primarily due to a $22.9 million decrease
in the company's net loss for the year then ended.  In addition,
the company's cash used in operating activities decreased due to a
$0.9 million increase in depreciation and amortization, an
increase in the company's unrealized loss related to derivative
instruments of $2.2 million, and an increase in equity-based
incentive compensation expense of
$1.2 million.  The impact of these increases was partially offset
by an increase of $1.8 million in cash used related to changes in
working capital.  The company's future results of operations,
including cash flow from operations, may not be comparable to the
historical results of operations of the company's predecessor
because the Crude Oil Business has historically been a part of the
integrated operations of the company's parent, and neither the
company's parent nor the company's predecessor recorded revenues
associated with the gathering, transportation, terminalling and
storage services provided on an inter-company basis.

Net cash used in investing activities was $20.0 million for the
year ended Dec. 31, 2007, as compared with $41.3 million for the
year ended Dec. 31, 2006.  This decrease was attributable to a
reduction in capital expenditures primarily resulting from the
timing of construction projects in its terminalling and storage
segment.  Capital expenditures for the years ended Dec. 31, 2007,
and 2006 were $20.4 million and $41.5 million, respectively,
consisting of both the company's acquisition of Big Tex on June
30, 2006, and expenditures for the construction of additional
crude oil storage capacity during these periods.  The company
added 0.4 million additional barrels of crude oil storage capacity
in the year ended Dec. 31, 2007, and
2.3 million additional barrels of crude oil storage capacity in
the year ended Dec. 31, 2006.

Cash flow from operations and the company's credit facility are
its primary sources of liquidity.  At Dec. 31, 2007, the company
had around $160.4 million of availability under its revolving
credit facility.  The company's working capital increased by
around $2.7 million in 2007 compared with 2006.  The company
believes that cash generated from these sources will continue to
be sufficient to meet its short-term working capital requirements,
long-term capital expenditure requirements and quarterly cash
distributions.  Usage of its revolving credit facility is subject
to ongoing compliance with covenants.  The company believes it is
currently in compliance with all covenants.

                           Balance Sheet

At Dec. 31, 2007, the company's consolidated balance sheet showed
$125.5 million in total assets, $108.3 million in total
liabilities, and $17.2 million in total partners' capital.   

The company's consolidated balance sheet at Dec. 31, 2007, showed
strained liquidity with $14.0 million in total current assets
available to pay $15.3 million in total current liabilities.

A full-text copy of the company's 2007 annual report is available
for free at http://ResearchArchives.com/t/s?2fc1

Tulsa, Oklahoma-based SemGroup Energy Partners, L.P. (NASDAQ:
SGLP) -- http://www.SGLP.com/-- owns and operates a diversified  
portfolio of complementary midstream energy assets.  SemGroup
Energy Partners provides crude oil and liquid asphalt cement
terminalling and storage services and crude oil gathering and
transportation services.  The general partner of SemGroup Energy
Partners is a subsidiary of SemGroup, L.P.


SIMDAG-ROBEL: Partners Face Breach Suit Filed by Donald Trump
-------------------------------------------------------------
The Hon. K. Rodney May of the U.S. Bankruptcy Court for the Middle
District of Florida allowed Donald Trump to proceed with his case
seeking $1 million payment from the developers of Trump Tower
Tampa, Tampa Bay Business Journal's Michael Hinman says.  Mr.
Trump may demand payment from SimDag-RoBEL LLC partners Frank
Dagostino, Howard Howell, Robert Lyons, Patrick Sheppard and Jody
Simon, except SimDag-RoBEL which is under chapter 11 bankruptcy,
Business Journal relates.

Business Journal notes that Mr. Trump asserted the $1 million
claim under a licensing agreement placing his name on Trump Tower
Tampa -- a planned $225 million luxury condominium with 52 floors
disclosed in January 2005.

In a countersuit, SimDag/RoBEL argued that the Mr. Trump violated
a confidentiality clause in the licensing agreement under which
Mr. Trump was not allowed to reveal his actual participation in
the condo project, Business Journal says.

Mr. Trump's counsel, W. Keith Fendrick, Esq., at Foley & Lardner
LLP, said in a July 10 filing that it is more hardship than the
Debtor for his client to appear in bankruptcy court, Business
Journal writes.

A mediation is set for Sept. 29, 2008, before mediator Peter J.
Grilli in order to resolve the dispute between the Debtor and Mr.
Trump, Business Journal notes.  Mr. Trump's breach of contract
suit will be heard on Feb. 2, 2009, subject to the outcome of the
court-ordered mediation, Business Journal relates.

                        About SimDag-Robel

Tampa, Florida-based SimDag-Robel, LLC, owns and operates a real
estate business.  The Debtor filed its chapter 11 petition on
June 17, 2008 (Bankr. M.D. Fla. Case No. 08-08804).  Judge K.
Rodney May presides over the case.  Adam L. Alpert, Esq., and
Jeffrey W. Warren, Esq., at Bush Ross, P.A., represent the Debtor
in its restructuring efforts.  The Debtor estimated assets between
$10 million and $50 million and debts between $10 million and
$50 million.  The Debtor listed Jerry Barnett/Miguel Alfredo/Ron
Yutrenka and Kevin Brodsky as its largest unsecured creditors;  
each is owed $1,600,000.


SIRIUS SATELLITE: XM Satellite Merger Gets FCC Votes
----------------------------------------------------
The Wall Street Journal reports that three votes have now been
cast in the Federal Communications Commission's review of the XM
Satellite Radio Holdings Inc. and Sirius Satellite Radio Inc.
merger, but the deal is not close to being done.

WSJ, citing an FCC official, says Democratic FCC commissioner
Michael Copps voted the first vote against the deal.  Two other
commissioners - chairman Kevin Martin and Robert McDowell - have
voted in favor of the merger, WSJ indicates.

According to the Journal, Mr. Copps's determination to reject the
merger wasn't a surprise; he's been vocal of his objections on
media consolidation and the companies weren't counting on getting
his approval.

The Journal indicates that the decision increases pressure on
another FCC commissioner - Republican Deborah Taylor Tate - the
only member of the five-person board who remain mum on her views
about the deal and whether or not she might approve of it.

Another FCC commissioner, Democrat Jonathan Adelstein, laid out
his conditions for the companies to get his vote, WSJ adds.  The
Journal states that these conditions include a six-year price cap
for existing customers, interoperable radios that would also
receive HD signals from terrestrial radio stations and a 25% set
aside of channels for non-commercial and minority-owned radio
stations.

WSJ, quoting one FCC official, says that very little haggling has
been going on about Mr. Adelstein's offer.

                   About XM Satellite Radio

Headquartered in Washington, D.C., XM Satellite Radio Holdings
Inc. (Nasdaq: XMSR) -- http://www.xmradio.com/-- is a satellite      
radio company.  The company broadcasts live daily from studios in
Washington, DC, New York City, Chicago, Nashville, Toronto and
Montreal.  The company also provides satellite-delivered
entertainment and data services for the automobile market through
partnerships with General Motors, Honda, Hyundai, Nissan, Porsche,
Subaru, Suzuki and Toyota.

                      About SIRIUS Satellite

Headquartered in New York, SIRIUS Satellite Radio Inc. (Nasdaq:
SIRI) http://www.sirius.com/-- provides satellite radio services     
in the United States.  The company offers over 130 channels to its
subscribers 69 channels of 100.0% commercial-free music and 65
channels of sports, news, talk, entertainment, data and weather.
Subscribers receive the company's service through SIRIUS radios,
which are sold by automakers, consumer electronics retailers,
mobile audio dealers and through the company's website.

As of March 31, 2008, SIRIUS radios were available as a factory
and dealer-installed option in 125 vehicle models and as a dealer
only-installed option in 29 vehicle models.

As reported in the Troubled Company Reporter on May 14, 2008, the
company's balance sheet at March 31, 2008, showed $1.5 billion in
total assets and $2.3 billion in total liabilities, resulting in a
$839.4 million total stockholders' deficit.


SIRIUS SATELLITE: Moody's to Review Ratings on Pending Merger
-------------------------------------------------------------
Moody's Investors Service has placed all ratings for Sirius
Satellite Radio Inc. under review for possible downgrade.  In
addition, Moody's downgraded the company's Speculative Grade
Liquidity rating to SGL-4 from SGL-2.

Moody's notes that the proposed merger between XM Satellite Radio
Holdings Inc. and Sirius remains subject to FCC approval.  The
merger is expected to yield significant revenue and cost synergies
as the combined entity has greater leverage with its OEM partners,
retailers and content providers or talent, and offers a
substantially wider audience to advertisers.  Additionally,
management believes the combined company will be better positioned
to compete in the rapidly evolving audio entertainment industry.  
However, Moody's believes that the realization of these synergies
carries considerable execution risk and its impact on the credit
metrics will be dependent on the size and timing of these
synergies as well as costs associated with realizing these
synergies.

The review for downgrade reflects the continued cash burn at both
Sirius and XM, uncertainty surrounding the time and magnitude of
synergies and therefore achievement of positive free cash flow, as
well as Moody's concerns regarding the significant debt maturities
(both at Sirius and XM) in 2009 which we believe present
considerable refinancing risk.

The SGL downgrade reflects the company's continued negative free
cash flow and limited internal cash (Moody's notes that the
company's cash balance as of March 31, 2008, was $253 million), as
well as the $300 million debt maturity in 2009.

These ratings are under review for possible downgrade:

Sirius Satellite Radio, Inc.

  -- Corporate family rating, Caa1
  -- Probability-of-default rating, Caa1
  -- $250 Million Senior Secured Term Loan, B1 (LGD 1, 5%)
  -- 9 5/8% senior notes due 2013, Caa2 (LGD 4, 60%)

Rating downgraded:

Sirius Satellite Radio Inc.

  -- Speculative Grade Liquidity Rating -- to SGL-4 from SGL-2

Headquartered in New York, SIRIUS Satellite Radio, Inc. is a
satellite radio broadcaster.


SIRVA INC: Withdrawal of Triple Net's Appeal on DIP Financing OK'd
------------------------------------------------------------------
U.S. District Judge Richard Sullivan of the U.S. District Court
for the Southern District of New York approved the stipulation
between Sirva Inc., its debtor-affiliates and Triple Net
Investments IX, LP, withdrawing with prejudice an appeal from:

   * a final order by the U.S. Bankruptcy Court for the Southern
     District of New York allowing Sirva Inc. and its debtor-
     affiliates to obtain postpetition financing, authorizing them
     to use cash collateral, and granting adequate protection to
     prepetition secured parties; and

   * the approval of the the stipulation resolving the
     reconsideration request of the Bankruptcy's Court order
     authorizing the payment of prepetition unsecured claims,
     entered into by the Debtors and the Official Committee of
     Unsecured Creditors in their Chapter 11 cases, and the
     Official Committee of Unsecured Creditors of 360networks
     (USA) Inc.

The parties are directed to bear their own costs.

                         About Sirva Inc.

The company and 61 of its affiliates filed separate petitions
for Chapter 11 protection on Feb. 5, 2008 (Bankr. S.D.N.Y. Case
No. 08-10433).  Marc Kieselstein, Esq. at Kirkland & Ellis,
L.L.P. is representing the Debtor.  When the Debtors filed for
bankruptcy, it reported total assets of US$924,457,299 and total
debts of US$1,232,566,813 for the quarter ended Sept. 30, 2007.  
The Court confirmed the Debtor's First Amended Prepackaged Plan on
May 7, 2008.  The Debtors' First Amended Prepackaged Joint Plan of
Reorganization became effective on May 12, 2008.  

(Sirva Inc. Bankruptcy News; Bankruptcy Creditors' Services Inc.
http://bankrupt.com/newsstand/or 215/945-7000).  


SOUTHERN LUMBER II: Case Summary & Five Largest Unsec. Creditors
----------------------------------------------------------------
Debtor: Southern Lumber II, LLC
        389 Rodgers Rd.
        McDonough, GA 30252

Bankruptcy Case No.: 08-73769

Chapter 11 Petition Date: July 22, 2008

Court: Northern District of Georgia (Atlanta)

Debtor's Counsel: William Russell Patterson, Esq.
                     Email: wrpjr@rbhs-llp.com
                  Ragsdale Beals Seigler Patterson & Gray
                  229 Peachtree St. N.E., Ste. 2400
                  Atlanta, GA 30303-1629
                  Tel: (404) 588-0500
                  http://www.rbhs-llp.com/

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

Estimated Debts:  $10,000,000 to $50,000,000

Debtor's Five Largest Unsecured Creditors:

   Entity                      Nature of Claim       Claim Amount
   ------                      ---------------       ------------
Colonial Bank                  Bellah Landing        $1,650,000
P.O. Box 10088                 Phase I (foreclosed
Birmingham, AL 35202           on May 6, 2008)

Richard Harp Excavation, Inc.  Business debt         $1,544,926
240 Industrial Way
Fayetteville, GA 30214

Southern Lumber, Inc.          Business debt         $527,645
P.O. Box 1274
Stockbridge, GA 30281

Kleemeier, Inc.                Business debt         $305,000
dba On-Site Kleemeier, Inc.
8070 Fairoaks Ct.
Jonesboro, GA 30236

The Erosion Co.                Business debt         $32,893


SPECTRUM BRAND: Sale Failure Cues Moody's to Confirm Junk Rating
----------------------------------------------------------------
Moody's Investors Service confirmed Spectrum Brand's Caa1
corporate family rating but downgraded its probability of default
rating and revised its rating outlook to negative following the
recent statement that the company was unable to obtain the consent
of its senior lenders to complete the proposed sale of its pet
division to Salton, Inc.  At the same time, the senior secured
credit facility rating was upgraded to B1 from B2 and the senior
subordinated notes rating was confirmed at Caa3.  These rating
actions conclude a review for possible downgrade initiated on May
22, 2008.

In 2006, Spectrum initiated an asset sale strategy aimed at
improving the company's capital structure and profitability.

