TCR_Public/080804.mbx          T R O U B L E D   C O M P A N Y   R E P O R T E R

              Monday, August 4, 2008, Vol. 12, No. 184           

                             Headlines

AFC ENTERPRISES: Moody's Assigns SGL-3 Liquidity Rating
ALLIED WASTE: Earns $111.4 Million in 2008 Second Quarter
AMERICAN AXLE: S&P Lowers Corp. Credit and Debt Ratings to 'B+'
AMERISTAR CASINOS: Has Ba3 CFR; Gets SGL-3 from Moody's
ATLANTIC MARINE: Moody's Cuts Corporate Family Rating to B2

AUSTIN CONVENTION: S&P Affirms $95MM 2006B Revenue Bonds at 'BB'
BARNERT HOSPITAL: Court Approves Amended Disclosure Statement
BAXL TECHNOLOGIES: Case Summary & 20 Largest Unsecured Creditors
BCE INC: Moody's Assigns B1 Corporate Family Rating to NewCo
BDB MANAGEMENT: Case Conversion Hearing Slated for August 18

BEST BRANDS: S&P's 'CCC' Rating Unaffected by Covenant Violation
BIRCH MOUNTAIN: Will Need Investors' Funding if Sale Option Fails
BOYD GAMING: Suspends Echelon Construction on Financial Woes
BUFFETS HOLDINGS: Can Sell Ohio, Kentucky Properties
BUFFETS HOLDINGS: Wants Confidential Pact With Realty Approved

BUFFETS HOLDINGS: Taps PricewaterhouseCoopers as Tax Advisor
BUILDING MATL'S: At Fitch's Neg. Watch on Likely Covenant Breach
BURNSIDE AVENUE: Files for Chapter 11 Bankruptcy in Manhattan
BURNSIDE AVENUE: Voluntary Chapter 11 Case Summary
C32-1 INTERAIR: Voluntary Chapter 11 Case Summary

CAROL FERRI: Voluntary Chapter 11 Case Summary
CELL THERAPEUTICS: Selling $12MM Shares to Midsummer Investment
CENTENNIAL COMMS: May 31 Balance Sheet Upside-Down By $1.0 Billion
CHRYSLER LLC: Surpasses Second Quarter Financial Objectives
CHRYSLER LLC: July 2008 U.S. Sales Down 29% at 98,109 Units

CHRYSLER LLC: Arm Completes Renewal of $24BB Annual Financing
CIPRICO INC: Gives In to Nasdaq Delisting and Suspension of Stocks
COINMACH SERVICE: S&P Rates $825MM Credit Facility 'B+'
COLUMBUS LOAN: Moody's Hikes Class C Notes Rating to Aaa from Ba1
COMMUNITY HEALTH: Earns $47.9 Million in 2008 Second Quarter

CREDIT SUISSE: Fitch Affirms 'B+' Rating on $7.5MM Class L Certs.
DAE AVIATION: Moody's Affirms Caa2 Rating on $325MM Unsec. Notes
DELTA AIR: Pilots Vote on Northwest Merger Through August 11
DELTA AIR: NWA Merger to Hit Smaller Ports First, Critics Say
DENNY'S CORP: June 25 Balance Sheet Upside-Down by $172 Million

DEUTSCHE BANK: Moody's Junks Ratings of 70 Classes of Notes
DOYLE MOORE: Voluntary Chapter 11 Case Summary
ENESCO GROUP: Judge Goldgar Converts Case to Chapter 7 Liquidation
ENESCO GROUP: David Brown Named as Chapter 7 Trustee
EXKELL: Case Summary & 20 Largest Unsecured Creditors

FGIC CORP: Fitch Junks Rating on $325MM of 6% Senior Notes
FIRST HORIZON: Moody's Cuts Classes II-A-1 and II-A-2 to B1
FIRST PRIORITY: Operations Closed; SunTrust Gets Insured Deposits
FORD MOTOR: Terminates Lighting Biz Sale Contract with Meridian
GENERAL MOTORS: Incurs $15.5BB 2008 Second Quarter Prelim Net Loss

GENERAL MOTORS: Financial Arm Posts $2.5BB Prelim Second Qtr. Loss
GLOBAL DEHUMIDIFICATION: Voluntary Chapter 11 Case Summary
GMAC LLC: Posts Prelim Second Quarter Net Loss of $2.5 Billion
GSAA HOME: Moody's Junks Ratings on 31 Classes of Securities
GSAMP MORTGAGE: Moody's Downgrades Class B-4 Rating to Caa2

HANOVER INSURANCE: Moody's Affirms FAFLIC Unit's Ba1 Rating
HARRAH'S ENTERTAINMENT: Bill's Casino Fires 28 Workers
HOMETOWN COMMERCIAL: Fitch Assigns 'DR6' Ratings; Removes Watch
HUDSON MEZZANINE: Moody's Junks Rating of 3 Classes of 2042 Notes
HUNTSMAN CORP: Earns $23.7 Million in 2008 Second Quarter

INCYTE CORP: June 30 Balance Sheet Upside-Down by $237.2 Million
INDYMAC BANCORP: Files Chapter 7 Protection in California
INDYMAC BANCORP: Voluntary Chapter 7 Case Summary
INN OF THE MOUNTAIN: Moody's Affirms B3 Corp. Family Ratings
INNOPHOS INC: S&P Lifts Corporate Credit Rating to 'B+' from 'B'

INSTANT WEB: Moody's Cuts Sr. Sec. 2nd Lien Term Loan to Caa2
INTERSTATE BAKERIES: Withdraws Bid for Incentive Plan Approval
I/OMAGIC CORP: Dismisses Swenson Advisors as Public Accountant
ISP CHEMCO: S&P Changes Outlook to Positive on Stable Performance
JACOBS ENTERTAINMENT: Moody's Sees High Covenant Violation Risk

JACUZZI BRANDS: S&P Cuts Credit Rating to B- & Loan Rating to CCC+
JEFFERSON COUNTY: Payment Deadline on $3.2BB Debt Moved to Nov. 17
JEFFERSON COUNTY: Moody's Downgrades $270,000,000 Debt to Ba3
JOURNAL REGISTER: Moody's Downgrades PDR to D, CFR to Ca
JP MORGAN: Fitch Holds 'BB-' Rating on $4MM Class H Certificates

JP MORGAN: Moody's Cuts Rating of $1.7MM Cl. P Securities to Caa1
INTERACTIVE INTERACTIVE: Balance Sheet Upside-Down by $72.3MM
KATHERINE TIMBLIN: Voluntary Chapter 11 Case Summary
KESHNET INTER: Voluntary Chapter 11 Case Summary
KIMBALL HILL: Inks Pact to Let Wachovia to File Consolidated Claim

KNIGHT COMMERCE: Seeks Bankruptcy Protection Under Chapter 11
LANTANA MENDOCINO: Personal Assets Sold Off by WestLB AG
LEINER HEALTH: Has Until September 30 to File Chapter 11 Plan
LEVITZ FURNITURE: Settles Long-Running Feud with Wohl/Anaheim
LEVITZ FURNITURE: May Hire Oliver Wyman as Actuarial Consultant

LEVITZ FURNITURE: Enters Into a Settlement Pact with WFNNB
LEVITZ FURNITURE: Sets Off $304,638 Debt Owed to DFS Services
LEXINGTON PRECISION: Has Until October 28 to File Chapter 11 Plan
MAJESTIC STAR: Moody's Cuts CFR to Caa2, Sees Weak Liquidity
MARINER HEALTH: Georgia Appeals Court Upholds $10MM PwC Ruling

MEADE INSTRUMENTS: BofA Grants Waiver for Covenant Violations
MERIDIAN AUTOMOTIVE: Asks Court to Close Chapter 11 Cases
MERIDIAN AUTOMOTIVE: Ford Terminates Lighting Biz Sale Contract
MERITAGE HOMES: Moody's Assigns SGL-2 Rating; CFR is B1
MERVYNS LLC: Gets Interim Approval of $465,000,000 DIP Financing

MRV COMMUNICATIONS: Says Review Continues, Restatement Likely
NETWORK COMMUNICATIONS: Moody's Assigns SGL-3; Outlook Negative
NEWBURY STREET: Moody's Rates $50.6MM Notes Due 2053 Caa3
NORTHWEST AIRLINES: Pilots Vote on Delta Merger Through August 11
NORTHWEST AIRLINES: Merger to Hit Smaller Ports First, Critics Say

NORTHWEST AIRLINES: Court Approves Settlement with M. Foret
NORTHWEST AIRLINES: CFO Disposes of 10,886 Common Shares
NORTHWEST AIRLINES: Posts $377MM Net Loss in Second Quarter 2008
NOVASTAR FINANCIAL: Files Suit Against HQ Building Owner
OK LUMBER: Case Summary & 20 Largest Unsecured Creditors

PACIFIC LUMBER: Emerges from Chapter 11 on July 30
PACIFIC LUMBER: BoNY Appeals Confirmation Order to District Court
PACIFIC LUMBER: Asks Court to Compel Enforcement of Conf. Order
PHOENIX LABS: Voluntary Chapter 11 Case Summary
PHOENIX 2002-1: Moody's Downgrades Class C Euronotes to Ba3

POLYMER GROUP: S&P Trims Corp. Credit Rating to 'B+' from 'BB-'
PREMIER PROPERTIES: Founder's Personal Assets for Auction Aug. 9
QUEBECOR WORLD: CCAA Stay Extended Until September 30
QUEBECOR WORLD: Ernst & Young Provides CCAA Status Report
QUEBECOR WORLD: Committee Revised After Cellmark's Resignation

QUEBECOR WORLD: Panel Taps Lowenstein Sandler as Conflicts Counsel
RAD RESTAURANTS: Voluntary Chapter 11 Case Summary
RAINBOW VEGAS: Voluntary Chapter 11 Case Summary
RESIDENTIAL CAPITAL: GMAC LLC Posts Prelim $2.5BB Prelim Net Loss
RESIDENTIAL CAPITAL: S&P's 'CCC+' Rtng Unmoved by $1.9BB Net Loss

RITCHIE RISK: Disclosure Statement OK'd; Plan Hearing Set Sept. 11
SEA CONTAINERS: Files Joint Ch. 11 Plan and Disclosure Statement
SEA CONTAINERS: Discloses Classification & Treatment of Claims
SEMGROUP LP: Taps Richards Layton as Bankruptcy Co-Counsel
SEMGROUP LP: Wants to Hire Hall Estill as Special Counsel

SEMGROUP LP: Organizational Meeting to Form Panel Held August 1
SOMERSET MEDICAL: Moody's Affirms Ba2 Rating on Series 2003 Bonds
STANFIELD/RMF: Moody's Hikes 3 Classes of Notes to Baa2 from B1
SUN-TIMES MEDIA: Polar Securities Declares 10.7% Equity Stake
TANSY LTD: Voluntary Chapter 11 Case Summary

THOMAS MECHANICAL: Case Summary & 20 Largest Unsecured Creditors
TIMBERWOLF I: Moody's Junks Ratings of 2011 and 2039 FR Notes
TIMOTHY BARNETT: Case Summary & Six Largest Unsecured Creditors
TRONOX INC: Earnings Decline Prompts S&P to Junk Credit Rating
UNI-MARTS LLC: Files Schedules of Assets And Liabilities

US AIRWAYS: Incurs $567MM Net Loss in Second Quarter Ended June 30
US AIRWAYS: Registers 6,700,000 Shares for Equity Incentive Plan
US AIRWAYS: Wellington Management Discloses 4.53% Stake
US AIRWAYS: Pilots Group Presses for Probe on Fueling Practices
US AIRWAYS: Inks Maintenance Pact with IAE; Ends Two Flights

VERANO CCS: Moody's Rates $180MM Mezzanine Notes Due 2016 B2
VIE SALON: Voluntary Chapter 11 Case Summary
VINTAGE PROPS: Halts Scheduled Passenger Operations
VISTEON CORP: June 30 Balance Sheet Upside-Down by $207 Million
WELLMAN INC: Beefs Up Chapter 11 Plan and Disclosure Statement

WELLMAN INC: Claims Classification & Treatment Under Ch. 11 Plan
WELLMAN INC: To Use $205MM Exit Financing to Pay Admin. Claims
WESCOLD INC: Case Summary & 20 Largest Unsecured Creditors
WHITING PETROLEUM: S&P Holds 'BB-' Rating; Revises Outlook to Pos.
WINDSOR QUALITY: Moody's Lowers Corporate Family Rating to B1

* Fitch Updates Q-IFS Rtngs on 564 Property/Casualty Insurance Cos
* S&P: Defaults in the US to Escalate Through the Rest of 2008
* S&P Says Slowing Economic Conditions Pressure S&P 500
* S&P Puts Default Ratings on 32 Classes of Notes

* Cadwalader Axes 96 Real Estate Finance and Securitizations Jobs

* BOND PRICING: For the Week of July 28, 2008 to August 1, 2008

                             *********

AFC ENTERPRISES: Moody's Assigns SGL-3 Liquidity Rating
-------------------------------------------------------
Moody's Investors Service assigned a Speculative Grade Liquidity
rating of SGL-3 to AFC Enterprises, Inc., indicating Moody's
belief that the company should maintain adequate liquidity over
the upcoming four quarters.

In Moody's view, AFC's solid internal cash flow generation should
provide sufficient liquidity to cover working capital and planned
capital spending over the next twelve months, despite expected
softening revenues and EBITDA generation in the foreseeable future
in part due to the challenging operating environment for
restaurant industry in the US. In addition, the company recently
announced its strategic plan of re-franchising all its sixty seven
company-owned locations, which could materially alter its business
and financial profile. Moody's anticipates that AFC's cash flow
should continue to be adequate irrespective of whether the
divesture transpires or not. Further, the SGL-3 also incorporates
Moody's view that the company's access to the $60 million revolver
(expires in May 2010) could be limited by its financial covenants,
cushion under which would become modest as these covenants tighten
through the next twelve months (such as its maximum leverage ratio
3.50 times in July 2008 to 3.25 times in October 2008 to 3.00
times in April 2009).

Moody's also notes that the company has recently become more
aggressive in share buyback, although recognizing it has
maintained a balanced financial discipline over the past few
years. AFC bought back $49 million worth of stock in the past
twelve months ended April 20, 2008, partially funded by increased
borrowing under its revolver. The liquidity rating is sensitive to
AFC's financial policy regarding the use of refranchising proceeds
($38 million to $42 million as expected by the company) as well as
the pace of share buyback program. The SGL-3 rating could be under
downward pressure if the company were to buy back shares more
aggressively that could result in a delay in de-levering the
balance sheet, and/or the cushion under its financial covenants
were to erode that the access to its revolver became encumbered.

For a more detailed discussion on AFC's SGL rating, please refer
to an updated credit opinion on Moody's.com.

AFC Enterprises, Inc., headquartered in Atlanta, Georgia, owns,
operates and franchises Popeyes Chicken & Biscuits (Popeyes) quick
service restaurants. AFC currently has a Corporate Family Rating
of B1 with a stable outlook.


ALLIED WASTE: Earns $111.4 Million in 2008 Second Quarter
---------------------------------------------------------
Allied Waste Industries Inc. reported Wednesday financial results
for its second quarter and six months ended June 30, 2008.

For the quarter, income from continuing operations increased 22%
to $111.4 million.  Prior year income from continuing operations
was $91.0 million.   

Total revenue for the second quarter was $1.58 billion, an
increase of $35.0 million, or 2.2%, over $1.55 billion in the
second quarter 2007.  Higher revenue for the quarter benefited
from a 6.9% increase in average price, of which 280 basis points
were associated with the company's fuel recovery fee, partially
offset by a 4.8% decrease in volumes.  Lower volumes for the
quarter primarily reflect the impact of U.S. economic conditions.

"We continue to perform well against our long-term strategies that
drive profitable growth, margin expansion, strategic pricing and
greater financial returns, while successfully adjusting our day-
to-day operations to the economic conditions which have remained
very challenging," said John Zillmer, chairman and chief executive
officer.  "Our management and operating leadership appreciate that
we are involved in an exciting merger opportunity with Republic
Services, but we remain focused on achieving our 2008 financial
goals and on driving greater efficiencies in every area of the
business."

Second quarter operating income before depreciation and
amortization, loss from divestitures and asset impairments, or
EBITDA, inclusive of $9.0 million of merger-related costs,
increased 7.9% to $453.4 million, compared with $420.1 million
last year.  EBITDA as a percentage of revenue increased 160 basis
points to 28.7%, or 29.3% excluding merger-related costs, compared
with 27.1% for the same period last year.  

For the quarter, operating costs as a percentage of revenue
dropped 90 basis points as the company benefited from ongoing
initiatives to lower expenses and drive greater efficiencies
throughout its operations.  Operating costs in the second quarter
also benefited from savings associated with the company's improved
safety and claims experience, and from a favorable resolution of
an environmental matter.  EBITDA margins for the quarter also
benefited from company actions to control SG&A expenses, which
decreased $15.7 million from the prior year, and declined as a
percentage of revenue to 9.3% from 10.6% last year."

"Our ability to maintain strong pricing and to control costs in
response to a slowing economy has been critical to sustaining
Allied's excellent operating and financial results," said Don
Slager, president and chief operating officer.  "Even after
adjusting for significantly higher fuel costs, which were
essentially offset through our fuel recovery fee, we were able to
lower operating expenses as a percentage of revenue by 90 basis
points and SG&A spending by an additional 130 basis points.  These
are important achievements and attest to the focus with which our
managers are operating the business."

Cash flow from operations in the second quarter 2008 was
$317.4 million, compared with $373.0 million in the comparable
quarter last year, as higher operating income was offset primarily
by increases in working capital.  Free cash flow for the second
quarter was $112.6 million, compared with prior year free cash
flow of $234.4 million reflecting lower cash flow from operations
and the timing of capital expenditures which were heavier in the
second quarter of 2008.

For the six-month period ended June 30, 2008, Allied Waste's
revenues were $3.07 billion, as strong pricing drove a
$74.4 million increase over the prior year.  Operating income for
the period increased 6.7% to $543.8 million, inclusive of
$32.8 million of merger-related costs, losses from divestitures
and asset impairments.  Income from continuing operations was
$184.0 million for the first half of 2008, compared with
$125.3 million for the first half of 2007.

                          Merger Update

During the quarter, Allied Waste and Republic Services Inc.
announced that their Boards of Directors unanimously approved a
definitive merger agreement between the two companies.  The   
$6.24 billion stock deal merger, which is expected to generate at
least $150.0 million in annual integration synergies, will
strengthen the national service platform of the companies and link
collection, transfer, recycling and disposal operations into an
efficient network spanning 40 states and serving 13 million
customers.  The merger is expected to close in the fourth quarter
of 2008.

"The merger of Allied Waste and Republic will generate tremendous
benefits for employees, customers and shareholders of both
companies," said Mr. Zillmer.  "Our organizations are working
closely on a comprehensive integration program that will help
ensure the businesses come together seamlessly and realize all the
operating and financial gains inherent in this powerful
combination."

                          Balance Sheet

At June 30, 2008, the company's consolidated balance sheet showed
$13.94 billion in total assets, $9.83 billion in total
liabilities, and $4.11 billion in total stockholders' equity.

The company's consolidated balance sheet at June 30, 2008, also
showed strained liquidity with $1.05 billion in total current
assets available to pay $1.87 billion in total current
liabilities.

                        About Allied Waste

Based in Phoenix, Arizona, Allied Waste Industries Inc. (NYSE: AW)
-- http://www.alliedwaste.com/and http://www.disposal.com/--  
provides waste collection, transfer, recycling and disposal
services to millions of residential, commercial and industrial
customers in over 100 major markets spanning 38 states and Puerto
Rico.  

                          *     *     *

As reported in the Troubled Company Reporter on June 25, 2008,
Fitch Ratings placed the ratings of Allied Waste Industries Inc.
on Rating Watch Positive, including the company's CCC+/RR6 Senior
subordinated rating, following the announcement that the company
intends to merge with Republic Services Inc.


AMERICAN AXLE: S&P Lowers Corp. Credit and Debt Ratings to 'B+'
---------------------------------------------------------------
Standard & Poor's Ratings Services lowered its corporate credit
rating on Detroit-based American Axle Manufacturing & Holdings
Inc. to 'B+' from 'BB-'.  The outlook is negative.
     
At the same time, S&P lowered its issue-level ratings on American
Axle's unsecured debt to 'B+' from 'BB-'.  The recovery rating of
'3', indicating an expectation of meaningful (50% to 70%) recovery
in the event of a payment default, was not changed.
     
"The downgrade and negative outlook reflect our view that Axle's
credit measures will deteriorate even more than we previously
expected in the face of a very challenging North American market
for light trucks, which represent most of American Axle's sales,"
said Standard & Poor's credit analyst Lawrence Orlowski.
     
Management expects 2008 revenue to fall 30% from 2007 levels; S&P
believes the revenue decline could be larger.  The U.S. economy is
weak as a result of falling housing prices and tightening credit
standards, thereby dampening consumer confidence and overall
demand.  In addition, all automakers are taking steps to
permanently reduce light-truck production over the next few years
in favor of increasing capacity for passenger cars.
     
S&P expects U.S. light-vehicle sales to be 14.4 million units in
2008, the lowest in 15 years and down sharply from 16.1 million
units in 2007.  S&P expects sales to fall further in 2009, to
about 14.1 million units, as the economy remains weak and housing
prices and consumers' access to credit remain under pressure.  S&P
estimates that there is a 20% chance that auto sales in 2008 and
2009 could plummet to 13.6 million and 11.7 million units,
respectively, which would present an overwhelming challenge for
the Michigan-based automakers and auto suppliers.
     
But even in the absence of that scenario, the shift in demand away
from light trucks is the most immediate challenge for American
Axle.  Higher energy prices have accelerated the ongoing shift in
consumer preferences away from full-size pickup trucks and SUVs.
During the past few months, industrywide sales of SUVs plunged
from the previous year's levels--down 32.5% in the first six
months of 2008.  The drop in June was even more severe--39.8%.  
S&P believes industrywide demand for SUVs has been permanently
reduced, caused recently by high gasoline prices.
     
Tempering these challenges are the substantial cost benefits to be
realized over the next 18 months from the new contract with the
United Auto Workers.  American Axle's new labor agreement reduces
the all-in wage costs by more than 50%; defined benefit plans are
frozen and replaced by defined contribution plans; and health care
expenses are shared with employees through premium sharing, higher
deductibles, and co-pays.  In addition, the agreement gives the
company better operational flexibility: For instance, job
classifications are reduced substantially, there is a no-strike
provision, and an employee must work 40 hours in a week before
overtime pay is allowed.

Furthermore, the long-term lay-off pool, under which laid-off
workers are paid near full wage, is capped at $18 million and ends
once this amount is reached.  As a result of these actions, as
well as planned cuts in the salaried workforce, management expects
structural cost reductions to exceed $350 million in 2009.
     
In accordance with the terms of the new agreement, workers at the
original U.S. locations will be able to choose from six buyout and
retirement offers.  Those not choosing one will be subject to an
involuntary program.  The company believes the entire cost of
these transitional programs to be $400 million to $450 million.
General Motors Corp. will reimburse American Axle for an important
portion of costs to implement the contract.
     
Still, the ratings on American Axle reflect the risks associated
with the company's heavy dependence on GM's SUVs and pickup
trucks, its relatively narrow product range, and its exposure to
cyclical and competitive markets.  Competitive challenges facing
GM and Chrysler LLC, including declining production volumes for
some of the vehicles American Axle serves, continue to hurt the
company's business.  Moreover, S&P believes the customer shift
away from SUVs is permanent, which may thwart American Axle's
efforts to improve profitability.  Therefore, a severe cyclical
industry downturn could easily offset the benefits from the
company's significantly reduced cost structure.

The outlook is negative.  S&P expects 2008 to be a weak year for
American Axle's sales and profitability because of the effect of
the strike on first-and second-quarter results, lower light-truck
production volumes from GM in the third and fourth quarters, and
costs associated with employee buyout and wage reduction programs.  
EBITDA margins may fall to single digits in 2008, but S&P expects
some improvement in 2009 as the company begins to realize some
cost savings from the new contract and workforce reductions.

However, a major risk is the permanent fall in demand for light
trucks that challenges management's ability to optimize production
capacity.  If EBITDA margins do not improve to more than 10% in
2009, S&P believes free operating cash flow will remain negative
in 2009, which could prompt us to lower the rating.  Prior to
2009, any reduction in American Axle's liquidity, such as a
substantial depletion in borrowing availability under its
revolving facility or concerns about future covenants, would
trigger a downgrade.  On the other hand, S&P could revise its
outlook to stable if American Axle capitalizes on cost savings and
industry conditions improve, but this is not likely this year.


AMERISTAR CASINOS: Has Ba3 CFR; Gets SGL-3 from Moody's
-------------------------------------------------------
Moody's Investors Service assigned an SGL-3 Speculative Grade
Liquidity rating to Ameristar Casinos, Inc.  The SGL-3 indicates
adequate liquidity. Ameristar has a Ba3 Corporate Family Rating
and stable rating outlook.

Rating assigned:

Speculative Grade Liquidity Rating of SGL-3

Ameristar's SGL-3 considers that the company has modest cushion
with respect to its senior leverage covenant. Additionally, while
the amount of the company's $1.4 billion revolving loan facility
available for borrowing is currently about $170 million, its
ability to borrow under the revolver is currently limited to less
than $50 million because of the senior leverage ratio covenant.

As of March 31, 2008, Ameristar was required to maintain a
leverage ratio, defined as consolidated debt/EBITDA, of no more
than 6.25 times, and a senior leverage ratio, defined as senior
debt/EBITDA of no more than 5.25 times. Although the company's
consolidated debt/EBITDA calculation for the latest 12-months
ended March 31, 2008 was well within the total leverage covenant
limit, at about 5.1 times, the cushion in the company's reported
senior leverage covenant was considerably less. Senior debt/EBITDA
for the 12-month period ended March 31, 2008 was also 5.1 times.

Despite the limited covenant cushion and revolver availability,
Ameristar is expected to generate positive cash flow after
interest, taxes, cash common dividends and maintenance
expenditures during the next 12-months. However, after considering
development capital expenditures, the company will likely have a
free cash flow deficit. Ameristar recently completed its $265
million expansion in St. Louis, Missouri, and a majority of its
$100 million expansion in Vicksburg, Mississippi, but still has
significant development related capital expenditures during the
next 12-month period, most of which is related to the completion
of the Black Hawk, Colorado expansion. Separately, Ameristar
delayed its Council Bluffs, Iowa expansion indefinitely.

Moody's expects Ameristar will eventually term out a portion of
its outstanding revolver in an effort to improve its liquidity.
However, capital markets uncertainty at this time may make it
difficult for the company to accomplish this under favorable
terms. To the extent Ameristar does term out a portion of its
revolver, materially improves its revolver availability and senior
leverage covenant cushion, and becomes free cash flow positive,
its Speculative Grade Liquidity rating could improve to SGL-2.

Ameristar Casinos, Inc. (NASDAQNM: ASCA) owns and operates eight
hotel/casinos in six markets. The company's portfolio of casinos
consists of: Ameristar St. Charles (St. Louis market); Ameristar
Kansas City; Ameristar Council Bluffs (Omaha market); Ameristar
Vicksburg; Ameristar Black Hawk (Denver market); Resorts East
Chicago (East Chicago market) and Cactus Petes and the Horseshu in
Jackpot, Nevada (Idaho market). Ameristar reported net revenues of
approximately $1.14 billion for the latest 12-month period ended
March 31, 2008.


ATLANTIC MARINE: Moody's Cuts Corporate Family Rating to B2
-----------------------------------------------------------
Moody's Investors Service has downgraded the corporate family
rating of Atlantic Marine Holding Company to B2 from B1 and
changed the ratings outlook to stable from negative. The downgrade
reflects lower than expected revenues and EBITDA margin for the
first half of 2008 combined with the company's small size,
dependence on large, critical orders, and increased leverage from
approximately $130 million of dividends paid and preferred stock
redeemed since the beginning of 2007.  The lower than expected
EBITDA for the first half of 2008 resulted from the late start of
a large vessel fabrication project and lower than expected gross
margin on another key fabrication project.

Atlantic Marine's B2 corporate family rating reflects the
company's small revenue base, heavy dependence on large ship
repair and fabrication contracts, combined with the inherent
cyclicality in its sales level, operating margins and cash flow
generation. Incorporated in the B2 rating is an expectation for
positive near-term demand, in part due to high oil exploration
activity which increases the need for commercial vessel
fabrication and MROC work.

The stable outlook reflects the company's sustained backlog level
since 2007, an adequate liquidity profile, and an expectation that
revenue and EBITDA margin levels will improve in the second half
of 2008 due to resolved work delays, recent orders and contract
bids pending. The stable outlook also contemplates that Atlantic
Marine's private equity owner, J.F. Lehman and Company, may
continue a financial policy of dividends following earnings growth
such that should credit metrics become relatively strong for the
B2 rating, debt could likely be increased to help fund returns to
shareholders.

In addition to the corporate family rating, the following rating
changes have occurred:

Probability of default to B3 from B2

$45.0 million first lien revolving credit facility due 2013 to B2
LGD 3, 36% from B1 LGD 3, 36%

$185.1 million first lien term loan due 2014 to B2 LGD 3, 26% from
B1 LGD 3, 36%

For further information please refer to the credit opinion on
moodys.com

Atlantic Marine Holding Company, headquartered in Jacksonville,
FL, is a provider of ship maintenance, repair, overhaul, and
conversion and marine fabrication services for U.S. Navy,
government, commercial and offshore oil and gas industry vessels.
The company operates two full service shipyards in Jacksonville,
FL, and Mobile, AL, as well as a third smaller facility at Naval
Station Mayport (FL).


AUSTIN CONVENTION: S&P Affirms $95MM 2006B Revenue Bonds at 'BB'
----------------------------------------------------------------
Standard & Poor's Ratings Services placed its 'BBB-' rating on
Austin Convention Center Enterprises Inc.'s $165 million first-
tier revenue bonds series 2006A on CreditWatch with negative
implications.  The Creditwatch placement reflects the bonds' ties
to the ratings on XL Capital Assurance Inc. (BBB-/Watch Neg/--),
which provides the surety for the bonds and a portion of the debt
service reserve fund.

At the same time, S&P affirmed the 'BB' rating on the
$95.17 million second-tier revenue bonds series 2006B.  The
outlook on the second-tier bonds is stable.
     
The '1' recovery rating assigned to the first-tier debt reflects
expectations of very high recovery (90%-100%) if a payment default
occurs, while the '5' recovery rating assigned to the second-tier
debt indicates modest recovery (10%-30%).
     
The bonds are secured by the hotel's net revenues.  The 2006
series proceeds refunded the majority of the 2001 series bonds,
which were used to build the 800-room convention center
headquarters hotel in downtown Austin, Texas.  The hotel has been
operating since its opening on Dec. 27, 2003 and reached a
stabilized occupancy of more than 76% in 2007.
     
S&P could downgrade the first-tier bonds if liquidity goes lower
than the current levels and if additional reserves were not
available to replace the surety policy.
     
The stable outlook on the second-tier bonds is based on hotel
operations meeting their projected financial performance.

S&P could lower the ratings or revise the outlook to negative if
coverage levels are lower than projections due to a prolonged
economic slowdown, or other competitive factors that reduce net
hotel revenues.  In addition, S&P could downgrade the first-tier
bonds if liquidity is lower than the current levels.
     
"A successful track record of financial performance well in excess
of forecasts and debt amortization significantly above forecast
levels could result in a rating upgrade," said Standard & Poor's
credit analyst Jodi Hecht.


BARNERT HOSPITAL: Court Approves Amended Disclosure Statement
-------------------------------------------------------------
The Hon. Donald H. Steckroth of the U.S. Bankruptcy Court for the
District of New Jersey approved an amended disclosure statement
explaining an amended Chapter 11 plan of liquidation filed by
Nathan and Miriam Barnert Memorial Hospital Association dba
Barnert Hospital on July 28, 2008.  The Court held that the
amended disclosure statement contains adequate information with
the meaning of Section 1125 of the Bankruptcy Code.

A hearing is set for Sept. 23, 2008, at 2:00 p.m., to consider
confirmation of the Debtor's plan.  Objections, if any, are due
Sept. 16, 2008.

The Court also approved procedures the Debtor proposed for
tabulation and solicitation of Plan votes.  The deadline for
voting on the Plan is Sept. 16, 2008.

                       Overview of the Plan

The amended plan proposes an orderly liquidation of the Debtor's
assets and provides that all collected funds will be paid to
creditors on account of their claims.  Pursuant to the Plan, a
liquidating trustee will be appointed to wind-down all of the
Debtor's assets and pursue all causes of action.

As reported in the Troubled Company Reporter on March 10, 2008,
the Debtor sold substantially all of its assets to Community
Healthcare Associates LLC, which topped Hospital Associates LLC,
the stalking horse bidder.  The Debtor will pay $350,000 as break-
up fee to Hospital Associates.

Under the asset purchase agreement dated Feb. 15, 2008, the
purchased assets are comprised of:

   -- assumption by Community Healthcare of the assumed
      liabilities;

   -- purchase note $6,000,000 as initial principal payment
      plus the amount of the financed receivables secured by the
      guaranty and the new mortgage;

   -- unencumbered asset payment; and

   -- aggregate of Community Healthcare's share of the transfer
      taxes, if any, and other payment obligations.

The amended plan classifies interests against and claims in the
Debtors in five classes.  The classification of interests and
claims are:

   Class    Type of Claims
   -----    --------------
   1        non-tax and tax priority claims
   2        secured claim of United States Department of
             Housing and Urban Development
   3        secured claim of General Electric
   4        general unsecured claims
   5        claims of owners

Under the amended plan, holders of administrative and priority tax
claims will be paid in an amount equal to their all allowed claims
on the plan's effective date.  There is a $596,627 in unpaid
administrative claims as of June 30, 2008.

Holders of Class 1 non-tax and tax priority claims, totaling
$415,207, will be paid after the plan's effective date.  The
Debtor has potential liability of at most $16,000 for unsecured
tax priority claims.

In connection with the sale of the Debtor's assets to Community
Healthcare, secured creditor United States Department of Housing
and Urban Development has agreed to receive:

   -- $6,000,000 to be paid by Community Healthcare;

   -- the payment by Community Healthcare for the accounts
      receivable of the Debtor;

   -- retention of all cash held by HUD in the debt reserve fund;

   -- the remaining proceeds of the DSH settlement; and

   -- the net proceeds of certain appeals or actions filed by the
      Debtor seeking retroactive reimbursement rates for services
      provided against various third parties.

HUD is expected to lose at least $5,000,000 after it receives the
payment.  Nevertheless, HUD agreed to waive any further claims
against the Debtor's estate.

Class 3 secured claims of General Electric will have a deficiency
claim, which will be treated as Class 4 claim.  The Debtor has
surrendered collateral to General Electric.

Holders of Class 4 general unsecured claims, totaling $24,143,895,
will receive a pro rata share of the liquidation proceeds and the
sale carve-out fund on the distribution date, at the option of the
liquidating trustee.

Class 5 claims of owner will be dissolved on the plan's effective
date.  Holders will not receive any distribution.

A full-text copy of the Purchase Agreement date Feb. 15, 2008, is
available for free at:

               http://ResearchArchives.com/t/s?28dd

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

               http://ResearchArchives.com/t/s?3056

A full-text copy of the Debtor's amended Chapter 11 plan of
liquidation is available for free at:

               http://ResearchArchives.com/t/s?3057

Nathan and Miriam Barnert Memorial Hospital Association, dba
Barnert Hospital -- http://www.barnerthospital.com/-- owns
and operates a 256 bed general acute care community hospital
located at 680 Broadway in Paterson, New Jersey.  The company
filed for chapter 11 protection on Aug. 15, 2007 (Bankr. D. N.J.
Case No.07-21631).  David J. Adler, Esq., at McCarter & English,
LLP, represents the Debtor in its restructuring efforts.  Warren
J. Martin Jr., Esq. and John S. Mairo, Esq., at Porzio Bromberg &    
Newman, P.C., represent the Official Committee of Unsecured
Creditors in this case.  Donlin Recano & Company Inc. is the
Debtor's claims, noticing, and balloting agent.  The Debtor's
schedules reflect total assets of $46,600,967 and total
liabilities of $61,303,505.