"The downgrade in the probability of default rating and change in
the rating outlook to negative principally reflects Moody's belief
that Spectrum's inability to sell either the Home & Garden
business or the Pet business increases the probability of a
default as its financial covenants continue to step down" Kevin
Cassidy, senior credit officer at Moody's Investors Service, said.

The negative outlook also reflects Moody's view that ultimate
recovery in a possible debt restructuring, which is considered
above average now, could diminish over time if the company's
operating performance deterioratesdue to the continuing weakness
in consumer spending.

Spectrum's Caa1 corporate family rating is driven by its very high
leverage at almost 10x (adjusted debt/EBITDA), weak interest
coverage of a little over 1x (EBITA/interest), and limited
financial flexibility.  The rating also reflects high raw material
costs, exposure to volatile zinc and nickel prices, competition
from well capitalized companies across most business lines, and
the weather dependency of the home and garden business.  The
rating is supported by Spectrum's portfolio of recognized brands,
strong market positions in many product categories, long-standing
relationships with key retailers, an improved cost structure
following restructuring efforts that were implemented in 2006, and
continued favorable trends in Latin America and the pet supply,
battery and personal care businesses.

The B1 rating of the senior secured credit facility reflects a
Caa2 PDR and a 13% LGD point estimate and the Caa3 rating of the
senior subordinated notes reflects a Caa2 PDR and 62% LGD point
estimate.  Despite a one notch downgrade of the PDR, the senior
secured credit facility was upgraded by one notch to B1 and the
senior subordinated notes were confirmed at Caa3 due to Moody's
expectation of a higher than average recovery in a possible
default scenario.

These ratings were confirmed/assessments revised:

  -- Corporate family rating at Caa1;

  -- $700 million 7.375% senior subordinated bonds due 2015 at
     Caa3 (LGD4, 62% from LGD5, 83%);

  -- $350 million variable rate toggle senior subordinated notes
     due 2013 at Caa3 (LGD4, 62% from LGD5, 83%);

This ratings was upgraded/assessment revised:

  -- $1.55 billion senior secured credit facility due 2013 to B1
     (LGD 2, 13%) from B2 (LGD2, 29%);

This rating was downgraded:

  -- Probability-of-default rating to Caa2 from Caa1

Headquartered in Atlanta, Georgia, Spectrum Brands, Inc. is a
global consumer products company with a diverse product portfolio
including consumer batteries, lawn and garden, electric shaving
and grooming, and household insect control.  Spectrum reported
sales of over $2 billion for the 12 months ended March 2008.


SPEIGHT FAMILY: Case Summary & Largest Unsecured Creditor
---------------------------------------------------------
Lead Debtor: Speight Family LLC
             8100 Bandley Drive
             Fountain, CO 80817

Bankruptcy Case No.: 08-20689

Debtor-affiliates filing separate Chapter 11 petitions:

        Entity                                     Case No.
        ------                                     --------
Speight Family LLLP                                08-20691
        
Chapter 11 Petition Date: July 22, 2008

Court: District of Colorado (Denver)

Judge: Elizabeth E. Brown

Debtors' Counsel: Jeffrey S. Brinen, Esq.
                   (jsb@kutnerlaw.com)
                  Kutner Miller Brinen, P.C.
                  303 E. 17th Ave., Ste. 500
                  Denver, CO 80203
                  Tel: (303) 832-2400
                  Fax: (303) 832-1510

Estimated Assets: $1 million to $10 million

Estimated Debts:  $1 million to $10 million

A list of the Debtors' largest unsecured creditors is available
for free at:

             http://bankrupt.com/misc/cob08-20689.pdf


SPHERE DRAKE: PRO Insurance Invokes Chapter 15
----------------------------------------------
Sphere Drake Insurance, Ltd. seeks bankruptcy protection from the
United States Bankruptcy Court for the Southern District of New
York through the Chapter 15 case that PRO Insurance Solutions,
Ltd., its foreign representative, commenced.

Together with Sovereign Marine & General Insurance Co. Ltd. and
other insurance companies, the Debtor underwrote insurance and
reinsurance business in pooling arrangements (WFUM Pools) through
Willis Faber (Underwriting Management), Ltd., Willis Faber &
Dumas, Ltd., and Devonport Underwriting Agency, Ltd.  The WFUM
Pools underwrote risks until the end of 1991, when they ceased
accepting new business and went into run-off.  In 1998, PRO
Insurance assumed the administration of the WFUM Pools.

When insurance pools like the WFUM Pools enter into run-off, they
cease writing new business and seek to determine, settle and pay
all liquidated claims of their insureds either as they arise, or,
if possible, before they arise.  Typically, a run-off of an
insurance pool will take 20 or more years to complete.

The Debtor and other WFUM Pools members each proposed to the High
Court in the United Kingdom a "cut off" scheme of arrangements to
shorten the run-off period, to reduce administrative costs and to
terminate the WFUM Pools.  With the approval of the Debtor's "cut
off" scheme and PRO Insurance as its foreign representative by its
creditors on October 19, 2007, the High Court sanctioned and
recognized its own "cut off" scheme on November 5, 2007.

Pro Insurance commences the Chapter 15 case to have the Debtor's
"cut off" scheme recognized in the United States, along with a
permanent injunction and other relief.

Howard Seife, Esq. at Chadbourne & Parke, LLP represents the
Debtor in its restructuring efforts.  When it filed for
protection, the Debtor listed estimated assets of between $50,000
and $100,000 and estimated debts between $1,000,000 and
$10,000,000.


SPHERE DRAKE: Chapter 15 Case Summary
-------------------------------------
Chapter 15 Petitioner: PRO Insurance Solutions, Ltd.

Chapter 15 Debtor: Sphere Drake Insurance, Ltd.
                   Park Gate
                   161-163 Preston Road
                   Brighton, East Sussex, BN1 6AU
                   United Kingdom

Chapter 15 Case No.: 08-12832

Type of Business: Together with Sovereign Marine & General
                  Insurance Co. Ltd. and other insurance
                  companies, the Debtor underwrote insurance and
                  reinsurance business in pooling arrangements
                  through Willis Faber (Underwriting Management),
                  Ltd., Willis Faber & Dumas, Ltd., and Devonport
                  Underwriting Agency, Ltd.

Chapter 15 Petition Date: July 22, 2008

Court: Southern District of New York (Manhattan)

Judge: James M. Peck

Chapter 15 Petitioner's Counsel: Howard Seife, Esq.
                                    Email: hseife@chadbourne.com
                                 Chadbourne & Parke, LLP
                                 30 Rockefeller Plaza
                                 New York, NY 10112
                                 Tel: (212) 408-5361
                                 Fax: (212) 541-5369
                                 http://www.chadbourne.com/

Estimated Assets: $50,000 to $100,000

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


STURGIS IRON: Closes Sale of Scrap Yards to Steel Dynamics  
----------------------------------------------------------
Steel Dynamics, Inc. disclosed at its second quarter and first
half report that during June 2008, it purchased certain assets of
Sturgis Iron & Metal, Inc. for $42 million.  SDI said none of the
seven scrap yards that were purchased are currently operating. The
following locations are expected to reopen in the third quarter
under OmniSource management: Sturgis, Kalamazoo and Monroe,
Michigan; South Bend and Peru, Indiana; and Fitzgerald, Georgia.

As reported in the Troubled Company Reporter on June 9, 2008, the
Hon. Jeffrey R. Hughes of the United States Bankruptcy Court for
the Western District of Michigan authorized Sturgis Iron & Iron
Metal Co. Inc. to sell substantially all of its assets to SDI Sub,
LLC under an asset purchase agreement dated May 12, 2008, as
amended.

Under the agreement, SDI Sub can elect to pay $1,000,000 to the
Debtor's Elkhart facility, which was classified as a superfund
site by the U.S Environmental Protection Agency in April 2008.  

                       About Sturgis Iron

Based in Sturgis, Michigan, Sturgis Iron & Metal Co., Inc. sells
ferrous metal scrap & waste in wholesale.  It also manufactures
secondary nonferrous metals, and provides pre-finishing iron or
steel processes services, finishing metal processing services, and
smelting metal services.

The company filed for chapter 11 protection on Apr. 4, 2008
(Bankr. W.D. Mich. Case No. 08-02966).  Jay L. Welford, Esq.,
Judith Greenstone Miller, Esq., Paige Barr, Esq., Paul R. Hage,
Esq. and Richard E. Kruger, Esq., at Jaffe Raitt Heuer & Weiss,
P.C. represent the Debtor in its restructuring efforts.  The
Debtor selected Kurtzman Carson Consultants LLC as claims agent.  
The U.S. Trustee for Region 9 appointed an Official Committee of
Unsecured Creditors in this case.  The Committee proposed Winston
& Strawn LLP as its counsel.

As reported in the Troubled Company Reporter on May 13, 2008, the
Debtor's summary of schedules shows total assets of $23,363,626
and total debts of $96,346,739.
     

TAHERA DIAMOND: Court Orders C$2 Mil. Reserve for Miners' Liens
---------------------------------------------------------------
The Ontario Superior Court of Justice on July 18, 2008, ordered
Tahera Diamond Corporation to set aside C$2,000,000 into a trust
account for the benefit of certain parties who are lien claimants
under the Miners Lien Act in effect in the Northwest Territories
and Nunavut.  The claims is in connection with goods and services
provided to Tahera prior to Jan. 16, 2008.

There has been no other new developments to report since Tahera's
press release of July 4, 2008.

The company provides its bi-weekly report under the alternative
information guidelines recommended by Ontario Securities
Commission Policy 57-603 and Canadian Securities Administrators
Staff Notice 57-301.

                      About Tahera Diamond

Tahera Diamond Corporation (TSX: TAH) -- http://www.tahera.com/--    
is a Canadian owned diamond mining company.  Tahera's wholly-owned
Jericho project, commencing commercial production in early 2006,
represents Canada's third, and Nunavut's first, diamond mine.

On Jan. 16, 2008, Tahera obtained an order from the Ontario
Superior Court of Justice granting Tahera and its subsidiary
protection pursuant to the provisions of the CCAA.  Tahera sought
protection under CCAA, as its current cash flows and cash on hand
would not allow it to meet its current obligations and its
obligations with respect to the 2008 winter road resupply.  The
Ontario Superior Court of Justice extended the Debtor's CCAA stay
period until Sept. 30, 2008.


TELKONET INC: Promotes Jeff Sobieski to Chief Operating Officer
---------------------------------------------------------------
Telkonet, Inc. appointed Jeff Sobieski as Chief Operating Officer
with immediate effect.  Formerly Executive Vice President of
Energy Management, Mr. Sobieski has been with Telkonet since March
2007 and is taking over as COO following Dottie Cleal's
resignation in May due to immediate-family health issues.

Telkonet's President and CEO Jason Tienor commented, "Our business
is seeing dramatic change with energy management related
opportunities permeating almost all aspects of our product lines
and many of our business functions and opportunities. Jeff assumed
the post of EVP of Energy Management in December 2007, with
responsibility for evolving the roadmap to realize continued
growth and efficiencies across the energy management products and
operations.  He also led the drive to secure high level business
for our energy management solution, as well as developing the
roadmap for our new networked platform, preparing Telkonet for
strong growth in this area.  As Telkonet continues to implement
additional operational efficiencies, the separate roles of EVP of
Energy Management and COO are increasingly redundant and
therefore, we have consolidated these into a single role held by
Jeff Sobieski.  We look forward to his continued strong
contributions to help Telkonet realize its success and achieve new
milestones."

As COO, Mr. Sobieski will work out of Telkonet's offices in both
Germantown and Milwaukee.

Commenting on his new role, Mr. Sobieski said, "I am gratified by
the Board's confidence in me, and regard this as a great honor and
opportunity.  As an existing part of the team, I can bring my
organizational knowledge and established relationships into play,
accelerating the process of uniting the company and establishing
cross-functional communication."

Prior to joining Telkonet, Mr. Sobieski, 33, was Chief Information
Officer at EthoStream, which he co-founded with Jason Tienor in
2002.  His career includes co-founding Interactive SolutionZ, a
Milwaukee-based IT consulting firm, and a number of high-level
consulting and system development projects, including positions
within major corporations in the medical and insurance industries.  
Mr. Sobieski holds a B.S. degree in Computer Science from the
University of Wisconsin-Oshkosh, and a MBA from Marquette
University.  He is married with two children.

                       Going Concern Doubt

As reported in the Troubled Company Reporter on April 22, 2008,
RBSM LLP, in McLean, Va., expressed substantial doubt about
Telkonet Inc.'s ability to continue as a going concern after
auditing the company's consolidated financial statements for the
years ended Dec. 31, 2007, and 2006.  The auditing firm pointed to
the company's significant operating losses in the current year and
also in the past.

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

                          About Telkonet

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


TELKONET INC: Registers 19.5MM Shares Issued to YA Global
---------------------------------------------------------
Telkonet Inc. delivered to the U.S. Securities and Exchange
Commission an amendment to the registration statement on Form S-3
filed July 1, 2008.

The registration statement -- filed under the Securities Act of
1933, as amended -- relates to the registration of 19,351,000
shares of the company's common stock, par value $0.001 per share,
that, according to Telkonet, may be offered and sold from time to
time by YA Global Investments, L.P.

Telkonet said it will not receive any proceeds from the sale of
the shares pursuant to the prospectus.  The company, however, will
bear the costs relating to the registration of the shares, which
is estimated to be roughly $15,444.

On May 30, 2008, Telkonet entered into a Securities Purchase
Agreement with YA Global pursuant to which the company agreed to
issue and sell to YA Global up to $3,500,000 of secured
convertible debentures and warrants to purchase up to 2,500,000
shares of the company's common stock.

YA Global is a Cayman Island exempt limited partnership managed by
Yorkville Advisors, LLC.  Investment decisions for Yorkville
Advisors are made by Mark Angelo, its portfolio manager.

The sale of the convertible debentures and warrants will be
effectuated in three separate closings, the first of which
occurred on May 30, 2008, and the remainder of which will occur
after the satisfaction of certain conditions, including, but not
limited to, the approval by the company's stockholders of an
amendment to the Company's certificate of incorporation
authorizing additional shares of common stock for issuance.