BAXL TECHNOLOGIES: Case Summary & 20 Largest Unsecured Creditors
----------------------------------------------------------------
Debtor: BAXL Technologies, Inc.
        6 Berkshire Boulevard
        Berkshire Corporate Park
        Bethel, CT 06801

Bankruptcy Case No.: 08-50689

Type of Business: The Debtor provides broadcasting services.
                  See: http://www.baxl.net

Chapter 11 Petition Date: July 31, 2008

Court: District of Connecticut (Bridgeport)

Judge: Alan H.W. Shiff

Debtors' Counsel: James Berman, Esq.
                   (jberman@zeislaw.com)
                  Zeisler and Zeisler
                  558 Clinton Avenue
                  P.O. Box 3186
                  Bridgeport, CT 06605
                  Tel: (203) 368-4234
                  Fax: (203) 367-9678
                  http://www.zeislaw.com/

Estimated Assets: $1 million to $10 million

Estimated Debts:  $1 million to $10 million

A list of the Debtor's largest unsecured creditors is available
for free at:

            http://bankrupt.com/misc/connb08-50689.pdf


BCE INC: Moody's Assigns B1 Corporate Family Rating to NewCo
------------------------------------------------------------
Moody's Investors Service provided updated ratings' guidance for
those debt instruments issued by Bell Canada that will remain
outstanding subsequent to the acquisition of its parent company,
BCE Inc. by a private equity consortium.  "Moody's view is that
the post-closing entity will have a corporate family rating of B1"
said Moody's Vice President/Senior Credit Officer, Bill Wolfe.  
Based on the B1 CFR, Wolfe also noted that "Bell Canada's existing
senior unsecured debt would be rated Ba1 and its subordinated
notes would be rated B3."  Wolfe also noted that the prospective
rating outcomes are subject to a number of assumptions, and are in
the middle of the guidance ranges that were previously provided.

Pending resolution of the acquisition transaction, BCE and Bell
Canada have a combined $8.3 billion of debt instruments on review
for possible downgrade (approximately $5.0 billion of $8.3 billion
total will remain outstanding after the acquisition). The review
was initiated on April 17, 2007, when BCE announced that its board
had entered into non-exclusive discussions with a specific group
of investors regarding the possible acquisition of the company.
Wolfe said that "Moody's expects to conclude the rating review
shortly before the going-private transaction closes. We also
expect to publish ratings on the approximately $34 billion of
acquisition debt at the same time."  BCE has indicated that
closing will occur on or before December 11, 2008.

Moody's does not take rating actions prompted by a major corporate
event until the event is nearly certain. "Our thesis has not
altered from last October when we first provided guidance
concerning post-closing ratings," said Wolfe. "However, with the
passage of time, execution risks have been dramatically reduced.
In particular, the recent announcements that all regulatory
approvals had been received and financing had been firmed-up were
important milestones that gave us much more confidence that the
transaction will close. This prompted us to update our guidance,
and since we expect future cash flow to remain fairly stable, we
were able to narrow the guidance to a single point from a three
notch range."

The interest carry on the post-acquisition debt will leave the
company with very little free cash flow with which to reduce debt.
More importantly, the company's cash flow stream will be difficult
to grow. Wolfe noted that "BCE has a large franchise with a
relatively diverse product offering featuring wire-line based
telephony and Internet service, and wireless telephony and video
services. In aggregate, however, since the product offering
features proportionately high exposure to declining legacy
businesses and low exposure to higher growth areas, prospects to
grow cash flow are challenged. In addition, customer service and
product quality have not been historic strengths. Further,
competition among telecommunications service providers is quite
complex, balancing inter-relationships among network quality,
customer service, hardware variety and features, price, and
complimentary products offered as part of a bundle. The resulting
market shares and profit rates reflect the relative trade-offs
that consumers have made at a point in time. Given its existing
technology and since none of the company's competitors are weak,
it will be difficult for BCE's value proposition to be
repositioned. Based on prior observations, we think it will be two
to three years before repositioning actions will have a tangible
impact. That time frame coincides with when we think the impact of
new competitors that have purchased spectrum from the Canadian
Government will be felt. It also potentially coincides with the
need to deploy additional resources towards a subsequent spectrum
auction. Consequently, we see BCE as having little capability of
growing its cash flow stream by more than the market and its
competitors will allow. While we expect some costs to be taken
out, forecasted cash flow is not expected to be dramatically
different from what is observed today. The significant change is
the debt level. When the expected debt level is accounted for, the
CFR is expected to be B1."

Moody's review of current and prospective ratings for BCE Inc. and
Bell Canada is detailed in a Credit Opinion and Analysis.

BCE Inc. (BCE) is a holding company that owns all of Bell Canada
(Bell), Canada's largest telecommunication services company. Both
firms are based in Montréal, Québec, Canada. BCE is the subject
of an acquisition agreement in which the company will be acquired
by a special purpose company formed by a private equity consortium
comprised of Ontario Teachers' Pension Plan (Teachers), Providence
Equity Partners Inc. (Providence), Madison Dearborn Partners, LLC
(MDP), and Merrill Lynch Global Private Equity (Merrill Lynch).
The approximately C$50 billion transaction was approved by BCE's
common and preferred shareholders on September 21, 2007. The
transaction is expected to close on or before December 11, 2008.


BDB MANAGEMENT: Case Conversion Hearing Slated for August 18
------------------------------------------------------------
The Hon. Thomas Carlson of the U.S. Bankruptcy Court for the
Northern District of California will hold a hearing on Aug. 18,
2008, to consider a motion by the Brandenburg creditors to convert
the chapter 11 case of BDB Management LLC and its debtor-
affiliates to a chapter 7 liquidation proceeding, Terry Brennan of
The Deal says.

Eric Brandenburg Separate Property Trust of San Jose filed a
$450,000 claim, and Karen Brandenburg of San Jose and the
Brandenburg Revocable Trust of San Jose each filed $250,000 claims
against the Debtors' assets, The Deal notes.

As reported in the Troubled Company Reporter on July 9, 2008, the
Brandenburgs, who hold around $2.3 million in unsecured claims
against the Debtors, related that the Debtors have no ongoing
business operations, no employees, customers, or vendors, and that
the Debtors' only listed asset is stock held in an account at
Merriman Curhan Ford Co. valued at more than $1.3 million.

The Brandenburgs contended that there is a high likelihood that
the estate will suffer substantial, continuing loss, and that
there is no real possibility for the Debtors' estates to be
rehabilitated.  The Brandenburgs asserted that proceeding under
chapter 7 is in the Debtors' best interests since it is necessary
to properly collect the estates' assets and to avoid inherent
conflicts between the interest of the parent debtor, BDB
Management LLC, and its affiliate, BDB Management III LLC.

They further related that the conflicts between these estates are
especially acute because a single trustee has been appointed for
all three of the estates.  Converting the Debtors' cases will
result in the appointment of a new trustee who can proceed without
conflicting loyalties and with full concentration on the interests
of the Debtor, said the Brandenburgs.

                        About BDB Management

Menlo Park, California-based BDB Management LLC and its affiliates
filed for Chapter 11 protection on June 7, 2008 (Bankr. N.D.
Calif. Lead Case No. 08-31001).  William J. del Biaggio, III, an
interest holder of the companies, filed for personal chapter 11
bankruptcy on June 6, 2008.  Judith Whitman, Esq., at Diemer
Whitman and Cardosi LLP, represents the Debtors in their
restructuring efforts.  When the Debtors filed for protection from
their creditors, they listed $50 million to $100 million in
estimated assets and $50 million to $100 million in estimated
debts.  The TCR said on July 9, 2008, that Sara L. Kistler, acting
U.S. Trustee for Region 17, had appointed R. Todd Nelson as the
chapter 11 trustee in BDB Management LLC and its debtor-
affiliates' bankruptcy cases.

Sand Hill Capital Partners III, the investment fund Mr. Del
Biaggio co-founded, filed for chapter 7 bankruptcy.  Sand Hill
disclosed $10.6 million in debts.  Established in 1996, Sand Hill
Capital has four debt funds under management, of which two are
actively investing.  Sand Hill has provided debt financing and
equity co-investing in multiple portfolio companies of top-tier
venture capital firms, including Broadcom, a semiconductor company
specializing in VoIP, wireless networking, and broadband
communications solutions; Commerce One, a provider of On-Demand
Supplier Relationship Management solutions and The Open Supplier
Network; IBahn, a provider of secure broadband-to-go at premium
hospitality locations; and Odwalla, maker of fruit drinks and
snacks.


BEST BRANDS: S&P's 'CCC' Rating Unaffected by Covenant Violation
----------------------------------------------------------------
Standard & Poor's Ratings Services said that its ratings and
outlook on Minnetonka, Minnesota-based Best Brands Corp.
(CCC/Negative/--) remain unchanged following the company's
disclosure that it violated its financial covenant compliance
under its first-lien bank credit agreement for the second-quarter
ended June 28, 2008.  Financial results have been weaker than
expected due to high commodity costs which have been only
partially offset by price increases and cost reduction efforts.
Best Brands had about $2.6 million in cash on its balance sheet as
of June 28, 2008 and currently has access to its $30 million
revolver ($16.4 million was borrowed as of June 28, 2008).

However, SP are concerned about the company's liquidity, and it
could lower the ratings if the company cannot obtain a waiver and
bank amendment in a timely and cost-effective manner, given
current market conditions.


BIRCH MOUNTAIN: Will Need Investors' Funding if Sale Option Fails
-----------------------------------------------------------------
As reported in the Troubled Company Reporter on July 28, 2008,
Birch Mountain Resources Ltd. disclosed that the special committee
of independent directors and its board of directors have
determined that it is necessary to pursue an immediate sale of the
company to unlock maximum value for its shareholders.

In a news statement, Birch Mountain related that in the event the
immediate sales process does not achieve an acceptable price, it
intends to work with its stakeholders to recapitalize the balance
sheet to improve liquidity and permit delivery of the business
plan.

The company related that the lack of liquidity has compressed
Birch Mountain's share price to a level significantly below its
underlying value.

On July 7, 2008, TCR said that Birch Mountain has not made the
scheduled June 30, 2008, interest payment to the holders of the
Convertible Unsecured Subordinate Debentures.  

As a consequence of the company being in breach of a financial
covenant under its senior secured credit facility, lender Tricap
Partners Ltd., has exercised its right under the loan agreement to
direct The Trustee, Computershare Trust Company of Canada, not to
make the scheduled interest payment on the Debentures until
further notice from the Lender.  The Trustee has issued a notice
of default to the company under the trust indenture.

As a consequence, the Trustee may, on behalf of the holders of the
Debentures, declare the principal amount and the accrued amount of
interest to be due and payable.  Alternatively, the Trustee may
waive the event of default upon such terms and conditions that the
Holders may prescribe.  The principal amount of the Debentures is
$34,500,000.  The amount of interest due as of June 30, 2008, was
$1,035,000.

                       About Birch Mountain

Headquartered in Calgary, Canada, Birch Mountain Resources Ltd.
(TSX and AMEX: BMD) -- http://www.birchmountain.com/-- operates     
the Muskeg Valley Quarry, an early production stage limestone
quarry that produces limestone aggregate products for sale to
customers in the Athabasca Oil Sands region of northeastern
Alberta.  

The company is engaged in the regulatory approval process for the
Hammerstone Project which will expand the Muskeg Valley Quarry and
add an integrated limestone processing complex to provide
manufactured limestone-based products such as quicklime, as well
as related environmental services such as spent lime re-calcining.

                        Going Concern Doubt

Birch Mountain Resources Ltd. disclosed in its report on Form 6-K
which was filed with the U.S. Securities and Exchange Commission
on May 20, 2008, that the company currently has insufficient
revenue to meet its yearly operating and capital requirements.  

The company has incurred operating losses since its inception in
1995, and as of March 31, 2008, has an accumulated deficit of
C$48.2 million.  Losses are from costs incurred in the early
operation and development of the Muskeg Valley Quarry and the
Hammerstone Project, exploration of mineral opportunities and
mineral technology research.  Future operating losses may occur as
a result of the continued operation of the Muskeg Valley Quarry
and development of the Hammerstone Project.

The company has a working capital balance at March 31, 2008, of
C$2.1 million, a decrease of approximately C$5.5 million from
Dec. 31, 2007.

The company has formally engaged RBC Capital Markets to assist in
the evaluation of strategic alternatives, which includes
discussing debt and equity strategies for its immediate and medium
term capital needs.  To the extent the company raises additional
capital by issuing equity or convertible debt securities,
ownership dilution to shareholders will result.  

The company believes these factors raise substantial doubt about
the company's ability to continue as a going concern.


BOYD GAMING: Suspends Echelon Construction on Financial Woes
------------------------------------------------------------
Boyd Gaming Corporation said it will delay construction of the
Echelon project on the Las Vegas Strip due to the difficult
environment surrounding the capital markets and the challenging
economic conditions.  The company expects to resume construction
in three to four quarters, assuming credit market conditions and
the economic outlook improves.

According to The Wall Street Journal, the Echelon project was
slated to open in 2010 with nearly 5,000 hotel rooms, five hotels,
two live entertainment theaters, and a shopping district.  The
Echelon was expected to reign as the tourist-oriented Strip, WSJ
adds.

WSJ related that the problem originated from Morgans Hotel Group's
inability to secure $950 million in financing for the hotels.
Separately, Boyd has already committed to funding $3.3 billion of
the project through a credit facility, which has been drawn down
by about $500 million so far, WSJ stated.  

In a press statement, the company said it is in discussions with  
Morgans and General Growth Properties to modify its existing
agreements, as both joint venture parties remain interested in
Echelon.  The delay will allow its joint ventures with Morgans and
GGP the opportunity to secure financing under more favorable
conditions at a later date.  It also provides additional time for
its joint venture with GGP, the High Street retail promenade, to
take advantage of an improved leasing environment, once economic
conditions moderate.

Morgans said it will evaluate future proposals to revive the joint
venture, WSJ related.

By delaying, the company said, it will be able to better manage
the timing of the construction of the aspects of Echelon and
ensure that they do not outpace the construction of the joint
venture components.  This delay will also give the company time to
focus on restoring momentum in our core business, and for
consumers in general, to regain their footing and confidence.

Keith Smith, president and chief executive officer of Boyd Gaming,
commented:  "The current economic climate is unprecedented in
recent years.  While we remain enthusiastic about the long-term
prospects for the Las Vegas market and Echelon, this is the right
decision for our company at this time.  This decision is not a
reflection of the merits of the project, nor the accomplishments
of our professional development team, but rather the challenges
we, and many other businesses, face in today's uncertain business
climate.

According to WSJ, the news came as a measurable relief to
investors; Boyd stock shot up 20% to $12.01 on August 1 in New
York Stock Exchange composite trading and many analysts praised
the move.  WSJ citing David Katz, Oppenheimer gambling analyst,
said the suspension must significantly decrease Boyd's risk
profile in the near term.

WSJ noted that Boyd's second-quarter net income fell nearly 2% to
$21.7 million from $22.1 million a year earlier, while the
company's revenue fell 10% to $460.8 million.

As of June 30, 2008, the company said it has incurred
approximately $500 million of capitalized costs related to the
overall project.

Key financial statistics for the three months ended June 30, 2008,
includes:

   -- June 30 debt balance: $2.5 billion
   -- June 30 cash: $148.7 million
   -- Dividends paid in the quarter: $13.2 million
   -- Maintenance capital expenditures
      during the quarter: $22.9 million
   -- Expansion capital expenditures
      during the quarter: $222.5 million
   -- Capitalized interest during the quarter: $7.9 million
   -- Cash distribution to the Company
      from Borgata in the quarter: $4.9 million
   -- June 30 debt balance at Borgata: $746.4 million

The company's board of directors has authorized an amendment to
the existing share repurchase program to increase the amount of
common stock available to be repurchased to $100 million.  The
board also suspended its quarterly dividend program, which the
company believed was not adequately valued in the share price at
recent trading levels.

                    Statement by Morgans Hotel

Morgans Hotel Group Co. issued a statement regarding the
announcement by Boyd Gaming Corporation that it will delay the
entire Echelon project due to the difficult environment
surrounding today's capital markets and current economic
conditions. In January 2006, MHG entered into a 50/50 joint
venture with Boyd to develop a Mondrian and Delano within Boyd's
Echelon development on the Las Vegas strip.

MHG announced on July 1, 2008, that the deadline to obtain
construction financing for the Echelon project was extended to
September 15, 2008. Given Boyd's announcement and the difficulties
in the credit markets, MHG believes that the joint venture will be
unable to secure financing at favorable rates and conditions by
September 15, 2008. MHG does not intend to further extend the
joint venture agreement on its current terms but expects to
evaluate future proposals relating to the project with Boyd.

                        About Boyd Gaming

Headquartered in Las Vegas, Boyd Gaming Corporation (NYSE: BYD) --
http://www.boydgaming.com/ -- is a diversified owner and operator    
of 17 gaming entertainment properties located in Nevada, New
Jersey, Mississippi, Illinois, Indiana, Louisiana, and Florida.  
The company is also developing Echelon, a world-class destination
resort on the Las Vegas Strip, expected to open in the third
quarter 2010.
                    
                         *      *      *

As reported in the Troubled Company Reporter on June 30, 2008,
Standard & Poor's Ratings Services revised its rating outlook on
Boyd Gaming Corp. to negative from stable.  Ratings, on the
company, including the 'BB' corporate credit rating, were
affirmed.


BUFFETS HOLDINGS: Can Sell Ohio, Kentucky Properties
----------------------------------------------------
The United States Bankruptcy Court for the District of Delaware
authorized Buffets Holdings Inc. and its debtor-affiliates to sell
on an "as is", "where is" basis, the nonresidential real
properties located at:

   i) 2551 E. Tiffin Avenue, Findlay, Ohio;
  ii) 1415 Niles Courtland Road, SE, Niles, Ohio; and
iii) 701 Red Mile Road, Lexington, Kentucky.

As reported in the Troubled Company Reporter on July 7, 2008,
the Debtors also wanted to sell, along with the Findlay and
Lexington Properties, certain equipment which are "of no use to
the Debtors and a burden to their estates."

Pauline K. Morgan, Esq., at Young Conaway Stargatt & Taylor, LLP
in Wilmington, Delaware, told the Court the Debtors have
identified the purchasers of the three properties and the
properties' agents.   The purchase price of the properties had
also been determined by the Debtors.  In light of these
developments, the Debtors asked the Court that the sale be made
free and clear of any liens, claims and encumbrances, and that
they be allowed to pay, out of the proceeds of the sales, the
commissions of local real estate brokers and other customary fees
and expenses in connection with the sale of the Properties, Ms.
Morgan related.

According to Ms. Morgan, the Debtors hired an experienced
national real estate consultant to develop a marketing plan for
the properties whose combined marketing efforts with the Local
Brokers produced purchasers, and resulted in the Debtors
executing the Sale Contracts for the three properties.

Details of the Sale contracts include:

  (1) The Findlay Property   : 2551 E. Tiffin Avenue
                               Findlay, Ohio
      Purchase Price         : $1,800,000
      Purchaser              : Grindstone Properties, LLC
      Execution Date         : Feb. 25, 2008
      Local Broker           : J.R. Finney Real Estate Company
                               Attn: J. Robert Finney
      Broker's Commission    : $72,000

  (2) The Niles Property     : 1415 Niles Courtland Road SE,
                               Niles, Ohio
      Purchase price         : $900,000
      Purchaser              : Napstak, LLC Attn: Alex Patel
      Execution Date         : Mar. 11, 2008
      Local Broker       (1) : Terra National Real Estate Group
                               Attn: Jack Barson                
                         (2) : JDHoliday Associates
      Brokers' Commission(1) : $22,500
                         (2) :  22,000

  (3) The Lexington Property : 701 Red Mile Road      
                               Lexington, Kentucky
      Purchase Price         : $1,050,000
      Purchaser              : Sirius Equity partners, LLC
      Execution Date         : May 9, 2008
      Local Broker           : Prudential CRES Commercial
                               Real Estate
      Brokers' Commission    : $52,500

As these properties were marketed by skilled commercial real
estate brokers, the Debtors believed that the prices under the
Sale Contracts reflect the true and reasonable market values of
the properties.  The properties, being not a core component of
the Debtors' long-range business strategy are an economic burden,
Ms. Morgan says.  The elimination of the liabilities associated
with the Properties and the value to be realized by the estates
through the sale of these properties is beneficial to the
Debtors, their estates and creditors, Ms. Morgan tells the Court.

The Debtors will sell the properties free and clear of liens,
claims or encumbrances, pursuant to Section 363(f) of the
Bankruptcy Code which authorizes the sale of a property free and
clear of lien, claims or encumbrances if:

   (i) applicable non-bankruptcy law permits the sale of the  
       property free and clear of interest;

  (ii) the lienholder or claimholder consents;

(iii) the interest is a lien and the price at which the property
       is to be sold is greater than the aggregate value of all
       liens on the property;

  (iv) the interest is a bona fide dispute; or

   (v) the entity could be compelled, in a legal or equitable
       proceeding, to accept a money satisfaction of the  
       interest.

The Debtors noted that the Sale Contracts are results of arm's-
length negotiations in which all parties acted in good faith.

                    About Buffets Holdings

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

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

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

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

As reported in the Troubled Company Reporter on Feb. 26, 2008,
the Court granted on February 22, 2008, final approval of the
Debtors' debtor-in-possession credit facility, consisting of
$85 million of new funding and $200 million carried over from the
company's prepetition credit facility.  (Buffets Holdings
Bankruptcy News, Issue No. 19; Bankruptcy Creditors' Service Inc.,
http://bankrupt.com/newsstand/or 215/945-7000).

                           *    *    *

As reported in the Troubled Company Reporter on June 16, 2008,
the Court further extended exclusive periods of the Debtors to (a)
file a Chapter 11 Plan through and including Sept. 30, 2008, and
(b) solicit acceptances of a plan through and including Dec. 1,
2008.


BUFFETS HOLDINGS: Wants Confidential Pact With Realty Approved
--------------------------------------------------------------
Buffets Holding Inc. and its debtor-affiliates ask the United
States Bankruptcy Court for the District of Delaware to approve a
confidential stipulation among:

     (i) Realty Income Taxes Properties, LP, Realty Income
         Pennsylvania Properties Trust and Crease Net Lease,  
         Inc., as landlords,

    (ii) Fire Mountain Restaurants, LLC, and Ryan's Restaurant
         Group, Inc., as tenants, and

   (iii) Buffets, Inc., as guarantor.

Pauline K. Morgan, Esq., at Young Conaway Stargatt & Taylor LLP,
in Wilmington, Delaware, tells the Court that on November 1,
2006, Buffets acquired Ryan's Restaurant Group, and financed the
acquisition through, among other things, a secured credit
facility with Credit Suisse and a sale-lease back financing
facility extended by Drawbridge Opportunities Fund, LP and its
affiliate, Fortress Investment Group, LLC.

At the time the merger was consummated, Buffets, Ryan's and
Fortress entered into a $567,000,000 sale and leaseback financing
relating to approximately 275 Ryan's brand restaurants and seven
Buffets brand restaurants.  A total of 105 restaurant locations
sold in the 2006 SLB Transaction were later transferred to the
Landlords from Fortress and are leased back to either Fire
Mountain or Ryan's Restaurants and operate as a Ryan's brand
restaurant pursuant to 105 individual leases, Ms. Morgan recalls.

Prior to the Petition Date, the Debtors, together with their
employed court-approved professionals and advisors, carefully
analyzed the leases to determine whether assuming or rejecting
these would be in the best interest of the Debtors and their
creditors.  The Debtors have diligently continued their analysis
of each of their leases, taking into consideration the restaurant
operating performance, competition within the geographical
market, rent and other material terms under the leases, the
condition of buildings, and other factors to consider with
respect to each restaurant location, Ms. Morgan notes.

Based on an analysis of the factors, the Debtors have rejected 64
leases, assigned seven leases to third parties and terminated
three leases pursuant to various court orders.

Using this analysis, the Debtors further investigated each of the
Realty Income Leases and determined that some Restaurant
locations were not suitable for assumption without lease
concessions.  This resulted in the Debtors' substantive
negotiations with the Landlords to determine if the Realty Income
Leases could be restructured in a manner that would permit the
Debtors to maintain the locations.  After significant
negotiations, Buffets, Fire Mountains and Ryan's Restaurant have
agreed to enter into a confidential stipulation with Realty
Income.  The stipulation provides, among others:

   (1) the Debtors will enter into an amendment to each Realty
       Income Lease which provides the Debtors either (a) a
       reduction of rent and an early expiration of the initial
       lease term, or (b) an early expiration of the initial
      lease term;

   (2) the Fire Mountains and Ryan's Restaurant must agree that
       the amendment and assumption of every Realty Income Lease
       is a condition precedent to the amendment and assumption
       of every other Realty Income Lease;

   (3) if the Debtors reject a Realty Income Lease without the
       consent of the Landlords, the stipulation and the
       amendments to the lease will be deemed void ab initio,
       and the parties return to the status quo ante position as
       if the stipulation had never been entered, and Fire
       Mountains Restaurant and Ryan's Restaurant must repay the
       savings actually achieved under the amendments to the  
       Lease, and Realty income is entitled to a rejection
       damage claim pursuant to Section 503(b)(7) of the
       Bankruptcy Code with respect to any rejected Realty Income
       Lease;

   (4) Realty Income will have non-priority general unsecured
       claims in these Debtors' bankruptcy cases with respect to
       the Leases:
      
          Debtor                    Claim Amount
          ------                    ------------
          Buffets, Inc.               $9,000,000
          Fire Mountain                8,575,000
          Ryan's Restaurant              425,000

       The maximum aggregate amount distributable to Realty
       Income under any or all of these claims will be
       $9,000,000;

   (5) a cure amount of $66,959 is payable with the Debtors'
       assumption of the Realty Income Leases, together with the
       payment of all currently due but unpaid taxes, plus all
       accrued interest and penalties;

   (6) the parties must maintain confidentiality of the details
       underlying the stipulation and the negotiations that lead
       to it, revealing them only to the extent and to persons
       required to obtain an order approving the assumption of
       the Realty Income Leases, including the Committee and
       Administrative Agent under the Debtors' postpetition
       credit facility subject to their existing confidentiality
       agreements with the Debtors.

The Debtors, with Realty Income's support, further seek the
Court's approval to file under seal the 105 individual lease
amendments.

Both the Debtors and Realty Income ask the Court to rule that the
Amendments to the Leases remain under seal and not be made
available to anyone except to the Office of the United States
Trustee, the Official Committee of Unsecured Creditors and its
advisors and counsel, the Administrative Agent for the Debtors'
postpetition lenders and its advisors and counsel, or others as
provided for in the stipulation or upon further Court order.

                    Realty Income's Statement

Realty Income Corporation, The Monthly Dividend Company(R), has
reached an agreement with Buffets Holdings for the continued lease
of all of its properties.

Under the terms of the agreement, all 105 of the leases, 104
owned by Realty Income and one owned by Crest Net Lease, Inc.,
will be assumed and continue to be operated by Buffets.  Rents
will be modified, for the 104 Realty Income properties, from an
annualized rent of $22,400,000 to $19,400,000 or 87% of previous
rents.  In addition, rents are to increase 2% annually.  
Currently the 104 properties represent approximately 6.8% of
Realty Income's annualized lease revenue.  Subsequent to the
execution of this agreement, it is anticipated that Buffets will
continue to be the Company's largest tenant and will represent
approximately 5.9% of Realty Income's annualized lease revenue.

Realty Income further stated that the results of these  
negotiations are consistent with the projections used in the
Company's previous earnings guidance and, there is no change in
earnings guidance based on this agreement.  The agreement has
been filed with the Court for approval at a future date and is
subject to the requirements of the code.

Realty Income, The Monthly Dividend Company(R), is a New York
Stock Exchange real estate company dedicated to providing  
shareholders with dependable monthly income.  To date the Company
has paid 455 consecutive common stock monthly dividends
throughout its 39-year operating history.  The monthly income is
supported by the cash flow from over 2,300 retail properties
owned under long-term lease agreements with leading regional and
national retail chains.  The Company is an active buyer of net-
leased retail properties nationwide.

                    About Buffets Holdings

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

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

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

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

As reported in the Troubled Company Reporter on Feb. 26, 2008,
the Court granted on February 22, 2008, final approval of the
Debtors' debtor-in-possession credit facility, consisting of
$85 million of new funding and $200 million carried over from the
company's prepetition credit facility.  (Buffets Holdings
Bankruptcy News, Issue No. 18; Bankruptcy Creditors' Service Inc.,
http://bankrupt.com/newsstand/or 215/945-7000).

                           *    *    *

As reported in the Troubled Company Reporter on June 16, 2008,
the Court further extended exclusive periods of the Debtors to (a)
file a Chapter 11 Plan through and including Sept. 30, 2008, and
(b) solicit acceptances of a plan through and including Dec. 1,
2008.


BUFFETS HOLDINGS: Taps PricewaterhouseCoopers as Tax Advisor
------------------------------------------------------------
Buffets Holdings Inc. and its debtor-affiliates ask the United
States Bankruptcy Court for the District of Delaware for
permission to employ PricewaterhouseCoopers as their tax advisor.

Sean T. Greecher, Esq., at Young Conaway Stargatt & Taylor, LLP
in Wilmington, Delaware, tells the Court that the Debtors require
the services of an experienced tax advisor who is familiar with
the Debtors' business and operations, their industry, and the
Chapter 11 process.

Mr. Greecher relates that PwC has served as the Debtors' tax
advisor since 2004, and has developed a great deal of
institutional knowledge, and an intimate understanding of the
Debtors' business, finances, operations, systems and capital
structure.

The Debtors, Mr. Greecher says, understand that PwC has wealth of
experience in providing accounting, tax and advisory services in
restructuring and reorganizations and has an excellent reputation
for services it has rendered in large and complex Chapter 11
cases on behalf of debtors and creditors throughout the united
States.

The Debtors, Mr. Greecher adds, believe that PwC is well-suited
and uniquely qualified to serve as the Debtors' tax advisor in
their Chapter 11 cases.

Aside from providing tax compliance and consulting services to
the Debtors, PWC will also:

   * estimate the amount of cancellation of indebtedness income
     that would be realized by the Debtors;

   * identify federal and state tax attributes and any
     limitations imposed upon them for the Debtors;

   * analyze the capital structure of Buffets;

   * to the extent necessary, determine Buffets' tax basis in its
     assets, including in stock of subsidiaries;

   * prepare a model that illustrates relevant tax consequences
     of proposed plans or reorganization; and

   * provide other tax assistance on an "as requested" basis.

For its services, PwC will be compensated based on its hourly
rates:

   Professional             Hourly Rate
   ------------             -----------

   Partner                         $675
   Director/Senior manager          585
   Manager                          485
   Senior Associate                 385
   Associate                        275

The firm will also be reimbursed of its necessary, reasonable
out-of-pocket expenses incurred in providing the services.

The Debtors will provide limited indemnity to PwC as is customary
and reasonable.

Jeffrey J. Bjustrom, a partner at PwC, assures the Court that PwC
is a "disinterested" person as that term is defined in Section
101(14) of the Bankruptcy Code, and does not hold or represent an
interest adverse to the Debtors within the meaning of Section
327(a).

                    About Buffets Holdings

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

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

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

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

As reported in the Troubled Company Reporter on Feb. 26, 2008,
the Court granted on February 22, 2008, final approval of the
Debtors' debtor-in-possession credit facility, consisting of
$85 million of new funding and $200 million carried over from the
company's prepetition credit facility.  (Buffets Holdings
Bankruptcy News, Issue No. 19; Bankruptcy Creditors' Service Inc.,
http://bankrupt.com/newsstand/or 215/945-7000).

                           *    *    *

As reported in the Troubled Company Reporter on June 16, 2008,
the Court further extended exclusive periods of the Debtors to (a)
file a Chapter 11 Plan through and including Sept. 30, 2008, and
(b) solicit acceptances of a plan through and including Dec. 1,
2008.


BUILDING MATL'S: At Fitch's Neg. Watch on Likely Covenant Breach
----------------------------------------------------------------
Fitch Ratings has placed Building Materials Holding Corporation's
ratings on Rating Watch Negative following the company's
announcement that it is likely to be out of compliance with
certain covenants under its bank credit facilities.

These ratings are affected:

  -- Issuer Default Rating 'B';
  -- Senior secured debt 'B+/RR3'.

The Rating Watch Negative reflects BMHC's exposure to liquidity
risk given ongoing discussions with its bank group regarding a
temporary waiver as well as regarding a permanent amendment to its
existing syndicated credit facilities.  The company announced that
based on preliminary evaluation of financial information for its
second quarter ended June 30, 2008, BMHC was out of compliance
with financial covenants relating to its minimum net worth and
earnings before interest, taxes, depreciation and amortization
requirements.  As of July 28, 2008, there were $29 million
outstanding under the revolver and $340 million outstanding on the
term loan.  Resolution of the Rating Watch Negative will be based
in part on the company's ability to negotiate a new bank credit
facility.

Fitch will review the terms and conditions of the new agreement,
including the amount of funds the company can access under it.  
Fitch will also review the company's financial operating prospects
and liquidity for the remainder of 2008 and into 2009 and take
that into consideration in resolving the Watch status.

The company's financial results have been adversely affected by
the meaningful multi-year downturn in the homebuilding market,
especially as the large public builders sharply reduced production
of new homes to balance supply with demand.  BMHC's revenues fell
36.6% during the first quarter of fiscal year 2008 while gross
margins for the quarter declined 220 basis points to 17.5%
compared to 19.7% during the same period in 2007.  In response to
the housing downturn, BMHC is unifying and streamlining its
operations, shutting down a number of underperforming businesses,
reducing capital expenditures and deferring discretionary capital
spending, and reducing SG&A expenses by consolidating business
infrastructure and optimizing its staffing levels.

Fitch expects that BMHC's margins and credit metrics will continue
to be under pressure as the housing environment remains difficult
for the remainder of the year and into next year.  In 2008, Fitch
projects that total and single family starts will decline 29.4%
and 35.2%, respectively.

BMHC is one of the largest providers of building materials and
residential construction services in the United States.  The
company serves the homebuilding industry through two recognized
brands: as BMC West, the company distributes building materials
and manufacture building components for professional builders and
contractors in the western and southern states; as SelectBuild, it
provides construction services to high-volume production
homebuilders in key markets across the country.




BURNSIDE AVENUE: Files for Chapter 11 Bankruptcy in Manhattan
-------------------------------------------------------------
Christopher Scinta at Bloomberg News reports that Burnside Avenue
Stores Inc. and 26 of its affiliates filed voluntary petitions
under Chapter 11 of the Bankruptcy Code before the United States
Bankruptcy Court for the Southern District of New York.

According to Bloomberg, company president Scott Dwek blamed an
ill-fated expansion program into the Midwest, higher rents on new
stores, and declining sale for the filing.  In connection with the
filing, the company is planning to close some of its unprofitable
stores, the report notes.

The company listed assets of $13 million and debts of $18 million,  
Bloomberg says.  The company owes $844,028 in claims to unsecured
creditor Nucci International from New York, the report adds.

The company lost roughly $10 million in 2007 on sales of
$37.4 million, relates Bloomberg, citing papers filed with the
Court.  

Burnside Avenue, the report relates, has joined other retailers
including Linens 'n Things Inc., Mervyn's LLC, and Steve & Barry's
LLC who sought relief under Chapter 11 of the Bankruptcy Code as
consumers reduce spending in the midst of soaring energy costs and
declining home values.

Headquartered in Bronx, New York, Burnside Avenue Lot Stores Inc.
operates discount stores in 64 locations.