At the May 30, 2008 closing, Telkonet sold convertible debentures
having an aggregate principal value of $1,500,000 and warrants to
purchase 2,100,000 shares of common stock.

The convertible debentures accrue interest at a rate of 13% per
annum and mature on May 29, 2011.  The convertible debentures may
be redeemed at any time, in whole or in part, by Telkonet upon the
company's payment of a redemption premium equal to 15% of the
principal amount of convertible debentures being redeemed,
provided that an Equity Conditions Failure -- as defined in the
convertible debentures -- is not occurring at the time of the
redemption.

Telkonet said YA Global may also convert all or a portion of the
convertible debentures at any time at a price equal to the lesser
of (i) $0.58, or (ii) 90% of the lowest volume weighted average
price of the company's common stock during the 10 trading days
immediately preceding the conversion date.  The warrants expire
five years from the date of issuance and entitle YA Global to
purchase shares of the company's common stock at a price per share
of $0.61.  The convertible debentures are secured by substantially
all of the company's assets.

A full-text copy of Telkonet's prospectus dated as July 10, 2008,
is available at no charge at:

     http://ResearchArchives.com/t/s?2fe3

Baker & Hostetler LLP, advised Telkonet in connection with the
registration statement.  To contact the firm:

     Baker & Hostetler LLP
     Washington Square, Suite 1100
     1050 Connecticut Avenue, N.W.
     Washington, DC 20036-5304
     Tel: (202) 861-1500
     Fax: (202) 861-1783
     http://www.bakerlaw.com/

                       Going Concern Doubt

As reported in the Troubled Company Reporter on April 22, 2008,
RBSM LLP, in McLean, Va., expressed substantial doubt about
Telkonet Inc.'s ability to continue as a going concern after
auditing the company's consolidated financial statements for the
years ended Dec. 31, 2007, and 2006.  The auditing firm pointed to
the company's significant operating losses in the current year and
also in the past.

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

                          About Telkonet

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


TORRENT ENERGY: Gets Bid Price Non-compliance Notice from Nasdaq
----------------------------------------------------------------
Neonode Inc. disclosed that on July 3, 2008, the company received
a Nasdaq Staff deficiency letter from The NASDAQ Stock Market
Listing Qualifications Department stating that for the last 30
consecutive business days, the bid price of the company's common
stock has closed below the $1.00 minimum required for continued
inclusion under Marketplace Rule 4310(c)(4).  The notice further
states that pursuant to Marketplace Rule 4310(c)(8)(D), the
company will be provided 180 calendar days (or until Dec. 30,  
2008) to regain compliance.  If, at anytime before Dec. 30, 2008,
the bid price of the company's common stock closes at $1.00 per
share or more for a minimum of 10 consecutive business days, the
company may regain compliance with the Rule.

The notice indicates that, if compliance with the Minimum Bid
Price Rule is not regained by Dec. 30, 2008, the NASDAQ staff will
determine whether the company meets the Nasdaq Capital Market
initial listing criteria as set forth in Marketplace Rule 4310(c),
except for the bid price requirement.  If the company meets the
initial listing criteria, the NASDAQ staff will notify the company
that it has been granted an additional 180 calendar day compliance
period.  If the company is not eligible for an additional
compliance period the NASDAQ staff will provide written
notification that the company's securities will be delisted.

Furthermore, the company disclosed that it received a staff
determination letter from NASDAQ on July 1, 2008, stating that the
company's common stock is subject to delisting from the NASDAQ
Capital Market indicating that it had failed to comply with
Marketplace Rule 4310(c)(3)(B), 4310(c)(3)(A) or 4310(c)(3)(C),
requiring the company maintain a market value of listed securities
of at least $35,000,000, stockholders' equity of $2,500,000 or net
income from continuing operations of $500,000 in the most recently
completed fiscal year or in two of the last three most recently
completed fiscal years.

The company has submitted a request to have a hearing to the
NASDAQ Listing Qualifications Panel.  This request stays the
delisting of the company's securities pending the hearing and a
determination by the Panel with the company continuing to trade
its securities under the ticker symbol "NEON" on the NASDAQ board.
There can be no assurance that the Panel will grant the Company's
request for continued listing.

                        About Neonode Inc.

Neonode Inc. (Nasdaq: NEON) -- http://www.neonode.com/-- is a     
Swedish mobile communication company that specializes in optical
finger based touch screen technology.  The company designs and
develops mobile phones under its own brand and licenses its
patented touch screen technologies, zForce(TM) and neno(TM) to
third parties.  Neonode USA, which is based in San Ramon, Calif.,
markets Neonode's products within North America, Latin America and
China and is the exclusive licensor of the Neonode Intellectual
Property.

As reported in the Troubled company Reporter on May 29, 2008,
Neonode Inc.'s consolidated balance sheet at March 31, 2008,
showed total assets of $13.9 million and total liabilities of
$23.4 million, resulting in a roughly $9.4 million of total
stockholders' deficit.

                     Going Concern Doubt

BDO Feinstein International AB, in Stockholm, Sweden, expressed
substantial doubt about Neonode Inc.'s ability to continue as a
going concern after auditing the company's consolidated financial
statements for the year ended Dec. 31, 2007.  the auditing firm
pointed to the company's recurring losses, negative cash flows
from operations, and working capital deficiency.


TRIBUNE COMPANY: Moody's Junks Corporate Family Rating to Caa2
--------------------------------------------------------------
Moody's Investors Service downgraded Tribune Company's (Tribune)
Corporate Family rating to Caa2 from B3, the Probability of
Default rating to Caa2 from B3 and associated debt ratings as
detailed, concluding the review for downgrade initiated on April
21, 2008.  Moody's also assigned an SGL-4 speculative-grade
liquidity rating.  The LGD point estimates were updated to reflect
the current mix of debt.  

The downgrades reflect Moody's expectation that ongoing declines
in Tribune's revenue will create increasing pressure on its
ability to generate a sufficient level of cash flow necessary to
sustain the highly levered capital structure and meet financial
maintenance covenant tests under its credit facility.  Tribune's
asset sales program will beneficially reduce debt including near
term maturities but also erode the future earnings base without
materially reducing the company's high leverage.  A reversal of
recent operating trends is becoming increasingly necessary to
avoid a restructuring of the company's balance sheet over the
intermediate term and this could prove challenging in the current
newspaper and television advertising environment despite Tribune's
new revenue initiatives and significant cost reduction efforts.  
The rating outlook is negative.

Downgrades:

Issuer: Tribune Company

  -- Corporate Family Rating, Downgraded to Caa2 from B3
  -- Probability of Default Rating, Downgraded to Caa2 from B3

  -- Guaranteed Senior Secured Bank Credit Facility, Downgraded to
     Caa1, LGD3 - 36% from B2, LGD3 - 35%

  -- Guaranteed Senior Unsecured $1.6 Billion Bridge Credit
     Facility, Downgraded to Caa3, LGD5 - 82% from Caa2, LGD5 -
     81%

  -- Senior Secured Bonds/Debentures, Downgraded to Ca, LGD5 - 89%
     from Caa2, LGD5 - 88%

  -- Subordinate Bonds (PHONES), Downgraded to Ca, LGD6 - 95% from
     Caa2, LGD6 - 94%

  -- Medium-Term Note Program, Downgraded to Ca from Caa2
  -- Multiple Seniority Shelf, Downgraded to (P)Ca from (P)Caa2

Assignments:

Issuer: Tribune Company

  -- Speculative Grade Liquidity Rating, Assigned SGL-4

Outlook Actions:

Issuer: Tribune Company

  -- Outlook, Changed To Negative From Rating Under Review

The Caa2 CFR reflects Moody's opinion that Tribune's ability to
generate meaningful unlevered cash flow from its sizable and
diversified portfolio of local print and broadcast media
properties and equity investments only marginally supports the
high debt burden associated with its December 2007 LBO.  Strong
local news and information infrastructure support the local media
properties and consumer base that attracts advertisers but online
and cross media competition for consumers and advertisers and a
cyclical slowdown in the U.S. economy are creating significant
revenue pressures.  In Moody's view, this will make it difficult
to materially reduce leverage over the intermediate term even if
the company were to devote asset sale proceeds and the majority of
its cash flow to debt reduction.

Tribune is attempting to manage its operating and financial
challenges by refocusing the content and advertising sales
strategies of its newspapers to maximize profitability,
implementing significant expense reductions, and selectively
divesting assets to reduce debt.  High leverage and revenue
pressure create little room for any missteps on any of these
fronts.  Notwithstanding the operating challenges, the decline in
short term interest rates has beneficially reduced cash interest
costs on approximately $6.5 billion of un-hedged floating rate
debt relative to earlier expectations, and Moody's believes
Tribune will generate a moderate level of free cash flow during
2008.

The negative rating outlook reflects Moody's concern that
continued revenue pressure not matched by corresponding expense
reductions and any difficulty in executing asset sales could
continue to weaken cash flow and liquidity and lead to a requisite
restructuring.

The SGL-4 rating indicates weak intrinsic liquidity as the company
is heavily reliant on asset sales and committed credit lines to
fund approximately $1.4 billion of debt maturities through June
2009.  Tribune has very limited headroom under its credit facility
financial covenants to absorb further revenue declines and a
covenant amendment might subsequently be necessary over the next
12 months.

Headquartered in Chicago, Illinois, Tribune Company operates the
second largest newspaper group in the U.S. as well as television
and radio broadcasting and interactive services.  The company owns
23 television stations including a VHF station in each of the top
three metro markets, and TV-newspaper duopolies in Los Angeles,
Chicago, Miami, and Hartford.  In addition, Tribune owns equity
interests in a variety of media enterprises including
CareerBuilder and the Food Network.  Annual revenue approximates
$4.9 billion.


TRITON AVIATION: Fitch Keeps 'C/DR6' Ratings on Four Note Classes
-----------------------------------------------------------------
Fitch Ratings has affirmed Triton Aviation Finance as:

  -- Class A-1 notes affirmed at 'BB-';
  -- Class B-1 notes remain at 'C/DR6';
  -- Class B-2 notes remain at 'C/DR6';
  -- Class C-1 notes remain at 'C/DR6';
  -- Class C-2 notes remain at 'C/DR6'.

Fitch's analysis incorporated expected cash flow to be available
to the trust over the remaining life of the transaction.  This
expectation is based on several factors including aircraft age,
current portfolio value, potential lease rates, and perceived
liquidity of the portfolio.  Lease rate and portfolio value
expectations have been updated to reflect Fitch's views on certain
aircraft given the aviation market volatility and significantly
elevated fuel prices.

Triton was affirmed as it was found to have credit support
consistent with its current ratings.


TRONOX INC: Lenders Waive Leverage Ratio Financial Covenant
-----------------------------------------------------------
Tronox Incorporated received approval from its lenders for an
amendment to its senior secured credit facility.

The agreement was entered among Tronox Incorporated, Tronox
Worldwide LLC, several banks and other financial institutions.
Lehman Brothers Inc. and Credit Suisse served as joint lead
arrangers and joint bookrunners.  ABN AMRO Bank N.V. served as
syndication agent, while JPMorgan Chase Bank N.A. and Citicorp USA
Inc. served as co-documentation agents.  Lehman Commercial Paper
Inc. acted as administrative agent.

As a result of increases in process chemical, energy and
transportation costs and production difficulties the company
experienced in the second quarter, combined with the impact of the
weak U.S. economy, Tronox had requested and received approval for
a waiver to its leverage ratio financial covenant for the 2008
second quarter and subsequently requested the amendment to its
leverage ratio financial covenant for the remainder of the year.  

These are the amended leverage ratios:

                                    Leverage Ratio
                                    --------------
     Three Months Ended           New       Previous
     ------------------           ---       --------
     June 30, 2008                5.20x     4.90x
     Sept. 30, 2008               5.55x     4.90x
     Dec. 31, 2008                5.35x     4.90x

A full text copy of the third amendment to credit agreement and
second amendment to guarantee and collateral agreement is
available for free at http://ResearchArchives.com/t/s?2fc9

Tronox remains focused on reducing costs and increasing prices.  
In the third quarter, the company is continuing to see a trend of
further price increases being implemented in all three regions of
the world, which it believes will help offset ongoing titanium
dioxide industry cost increases.  

There is no assurance, however, that these pricing trends will
offset continuing cost increases that the company is unable to
predict and that depend on numerous factors beyond its control.
Tronox continues to evaluate all strategic alternatives to improve
the business, including development opportunities, mitigation of
legacy liabilities, capital restructuring and land sales.

                     About Tronox Incorporated

Headquartered in Oklahoma City, Tronox Incorporated (NYSE:TRX) --
http://www.tronox.com/-- is a producer and marketer of titanium  
dioxide pigment.  Titanium dioxide pigment is an inorganic white
pigment used in paint, coatings, plastics, paper and many other
everyday products.  The company's five pigment plants, which are
located in the United States, Australia, Germany and the
Netherlands, supply performance products to approximately 1,100
customers in 100 countries.  In addition, Tronox produces
electrolytic products, including sodium chlorate, electrolytic
manganese dioxide, boron trichloride, elemental boron and lithium
manganese oxide.


UAL CORP: Reports $2.7 Billion Net Loss in Second Quarter 2008
--------------------------------------------------------------
Driven by a $773 million increase in consolidated fuel expense,
UAL Corporation, the holding company whose primary subsidiary is
United Airlines Inc., reported a net loss of $2.7 billion, or
$151 million, excluding certain largely non-cash accounting
charges.  For the second quarter ended June 30, 2008, the company:

   -- reported basic and diluted loss per share of $1.19
      excluding certain largely non-cash accounting charges.
      United's reported GAAP loss per share was $21.47;

   -- recorded $2.6 billion of previously announced accounting
      charges, including a $2.3 billion non-cash special charge
      for goodwill impairment;

   -- continued its focus on controlling costs, with mainline
      cost per available seat mile (CASM), excluding fuel and
      the above mentioned accounting charges, up 2.6% versus
      the same period in 2007. Mainline CASM for the quarter was
      up 85.5% versus the second quarter of 2007, reflecting a
      55.4% increase in mainline fuel price per gallon and the
      significant accounting charges;

   -- strengthened its cash position by raising $90 million
      through new financings, asset sales and freeing up
      $130 million in restricted cash.  In addition, the
      company expects to raise $330 million in cash in the
      third quarter through aircraft financings and the release
      of restricted cash, resulting in a total cash balance
      improvement of approximately $550 million;

   -- announced further capacity cuts and the retirement of the
      entire B737 fleet as well as six B747s.  In total, United
      will retire 100 aircraft and will reduce fourth-quarter
      mainline domestic capacity 15.5% to 16.5% year-over-year.
      In conjunction with the capacity reductions, the company
      expects to reduce its workforce by approximately 7,000 by
      year-end 2009; and

   -- announced an alliance partnership with Continental
      Airlines, a partnership that will create the most
      comprehensive domestic system by linking networks as well
      as creating potential for cost savings and operational
      efficiencies, while simultaneously benefiting customers.

                   Quarterly Net Loss Driven By
                      Record High Fuel Costs

The company's financial results in the second quarter of 2008 were
impacted by previously disclosed largely non-cash accounting
charges that, coupled with a $773 million or 54.1% increase in
consolidated fuel expense, caused the company's net, pre-tax and
operating results to be significantly lower year-over-year.  The
accounting charges include:

   -- a non-cash special charge of $2.3 billion for goodwill
      impairment;

   -- non-cash special charges of $194 million relating to the
      impairment of B737 aircraft that are being retired from
      the company's operating fleet, aircraft pre-delivery
      deposits and certain indefinite-lived intangible assets
      other than goodwill net of a related tax benefit of
      $29 million;

   -- severance charges of $82 million related to the staffing
      reductions that will result from the capacity reductions
      the company has announced.  Cash payments related to
      severance will be incurred over time as we implement the
      company's capacity reduction plans;

   -- other largely non-cash charges of $54 million related to
      certain projects that have been terminated or deferred
      and a non-cash adjustment to increase certain employee
      benefit obligations; and

   -- a $29 million cash gain from a litigation settlement.

Despite continued unit revenue growth, and better cost performance
compared to its prior guidance, these gains were insufficient to
offset the more than 55 percent increase in average fuel price per
gallon.

"Our industry is challenged as never before by the unrelenting
price of oil, and United is taking aggressive action to offset
unprecedented fuel costs and to strengthen the competitiveness of
our business," said Glenn Tilton, United president, chairman and
CEO.  "The elimination of our entire B737 fleet and our alliance
with Continental are examples of the different approach we are
taking to respond to dramatically changed market conditions to
deliver better results for all our stakeholders."

                  Additional Actions to Address
                     Unprecedented Fuel Costs

While the price of jet fuel has steadily increased over the last
few years, the rise in 2008 has been unprecedented, with fuel
increasing by more than 37% since the beginning of the year.  
United is executing an aggressive plan to address the skyrocketing
cost of fuel by:

   -- sizing the business appropriately for the environment,
      leading the industry in permanently reducing capacity.
      United is removing 94 narrowbody aircraft and 6 widebody
      aircraft from its operations, retiring its entire fleet
      of B737s in the process;

   -- using its capacity discipline to pass higher commodity
      costs to customers through fare and fuel surcharge
      initiatives;

   -- creating new revenue streams by charging for a la carte
      service, such as checked bags;

   -- reducing costs across the business; and

   -- reducing capital expenditures.

            $550 Million Raised From New Transactions

During the quarter, the company raised $90 million through new
aircraft financing transactions and assets sales and freed up
$130 million in restricted cash by replacing it with a
$100 million letter of credit.

In addition, early in the third quarter, the company received
funds from a $241 million aircraft financing transaction whereby
it raised additional debt.  The company freed up another
$50 million of restricted cash by replacing it with letters of
credit worth $34 million.  The company also reached agreements in
principle for the sale of assets worth approximately $40 million.

As a result of all these actions, the company raised approximately
$550 million in cash.

Despite escalating fuel prices, the company generated positive
operating and free cash flow during the quarter.  The company
realized $217 million of operating cash flow and $127 million of
free cash flow, defined as operating cash flow less capital
expenditures, during the second quarter.

The company reduced total on and off balance sheet debt by
$292 million in the quarter to $11.1 billion, despite entering
into new debt financing.  The company ended the quarter with an
unrestricted cash balance of $2.9 billion and a restricted cash
balance of $655 million. The company's quarter-end cash balance
does not include any cash deposits associated with collateral from
its fuel hedge counterparties.

In addition to its strong cash balance, and subsequent to the
financings and asset sales previously discussed, the company
continues to have over $3 billion in unencumbered hard assets that
it can use to further enhance liquidity through asset sales and/or
secured financing transactions.

"We continue to take the difficult, but necessary action across
the company to reduce our costs, including reducing our workforce
by more than 7,000 people," said Jake Brace, United executive vice
president and CFO.  "We are maintaining our cost guidance for the
year even as we dramatically reduce capacity, and are improving
our liquidity, ensuring United is well positioned to weather the
current environment."

             Capacity Discipline Drives Revenue Growth

The company's focus on capacity discipline and strong revenue
management drove continued revenue growth.  Total revenues
increased by 3.0% in the second quarter of 2008 compared to the
same period in 2007, as growth in passenger unit revenue and cargo
more than offset the year-over-year reduction in capacity.  The
company's mainline RASM increased by 5.1% year-over-year from the
second quarter of 2007 due to strong passenger and cargo yield
performance partially offset by lower passenger load factors.

The company's cargo business continued its strong performance with
a 30.9% year-over-year increase in revenue.  Higher fuel
surcharges, foreign exchange gains and strong yield improvements
contributed to the cargo revenue increase.

Total passenger revenues increased by 2.6% in the second quarter
compared to the prior year as a result of a 7.7% gain in
consolidated yield, more than offsetting the 3 point decline in
system load factor. Mainline domestic PRASM for the quarter
increased by 5.9%, aided by a 4.8% reduction in capacity.
International PRASM grew 3.2% in the second quarter compared to
the same period last year, despite a 3.7% increase in
international capacity year-over-year. Consolidated PRASM
increased 3.9% year-over-year.

The company's change to deferred revenue accounting for the
Mileage Plus program, from the previous incremental cost method,
decreased consolidated passenger revenue by approximately
$42 million in the second quarter of 2008.  The change to the
expiration period for Mileage Plus accounts without activity from
36 to 18 months, which the company instituted in January 2007, did
not impact the company's revenue results in the second quarter of
2008, as it did in the second quarter of 2007.

In the second quarter of 2007 deferred revenue accounting
increased consolidated passenger revenue by a net $1 million,
including $47 million of non-cash revenue recognized from the
expiration policy change.  In total, these Mileage Plus accounting
changes resulted in a net year-over-year decrease in consolidated
passenger revenues of $43 million for the second quarter of 2008
compared to the same period in 2007.

As the company no longer follows the incremental cost method of
accounting, differences between the two accounting methods are
calculated using the company's best estimate of the incremental
cost method.  Excluding Mileage Plus accounting impacts,
consolidated PRASM increased 4.9% year-over-year.

Regional affiliate PRASM was up 0.3 percent compared to last year,
with a 6.6% increase in yield and a 1.1% capacity decline. Load
factor for regional affiliates decreased 4.7 points in the second
quarter of 2008 compared to the second quarter of 2007, while
stage length for regional affiliates was up 5.3% for the same
period.

             Focus On Improving Operating Performance

"Our focus and our energy are all about generating a step change
in our performance," said John Tague, executive vice president and
COO.

"We've set the targets, put the right leaders in place, and we're
executing against our plan with a clear understanding of what we
need to achieve, how we need to do it, and that we are ultimately
accountable for that outcome."

                 Continued Focus on Cost Control

Mainline CASM increased by 85.5% year-over-year to 20.39 cents
reflecting the large special charge and other largely non-cash
accounting charges that the company took in the second quarter, as
well as the steep increase in fuel expense.  Second quarter
mainline CASM, excluding these charges and fuel, increased by
2.6% from the year-ago quarter to 7.80 cents, better than the
company's guidance due to lower than expected maintenance costs
and airport rent costs.  This result demonstrates United's
continued focus on controlling non-fuel costs.

The company has classified the majority of its various fuel
hedging positions as economic hedges for accounting purposes.  The
company recorded a net gain of $238 million on hedge contracts in
the second quarter -- a realized gain of $30 million relating to
the current quarter and an unrealized gain of $208 million
relating to contracts settling in future periods.  The cash
benefit of hedging during the quarter was $51 million. These gains
were recorded in mainline aircraft fuel expense and resulted in
lower fuel expense, than would otherwise be the case, for the
second quarter.

                      About UAL Corporation

Based in Chicago, Illinois, UAL Corporation (NASDAQ: UAUA)
-- http://www.united.com/-- is the holding company for United
Airlines, Inc.  United Airlines is the world's second largest
air carrier.  The airline flies to Brazil, Korea and Germany.

The company filed for chapter 11 protection on Dec. 9, 2002
(Bankr. N.D. Ill. Case No. 02-48191).  James H.M. Sprayregen,
Esq., Marc Kieselstein, Esq., David R. Seligman, Esq., and
Steven R. Kotarba, Esq., at Kirkland & Ellis, represented the
Debtors in their restructuring efforts.  Fruman Jacobson, Esq.,
at Sonnenschein Nath & Rosenthal LLP represented the Official
Committee of Unsecured Creditors before the Committee was
dissolved when the Debtors emerged from bankruptcy.

Judge Eugene R. Wedoff confirmed the Debtors' Second Amended
Plan on Jan. 20, 2006.  The company emerged from bankruptcy
protection on Feb. 1, 2006.

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

                         *     *     *

The Troubled Company Reporter said on June 2, 2008, that Fitch
Ratings has revised the Rating Outlook for UAL Corp. and its
principal operating subsidiary United Airlines, Inc. to Negative
from Stable.  Debt ratings for both entities have been affirmed
as: UAL & United Issuer Default Ratings at 'B-'; United's secured
bank credit facility (Term Loan and Revolving Credit Facility) at
'BB-/RR1'; and Senior unsecured rating for United at 'CCC/RR6'.

The TCR said on July 22, 2008, that Moody's Investors Service
lowered the Corporate Family and Probability of Default ratings of
UAL Corp. (United) to Caa1 from B2, the secured bank debt rating
to B3 from B1 and certain tranches of the Enhanced Equipment Trust
Certificates (EETC) of United Airlines, Inc. (United Airlines).  
Moody's affirmed the SGL-3 Speculative Grade Liquidity Assessment.  
The rating outlook is negative.



UAL CORP: Demands Payment of $4.5 Million Damages Under T8 Lease
----------------------------------------------------------------
Pursuant to the findings of fact and conclusions of law issued by
the U.S. District Court for the Northern District of Illinois,
United Airlines, Inc., contended that the District Court
incorrectly ruled that United is not entitled to damages.

Judge Eugene R. Wedoff of the U.S. Bankruptcy Court for the
Northern District of Illinois granted United Air's request for the
Court to reconsider its June 19, 2007, ruling that United does not
have a contractual right under a T8 Lease to operate Turbo-Prop
aircraft from Terminal 8.

Judge Wedoff declared that United's Motion to stay the June 19
Order is moot, due to the Court's issuance of a temporary
injunction in favor of United on May 31, 2008.

Micah E. Marcus, Esq., at Kirkland & Ellis LLP, in Chicago,
Illinois, asserted that United's damages aggregate $4,500,000,  
the amount of rent United paid to the city of Los Angeles and Los
Angeles World Airports, for use of a remote terminal facility at
LAX -- from the time that United first sought to reject a remote
facility lease in November 2005 until August 2007, the expiration
of the Remote Facility Lease.

The Remote Facility Lease Payments, if returned to United, will
in no way constitute a windfall to United, but will simply put
United in the position it would have been in had the City not
breached the T8 Lease, Mr. Marcus explained.  Moreover, United's
out-of-pocket rental payments for the Remote Facility Lease can
be equated to a party's reasonable attempt to mitigate damages,
in this case, United securing protection in the event of a sudden
and forced return to the Remote Facility, he pointed out.  

Thus, United asked the Court to (i) approve its rejection of the
Remote Facility Lease, nunc pro tunc to Nov. 30, 2005, and (ii)
require the City repayment of any and all rents paid by United
under the Remote Facility Lease after the effective date of the
rejection.

                   City Should Not be Penalized

As United's making of the payments was to preserve its ability to
use the Remote Facility, the costs that United incurred are its
own responsibility, the City asserted.  The City should not now be
penalized by granting United a windfall from the City's pockets,
Ann E. Pille, Esq., at Reed Smith, LLP, in Chicago, Illinois,
reiterated.

Furthermore, United's refusal to reject the Remote Facility Lease
led to the City's inability to re-let the facility to other
airlines, and forgo rent payments from another potential tenant.  
If the City is to return the payments, it would result in
substantial harm to the City, Ms. Pille stated.  

Because the Remote Facility Lease is expired, United no longer
has the statutory or jurisdictional power pursuant to Section 365
of the Bankruptcy Code to reject it, retroactively or otherwise.  
Moreover, the Court only permitted United to assume or reject the
Remote Facility Lease, thus, United is estopped from seeking to
reject the Remote Facility Lease retroactively, the City
concluded.

                   United Blames City for Delay

United reiterated that the City is entirely to blame for the
delay in the rejection of the Remote Facility Lease since if it
was not for the City's breach of the T-8 Lease, United would not
have conditionally withdrawn its notice of rejection in January
2006.  There is even no windfall on United's part as the money
rightfully belongs to United, and the City should not benefit
from its conduct of breaching contracts and causing the delay of
United's rejection of the Remote Facility Lease, Mr. Marcus
argued.