BURNSIDE AVENUE: Voluntary Chapter 11 Case Summary
--------------------------------------------------
Lead Debtor: Burnside Avenue Lot Stores, Inc.
             dba Lot Stores
             18 East Burnside Ave.
             Bronx, NY 10453

Bankruptcy Case No.: 08-41898

Debtor-affiliates filing separate Chapter 11 petitions:

        Entity                                     Case No.
        ------                                     --------
        Burnside Avenue Lot Stores, Inc.           08-12988
        138th Street Lot Stores, Inc.              08-12989
        Castle Hill Lot Stores, Inc.               08-12990
        125th Street Lot Stores, Inc.              08-12991
        Castle Center Lot Stores, Inc.             08-12992
        Lenox Avenue Lot Stores, Inc.              08-12993
        Retail Hub Family Place, Inc.              08-12994
        Lot Stores Management Company, Inc.        08-12995
        Lot Stores, Inc.                           08-12996
        Albert Dweck Distributors, Inc.            08-12997
        Avon Avenue Lot Stores, Inc.               08-12998
        155 Main Street Lot Stores, Inc.           08-12999
        Lot Stores of Roebling Center, Inc.        08-13000
        Old Colony Lot Stores, Inc.                08-13002
        Atlantic Avenue Lot Stores, Inc.           08-13004
        Lot Stores of Strawberry Square, Inc.      08-13005
        Front Street Lot Stores, Inc.              08-13006
        Lot Stores of North Philadelphia, Inc.     08-13008
        Imperial Plaza Lot Stores, Inc.            08-13009
        Woodland Village Lot Stores, Inc.          08-13010
        1211 Lot Stores, Inc.                      08-13011
        Overbrook Plaza Lot Stores, Inc.           08-13012
        Westside Shopping Center Lot Stores, Inc.  08-13013
        Beltway Plaza Lot Stores, Inc.             08-13014
        East Over Lot Stores, Inc.                 08-13015
        East River Lot Stores, Inc.                08-13016
        Lot Stores of H Street Connection, Inc.    08-13017

Type of business: The Debtors own and operate department stores.

Chapter 11 Petition Date: July 31, 2008

Court: Southern District of New York (Manhattan)

Judge: James M. Peck

Debtors' Counsel: Kevin J. Nash, Esq.
                     Email: FinkGold@aol.com
                  Finkel Goldstein Rosenbloom Nash, LLP
                  26 Broadway, Ste. 711
                  New York, NY 10004
                  Tel: (212) 344-2929
                  Fax: (212) 422-6836

Burnside Avenue Lot Stores, Inc's Financial Condition:

Estimated Assets: $100,000,000 to $500,000,000

Estimated Debts:  $10,000,000 to $50,000,000

The company listed assets of $13 million and debts of $18 million,  
Bloomberg News says.


C32-1 INTERAIR: Voluntary Chapter 11 Case Summary
-------------------------------------------------
Debtor: C32-1 Interair Commerce Center, LLC
        c/o Marc S. Stern
        1825 NW 65th St.
        Seattle, WA 98117  

Bankruptcy Case No.: 08-14867

Chapter 11 Petition Date: July 31, 2008

Court: Western District of Washington (Seattle)

Debtors' Counsel: Marc S. Stern, Esq.
                   (marc@hutzbah.com)
                  1825 NW 65th St.
                  Seattle, WA 98117
                  Te: (206) 448-7996
                  http://www.hutzbahlaw.com/

Total Assets: $8,000,000

Total Debts:  $8,744,594

The Debtor does not have any creditors who are not insiders.


CAROL FERRI: Voluntary Chapter 11 Case Summary
----------------------------------------------
Debtor: Carol Ferri
        4124 Macaw
        Las Cruces, NM 88001

Bankruptcy Case No.: 08-12399

Chapter 11 Petition Date: July 25, 2008

Court: New Mexico (Albuquerque)

Judge: Mark B. McFeeley

Debtor's Counsel: R. Trey Arvizu, III, Esq.
                  (arvizulawoffices@qwestoffice.net)
                  PO Box 1479
                  Las Cruces, NM 88004-1479
                  Tel: (575) 527-8600
                  Fax: (575) 527-1199

Estimated Assets: $1 million to $10 million

Estimated Debts: $500,000 to $1 million

A list of the Debtor's largest unsecured creditors is available
for free at http://bankrupt.com/misc/NMb08-12399.pdf


CELL THERAPEUTICS: Selling $12MM Shares to Midsummer Investment
---------------------------------------------------------------
Cell Therapeutics Inc. entered into an equity line of credit
agreement with Midsummer Investment Ltd. for the sale of up to
$12 million of common stock over time.  The stock would be issued
upon exercise of a warrant pursuant to the terms of the agreement.

The company has the right to raise cash under the agreement for
shares of the company's common stock on a periodic basis.  The
number and price per share of each issuance are determined by a
contractual formula based on the trading volume and a discount to
the volume weighted average price of the company's common stock,
as reported by the Milan Stock Exchange, over a preceding period
of trading days.

The first draw under the agreement is expected to take place in
August 2008, and the agreement contemplates that additional draws,
subject to customary closing conditions, will occur until the
warrant is exercised in full or the company elects to suspend
future closings under the agreement.  The company can choose to
reactivate the line of credit after any such suspension.

A prospectus supplement relating to the common stock to be issued
in respect of the agreement was filed with Securities and Exchange
Commission.  Copies of the prospectus supplement and accompanying
base prospectus may be obtained directly from:

     Cell Therapeutics Inc.
     501 Elliott Avenue West, Suite 400
     Seattle, WA 98119

                     About Cell Therapeutics

Headquartered in Seattle, Cell Therapeutics Inc. --
http://www.CellTherapeutics.com/-- is a biopharmaceutical company   
committed to developing an integrated portfolio of oncology
products aimed at making cancer more treatable.

As reported in the Troubled company Reporter on May 20, 2008,
Cell Therapeutics Inc.'s consolidated balance sheet at March 31,
2008, showed $78.6 million in total assets, $192.8 million in
total liabilities, and $9.9 million in no par value preferred
stock, resulting in a $124.1 million total stockholders' deficit.

                        Going Concern Doubt

Stonefield Josephson Inc. in Los Angeles, California, expressed
substantial doubt about Cell Therapeutics Inc.'s ability to
continue as a going concern after auditing company's financial
statements for the year ended Dec. 31, 2007.  

The auditing firm reported that the company has substantial
monetary liabilities in excess of monetary assets as of Dec. 31,
2007, including approximately $19.8 million of convertible
subordinated notes and senior subordinated notes which mature in
June 2008.

The company has incurred losses since inception and expects to
generate losses from operations for at least the next couple of
years primarily due to research and development costs for Zevalin,
OPAXIO (paclitaxel poliglumex), pixantrone, and brostallicin.  

The company said that its $15.3 million in cash and cash
equivalents, securities available-for-sales, as of March 31, 2008,  
even with the $5.0 million additional financing from a second
offering of securities to the purchaser of the Series E preferred
stock and 13.5% convertible senior notes, will not sufficient to
fund the company's planned operations for the next twelve months
as well as repay approximately $10.7 million in principal due on
its convertible subordinated and senior subordinated notes in June
2008.


CENTENNIAL COMMS: May 31 Balance Sheet Upside-Down By $1.0 Billion
------------------------------------------------------------------
Centennial Communications Corp.'s consolidated balance sheet at
May 31, 2008, showed $1.38 billion in total assets, $2.42 billion
in total liabilities, and $4.9 million in minority interest in
subsidiaries, resulting in a $1.04 billion stockholders' deficit.

For the full year, the company reported income from continuing
operations of $28.0 million, as compared to income from continuing
operations of $7.0 million for fiscal year 2007.  Including
discontinued operations, net income was $25.1 million for the
fiscal year ended May 31, 2008, compared to a net loss of
$31.6 million for the fiscal year ended May 31, 2007.

Centennial reported full-year 2008 consolidated revenue from
continuing operations of $1.00 billion, which included
$550.7 million from U.S. wireless and $450.7 million from Puerto
Rico operations.  The company's fiscal 2008 consolidated adjusted
operating income from continuing operations was $404.1 million, an
increase of 11 percent versus the adjusted 2007 fiscal year.

At May 31, 2008, the company had total liquidity of
$255.2 million, consisting of cash and cash equivalents totaling
$105.2 million and approximately $150.0 million available under
its revolving credit facility.  Additionally, at May 31, 2008, the
company had restricted cash of $6.5 million, which is held in
escrow as the result of a reciprocal escrow agreement with one of
its customers.

The company ended fiscal 2008 with net debt of $1.90 billion, a
decrease of $46.3 million from the end of fiscal 2007.

                      Fourth Quarter Results

The company reported income from continuing operations of
$13.6 million for the fiscal fourth quarter of 2008 as compared to
income from continuing operations of $5.9 million in the fiscal
fourth quarter of 2007.  Including discontinued operations, net
income was $12.9 million for the 2008 fiscal fourth quarter
compared to $5.2 million in the 2007 fiscal fourth quarter.  

Consolidated adjusted operating income from continuing operations
for the fiscal fourth quarter was $109.0 million, as compared to
$98.1 million for the adjusted prior-year quarter.  For
comparison, the company's fiscal 2007 financial results have been
adjusted to reflect the Universal Service Fund (USF) charge in the
period to which it relates.

"In the U.S., we move into fiscal 2009 with a high-quality
customer base that supports strong retail cash flow growth," said
Michael J. Small, Centennial's chief executive officer.  "We'll
continue to invest in our network, retail distribution presence
and front-line Associates to showcase our strengths."

Small continued, "In Puerto Rico, we've introduced new unlimited
rate plans to give our customers a full menu of choices, and we'll
make targeted investments in fiscal 2009 to fortify a good
competitive position by emphasizing our premium brand with
customers who are heavy users of wireless service.  We're also
leveraging our strong collection of assets in the residential and
enterprise markets to capitalize on emerging bandwidth growth in a
way that very few players can."

Centennial reported fiscal fourth-quarter consolidated revenue
from continuing operations of $258.7 million, which included
$142.5 million from U.S. wireless and $116.2 million from Puerto
Rico operations.  Consolidated revenue from continuing operations
grew 9 percent versus the adjusted fiscal fourth quarter of 2007.

The company ended the quarter with 1,092,600 total wireless
subscribers, which compares to 1,049,600 for the year-ago quarter
and 1,086,300 for the previous quarter ended Feb. 29, 2008.  The
company reported 582,200 total access lines and equivalents at the
end of the fiscal fourth quarter, which compares to 502,100 for
the year-ago quarter.

Full-text copies of the company's consolidated financial
statements for the year ended May 31, 2008, are available for free
at http://researcharchives.com/t/s?3058

                About Centennial Communications

Based in Wall, New Jersey, Centennial Communications Corp.
(Nasdaq: CYCL) - http://www.centennialwireless.com/--
provides regional wireless and integrated communications
services in the United States and the Puerto Rico with
approximately 1.1 million wireless subscribers and 582,200 access
lines and equivalents.  The US business owns and operates
wireless networks in the Midwest and Southeast covering parts of
six states.  Centennial's Puerto Rico business owns and operates
wireless networks in Puerto Rico and the U.S. Virgin Islands and
provides facilities-based integrated voice, data and Internet
solutions.  Welsh, Carson, Anderson & Stowe is a significant
shareholder of Centennial.

                          *     *     *

Centennial Communications Corp. continues to carry Moody's
Investor Services' 'Caa1' senior unsecured debt rating, which was
placed in September 2006.

As reported in the Troubled Company Reporter on Aug. 1, 2008,
Standard & Poor's Ratings Services said its credit ratings and
outlook on Centennial Communications Corp. (B/Stable/--) are not
immediately affected by the company's recent announcement that it
has conducted a strategic review and is considering separating its
Puerto Rican operations from its U.S. operations.  


CHRYSLER LLC: Surpasses Second Quarter Financial Objectives
-----------------------------------------------------------
Ron Kolka, executive vice president and chief financial officer of
Chrysler LLC said it is ahead of its operational plan and it
continues to perform ahead of its financial plan for the second
quarter and first half of 2008, in spite of the severe economic
and industry challenges.

In a press statement, the company said that as of June 30, 2008,
it has Cash/Marketable Securities of $11.7 billion, including
$2.3 billion in Restricted Cash and excluding $2.3 billion in VEBA
assets, ahead of its plan and down slightly from year-end 2007.  
As well, for the six months ended June 30, 2008, Chrysler posted
an EBITDA of approximately $1.1 billion, ahead of plan.

According to The Wall Street Journal, the public disclosure is a
rarity since Chrysler isn't required to share any financial data.

WSJ, citing Jim Press, Chrysler president, said the company wanted  
to tell the real story amid speculations that circulate about the
company.

Chrysler's holdings, WSJ indicated, included $2.3 billion in
restricted cash, excluding $2.3 billion in its retirement fund
assets.

In a statement, Mr. Kolka added that Chrysler's negative product
mix, largely driven by trucks and SUVs, was off-set in the first
half with a positive mix which includes the effects from
substantially reduced fleet sales; the effects of new products --
the all-new Chrysler and Dodge minivans, Dodge Journey and Jeep
Liberty and the elimination of unprofitable models (Chrysler PT
Cruiser Convertible, Pacifica and Crossfire and the Dodge Magnum).

                        About Chrysler LLC

Based in Auburn Hills, Michigan, Chrysler LLC --
http://www.chrysler.com/-- a unit of Cerberus Capital      
Management LP, produces Chrysler, Jeep(R), Dodge and Mopar(R)
brand vehicles and products.  The company has dealers worldwide,
including Canada, Mexico, U.S., Germany, France, U.K.,
Argentina, Brazil, Venezuela, China, Japan and Australia.

                          *     *     *

As reported in the Troubled Company Reporter on Aug 1, 2008,
Standard & Poor's Ratings Services lowered the ratings on General
Motors Corp., Ford Motor Co., and Chrysler LLC, all to 'B-' from
'B'.  The ratings on GM and Ford were removed from CreditWatch
with negative implications, where they had been placed on June 20,
2008.  Chrysler will remain on CreditWatch pending the renewal of
certain bank lines at DaimlerChrysler Financial Services Americas
LLC, which S&P expects to be completed in the next few days.  If
the bank lines are renewed as expected, S&P would affirms the
ratings on Chrysler and DCFS and remove them from CreditWatch.

On July 31, 2008, TCR said that Fitch Ratings has downgraded the
Issuer Default Rating of Chrysler LLC to 'CCC' from 'B-'.  The
Rating Outlook is Negative.  The downgrade reflects Chrysler's
restricted access to economic retail financing for its vehicles,
which is expected to result in a further step-down in retail
volumes.  Lack of competitive financing is also expected to result
in more costly subvention payments and other forms of sales
incentives.  Fitch is also concerned with the state of the
securitization market and the ability of the automakers to access
this market on an economic basis over the near term, given the
steep drop in residual values, higher default rates, higher loss
severity being experienced and jittery capital markets.


CHRYSLER LLC: July 2008 U.S. Sales Down 29% at 98,109 Units
-----------------------------------------------------------
Chrysler LLC reported total July 2008 U.S. sales of 98,109 units,
which is 29% below the same period last year.  Total July sales
reflect a continued contraction of the market of pickup trucks and
SUV sales and reductions in fleet sales.  The company's recently
completed "Let's Refuel America $2.99 Gas Guarantee" promotion
boosted showroom traffic and helped sales of Chrysler's newest
highly fuel-efficient vehicles throughout the three-month program
period.

"We are writing a new chapter in the auto industry story as
customers, dealers and companies adjust to a changing
environment," Jim Press, Chrysler LLC Vice Chairman and President,
said.  "There are many changes taking place that give us at the
new Chrysler cause for optimism.  In the short term, our 2009
model year vehicles with value packages will soon be arriving in
dealerships, and our August incentive packages are the best deals
of the year, helping to make owning as affordable as leasing.

"Within the product lineup, our leadership in minivans is well-
timed as consumers look for fuel-efficient alternatives to larger
SUVs.  Two new fuel-saving hybrid SUVs, the Dodge Durango and
Chrysler Aspen will soon be hitting the streets.  The Dodge
Journey and Jeep(R) Patriot are gaining more customers on the
appeal of fuel efficiency and affordability.  And the success of
cars like the Dodge Avenger, Charger and Challenger shows that
customers still want their cars to stand out from the crowd.  
Lastly, this fall we come to market with our best new pickup truck
ever — the 2009 Dodge Ram."

                          July Highlights

The Chrysler Town & Country posted a 24% increase with 8,070 sales
versus July 2007 sales of 6,513 units.  With room for seven
passengers, and the industry-exclusive Swivel 'n Go(TM) seating
system, the Chrysler Town & Country could be considered as a fuel-
efficient alternative to a full-sized SUV.  Town & Country sales
in July helped drive total minivan sales up 5%.  Total long-wheel-
base minivan retail sales increased 21% in July.

The Jeep Patriot continues to gain traction in the market,
offering excellent fuel economy, interior flexibility and utility
at a great value.  Total sales of 3,451 were up 4% versus last
year due to consumer interest in the company's most fuel-efficient
vehicles.  Additionally, Jeep Patriot 2008 year-to-date sales
increased 119%, with 40,135 total sales when compared with July
2007 year-to-date sales of 18,286 units.

Response to sales promotions of the Dodge Ram helped lesson the
impact of slow pickup truck demand.  Dodge Ram pickup sales were
down 27% (21,328 units) versus 2007 sales of 29,312, but sales
increased 32% when compared with June 2008 sales of 16,149 units.

The Dodge Avenger sedan continued with good performance with 4,318
units sold, up 2% when compared with July 2007 sales of 4,213.

The highly anticipated all-new Dodge Challenger SRT8(R) hit the
streets in July with excitement and solid sales results (2,895
units sold).  The return of the iconic Dodge Challenger combines
unmistakable design cues reminiscent of the original Challenger
with world-class performance making it the hottest vehicle on the
streets this summer.  In total, 3,990 Dodge Challengers have been
delivered to customers.

The company finished the month with 409,331 units of inventory, or
a 108-day supply.  As part of a planned reduction in manufacturing
and capacity, inventory is down 12% compared with July 2007 when
it totaled 464,875 units.

                      About Chrysler LLC

Based in Auburn Hills, Michigan, Chrysler LLC --
http://www.chrysler.com/-- a unit of Cerberus Capital       
Management LP, produces Chrysler, Jeep(R), Dodge and Mopar(R)
brand vehicles and products.  The company has dealers worldwide,
including Canada, Mexico, U.S., Germany, France, U.K.,
Argentina, Brazil, Venezuela, China, Japan and Australia.

                          *     *     *

As reported in the Troubled Company Reporter on Aug. 1, 2008,
Standard & Poor's Ratings Services lowered the ratings on General
Motors Corp., Ford Motor Co., and Chrysler LLC, all to 'B-' from
'B'.  The ratings on GM and Ford were removed from CreditWatch
with negative implications, where they had been placed on June 20,
2008.  Chrysler will remain on CreditWatch pending the renewal of
certain bank lines at DaimlerChrysler Financial Services Americas
LLC, which S&P expects to be completed in the next few days.  If
the bank lines are renewed as expected, S&P would affirms the
ratings on Chrysler and DCFS and remove them from CreditWatch.

As reported in the Troubled Company Reporter June 24, 2008,
Moody's Investors Service affirmed the B3 Corporate Family Rating
and Probability of Default Rating of Chrysler LLC, but changed the
outlook to negative from stable.  The change in outlook reflects
the increasingly challenging environment faced by Chrysler as the
outlook for US vehicle demand falls, and as high fuel costs drive
US consumers away from light trucks and SUVs, and toward more fuel
efficient vehicles.

As reported in the Troubled Company Reporter on May 9, 2008,
Fitch Ratings downgraded the Issuer Default Rating of Chrysler
LLC to 'B' from 'B+', with a Negative Rating Outlook.  Fitch has
also downgraded the senior secured bank facilities, including
senior secured first-lien bank loan to 'BB/RR1' from 'BB+/RR1';
and senior secured second-lien bank loan to 'CCC+/RR6' from
'BB+/RR1'.  The recovery rating on the second lien was also
downgraded from 'BB+/RR1' to 'CCC+/RR6' based on lower asset value
assumptions and associated recoveries in the event of a stress
scenario.


CHRYSLER LLC: Arm Completes Renewal of $24BB Annual Financing
-------------------------------------------------------------
Chrysler Financial, the subsidiary of Chrysler LLC, has completed
the renewal of its annual credit facilities.  The $24 billion
credit facilities provide funding for the company's dealer and
consumer financial services products.  Originally, the company was
seeking a renewal of its conduit credit facilities in the amount
of $30 billion.  Chrysler Financial reduced the amount required
due to conditions in the credit markets and changes in the
company's retail strategy.

"We are pleased with the completion of our credit facilities
renewal and the continuing confidence in our company demonstrated
by the banking community," Tom Gilman, executive vice chairman -
Chrysler Financial, said.  "90% of all banks that were part of the
original conduit participated in the renewal.  The liquidity
provided by these facilities will enable us to support our dealers
and their retail customers."

"I would like to thank our investors who have continued to support
us through the renewal,' Mr. Gilman added.  "And, I would like to
acknowledge the skilled leadership of Citi, JPMorgan and the Royal
Bank of Scotland who led the syndication of the loan facilities
and partnered with us to manage such a large transaction."  

"Getting this world-class financing done in this market is a
validation of Chrysler Financial and Chrysler, their management
and their strategic plans," James B. Lee, Jr., vice chairman of
JPMorgan, said.

"The depth and breadth of participation in this transaction was
impressive, particularly in the current market environment," said
Chad Leat, chairman of Citi's Alternative Asset Group.

             About Chrysler Financial and Chrysler LLC

Chrysler Financial -- http://corp.chryslerfinancial.com/-- offers  
automotive financial products and services to both dealers and
consumers of Chrysler, Jeep(R) and Dodge vehicles in the U.S.,
Canada, Mexico and Venezuela.  In addition it offers vehicle
wholesale and retail financing to more than 3,600 Chrysler, Jeep
and Dodge dealers.  Nearly three million drivers in the United
States benefits the financing of Chrysler Financial.  Chrysler
Financial has an employee base of 4,000 and supports a portfolio
of $70 billion.

Headquartered in Auburn Hills, Michigan, Chrysler LLC --
http://www.chrysler.com/-- a unit of Cerberus Capital      
Management LP, produces Chrysler, Jeep(R), Dodge and Mopar(R)
brand vehicles and products.  The company has dealers worldwide,
including Canada, Mexico, U.S., Germany, France, U.K.,
Argentina, Brazil, Venezuela, China, Japan and Australia.

                          *     *     *

As reported in the Troubled Company Reporter on Aug 1, 2008,
Standard & Poor's Ratings Services lowered the ratings on General
Motors Corp., Ford Motor Co., and Chrysler LLC, all to 'B-' from
'B'.  The ratings on GM and Ford were removed from CreditWatch
with negative implications, where they had been placed on June 20,
2008.  Chrysler will remain on CreditWatch pending the renewal of
certain bank lines at DaimlerChrysler Financial Services Americas
LLC, which S&P expects to be completed in the next few days.  If
the bank lines are renewed as expected, S&P would affirms the
ratings on Chrysler and DCFS and remove them from CreditWatch.

On July 31, 2008, TCR stated that Fitch Ratings has downgraded the
Issuer Default Rating of Chrysler LLC to 'CCC' from 'B-'.  The
rating outlook is negative.  The downgrade reflects Chrysler's
restricted access to economic retail financing for its vehicles,
which is expected to result in a further step-down in retail
volumes.  Lack of competitive financing is also expected to result
in more costly subvention payments and other forms of sales
incentives.  Fitch is also concerned with the state of the
securitization market and the ability of the automakers to access
this market on an economic basis over the near term, given the
steep drop in residual values, higher default rates, higher loss
severity being experienced and jittery capital markets.


CIPRICO INC: Gives In to Nasdaq Delisting and Suspension of Stocks
------------------------------------------------------------------
Ciprico Inc. received a letter on July 30, 2008, from the Nasdaq
Stock Market stating that the Nasdaq Listing Qualifications
Hearings Panel has determined to delist the company's shares from
the Nasdaq Stock Market and will suspend trading of those shares
at the open of business today, August 1, 2008.

In addition to the company's Nasdaq listing violations, the filing
for protection under Chapter 11 of the U.S. Bankruptcy Code served
as a basis for delisting the company's securities.   

As reported in the Troubled Company Reporter on July 30, 2008,
Ciprico Inc. filed a voluntary petition under Chapter 11 of the
Bankruptcy Code before the U.S. Bankruptcy Court for the District
of Minnesota due to slow sales.  It is presently evaluating other
alternatives to maximize the value of its assets.

The company stated that it does not intend to incur additional
costs to appeal the Panel's decision.

                           About Ciprico

Headquartered in Minneapolis, Minnesota, Ciprico Inc. (NASDAQ:
CPCI) -- http://www.ciprico.com-- provides software to   
information techonolgy servers, workstations and digital media
workflows.


COINMACH SERVICE: S&P Rates $825MM Credit Facility 'B+'
-------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'B' corporate
credit rating to Plainview, New York-based Coinmach Service Corp.  
The outlook is negative.
     
At the same time, S&P assigned a 'B+' rating to the company's
senior secured $825 million credit facility, which includes a
$50 million revolving credit facility due 2013, a $725 million
term loan B due 2014, and a $50 million delayed-draw term loan
facility due 2014, one notch above the corporate credit rating,
and a recovery rating of '2'.  S&P also assigned a 'CCC+' rating
to the company's $175 million senior unsecured and $225 million
senior subordinated interim-loan facilities due 2008, two notches
below the corporate credit rating, and a recovery rating of '6'.
     
As of March 31, 2008, CSC had about $1.17 billion of debt.
     
The ratings on CSC reflect its very highly leveraged financial
profile following its acquisition by Babcock & Brown Ltd. in
November 2007, and its significant cash flow requirements to fund
capital expenditures and interest.  The company's relatively
stable and predictable cash flows mitigate these factors.
     
CSC, through its operating company Coinmach Corp., is the leading
supplier of outsourced laundry services for multifamily housing
properties in the highly fragmented North American market, with a
strong presence in the Northeast, Mid-Atlantic, Southwest, and
Southeast regions.
     
"The negative outlook on CSC reflects our concerns about the
company's ability to reduce its very high debt leverage and
maintain adequate liquidity," said Standard & Poor's credit
analyst Christopher Johnson.  Although management expects to
improve the company's financial profile over the intermediate
term, we could lower the ratings if leverage increases to about
8.5x and/or the amount of covenant cushion significantly tightens,
which would constrain the company's liquidity position.  "If,
however, the company can reduce leverage to about 8x, we could
revise the outlook to stable," he continued.


COLUMBUS LOAN: Moody's Hikes Class C Notes Rating to Aaa from Ba1
-----------------------------------------------------------------
Moody's Investors Service has upgraded the ratings on these notes
issued by Columbus Loan Funding Ltd.:

Class Description: U.S. $11,500,000 Class C Floating Rate Senior
Subordinate Notes Due 2012

Prior Rating: Ba1

Current Rating: Aaa

According to Moody's, this rating action is a result of the pay
down of the Class C notes and related improvement in the Class C
Principal Coverage Test. The transaction's underlying collateral
pool consists primarily of Senior Secured Loans.

Additionally, Moody's has withdrawn the ratings on the following
notes:

Class Description: U.S. $27,500,000 Class A-II Floating Rate
Senior Subordinate Notes Due 2012

Prior Rating: Aaa

Current Rating: WR

Class Description: U.S. $10,000,000 Class A-III Floating Rate
Senior Subordinate Notes Due 2012

Prior Rating: Aaa

Current Rating: WR

Class Description: U.S. $41,750,000 Class B Floating Rate Senior
Subordinate Notes Due 2012

Prior Rating: Aa3

Current Rating: WR

According to Moody's, the withdrawal of the ratings is a result of
the Class A-II, Class A-III, and Class B notes being redeemed in
full.


COMMUNITY HEALTH: Earns $47.9 Million in 2008 Second Quarter
------------------------------------------------------------
Community Health Systems Inc. disclosed on Monday its financial
and operating results for the second quarter and six months ended
June 30, 2008.

Net income decreased 10.9 percent to $47.9 million for the three
months ended June 30, 2008, compared with $53.8 million for the
same period last year.

Net operating revenues for the three months ended June 30, 2008,
totaled $2.7 billion, a 124.6 percent increase compared with
$1.2 billion for the same period last year.

Income from continuing operations was $49.8 million for the three
months ended June 30, 2008, compared with $53.6 million for the
same period last year.

Adjusted EBITDA for the three months ended June 30, 2008, was
$368.5 million, compared with $168.9 million for the same period
last year, representing a 118.2 percent increase.  Adjusted EBITDA
is EBITDA adjusted to exclude discontinued operations, loss from
early extinguishment of debt and minority interest in earnings.  

Net cash provided by operating activities for the three months
ended June 30, 2008, was $407.9 million, compared with $95.6
million for the same period last year.
          
The consolidated financial results for the three months ended
June 30, 2008, reflect a 101.3 percent increase in total
admissions compared with the same period last year.  This increase
is primarily attributable to the expansion of the company's
hospital portfolio in 2007.  On a same-store basis, admissions
increased 2.3 percent and adjusted admissions increased 2.4
percent, compared with the same period last year.  On a same-store
basis, net operating revenues increased 4.9 percent, compared with
the same period last year.

                        Six Months Results

Net operating revenues for the six months ended June 30, 2008,
totaled $5.4 billion, a 130.3 percent increase compared with
$2.4 billion for the same period last year.  Income from
continuing operations was $101.2 million for the six months ended
June 30, 2008, compared with $110.8 million for the same period
last year.  

Net income was $108.0 million for the six months ended June 30,
2008, compared with $108.1 million for the same period last year.

Adjusted EBITDA for the six months ended June 30, 2008, was
$751.7 million, compared with $339.1 million for the same period
last year, representing a 121.6 percent increase.  

Net cash provided by operating activities for the six months ended
June 30, 2008, was $416.8 million, compared with $216.0 million
for the same period last year.

The consolidated financial results for the six months ended
June 30, 2008, reflect a 106.3 percent increase in total
admissions compared with the same period last year.  This increase
is primarily attributable to the expansion of the company's
hospital portfolio in 2007.  On a same-store basis, both
admissions and adjusted admissions increased 3.1 percent, compared
with the same period last year.  On a same-store basis, net
operating revenues increased 5.3 percent, compared with the same
period last year.
          
Commenting on the results, Wayne T. Smith, chairman, president and
chief executive officer of Community Health Systems Inc. stated,
"Community Health Systems delivered a solid operating performance
for the second quarter of 2008.  These results reflect consistent
execution of our strategy and our continued progress with respect
to the integration of the significant number of facilities
acquired in 2007.  

"We are pleased with the overall trends in our business during the
second quarter with strong same-store growth metrics as well as
efficient expense management.  Our hospitals are well positioned
in each of their respective markets, and are geographically
diversified, which minimizes our operating risk as no one state
represents a disproportionately greater percentage of our total
revenues or earnings.  We believe we have a business model in
place that has proven, over time, to enhance the operating
performance at both our existing and acquired facilities.  This
model has enabled us to continue to meet our objectives in today's
hospital industry operating environment.
         
"As we continue to integrate our recently acquired hospitals, we
are focused on the further expansion of our business model to
drive improved returns on these assets," added Smith.  "We are
pleased with our progress through this transition period and will
continue to identify operating synergies including reduced
marketing and supply costs, targeted physician recruiting,
centralized managed care negotiations and a more efficient
allocation of capital.  We believe we have significant
opportunities for continued improvement in the second half of
2008.  Above all, we remain focused on delivering value to both
our shareholders and the communities we serve."

                          Balance Sheet

At June 30, 2008, the company's consolidated balance sheet showed
$13.3 billion in total assets, $11.2 billion in total liabilities,
$320.6 million in minority interest, and $1.8 billion in total
stockholders' equity.

                      About Community Health

Located in the Nashville, Tennessee, suburb of Franklin, Community
Health Systems Inc. (NYSE: CYH) -- http://www.chs.net/-- operates  
general acute care hospitals in non-urban and mid-size markets
throughout the country.  Through its subsidiaries, the company
currently owns, leases or operates 117 hospitals in 28 states with
an aggregate of approximately 17,000 licensed beds.  Its hospitals
offer a broad range of inpatient and surgical services, outpatient
treatment and skilled nursing care.  In addition, through its QHR
subsidiary, the company provides management and consulting
services to over 160 independent non-affiliated general acute care
hospitals located throughout the United States.

                          *     *     *

As reported in the Troubled Company Reporter on July 21, 2008,
Fitch Ratings affirmed Community Health Systems Inc.'s
Issuer Default Rating at 'B', Secured Bank Credit Facility at
'BB-/RR2', and Senior Unsecured Notes at 'CCC+/RR6'.  The Rating
Outlook is Stable.  


CREDIT SUISSE: Fitch Affirms 'B+' Rating on $7.5MM Class L Certs.
-----------------------------------------------------------------
Fitch Ratings affirmed Credit Suisse First Boston Mortgage
Securities Corp.'s commercial mortgage pass-through certificates,
series 2001-CK1, as:

  -- $461.8 million class A-3 at 'AAA';
  -- Interest-only class A-X at 'AAA';
  -- Interest-only class A-Y at 'AAA';
  -- Interest-only class A-CP at 'AAA';
  -- $42.9 million class B at 'AAA';
  -- $45.4 million class C at 'AAA';
  -- $12.6 million class D at 'AAA';
  -- $12.6 million class E at 'AAA';
  -- $20.2 million class F at 'AAA';
  -- $17.7 million class G at 'AA+';
  -- $17.5 million class H at 'A-';
  -- $27.4 million class J at 'BB+';
  -- $7.5 million class K at 'BB';
  -- $7.5 million class L at 'B+'.

Fitch does not rate classes M, N, and O.  The class A-1 and A-2
certificates have paid in full.

The rating affirmations are the result of minimal reduction of the
pool collateral balance and stable performance since the last
Fitch rating action.  As of the July 2008 distribution date, the
pool has paid down 29.7%, to $700.6 million from $997.1 million at
issuance.  Forty-one loans (45.1%) have defeased since issuance.

Fitch has identified 15 loans (13.7%) as Fitch Loans of Concern,
which include two loans in special servicing (4.5%).

The largest specially serviced loan (3.1%) was originally a
portfolio of four cross-collateralized, cross-defaulted
multifamily buildings located in Texas and Indiana.  The portfolio
transferred to special servicing in August 2006 due to technical
default because of weak performance and existence of significant
deferred maintenance.  Of the three of the assets that are located
in Texas (Houston, Arlington and Amarillo), the Arlington and
Amarillo properties have been sold.  The remaining property in
Texas is currently 38% occupied and is being marketed for sale.  
One property is located in Indianapolis, Indiana and the special
servicer is working to foreclose on this asset.  Losses on this
specially serviced loan are anticipated to be fully absorbed by
the nonrated class O.

The second specially serviced loan (1.4%) is secured by two office
buildings in Clayton, Missouri.  The loan is current and losses
are not expected at this time.

The largest loan in the pool, Stonewood Center Mall (10.5%),
maintains its investment grade shadow rating.  The loan is secured
by the leasehold interest in a 929,792 square foot regional retail
mall in Downey, California.  As of March 2008, occupancy was 98%
compared to 94% at issuance and the anticipated repayment date is
Dec. 11, 2010.

There is minimal short-term maturity risk as no loans mature in
2008 and one loan (0.2%) matures in 2009.  The majority of the
non-defeased loans (40.5%) mature in 2010 and 2011.


DAE AVIATION: Moody's Affirms Caa2 Rating on $325MM Unsec. Notes
----------------------------------------------------------------
Moody's Investors Service affirmed DAE Aviation Holdings, Inc.'s
Corporate Family and Probability of Default Ratings of B3 but
lowered the rating outlook to negative from stable.  At the same
time, the rating agency upgraded the rating on the company's
secured bank credit facilities to B1 from B2 and affirmed the Caa2
rating on the company's senior unsecured notes.

At the end of February 2008, DAE Aviation sold its fixed base
operations for roughly $435 million and applied some $355 million
of proceeds to reduce bank indebtedness ($280 million against an
asset sale bridge loan and additional pay-downs of $75 million to
secured term loans). Although there has been a reduction in
aggregate indebtedness, pro forma metrics provided by the
continuing maintenance, repair and overhaul and other business
units reflect ongoing extensive leverage, weak interest coverage
and negative free cash flow and remain representative of the B3
Corporate Family Rating category.

The actions on facility ratings flow from changes in recovery
expectations on the company's debt structure. By reducing the
level of senior secured indebtedness, recovery rates on the
smaller remaining amount of secured debt improve. Similarly, with
less senior debt above their claims, the senior unsecured notes
are also expected to benefit from higher recovery rates. However,
the change was not significant enough to affect the rating of the
notes.