Procedurally, Mr. Marcus pointed out, the Retroactive Rejection is
with merit as United sought the rejection of the Remote Facility
Lease long before it expired, making the request timely.  Mr.
Marcus explained that the very purpose behind the allowance of
retroactive rejection is that it acts as a stimulus to all
parties to cooperate in getting the motion to reject heard and
determined at the earliest practicable date.  As United has done
everything in its power to have its motion resolved on the
merits, United's retroactive rejection of the Remote Facility
Lease should be approved by the Court, he added.

                      About UAL Corporation

Based in Chicago, Illinois, UAL Corporation (NASDAQ: UAUA)
-- http://www.united.com/-- is the holding company for United
Airlines, Inc.  United Airlines is the world's second largest
air carrier.  The airline flies to Brazil, Korea and Germany.

The company filed for chapter 11 protection on Dec. 9, 2002
(Bankr. N.D. Ill. Case No. 02-48191).  James H.M. Sprayregen,
Esq., Marc Kieselstein, Esq., David R. Seligman, Esq., and
Steven R. Kotarba, Esq., at Kirkland & Ellis, represented the
Debtors in their restructuring efforts.  Fruman Jacobson, Esq.,
at Sonnenschein Nath & Rosenthal LLP represented the Official
Committee of Unsecured Creditors before the Committee was
dissolved when the Debtors emerged from bankruptcy.

Judge Eugene R. Wedoff confirmed the Debtors' Second Amended
Plan on Jan. 20, 2006.  The company emerged from bankruptcy
protection on Feb. 1, 2006.

(United Airlines Bankruptcy News, Issue No. 161; Bankruptcy
Creditors' Service Inc., http://bankrupt.com/newsstand/or      
215/945-7000)

                         *     *     *

The Troubled Company Reporter said on June 2, 2008, that Fitch
Ratings has revised the Rating Outlook for UAL Corp. and its
principal operating subsidiary United Airlines, Inc. to Negative
from Stable.  Debt ratings for both entities have been affirmed
as: UAL & United Issuer Default Ratings at 'B-'; United's secured
bank credit facility (Term Loan and Revolving Credit Facility) at
'BB-/RR1'; and Senior unsecured rating for United at 'CCC/RR6'.

The TCR said on July 22, 2008, that Moody's Investors Service
lowered the Corporate Family and Probability of Default ratings of
UAL Corp. (United) to Caa1 from B2, the secured bank debt rating
to B3 from B1 and certain tranches of the Enhanced Equipment Trust
Certificates (EETC) of United Airlines, Inc. (United Airlines).  
Moody's affirmed the SGL-3 Speculative Grade Liquidity Assessment.  
The rating outlook is negative.


UAL CORP: Deloitte Audits Statements on Four Incentive Plans
------------------------------------------------------------
Deloitte & Touche LLP, reported that it audited the statements of
net assets available for benefits of United Airlines, Inc.'s (i)
Ground Employee 401(k) Plan, (ii) Management and Administrative
401(k) Plan (iii) Flight Attendant 401(k) Plan, and (iv) Pilot
Directed Account Plan.

The Ground Employee Plan covers all employees represented by the
Aircraft Mechanics and Fraternal Association and the
International Association of Machinists and Aerospace Workers.  
AMFA shares are distributed into (i) 85%, which is allocated
based on that employee's Considered Earnings, excluding overtime,
for the period from May 1, 2003, through Dec. 31, 2005, in
proportion to the total of all employees, and (ii) 15%, which is
distributed according to a similar ratio based on Considered
Earnings, excluding overtime, for the period Jan. 1, 2005, through
Dec. 31, 2005.  IAM shares are distributed based on each eligible
employee’s Considered Earnings for the period from May 1, 2003
through Dec. 31, 2005, in proportion to the total for all IAM-
represented employees for the period.  Under the Plan, equity
distributions occurred on April 27, 2007, for  $9,325,378 and on
Nov. 8, 2007 for $127,549

The Management and Administrative Plan covers all employees who
are classified as management employees, officers, administrative,
employees, meteorologists, test pilots, maintenance instructors,
engineers and flight dispatchers.  Effective Dec. 31, 2007, the
Mileage Plus Inc. Investment Plan was merged with and into the
Plan pursuant to an amendment adopted by United's Retirement and
Welfare Administration Committee.  Only Management and
Administrative employees hired as of Dec. 31, 2005, are eligible
for the equity distribution.  Under the Plan, equity distributions
were made on April 27, 2007, for $3,649,693, and on Nov. 8, 2007,
for $120,496.

The Flight Attendant Plan includes flight attendants represented
by the Association of Flight Attendants - CWA.  Pursuant to
United's Plan of Reorganization, Flight attendant shares were
allocated in two groups.  One-third of the shares were
distributed on a per capita basis and the remaining two-thirds
were distributed based on each eligible employee's Considered
Earnings for the period May 1, 2003 through Dec. 30, 2005, in
proportion to the total for all flight attendants for the period.  
Under the Plan, an equity distribution was made on April 27,
2007, for $3,490,003, and on November 8, for $1,140,701.

The Pilot Directed Plan covers all employees of United who are
represented by the Air Line Pilots Association, International.  
For eligible pilots, approximately 5% of the ALPA shares were
allocated to pilots on furlough status with the remainder
allocated to active pilots on a seniority-based formula.  An
equity distribution of $184,272 occurred on April 27, 2007,
related to the 2006 Plan year and additional distributions
occurred on Nov. 8, 2007, for $9,109,389.  Some pilots opted
to have United sell their claim to these shares in advance of
United's emergence from bankruptcy.  The cash proceeds from this
sale were distributed in the same manner as the shares
distribution which included contributions to the Plan.

Full-text copies of the audited statements are available for free
at the SEC:

   * Ground Employee Plan, at:
     http://ResearchArchives.com/t/s?2fe5
   
   * Management and Administrative Plan, at:
     http://ResearchArchives.com/t/s?2fe6

   * Flight Attendant Plan, at:
     http://ResearchArchives.com/t/s?2fe7

   * Pilot Directed Account Plan, at:
     http://ResearchArchives.com/t/s?2fe8

                      About UAL Corporation

Based in Chicago, Illinois, UAL Corporation (NASDAQ: UAUA)
-- http://www.united.com/-- is the holding company for United
Airlines, Inc.  United Airlines is the world's second largest
air carrier.  The airline flies to Brazil, Korea and Germany.

The company filed for chapter 11 protection on Dec. 9, 2002
(Bankr. N.D. Ill. Case No. 02-48191).  James H.M. Sprayregen,
Esq., Marc Kieselstein, Esq., David R. Seligman, Esq., and
Steven R. Kotarba, Esq., at Kirkland & Ellis, represented the
Debtors in their restructuring efforts.  Fruman Jacobson, Esq.,
at Sonnenschein Nath & Rosenthal LLP represented the Official
Committee of Unsecured Creditors before the Committee was
dissolved when the Debtors emerged from bankruptcy.

Judge Eugene R. Wedoff confirmed the Debtors' Second Amended
Plan on Jan. 20, 2006.  The company emerged from bankruptcy
protection on Feb. 1, 2006.

(United Airlines Bankruptcy News, Issue No. 161; Bankruptcy
Creditors' Service Inc., http://bankrupt.com/newsstand/or      
215/945-7000)

                         *     *     *

The Troubled Company Reporter said on June 2, 2008, that Fitch
Ratings has revised the Rating Outlook for UAL Corp. and its
principal operating subsidiary United Airlines, Inc. to Negative
from Stable.  Debt ratings for both entities have been affirmed
as: UAL & United Issuer Default Ratings at 'B-'; United's secured
bank credit facility (Term Loan and Revolving Credit Facility) at
'BB-/RR1'; and Senior unsecured rating for United at 'CCC/RR6'.

The TCR said on July 22, 2008, that Moody's Investors Service
lowered the Corporate Family and Probability of Default ratings of
UAL Corp. (United) to Caa1 from B2, the secured bank debt rating
to B3 from B1 and certain tranches of the Enhanced Equipment Trust
Certificates (EETC) of United Airlines, Inc. (United Airlines).  
Moody's affirmed the SGL-3 Speculative Grade Liquidity Assessment.  
The rating outlook is negative.


UAL CORP: Ends Some Int'l Flights; Defers Moscow Flight Debut
-------------------------------------------------------------
UAL Corporation's unit, United Airlines Inc., intends to
discontinue a host of international routes effective Sept. 2,
2008, and Oct. 25, 2008, Bloomberg News reports.

United's San Francisco - Nagoya; Los Angeles - Frankfurt; and
Denver - London Heathrow routes will end on October 25, Bloomberg
says.  The carrier's San Francisco - Taipei and Chicago - Mexico
City flights will be discontinued by September 2, according to
the report.  United will also let go of two daily flights between
Chicago and Tokyo's Narita airport.

"Asia-Pacific flights are the jewel in United's crown, and
if they're not working for them, they're in deep doo-doo,"
Michael Roach of consulting firm Roach & Sbarra in San
Francisco, told Bloomberg.  "Their strategy is dependent on high-
priced business, and it seems they're not doing so well at that."

United spokesman Jeff Kovick confirmed to Bloomberg that United
will end flights to Fort Lauderdale and West Palm Beach effective
on September 2.  United is set to announce more schedule changes
in the coming days, Mr. Kovick says.

                United Defers Moscow Maiden Flight

United Airlines asked the Department of Transportation in
Illinois to defer the debut of the flights between Washington-
Dulles airport and Moscow, from October 2008 to March 29, 2009,
The Associated Press reports.

United cites skyrocketing oil prices as the reason for the
postponement, AP discloses.  United intends to offer the flight
when demand would be higher, considering that fuel costs
increased by more than 20% since the carrier first applied for
the route, AP notes.

                      About UAL Corporation

Based in Chicago, Illinois, UAL Corporation (NASDAQ: UAUA)
-- http://www.united.com/-- is the holding company for United
Airlines, Inc.  United Airlines is the world's second largest
air carrier.  The airline flies to Brazil, Korea and Germany.

The company filed for chapter 11 protection on Dec. 9, 2002
(Bankr. N.D. Ill. Case No. 02-48191).  James H.M. Sprayregen,
Esq., Marc Kieselstein, Esq., David R. Seligman, Esq., and
Steven R. Kotarba, Esq., at Kirkland & Ellis, represented the
Debtors in their restructuring efforts.  Fruman Jacobson, Esq.,
at Sonnenschein Nath & Rosenthal LLP represented the Official
Committee of Unsecured Creditors before the Committee was
dissolved when the Debtors emerged from bankruptcy.

Judge Eugene R. Wedoff confirmed the Debtors' Second Amended
Plan on Jan. 20, 2006.  The company emerged from bankruptcy
protection on Feb. 1, 2006.

(United Airlines Bankruptcy News, Issue No. 161; Bankruptcy
Creditors' Service Inc., http://bankrupt.com/newsstand/or      
215/945-7000)

                         *     *     *

The Troubled Company Reporter said on June 2, 2008, that Fitch
Ratings has revised the Rating Outlook for UAL Corp. and its
principal operating subsidiary United Airlines, Inc. to Negative
from Stable.  Debt ratings for both entities have been affirmed
as: UAL & United Issuer Default Ratings at 'B-'; United's secured
bank credit facility (Term Loan and Revolving Credit Facility) at
'BB-/RR1'; and Senior unsecured rating for United at 'CCC/RR6'.

The TCR said on July 22, 2008, that Moody's Investors Service
lowered the Corporate Family and Probability of Default ratings of
UAL Corp. (United) to Caa1 from B2, the secured bank debt rating
to B3 from B1 and certain tranches of the Enhanced Equipment Trust
Certificates (EETC) of United Airlines, Inc. (United Airlines).  
Moody's affirmed the SGL-3 Speculative Grade Liquidity Assessment.  
The rating outlook is negative.


UAL CORP: Lays Off 485 Jobs From Illinois and Colorado
------------------------------------------------------
United Air Lines, Inc. laid off 335 staff members in mid-June,
from its operations in Elk Grove Township, Cook County, Illinois,
The Daily Herald reports.

Megan McCarthy, United's spokesperson, did not confirm the types
of jobs that were eliminated.  "The cause is the ever-increasing
cost of fuel," Ms. McCarthy told the Daily herald.

Meanwhile, United intends to lay off 50 customer service
representatives and 100 ramp servicemen in Denver, Kansas.com
discloses.

                      About UAL Corporation

Based in Chicago, Illinois, UAL Corporation (NASDAQ: UAUA)
-- http://www.united.com/-- is the holding company for United
Airlines, Inc.  United Airlines is the world's second largest
air carrier.  The airline flies to Brazil, Korea and Germany.

The company filed for chapter 11 protection on Dec. 9, 2002
(Bankr. N.D. Ill. Case No. 02-48191).  James H.M. Sprayregen,
Esq., Marc Kieselstein, Esq., David R. Seligman, Esq., and
Steven R. Kotarba, Esq., at Kirkland & Ellis, represented the
Debtors in their restructuring efforts.  Fruman Jacobson, Esq.,
at Sonnenschein Nath & Rosenthal LLP represented the Official
Committee of Unsecured Creditors before the Committee was
dissolved when the Debtors emerged from bankruptcy.

Judge Eugene R. Wedoff confirmed the Debtors' Second Amended
Plan on Jan. 20, 2006.  The company emerged from bankruptcy
protection on Feb. 1, 2006.

(United Airlines Bankruptcy News, Issue No. 161; Bankruptcy
Creditors' Service Inc., http://bankrupt.com/newsstand/or      
215/945-7000)

                         *     *     *

The Troubled Company Reporter said on June 2, 2008, that Fitch
Ratings has revised the Rating Outlook for UAL Corp. and its
principal operating subsidiary United Airlines, Inc. to Negative
from Stable.  Debt ratings for both entities have been affirmed
as: UAL & United Issuer Default Ratings at 'B-'; United's secured
bank credit facility (Term Loan and Revolving Credit Facility) at
'BB-/RR1'; and Senior unsecured rating for United at 'CCC/RR6'.