The change in outlook stems from the performance of the continuing
businesses to date (consisting principally of the MRO operations)
which is seen as modestly below earlier expectations and could be
subject to additional pressure from developments in the North
American aviation industry. DAE Aviation has yet to generate free
cash flow from its continuing operations. Some of that negative
free cash flow would be attributable to the carrying costs of the
investment in Landmark Aviation's FBO business; but not all. The
company will have some exposure to North American based airlines
which operate regional jets whose engines are serviced by the
company's MRO network and who have announced fleet capacity
reductions. These reductions are concentrated in older aircraft
with seating capacity of 50 or fewer passengers which tend to be
less fuel efficient but may require more frequent maintenance and
repair services. But, the bulk of DAE Aviation's MRO activity
remains in servicing business and military aircraft. Despite some
near term challenges, the MRO sector is expected to grow over time
and the company's position as an authorized provider of OEM
aftermarket services and diversification across multiple engine
platforms should benefit from these trends. The negative outlook
incorporates some uncertainty as to when and how the outcome of
these countervailing issues will be resolved. Similarly, covenant
compliance headroom could diminish over the next year unless the
performance of the MRO operations improves to offset the impact of
contributions from the FBO business rolling-off, potentially
adversely affecting the company's liquidity profile.

Ratings affirmed with updated Loss Given Default assessments:

Corporate Family, B3

Probability of Default, B3

$325 million senior unsecured notes, Caa2 (LGD-5, 82%)

Ratings upgraded with updated Loss Given Default assessments:

$100 million secured revolving credit to B1 (LGD-3, 30%) from B2
(LGD-3, 35%)

$479 million secured term loans to B1 (LGD-3, 30%) from B2 (LGD-3,
35%)

The last rating action was on July 10, 2007 at which time initial
ratings were assigned.

DAE Aviation Holdings, Inc., headquartered in Winnipeg, Manitoba,
is a 100%-owned subsidiary of Dubai Aerospace Enterprises LTD, and
is a leading provider of maintenance, repair and overhaul, and
aircraft completion & modification services to the regional,
business, military and general aviation industries. The company
was formed in 2007 through the acquisition of the MRO and FBOs of
Standard Aero Holdings, Inc. and Piedmont/Hawthorne Holdings, Inc.
(d/b/a Landmark Aviation) which was valued at approximately $1.9
billion. Annual revenue of the continuing MRO businesses is
approximately $1.5 billion.


DELTA AIR: Pilots Vote on Northwest Merger Through August 11
------------------------------------------------------------
Pilots of Delta Airlines Inc. and Northwest Airlines, Inc., began
voting July 14, 2008, on a joint labor agreement that will
essentially govern the terms of employment of both carrier's
pilots groups upon the closing of the Delta-Northwest merger, the
Atlanta Journal-Constitution reports.  Voting ends Aug. 11, 2008.

Voting results will be determined separately as the pilot groups
are represented by separate units of the Air Line Pilots
Association, AJC says.

The Tentative Agreement provides for, among others, Delta's
agreement to issue shares of its common stock equal to (i) 3.5% of
the fully-diluted shares outstanding of Delta to Delta pilots; and
(ii) 2.38% of the fully-diluted shares outstanding of Delta to
Northwest pilots, when the merger closes.

According to AJC, the Northwest pilots union informed its members
of certain meetings it held with Delta pilots in Chicago,
Illinois, to continue talks on the integration of their seniority
lists.

Absent an agreement within the 30-day negotiating period, Delta
and Northwest pilot groups will go into binding arbitration to
establish a combined seniority list in November 2008, says the
report.

                     About Northwest Airlines

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

The company and 12 affiliates filed for chapter 11 protection on
Sept. 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-17930).  Bruce
R. Zirinsky, Esq., and Gregory M. Petrick, Esq., at Cadwalader,
Wickersham & Taft LLP in New York, and Mark C. Ellenberg, Esq.,
at Cadwalader, Wickersham & Taft LLP in Washington, represent the
Debtors in their restructuring efforts.  The Official Committee
of Unsecured Creditors has retained Scott L. Hazan, Esq., at  
Otterbourg, Steindler, Houston & Rosen, P.C. as its bankruptcy  
counsel in the Debtors' chapter 11 cases.  When the Debtors filed
for bankruptcy, they listed $14.4 billion in total assets and
$17.9 billion in total debts.  On Jan. 12, 2007, the Debtors filed
with the Court their chapter 11 plan.  On Feb. 15, 2007, the
Debtors filed an amended plan and disclosure statement.  The Court
approved the adequacy of the Debtors' amended disclosure statement
on March 26, 2007.  On May 21, 2007, the Court confirmed the
Debtors' amended plan.  That amended plan took effect May 31,
2007.

(Northwest Airlines Bankruptcy News, Issue No. 97; Bankruptcy
Creditors' Service, Inc., http://bankrupt.com/newsstand/or  
215/945-7000).

                           *     *     *

As reported in the Troubled Company Reporter on July 29, 2008,
Standard & Poor's Ratings Services lowered its ratings on
Northwest Airlines Corp. and subsidiary Northwest Airlines Inc.
(both rated B/Negative/--), including lowering the long-term
corporate credit ratings on both entities to 'B' from 'B+', and
removed the ratings from CreditWatch, where they had been placed
with negative implications April 15, 2008.  The outlook is
negative.      

The downgrade reflects expected losses and reduced or negative
operating cash flow caused by high fuel prices.  S&P also lowered
our ratings on enhanced equipment trust certificates, in some
cases by more than one notch.

                         About Delta Air

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

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

The Debtors filed a chapter 11 plan of reorganization and
disclosure statement explaining that plan on Dec. 19, 2007.  On
Jan. 19, 2007, they filed revisions to the plan and disclosure
statement, and submitted further revisions to the plan on
Feb. 2, 2007.  On Feb. 7, 2007, the Court approved the Debtors'
disclosure statement.  In April 25, 2007, the Court confirmed the
Debtors' plan.  That plan became effective on April 30, 2007.  The
Court entered a final decree closing 17 cases on Sept. 26, 2007.    
(Delta Air Lines Bankruptcy News; Bankruptcy Creditors' Service,
Inc., http://bankrupt.com/newsstand/or 215/945-7000).


DELTA AIR: NWA Merger to Hit Smaller Ports First, Critics Say
-------------------------------------------------------------
Even before Northwest Airlines Corp. and Delta Air Lines Inc.
confirmed their merger plan in April of this year, critics have
already noted that smaller airports would be the first casualties
after the consolidation, John Welbes at TwinCities.com remarks.

Delta has been discontinuing flights between cities in its
network, but denies that the cuts are connected with the proposed
tie up, Mr. Welbes states.  Delta insists that the flight
trimming is part of a "parking program" ensuing from escalating
oil costs, Mr. Welbes discloses.

Nevertheless, Delta's capacity cuts hint at what's in store for
regional airports after the merger, Mr. Welbes avers.

"This will be the lowest amount of service that we've had in the
last four years," said Debbie Gulliver, travel manager at
Michigan State University in Lansing, Michigan, reports
TwinCities.com.  Delta will be exiting Lansing come September 1,
according to Mr. Welbes.  Northwest currently controls about 55%
of the market at the Lansing airport, Mr. Welbes points out.  
Apart from Lansing, Delta has begun pulling out of other markets
where Northwest has a presence, including Green Bay, Wisconsin;
State College, Pennsylvania; Toledo, Ohio and Sioux Falls, South
Dakota.

Northwest reported in its second quarter results that its
capacity reductions will not affect its service to any cities;
however, frequency of flights to certain markets will be reduced.

In the end, Delta might end up holding on to more of its flights
than Northwest, due to Northwest's older fleet and higher
maintenance costs, Mr. Welbes says.  Despite this, Northwest's
operational performance for the summer of 2008 is a complete
turnaround from that of last year's, when the carrier canceled as
many as 100 flights in a day, due to problems in pilot staffing,
the Star Tribune relates.  Consequently, Northwest and its pilots
union agreed to implement new work rules which reduced pilots'
flight hours and providing them an incentive of 150% of their pay
rate for flying more than 80 hours a month.

U.S. airlines are continuing to battle spiraling fuel prices
which almost doubled from a year ago, causing losses in almost
all of the major airlines for the second quarter of 2008, says
Mr. Welbes.  Specifically, United Airlines, Inc., posted the
largest loss of $2.7 billion; American Airlines was hit by
$1.4 billion; Delta Air Lines lost $1.04 billion, US Airways
dropped $567 million and Northwest Airlines, posted a $377 million
loss.  The least hurt was Continental Airlines, which lost
$3 million.

                     About Northwest Airlines

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

The company and 12 affiliates filed for chapter 11 protection on
Sept. 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-17930).  Bruce
R. Zirinsky, Esq., and Gregory M. Petrick, Esq., at Cadwalader,
Wickersham & Taft LLP in New York, and Mark C. Ellenberg, Esq.,
at Cadwalader, Wickersham & Taft LLP in Washington, represent the
Debtors in their restructuring efforts.  The Official Committee
of Unsecured Creditors has retained Scott L. Hazan, Esq., at  
Otterbourg, Steindler, Houston & Rosen, P.C. as its bankruptcy  
counsel in the Debtors' chapter 11 cases.  When the Debtors filed
for bankruptcy, they listed $14.4 billion in total assets and
$17.9 billion in total debts.  On Jan. 12, 2007, the Debtors filed
with the Court their chapter 11 plan.  On Feb. 15, 2007, the
Debtors filed an amended plan and disclosure statement.  The Court
approved the adequacy of the Debtors' amended disclosure statement
on March 26, 2007.  On May 21, 2007, the Court confirmed the
Debtors' amended plan.  That amended plan took effect May 31,
2007.

(Northwest Airlines Bankruptcy News, Issue No. 97; Bankruptcy
Creditors' Service, Inc., http://bankrupt.com/newsstand/or  
215/945-7000).

                           *     *     *

As reported in the Troubled Company Reporter on July 29, 2008,
Standard & Poor's Ratings Services lowered its ratings on
Northwest Airlines Corp. and subsidiary Northwest Airlines Inc.
(both rated B/Negative/--), including lowering the long-term
corporate credit ratings on both entities to 'B' from 'B+', and
removed the ratings from CreditWatch, where they had been placed
with negative implications April 15, 2008.  The outlook is
negative.      

The downgrade reflects expected losses and reduced or negative
operating cash flow caused by high fuel prices.  S&P also lowered
our ratings on enhanced equipment trust certificates, in some
cases by more than one notch.

                         About Delta Air

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

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

The Debtors filed a chapter 11 plan of reorganization and
disclosure statement explaining that plan on Dec. 19, 2007.  On
Jan. 19, 2007, they filed revisions to the plan and disclosure
statement, and submitted further revisions to the plan on
Feb. 2, 2007.  On Feb. 7, 2007, the Court approved the Debtors'
disclosure statement.  In April 25, 2007, the Court confirmed the
Debtors' plan.  That plan became effective on April 30, 2007.  The
Court entered a final decree closing 17 cases on Sept. 26, 2007.    
(Delta Air Lines Bankruptcy News; Bankruptcy Creditors' Service,
Inc., http://bankrupt.com/newsstand/or 215/945-7000).


DENNY'S CORP: June 25 Balance Sheet Upside-Down by $172 Million
---------------------------------------------------------------
Denny's Corporation reported Tuesday results for its second
quarter ended June 25, 2008.

At June 25, 2008, the company's consolidated balance sheet showed
$354.7 million in total assets and $526.7 million in total
liabilities, resulting in a $172.0 million stockholders' deficit.

The company's consolidated balance sheet at June 25, 2008, also
showed strained liquidity with $42.1 million in total assets
available to pay $115.5 million in total current liabilities.

The company said it is able to operate with a substantial working
capital deficit because (1) restaurant operations and most food
service operations are conducted primarily on a cash (and cash
equivalent) basis with a low level of accounts receivable, (2)
rapid turnover allows a limited investment in inventories, and (3)
accounts payable for food, beverages and supplies usually become
due after the receipt of cash from the related sales.

Net income for the second quarter was $3.2 million, a decrease of
$7.4 million compared with prior year net income of $10.6 million.  
Adjusted income before taxes for the second quarter was
$5.7 million, an increase of $4.2 million compared with prior year
income of $1.5 million.  This measure, which is used as an
internal profitability metric, excludes restructuring charges,
exit costs, impairment charges, asset sale gains, share-based
compensation, other nonoperating expenses and income taxes.

For the second quarter of 2008, Denny's reported total operating
revenue, including company restaurant sales and franchise revenue,
of $190.3 million compared with $240.9 million in the prior year
quarter.  Company restaurant sales decreased $55.1 million due
primarily to 141 fewer equivalent company restaurants compared
with the prior year quarter resulting from the sale of company
restaurants to franchisees under the Franchise Growth Initiative.  
During the second quarter, Denny's opened two new company
restaurants, closed one and sold 20 to franchisee operators.

Company restaurant operating margin (as a percentage of company
restaurant sales) for the second quarter was 12.5%, an increase of
0.9 percentage points compared with the same period last year.  
Product costs for the second quarter decreased 1.9 percentage
points to 23.9% of sales due primarily to favorable menu mix and
menu price increases.  Payroll and benefit costs increased 0.2
percentage points to 42.3% of sales as a result of higher group
insurance and management staffing costs partially offset by
improved crew labor efficiency and menu price increases.  Utility
expenses increased 0.3 percentage points to 4.9% of sales due
primarily to higher natural gas costs.

Franchise revenue in the second quarter increased $4.4 million, or
20%, to $27.0 million due primarily to an increase of 146
equivalent franchise restaurants compared with the prior year
period.  The growth in franchise revenue included a $3.0 million
increase in occupancy revenue, a $1.6 million increase in
royalties partially offset by a $200,000 decrease in franchise
fees.  

Franchise operating margin increased by $2.8 million, or 18%, to
$18.5 million in the second quarter as higher franchise revenue
offset a $1.6 million increase in franchise costs, primarily
franchise occupancy costs.  Franchise operating margin was 68.5%
as a percentage of franchise and license revenue.  During the
second quarter, Denny’s franchisees opened two new restaurants,
closed eight and purchased 20 company restaurants.

Nelson Marchioli, president and chief executive officer, stated,
"We are pleased to report greater operating margins and strong
core earnings growth despite the difficult consumer and cost
environment.  The strategic actions we have taken to optimize our
business model, increase profitability and reduce debt are evident
in our improving results.  The growing contribution of our higher
margin franchise operations along with margin improvements in our
company restaurants have allowed us to raise our income guidance
for 2008.  

"While we expect the challenge of reduced consumer spending to
continue impacting our sales, we are encouraged by the reception
to our new products and promotions.  Our brand and marketing teams
are delivering compelling new menu items along with aggressive new
promotional campaigns to build profitable and sustainable sales
growth.  Through our strategic initiatives and day-to-day
execution in our restaurants, we expect continued financial
performance improvements as well as enhanced shareholder value
over time."

General and administrative expenses for the second quarter
declined $1.6 million from the same period last year resulting
primarily from reduced staffing and other compensation expenses.

Depreciation and amortization expense for the second quarter
declined by $2.6 million compared with the prior year period
primarily as a result of the sale of restaurant and real estate
assets over the past year.  Operating gains, losses and other
charges, net, which reflect restructuring charges, exit costs,
impairment charges and gains or losses on the sale of assets,
decreased $15.1 million in the quarter due primarily to a
$10.3 million decrease in gains on the sale of restaurants and a
$4.5 million increase in severance and other restructuring charges
attributable to the redesign of Denny's organizational structure
as it transitions to a franchise-focused business model.

Operating income for the second quarter decreased $12.8 million to
$10.5 million due primarily to the decrease in gains on the sale
of restaurants and the increase in restructuring charges compared
with the prior year period.  Excluding gains, losses, and other
charges in both periods, operating income increased $2.3 million
despite a $50.7 million decrease in total operating revenue due
primarily to the sale of company restaurants.

Interest expense for the second quarter decreased $2.1 million, or
approximately 19%, to $8.9 million as a result of a $97.2 million
reduction in debt from the prior year period.

Other nonoperating income increased $1.4 million in the second
quarter due primarily to changes in the fair value of Denny's
$100.0 million interest rate swap.

                Franchise Growth Initiative (FGI)

Denny's continues its strategic initiative to increase franchise
restaurant development through the sale of certain company
restaurants.  During the second quarter, the company sold 20
restaurants to seven franchisee operators under FGI, bringing the
number of company restaurants sold year-to-date to 41 and the
number sold since the program began in early 2007 to 171.  
Additionally, over the last 18 months Denny's has signed
development agreements for 136 new restaurants, 14 of which have
opened, yielding a current development pipeline of 122 new
restaurants.

Denny's ended the second quarter of 2008 with a system mix of 77%
franchised and licensed restaurants and 23% company restaurants
compared with 66% franchised and licensed restaurants and 34%
company restaurants before the FGI program began in 2007.

The 41 company restaurants sold in 2008 generated net sale
proceeds of $22.0 million of which $16.4 million was received in
cash during the first half of the year.  $3.2 million of the sales
proceeds were received in cash subsequent to the quarter end and
were included in accounts receivable on the second quarter balance
sheet.  Additionally, $2.4 million of the sale proceeds were
received in the form of notes receivable.  The majority of the
cash proceeds were used to reduce debt by $15.4 million during the
first half of 2008.

                         Business Outlook

Mark Wolfinger, executive vice president, chief administrative
officer and chief financial officer, stated, "While our sales
expectations for the year remain cautious due to the economic
pressures on our customers, we will continue to focus on
profitable sales drivers, lowering our operating costs and
increasing our organizational efficiency.  As a result of higher
earnings the past two quarters and our expectation for continued
income growth through the remainder of the year, we are increasing
our guidance for adjusted income before taxes in 2008 to $13.0 to
$17 million, an increase of 25% to 60% over the 2007 result."

                 Liquidity and Capital Resources

The comany's credit facility consists of a $50.0 million revolving
credit facility (including up to $10 million for a revolving
letter of credit facility), a $137.0 million term loan and an
additional $37.0 million letter of credit facility.  At June 25,
2008, the company had outstanding letters of credit of
$35.3 million (comprised of $35.0 million under the letter of
credit facility and $300,000 under the revolving facility).  There
were no revolving loans outstanding at June 25, 2008.  These
balances result in availability of $2.0 million under the letter
of credit facility and $49.7 million under the revolving facility.

The revolving facility matures on Dec. 15, 2011.  The term loan
and the $37 million letter of credit facility mature on March 31,
2012.  

The credit facility is guaranteed by Denny's Corporation and its
other subsidiaries and is secured by substantially all of the
assets of Denny's and its subsidiaries.  In addition, the credit
facility is secured by first-priority mortgages on 119 company-
owned real estate assets.  

Full-text copies of the company's consolidated financial
statements for the quarter ended June 25, 2008, are available for
free at http://researcharchives.com/t/s?3044

                       About Denny's Corp.

Headquartered in Spartanburg, South Carolina, Denny's
Corporation (Nasdaq: DENN) -- http://www.dennys.com/-- is a     
full-service family restaurant chain, consisting of 354 company-
owned units and 1,191 franchised and licensed units, with
operations in the United States, Canada, Costa Rica, Guam, Mexico,
New Zealand and Puerto Rico.  


DEUTSCHE BANK: Moody's Junks Ratings of 70 Classes of Notes
-----------------------------------------------------------
Moody's Investors Service has downgraded the ratings of 177
tranches from 19 Alt-A transactions issued by Deutsche Bank.
Eighteen downgraded tranches remain on review for possible
downgrade. Additionally, 27 senior tranches were confirmed at Aaa.
The collateral backing these transactions consists primarily of
first-lien, fixed and adjustable-rate, Alt-A mortgage loans.

Ratings were downgraded, in general, based on higher than
anticipated rates of delinquency, foreclosure, and REO in the
underlying collateral relative to credit enhancement levels.
Certain tranches were confirmed due to additional enhancement
provided by structural features. The actions are a result of
Moody's on-going review process.

Complete rating actions are:

Issuer: Deutsche Alt-A Securities, Inc. Mortgage Loan Trust Series
2005-6

Cl. I-A-1, Downgraded to A1 from Aaa

Cl. I-A-3, Downgraded to A1 from Aaa

Cl. I-A-5, Downgraded to A1 from Aaa

Cl. I-A-6, Downgraded to A1 from Aaa

Cl. I-A-7, Downgraded to A1 from Aaa

Cl. I-A-PO, Downgraded to A1 from Aaa

Cl. II-A-1, Downgraded to A1 from Aaa

Cl. II-A-2, Downgraded to A1 from Aaa

Cl. II-A-PO, Downgraded to A1 from Aaa

Cl. II-A-3, Downgraded to Aa2 from Aaa

Cl. I-A-8, Downgraded to A2 from Aa1

Cl. II-A-4, Downgraded to A2 from Aa1

Issuer: Deutsche Alt-A Securities Mortgage Loan Trust, Series
2006-AR4

Cl. A-1, Downgraded to Aa2 from Aaa

Cl. A-2, Downgraded to Aa2 from Aaa

Cl. A-3, Downgraded to Ba2 from Aaa

Cl. M-1, Downgraded to B3 from B2; Placed Under Review for further
Possible Downgrade

Cl. M-2, Downgraded to Ca from B3

Cl. M-3, Downgraded to Ca from B3

Cl. M-4, Downgraded to Ca from B3

Cl. M-5, Downgraded to Ca from B3

Cl. M-6, Downgraded to Ca from B3

Issuer: Deutsche Alt-A Securities Mortgage Loan Trust, Series
2006-AR5

Cl. I-A-1, Downgraded to Baa1 from Aaa

Cl. I-A-2, Downgraded to Aa2 from Aaa

Cl. I-A-3, Downgraded to Baa1 from Aaa

Cl. I-A-4, Downgraded to B3 from Aaa; Placed Under Review for
further Possible Downgrade

Cl. II-1A, Downgraded to A1 from Aaa

Cl. II-2A, Downgraded to A1 from Aaa

Cl. II-3A, Downgraded to A2 from Aaa

Cl. II-X1, Downgraded to A1 from Aaa

Cl. II-X2, Downgraded to A1 from Aaa

Cl. II-PO, Downgraded to A1 from Aaa

Cl. I-M-1, Downgraded to Ca from B3

Cl. I-M-2, Downgraded to Ca from B3

Cl. I-M-3, Downgraded to Ca from Caa1

Cl. I-M-4, Downgraded to Ca from Caa1

Cl. I-M-5, Downgraded to Ca from Caa1

Cl. I-M-6, Downgraded to Ca from Caa1

Issuer: Deutsche Alt-A Securities Mortgage Loan Trust, Series
2007-1

Cl. I-A-1, Downgraded to Aa1 from Aaa

Cl. I-A-2, Downgraded to Aa3 from Aaa

Cl. I-A-3A, Downgraded to A1 from Aaa

Cl. I-A-3B, Downgraded to A1 from Aaa

Cl. I-A-3C, Downgraded to A1 from Aaa

Cl. I-A-4B, Downgraded to A2 from Aaa

Cl. II-A-1, Downgraded to Aa3 from Aaa

Cl. A-5, Downgraded to Ba3 from Aaa

Cl. M-1, Downgraded to B3 from B1; Placed Under Review for further
Possible Downgrade

Cl. M-2, Downgraded to Caa2 from B1

Cl. M-3, Downgraded to Ca from B1

Cl. M-4, Downgraded to Ca from B2

Cl. M-5, Downgraded to Ca from B3

Issuer: Deutsche Alt-A Securities Mortgage Loan Trust, Series
2007-2

Cl. I-A-2, Downgraded to Baa3 from Aaa

Cl. II-A-2, Downgraded to Baa3 from Aaa

Cl. M-1, Downgraded to Ba2 from A1

Cl. M-2, Downgraded to B1 from Baa1

Cl. M-3, Downgraded to B1 from Baa2; Placed Under Review for
further Possible Downgrade

Cl. M-4, Downgraded to B2 from Ba1; Placed Under Review for
further Possible Downgrade

Cl. M-5, Downgraded to B3 from Ba3; Placed Under Review for
further Possible Downgrade

Cl. M-6, Downgraded to Caa1 from B1; Placed Under Review for
further Possible Downgrade

Cl. M-7, Downgraded to Ca from B1

Cl. M-8, Downgraded to Ca from B1

Cl. M-9, Downgraded to Ca from B1

Issuer: Deutsche Alt-A Securities Mortgage Loan Trust, Series
2007-AR2

Cl. A-1, Confirmed at Aaa

Cl. A-2, Downgraded to Baa2 from Aaa

Cl. A-3, Downgraded to Ba3 from Aaa

Cl. A-4, Confirmed at Aaa

Cl. A-5, Confirmed at Aaa

Cl. A-6, Downgraded to Baa2 from Aaa

Cl. A-7, Downgraded to Baa2 from Aaa

Cl. M-2, Downgraded to Ca from B3

Cl. M-3, Downgraded to Ca from Caa1

Cl. M-4, Downgraded to Ca from Caa1

Cl. M-5, Downgraded to Ca from Caa1

Issuer: Deutsche Alt-A Securities Mortgage Loan Trust, Series
2007-BAR1

Cl. A-1, Downgraded to Aa2 from Aaa

Cl. A-2, Downgraded to A1 from Aaa

Cl. A-3, Downgraded to Ba1 from Aaa

Cl. A-4, Downgraded to Ba2 from Aaa

Cl. A-5, Downgraded to B3 from Aaa; Placed Under Review for
further Possible Downgrade

Cl. M-1, Downgraded to Caa1 from Aa1

Cl. M-2, Downgraded to Caa2 from Aa2

Cl. M-3, Downgraded to Caa3 from Aa3

Cl. M-4, Downgraded to Ca from Baa3

Cl. M-5, Downgraded to Ca from Ba2

Cl. M-6, Downgraded to Ca from Ba3

Cl. M-7, Downgraded to Ca from B2

Cl. M-8, Downgraded to Ca from Caa1

Cl. M-9, Downgraded to Ca from Caa3

Issuer: Deutsche Alt-A Securities, Inc. Mortgage Loan Trust Series
2006-AF1

Cl. A-5, Downgraded to A1 from Aaa

Cl. M-5, Downgraded to Ca from B3

Cl. M-6, Downgraded to Ca from B3

Issuer: Deutsche Alt-A Securities, Inc. Mortgage Loan Trust Series
2006-AR1

Cl. I-A-2, Downgraded to Aa2 from Aaa

Cl. I-A-3, Downgraded to Aa3 from Aaa

Cl. I-A-4, Downgraded to Ba3 from Aaa

Cl. I-M-1, Downgraded to B2 from Ba1; Placed Under Review for
further Possible Downgrade

Cl. I-M-3, Downgraded to Ca from B3

Cl. I-M-4, Downgraded to Ca from B3

Cl. I-M-5, Downgraded to Ca from B3

Cl. I-M-6, Downgraded to Ca from Caa1

Issuer: Deutsche Alt-A Securities, Inc. Mortgage Loan Trust Series
2006-AR2

Cl. A-1-1, Confirmed at Aaa

Cl. A-1-2, Confirmed at Aaa

Cl. A-2, Downgraded to Baa2 from Aaa

Cl. M-5, Downgraded to Ca from B3

Cl. M-6, Downgraded to Ca from B3

Issuer: Deutsche Alt-A Securities, Inc. Mortgage Loan Trust Series
2006-AR3

Cl. A-1, Downgraded to Baa1 from Aaa

Cl. A-2, Downgraded to Baa1 from Aaa

Cl. A-3, Downgraded to A1 from Aaa

Cl. A-4, Downgraded to A2 from Aaa

Cl. A-5, Downgraded to A3 from Aaa

Cl. A-6, Downgraded to Baa2 from Aaa

Cl. A-7, Downgraded to B3 from Aaa; Placed Under Review for
further Possible Downgrade

Cl. M-1, Downgraded to Ca from B3

Cl. M-2, Downgraded to Ca from B3

Cl. M-3, Downgraded to Ca from Caa1

Cl. M-4, Downgraded to Ca from Caa1

Issuer: Deutsche Alt-A Securities, Inc. Mortgage Loan Trust Series
2006-AR6

Cl. A-1, Confirmed at Aaa

Cl. A-2, Downgraded to Aa1 from Aaa

Cl. A-3, Downgraded to Aa1 from Aaa

Cl. A-4, Downgraded to A2 from Aaa

Cl. A-5, Downgraded to A3 from Aaa

Cl. A-6, Confirmed at Aaa

Cl. A-7, Downgraded to A3 from Aaa

Cl. A-8, Downgraded to Ba3 from Aaa

Cl. M-1, Downgraded to B3 from B2; Placed Under Review for further
Possible Downgrade

Cl. M-2, Downgraded to Ca from B3

Cl. M-3, Downgraded to Ca from B3

Cl. M-4, Downgraded to Ca from B3

Cl. M-5, Downgraded to Ca from B3

Cl. M-6, Downgraded to Ca from Caa1

Issuer: Deutsche Alt-A Securities, Inc. Mortgage Loan Trust Series
2007-AR1

Cl. A-1, Downgraded to Baa1 from Aaa

Cl. A-2, Downgraded to Baa1 from Aaa

Cl. A-3A, Downgraded to Aa2 from Aaa

Cl. A-3B, Confirmed at Aaa

Cl. A-3C, Downgraded to Aa3 from Aaa

Cl. A-4, Downgraded to Baa1 from Aaa

Cl. A-5, Downgraded to Baa2 from Aaa

Cl. A-6, Downgraded to B1 from Aaa; Placed Under Review for
further Possible Downgrade

Cl. M-1, Downgraded to B3 from B2; Placed Under Review for further
Possible Downgrade

Cl. M-2, Downgraded to Ca from B3

Cl. M-3, Downgraded to Ca from B3

Cl. M-4, Downgraded to Ca from B3

Issuer: Deutsche Alt-A Securities, Inc. Mortgage Loan Trust Series
2007-AR3

Cl. II-A-1, Downgraded to Aa3 from Aaa

Cl. II-A-2A, Confirmed at Aaa

Cl. II-A-2B, Confirmed at Aaa

Cl. II-A-3, Downgraded to A2 from Aaa

Cl. II-A-4, Downgraded to A1 from Aaa

Cl. II-A-5, Downgraded to Aa1 from Aaa

Cl. II-A-6, Downgraded to A2 from Aaa

Cl. II-A-7, Downgraded to Ba3 from Aaa

Cl. I-M-1, Downgraded to Ca from B3

Cl. I-M-2, Downgraded to Ca from B3

Cl. II-M-2, Downgraded to B3 from B2; Placed Under Review for
further Possible Downgrade

Cl. II-M-3, Downgraded to Ca from B3

Cl. II-M-4, Downgraded to Ca from B3

Cl. II-M-5, Downgraded to Ca from B3

Issuer: Deutsche Alt-B Securities Mortgage Loan Trust, Series
2006-AB1

Cl. A-1-A, Downgraded to Baa1 from Aaa

Cl. A-1-B, Downgraded to Baa1 from Aaa

Cl. A-1-C, Downgraded to Baa2 from Aaa

Cl. A-4, Downgraded to Baa2 from Aaa

Cl. A-X-2, Downgraded to Baa2 from Aaa

Cl. A-2-A, Confirmed at Aaa

Cl. A-2-B, Downgraded to Baa2 from Aaa

Cl. A-2-C, Downgraded to Baa2 from Aaa

Cl. A-2-D, Downgraded to Baa2 from Aaa

Cl. A-X, Confirmed at Aaa

Issuer: Deutsche Alt-B Securities Mortgage Loan Trust, Series
2006-AB4

Cl. A-1A, Confirmed at Aaa

Cl. A-1B-1, Confirmed at Aaa

Cl. A-1C, Downgraded to Aa1 from Aaa

Cl. A-2, Downgraded to Baa2 from Aaa

Cl. A-3, Downgraded to Baa2 from Aaa

Cl. A-3A-1, Downgraded to Aa2 from Aaa

Cl. A-4B, Downgraded to Baa3 from Aaa

Cl. A-4C, Downgraded to Baa3 from Aaa

Cl. A-6A-1, Confirmed at Aaa

Cl. A-6A-2, Confirmed at Aaa

Cl. M-5, Downgraded to Ca from B3

Cl. M-6, Downgraded to Ca from B3

Cl. M-7, Downgraded to Ca from B3

Cl. M-8, Downgraded to Ca from B3

Cl. M-9, Downgraded to Ca from Caa1

Cl. M-10, Downgraded to Ca from Caa1

Issuer: Deutsche Alt-B Securities Mortgage Loan Trust, Series
2007-AB1

Cl. A-1, Downgraded to A1 from Aaa

Cl. AI-1, Downgraded to A1 from Aaa

Cl. X, Downgraded to A1 from Aaa

Cl. PO, Downgraded to B2 from Aaa; Placed Under Review for further
Possible Downgrade

Cl. A-2, Downgraded to B3 from Aaa; Placed Under Review for
further Possible Downgrade

Cl. AI-2, Downgraded to B3 from Aaa; Placed Under Review for
further Possible Downgrade

Cl. B-1, Downgraded to Caa2 from B2

Issuer: Deutsche Alt-B Securities, Inc. Mortgage Loan Trust Series
2006-AB2

Cl. A-1, Confirmed at Aaa

Cl. A-2, Confirmed at Aaa

Cl. A-3, Confirmed at Aaa

Cl. A-5B, Confirmed at Aaa

Cl. A-8, Confirmed at Aaa

Cl. M-5, Downgraded to Ca from B3

Cl. M-6, Downgraded to Ca from B3

Issuer: Deutsche Alt-B Securities, Inc. Mortgage Loan Trust Series
2006-AB3

Cl. A-1, Confirmed at Aaa

Cl. A-2, Confirmed at Aaa

Cl. A-3, Confirmed at Aaa

Cl. A-5B, Confirmed at Aaa

Cl. A-7, Confirmed at Aaa

Cl. A-8, Confirmed at Aaa

Cl. M-1, Downgraded to B2 from Ba3; Placed Under Review for
further Possible Downgrade

Cl. M-4, Downgraded to Ca from B3

Cl. M-5, Downgraded to Ca from B3

Cl. M-6, Downgraded to Ca from B3

Cl. M-7, Downgraded to Ca from Caa1

A list of these actions including CUSIP identifiers may be found
at http://ResearchArchives.com/t/s?304


DOYLE MOORE: Voluntary Chapter 11 Case Summary
----------------------------------------------
Debtor: Doyle David Moore
        dba Black Gold Transport
        P.O. Box 1196
        Kermit, WV 25674

Bankruptcy Case No.: 08-20705

Chapter 11 Petition Date: July 25, 2008

Court: Southern District of West Virginia (Charleston)

Debtor's Counsel: Joseph W. Caldwell, Esq.
                  (joecaldwell@verizon.net)
                  Caldwell & Riffee
                  P. O. Box 4427
                  Charleston, WV 25364-4427
                  Tel: (304) 925-2100
                  Fax: (304) 925-2193

Estimated Assets: $1 million to $10 million

Estimated Debts: $1 million to $10 million

A list of the Debtor's largest unsecured creditors is available
for free at http://bankrupt.com/misc/WVsb08-20705.pdf


ENESCO GROUP: Judge Goldgar Converts Case to Chapter 7 Liquidation
------------------------------------------------------------------
The Hon. A. Benjamin Goldgar converted the chapter 11 case of
Enesco Group, Inc., and its debtor-affiliates to a chapter 7
liquidation proceeding at the behest of William T. Neary, the U.S.
Trustee for Region 11.

The U.S. Trustee pointed to the Court that there is diminution of
the Debtors' estates and the absence of a reasonable likelihood of
rehabilitation.

Judge Goldgar directed that the Debtors will:

   a. on or before Aug. 4, 2008, account for and turn over to
      the Court-appointed chapter 7 trustee all records and
      property of the estate under its custody and control;

   b. on or before Aug. 12, 2008, file schedules of all unpaid
      debts incurred after the commencement of the chapter 11
      case;

   c. on or before Aug. 28, 2008, file a final report and
      account;

   d. within 15 days after the entry of the case conversion
      order, or July 28, 2008, file the statement and schedules,
      if these documents have not already been filed.

The Court designated Marie Eisenbach Graul to perform the acts the
Debtors are required by the case conversion order.

The Court will conduct a status hearing on Oct. 1, 2008, at 10:00
a.m., to determine whether the Debtors and designated person have
complied to the order.
                                                                                                                           
                        About Enesco Group

Based in Itasca, Illinois, Enesco Group, Inc. --
http://www.enesco.com/-- is a producer of giftware, and home
and garden decor products.  Enesco's product lines include some
of the world's most recognizable brands, including Disney,
Heartwood Creek, Nickelodeon, Cherished Teddies, Lilliput Lane,
Border Fine Arts, among others.