The TCR said on July 22, 2008, that Moody's Investors Service
lowered the Corporate Family and Probability of Default ratings of
UAL Corp. (United) to Caa1 from B2, the secured bank debt rating
to B3 from B1 and certain tranches of the Enhanced Equipment Trust
Certificates (EETC) of United Airlines, Inc. (United Airlines).  
Moody's affirmed the SGL-3 Speculative Grade Liquidity Assessment.  
The rating outlook is negative.


US AIRWAYS: Moody's Junks Corporate Family Rating; Outlook Neg
--------------------------------------------------------------
Moody's Investors Service downgraded the Corporate Family and
Probability of Default Ratings of US Airways Group, Inc. to Caa1
from B3 and lowered the ratings of its outstanding corporate debt
instruments and certain Enhanced Equipment Trust Certificates
(EETC).  Moody's lowered the Speculative Grade Liquidity
Assessment to SGL-4 from SGL-3.  The rating outlook is negative.

The rating actions were prompted by the expectation that US
Airways' financial performance will remain under pressure and that
its liquidity profile could deteriorate as a result of the
difficult operating environment facing the U.S. airline industry.  
Despite the recent moderation in fuel costs, Moody's believes the
environment will continue to be characterized by sustained high
fuel costs and a weakening domestic economy that precludes
adequate pass-thru of rising costs in ticket prices.  US Airways
reported a net loss (excluding special items) of $101 million for
the second quarter of 2008, a sharp decline from a profit of
$261 million in 2007, primarily due to the effects of higher fuel
costs.  Absent a significant improvement in its ability to recover
fuel costs in ticket pricing, US Airways will continue to incur
losses that will erode its financial profile.

Moody's also notes that US Airway's non-fuel costs are higher than
those of a number of other domestic airlines partly due to fleet
age and the full consolidation of a regional airline subsidiary.  
The benefits of the merger between US Airways and America West
Airlines, which have not yet been fully realized, continue to
represent an opportunity for non-fuel cost savings.

US Airways has initiated a number of actions to more effectively
control costs, including increasing its fuel hedges, planned
capacity cuts, workforce reductions, and other changes in its
operations.  Yet even with these initiatives, a combination of
deteriorating economic conditions and sustained high fuel costs
are likely to preclude a return of financial metrics supportive of
a rating above the Caa range in the near term.  Absent an
improvement in the operating environment, sustained cash operating
losses, in conjunction with scheduled debt maturities and capital
expenditures, could cause a material deterioration in the
company's cash balance over the coming year.

The SGL-4 reflects a weakening liquidity profile.  US Airways'
$2.8 billion of cash and investments at June 30, 2008
($2.3 billion of which was unrestricted) provides important near
term flexibility, but could erode rapidly over the coming months.  
The company has financed its 2008 aircraft deliveries and is
actively pursuing initiatives to enhance its liquidity through
additional financings, sale leaseback transactions and reduced
capital spending.  Absent full effectiveness of these liquidity
initiatives, continuing losses due to sustained high fuel costs
could meaningfully decrease the cash balance during the seasonally
weaker winter months, when air traffic liability will reverse, and
become a use of cash.  US Airways' credit card processing banks
have a credit card holdback to 25% of unused credit card
receivables and under certain circumstances could increase this
amount further, which would increase US Airways' cash
requirements.  As well, the company's term loan facility requires
US Airways to maintain unrestricted cash and equivalents of not
less than $1.25 billion, with not less than $750 million of that
amount held in cash control accounts, which constrains financial
flexibility.

The rating actions on US Airways' EETCs consider the underlying
Corporate Family rating of US Airways, the continuing availability
of liquidity facilities to meet interest payments for 18 months in
the event of a US Airways default, and the asset values of
specific aircraft which comprise the collateral pool for the
EETCs.  The downgrades on the ratings on the junior certificates
of the 1998-1 and 1999-1 EETCs reflect that the aircraft that
secure the EETCs are generally older aircraft, which may make
their values more susceptible to volatility if current market
conditions persist.

The negative outlook considers the potential for continued
deterioration in US Airways' key credit metrics, such as interest
coverage and leverage during 2008, due primarily to high fuel
costs and a weak domestic demand environment.  Although load
factors remain strong, fare increases are unlikely to fully offset
the impact of elevated fuel costs.  US Airways' plan to reduce
capacity in the fall should allow the company to raise fares in
the near term but unless fuel costs decline the company is likely
to continue to sustain further losses.

US Airways' rating could be lowered if the company is unable to
reverse operating losses and restore cash flow and financial
metrics, or if weak operating conditions or increased holdback
requirements from credit card processors further constrain
available liquidity.

US Airways' rating outlook could be stabilized with sustained
increases to revenues or reduced non-fuel costs, or a sustained
decline in fuel costs that increases cash flow from operations and
enables the company to satisfy maturing debt and capital spending
requirements from existing cash reserves and cash from operations.

Downgrades:

Issuer: Hillsborough County Aviation Authority, FL

  -- Senior Secured Revenue Bonds, Downgraded to Caa3 from Caa2

Issuer: Indianapolis Airport Authority, IN

  -- Revenue Bonds, Downgraded to Caa3 from Caa2

Issuer: Phoenix Industrial Development Authority, AZ

  -- Senior Unsecured Revenue Bonds, Downgraded to Caa3 from Caa2

Issuer: US Airways Group, Inc.

  -- Probability of Default Rating, Downgraded to Caa1 from B3

  -- Speculative Grade Liquidity Rating, Downgraded to SGL-4 from
     SGL-3

  -- Corporate Family Rating, Downgraded to Caa1 from B3
  -- Senior Secured Bank Credit Facility, Downgraded to B3 from B2

Issuer: US Airways, Inc.

Ser. 1998-1 Pass Through Certificates

  -- Class C Certificates, Downgraded to Caa1 from B3

Ser. 1999-1 Pass Through Certificates

  -- Class C Certificates, Downgraded to Caa1 from B3

Headquartered in Tempe, Arizona, US Airways Group, Inc., through
its subsidiaries operates the 5th largest airline in the U.S. with
service throughout the U.S. as well as Canada, the Caribbean,
Latin America and Europe.


US CONCRETE: 'B+' Corporate Credit Rating On CreditWatch Negative
-----------------------------------------------------------------
Standard & Poor's Ratings Services placed its ratings, including
its 'B+' corporate credit rating, on ready-mixed concrete producer
U.S. Concrete Inc., on CreditWatch with negative implications.

The CreditWatch listing follows the company's announcement that as
a result of the challenging operating conditions in construction
end-markets, its second quarter 2008 earnings would be below prior
expectations mainly due to lower ready-mixed concrete volumes
across most of the regions it operates. In addition, it is
expected that the company's operating performance will continue to
be impacted in the near term by lower volumes.

"While liquidity is expected to remain sufficient to meet
obligations during this period, the company's credit measures will
likely deteriorate to a level that would be very aggressive for
the current ratings," said credit analyst Thomas Nadramia.

In resolving the CreditWatch listing, we will discuss with
management its near-term operating expectations and liquidity
position. A rating downgrade is not a foregone conclusion.
However, if a downgrade is the ultimate conclusion
of our review, it will likely be limited to one notch.


U.S. ENERGY: Has Until August 22 to File Chapter 11 Plan
--------------------------------------------------------
The Hon. Robert D. Drain of the United States Bankruptcy Court for
the Southern District of New York extended the exclusive periods
of U.S. Energy System Inc. and its debtor-affiliates to:

   a) file a Chapter 11 plan until Aug. 22, 2008, and

   b) solicit acceptances of that plan until Oct. 21, 2008.

As reported in the Troubled Company Reporter on June 25, 2008, the
Debtors originally asked Judge Drain to set Sept. 8, 2008, as the
period within which they may file a proposed Chapter 11 plan.

The requested extension of time will allow them to bring
restructuring negotiations to a conclusion and, eventually,
propose and file a confirmable Chapter 11 plans for each of the
Debtors.  The Debtor will file a request before the Court for
approval of a proposed bidding procedures for the sale of the
outstanding common stock of Debtors' affiliates, U.S. Energy
Biogas Corp., to:

   a) resolve all of Biogas' secured debt,

   b) discharge an entire tranche of secured debt owed by U.S.
      Energy Overseas Investment LLC, a debtor affiliate, and

   c) provide U.S Energy Systems with sufficient fund to pay the
      administrative expenses associated with confirmation of a
      Chapter 11 plan.

According to Bloomberg News, lender Silver Point Capital LP is
expected to make a bid for the Debtors' Biogas within two weeks.

As reported in the Troubled Company Reporter on Aug. 8, 2007, the
Debtors executed a letter of intent submitted by Silver Point, to
acquire 100% of the common stock of the Debtors' Biogas for
$9,000,000.

The Debtors said that they have made substantial progress in
their Chapter 11 cases They have resolved their corporate
governance disputes, established a bar dates in their cases and
timely fulfilled statutory requirements attendant to the
commencement of their cases.

                       About U.S. Energy

Based in Avon, Connecticut, U.S. Energy Systems Inc. (Pink Sheets:
USEY) --  http://www.usenergysystems.com/-- owns green power
and clean energy and resources.  USEY owns and operates energy
projects in the United States and United Kingdom that generate
electricity, thermal energy and gas production.

The company filed for Chapter 11 protection on Jan. 9, 2008 (Bank.
S.D.N.Y. Case No. 08-10054).  There are 34 affiliates who filed
for separate Chapter 11 petitions.  Peter S. Partee, Esq., at
Hunton & Williams LLP, represents the Debtor in its restructuring
efforts.  Jefferies & Company, Inc. serves as the company's
financial advisor.  The Debtor also selected Epiq Bankruptcy
Solutions LLC as noticing, claims and balloting agent.

The Official Committee of Unsecured Creditors has yet to be
appointed in these cases by the U.S. Trustee for Region 2.  When
the Debtors filed for protection from their creditors, they listed
total assets of $258,200,000 and total debts of $175,300,000.US


WASHINGTON MUTUAL: $3.3BB Loss Cues Moody's to Review Ratings
-------------------------------------------------------------
Moody's Investors Service placed the ratings of Washington Mutual,
Inc., having a Baa3 senior unsecured rating, and Washington Mutual
Bank, having a C- financial strength rating of, Baa2 long term
deposit rating, and Prime-2 short term rating, under review for
downgrade.

The review follows WaMu's reported $3.3 billion loss for the
second quarter of 2008.  During its review, Moody's will assess
the affect of Wamu's recent and expected operating performance on
its financial flexibility.  This will include a review of the
firm's ability to manage unexpected losses given WaMu's
significant asset quality issues and the related provisioning
needs.  Additionally, Moody's will review WaMu's capital adequacy
and contingency funding plans.

WaMu's financial flexibility has been reduced due to the
significant decline in its market value--it is trading at a
substantial discount to book value--and a decline in balances of
certain deposit categories in the second quarter of 2008.  Moody's
believes that it would be expensive, at best, for WaMu to raise
new equity capital or issue new debt given the market's current
negative opinion of the company.  The make whole provision in
WaMu's recently issued $7 billion convertible preferred investment
contributes significantly to this limited ability to access new
equity.  Additionally, though liquidity remains sufficient, WaMu
experienced some declines in its commercial and brokered
institutional deposit balances in the second quarter of 2008.

"This reduced financial flexibility makes it more difficult for
the company to successfully navigate through unanticipated
events," Craig Emrick, Moody's vice president and senior credit
officer said .

Moody's said that although WaMu's financial flexibility has
declined, its liquidity has remained sufficient through the
difficult market conditions.  At the bank level this has been
provided through its core deposit franchise, Federal Home Loan
Bank access and limited wholesale funding.  At the holding company
level, debt maturities in 2008 and 2009 are limited and cash
balances (excluding any amounts related to the $7 billion capital
raise) are sufficient to cover holding company cash needs through
2009.

WaMu's asset quality issues primarily relate to the company's
residential mortgage portfolio, but deterioration is also being
experienced in the company's credit card portfolio.  To establish
the necessary provisioning for this asset quality deterioration,
Moody's expects WaMu to record sizable quarterly losses through
2009.

Although Moody's most recent capital replenishment analysis on
WaMu results in the company maintaining regulatory capital ratios
above the well capitalized minimums, this analysis is based on
several assumptions.  The most important of these assumptions is
the lifetime loss on WaMu's residential mortgage portfolio.  
Moody's loss assumption for this portfolio that is incorporated
into the rating--currently at $23.6 billion for mortgage loans
held for investment--has grown significantly over the previous
nine months and has the potential to increase further depending on
the actual severity of house price declines and the performance of
the U.S. economy.

"We believe that WaMu's recent $7 billion capital raise should
provide sufficient cushion to absorb the large credit provisions
WaMu will be required to take in the coming quarters," Mr. Emrick
said.  "However, if WaMu's actual losses exceed the assumed losses
included in Moody's capital replenishment analysis, or if our
other assumptions turn out to be inaccurate, the company could
face a capital shortfall and may have limited financial
flexibility to offset this."

Moody's noted that WaMu has disclosed initiatives to reduce the
size of its balance sheet and achieve annualized cost savings of
$1.0 billion.  If these initiatives are successfully executed they
would represent positive developments for the credit profile of
WaMu.