Enesco distributes products to a wide array of specialty gift
retailers, home decor boutiques and direct mail retailers, as
well as mass-market chains.  The company serves markets
operating in Europe, particularly in the United Kingdom and
France, as well in the Asia Pacific in Australia and Hong Kong.
The company also has Latin-American operations in Mexico.

Enesco Group and its two affiliates, Enesco International Ltd.
and Gregg Manufacturing, Inc., filed for chapter 11 protection
on Jan. 12, 2007 (Bankr. N.D. Ill. Lead Case No. 07-00565).
Shaw Gussis Fishman Glantz Wolfson & Tow and Skadden, Arps,
Slate, Meagher & Flom LLP, represent the Debtors.  Epiq Bankruptcy
Solutions, LLC, acts as the Debtors' claims and noticing agent.
Brad Berish, Esq., at Adelman & Gettleman, Ltd., and Nancy A.
Peterman, Esq., at Greenberg Traurig LLP, represent the Official
Committee of Unsecured Creditors as bankruptcy counsel.  In its
schedules, Enesco disclosed total assets of $61,879,068 and total
debts of $231,510,180.


ENESCO GROUP: David Brown Named as Chapter 7 Trustee
----------------------------------------------------
William T. Neary, the U.S. Trustee for Region 11, appointed David
R. Brown as the chapter 7 trustee to oversee the liquidation of
Enesco Group, Inc., and its debtor-affiliates' bankruptcy estates.

Judge A. Benjamin Goldgar entered an order converting the Debtors'
chapter 11 case to a chapter 7 liquidation proceeding.

                        About Enesco Group

Based in Itasca, Illinois, Enesco Group, Inc. --
http://www.enesco.com/-- is a producer of giftware, and home
and garden decor products.  Enesco's product lines include some
of the world's most recognizable brands, including Disney,
Heartwood Creek, Nickelodeon, Cherished Teddies, Lilliput Lane,
Border Fine Arts, among others.

Enesco distributes products to a wide array of specialty gift
retailers, home decor boutiques and direct mail retailers, as
well as mass-market chains.  The company serves markets
operating in Europe, particularly in the United Kingdom and
France, as well in the Asia Pacific in Australia and Hong Kong.
The company also has Latin-American operations in Mexico.

Enesco Group and its two affiliates, Enesco International Ltd.
and Gregg Manufacturing, Inc., filed for chapter 11 protection
on Jan. 12, 2007 (Bankr. N.D. Ill. Lead Case No. 07-00565).
Shaw Gussis Fishman Glantz Wolfson & Tow and Skadden, Arps,
Slate, Meagher & Flom LLP, represent the Debtors.  Epiq Bankruptcy
Solutions, LLC, acts as the Debtors' claims and noticing agent.
Brad Berish, Esq., at Adelman & Gettleman, Ltd., and Nancy A.
Peterman, Esq., at Greenberg Traurig LLP, represent the Official
Committee of Unsecured Creditors as bankruptcy counsel.  In its
schedules, Enesco disclosed total assets of $61,879,068 and total
debts of $231,510,180.


EXKELL: Case Summary & 20 Largest Unsecured Creditors
-----------------------------------------------------
Debtor: Exkell, Inc.
        dba Rock N Rocks
        111 Franklin St.
        Clarksville, TN 37040

Bankruptcy Case No.: 08-06698

Chapter 11 Petition Date: July 31, 2008

Court: Middle District of Tennessee (Nashville)

Judge: Marian F Harrison

Debtor's Counsel: Steven L. Lefkovitz, Esq.
                     Email: Stevelefkovitz@aol.com
                  Lefkovitz & Lefkovitz
                  618 Church St., Ste. 410
                  Nashville, TN 37219
                  Tel: (615) 256-8300
                  Fax: (615) 250-4926

Total Assets: $879,682

Total Debts:  $1,180,543

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

      
FGIC CORP: Fitch Junks Rating on $325MM of 6% Senior Notes
----------------------------------------------------------
Fitch Ratings has downgraded these ratings on FGIC Corporation and
its financial guaranty insurance subsidiaries Financial Guaranty
Insurance Company and FGIC UK Ltd. as shown below:

FGIC
FGIC UK Ltd.
  -- Insurer financial strength to 'CCC' from 'BBB'.

Fitch has placed these ratings on Rating Watch Evolving.

FGIC Corp.
  -- Long-term Issuer to 'CCC-' from 'BB';
  -- $325 million of 6% senior notes due Jan. 15, 2034 to 'CCC-'
     from 'BB'.

Fitch has placed these ratings on Rating Watch Negative.

The rating action is based on Fitch's expectation that FGIC will
experience further credit deterioration on its book of business
backed by residential mortgage-backed securities.  This
deterioration could lead to further additions in loss reserves
which will increase the possibility that FGIC could become
subjected to some form of regulatory intervention.

Moreover, as of March 31, 2008 FGIC would have negative statutory
capital if not for the $600 million 'contingent gain' the company
recognized related to a structured finance CDO transaction, known
as Havenrock II, that is currently being disputed in court.  Fitch
continues to monitor developments with respect to this dispute for
potential implications to the financial condition of FGIC.

In the event that some form of regulatory intervention were to
occur, FGIC's exposure to credit derivatives would be subject to
immediate termination with its outstanding counterparties.  In
this scenario, FGIC would be required to settle the CDS contracts
at their current market value; a level that Fitch believes is
considerably greater than the company's existing claims-paying
resources.

Given the heightened risk of regulatory intervention, and FGIC's
inability to date to raise additional third-party capital, either
from its existing owners or externally, it is likely the company
will need to pursue the commutation of some of its most capital
intensive exposures, namely SF CDOs underwritten in CDS form.  
Such options are more likely given the precedent set by the
recently announced commutation of several SF CDO contracts between
Security Capital Assurance Ltd. and Merrill Lynch & Co., Inc.

The Rating Watch Evolving reflects:
  -- The uncertainty noted above related to the outcome of the
     Havenrock II dispute, and the potential for either favorable
     or negative outcomes;

  -- Fitch's expectation for higher RMBS loss reserves in the next
     several quarters;

  -- Ongoing negotiations with external reinsurance providers that
     could ultimately improve certain policyholder positions; and

  -- Rating implications tied to Fitch's ultimate viewpoint
     related to the nature of the negotiations surrounding
     probable commutations.  Given FGIC's greatly weakened
     financial condition, Fitch would evaluate any commutation to
     judge whether it was 'distressed' and viewed as an economic
     default per Fitch's rating methodology.

The Rating Watch Negative on FGIC Corp.'s long-term issuer and
senior unsecured debt ratings reflects Fitch's expectation that if
FGIC's financial condition continues to deteriorate and triggers
some form of regulatory intervention, regulators will likely
prevent FGIC from paying dividends to FGIC Corp. in order to
service its debt or other holding company operating expenses.

Fitch will comment on the impact of the downgrade of FGIC's IFS
rating on the ratings of securities insured by FGIC in a separate
release.

FGIC Corp. is a U.S. holding company whose primary operating
financial guaranty subsidiaries are FGIC and FGIC U.K Ltd.  For
March 31, 2008, FGIC Corp. reported consolidated assets under
Generally Accepted Accounting Principles of $6.7 billion and
shareholders' equity of approximately $548 million.  On an
aggregated basis, net par outstanding for FGIC totaled $308
billion as of March 31, 2008.


FIRST HORIZON: Moody's Cuts Classes II-A-1 and II-A-2 to B1
-----------------------------------------------------------
Moody's Investors Service has downgraded the ratings of 42
tranches from 14 Alt-A transactions issued by First Horizon.  
Additionally, 4 senior tranches were confirmed at Aaa.  The
collateral backing these transactions consists primarily of first-
lien, fixed and adjustable-rate, Alt-A mortgage loans.

Ratings were downgraded, in general, based on higher than
anticipated rates of delinquency, foreclosure, and REO in the
underlying collateral relative to credit enhancement levels.  
Certain tranches were confirmed due to additional enhancement
provided by structural features. The actions described below are a
result of Moody's on-going review process.

Complete rating actions are:

Issuer: First Horizon Alternative Mortgage Securities Trust 2005-
AA11

Cl. I-A-1, Downgraded to A1 from Aaa

Cl. II-A-1, Downgraded to A2 from Aaa

Issuer: First Horizon Alternative Mortgage Securities Trust 2005-
AA7

Cl. I-A-2, Downgraded to Aa3 from Aaa

Cl. II-A-2, Downgraded to Aa3 from Aaa

Issuer: First Horizon Alternative Mortgage Securities Trust 2005-
AA9

Cl. I-A-1, Downgraded to A1 from Aaa

Cl. II-A-1, Downgraded to Aa3 from Aaa

Cl. III-A-1, Downgraded to Aa3 from Aaa

Issuer: First Horizon Mortgage Securities Trust 2005-AA12

Cl. I-A-2, Downgraded to A1 from Aaa

Cl. II-A-1, Downgraded to A1 from Aaa

Cl. III-A-2, Downgraded to A1 from Aaa

Issuer: First Horizon Alternative Mortgage Securities Trust 2006-
AA1

Cl. I-A-2, Downgraded to A2 from Aa1

Cl. II-A-2, Downgraded to A2 from Aaa

Issuer: First Horizon Alternative Mortgage Securities Trust 2006-
AA2

Cl. II-A-2, Downgraded to Baa2 from Aa1

Issuer: First Horizon Alternative Mortgage Securities Trust 2006-
AA3

Cl. A-2, Downgraded to Baa2 from Aa1

Issuer: First Horizon Alternative Mortgage Securities Trust 2006-
AA4

Cl. I-A-1, Downgraded to Aa1 from Aaa

Cl. I-A-2, Downgraded to Aa1 from Aaa

Cl. IV-AIO, Confirmed at Aaa

Cl. 2IO3, Confirmed at Aaa

Cl. 2AB3, Downgraded to Aa2 from Aa1

Cl. IV-A-2, Downgraded to Aa2 from Aa1

Issuer: First Horizon Alternative Mortgage Securities Trust 2006-
AA7

Cl. A-1, Downgraded to Aa3 from Aaa

Cl. A-2, Downgraded to Ba3 from Aa1

Issuer: First Horizon Alternative Mortgage Securities Trust 2006-
FA3

Cl. A-1, Downgraded to Aa1 from Aaa

Cl. A-2, Downgraded to Aa1 from Aaa

Cl. A-3, Downgraded to Aa1 from Aaa

Cl. A-4, Downgraded to Aa1 from Aaa

Cl. A-5, Downgraded to Aa1 from Aaa

Cl. A-7, Downgraded to Aa2 from Aa1

Cl. A-9, Downgraded to Aa1 from Aaa

Cl. A-10, Downgraded to Aa2 from Aa1

Cl. A-11, Downgraded to Aa1 from Aaa

Cl. A-12, Downgraded to Aa1 from Aaa

Cl. A-13, Downgraded to Aa1 from Aaa

Cl. A-PO, Downgraded to Aa1 from Aaa

Issuer: First Horizon Alternative Mortgage Securities Trust 2006-
FA8

Cl. I-A-6, Downgraded to Aa3 from Aa1

Issuer: First Horizon Alternative Mortgage Securities Trust 2007-
AA2

Cl. I-A-1, Downgraded to Aa2 from Aaa

Cl. I-A-2, Downgraded to Ba3 from Aaa

Cl. I-A-3, Downgraded to Aa2 from Aaa

Cl. II-A-1, Downgraded to B1 from Aaa

Cl. II-A-2, Downgraded to B1 from Aaa

Issuer: First Horizon Alternative Mortgage Securities Trust 2007-
FA2

Cl. I-A-4, Confirmed at Aaa

Issuer: First Horizon Alternative Mortgage Securities Trust 2007-
FA3

Cl. A-8, Confirmed at Aaa

Cl. A-9, Downgraded to Baa3 from Aa1

Cl. A-10, Downgraded to Baa3 from Aa1

A list of these actions including CUSIP identifiers may be found
at http://ResearchArchives.com/t/s?3043


FIRST PRIORITY: Operations Closed; SunTrust Gets Insured Deposits
-----------------------------------------------------------------
First Priority Bank was closed Friday by the Commissioner of the
Florida Office of Financial Regulation, and the Federal Deposit
Insurance Corporation was named receiver.  To protect the
depositors, the FDIC entered into a purchase and assumption
agreement with SunTrust Bank Inc. to assume the insured deposits
of First Priority.

The six branches of First Priority will reopen on Monday as
branches of SunTrust Bank.  Depositors of the failed bank will
automatically become depositors of SunTrust.  Deposits will
continue to be insured by the FDIC, so there is no need for
customers to change their banking relationship to retain their
deposit insurance coverage.  For the time being, however,
customers of both banks should use their existing branches until
SunTrust can fully integrate the deposit records of First
Priority.

Over the weekend, customers of First Priority can access their
money by writing checks or using ATM or debit cards.  Checks drawn
on the bank will continue to be processed.  Loan customers should
continue to make their payments as usual.

As of June 30 2008, First Priority had total assets of $259
million and total deposits of $227 million.  At the time of
closing, there were approximately $13 million in uninsured
deposits held in approximately 840 accounts that potentially
exceeded the insurance limits.  This amount is an estimate that is
likely to change once the FDIC obtains additional information from
these customers.

Customers with accounts in excess of $100,000 should contact the
FDIC toll free at 1-800-837-0215 to set up an appointment to
discuss their deposits.  This phone number will be operational
this evening until 9:00 p.m. EDT; on Saturday from 8:00 a.m. to
8:00 p.m. EDT; and on Sunday and thereafter from 8:00 a.m. to 6:00
p.m. EDT.

In addition to continued access to their insured deposits,
depositors of First Priority with amounts exceeding the insurance
limits will receive a payment of 50 percent of their uninsured
balance from the FDIC as receiver.  The FDIC will mail these
payments directly to the customers early next week; the amounts
will not appear in their account balances at SunTrust Bank.

SunTrust agreed to assume the insured deposits for no premium.  In
addition to assuming the failed bank's insured deposits, SunTrust
Bank will purchase approximately $42 million of the failed bank's
assets.  The assets are comprised mainly of cash, cash equivalents
and securities. The FDIC, however, entered into a separate
agreement with LNV Corporation, Plano, Texas, to purchase
$14 million in First Priority's assets.  LNV Corporation is a
subsidiary of Beal Bank Nevada, Las Vegas, Nevada.  The FDIC will
retain the remaining assets for later disposition.

The cost to the FDIC's Deposit Insurance Fund is estimated to be
$72 million. First Priority is the first bank to fail in Florida
since Guaranty National Bank, Tallahassee, on March 12, 2004.  
This year, a total of eight FDIC-insured institutions have been
closed.

Three other banks have failed since July 2008:

    Bank                  Location                   Closing Date
    ----                  --------                   ------------
First Heritage Bank, NA   Newport Beach, California  July 25, 2008
First National Bank of    Reno, Nevada               July 25, 2008
   Nevada
IndyMac Bank              Pasadena, California       July 11, 2008

The FDIC has been appointed receiver for these banks.

                           About FDIC

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

                       About SunTrust Bank

Headquartered in Atlanta, Georgia, SunTrust Banks, Inc., provides
deposit, credit, trust, and investment services to businesses and
institutional clients.  The bank also provides mortgage banking,
brokerage, investment management, equipment leasing, and capital
market services.  According to its webite, the bank has total
assets of $179 billion as of March 31, 2008.  On the
Net:https://www.suntrust.com/

                       About First Priority

Headquartered in Bradenton, Florida, First Priority Bank, a wholly
owned subsidiary of First Priority Financial Corp., provides
financial management to averaged size businesses and individuals
as well.  The bank is a is a Pennsylvania state-chartered and FDIC
insured. On the Net: http://www.fpbank.com/


FORD MOTOR: Terminates Lighting Biz Sale Contract with Meridian
---------------------------------------------------------------
Meridian Automotive Systems, Inc., said Ford Motor Company and its
affiliate, Automotive Components Holdings, LLC, terminated a
Memorandum of Understanding, pursuant to which Meridian will
purchase ACH's Sandusky, Ohio, automotive lighting facility.

According to Meridian, ACH and Ford said that it will not be
possible to sell the Sandusky lighting business on the terms
under the MOU because of the "significant changes in the overall
business environment, including recent reductions in projected
industry volumes."

"The decision by ACH and Ford to terminate the MOU is
understandable, but is disappointing to all of us," Richard E.
Newsted, Meridian's president and chief executive officer, said.
"We would reconsider this opportunity should business conditions
improve.  Of course, we remain committed to our lighting
customers and will continue to serve them from our world-class
manufacturing facilities located in Grand Rapids, Michigan and
Muzquiz, Coahuila, Mexico."

The deal was contingent on reaching a new and long-term contract
with the United Autoworkers that would reduce operating costs at
the plant.  Kevin Furr, president of UAW Local 1216, related to
the Sandusky Register that Meridian's backing out will have a
positive impact on the Sandusky plant.  "We feel that Meridian
was not a good purchaser for our plant, relative to the employees
and the community," Sandusky Register quoted Mr. Furr as saying.

Meridian is currently a defendant in a lawsuit filed in the U.S.
District Court for the Southern District of Ohio by the United
Steelworkers on behalf of Meridian's workers at its Jackson, Ohio
facility.  The USW alleged that Meridian violated the Workers
Adjustment and Retraining Notification Act when the company failed
to notify Union-represented employees of its intent to close the
Jackson plant 60 days before the actions were executed.

Reuters related that the now-terminated sale had been part of a
push by Ford to unload the money-losing assets of its former
Visteon Corp. subsidiary.  In the past 18 months, Ford has
announced a series of deals to sell off plants it took back from
Visteon as part of a bailout that was completed in 2005, Reuters
added.

                About Meridian Automotive Systems

Headquartered in Dearborn, Mich., Meridian Automotive Systems
Inc. -- http://www.meridianautosystems.com/-- supplies    
technologically advanced front and rear end modules, lighting,
exterior composites, console modules, instrument panels and other
interior systems to automobile and truck manufacturers.  Meridian
operates 22 plants in the United States, Canada and Mexico,
supplying Original Equipment Manufacturers and major Tier One
parts suppliers.  The Company and its debtor-affiliates filed for
chapter 11 protection on April 26, 2005 (Bankr. D. Del. Case Nos.
05-11168 through 05-11176).  James F. Conlan, Esq., Larry J.
Nyhan, Esq., Paul S. Caruso, Esq., and Bojan Guzina, Esq., at
Sidley Austin Brown & Wood LLP, and Robert S. Brady, Esq., Edmon
L. Morton, Esq., Edward J. Kosmowski, Esq., and Ian S. Fredericks,
Esq., at Young Conaway Stargatt & Taylor, LLP, represent the
Debtors in their restructuring efforts.  Eric E. Sagerman, Esq.,
at Winston & Strawn LLP represents the Official Committee of
Unsecured Creditors.  The Committee also hired Ian Connor
Bifferato, Esq., at Bifferato, Gentilotti, Biden & Balick, P.A.,
to prosecute an adversary proceeding against Meridian's First Lien
Lenders and Second Lien Lenders to invalidate their liens.  When
the Debtors filed for protection from their creditors, they listed
$530 million in total assets and approximately $815 million in
total liabilities.  

The Hon. Mary Walrath confirmed Meridian's Revised Fourth Amended
Reorganization Plan on Dec. 6, 2006.  The company emerged from
chapter 11 protection on Dec. 29, 2006. (Meridian Bankruptcy News,
Issue No. 62; Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000).

                         About Ford Motor

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

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

                            *   *   *

As reported in the Troubled Company Reporter on 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.


GENERAL MOTORS: Incurs $15.5BB 2008 Second Quarter Prelim Net Loss
------------------------------------------------------------------
General Motors Corp. reported its financial results for the second
quarter of 2008, which include significant charges and special
items.  The reported net loss was $15.5 billion or $27.33 per
share for the second quarter, including these charges and special
items, compared with net income from continuing operations of
$784 million or $1.37 per share in the second quarter of 2007.  On
an adjusted basis, GM posted a net loss of $6.3 billion or $11.21
per share, compared with net income from continuing operations of
$1.3 billion or $2.29 per share in the same period last year.

GM previously disclosed that it anticipated a significant second
quarter loss, driven in large part by costs associated with the
American Axle and Manufacturing Holdings Inc. and local U.S.
strikes, and charges related to the successful U.S. hourly
attrition program, actions to reduce North American truck
capacity, Delphi and other matters.  The operating and liquidity
actions announced on July 15 contemplated weak second quarter
results and a continued unfavorable U.S. environment.  The company
has outlined a strong cadence of product, powertrain, capacity and
liquidity actions over the past 60 days, to realign the business
with current U.S. economic and auto market conditions, and
position the company for profitable global growth.

Some of those actions include cessation of production at four
truck plants, shift reductions at two truck plants, the addition
of shifts at two car plants, announcement of the new Chevrolet
global small car program and next generation Chevrolet Aveo
compact car, introduction of a high-efficiency 4-cylinder engine
for U.S. application, salaried headcount reductions and
compensation actions, deferral of certain payments to the UAW
VEBA, suspension of the dividend on common stock, reductions in
sales and marketing budgets, the strategic review of the Hummer
brand and production funding approval for the Chevrolet Volt
extended range electric vehicle.

"As our recent product, capacity and liquidity actions clearly
demonstrate, we are reacting rapidly to the challenges facing the
U.S. economy and auto market, and we continue to take the
aggressive steps necessary to transform our U.S. operations," said
GM Chairman and CEO Rick Wagoner.  "We have the right plan for GM,
driven by great products, building strong brands, fuel-economy
technology leadership and taking full advantage of global growth
opportunities."

GM's second quarter results were primarily driven by several
factors: significant losses in GM North America (GMNA) due to
continuing U.S. industry volume declines and shifts in vehicle
mix, the long strike at American Axle and large lease-related
charges; a number of special charges associated with GM's ongoing
restructuring actions; continued losses at GMAC Financial Services
(GMAC) and updated estimates regarding recoveries and expectations
of assumed benefit obligations in the Delphi bankruptcy.

GM recorded $9.1 billion of special items, predominantly non-cash
in nature for the current quarter or near-term periods, which
include:

   * $3.3 billion relating to the 2008 GMNA hourly special
     attrition program;

   * $2.8 billion adjustment to the Delphi reserve;

   * $1.1 billion GMNA restructuring and capacity related costs;

   * $1.3 billion impairment of GM's equity interest in GMAC;

   * $340 million Canadian Auto Workers contract-related  
     accounting charges; and

   * $197 million related to settlement of the strike at American
     Axle.

In addition, the GMNA adjusted net income results reflect a
$1.6 billion charge related to lower residual values for off-lease
vehicles.  The total impact of declining residual values in GM's
second quarter earnings was $2.0 billion, including impairments of
lease assets at both GMAC and GM.

Revenue for the second quarter was $38.2 billion, down from
$46.7 billion in the year-ago quarter, which is more than
accounted for by the decline in GMNA revenues.  Combined revenues
for the GM Europe (GME), GM Asia Pacific (GMAP) and GM Latin
America, Africa and Middle East (GMLAAM) regions were $20.8
billion, up $1.7 billion over the same period 2007.

GM reports its automotive operations and regional results on an
earnings-before-tax basis, with taxes reported on a total
corporate basis.

                   GM Automotive Operations

The second quarter adjusted automotive loss of $4.0 billion
($9.1 billion reported) reflects the losses in GMNA driven largely
by volume declines including the impact of the American Axle and
local strikes as well as adjustments to lease vehicle residual
reserves.  In addition, GMAP results were negatively impacted by
adjustments relating to hedge accounting.  The losses were
partially offset by exceptionally strong performance in the GMLAAM
region and continued profitability in GME.  The loss compares with
adjusted automotive earnings from continuing operations of
$1 billion in the second quarter of 2007 (reported earnings of
$803 million).

GM sold 2.29 million vehicles worldwide in the second quarter,
down 5% year over year.  Sales in GMNA were down 20%, or 236,000
units versus the year-ago period, while sales outside of North
America grew by 10% or 116,000 units.  A record 65% of GM unit
sales for the second quarter were outside the United States.  
Global market share was 12.3%, down 0.9% due to weakness in North
America.

GMNA revenue for the second quarter was $19.8 billion, down from
$29.7 billion in the year-ago period.  The decline was largely
attributable to a markedly weaker U.S. auto market and lost
production due to the work stoppage at American Axle, and at
several GM facilities in May and June.  Although volume overall
was down 20%, some of GM's most recently launched cars and
crossovers continue to sell especially well, including the
Chevrolet Malibu and Cadillac CTS, up 113% and 33%, respectively,
over the year-ago period.

GMNA adjusted results reflect significantly lower volume resulting
from overall industry deterioration, continued dealer stock
reductions, the negative impact of industry segment shifts,
model/option mix and an increase to lease vehicle residual
reserves related to declining residual values.  The results also
reflect favorable structural and net material cost performance and
pension/OPEB/manufacturing savings.

GME achieved record second-quarter sales of 590,000 units, driven
by 48% sales growth in Russia and exceptional performance of the
Chevrolet brand, which saw a 19% increase in sales to 137,000
units and record market share of 2.2% in the second quarter.  
Material and structural cost performance improved during the
quarter.  However, unfavorable exchange rates and an economic
slowdown in key markets including Spain, Italy and the U.K. had a
significant impact on earnings.

Improved mix, net pricing and material cost performance along
with strong sales performance in key markets helped GMLAAM to
improve its year-over-year earnings before tax by over 50%, to
$445 million.  Volume for the region was up nearly 18% over 2007,
and quarterly sales records were set in Brazil, Chile, Egypt and
North Africa.

The second quarter earnings for GMAP reflect a $285 million pretax
accounting charge related to adjusting prior FAS133 hedge
accounting, partially offset by gains in India and Thailand, and
improved operating performance at Australia's Holden.

                            GMAC

On a standalone basis, GMAC reported a net loss of $2.5 billion
for the second quarter 2008.  Affecting results were continuing
large losses at Residential Capital, LLC related to asset sales,
valuation adjustments and loan loss provisions, as well as a
$716 million pre-tax impairment of lease assets in the automotive
finance business as a result of lower used vehicle prices,
particularly for SUVs.  These items were partially offset by
profitable results in the insurance and international auto finance
businesses.  GM reported an adjusted loss of $1.2 billion for the
quarter attributable to GMAC, as a result of its 49% equity
interest.

Following a first quarter impairment against its investment in
GMAC, GM conducted further analysis in the second quarter to
determine if additional impairments were required based on current
fair value estimates.  Factors considered include continued
deterioration in the mortgage and consumer credit markets and a
more challenging North American automotive financing environment.  
As a result, GM recorded impairment charges totaling $1.3 billion
against its common and preferred equity interests in GMAC.

                          Cash and Liquidity

Reflecting the non-cash nature of many of the charges recorded in
GM's reported second-quarter results, cash, marketable securities,
and readily-available assets of the Voluntary Employees'
Beneficiary Association trust totaled $21.0 billion on June 30,
2008, down from $23.9 billion on March 31, 2008.  The change in
liquidity reflects negative adjusted operating cash flow of
$3.6 billion in the second quarter 2008, driven primarily by
weaker results in GMNA.  As of June 30, including undrawn,
committed U.S. credit facilities of approximately $5 billion, GM
has access to approximately $26 billion in liquidity.  In July, GM
provided notice to draw $1 billion under its secured revolving
loan facility.

As disclosed in the Troubled Company Reporter on July 16, 2008, GM
is taking operating and related actions to improve cash flow by
approximately $10 billion through the end of 2009.  In addition,
the company has outlined plans to raise approximately $5 billion
through capital markets activities and asset sales.  GM is
confident that these initiatives, along with its current cash
position and $4-5 billion of committed U.S. credit lines, will
provide the company with ample liquidity to meet its operational
needs through 2009.

The loss is GM's third largest in its 100-year history, various
reports say.  Detroit Free Press' Katie Merx relates that
investors were unfazed by GM's loss and that cuts are under way
soften impact of blow on the automaker's shares.

GM's second-quarter loss pushed the $8.7-billion second-quarter
loss Ford reported down to fourth place "in the annals of
miserable quarters," according to Ms. Merx.  GM, she says, now
owns the top three spots, including its $39 billion loss in the
third quarter in 2007 and its $21 billion loss in the first
quarter in 1992.

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.

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.

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

                          *     *     *

As disclosed in the Troubled Company Reporter on Aug. 1, 2008,
Standard & Poor's Ratings Services lowered the ratings on General
Motors Corp., Ford Motor Co., and Chrysler LLC, all to 'B-' from
'B'.  The ratings on GM and Ford were removed from CreditWatch
with negative implications, where they had been placed on June 20,
2008.  Chrysler will remain on CreditWatch pending the renewal of
certain bank lines at DaimlerChrysler Financial Services Americas
LLC, which S&P expects to be completed in the next few days.  If
the bank lines are renewed as expected, S&P would affirms the
ratings on Chrysler and DCFS and remove them from CreditWatch.

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.


GENERAL MOTORS: Financial Arm Posts $2.5BB Prelim Second Qtr. Loss
------------------------------------------------------------------
GMAC LLC's wholly owned subsidiary GMAC Financial Services
reported a 2008 second quarter net loss of $2.5 billion, compared
to net income of $293 million in the second quarter of 2007.    
Affecting results in the quarter were a $716 million impairment of
vehicle operating lease assets in the automotive finance business
as a result of declining vehicle sales and lower used vehicle
prices for certain segments, as well as significant losses at
Residential Capital, LLC related to asset sales, valuation
adjustments, and loan loss provisions.  These items were partially
offset by profitable results in the insurance and international
auto finance businesses.

"A soft economic environment and continued volatility in the
mortgage and credit markets have significantly affected results
for the second quarter," GMAC Chief Executive Officer Alvaro G. de
Molina said.  "While conditions such as higher fuel prices and
weaker consumer credit prove to be headwinds, we continue to
aggressively manage through this economic disruption to position
GMAC for longer-term success.

"Despite the current obstacles, we are encouraged by some key wins
such as successfully completing our global refinancing and bond
exchange, preserving long-term ownership of GMAC Bank, and de-
risking the balance sheet at ResCap.  There is still more to do
and the management team is committed to taking the steps needed to
ensure a solid foundation for the company, including continued
realignment and streamlining of the mortgage business and better
optimization of the risk and reward model in auto financing."

                Second Quarter Net Income/(Loss)
                           ($ in millions)

                                   Q208     Q207       Change
                                   ----     ----       ------
    Global Automotive Finance     ($717)    $395      ($1,112)
    Insurance                       135      131            4
    ResCap                       (1,860)    (254)      (1,606)
    Other(1)                        (40)      21          (61)
    Net Income/(Loss)           ($2,482)    $293      ($2,775)


     (1) Includes Commercial Finance operating segment, 21%
         ownership of former commercial mortgage unit and other
         corporate activities.

                        Liquidity and Capital

GMAC's consolidated cash and cash equivalents were $14.3 billion
as of June 30, 2008, down slightly from the cash balance of $14.8
billion at March 31, 2008.  Of these total balances, ResCap's cash
and cash equivalents balance was $6.6 billion at quarter-end, up
from $4.2 billion at March 31, 2008.  The change in consolidated
cash is related to repayment of GMAC and ResCap debt maturities,
offset by new secured funding, lower asset levels and growth in
deposits at GMAC Bank.

In June, GMAC and ResCap announced a comprehensive series of
transactions, which included extending key bank facilities,
increasing the amount of available funding and further enhancing
liquidity positions. The transactions included:

   -- GMAC obtaining a new, globally syndicated $11.4 billion
      secured revolving credit facility with a multi-year maturity
      which steps down to $7.9 billion after two years, and
      renewing the one-year, syndicated commercial paper back-up
      facility, New Center Asset Trust, in the amount of
      $10 billion.

   -- ResCap extending for one year the maturity on substantially
      all of its bilateral bank facilities totaling approximately
      $11.6 billion and obtaining a new $2.5 billion syndicated
      whole loan repurchase facility.

   -- ResCap executing private exchange and cash tender offers for
      U.S. dollar equivalent of $14.0 billion in aggregate
      principal amount of its outstanding debt, thereby reducing
      debt outstanding by $2.9 billion in principal and extending
      maturities.

   -- GMAC providing a $3.5 billion two-year senior secured credit
      facility to ResCap, which includes $750 million of first
      loss protection from General Motors Corp. and Cerberus
      ResCap Financing LLC, an affiliate of FIM Holdings LLC.

   -- Significantly reducing ResCap's tangible net worth covenants
      related to its credit facilities from the previous level of
      $5.4 billion to $250 million (excluding GMAC Bank) with
      consolidated liquidity of $750 million.

During the second quarter, GMAC and certain affiliates of Cerberus
disclosed approximately $2.4 billion of intended actions to
support ResCap's near term liquidity. In addition, GMAC
contributed to ResCap approximately $250 million (principal
amount) of ResCap debt, which was subsequently retired.  In
exchange for the capital contribution, GMAC received additional
shares of ResCap preferred equity equal to the market value of the
debt as of March 31, 2008.  As of June 30, 2008, ResCap's total
equity base was $4.1 billion.

The Federal Deposit Insurance Corporation granted a 10-year
extension of GMAC Bank's current ownership on July 21, 2008.  This
action enables GMAC to strengthen the bank over the long-term,
which is an important source of funding for mortgage and
automotive financing activities.

                    Global Automotive Finance

GMAC's global automotive finance business reported a net loss of
$717 million in the second quarter of 2008, compared to net income
of $395 million in the year-ago period.  Weaker performance was
primarily driven by a $716 million pre-tax impairment on operating
leases in the North American operation, which more than offset
profits in the international business.  In measuring the
accounting impairment, the company was able to consider expected
cash flows from various arrangements with General Motors Corp.,
including approximately $750 million related to the risk-sharing
arrangement; approximately $800 million related to the residual
support program; and approximately $350 of residual-related
settlement payments.  Additional factors affecting results were an
increase in the provision for credit losses due to loss severity
and lower gains on sales.

The North American lease portfolio included approximately
$30 billion in assets as of June 30, 2008 with approximately
$12 billion in sport-utility vehicle leases, $6 billion in truck
leases and $12 billion in car leases.  The impairment of operating
leases resulted from the sharp decline in demand and used vehicle
sale prices for sport-utility vehicles and trucks in the U.S. and
Canada, which has affected GMAC's remarketing proceeds for these
vehicles.  As a result of these market trends, GMAC is taking
steps to reduce the volume of new lease originations in the U.S.
The company will also discontinue the SmartBuy balloon contract
program, suspend all incentivized lease programs in Canada and
increase pricing and returns on other lending activities.  GMAC's
lease portfolio outside of North America has not experienced the
same decrease in market value.

New vehicle financing originations for the second quarter of 2008
decreased to $12.4 billion of retail and lease contracts from
$14.0 billion in the second quarter of 2007, due to lower industry
sales levels in North America.

Credit losses have increased in the second quarter of 2008 to
1.40% of managed retail assets, versus 0.92% in the second quarter
of 2007.  The sharp increase is related to the current trends in
used vehicle prices, which drove higher loss severity.  While
losses trended up, delinquencies decreased in the second quarter
of 2008 to 2.30% of managed retail assets, versus 2.46% in the
prior year period.  The decrease reflects the recent measures
taken to tighten underwriting criteria and increased customer
servicing activities as the U.S. economy remains weak.

                            Insurance

GMAC's insurance business recorded net income of $135 million, up
slightly from net income of $131 million in the second quarter of
2007.  Results primarily reflect a non-recurring tax benefit,
which offset higher weather-related losses.

The insurance investment portfolio was $7.1 billion at June 30,
2008, compared to $7.4 billion at June 30, 2007.  The decrease in
the portfolio is due primarily to the repayment of intercompany
loans related to the funding of the Provident Insurance
acquisition.  The majority of the investment portfolio is in fixed
income securities with less than 10 percent invested in equity
securities.

In July, GMAC's plan to dividend 100 percent of the voting
interest in the insurance business to GMAC's shareholders was
completed.  GMAC continues to hold 100 percent of the economic
interest in GMAC Insurance.  This action was taken in the interest
of maintaining the current financial strength rating and,
therefore, preserving the value of the operation.