On Review for Possible Downgrade:

Issuer: Bank United

  -- Subordinate Regular Bond/Debenture, Placed on Review for
     Possible Downgrade, currently Baa3

Issuer: Providian Capital I

  -- Preferred Stock Preferred Stock, Placed on Review for
     Possible Downgrade, currently Ba1

Issuer: Providian Financial Corporation

  -- Senior Unsecured Conv./Exch. Bond/Debenture, Placed on Review
     for Possible Downgrade, currently Baa3

Issuer: Washington Mutual Bank

  -- Bank Financial Strength Rating, Placed on Review for Possible
     Downgrade, currently C-

  -- Issuer Rating, Placed on Review for Possible Downgrade,
     currently Baa2

  -- OSO Rating, Placed on Review for Possible Downgrade,
     currently P-2

  -- Deposit Rating, Placed on Review for Possible Downgrade,
     currently P-2

  -- OSO Senior Unsecured OSO Rating, Placed on Review for
     Possible Downgrade, currently Baa2

  -- Multiple Seniority Bank Note Program, Placed on Review for
     Possible Downgrade, currently Baa3

  -- Subordinate Regular Bond/Debenture, Placed on Review for
     Possible Downgrade, currently Baa3

  -- Senior Unsecured Deposit Note/Takedown, Placed on Review for
     Possible Downgrade, currently Baa2

  -- Senior Unsecured Regular Bond/Debenture, Placed on Review for
     Possible Downgrade, currently Baa2

  -- Senior Unsecured Deposit Rating, Placed on Review for
     Possible Downgrade, currently Baa2

Issuer: Washington Mutual Bank FSB

  -- Bank Financial Strength Rating, Placed on Review for Possible
     Downgrade, currently C-

  -- Issuer Rating, Placed on Review for Possible Downgrade,
     currently Baa2

  -- OSO Rating, Placed on Review for Possible Downgrade,
     currently P-2

  -- Deposit Rating, Placed on Review for Possible Downgrade,
     currently P-2

  -- OSO Senior Unsecured OSO Rating, Placed on Review for
     Possible Downgrade, currently Baa2

  -- Senior Unsecured Deposit Rating, Placed on Review for
     Possible Downgrade, currently Baa2

Issuer: Washington Mutual Capital I

  -- Preferred Stock Preferred Stock, Placed on Review for
     Possible Downgrade, currently Ba1

Issuer: Washington Mutual Capital Trust 2001

  -- Preferred Stock Preferred Stock, Placed on Review for
     Possible Downgrade, currently Ba1

Issuer: Washington Mutual Pfd Funding (Cayman) I Ltd

  -- Preferred Stock Preferred Stock, Placed on Review for
     Possible Downgrade, currently Ba2

Issuer: Washington Mutual Preferred Funding Trust I

  -- Preferred Stock Preferred Stock, Placed on Review for
     Possible Downgrade, currently Ba2

Issuer: Washington Mutual Preferred Funding Trust II

  -- Preferred Stock Preferred Stock, Placed on Review for
     Possible Downgrade, currently Ba2

Issuer: Washington Mutual Preferred Funding Trust III

  -- Preferred Stock Preferred Stock, Placed on Review for
     Possible Downgrade, currently Ba2

Issuer: Washington Mutual Preferred Funding Trust IV

  -- Preferred Stock Preferred Stock, Placed on Review for
     Possible Downgrade, currently Ba2

Issuer: Washington Mutual, Inc.

  -- Multiple Seniority Shelf, Placed on Review for Possible
     Downgrade, currently (P)Ba2

  -- Preferred Stock Preferred Stock, Placed on Review for
     Possible Downgrade, currently Ba2

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

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

  -- Senior Unsecured Regular Bond/Debenture, Placed on Review for
     Possible Downgrade, currently Baa3

Outlook Actions:

Issuer: Bank United

  -- Outlook, Changed To Rating Under Review From Stable

Issuer: Providian Capital I

  -- Outlook, Changed To Rating Under Review From Stable

Issuer: Providian Financial Corporation

  -- Outlook, Changed To Rating Under Review From Stable

Issuer: Washington Mutual Bank

  -- Outlook, Changed To Rating Under Review From Stable

Issuer: Washington Mutual Bank FSB

  -- Outlook, Changed To Rating Under Review From Stable

Issuer: Washington Mutual Capital I

  -- Outlook, Changed To Rating Under Review From Stable

Issuer: Washington Mutual Capital Trust 2001

  -- Outlook, Changed To Rating Under Review From Stable

Issuer: Washington Mutual Pfd Funding (Cayman) I Ltd

  -- Outlook, Changed To Rating Under Review From Stable

Issuer: Washington Mutual Preferred Funding Trust I

  -- Outlook, Changed To Rating Under Review From Stable

Issuer: Washington Mutual Preferred Funding Trust II

  -- Outlook, Changed To Rating Under Review From Stable

Issuer: Washington Mutual Preferred Funding Trust III

  -- Outlook, Changed To Rating Under Review From Stable

Issuer: Washington Mutual Preferred Funding Trust IV

  -- Outlook, Changed To Rating Under Review From Stable

Issuer: Washington Mutual, Inc.

  -- Outlook, Changed To Rating Under Review From Stable

Headquartered in Seattle, Washington, Washington Mutual, Inc.  
reported on June 30, 2008, that its assets were $310 billion.


WCI COMMUNITIES: Amends Exchange Offer for $125MM of 4% Sr. Notes
-----------------------------------------------------------------
WCI Communities Inc. amended the exchange offer commenced on
July 8, 2008 for all of its outstanding $125 million
4% Contingent Convertible Senior Subordinated Notes due 2023.
Pursuant to the terms of the amended exchange offer, the company
offers to exchange a unit, consisting of $1,000 principal amount
of new 17.5% senior secured notes due 2012 and a warrant to
purchase 33.7392 shares of its common stock, for each $1,000
principal amount of the company's current Outstanding Notes.

The exchange offer will expire at 12:00 midnight EDT on Aug. 4,
2008, unless extended or terminated by the company.  Tendered
notes may be withdrawn at any time prior to 12:00 midnight on the
expiration date.  

Investors and security holders may obtain the offering memorandum
and related materials through the exchange agent for the exchange
offer:

     The Bank of New York Mellon Trust Company NA
     Attn: David Mauer
     101 Barclay Street - 7 East
     New York, NY 10286
     Tel (212) 815-3687
     Fax (212) 298-1915

The exchange offer is being made pursuant to Section 3(a)(9) of
the Securities Act of 1933, as amended.  No commission or other
remuneration will be paid or given, directly or indirectly, by WCI
for solicitation of acceptance of the exchange offer.
The consummation of the exchange offer is subject to certain
customary conditions, including a 90% minimum tender condition,
which means that at least 90% of the aggregate principal amount
outstanding of the notes must have been validly tendered and not
withdrawn.  The exchange offer is also conditioned on the
amendment and restatement of the company's existing credit
facilities and issuance of new second lien notes.  

No assurances can be given that the company will be successful in
entering into an amendment and restatement of the company's
existing credit facilities or issuing new second lien notes, in
each case on satisfactory terms or at all.  Subject to applicable
law, WCI may, in its sole discretion, waive any condition
applicable to the exchange offer or extend or terminate or
otherwise amend the exchange offer.

A full-text copy of the amendment is available for free at
http://ResearchArchives.com/t/s?2fe1

                    About WCI Communities

WCI Communities Inc. (NYSE: WCI) -- http://www.wcicommunities.com/  
-- named America's Best Builder in 2004 by the National
Association of Home Builders and Builder Magazine, has been
creating amenity-rich, master-planned lifestyle communities since
1946.  Florida-based WCI caters to primary, retirement, and
second-home buyers in Florida, New York, New Jersey, Connecticut,
Maryland and Virginia.  

The company offers traditional and tower home choices with prices
from the high-$100,000s to more than $10.0 million and features a
wide array of recreational amenities in its communities.  In
addition to homebuilding, WCI generates revenues from its
Prudential Florida WCI Realty Division, and title businesses, and
its recreational amenities, as well as through land sales and
joint ventures. The company currently owns and controls
developable land on which the company plans to build over 15,000
traditional and tower homes.

The company operates in three principal business segments: Tower
Homebuilding, Traditional Homebuilding, which includes sales of
lots, and Real Estate Services, which includes real estate
brokerage and title operations.

                         *     *     *

As disclosed in the Troubled Company Reporter on May 23, 2008,
Standard & Poor's Ratings Services lowered its corporate credit
rating on WCI Communities Inc. to 'CC' from 'CCC'.  Concurrently,
S&P lowered its ratings on $650 million of subordinated notes to
'C' from 'CC'.  The outlook remains negative.

WCI Communities Inc. still carries Moody's Investors Service's
Caa2 corporate family and Caa3 senior subordinate ratings.  
Outlook is negative.

                        Going Concern Doubt

Ernst & Young LLP, in Miami, Florida, expressed substantial doubt
about WCI Communities Inc.'s ability to continue as a going
concern after auditing the company's consolidated financial
statements for the year ended Dec. 31, 2007.  

Holders of the company's $125.0 million, 4.0% Contingent
Convertible Senior Subordinated Notes due 2023 have an option of
requiring the company to repurchase the convertible notes at a
price of 100.0% of the principal amount on Aug. 5, 2008.  Pursuant
to certain amendments in the company's revolving credit facility  
and Senior Term Loan Agreement, the company will need to have
sufficient liquidity after giving effect to, on a pro forma basis,
the repurchase of the convertible notes.

The company does not anticipate having sufficient liquidity to
satisfy bank covenant liquidity tests.  If the company is unable
to obtain an amendment or waiver, issue exchange securities, or
otherwise satisfy its obligations to repurchase the convertible
otes, the convertible note holders would have the right to
exercise remedies specified in the Indenture, including
accelerating the maturity of the convertible notes, which would
result in the acceleration of substantially all of the company's
other outstanding indebtedness.  

In addition, if the company is determined to be in default on the
convertible notes, it may be prohibited from drawing additional
funds under the revolving credit facility, which could impair its
ability to maintain sufficient working capital.


XERIUM TECH: Names CEO Stephen R. Light as Chairman of the Board
----------------------------------------------------------------
Xerium Technologies Inc.'s board of directors appointed Stephen R.
Light, Xerium's president and chief executive officer, as its
chairman of the board of directors.  

The board also has appointed Michael Phillips, who has served as a
director since December 1999, to the new position of vice chairman
of the board.  John S. Thompson, who stepped down after serving as
board chairman since July 2004, will continue to serve as a
director.

"The entire board and I are very grateful to [Mr. Thompson] for
his stewardship during times of momentous change and progress,
including the IPO, a major debt refinancing, and a smooth
transitioning to new leadership," Mr. Light commented.  "We look
forward to continuing to benefit from [[Mr. Thompson's] wisdom and
experience as an active member of our board.  All of us at Xerium
are fully committed to moving forward with our recently announced
strategic repositioning, which calls for us to improve this
company's financial strength and operational efficiency to the
benefit of our numerous stakeholders, which includes all of our
employees, suppliers, customers, and shareholders."

Mr. Light joined Xerium as president and CEO, well as a director,
in February 2008.  Prior to joining Xerium, he completed the
turnaround of Flow International Corp., a producer of industrial
waterjet cutting and cleaning equipment.  Mr. Light also served as
president and CEO of OmniQuip Textron, and held senior level
management positions at General Electric, Emerson Electric and
N.V. Phillips.

Mr. Phillips is a partner with private equity firm Apax Partners
Beteiligungsberatung GmbH, which is an affiliate of Apax Europe IV
GP Co. Ltd., the beneficial owner of approximately 54.3% of the
outstanding shares of common stock of Xerium Technologies.

Mr. Phillips joined Apax Partners in 1992, he is a member of the
Executive Committee and Apax Approval, Investment and Exit
Committees and he leads the Munich office.

Mr. Thompson has served as a director and chairman of the board
since July 2004.  He served as chief executive officer of SPS
Technologies Inc., a manufacturer of specialty fasteners,
assemblies, precision components, metalworking, magnetic products
and superalloys listed on the New York Stock Exchange, from
April 2002 to December 2003, when he retired.  He also served as
its president and chief operating officer from October 1999 to
March 2002, and as a director from April 2000 to December 2003.

                     About Xerium Technologies

Based on Youngsville, North Carolina, Xerium Technologies Inc.
(NYSE: XRM) -- http://www.xerium.com/-- manufactures and supplies     
consumable products used in the production of paper: clothing and
roll covers.  With 35 manufacturing facilities in 15 countries,
including Austria, Brazil and Japan, Xerium Technologies has
approximately 3,900 employees.

                         *     *     *

As disclosed in the Troubled Company Reporter on June 9, 2008,
Moody's Investors Service revised Xerium Technologies, Inc.'s
outlook to positive from negative, upgraded its speculative grade
liquidity rating to SGL-3 from SGL-4, and upgraded its probability
of default rating to Caa1 from Caa2.

As related in the Troubled Company Reporter on June 5, 2008,
Standard & Poor's Ratings Services affirmed its ratings on Xerium
Technologies Inc., including the 'CCC+' corporate credit rating,
and removed them from CreditWatch, where they were originally
placed with negative implications on March 19, 2008.  At the same
time, S&P assigned a positive outlook.


XM SATELLITE: Sirius Merger Wins Approval of Two FC Commissioners
-----------------------------------------------------------------
The Wall Street Journal reports that three votes have now been
cast in the Federal Communications Commission's review of the XM
Satellite Radio Holdings Inc. and Sirius Satellite Radio Inc.
merger, but the deal is not close to being done.

WSJ, citing an FCC official, says Democratic FCC commissioner
Michael Copps voted the first vote against the deal.  Two other
commissioners - chairman Kevin Martin and Robert McDowell - have
voted in favor of the merger, WSJ indicates.

According to the Journal, Mr. Copps's determination to reject the
merger wasn't a surprise; he's been vocal of his objections on
media consolidation and the companies weren't counting on getting
his approval.

The Journal indicates that the decision increases pressure on
another FCC commissioner - Republican Deborah Taylor Tate - the
only member of the five-person board who remain mum on her views
about the deal and whether or not she might approve of it.

Another FCC commissioner, Democrat Jonathan Adelstein, laid out
his conditions for the companies to get his vote, WSJ adds.  The
Journal states that these conditions include a six-year price cap
for existing customers, interoperable radios that would also
receive HD signals from terrestrial radio stations and a 25% set
aside of channels for non-commercial and minority-owned radio
stations.

WSJ, quoting one FCC official, says that very little haggling has
been going on about Mr. Adelstein's offer.