                     Real Estate Finance

ResCap reported a net loss of $1.9 billion for the second quarter
of 2008, compared to a net loss of $254 million in the year-ago
period.  Results are primarily attributable to significant losses
from asset sales as ResCap reduced the size and risk of its
balance sheet and higher loan loss provisions due to continued
deterioration in certain European markets.  Partially offsetting
losses was a $647 million gain recognized from ResCap's tender
offer and the retirement of debt.

ResCap continues to implement an aggressive realignment of its
business amid a vastly changing mortgage market, despite the
negative impact to short-term earnings.  Recent actions include
significantly reducing the size and risk of its balance sheet,
originating only mortgages with market liquidity, winding down the
business lending portfolio, leveraging the world-class servicing
platform, and continuing to rationalize the cost base.

ResCap's U.S. residential finance business is beginning to
stabilize as the company reduces balance sheet risk and continues
to realign operations.  While prime conforming loan production
decreased modestly year-over-year with $12.2 billion in the second
quarter of 2008 versus $12.7 billion in the year- ago period,
production of higher-margin government loans increased to
$3.8 billion this quarter compared to $800 million in the second
quarter of 2007.  In addition, operating expense targets were
achieved.

The international mortgage business experienced a decline in net
income in the second quarter related to illiquidity in the global
capital markets and the continued weakening of consumer credit in
key markets.  This drove significant realized and unrealized
losses on loans held for sale.  As a result of the market
environment, ResCap has currently suspended all production outside
of the U.S. with the exception of Canadian insured loans.  The
business lending operations also experienced continued pressure in
the second quarter related to the decline in home sales and
residential real estate values.

                            Outlook

GMAC continues to manage through a softer economic environment and
a global market disruption with significant actions geared toward
achieving longer-term financial health.  Recent actions include:

   -- Stabilizing liquidity by refinancing bank lines, extending
      debt maturities, and preserving long-term ownership of GMAC
      Bank;

   -- Significantly reducing ResCap's balance sheet;

   -- Taking steps to increase pricing and improve returns for all
      automotive leasing and lending activities;

   -- Reducing the volume of new lease originations in the U.S.
      and suspending all incentivized lease programs in Canada;

   -- Executing a plan to preserve the value of the insurance
      business; and

   -- Leveraging the proven servicing platforms in mortgage and
      auto finance to mitigate frequency and severity of losses.

Looking ahead, the company is focused on executing strategies that
restore profitability and longer-term financial health including
improving funding costs, evaluating opportunities to shed non-core
operations, and taking steps that move GMAC toward an independent,
bank-funded lender and servicer.

                         About GMAC LLC

GMAC LLC -- http://www.gmacfs.com/-- formerly General Motors           
Acceptance Corporation, is a global, diversified financial
services company that operates in approximately 40 countries in
automotive finance, real estate finance, insurance and other
commercial businesses.  GMAC was established in 1919 and employs
approximately 26,700 people worldwide.

GMAC Financial Services is in turn wholly owned by GMAC LLC.

Cerberus Capital Management LP led a group of investors that
bought a 51% stake in GMAC LLC from General Motors Corp. in
December 2006 for $14 billion.

                       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.

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.

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

                          *     *     *

As 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.


GLOBAL DEHUMIDIFICATION: Voluntary Chapter 11 Case Summary
----------------------------------------------------------
Debtor: Global Dehumidification Solutions, Inc.
        2620 Leah Dr.
        Columbia, TN 38401

Bankruptcy Case No.: 08-06697

Chapter 11 Petition Date: July 31, 2008

Court: Middle District of Tennessee (Columbia)

Judge: George C. Paine, II

Debtor's Counsel: Robin Bicket White, Esq.
                     Email: rbw@mglaw.net
                  Mglaw, PLLC
                  2525 W. End Ave., Ste. 1475
                  Nashville, TN 37203
                  Tel: (615) 846-8000
                  Fax: (615) 846-9000
                  http://www.mglaw.net

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

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

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


GMAC LLC: Posts Prelim Second Quarter Net Loss of $2.5 Billion
--------------------------------------------------------------
GMAC LLC's wholly owned subsidiary GMAC Financial Services
reported a 2008 second quarter net loss of $2.5 billion, compared
to net income of $293 million in the second quarter of 2007.  
Affecting results in the quarter were a $716 million impairment of
vehicle operating lease assets in the automotive finance business
as a result of declining vehicle sales and lower used vehicle
prices for certain segments, as well as significant losses at
Residential Capital, LLC related to asset sales, valuation
adjustments, and loan loss provisions.  These items were partially
offset by profitable results in the insurance and international
auto finance businesses.

"A soft economic environment and continued volatility in the
mortgage and credit markets have significantly affected results
for the second quarter," GMAC Chief Executive Officer Alvaro G. de
Molina said.  "While conditions such as higher fuel prices and
weaker consumer credit prove to be headwinds, we continue to
aggressively manage through this economic disruption to position
GMAC for longer-term success.

"Despite the current obstacles, we are encouraged by some key wins
such as successfully completing our global refinancing and bond
exchange, preserving long-term ownership of GMAC Bank, and de-
risking the balance sheet at ResCap.  There is still more to do
and the management team is committed to taking the steps needed to
ensure a solid foundation for the company, including continued
realignment and streamlining of the mortgage business and better
optimization of the risk and reward model in auto financing."

                Second Quarter Net Income/(Loss)
                           ($ in millions)

                                   Q208     Q207       Change
                                   ----     ----       ------
    Global Automotive Finance     ($717)    $395      ($1,112)
    Insurance                       135      131            4
    ResCap                       (1,860)    (254)      (1,606)
    Other(1)                        (40)      21          (61)
    Net Income/(Loss)           ($2,482)    $293      ($2,775)


     (1) Includes Commercial Finance operating segment, 21%
         ownership of former commercial mortgage unit and other
         corporate activities.

                        Liquidity and Capital

GMAC's consolidated cash and cash equivalents were $14.3 billion
as of June 30, 2008, down slightly from the cash balance of $14.8
billion at March 31, 2008.  Of these total balances, ResCap's cash
and cash equivalents balance was $6.6 billion at quarter-end, up
from $4.2 billion at March 31, 2008.  The change in consolidated
cash is related to repayment of GMAC and ResCap debt maturities,
offset by new secured funding, lower asset levels and growth in
deposits at GMAC Bank.

In June, GMAC and ResCap announced a comprehensive series of
transactions, which included extending key bank facilities,
increasing the amount of available funding and further enhancing
liquidity positions. The transactions included:

   -- GMAC obtaining a new, globally syndicated $11.4 billion
      secured revolving credit facility with a multi-year maturity
      which steps down to $7.9 billion after two years, and
      renewing the one-year, syndicated commercial paper back-up
      facility, New Center Asset Trust, in the amount of
      $10 billion.

   -- ResCap extending for one year the maturity on substantially
      all of its bilateral bank facilities totaling approximately
      $11.6 billion and obtaining a new $2.5 billion syndicated
      whole loan repurchase facility.

   -- ResCap executing private exchange and cash tender offers for
      U.S. dollar equivalent of $14.0 billion in aggregate
      principal amount of its outstanding debt, thereby reducing
      debt outstanding by $2.9 billion in principal and extending
      maturities.

   -- GMAC providing a $3.5 billion two-year senior secured credit
      facility to ResCap, which includes $750 million of first
      loss protection from General Motors Corp. and Cerberus
      ResCap Financing LLC, an affiliate of FIM Holdings LLC.

   -- Significantly reducing ResCap's tangible net worth covenants
      related to its credit facilities from the previous level of
      $5.4 billion to $250 million (excluding GMAC Bank) with
      consolidated liquidity of $750 million.

During the second quarter, GMAC and certain affiliates of Cerberus
disclosed approximately $2.4 billion of intended actions to
support ResCap's near term liquidity. In addition, GMAC
contributed to ResCap approximately $250 million (principal
amount) of ResCap debt, which was subsequently retired.  In
exchange for the capital contribution, GMAC received additional
shares of ResCap preferred equity equal to the market value of the
debt as of March 31, 2008.  As of June 30, 2008, ResCap's total
equity base was $4.1 billion.

The Federal Deposit Insurance Corporation granted a 10-year
extension of GMAC Bank's current ownership on July 21, 2008.  This
action enables GMAC to strengthen the bank over the long-term,
which is an important source of funding for mortgage and
automotive financing activities.

                    Global Automotive Finance

GMAC's global automotive finance business reported a net loss of
$717 million in the second quarter of 2008, compared to net income
of $395 million in the year-ago period.  Weaker performance was
primarily driven by a $716 million pre-tax impairment on operating
leases in the North American operation, which more than offset
profits in the international business.  In measuring the
accounting impairment, the company was able to consider expected
cash flows from various arrangements with General Motors Corp.,
including approximately $750 million related to the risk-sharing
arrangement; approximately $800 million related to the residual
support program; and approximately $350 of residual-related
settlement payments.  Additional factors affecting results were an
increase in the provision for credit losses due to loss severity
and lower gains on sales.

The North American lease portfolio included approximately
$30 billion in assets as of June 30, 2008 with approximately
$12 billion in sport-utility vehicle leases, $6 billion in truck
leases and $12 billion in car leases.  The impairment of operating
leases resulted from the sharp decline in demand and used vehicle
sale prices for sport-utility vehicles and trucks in the U.S. and
Canada, which has affected GMAC's remarketing proceeds for these
vehicles.  As a result of these market trends, GMAC is taking
steps to reduce the volume of new lease originations in the U.S.
The company will also discontinue the SmartBuy balloon contract
program, suspend all incentivized lease programs in Canada and
increase pricing and returns on other lending activities.  GMAC's
lease portfolio outside of North America has not experienced the
same decrease in market value.

New vehicle financing originations for the second quarter of 2008
decreased to $12.4 billion of retail and lease contracts from
$14.0 billion in the second quarter of 2007, due to lower industry
sales levels in North America.

Credit losses have increased in the second quarter of 2008 to
1.40% of managed retail assets, versus 0.92% in the second quarter
of 2007.  The sharp increase is related to the current trends in
used vehicle prices, which drove higher loss severity.  While
losses trended up, delinquencies decreased in the second quarter
of 2008 to 2.30% of managed retail assets, versus 2.46% in the
prior year period.  The decrease reflects the recent measures
taken to tighten underwriting criteria and increased customer
servicing activities as the U.S. economy remains weak.

                            Insurance

GMAC's insurance business recorded net income of $135 million, up
slightly from net income of $131 million in the second quarter of
2007.  Results primarily reflect a non-recurring tax benefit,
which offset higher weather-related losses.

The insurance investment portfolio was $7.1 billion at June 30,
2008, compared to $7.4 billion at June 30, 2007.  The decrease in
the portfolio is due primarily to the repayment of intercompany
loans related to the funding of the Provident Insurance
acquisition.  The majority of the investment portfolio is in fixed
income securities with less than 10 percent invested in equity
securities.

In July, GMAC's plan to dividend 100 percent of the voting
interest in the insurance business to GMAC's shareholders was
completed.  GMAC continues to hold 100 percent of the economic
interest in GMAC Insurance.  This action was taken in the interest
of maintaining the current financial strength rating and,
therefore, preserving the value of the operation.

                     Real Estate Finance

ResCap reported a net loss of $1.9 billion for the second quarter
of 2008, compared to a net loss of $254 million in the year-ago
period.  Results are primarily attributable to significant losses
from asset sales as ResCap reduced the size and risk of its
balance sheet and higher loan loss provisions due to continued
deterioration in certain European markets.  Partially offsetting
losses was a $647 million gain recognized from ResCap's tender
offer and the retirement of debt.

ResCap continues to implement an aggressive realignment of its
business amid a vastly changing mortgage market, despite the
negative impact to short-term earnings.  Recent actions include
significantly reducing the size and risk of its balance sheet,
originating only mortgages with market liquidity, winding down the
business lending portfolio, leveraging the world-class servicing
platform, and continuing to rationalize the cost base.

ResCap's U.S. residential finance business is beginning to
stabilize as the company reduces balance sheet risk and continues
to realign operations.  While prime conforming loan production
decreased modestly year-over-year with $12.2 billion in the second
quarter of 2008 versus $12.7 billion in the year- ago period,
production of higher-margin government loans increased to
$3.8 billion this quarter compared to $800 million in the second
quarter of 2007.  In addition, operating expense targets were
achieved.

The international mortgage business experienced a decline in net
income in the second quarter related to illiquidity in the global
capital markets and the continued weakening of consumer credit in
key markets.  This drove significant realized and unrealized
losses on loans held for sale.  As a result of the market
environment, ResCap has currently suspended all production outside
of the U.S. with the exception of Canadian insured loans.  The
business lending operations also experienced continued pressure in
the second quarter related to the decline in home sales and
residential real estate values.

                            Outlook

GMAC continues to manage through a softer economic environment and
a global market disruption with significant actions geared toward
achieving longer-term financial health.  Recent actions include:

   -- Stabilizing liquidity by refinancing bank lines, extending
      debt maturities, and preserving long-term ownership of GMAC
      Bank;

   -- Significantly reducing ResCap's balance sheet;

   -- Taking steps to increase pricing and improve returns for all
      automotive leasing and lending activities;

   -- Reducing the volume of new lease originations in the U.S.
      and suspending all incentivized lease programs in Canada;

   -- Executing a plan to preserve the value of the insurance
      business; and

   -- Leveraging the proven servicing platforms in mortgage and
      auto finance to mitigate frequency and severity of losses.

Looking ahead, the company is focused on executing strategies that
restore profitability and longer-term financial health including
improving funding costs, evaluating opportunities to shed non-core
operations, and taking steps that move GMAC toward an independent,
bank-funded lender and servicer.

                         About GMAC LLC

GMAC LLC -- http://www.gmacfs.com/-- formerly General Motors           
Acceptance Corporation, is a global, diversified financial
services company that operates in approximately 40 countries in
automotive finance, real estate finance, insurance and other
commercial businesses.  GMAC was established in 1919 and employs
approximately 26,700 people worldwide.

GMAC Financial Services is in turn wholly owned by GMAC LLC.

Cerberus Capital Management LP led a group of investors that
bought a 51% stake in GMAC LLC from General Motors Corp. in
December 2006 for $14 billion.

                          *     *     *

As reported by the Troubled Company Reporter on June 4, 2008,
Fitch Ratings has downgraded the long-term Issuer Default Rating
of GMAC LLC and related subsidiaries to 'BB-' from 'BB'.  Fitch
has also downgraded GMAC's unsecured long-term ratings to 'B+'
from 'BB-', reflecting the potential for reduced recovery in a
default scenario should the company encumber assets.   
Additionally, Fitch has affirmed the 'B' short-term ratings.  The
Rating Outlook remains Negative.

As reported in the Troubled Company Reporter on April 25, 2008,
Moody's Investors Service downgraded GMAC LLC's senior rating to
B2 from B1; the rating remains on review for further possible
downgrade.  This action follows Moody's rating downgrade of ResCap
LLC, GMAC's wholly owned residential mortgage unit, to Caa1 from
B2.


GSAA HOME: Moody's Junks Ratings on 31 Classes of Securities
------------------------------------------------------------
Moody's Investors Service has downgraded the ratings of 108
tranches from 16 Alt-A transactions issued by GSAA.  Nine tranches
remain on review for possible further downgrade. Additionally, 13
senior tranches were confirmed at Aaa. The collateral backing
these transactions consists primarily of first-lien, fixed and
adjustable-rate, Alt-A mortgage loans.

Ratings were downgraded, in general, based on higher than
anticipated rates of delinquency, foreclosure, and REO in the
underlying collateral relative to credit enhancement levels.
Certain tranches were confirmed due to additional enhancement
provided by structural features. The actions are a result of
Moody's on-going review process.

Complete rating actions are:

Issuer: GSAA Home Equity Trust Asset Backed Certificates Series
2005-12

Cl. B-1, Downgraded to Baa3 from Baa1

Cl. B-2, Downgraded to B1 from Ba1

Cl. B-3, Downgraded to Ca from B3

Cl. B-4, Downgraded to Ca from Caa3

Issuer: GSAA Home Equity Trust 2005-14

Cl. 1A2, Downgraded to Aa2 from Aaa

Cl. 2A2, Downgraded to Aa3 from Aaa

Cl. 2A4, Downgraded to A1 from Aaa

Cl. M-6, Downgraded to Ca from B3

Issuer: GSAA Home Equity Trust 2005-15

Cl. 1A2, Downgraded to Aa1 from Aaa

Cl. 2A1, Downgraded to Aa3 from Aaa

Cl. 2A2, Downgraded to A1 from Aaa

Cl. 2A4, Downgraded to A1 from Aaa

Cl. B-1, Downgraded to Ca from B3

Cl. M-1, Downgraded to A3 from Aa3

Cl. M-2, Downgraded to Baa2 from A2

Cl. M-3, Downgraded to Baa3 from Baa1

Issuer: GSAA Home Equity Trust 2006-1

Cl. A-1, Downgraded to Aa1 from Aaa

Cl. A-2, Downgraded to Aa3 from Aaa

Cl. A-4, Downgraded to A1 from Aaa

Cl. M-1, Downgraded to Baa2 from Baa1

Cl. M-5, Downgraded to Ca from B3

Issuer: GSAA Home Equity Trust 2006-9

Cl. A-2, Downgraded to Aa2 from Aaa

Cl. A-3, Downgraded to Aa3 from Aaa

Cl. A-4-B, Downgraded to A2 from Aaa

Cl. M-4, Downgraded to Ca from B3

Cl. M-5, Downgraded to Ca from B3

Issuer: GSAA Home Equity Trust 2006-14

Cl. A-1, Downgraded to Aa3 from Aaa

Cl. A-2, Downgraded to Baa1 from Aaa

Cl. A-3A, Confirmed at Aaa

Cl. A-3B, Downgraded to Ba1 from Aaa

Cl. M-3, Downgraded to Ca from B3

Cl. M-4, Downgraded to Ca from B3

Issuer: GSAA Home Equity Trust 2006-16, Asset-Backed Certificates,
Series 2006-16

Cl. A-1, Downgraded to Aa2 from Aaa

Cl. A-2, Downgraded to Aa3 from Aaa

Cl. A-3-B, Downgraded to A1 from Aaa

Cl. M-1, Downgraded to Baa1 from A1

Cl. B-1, Downgraded to Ca from B3

Cl. M-5, Downgraded to Ca from B3

Issuer: GSAA Home Equity Trust 2006-17

Cl. A-1, Downgraded to Aa3 from Aaa

Cl. A-2, Downgraded to Baa1 from Aaa

Cl. A-3A, Confirmed at Aaa

Cl. A-3B, Downgraded to Ba1 from Aaa

Cl. M-4, Downgraded to Ca from B3

Cl. M-5, Downgraded to Ca from B3

Cl. M-6, Downgraded to Ca from Caa1

Issuer: GSAA Home Equity Trust 2006-19

Cl. A-1, Downgraded to Aa3 from Aaa

Cl. A-2, Downgraded to Baa1 from Aaa

Cl. A-3-A, Confirmed at Aaa

Cl. A-3-B, Downgraded to Ba1 from Aaa

Cl. M-1, Downgraded to B1 from Ba3; Placed Under Review for
further Possible Downgrade

Cl. M-4, Downgraded to Ca from B3

Cl. M-5, Downgraded to Ca from B3

Cl. M-6, Downgraded to Ca from B3

Cl. B-1, Downgraded to Ca from Caa1

Issuer: GSAA Home Equity Trust 2006-20

Cl. A4A, Confirmed at Aaa

Cl. A4B, Downgraded to Baa3 from Aaa

Cl. 1A1, Downgraded to A1 from Aaa

Cl. 1A2, Downgraded to Baa3 from Aaa

Cl. 2A1A, Confirmed at Aaa

Cl. 2A1B, Downgraded to Aa1 from Aaa

Cl. B-1, Downgraded to Ca from B3

Cl. M-4, Downgraded to B3 from B2; Placed Under Review for further
Possible Downgrade

Cl. M-5, Downgraded to Ca from B3

Issuer: GSAA Home Equity Trust 2007-1

Cl. A4B, Downgraded to A3 from Aaa

Cl. 1A1, Downgraded to A1 from Aaa

Cl. 1A2, Downgraded to A3 from Aaa

Cl. 2A1B, Downgraded to Aa1 from Aaa

Cl. M1, Downgraded to Baa2 from A2

Cl. M5, Downgraded to B3 from B2; Placed Under Review for further
Possible Downgrade

Cl. M6, Downgraded to Ca from B3

Issuer: GSAA Home Equity Trust 2007-2

Cl. AF2, Downgraded to Aa3 from Aaa

Cl. AF3, Downgraded to A2 from Aaa

Cl. AF4B, Downgraded to A3 from Aaa

Cl. AF5A, Confirmed at Aaa

Cl. AF5B, Downgraded to A3 from Aaa

Cl. AF6A, Confirmed at Aaa

Cl. AF6B, Downgraded to A2 from Aaa

Cl. AV1, Downgraded to Aa2 from Aaa

Cl. M1, Downgraded to Baa2 from A2

Cl. M2, Downgraded to Ba1 from Baa3

Cl. M6, Downgraded to B3 from B2; Placed Under Review for further
Possible Downgrade

Issuer: GSAA Home Equity Trust 2007-3

Cl. A4A, Downgraded to Aa3 from Aaa

Cl. A4B, Downgraded to Baa3 from Aaa

Cl. 1A1A, Downgraded to Aa2 from Aaa

Cl. 1A1B, Downgraded to Baa3 from Aaa

Cl. 1A2, Downgraded to Baa3 from Aaa

Cl. 2A1A, Confirmed at Aaa

Cl. 2A1B, Downgraded to Aa3 from Aaa

Cl. B-1, Downgraded to Ca from B3

Cl. M-1, Downgraded to B1 from Ba1

Cl. M-3, Downgraded to B3 from B2; Placed Under Review for further
Possible Downgrade

Cl. M-4, Downgraded to B3 from B2; Placed Under Review for further
Possible Downgrade

Cl. M-5, Downgraded to Ca from B3

Cl. M-6, Downgraded to Ca from B3

Issuer: GSAA Home Equity Trust 2007-4

Cl. A-1, Downgraded to Baa2 from Aaa

Cl. A-2, Downgraded to Baa3 from Aaa

Cl. A-3B, Downgraded to Ba1 from Aaa

Cl. M-1, Downgraded to B1 from Baa3

Cl. M-2, Downgraded to B3 from B1; Placed Under Review for further
Possible Downgrade

Cl. M-3, Downgraded to B3 from B1; Placed Under Review for further
Possible Downgrade

Cl. M-4, Downgraded to Ca from B2

Cl. M-5, Downgraded to Ca from B2

Cl. M-6, Downgraded to Ca from B3

Issuer: GSAA Home Equity Trust 2007-5

Cl. 2A1A, Confirmed at Aaa

Cl. 2A1B, Downgraded to Baa2 from Aaa

Cl. 2A2A, Confirmed at Aaa

Cl. 2A2B, Downgraded to Baa2 from Aaa

Cl. 2A3A, Confirmed at Aaa

Cl. 2A3B, Downgraded to Baa3 from Aaa

Cl. 2M5, Downgraded to Ca from B2

Cl. 2M6, Downgraded to Ca from B3

Issuer: GSAA Home Equity Trust 2007-6

Cl. A4, Downgraded to Aa1 from Aaa

Cl. A5, Downgraded to Ba1 from Aaa

Cl. 1A1, Downgraded to Aa1 from Aaa

Cl. 1A2, Downgraded to Aa1 from Aaa

Cl. 2A1, Confirmed at Aaa

Cl. 3A1A, Confirmed at Aaa

Cl. 3A1B, Downgraded to Ba2 from Aaa

Cl. M4, Downgraded to B3 from B2; Placed Under Review for further
Possible Downgrade

Cl. M5, Downgraded to Ca from B3

Cl. M6, Downgraded to Ca from B3


GSAMP MORTGAGE: Moody's Downgrades Class B-4 Rating to Caa2
-----------------------------------------------------------
Moody's Investors Service has downgraded 5 certificates from 2
GSAMP Mortgage Loan Trust transactions issued in 2002 and 2004.  
The transactions are primarily backed by first-lien fixed and
adjustable-rate subprime mortgage loans.

The downgrades are due to low current credit enhancement levels
relative to current pool projected losses. Pool factors for both
deals are less than 20%. Moody's Investors Service is also
publishing the underlying rating on two insured notes identified
below. The ratings on securities that are guaranteed or "wrapped"
by a financial guarantor is the higher of a) the rating of the
guarantor or b) the published underlying rating.

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

Complete rating actions are:

Issuer: GSAMP Trust 2002-HE2

Cl. A1 currently Aa3

Financial Guarantor: Ambac Assurance Corporation (Aa3, negative
outlook)

Underlying Rating: A3

Cl. A2 currently Aa3

Financial Guarantor: Ambac Assurance Corporation (Aa3, negative
outlook)

Underlying Rating: A3

Cl. B-2, Downgraded to Baa3 from Baa2

Issuer: GSAMP Trust 2004-HE2

Cl. B-1, Downgraded to Ba2 from Baa1

Cl. B-2, Downgraded to B1 from Baa2

Cl. B-3, Downgraded to B3 from Baa3

Cl. B-4, Downgrade to Caa2 from B3


HANOVER INSURANCE: Moody's Affirms FAFLIC Unit's Ba1 Rating
-----------------------------------------------------------
Moody's Investors Service has affirmed the ratings of The Hanover
Insurance Group (NYSE: THG; senior debt at Baa3) and Hanover
Insurance Company (insurance financial strength (IFS) at A3) with
a stable outlook, following the company's announcement that it has
reached an agreement to sell its discontinued life insurance
subsidiary, First Allmerica Financial Life Insurance Company
(FAFLIC), to Commonwealth Annuity and Life Insurance Company
(CALIC), a Goldman Sachs Company. In the same action, Moody's has
placed the Ba1 insurance financial strength rating of FAFLIC on
review for possible upgrade.

According to the rating agency, the sale of FAFLIC is only
expected to have a modest impact on THG's capital adequacy and
profitability. However, the sale would allow THG to monetize the
capital in this run-off business, which otherwise could only be
released through occasional dividends approved by insurance
regulators. Sale proceeds are expected to increase holding company
cash by a projected amount of $220 million (albeit the final
purchase price will be determined at closing). Moody's expects the
holding company to maintain sufficient cash to cover twice the sum
of interest expense and common dividends, or roughly $120 million.

Under the terms of the agreement, CALIC, part of the Goldman Sachs
Insurance Group, will acquire the common stock of FAFLIC from THG.
Moody's review of FAFLIC's Ba1 IFS rating will focus on the
explicit support provided by Goldman Sachs and their intentions to
extend the existing keepwell on CALIC to FAFLIC. A failure to
close the deal would likely result in the confirmation of FAFLIC's
rating.

The last rating action on THG occurred on January 28, 2008, when
Moody's upgraded the senior debt rating to Baa3 and the insurance
financial strength rating of Hanover Insurance Company to A3.

These ratings have been affirmed with a stable outlook:

The Hanover Insurance Group, Inc. -- senior unsecured debt rating
at Baa3;

AFC Capital Trust I -- preferred stock rating at Ba1;

Hanover Insurance Co. -- insurance financial strength at A3.

These ratings have been placed on review for upgrade:

First Allmerica Financial Life Insurance Co. -- insurance
financial strength at Ba1; short-term insurance financial strength
at NP (Not Prime).

This commercial paper rating has been withdrawn because the
program is no longer in effect:

The Hanover Insurance Group, Inc. -- commercial paper rating of
Prime-3 withdrawn.

The Hanover Insurance Group (NYSE: THG), formerly Allmerica
Financial Corporation, is a holding company for its insurance
subsidiaries, which collectively rank among the top 35 property
and casualty insurers in the United States. THG operates as The
Hanover Insurance Company, except in Michigan and other Midwest
states where it does business as Citizens Insurance Company of
America. It offers a range of property and casualty insurance
products to individuals and business owners through its network of
over 2,000 independent agents. For full year 2007, THG reported
net premiums written of $2.4 billion and net income of $253
million. As of December 31, 2007, shareholders' equity was $2.3
billion.

FAFLIC is the run-off life insurance subsidiary of THG. For the
year ended December 31, 2007, FAFLIC reported statutory net income
of $17 million, up from $13 million in the year ago period. As of
the end 2007, FAFLIC had statutory capital and surplus of $164
million.

Moody's insurance financial strength ratings are opinions of the
ability of insurance companies to repay punctually senior
policyholder claims and obligations.


HARRAH'S ENTERTAINMENT: Bill's Casino Fires 28 Workers
------------------------------------------------------
Bill's Casino Lake Tahoe, a Nevada unit of Harrah's Entertainment,
Inc., terminated 28 table-game dealers due to economic slump and
lower revenue, various reports say.

Spokespersons, John Packer and Gary Thompson, said that money
generated by Bill's Casino wasn't enough to meet operational needs
as customers gambling expenditures dwindle, according to the
reports.

Two of Harrah's Entertainment units -- Lake Tahoe Horizon Casino,
now known as Horizon Casino, and Montbleu Resort Casino & Spa --
have filed for chapter 11 bankruptcy, The Sacramento Bee relates.  
Horizon and Montbleu were sold to Columbia Sussex in 1990.  The
Bee adds that the financial problem of Bill's Casino will worsen
when Shingle Springs Band of Miwok Indians opens its Red Hawk
Casino this year.

Jerry Bindel, South Lake Tahoe Lodging Association president,
commented that Bill' Casino doesn't have an inn, the Bee writes.  
Since most of the casino's clients are day trippers, they are
prone to play at Indian casinos, the Bee quotes Mr. Bindel as
saying.

Bill's Casino is named after the founder of Harrah's
Entertainment, Bill Harrah.

                   About Harrah's Entertainment
                                                                                                                            
Harrah's Entertainment, Inc. -- http://www.harrahs.com-- provides  
branded casino entertainment with about 85,000 workers.  Since its
beginning in Reno, Nevada, more than 70 years ago, Harrah's has
grown through development of new properties, expansions and
acquisitions, and now owns or manages casinos on four continents.  
The company's properties operate primarily under the Harrah's,
Caesars and Horseshoe brand names; Harrah's also owns the London
Clubs International family of casinos and the World Series of
Poker.  It has casinos in Arizona, California, Illinois, Indiana,
Iowa, Louisiana, Mississippi, Missouri, Nevada, New Jersey, North
Carolina and Pennsylvania.  It also has casinos in Uruguay and in
Ontario, Canada.

On Jan. 28, 2008, Harrah's Entertainment was acquired by
affiliates of private-equity firms TPG Capital and Apollo Global
Management.

                          *     *     *

The Troubled Company Reporter related on July 7, 2008, that
Standard & Poor's Ratings Services revised its rating outlook on
Las Vegas-based Harrah's Entertainment Inc. and its wholly owned
subsidiary, Harrah's Operating Co. Inc., to negative from stable.   
At the same time, S&P affirmed the 'B+' corporate credit rating on
each entity.

The TCR said on July 21, 2008, that Moody's Investors Service
downgraded Harrah's Entertainment Inc.'s (HET) Corporate Family
Rating to B3 from B2 and affirmed its Speculative Grade Liquidity
Rating at SGL-3.  Moody's also downgraded various classes of debt
issued by Harrah's Operating Company, Inc. (HOC) including its
senior secured guaranteed bank revolving and term loan credit
facilities each to Ba3 from Ba2, senior unsecured parent and
operating company guaranteed notes to Caa1 from B3, senior
unsecured parent only guaranteed notes to Caa2 from Caa1, and
senior subordinated notes to Caa2 from Caa1.  HOC is a wholly-
owned direct subsidiary of HET.  The rating outlook is stable.


HOMETOWN COMMERCIAL: Fitch Assigns 'DR6' Ratings; Removes Watch
---------------------------------------------------------------
Fitch downgraded, assigned Distressed Recovery ratings, and
removes from Rating Watch Negative these classes in the Hometown
Commercial Capital Trust 2006-1 and Hometown 2007-1 commercial
small balance transactions, as:

Hometown 2006-1:
  -- $105.5 million class A to 'AA-' from 'AAA';
  -- $3.4 million class B to 'A-'from 'AA';
  -- $1.7 million class C to 'BBB+' from 'AA-';
  -- $3.2 million class D to 'BB+' from 'A';
  -- $4.3 million class E to 'C/DR6' from 'BBB+';
  -- $1.5 million class F to 'C/DR6' from 'BBB';
  -- $1.9 million class G to 'C/DR6' from 'BBB-';
  -- $1.1 million class H to 'C/DR6' from 'BB+';
  -- $560,000 class J to 'C/DR6' from 'BB';
  -- $746,000 class K to C/DR6' from 'BB-';
  -- $372,000 class L to 'C/DR6' from 'B+';
  -- $560,000 class M to 'C/DR6' from 'B';
  -- $559,000 class N to C/DR6' from 'B-'.

Hometown 2007-1:
  -- $123 million class A to 'AA' from 'AAA';
  -- $3.3 million class B to 'A' from 'AA';
  -- $4.6 million class C to 'BBB' from 'A';
  -- $3.9 million class D to 'B' from 'BBB+';
  -- $1.5 million class E to 'CCC/DR1' from 'BBB';
  -- $1.8 million class F to C/DR6 ' from 'BBB-';
  -- $1.1 million class G to 'C/DR6' from 'BB+';
  -- $553,000 class H to 'C/DR6' from 'BB';
  -- $738,000 class J to 'C/DR6' from 'BB-';
  -- $368,000 class K to C/DR6' from 'B+';
  -- $554,000 class L to 'C/DR6' from 'B';
  -- $737,000 class M to 'C/DR6' from 'B-'.

Fitch also affirmed this class: in Hometown 2006-1:
  -- Interest-only class X at 'AAA'.

The $2.5 million Class O is not rated by Fitch.

Fitch also affirmed this class in Hometown 2007-1:
  --  Interest-only class X at 'AAA'.

The $3.3 million class N is not rated by Fitch.

The downgrades and assignments of distressed recovery ratings are
the result of expected losses on loans currently in special
servicing and a large concentration of loans that Fitch has
identified as loans of concern.  The losses Fitch has calculated
are significant and occurring earlier in the seasoning of both
transactions than expected.  Fitch's loss expectations are based
on recent valuations provided by the special servicers.  The large
number of downgrades is due to the thin tranche size of the lower
classes.

The transactions are small balance CMBS with loan sizes ranging
from $960,000 to $14.4 million and are highly concentrated with
the top 10 loans representing 50% and 39.1% respectively.
Approximately 82.5% of loans in the 2006-1 transaction and 83.6%
of loans in the 2007-1 transaction are full recourse to the
sponsor.  The largest loan (11.2%) in the Hometown 2006-1
transaction is expected to incur a loss.  Losses are also expected
on the top three loans (15%) in the Hometown 2007-1 transaction.

Hometown 2006-1 has 6 loans (24.3%) and Hometown 2007-1 has 9
loans (27.9%) currently in special servicing.  The loans are
secured by multifamily properties located in Nashville, Madison
and Chattanooga, Tennessee.  Six of the specially serviced loans
between the two transactions have the same the sponsor, Steven
Green.  The sponsor is no longer able to operate the properties
and has put them up for sale as part of a larger portfolio sale
totaling 24 assets.  The special servicer is currently negotiating
contracts to sell the assets.  Several of the specially serviced
properties have significant deferred maintenance issues.


HUDSON MEZZANINE: Moody's Junks Rating of 3 Classes of 2042 Notes
-----------------------------------------------------------------
Moody's Investors Service downgraded ratings of three classes of
notes issued by and the rating assigned to a swap agreement
entered into by Hudson Mezzanine Funding 2006-1 Ltd., and left on
review for possible further downgrade one of the ratings.  In
addition, Moody's placed on review for possible downgrade the
rating of one class of Notes without lowering the rating.  The
rating action is:

Class Description: U.S. $37,000,000 Class S Floating Rate Notes
Due 2012

Prior Rating: Aaa

Current Rating: Aaa, on review for possible downgrade

Class Description: U.S. $1,200,000,000 Senior Swap

Prior Rating: Ba3, on review for possible downgrade

Current Rating: Caa3, on review for possible downgrade

Class Description: U.S.$ 110,000,000 Class A-f Floating Rate Notes
due 2042

Prior Rating: B3, on review for possible downgrade

Current Rating: Ca

Class Description: U.S. $120,000,000 Class A-b Floating Rate Notes
due 2042

Prior Rating: B3, on review for possible downgrade

Current Rating: Ca

Class Description: U.S. $230,000,000 Class B Floating Rate Notes
due 2042

Prior Rating: Caa3, on review for possible downgrade

Current Rating: Ca

The rating downgrade actions reflect deterioration in the credit
quality of the underlying portfolio, as well as the occurrence, as
reported by the Trustee on July 22, 2008, of an event of default
caused by a default in the payment of interest on the Class B
Notes when due and payable and a continuation of such default for
a period of seven days, as described in Section 5.1(a) of the
Indenture dated December 5, 2006.