                      About SIRIUS Satellite

Headquartered in New York, SIRIUS Satellite Radio Inc. (Nasdaq:
SIRI) http://www.sirius.com/-- provides satellite radio services     
in the United States.  The company offers over 130 channels to its
subscribers 69 channels of 100.0% commercial-free music and 65
channels of sports, news, talk, entertainment, data and weather.
Subscribers receive the company's service through SIRIUS radios,
which are sold by automakers, consumer electronics retailers,
mobile audio dealers and through the company's website.

                   About XM Satellite Radio

Headquartered in Washington, D.C., XM Satellite Radio Holdings
Inc. (Nasdaq: XMSR) -- http://www.xmradio.com/-- is a satellite      
radio company.  The company broadcasts live daily from studios in
Washington, DC, New York City, Chicago, Nashville, Toronto and
Montreal.  The company also provides satellite-delivered
entertainment and data services for the automobile market through
partnerships with General Motors, Honda, Hyundai, Nissan, Porsche,
Subaru, Suzuki and Toyota.

At March 31, 2008, the company's consolidated balance sheet showed
$1.7 billion in total assets, $2.7 billion in total liabilities,
$60.2 million in minority interest, resulting in a $1.1 billion
total stockholders' deficit.

                         *     *     *

As reported in the Troubled Company Reporter on March 28, 2008,
Standard & Poor's Ratings Services said its ratings on XM
Satellite Radio Holdings Inc. and XM  atellite Radio Inc.
(CCC+/Watch Developing/--) remain on CreditWatch with developing
implications, where S&P originally placed them on March 4, 2008,
due to S&P's concerns over standalone refinancing risks XM might
face if its merger with Sirius Satellite Radio Inc. (CCC+/Watch
Developing/--) wasn't approved.


ZVUE CORP: Has Until August 1 to Comply with Nasdaq Listing Rules
-----------------------------------------------------------------
ZVUE Corporation received notice from the NASDAQ Stock Market that
the company does not meet the independent director and audit
committee requirements for continued listing on The Nasdaq Stock
Market under Marketplace Rules 4350(c)(1)1 and 4350(d)(2)2.

In addition, the company is not eligible for the cure period
provided in Marketplace Rule 4350.  As a result, Staff is
reviewing the company's eligibility for continued listing on The
Nasdaq Stock Market.  To facilitate this review, NASDAQ has asked
the company to provide a specific plan and timetable to achieve
compliance with the Rules on or before Aug. 1, 2008.  The company
is in the process of preparing the requested plan and timetable
and expects to meet the Aug. 1, 2008 deadline.

ZVUE Corporation, fka 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.


* Chapter 11 Cases with Assets & Liabilities Below $1,000,000
-------------------------------------------------------------
Recent Chapter 11 cases filed with assets and liabilities below
$1,000,000:

In Re Global Restaurant Group, L.L.C.
      dba Crescent Moon
   Bankr. N.D. Ga. Case No. 08-73037
      Chapter 11 Petition filed July 10, 2008
         See http://bankrupt.com/misc/ganb08-73037.pdf

In Re T.O.T. Gourmet Market & Cafe Corp.
   Bankr. D. Md. Case No. 08-19150
      Chapter 11 Petition filed July 15, 2008
         See http://bankrupt.com/misc/mdb08-19150.pdf

In Re Colorado Freightways, Inc.
   Bankr. W.D. Mo. Case No. 08-42834
      Chapter 11 Petition filed July 16, 2008
         See http://bankrupt.com/misc/mowb08-42834.pdf

In Re Investors Property Corp.
   Bankr. M.D. Fla. Case No. 08-04126
      Chapter 11 Petition filed July 16, 2008
         Filed as Pro Se

In Re Assata Nneka Tate
      dba Assata's Cafe & Lounge
   Bankr. N.D. Texas Case No. 08-33417
      Chapter 11 Petition filed July 16, 2008
         Filed as Pro Se

In Re Jason A. Avery
      aka Norcal Construction
   Bankr. N.D. Calif. Case No. 08-11413
      Chapter 11 Petition filed July 16, 2008
         Filed as Pro Se

In Re Rodney Reagan Rife
   Bankr. E.D. Texas Case No. 08-10367
      Chapter 11 Petition filed July 16, 2008
         See http://bankrupt.com/misc/txeb08-10367.pdf

In Re Charles R. DiJulio
   Bankr. D. Ariz. Case No. 08-08852
      Chapter 11 Petition filed July 17, 2008
         See http://bankrupt.com/misc/azb08-08852.pdf

In Re David Gregg, Sr. & Elizabeth Gregg
   Bankr. D. Ariz. Case No. 08-08908
      Chapter 11 Petition filed July 17, 2008
         See http://bankrupt.com/misc/azb08-08908.pdf

In Re 535 Third Avenue, LLC
   Bankr. D. Ariz. Case No. 08-12750
      Chapter 11 Petition filed July 17, 2008
         See http://bankrupt.com/misc/azb08-12750.pdf

In Re Gaiser Heating & Cooling, Inc.
   Bankr. S.D. Ind. Case No. 08-08492
      Chapter 11 Petition filed July 17, 2008
         See http://bankrupt.com/misc/insb08-08492.pdf

In Re Atlanta Chicken & Biscuit, Inc.
   Bankr. E.D. Mich. Case No. 08-22076
      Chapter 11 Petition filed July 17, 2008
         See http://bankrupt.com/misc/mieb08-22076.pdf

In Re D&B Properties of Belleville, Inc.
      aka D.P. Properties of Belleville, Inc.
   Bankr. E.D. Mich. Case No. 08-57303
      Chapter 11 Petition filed July 17, 2008
         See http://bankrupt.com/misc/mieb08-57303.pdf

n Re J.O.B. Water Street Corp.
   Bankr. D. N.H. Case No. 08-12009
      Chapter 11 Petition filed July 17, 2008
         See http://bankrupt.com/misc/nhb08-12009.pdf

In Re Country Hearth, Inc.
      dba Marlybone Pub
   Bankr. D. N.J. Case No. 08-23417
      Chapter 11 Petition filed July 17, 2008
         See http://bankrupt.com/misc/njb08-23417.pdf

In Re Home Repair Services, LLC
   Bankr. D. N.J. Case No. 08-23420
      Chapter 11 Petition filed July 17, 2008
         See http://bankrupt.com/misc/njb08-23420.pdf

In Re Julie Dee Torres
      dba Julia's Cafe
   Bankr. D. N.M. Case No. 08-12302
      Chapter 11 Petition filed July 17, 2008
         See http://bankrupt.com/misc/nmb08-12302.pdf

In Re Les Poissoniers, Inc.
   Bankr. S.D. N.Y. Case No. 08-12747
      Chapter 11 Petition filed July 17, 2008
         See http://bankrupt.com/misc/nysb08-12747.pdf

In Re Gary W. Williams & Linda K. Williams
   Bankr. W.D. Penn. Case No. 08-24668
      Chapter 11 Petition filed July 17, 2008
         See http://bankrupt.com/misc/pawb08-24668.pdf

In Re Vaughan Contracting, Inc.
   Bankr. W.D. Penn. Case No. 08-24673
      Chapter 11 Petition filed July 17, 2008
         See http://bankrupt.com/misc/pawb08-24673.pdf

In Re Elkview Development, Inc.
   Bankr. N.D. W.V. Case No. 08-01099
      Chapter 11 Petition filed July 17, 2008
         Filed as Pro Se

In Re Frederick Michael Jarnagin
   Bankr. D. Ariz. Case No. 08-08956
      Chapter 11 Petition filed July 18, 2008
         See http://bankrupt.com/misc/azb08-08956.pdf

In Re Birmingham Hardwood Imports, Inc.
   Bankr. E.D. Mich. Case No. 08-57353
      Chapter 11 Petition filed July 18, 2008
         See http://bankrupt.com/misc/mieb08-57353.pdf

In Re Carpenter Lake Development, Inc.
      dba Double JJ Realty
   Bankr. W.D. Mich. Case No. 08-06294
      Chapter 11 Petition filed July 18, 2008
         See http://bankrupt.com/misc/miwb08-06294.pdf

In Re Carpenter Ridge, Inc.
   Bankr. W.D. Mich. Case No. 08-06295
      Chapter 11 Petition filed July 18, 2008
         See http://bankrupt.com/misc/miwb08-06295.pdf

In Re Double J.J. Resort Ranch, Inc.
   Bankr. W.D. Mich. Case No. 08-06296
      Chapter 11 Petition filed July 18, 2008
         See http://bankrupt.com/misc/miwb08-06296.pdf

In Re American Appaloosas, Inc.
   Bankr. W.D. Mich. Case No. 08-06298
      Chapter 11 Petition filed July 18, 2008
         See http://bankrupt.com/misc/miwb08-06298.pdf

In Re OUTDOOResources, Inc.
   Bankr. W.D. Mich. Case No. 08-06299
      Chapter 11 Petition filed July 18, 2008
         See http://bankrupt.com/misc/miwb08-06299.pdf

In Re James D. Bernt
      dba Critter Bernts Trucking
      dba Bernt Trucking
      & Karen A. Bernt
   Bankr. D. Neb. Case No. 08-41623
      Chapter 11 Petition filed July 18, 2008
         See http://bankrupt.com/misc/neb08-41623.pdf

In Re Robert Deiro & Associates, Inc.
      dba Deiro Auctioneers
   Bankr. D. Nev. Case No. 08-17893
      Chapter 11 Petition filed July 18, 2008
         See http://bankrupt.com/misc/nvb08-17893.pdf

In Re Piazza Chiropractic Associates, Ltd.
   Bankr. E.D. Penn. Case No. 08-14590
      Chapter 11 Petition filed July 18, 2008
         See http://bankrupt.com/misc/paeb08-14590.pdf

In Re Maurice R. Strawn, Jr.
   Bankr. W.D. Penn. Case No. 08-70785
      Chapter 11 Petition filed July 18, 2008
         See http://bankrupt.com/misc/pawb08-70785.pdf

In Re Samuel Franco
   Bankr. D. N.J. Case No. 08-23484
      Chapter 11 Petition filed July 18, 2008
         Filed as Pro Se

In Re 531 Franklin Street Revocable Trust
   Bankr. W.D. N.Y. Case No. 08-13133
      Chapter 11 Petition filed July 18, 2008
         Filed as Pro Se

In Re Daniel J. Moore & Jeannine K. Moore
   Bankr. W.D. Wash. Case No. 08-43430
      Chapter 11 Petition filed July 18, 2008
         See http://bankrupt.com/misc/wawb08-43430.pdf

In Re Mr. Pizza Man Ocean, L.P.
   Bankr. N.D. Calif. Case No. 08-31327
      Chapter 11 Petition filed July 22, 2008
         See http://bankrupt.com/misc/canb08-31327.pdf

In Re Boss Group, L.L.C.
   Bankr. S.D. Fla. Case No. 08-20145
      Chapter 11 Petition filed July 22, 2008
         See http://bankrupt.com/misc/flsb08-20145.pdf

In Re Unicare Home Health, Inc.
   Bankr. E.D. Mich. Case No. 08-32984
      Chapter 11 Petition filed July 22, 2008
         See http://bankrupt.com/misc/mieb08-32984.pdf

In Re Kelly Shane Cleveland
      dba Webb City Florist
   Bankr. W.D. Mo. Case No. 08-30608
      Chapter 11 Petition filed July 22, 2008
         See http://bankrupt.com/misc/miwb08-30608.pdf

In Re Tarver, Inc.
   Bankr. D. Neb. Case No. 08-81813
      Chapter 11 Petition filed July 22, 2008
         See http://bankrupt.com/misc/nvb08-81813.pdf

In Re Cheryl Armenio-Stazinski
   Bankr. D. Mass. Case No. 08-15367
      Chapter 11 Petition filed July 22, 2008
         Filed as Pro Se

                             *********

Monday's edition of the TCR delivers a list of indicative prices
for bond issues that reportedly trade well below par.  Prices are
obtained by TCR editors from a variety of outside sources during
the prior week we think are reliable.  Those sources may not,
however, be complete or accurate.  The Monday Bond Pricing table
is compiled on the Friday prior to publication.  Prices reported
are not intended to reflect actual trades.  Prices for actual
trades are probably different.  Our objective is to share
information, not make markets in publicly traded securities.
Nothing in the TCR constitutes an offer or solicitation to buy or
sell any security of any kind.  It is likely that some entity
affiliated with a TCR editor holds some position in the issuers'
public debt and equity securities about which we report.

Each Tuesday edition of the TCR contains a list of companies with
insolvent balance sheets whose shares trade higher than $3 per
share in public markets.  At first glance, this list may look like
the definitive compilation of stocks that are ideal to sell short.  
Don't be fooled.  Assets, for example, reported at historical cost
net of depreciation may understate the true value of a firm's
assets.  A company may establish reserves on its balance sheet for
liabilities that may never materialize.  The prices at which
equity securities trade in public market are determined by more
than a balance sheet solvency test.

A list of Meetings, Conferences and Seminars appears in each
Wednesday's edition of the TCR. Submissions about insolvency-
related conferences are encouraged.  Send announcements to
conferences@bankrupt.com/

On Thursdays, the TCR delivers a list of recently filed chapter 11
cases involving less than $1,000,000 in assets and liabilities
delivered to nation's bankruptcy courts.  The list includes links
to freely downloadable images of these small-dollar petitions in
Acrobat PDF format.

Each Friday's edition of the TCR includes a review about a book of
interest to troubled company professionals.  All titles are
available at your local bookstore or through Amazon.com.  Go to
http://www.bankrupt.com/books/to order any title today.

Monthly Operating Reports are summarized in every Saturday edition
of the TCR.

For copies of court documents filed in the District of Delaware,
please contact Vito at Parcels, Inc., at 302-658-9911.  For
bankruptcy documents filed in cases pending outside the District
of Delaware, contact Ken Troubh at Nationwide Research &
Consulting at 207/791-2852.

                             *********

S U B S C R I P T I O N   I N F O R M A T I O N

Troubled Company Reporter is a daily newsletter co-published
by Bankruptcy Creditors' Service, Inc., Fairless Hills,
Pennsylvania, USA, and Beard Group, Inc., Frederick, Maryland,
USA.  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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