Hudson Mezzanine Funding 2006-1, Ltd. is a collateralized debt
obligation backed primarily by a portfolio of structured finance
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 and the Notes.

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


HUNTSMAN CORP: Earns $23.7 Million in 2008 Second Quarter
---------------------------------------------------------
Huntsman Corp. reported on Wednesday its financial results for the
second quarter ended June 30, 2008.  

Net income for the second quarter of 2008 was $23.7 million as
compared to a net loss of $70.9 million for the same period in
2007 and compared to $7.3 million for the first quarter of 2008.

Revenues for the second quarter of 2008 were $2.89 billion, an
increase of 17% as compared to $2.47 billion for the second
quarter of 2007 and an increase of 14% as compared to
$2.54 billion for the first quarter of 2008.  Revenues increased
in all of the company's segments primarily due to higher average
selling prices, while sales volumes were higher in Polyurethanes.

Adjusted net income from continuing operations for the second
quarter of 2008 was $19.9 million as compared to $83.8 million for
the same period in 2007 and $16.9 million for the first quarter of
2008.

Adjusted EBITDA from continuing operations for the second quarter
of 2008 was $209.8 million as compared to $246.4 million for the
same period in 2007 and compared to $188.3 million for the first
quarter of 2008.

Peter R. Huntsman, Hunstman Corp.'s president and chief executive
officer, stated:

"I am very pleased with our results in the second quarter.  
Adjusted EBITDA was $209.8 million, an increase of 11% as compared
to the first quarter results.  This increase in profitability was
achieved in spite of a challenging raw material environment and
the continued decline in the value of the U.S. dollar.  Sales
volumes were strong in all of our divisions, with total volumes in
our Polyurethanes division up by 14%, in Materials & Effects up
7%, in Performance Products up 13%, and in Pigments up 9%, all
relative to the first quarter of 2008.

"As we look forward to the second half of 2008, we are encouraged
by the recent moderation in crude oil and natural gas prices that
we have seen in the past several weeks.  This, together with the
aggressive actions we have recently taken to increase our selling
prices, is expected to result in further opportunities to increase
margins in many of our products.  We expect that Adjusted EBITDA
in the second half of the year will be stronger than the results
in both the first half of 2008 and the second half of 2007."

For the three months ended June 30, 2008, EBITDA was
$210.2 million as compared to $22.6 million in the same period in
2007.  

        Liquidity, Capital Resources and Outstanding Debt

As of June 30, 2008, the company had approximately $579.0 million
in cash and unused borrowing capacity.  During the three months
ended June 30, 2008, adjusted net working capital increased
approximately $86.0 million, which together with the company's  
capital spending and certain investments in foreign joint
ventures, including its ethyleneamines manufacturing joint venture
in Jubail, Saudi Arabia,  resulted in higher debt levels at
June 30, 2008, as compared to March 31, 2008.

For the three months ended June 30, 2008, total capital
expenditures were approximately $115.0 million as compared to
approximately $178.0 million for the same period in 2007.  Lower
spending attributable to the rebuild of the fire damaged Port
Arthur, Texas olefins facility which was sold in the fourth
quarter of 2007, has been partially offset by higher spending on
various other projects, including the company's maleic anhydride
expansion at its Geismar, Louisiana site.  The company said it
expects to spend approximately $440.0 million on capital
expenditures in 2008.

At June 30, 2008, the company had total debt of $3.95 billion,
compared to total debt of $3.57 billion at Dec. 31, 2007.

                   Update on Merger With Hexion

On June 18, 2008, Hexion Specialty Chemicals Inc. filed a lawsuit
in Delaware seeking to avoid its obligations under the merger
agreement.  Huntsman strongly disagrees with allegations outlined
in this lawsuit.  A trial is scheduled to begin on Sept. 8, 2008,
to adjudicate these allegations.

On June 23, 2008, Huntsman filed a lawsuit in Texas against Apollo
Management, L.P. and its principals Leon Black and Joshua Harris
for fraud and tortious interference with its merger with Hexion,
an entity owned by an affiliate of Apollo.

On June 30, 2008, the European Commission approved the proposed
merger between Hexion and Huntsman contingent on, among other
things, divestment of a portion of Hexion's global specialty epoxy
resins business to a purchaser approved by the European
Commission.  Huntsman said that with this conditional approval of
the European Commission, all significant regulatory approvals
related to the merger other than FTC approval have now been
received.

On July 4, 2008, Huntsman's board of directors voted unanimously
to exercise its right to extend the merger agreement.  The
termination date under the merger agreement is now Oct. 2, 2008.

                       About Huntsman Corp.
  
Headquartered in Salt Lake City, Utah, Huntsman Corporation
(NYSE: HUN) -- http://www.huntsman.com/ -- is a manufacturer of        
differentiated chemical products and inorganic chemical products.  
The company operates in four segments: Polyurethanes, Materials
and Effects, Performance Products and Pigments.  Its products are
used in a range of applications, including those in the adhesives,
aerospace, automotive, construction products, durable and non-
durable consumer products, electronics, medical, packaging, paints
and coatings, power generation, refining, synthetic fiber, textile
chemicals and dye industries.

At March 31, 2008, the company's consolidated balance sheet showed
$8.68 billion in total assets, $6.71 billion in total liabilities,
$32.1 million in minority interests, and $1.94 billion in total
stockholders' equity.

                          *     *     *

As reported in the Troubled Company Reporter on June 24, 2008,
Moody's Investors Service reiterated that the debt ratings and the
corporate family ratings (CFR -- Ba3) for Huntsman Corporation  
and Huntsman International LLC, a subsidiary of Huntsman remain
under review for possible downgrade.

This follows the announcement by Hexion Specialty Chemicals and
Apollo in which Hexion/Apollo claim they would not be required to
consummate the previously announced merger agreement between the
two companies.


INCYTE CORP: June 30 Balance Sheet Upside-Down by $237.2 Million
----------------------------------------------------------------
Incyte Corporation disclosed Tuesday its financial results for the  
second quarter ended June 30, 2008 and reported continued progress
in several lead clinical programs.

At June 30, 2008, the company's consolidated balance sheet showed
$204.7 million in total assets and $441.9 million in total
liabilities, resulting in a $237.2 million stockholders' deficit.

The net loss for the quarter ended June 30, 2008 was
$45.6 million, as compared to $18.4 million for the same period in
2007.

The net loss for the six months ended June 30, 2008 was
$85.7 million, as compared to $40.6 million for the same period in
2007.

Included in the net loss for the quarter and the six months ended
June 30, 2008, was $3.9 million and $7.3 million, respectively, of
non-cash expense related to the impact of expensing share-based
payments, including employee stock options, as compared to
$2.6 million and $4.8 million, respectively, for the same periods
in 2007.

Total revenues for the quarter ended June 30, 2008 were $614,000
as compared to $10.6 million for the same period in 2007.  
Revenues for the six months ended June 30, 2008 were $1.9 million,
as compared to $18.0 million for the same period in 2007.  The
decrease was primarily the result of revenues recognized in 2007
under the company's collaborative research and license agreement
with Pfizer.  The company said it does not expect to generate
product sales from its drug discovery and development efforts for
several years.

Research and development expenses for the quarter ended June 30,
2008, were $38.1 million as compared to $23.3 million for the same
period last year.  Research and development expenses for the six
months ended June 30, 2008, were $71.1 million, as compared to
$47.2 million for the same period last year.  The increase in
research and development expenses resulted from the growth and
advancement of the company's clinical pipeline.  

Selling, general and administrative expenses for the quarter and
the six months ended June 30, 2008, were $4.1 million and
$8.5 million, respectively, as compared to $3.5 million and
$7.2 million, respectively, for the same periods in 2007.

Interest income for the quarter and the six months ended June 30,
2008, was $1.4 million and $3.5 million, respectively, as compared
to $3.7 million and $7.8 million, respectively, for the same
periods in 2007.

Interest expense for the quarter and the six months ended June 30,
2008, was $6.2 million and $12.4 million, respectively, as
compared to $6.0 million and $11.9 million, respectively, for the
same periods in 2007.  Included in interest expense for the
quarter and the six months ended June 30, 2008, was $2.2 million
and $4.3 million, respectively, of non-cash charges to amortize
the original issue discount of the company's 3 1/2% Convertible
Senior Notes.

Paul Friedman, M.D., president and chief executive officer of
Incyte, stated, "During the second quarter, we presented clinical
findings at several scientific conferences from our ongoing Phase
II trials demonstrating that our lead JAK inhibitor compound,
INCB18424, was well tolerated and provided rapid and profound
effects in patients with myelofibrosis and rheumatoid arthritis.  
Additionally, we continue to see encouraging efficacy results in
psoriasis patients using the topical formulation of INCB18424.

"We also presented clinical results from a 28-day Phase IIa trial
with INCB13739 demonstrating that oral treatment with this 11beta-
HSD1 inhibitor significantly improved insulin sensitivity and
decreased plasma cholesterol levels in patients with type 2
diabetes.  These results suggest that INCB13739 may be more
effective in addressing a broad range of metabolic risk factors
than existing diabetes therapies.

"We expect to make substantial clinical progress this year and
next, which will include results from ongoing Phase II trials with
INCB18424 in myelofibrosis, polycythemia vera and essential
thrombocythemia, rheumatoid arthritis and psoriasis, the ongoing
Phase IIb trial for our HSD1-inhibitor and a Phase IIa trial with
our HM74a agonist."

                        Cash Position/Debt

As of June 30, 2008, cash, short-term and long-term marketable
securities totaled $188.0 million, compared to $257.3 million as
of Dec. 31, 2007.

During the six months ended June 30, 2008, the company used
$69.3 million in cash and marketable securities.  Cash use
guidance of $132.0 to $142.0 million for 2008 remains unchanged.

As of June 30, 2008, the aggregate principal amount of total
consolidated debt was $421.8 million.

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?3045

                        About Incyte Corp.

Based in Wilmington, Delaware, Incyte Corporation (Nasdaq: INCY)
-- http://www.incyte.com/-- is a drug discovery and development    
company focused on developing proprietary small molecule drugs to
treat serious unmet medical needs.  Incyte's pipeline includes
multiple compounds in Phase I and Phase II development for
oncology, inflammation and diabetes.  


INDYMAC BANCORP: Files Chapter 7 Protection in California
---------------------------------------------------------
Bloomberg News reported that IndyMac Bancorp Inc. filed for
Chapter 7 Bankruptcy protection with the U.S. Bankruptcy Court for
Central District of California (Bankr. Case No. 08-21752).

According to Bloomberg, the liquidation of Indymac Bancorp's
remaining assets came three weeks after its bank was seized by
U.S. regulators and put under the management of the Federal
Deposit Insurance Corporation.

IndyMac, once the second- largest U.S. independent mortgage
lender, Bloomberg noted, has $32.01 billion in assets as of
July 11.  

Bloomberg, citing court documents, stated that IndyMac's
liabilities are between $100 million and $500 million.  IndyMac
said it has fewer than 50 creditors, including accounting firm
Ernst & Young LLP, law firm Alston & Bird, and JPMorgan Chase &
Co. and other banks, none of the outstanding claims were listed,
Bloomberg indicated.  

                IndyMac Federal Bank FSB's Statement

In a press statement, IndyMac Federal Bank FSB fka IndyMac Bank,
the former subsidiary of IndyMac Bancorp related that this action
has no effect on its operations.  Other than a similarity of name,
IndyMac Federal Bank has no relationship, nor does it share any
employees, with IndyMac Bancorp.

"The statement by the former holding company of IndyMac Bank has
no impact on IndyMac Federal Bank or its customers,"  John
Bovenzi, IndyMac Federal Bank CEO, said.  "Our customers will
continue to receive the same value and personal service they have
come to expect from IndyMac, which, due to its FDIC backing is one
of the safest banks in America and a great place for our customers
to keep their funds."

IndyMac Federal Bank remains under the FDIC's conservatorship and,
as such, is backed by the FDIC's approximately $53 billion deposit
insurance fund, which is further backstopped by the full faith and
credit of the U.S. government.

In a July 31 regulatory filing, Indymac stated that it expects
that the Bankruptcy Court will appoint a bankruptcy trustee
promptly.

Alston & Bird LLP represents the company in this bankruptcy case.

The company, according to Bloomberg, proposed that its first
creditor meeting be held on Aug. 28.

                    About IndyMac Bancorp Inc.

Based in Pasadena, California, IndyMac Bancorp Inc. (NYSE:IMB) --
http://www.indymacbank.com/-- is the holding company for IndyMac   
Bank FSB, a hybrid thrift/mortgage bank that originated mortgages
in all 50 states of the United States.  Through its hybrid thrift-
mortgage bank business model, IndyMac designed, manufactured, and
distributing cost-efficient financing for the acquisition,
development, and improvement of single-family homes.  IndyMac also
provided financing secured by single-family homes to facilitate
consumers' personal financial goals and strategically invests in
single-family mortgage-related assets.

                           *     *     *

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

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

As reported in the Troubled Company Reporter on Feb. 22, 2008,
Standard & Poor's Ratings Services lowered its ratings on five
classes of asset-backed certificates from IndyMac Bank FSB's
series SPMD 2002-A and SPMD 2002-B.  Concurrently, S&P removed
three of the lowered ratings from CreditWatch with negative
implications.  Additionally, S&P affirmed its ratings on the
remaining classes from these two series.


INDYMAC BANCORP: Voluntary Chapter 7 Case Summary
-------------------------------------------------
Debtor: Indymac Bancorp Inc.
        Attn: Edwin Woodsome
        Orrick, Harrington & Sutcliffe, LLP
        777 South Figueroa Street, Suite 3200
        Los Angeles, CA 90017

Bankruptcy Case No.: 08-21752

Chapter 7 Petition Date: July 31, 2008

Court: Central District of California (Los Angeles)

Judge: Sheri Bluebond

Debtor's Counsel: Dean G. Rallis, Jr., Esq.
                  333 S. Hope Street, 16th Floor
                  Los Angeles, CA 90071
                  Tel: (213) 576-1100
                  email: drallis@wbcounsel.com

                  John C. Weitnauer, Esq.
                  1201 W. Peachtree Street
                  Atlanta, GA 30309-3424
                  Tel: (404) 881-7000

Estimated Assets: $50 million to $100 million

Estimated Debts: $100 million to $500 million


INN OF THE MOUNTAIN: Moody's Affirms B3 Corp. Family Ratings
------------------------------------------------------------
Moody's Investors Service changed the rating outlook for Inn of
the Mountain Gods Resorts and Casino to negative from stable,
based on the expectation that the recent deterioration in EBITDA
could continue in the current fiscal year due to economic
challenges. IMGRC's B3 corporate family, B3 probability of default
and B3 senior notes ratings were affirmed.

IMGRC's operating performance deteriorated in the second half of
the fiscal year ended April 30, 2008 due largely to a lack of
snowfall negatively impacting the ski resort and indirectly the
casino facility, as well as operating disruptions caused by high
management turnover. Moody's believes that weak consumer spending
and lower leisure travel budgets could hurt EBITDA in the near
term, given IMGRC's reliance on tourist traffic and visitation of
regional patrons from a radius in excess of 100 miles. The rating
agency also cautions that IMGRC's EBITDA to interest coverage of
approximately 1.4 times as of April 30, 2008 provides limited
leeway in the B3 rating category.

Further decline in operating performance to the extent that EBITDA
would not cover anymore debt service obligations and maintenance
capital expenditures could result in a rating downgrade.

Ratings affirmed:

B3 corporate family rating

B3 probability of default rating

B3 senior unsecured notes rating (LGD assessment revised to
LGD4/52% from LGD4/54%)

IMGRC includes all of the resort enterprises of the Mescalero
Apache Tribe, a federally recognized Indian tribe with
approximately 4,400 members on a 725-square mile reservation
located in the Sacramento Mountains in south-central New Mexico.
IMGRC comprises a small locals-oriented casino, a resort hotel and
casino and the second largest ski resort in New Mexico. Net
revenues for the fiscal year ended April 30, 2008 were $124.4
million.


INNOPHOS INC: S&P Lifts Corporate Credit Rating to 'B+' from 'B'
----------------------------------------------------------------
Standard & Poor's Ratings Services raised its ratings on Innophos
Inc., including its corporate credit rating to 'B+' from 'B'.  The
outlook is positive.  The Cranbury, New Jersey-based company had
total reported debt of approximately $398 million at March 31,
2008.
      
"The upgrade reflects Innophos' improved operating performance and
stronger financial risk profile, along with our expectation that
profitability should continue to fare well in the near term," said
Standard & Poor's credit analyst James Siahaan.  Despite
substantial increases in its raw material costs, Innophos has
successfully raised prices multiple times this year, and has
benefited from relatively consistent demand for its products.  The
company is likely to continue to derive considerable revenue and
earnings growth during the next two years.
     
The ratings on Innophos, a manufacturer of specialty phosphates,
reflect the company's moderate sales base of about $700 million,
its narrow product line in a niche, mature market, and highly
leveraged financial risk profile.  These negatives are partially
offset by the company's solid position in the production of
specialty phosphates, good operating margins, strengthening cash
flow protection measures, and the potential for additional debt
reduction from discretionary cash flows.
     
The outlook is positive.   The company's ability to sustain price
levels and derive profits during this cyclical upturn, as well as
its ability to mitigate higher raw material costs will be key to
supporting modestly higher ratings.   S&P expects Innophos to
exhibit meaningful improvement in internal funds generation during
the near term.  S&P could raise the ratings if the company
continues to demonstrate solid performance, adheres to financial
policies that do not weaken the capital structure, and
successfully refinances its senior credit facility that matures in
2009.  

However, S&P could revise the outlook to stable or negative or
lower the ratings if pricing and margins undergo significant and
unexpected compression, if volumes in the company's typically
steady consumer non-discretionary markets decline, and if expected
credit metrics at the current rating cannot be maintained.


INSTANT WEB: Moody's Cuts Sr. Sec. 2nd Lien Term Loan to Caa2
-------------------------------------------------------------
Moody's Investors Service downgraded the corporate family and
probability of default ratings for Instant Web, Inc. to B3 from B2
and changed the outlook to negative.  

The downgrade reflects expectations for deterioration over the
next several quarters such that Instant Web is unlikely to achieve
the necessary improvement to sustain a B2 credit profile. Instant
Web faces pressure from softening end markets, especially in
financial services, that will likely adversely impact operating
results until the sector recovers. Instant Web recently announced
the closure of its facility in Long Island, New York, and
relocation of business from that facility to its existing
operations in North Carolina and Minnesota. While Moody's believes
IWCO will realize cost savings from this action, it indicates that
mail volumes and revenue will be much lower than previously
expected. The negative outlook incorporates concerns over the
potential for continued declines. A summary of today's actions
follows.

Instant Web, Inc.

....Probability of Default Rating, Downgraded to B3 from B2

....Corporate Family Rating, Downgraded to B3 from B2

....Senior Secured Second Lien Term Loan, Downgraded to Caa2,
LGD6, 93% from Caa1

....Senior Secured First Lien Credit Facility, B1, LGD3, 32%

....Outlook, Changed To Negative From Stable

The B3 corporate family rating reflects high financial risk,
including debt-to-EBITDA of approximately 8 times and negative
free cash flow, customer concentration, and lack of scale. Instant
Web's compelling business model and favorable long term trends in
direct mail support its ratings. However, shifting consumer debt
profiles may adversely impact the willingness of the credit card
business to attract new customers in the current market
environment, and Instant Web derives a large portion of its
revenue from financial services companies. Adequate liquidity also
supports the rating. Headquartered in Chanhassen, Minnesota,
Instant Web, Inc. a wholly-owned subsidiary of parent holding
company IWCO Direct Holdings, Inc., provides its clients an
integrated package of direct mail production services, including
print, envelope, plastic, mailing, and data services. The company
is the largest commingler of standard mail in North America with
revenues of approximately $300 million in 2007.


INTERSTATE BAKERIES: Withdraws Bid for Incentive Plan Approval
--------------------------------------------------------------
Interstate Bakeries Corp. and its debtor-affiliates informed the
U.S. Bankruptcy Court for the Western District of Missouri and
parties-in-interest, on July 17, 2008, that it has withdrawn its
request seeking permission to implement the IBC Management
Incentive Plan for Fiscal Year 2008.

The Debtors proposed the 2008 Incentive Plan -- which covered the
business plan year period from June 3, 2007 through May 31, 2008
-- to incentivize IBC's top 520 salaried employees with designated
annual rewards based upon a specified percentage of their base
salaries.  The rewards were limited to a maximum amount of between
5% and 10% of the base salaries of the Debtors' employees.

The proposed 2008 Incentive Plan would award an aggregate of
$6,000,000 in bonuses to employees, where approximately 31% or
$1,800,000 of the total awards was allocated to a group of 17
individuals, of which four were designated to receive $892,000.

Rewards under the 2008 Incentive Plan will not be granted to any
employee "unless IBC meets or exceeds the company EBITDA Target",
which was drawn from the Business Plan.

The Official Committee of Unsecured Creditors objected to the
proposed Incentive Plan, arguing that it was "unfair and
unreasonable," as it qualified only a limited pool of management
employees.

The International Brotherhood of Teamsters said IBC's proposed
bonus program lacked a legitimate business justification because
"[the Debtors'] Plan of Reorganization -- dependent on a deal
with IBT, which will not occur -- cannot be confirmed."

The Debtors did not disclose the reason for the withdrawal of
their request.

Headquartered in Kansas City, Missouri, Interstate Bakeries
Corporation is a wholesale baker and distributor of fresh-baked
bread and sweet goods, under various national brand names,
including Wonder(R), Baker's Inn(R), Merita(R), Hostess(R) and
Drake's(R).  Currently, IBC employs more than 25,000 people and
operates 45 bakeries, as well as approximately 800 distribution
centers and approximately 800 bakery outlets throughout the
country.

The company and eight of its subsidiaries and affiliates filed for
chapter 11 protection on Sept. 22, 2004 (Bankr. W.D. Mo. Case No.
04-45814).  J. Eric Ivester, Esq., and Samuel S. Ory, Esq., at
Skadden, Arps, Slate, Meagher & Flom LLP, represent the Debtors
in their restructuring efforts.  When the Debtors filed for
protection from their creditors, they listed $1,626,425,000 in
total assets and $1,321,713,000 (excluding the $100,000,000 issue
of 6% senior subordinated convertible notes due Aug. 15, 2014) in
total debts.  The Debtors' filed their Chapter 11 Plan and
Disclosure Statement on Nov. 5, 2007.  Their exclusive period to
file a chapter 11 plan expired on November 8.  On Jan. 25, 2008,
the Debtors filed their First Amended Plan and Disclosure
Statement.  On Jan. 30, 2008, the Debtors received Court approval
of the First Amended Disclosure Statement.

IBC confirmed that it has not received any qualifying alternative
proposals for funding its plan of reorganization in accordance
with the Court-approved alternative proposal procedures.  As a
result, no auction was held on Jan. 22, 2008, as would have been
required under those procedures.  The deadline for submission of
alternative proposals was Jan. 15, 2008.  A new plan filing
deadline was set for June 30, 2008; no plan was filed as of that
date.

(Interstate Bakeries Bankruptcy News, Issue No. 103; Bankruptcy
Creditors' Service Inc., http://bankrupt.com/newsstand/or
215/945-7000).


I/OMAGIC CORP: Dismisses Swenson Advisors as Public Accountant
--------------------------------------------------------------
I/OMagic Corporation disclosed, on July 11, 2008, the dismissal of
Swenson Advisors, LLP, the independent registered public
accounting firm that was engaged as the company's principal
accountant to audit the company's consolidated financial
statement.  

The initial Form 8-K inadvertently identified a dismissal date of
July 7, 2008; however, although the company provided formal notice
of dismissal to Swenson on July 7, 2008, its Audit Committee first
approved the dismissal of Swenson on June 27, 2008 and
subsequently executed written resolutions concerning the dismissal
effective as of July 1, 2008.

In addition, the Initial Form 8-K reported the engagement of Simon
& Edward, LLP, as the company's new independent registered public
accounting firm on July 7, 2008; however, although the company
intended to engage Simon & Edward on July 7, 2008 -- the same day
the company formally notified Swenson of its dismissal --
I/OMagic's Audit Committee first approved the engagement of
Simon & Edward on June 27, 2008, but at that time it had not
formally engaged Simon & Edward through the execution of an
engagement letter.  The company formally engaged Simon & Edward
through the execution of an engagement letter on July 21,
2008.  Accordingly, the company hereby amend and restate the
Initial Form 8-K:

   (a) On June 27, 2008, the company dismissed Swenson, and on
       July 7, 2008, the company formally notified Swenson of its
       dismissal.

The decision to change the company's independent registered public
accounting firm was approved by its Audit Committee.  The reason
for the change was to allow the company to engage an alternative
firm that it believes has adequate resources to provide the
company with the auditing and tax services it requires on a more
cost-effective basis.

Except as to going concern qualifications, the audit reports of
Swenson on the company's consolidated financial statements and
consolidated financial statement schedules as of and for the years
ended December 31, 2006 and 2007 did not contain any adverse
opinion or disclaimer of opinion, nor were they qualified as to
uncertainty, audit scope or accounting principles.

During the years ended December 31, 2006 and 2007 and the
subsequent interim period through July 7, 2008, there were no
disagreements with Swenson on any matter of accounting principles
or practices, financial statement disclosure, or auditing scope or
procedures which disagreements, if not resolved to Swenson's
satisfaction, would have caused Swenson to make reference to the
subject matter of the disagreement in connection with its opinion.

                       About I/OMagic Corp.

Headquartered in Irvine, California, I/OMagic Corp. (OTC BB: IOMG)
-- http://www.iomagic.com/-- sells data storage products,   
televisions, most of which are high-definition televisions, or
HDTVs, utilizing liquid crystal display, or LCD, technology, and
other consumer electronics products.

                      Going Concern Doubt

As reported in the Troubled Company Reporter on April 23, 2008,
Swenson Advisors, LLP, in San Diego, Calif., expressed substantial
doubt about I/OMagic Corp.'s ability to continue as a going
concern after auditing the company's consolidated financial
statements for the years ended Dec. 31, 2007, and 2006.  The
auditing firm said that the company has incurred significant
operating losses, has serious liquidity concerns, and may require
additional financing in the foreseeable future.

At March 31, 2008, the company had cash and cash equivalents of
$357,042 and as of May 16, 2008, the company had only $827,524 of
cash on hand.  Accordingly, the company is presently experiencing
a lack of liquidity and may have insufficient liquidity to fund
its operations for the next twelve months.

If the company's net losses continue or increase, the company said
it could experience significant additional shortages of liquidity
and its ability to purchase inventory and to operate its business
may be significantly impaired, which could lead to further
declines in its results of operations and financial condition.


ISP CHEMCO: S&P Changes Outlook to Positive on Stable Performance
-----------------------------------------------------------------
Standard & Poor's Ratings Services revised its outlook on ISP
Chemco LLC to positive from stable.  S&P affirmed all the ratings
including the 'B+' corporate credit rating.  The outlook revision
reflects very stable operating performance, and better than
expected earnings and cash flow in the current challenging cost
and economic environment.
     
"We expect cash flow protection and other key ratios to remain at
about current levels, with operating cash flow and cash on hand
used to fund bolt-on acquisitions or moderate dividends," said
Standard & poor's credit analyst Cynthia Werneth.
     
Total debt outstanding at March 30, 2008 (adjusted to include
about $100 million of off-balance-sheet accounts receivable and
operating lease financing and unfunded postretirement obligations)
was about $1.35 billion.
     
The ratings on ISP Chemco reflect its highly leveraged financial
profile and the risks associated with private ownership.  These
factors are partially mitigated by the company's satisfactory
business position as a global producer of specialty and industrial
chemicals.  Annual sales are about $1.6 billion.
     
Wayne, New Jersey-based ISP Chemco's credit quality is supported
by its diverse portfolio of specialty chemicals, which make up
more than 70% of its revenues and an even greater proportion of
operating income.  The company's remaining sales are from
industrial chemicals.
     
The positive outlook points to the potential for a one-notch
upgrade during the next few quarters if credit metrics remain at
about current levels, with funds from operations, after estimated
tax liability, to adjusted total debt approaching 15%.  S&P would
also expect any dividends, meaningful-sized acquisitions, or
resolution of the outstanding tax matter to be financed with free
cash flow and cash on hand.  Despite some uncertainties regarding
financial policies, S&P gives considerable weight to ISP Chemco's
investment-grade business risk profile and relative earnings
stability.  On the contrary, S&P would revise the outlook to
stable if an increase in debt or deterioration in operating
results seems likely to push FFO to debt down toward 10%.  If this
ratio were to drop to and remain below 10%, S&P would lower the
ratings.


JACOBS ENTERTAINMENT: Moody's Sees High Covenant Violation Risk
---------------------------------------------------------------
Moody's Investors Service assigned a Speculative Grade Liquidity
rating of SGL-4 to Jacobs Entertainment Inc., reflecting the high
risk of financial covenant violation in the next twelve months.  
While internal cash flow and the degree of availability under the
revolver could be commensurate with an adequate liquidity, Moody's
believes that the risk of covenant breach justifies a more
conservative assessment.

Moody's anticipates that the company's cash flow from operations
and cash balances should cover capital expenditures, distributions
to stockholders and land acquisitions in the coming year.
Additionally, the rating agency does not expect borrowings under
the revolver to significantly increase in the next twelve months
from a peak reached in June 2008 after a coupon payment on the
senior unsecured notes, although EBITDA is expected to remain
constrained by a challenging market environment.

However, Moody's believes that the company could have too limited
leeway under its net senior secured leverage covenant. The risk of
violation is particularly high in the first quarter of 2009 when
the step down comes into effect.

For more information on JEI's SGL analysis, please refer to the
credit opinion on Moodys.com.

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


JACUZZI BRANDS: S&P Cuts Credit Rating to B- & Loan Rating to CCC+
------------------------------------------------------------------
Standard & Poor's Ratings Services lowered its corporate credit
rating on Jacuzzi Brands Corp. to 'B-' from 'B'.  At the same
time, S&P lowered the ratings on the company's $170 million first-
lien term loan and $15 million synthetic letter of credit facility
to 'CCC+' from 'B' and revised the recovery rating to '5',
indicating S&P's expectation for modest (10%-30%) recovery in the
event of a payment default.  Similarly, the rating on Jacuzzi's
$150 million second-lien term loan was lowered to 'CCC' from 'B-'
and the recovery rating was changed to '6', indicating negligible
(0%-10%) recovery in the event of a payment default.  The outlook
is negative.
     
"The lower ratings reflect our assessment that as a result of the
ongoing challenging operating conditions due to the weak U.S.
economy and continued housing downturn, demand for the company's
discretionary bath and spa products will continue to decline in
the near term," said Standard & Poor's credit analyst Thomas
Nadramia.
     
As a result, operating performance will likely be weaker than
expected, resulting in a deterioration to credit metrics to a
level that S&P would consider to be weak for the current rating.  
While the company's near-term liquidity position seems adequate
given its availability under bank credit lines, the payment-in-
kind period on its $150 million second-lien term loan expires in
October 2009, thus requiring approximately $15 million to
$17 million in additional interest servicing costs at current
rates at that time.
     
The ratings on Jacuzzi reflect very competitive industry
conditions, overall industry cyclicality, the relatively narrow
focus of the company's principal product lines, weak operating
margins, and very aggressive financial leverage.  The ratings also
reflect the benefits of strong brand names, including Jacuzzi and
Sundance, and geographic diversity--50% of sales now come from
products sold outside the U.S.
     
The outlook is negative.  Given current operating conditions, S&P
expects Jacuzzi's operating performance will continue to be
negatively affected in the near term because we expect repair and
remodeling spending to continue to soften.  S&P could lower
ratings further if operating performance does not stabilize in the
near-to-intermediate term, resulting in a further weakening in
credit measures.  In addition, S&P are concerned that without a
significant improvement in the operating environment over the next
12 months, the company's ability to meet its requirements to pay
cash interest once again on its second-lien debt will be
difficult.  Although unlikely in the near term, S&P could revise
the outlook to stable if the company reverses recent sales and
margin deterioration and meaningfully improves credit metrics and
interest coverage.


JEFFERSON COUNTY: Payment Deadline on $3.2BB Debt Moved to Nov. 17
------------------------------------------------------------------
Jefferson County on Friday reached an agreement with creditors to
extend payment on a $3.2  billion sewer debt until Nov. 17, 2008,    
reports say.  A $100 million payment on the debt was supposedly
due Friday, Aug. 1.  

As part of agreement, the county will pay creditors $44 million of
principal.  XL Capital Assurance, the bond insurance unit of
Security Capital Assurance and a major bond insurer for Jefferson
County, would pay $35 million of the principal, county commission
President Bettye Fine Collins said, according to a report by
Melinda Dickinson of Reuters.

Jefferson County has $4.6 billion in overall debt, including
$3.2 billion in sewer bonds.  The county was required to post a
collateral on interest-rate swaps tied to the bonds after a series
of downgrades on the debt.  The Aug. 1 agreement was the fourth
extension with creditors since the county failed to make a payment
on April 1.  The county's major creditors include investment banks
JPMorgan Chase, Goldman Sachs and Lehman Brothers.

Two of the firms that guarantee to make the payments on Jefferson
County's sewer bonds in the event of default were FGIC Corp. and
XL Capital Assurance Inc.  FGIC insured $1.56 billion of Jefferson
County auction-rate securities, and XL Capital backed $397 million
of the bonds.

XLCA  said that as of June 2, 2008, the Company's exposure to
Jefferson County was $810 million, net of reinsurance.  XLCA has
not established any loss reserves at this time in connection with
Jefferson County.

                      Restructuring Proposal

The proposed plan to pay the $3.2 billion sewer debt has these
main parts:

     -- an extension to an existing one-cent sales tax due to   
        expire in the next five years that is expected to generate
        $663 million;

     -- an expansion of the occupational tax that is expected to
        generate $38 million; and

     -- the use of the sewer revenue, generating $1.9 billion, to
        pay down debt.

In addition, should this proposed revenue generation plans fail,
property taxes will be raised to generate more funds to cover the
shortfall.

A copy of the plan is available at  
http://bankrupt.com/misc/sewer_restructuring_plan.pdf

Majority of the Jefferson County Commission are opposed to the
plan.  The Commission will vote on Tuesday whether to ask Gov. Bob
Riley to call a special session to allow state legislators to
consider the new proposal.  Voters still have to approve the
proposal in a statewide referendum Nov. 4.

On Friday, county leaders will disclose the proposals to the
public and invite taxpayers to comment on the proposals.

           Citigroup Replaces Goldman Sachs as Adviser

Citigroup Inc. was appointed as part of a new banking team
advising Jefferson County after Goldman Sachs Group. Inc. refused
to take the job, Martin Z. Braun and William Selway at Bloomberg
News reported.  As reported by the Troubled Company Reporter on
July 9, 2008, the Jefferson County Commission dismissed current
advisers Porter, White & Co., Merrill Lynch & Co., and Birmingham
law firm Bradley Arant Rose & White as negotiators in their debt
restructuring effort.  They hired as replacement, Goldman, Sachs &
Co.; Birmingham investment bank Sterne, Agee & Leach Inc. and
Memphis-based investment firm Morgan Keegan & Co.  

                     About Jefferson County

Jefferson County has its seat in Birmingham.  It has a population
of 660,000.  It ended its 2006 fiscal year with a $42.6 million
general fund balance, according to Standard & Poor's.  Patrick
Darby, a lawyer with the Birmingham firm of Bradley Arant Rose &
White, represents Jefferson County.  Porter, White & Co. in
Birmingham is the county's financial adviser.  A bankruptcy by
Jefferson County stands to be the largest municipal bankruptcy in
U.S. history.

                         *     *     *

As reported by the Troubled Company Reporter on June 10, 2008,
Standard & Poor's Ratings Services' ratings on Jefferson County,
Ala.'s series 1997A, series 2001A, series 2003 B-1-A through 2003
B-1-E, and series 2003 C-1 through 2003 C-10 sewer system revenue
bonds ('CCC' underlying rating [SPUR]) remain on CreditWatch with
developing implications.

On April 1, 2008, Standard & Poor's lowered its SPUR on the
county's variable-rate demand series 2003 B-2 through 2003 B-7
sewer revenue refunding warrants to 'D' from 'CCC' due to the
sewer system's failure to make a principal payment on the bank
warrants when due on April 1, 2008, in accordance with the terms
of the standby warrant purchase agreement.

As reported by the TCR on July 22, 2008, Moody's Investors
Service's continues to review the Caa3 rating on Jefferson
County's (AL) $3.2 billion in outstanding sewer revenue
warrants for possible downgrade.  


JEFFERSON COUNTY: Moody's Downgrades $270,000,000 Debt to Ba3
-------------------------------------------------------------
Moody's Investors Service has downgraded to Ba3 from Baa1 the
rating on Jefferson County's (AL) $270 million in outstanding
general obligation debt.  At this time, Moody's has also
downgraded: to B1 from Baa2 the county's $86.7 million in
outstanding lease revenue warrants issued through the Jefferson
County Public Building Authority; to B1 from Baa2 the county's
$996.8 million in limited obligation school warrants secured by
sales taxes; to B1 from Baa1 the rating on $20.3 million in
special tax bonds issued by the Birmingham-Jefferson Civic Center
Authority (BJCCA) partially secured by the county's occupational
tax; and to B1 from Baa2 the rating on $40.86 million in debt
issued by BJCCA partially secured by a beverage tax and lodging
tax levied and the collected by the county. The sewer revenue
bonds continue to be rated Caa3, on review for possible downgrade.

Downgrade of the general obligation and other non-sewer debt
reflects the county's lack of progress toward a resolution of the
sewer system financial crisis, heightening the risk that it will
pursue a bankruptcy filing. The downgrade also reflects the
failure of the county to approve an extension on the existing
forbearance agreements with the liquidity banks and bond insurers
prior to their expiration, which now requires the county pay
approximately $106 million to the liquidity banks. Moody's expects
that the county will not make that payment; were the county to
make the payment, it would significantly deplete available
resources of the sewer system.

It is Moody's belief that the county's failure to agree upon a
plan for a solution to the sewer system's financial crisis in a
timely fashion is inconsistent with an investment grade rating on
the general credit quality of the county. Moody's believes the
heightened risk that the county will file for bankruptcy further
weakens credit quality and raises questions about how non-sewer
obligations may be treated in a bankruptcy. Finally, Moody's
believes that the county's failure to agree to the extension in a
timely manner, thus avoiding a non-payment on the bank bonds,
indicates additional weakness to the overall credit quality of the
county.

Given the lack of history of municipal bankruptcy, Moody's is
unable to determine what county revenues, assets and debt
obligations could be affected by bankruptcy proceedings, and the
downgrades of Moody's ratings on the non-sewer obligations
reflects Moody's concern that a bankruptcy filing could weaken the
county's ability to meet its debt backed by pledges of the general
obligation, lease revenue, and various dedicated taxes. While each
of these securities could be affected by a bankruptcy, Moody's
believes the general obligation remains the strongest pledge
available to a municipality. Accordingly, the sales tax, lease
revenue and other special tax obligations are lowered one notch
lower than the G.O. debt, to B1.

Moody's has downgraded the BJCCA bonds secured by the county's
pledge of $10 million annually from its occupational tax, as well
as the City of Birmingham's (G.O. rated Aa3) $3 million payments
from its occupational tax, to the same level as the general
obligation debt. The county's obligation to support this debt ends
in December 2008, with only one county payment of $5 million
remaining. Although a bankruptcy filing could disrupt these
remaining payments, Moody's believes the disruption of the
occupation tax bonds would be short-lived given the limited
timeframe remaining on the county's obligation.


JOURNAL REGISTER: Moody's Downgrades PDR to D, CFR to Ca
--------------------------------------------------------
Moody's Investors Service has downgraded Journal Register
Company's Probability of Default rating to D from Caa3 and its
Corporate Family rating to Ca from Caa2. The rating outlook is
stable.  Moody's plans to withdraw all of Journal Register's
ratings shortly.

Details of the rating actions are:

Ratings downgraded:

Senior secured revolving credit facility due 2012 - to Ca, LGD3,
49% from Caa2, LGD3, 34%

Senior secured term loan A due 2012 - to Ca, LGD3, 49% from Caa2,
LGD3, 34%

Corporate Family Rating - to Ca from Caa2

Probability of Default Rating - to D from Caa3

The rating outlook is stable.

The downgrade of the Probability of Default rating to D reflects
Moody's opinion that the forbearance agreement which Journal
Register recently concluded whereby interest will now be paid-in-
kind vs. in cash as originally stipulated with its lenders is
tantamount to an event of default.

The downgrade of the Corporate Family rating to Ca from Caa2 and
the increase in the LGD point estimates incorporate Moody's view
that Journal Register's debt holders are now expected to realize
only an average recovery level in the event of a recapitalization,
bankruptcy filing or other restructuring scenario given currently
very weak market conditions, as opposed to an above average
recovery expectation previously given the fully secured all bank
debt capital structure.

On July 25, 2008, Journal Register announced that it had entered
into a forbearance agreement with its lenders.  According to the
terms of the forbearance agreement, for the period from July 24,
2008 through October 31, 2008, interest under the company's senior
secured credit agreement will accrue but not be paid. The
agreement also suspended lender commitments to make further
extensions of credit during the forbearance period.

Prior to the conclusion of the forbearance agreement, Moody's
considered that the continuing deterioration of Journal Register's
business, its weak cash flow and squeezed liquidity had already
placed the company in jeopardy of breaching its financial
covenants and thereby defaulting under its credit agreement.  
Journal Register reports the entire $640 million balance of its
senior secured debt as a current liability, causing its current
liabilities to substantially exceed its current assets,
representing an insolvent credit profile. In this context, Moody's
considers that the forbearance agreement (permitting Journal
Register to make non-cash payment of its interest obligations
through the end of October 2008) effectively constitutes an
interest payment default.

Journal Register Company is a leading US newspaper publishing
company. Based in Yardley Pennsylvania, the company recorded sales
of $451 million for the LTM period ended March 31, 2008.


JP MORGAN: Fitch Holds 'BB-' Rating on $4MM Class H Certificates
----------------------------------------------------------------
Fitch Ratings upgraded J.P. Morgan Commercial Mortgage Finance
Corp.'s mortgage pass-through certificates, series 1999-C7, as:

  -- $38.1 million class F to 'AA' from 'A'.

Additionally, Fitch affirmed these classes:

  -- Interest-only class X at 'AAA';
  -- $22.7 million class B at 'AAA';
  -- $40.1 million class C at 'AAA'.
  -- $52.1 million class D at 'AAA';
  -- $12.0 million class E at 'AAA';
  -- $26.0 million class G at 'BB';
  -- $4.0 million class H at 'BB-'.

Fitch does not rate the $23.4 million class NR certificates.  The
class A-1 and A-2 certificates have paid in full.

The upgrade reflects increased credit enhancement due to scheduled
amortization and loan payoffs since last review of 16.8%.  As of
the July 2008 distribution date, the pool's aggregate balance has
been reduced 72.7%, to $218.4 million from $801.4 million at
issuance.  Two loans (25.6%), including the largest loan in the
pool, have defeased.

One asset (3.3%) has been in special servicing since 2003 and real
estate-owned since 2004.  The loan is secured by 107,052 sf of
office space in Ridgeland, Mississippi, a Jackson-area suburb.  
The properties consist of two office buildings, one of which
needed significant repairs.  The special servicer is working to
lease up vacant space and is marketing the properties for sale.
Recent valuations of the asset indicate losses upon liquidation.

Thirty-one (85.2%) of the remaining 51 loans in the transaction
have an anticipated repayment date in either 2008 or 2009.  These
include the two defeased loans (25.6%).  The 49 non-defeased loans
have a year-end 2007 weighted average DSCR of 1.71x.


JP MORGAN: Moody's Cuts Rating of $1.7MM Cl. P Securities to Caa1
-----------------------------------------------------------------
Moody's Investors Service upgraded the ratings of six classes,
downgraded two classes and affirmed 12 classes of J.P. Morgan
Chase Commercial Mortgage Securities Corp., Commercial Mortgage
Pass-Through Certificates, Series 2003-C1:

-Class A-1, $126,963,263, affirmed at Aaa

-Class A-2, $595,147,000, affirmed at Aaa

-Class X-1, Notional, affirmed at Aaa

-Class X-2, Notional, affirmed at Aaa

-Class B, $34,700,000, affirmed at Aaa

-Class C, $10,676,000, affirmed at Aaa

-Class D, $32,031,000, upgraded to Aaa from Aa2

-Class E, $14,680,000, upgraded to Aa3 from A1

-Class F, $17,350,000, upgraded to A2 from A3

-Class G, $17,350,000, affirmed at Baa2

-Class H, $12,011,000, affirmed at Baa3

-Class J, $16,015,000, affirmed at Ba1

-Class K, $10,677,000, affirmed at Ba2

-Class L, $6,673,000, affirmed at Ba3

-Class M, $8,007,000, affirmed at B1

-Class N, $4,004,000, downgraded to B3 from B2

-Class P, $1,776,000, downgraded to Caa1 from B3

-Class CM-1, $2,156,331, upgraded to A3 from Baa1

-Class CM-2, $3,965,729, upgraded to Baa1 from Baa2

-Class CM-3, $3,965,729, upgraded to Baa2 from Baa3

Moody's upgraded Classes D, E and F due to increased defeasance
and credit enhancement.  The upgrade of Classes CM-1, CM-2 and CM-
3 is due to the improved performance of the Concord Mills Loan.
Moody's downgraded Classes M and N due to concerns about the
Crossroads Mall and increased dispersion. According to Moody's
analysis, 15.9% of the pool has a loan to value ratio greater than
100.0%, compared to 8.5% at last review and 2.7% at
securitization.

As of the July 14, 2008 distribution date, the transaction's
aggregate principal balance has decreased by approximately 13.3%
to $943.6 million from $1.09 billion at securitization. The
Certificates are collateralized by 95 loans, ranging in size from
less than 1.0% to 15.8% of the pool, with the top ten loans
representing 57.2% of the pool. The pool includes two loans with
investment grade underlying ratings, which represent 27.4% of the
pool. Twenty-four loans, representing 21.4% of the pool, have
defeased and are collateralized by U.S. Government securities.

One loan has been liquidated from the pool, resulting in a $5.0
million realized loss. Currently there are no loans in special
servicing. Eleven loans, representing 13.2% of the pool, are on
the master servicer's watchlist. The master servicer's watchlist
includes loans which meet certain portfolio review guidelines
established as part of the Commercial Mortgage Securities
Association's monthly reporting package. As part of Moody's
ongoing monitoring of a transaction, Moody's reviews the watchlist
to assess which loans have material issues that could impact
performance. Not all loans on the watchlist are delinquent or have
significant issues.

Moody's was provided with year-end 2007 operating results for
85.9% of the pool. Moody's weighted average LTV ratio for the
conduit component is 89.4% compared to 85.4% at Moody's last full
review in April 2006 and 90.6% at securitization.

The largest loan with an underlying rating is the Concord Mills
Loan ($148.5 million -- 15.8%), which represents the pooled
component of a $168.0 million mortgage loan. The loan is secured
by a 1.3 million square foot regional mall located 15 miles north
of Charlotte in Concord, North Carolina. Major tenants include
Bass Pro Outdoor World, Burlington Coat Factory and TJ Maxx. The
in-line shops were 89.0% occupied as of March 2008, compared to
100.0% at last review. Despite the decline in occupancy, financial
performance has improved since securitization due to increased
revenues and amortization. The loan sponsor is the Simon Property
Group. The non-pooled component is held within the trust and is
the security for non-pooled Classes CM-1, CM-2 and CM-3. Moody's
current underlying ratings of the pooled and non-pooled loans are
A2 and Baa2, respectively, compared to A3 and Baa3 at last review.

The second loan with an underlying rating is the Bishops Gate Loan
($35.0 million -- 3.7%), which is secured by two office buildings
totaling 484,000 square feet located in Mt. Laurel, New Jersey.
The collateral is 100.0% leased to PHH Mortgage (formerly Cendant
Mortgage), a subsidiary of PHH Corporation (Moody's senior
unsecured rating Baa3; negative outlook). The lease to PHH
Mortgage is triple net expiring in December 2022. The loan matures
in January 2013. Moody's current underlying rating is A3, the same
as at last review.

The top three conduit exposures represent 11.8% of the pool. The
largest conduit exposure is the Crossroads Mall Loan ($41.4
million - 4.4%), which is secured by the borrower's interest in a
858,000 square foot regional mall located in Omaha, Nebraska. The
mall is anchored by Dillard's, Sears and Target. The Target store
was constructed in 2006 and is a replacement for Younkers, which
originally served as the mall's third anchor. Dillards has
announced plans to close their store in August, 2008. The store
has operated as a clearance center since January 2008. The in-line
space was 61.0% occupied as of March 2008 compared to 66.0% at
last review. The mall has been impacted by competition from two
other malls located within nine miles of the property. The loan is
on the servicer's watchlist due to low occupancy. The loan sponsor
is Simon Property Group. Moody's LTV is significantly in excess of
100.0% compared to 98.8% at last review.

The second largest conduit exposure is the Crossways/Newington
Portfolio ($41.0 million -- 4.4%), which consists of two cross-
collateralized loans secured by two industrial/office buildings
totaling 812,000 square feet. Both properties are located in
Virginia. The two properties were 89.0% occupied as of March 2008
compared to 99.0% at last review. Moody's LTV is 77.4% compared to
79.8% at last review.

The third largest conduit exposure is the Somerset Shoppes Loan
($27.9 million -- 3.0%), which is secured by a 187,000 square foot
community shopping center located in Boca Raton, Florida. Major
tenants include T.J. Maxx, Michaels and Loehmans. The center was
92.0% occupied as of March 2008 compared to 95.0% at last review.
Moody's LTV is 88.3% compared to 93.5% at last review.


INTERACTIVE INTERACTIVE: Balance Sheet Upside-Down by $72.3MM
-------------------------------------------------------------
LodgeNet Interactive Corporation disclosed Tuesday its financial
results for the second quarter ended June 30, 2008.

At June 30, 2008, the company's consolidated balance sheet showed
$656.5 million in total assets and $728.8 million in total
liabilities, resulting in a $72.3 million stockholders' deficit.

The company reported a net loss of $7.5 million for the second
quarter of 2008, compared to a net loss of $34.0 million in the
prior year quarter.  For the current quarter, the net loss
included $3.7 million of acquisition related costs for
restructuring, integration, and amortization of acquired
intangibles.  Excluding acquisition and financing related items,
net loss was $3.7 million compared to a net loss of $6.5 million  
for the same period of 2007.

Total revenue for the second quarter of 2008 was $137.3 million,
an increase of $2.4 million or 1.8%, compared to the second
quarter of 2007.  The growth in revenue was primarily driven by an
increase in revenue from Hotel Services and System Sales.  The
average monthly total revenue per room increased 0.8% to $24.65
for the second quarter of 2008 compared to $24.45 for the second
quarter of 2007.

"While the macroeconomic environment was challenging during the
quarter, the continued implementation of our strategic business
plan generally offset those impacts, producing greater revenue,
adjusted operating cash flow, and adjusted net free cash flow as
compared to last year," said Scott C. Petersen, LodgeNet president
and chief executive officer.  

"We generated $12.4 million of adjusted net free cash flow during
the quarter, up from a negative $1.0 million during the first
quarter of 2008,"  said Gary H. Ritondaro, LodgeNet's chief
financial officer.  "As a result, we were in a position to reduce
our long-term debt by $13.6 million in the quarter.  We ended the
second quarter with a consolidated debt leverage ratio of 4.31
times total debt, a meaningful improvement over the 4.45 ratio
that we had at the end of the first quarter."

Interest expense was $10.5 million in the current quarter versus
$11.6 million in the second quarter of 2007.  The decrease
resulted from the change in weighted average long-term debt, which
decreased to $623.1 million during the second quarter of 2008 from
$627.7 million in the second quarter of 2007.  The annualized
interest rate decreased to 6.7% for the second quarter of 2008
versus 7.4% for the second quarter 2007.

For the second quarter of 2008, cash provided by operating
activities, excluding $1.6 million of cash used for integration
and restructuring related activities, was $32.2 million.  Cash
used for property and equipment additions, including growth
related capital, was $19.8 million.  

During the quarter, the company made the required term B payment
of $1.6 million and in addition it made a $5.0 million prepayment
against the Term B portion of the credit facility and a payment of
$7.0 million to repay the then outstanding borrowing under the
credit revolver.

                    About LodgeNet Interactive

Based in Sioux Falls, South Dakota, LodgeNet Interactive Corp.
(Nasdaq: LNET) -- http://www.lodgenet.com/-- provided media and  
connectivity solutions designed to meet the unique needs of
hospitality, healthcare and other guest-based businesses.  
LodgeNet Interactive serves more than 1.9 million hotel rooms
representing 9,900 hotel properties worldwide in addition to
healthcare facilities throughout the United States.  

The company's services include: Interactive Television Solutions,
Broadband Internet Solutions, Content Solutions, Professional
Solutions and Advertising Media Solutions.  LodgeNet Interactive
Corporation owns and operates businesses under the industry
leading brands: LodgeNet, LodgeNetRX, and The Hotel Networks.

                          *     *     *

As reported in the Troubled Company Reporter on June 17, 2008,
Standard & Poor's Ratings Services placed its ratings, including
the 'B+' corporate credit rating, on LodgeNet Interactive Corp.
on CreditWatch with negative implications.


KATHERINE TIMBLIN: Voluntary Chapter 11 Case Summary
----------------------------------------------------
Debtor: Katherine Rae Timblin
        207 Osprey Roost Road
        Sandpoint, ID 83864

Bankruptcy Case No.: 08-20467

Chapter 11 Petition Date: July 28, 2008

Court: District of Idaho (Coeur dAlene)

Judge: Terry L. Myers

Debtor's Counsel: Bruce A. Anderson, Esq.
                  (baafiling@ejame.com)
                  1400 Northwood Center Court #C
                  Coeur d'Alene, ID 83814
                  Tel: (208) 667-2900
                  Fax: (208) 667-2150

Estimated Assets: $1 million to $10 million

Estimated Debts: $1 million to $10 million

A list of the Debtor's largest unsecured creditors is available
for free at http://bankrupt.com/misc/IDb08-20467.pdf


KESHNET INTER: Voluntary Chapter 11 Case Summary
--------------------------------------------
Debtor: The Keshet Inter Vivos Trust
        1835 East Hallandale Beach Boulevard #299
        Hallandale, FL 33009

Bankruptcy Case No.: 08-20580

Related Information: Sharon Yehuda, trustee, filed the petition
                     on the Debtor's behalf.

Chapter 11 Petition Date: July 29, 2008

Court: Southern District of Florida (Fort Lauderdale)

Judge: Raymond B. Ray

Debtor's Counsel: John A Moffa, Esq.
                  (trusteeattorney@gmail.com)
                  7771 West Oakland Park Boulevard #141
                  Sunrise, FL 33351
                  Tel: (954) 634-4733
                  Fax: 954-634-4741

Estimated Assets: $1 million to $10 million

Estimated Debts: $1 million to $10 million

A list of the Debtor's largest unsecured creditors is available
for free at http://bankrupt.com/misc/FLb08-20580.pdf


KIMBALL HILL: Inks Pact to Let Wachovia to File Consolidated Claim
------------------------------------------------------------------
Kimball Hill Inc. and its debtor-affiliates, and certain
prepetition lenders agreed to allow Wachovia Bank N.A., to file a
consolidated proof of claim on account of certain guaranties.

Prior to the date of bankruptcy, the Debtors entered into a Credit
Agreement dated July 20, 2005, with Kyle Acquisition Group, LLC,
Wachovia Bank, National Association, and certain other lenders.  
Debtors Kimball Hill, Inc., and Kimball Hill Homes Nevada, Inc.,
executed and delivered a Limited Guaranty, Repayment Guaranty,
and Completion Guaranty, for the benefit of the Lenders and other
holders of secured obligation, in connection with the prepetition
credit facility.

The parties stipulate that Wachovia Bank is authorized to file
one master proof of claim in the bankruptcy proceeding of Kimball
Hill, Inc., on behalf of itself, the Lenders and other holders of
secured obligations on account of all claims arising under the
Guaranties.  

Upon the filing of a Master Proof of Claim in the Debtors' lead
case, Wachovia Bank, the Lenders and the other Holders of Secured
Obligations will be deemed to have filed individually a proof of
claim against each of the Debtors that are guarantors in the
Guaranties.

Wachovia Bank need not attach supporting documents to any Master
Proof of Claim it will file, so long as the claim include a list
those documents.  Upon the request of the Debtors or any other
party-in-interest, however, the listed documents will be provided
within three business days.

The Master Proof of Claim also need not specifically identify the
individual lenders or other holders of secured obligations in the
Master Proof of Claim or attribute any portion of the Claims to
any individual lenders or other holder.  However, upon the
request of the Debtors, Wachovia Bank will provide those
information to the Debtors within a reasonable time.

                        About Kimball Hill

Based in Rolling Meadow, Illinois, Kimball Hill Inc. --
http://www.kimballhillhomes.com/-- is one of the largest              
privately-owned homebuilders and one of the 30 largest
homebuilders in the United States, as measured by home deliveries
and revenues.  The company designs, builds and markets single-
family detached, single-family attached and multi-family homes.
The company currently operate within 12 markets, including, among
others, Chicago, Dallas, Ft. Worth, Houston, Las Vegas, Sacramento
and Tampa, in five regions: Florida, the Midwest, Nevada, the
Pacific Coast and Texas.

Kimball Hill, Inc. and 29 of its affiliates filed for Chapter 11
protection on April 23, 2008 (Bankr. N.D. Ill. Lead Case No. 08-
10095).  Ray C. Schrock, Esq., at Kirkland & Ellis LLP, represents
the Debtors in their restructuring efforts.  The Debtors'
consolidated financial condition as of Dec. 31, 2007 reflected
total assets of $795,473,000 and total debts $631,867,000.

The Debtors have until Aug. 21, 2008, to exclusively file a
bankruptcy plan.  (Kimball Hill Bankruptcy News, Issue No. 9;
Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000).


KNIGHT COMMERCE: Seeks Bankruptcy Protection Under Chapter 11
-------------------------------------------------------------
Jeff Ostrowski of PalmBeachPost.com reports that Knight Commerce
Center Inc. filed a voluntary petition under Chapter 11 of the
Bankruptcy Code.

According to PalmBeachPost.com, the company listed assets and debt
of between $10 million and $50 million each.  Company head, Bill
Knight, owes at least $100,335 in taxes to Palm Beach County Tax
Collector, the report notes.

Last year, the company faced foreclosure filed by Florida
Community Bank of Immokalee after it failed to pay its loan since
May 2007, Mr. Ostrowski says.

Knight Commerce owns NexStore gas station and deli in Boca Raton,
Florida.


LANTANA MENDOCINO: Personal Assets Sold Off by WestLB AG
--------------------------------------------------------
WestLB AG, New York branch held a public auction of the personal
property of Lantana Mendocino LLC on July 28, 2008, at the
Mendocino County Courthouse, 100 North State Street in Ukiah,
California.

The sold property consists of certain UCC financing statements
52719962 and 52720051 filed with the Delaware Secretary of State
in relation to the operation of The Heritage House hotel in Little
River, California.

Further information regarding the sale and the collateral may be
obtained from counsel for secured party, Michael Rupe, Esq., at
Muchin Rosenman LLP located at 575 Madison Avenue in New York,
telephone numbers, (212) 940-8518.

Lantana Mendocino LLC is a Delaware limited liability company.


LEINER HEALTH: Has Until September 30 to File Chapter 11 Plan
-------------------------------------------------------------
The United States Bankruptcy Court for the District of Delaware
extended the exclusive periods of Leiner Health Products Inc. and
its debtor-affiliates to:

   a) file a Chapter 11 plan until Sept. 30, 2008, and

   b) solicit acceptances of that plan until Nov. 30, 2008.

As reported in the Troubled Company Reporter on July 18, 2008,
the requested extension will enable the Debtors to negotiate and
formulate a Chapter 11 plan of liquidation as they continue to
resolve creditors' claims and any litigation with respect to the
claims.

Separately, the Debtors entered into an agreement with the
Official Committee of Unsecured Creditors and certain financial
institution to resolve, among other things:

   -- the amount of the claims of the Debtors' prepetition secured
      lenders;

   -- the payment of a portion of the (i) claims of the
      prepetition secured lenders' claim and (ii) sale bonuses to
      the Debtors' management under the asset sale incentive
      program before confirmation of a Chapter 11 plan; and

   -- the reserve of $8 million of the sale bonuses provided for
      under the asset sale incentive program for the unsecured
      creditors' recoveries.

                       About Leiner Health

Based in Carson, California, Leiner Health Products Inc. --
http://www.leiner.com/-- manufactures and supplies store brand
vitamins, minerals and nutritional supplements products, and over-
the-counter pharmaceuticals in the US food, drug and mass merchant
and warehouse club retail market.  In addition to its primary
VMS and OTC products, they provide contract manufacturing
services.  During the fiscal year ended March 31, 2007, the VMS
business comprised approximately 61% of net sales.  On March 20,
2007, they voluntarily suspended the production and distribution
of all OTC products manufactured, packaged or tested at its
facilities in the US.

The company filed for Chapter 11 protection on March 10, 2008
(Bankr. D. Del. Lead Case No.08-10446).  Jason M. Madron, Esq.,
and Mark D. Collins, Esq., at Richards, Layton & Finger, P.A.,
represent the Debtors.  The Debtors selected Garden City Group
Inc. as noticing, claims and balloting agent.  The U.S. Trustee
for Region 3 appointed creditors to serve on an Official Committee
of Unsecured Creditors in these cases.  The Committee selects Saul
Ewing LLP as its counsel.

As reported in the Troubled Company Reporter on April 10, 2008,
the Debtors' schedules of assets and liabilities showed total
assets of $133,412,547 and total debts of $477,961,526.


LEVITZ FURNITURE: Settles Long-Running Feud with Wohl/Anaheim
-------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of New York
approved a stipulation resolving a long-running dispute over
tenancy issue among Levitz Furniture Inc., nka PVLTZ Inc., its
debtor-affiliates, and Wohl/Anaheim, LLC.

The Debtors and Wohl/Anaheim negotiated and inked the stipulation
on June 23, 2008, under which the parties agreed to release each
other from all claims.

                           The Lease

On Feb. 7, 1979, Elden W. Bainbridge, as Trustee under a
Declaration of Trust dated June 13, 1968 and Gold Key Furniture,
Inc. entered into a lease for commercial real property in a
retail shopping center located at 1000 N. Tustin Avenue, in
Anaheim, California.

After a series of amendments, subleases and assignments, the
Lease passed to successors-in-interest Wohl/Anaheim, as landlord,
and Levitz Furniture Corporation, as tenant.

The term of the Lease ends on July 31, 2009, at which time the
tenant has an option to extend the term for a period of five
years.

On Oct. 11, 2005, Levitz and its affiliated debtor entities
filed Chapter 11 petitions.  Through its bankruptcy case, Levitz
and its affiliates effected a sale of substantially all of their
assets to PLVTZ and the Pride Capital Group, dba Great American
Group.

The bankruptcy court presiding over the Levitz bankruptcy cases
approved the sale pursuant to an order entered on December 14,
2005.  Pursuant to the Sale Order, PLVTZ was authorized to
purchase all of Levitz's rights to designate the ultimate
assignee of Levitz's rights to several leases, including the
Lease.  The Sale Order also provided that PLVTZ must exercise its
Designation Rights before May 31, 2006.

Prior to May 31, 2006, Levitz filed a motion approving the
assumption and assignment of certain real property leases,
including the Lease.  Under the Motion, Levitz sought to assume
the Lease and assign it to PLVTZ.  Wohl/Anaheim objected to the
Levitz Motion and argued that PLVTZ could not provide adequate
assurance of future performance under the Lease.

Before the bankruptcy court presiding over the Levitz bankruptcy
cases ruled on the Levitz Motion as it pertained to
Wohl/Anaheim's objection, on March 28, 2008, the Court entered an
order dismissing the Levitz bankruptcy cases without reserving
jurisdiction to decide whether to approve the assignment of the
Lease to PLVTZ.

Since PLVTZ designated itself as assignee of the Lease until
October 2007, a period of approximately 15 months, PLVTZ paid to
Wohl/Anaheim amounts equal to the base rent and common area
maintenance charges payable under the Lease.  Throughout this
period, and until February 2008, PLVTZ occupied the Premises and
operated a furniture store.

Consequently, PLVTZ filed for Chapter 11 on Nov. 8, 2007.

                        Lift Stay Motion

In May 2008, Wohl/Anaheim asked the Court to issue an order (i)
directing immediate payment of postpetition expenses; and (ii)
lifting the automatic stay to permit Wohl/Anaheim to proceed with
"Unlawful Detainer Proceedings".  In the alternative,
Wohl/Anaheim asked the Court to compel abandonment of PLVTZ's
conditional interest in the Lease.

The Lift Stay Motion contends that:

   (1) given the financial condition of PLVTZ, even if the
       bankruptcy court presiding over the Levitz bankruptcy case
       had not dismissed that case, it would be an abuse of the
       court's discretion to approve the assumption of the Lease
       by Levitz and its assignment to PLVTZ;

   (2) PLVTZ never had anything more than a prospective
       conditional interest in the Lease; and

   (3) PLVTZ would have to pay at least $276,572 to cure the
       arrearages which accrued prior to Levitz's bankruptcy
       filing and prior to PLVTZ's own bankruptcy filing.

PLVTZ objected to the Lift Stay Motion arguing that Wohl/Anaheim
did not provide proof to support its assertion.

The Debtor told the Court that it is prepared to present expert
testimony that its interest in the property at issue has
substantial value to the estate and is not burdensome.

Under the court-approved stipulation, the parties agreed that  
Wohl/Anaheim will to remit $100,000 to the Debtor's counsel
tasked to deposit and hold the fund in trust in a segregated
account.  Upon payment, the Debtor will forfeit possession of the
Anaheim Property, and the Motion to Lift Stay filed will be
dismissed as moot.

Moreover, PLVTZ will allow Wohl access to the Premises to show
the Premises to prospective tenants and to perform whatever
cleanup or make whatever repairs Wohl deems necessary in its
reasonable discretion and all costs incurred by Wohl in
connection with the cleanup or repairs will be solely at
its expense.

At its sole cost and expense, PLVTZ will keep the Premises
insured and will pay all utility costs and other expenses to
maintain the Premises in the same manner and to the same extent
as required under the Lease through June 30, 2008.

                  About Levitz Furniture/PVLTZ

Based in New York City, Levitz Furniture Inc., nka PVLTZ Inc. --
http://www.levitz.com/-- is a specialty retailer of furniture,
bedding and home furnishings in the United States.  It has 76
locations in major metropolitan areas, principally in the
Northeast and on the West Coast of the United States.

Levitz Furniture Inc. and 11 affiliates filed for chapter 11 on
Sept. 5, 1997.  In December 2000, the Court confirmed the Debtors'
Plan and Levitz emerged from chapter 11 on February 2001.  Levitz
Home Furnishings Inc. was created as the new holding company as a
result of the emergence.

Levitz Home Furnishings and 12 affiliates filed for chapter 11
protection on Oct. 11, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-
45189).  In their second filing, the Debtors disclosed about
$245 million in total assets and $456 million in total debts.
Nicholas M. Miller, Esq., and Richard H. Engman, Esq., at Jones
Day represented the Debtors.  Jeffrey L. Cohen, Esq., Jay R.
Indyke, Esq., and Cathy Hershcopf, Esq., at Cooley Godward Kronish
LLP served as counsel to the Official Committee of Unsecured
Creditors.  During this period, the Debtors closed around 35
stores in the Northeast, California, Minnesota and Arizona.

PLVTZ Inc., a company created by Prentice Capital Management LP,
and Great American Group purchased substantially all the assets of
Levitz Home Furnishings in December 2005.  Initially, Prentice
owned all of the equity interests in PLVTZ.  On July 6, 2007,
PLVTZ was converted into a Delaware corporation, and Harbinger
Capital Partners Special Situations Fund, LP, Harbinger Capital
Partners Master Fund I, Ltd., and their affiliates became minority
shareholders.  Great American's stake in the acquisition was in
running the going-out-of-business sales for some 27 Levitz units.

PLVTZ, dba Levitz Furniture, continued to face decline in
financial performance since December 2005.  Liquidity issues and
the inability to obtain additional capital prompted PLVTZ to seek
protection under chapter 11 on Nov. 8, 2007 (Bankr. S.D.N.Y. Lead
Case No. 07-13532).  Paul D. Leake, Esq., and Brad B. Erens, Esq.,
at Jones Day represents the Debtors in their restructuring
efforts.  Kurtzman Carson Consultants LLC serves as the Debtors'
claims and noticing agent.  The Debtor's schedules show total
assets of $123,842,190 and total liabilities of $76,421,661.

The Debtors' exclusive period to file a chapter 11 plan expired on
March 7, 2008.  On March 28, 2008, the Court dismissed the chapter
11 cases of Levitz II (Levitz Home Furnishings Inc., and its
remaining six debtor-affiliates).

(Levitz Bankruptcy News, Issue No. 42; Bankruptcy Creditors'
Service Inc., http://bankrupt.com/newsstand/or 215/945-7000).


LEVITZ FURNITURE: May Hire Oliver Wyman as Actuarial Consultant
---------------------------------------------------------------
PLVTZInc., fka Levitz Furniture Inc., obtained authority from the
U.S. Bankruptcy Court for the Southern District of New York to
employ Oliver Wyman Actuarial Consulting Inc., as its actuarial
consultant nunc pro tunc to May 28, 2008.

The Troubled Company Reporter said on June 25, 2008, the Debtor
selected Oliver Wyman, a global management consulting firm,
because of the firm's broad experience in actuarial consulting
services to property and casualty insurance companies,
investors and brokerage firms, among others.  The Debtor said it
believes that Oliver Wyman is well qualified to perform these
services, to assist it in its Chapter 11 proceeding.

Oliver Wyman is expected to familiarize itself with the business,
operations, properties and financial condition of the Debtor, and
provide actuarial services including:

   (a) assisting the Debtor in determining outstanding
       liabilities on its workers' compensation insurance
       programs;

   (b) valuing the unpaid cost of workers' compensation claims
       with dates of loss during a specified time period;

   (c) assisting the Debtor in assessing and determining the
       reasonability of collateral requirements; and

   (e) rendering other actuarial consulting services as may
       from  time to time be agreed upon by the parties.

Oliver Wyman will be compensated on an hourly basis at these
hourly rates:
   
   Scott J. Lefkowitz, FCAS, MAAA, FCA     $600
   Other Fully Credentialed Actuaries      $525
   Associate Actuaries                     $450
   Consulting Technicians                  $300
   Analysts                                $225
   Administrative                           $65

The firm will also be reimbursed for reasonable, actual, out of
pocket expenditures.

Scott Lefkowitz, a director at Oliver Wyman, assured the court
that his firm does not hold or represent any interest adverse to
the Debtor, and is a "disinterested person," as defined in
Section 101(14) of the Bankruptcy Code, as modified by Section
1107(b).

                  About Levitz Furniture/PVLTZ

Based in New York City, Levitz Furniture Inc., nka PVLTZ Inc. --
http://www.levitz.com/-- is a specialty retailer of furniture,
bedding and home furnishings in the United States.  It has 76
locations in major metropolitan areas, principally in the
Northeast and on the West Coast of the United States.

Levitz Furniture Inc. and 11 affiliates filed for chapter 11 on
Sept. 5, 1997.  In December 2000, the Court confirmed the Debtors'
Plan and Levitz emerged from chapter 11 on February 2001.  Levitz
Home Furnishings Inc. was created as the new holding company as a
result of the emergence.

Levitz Home Furnishings and 12 affiliates filed for chapter 11
protection on Oct. 11, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-
45189).  In their second filing, the Debtors disclosed about
$245 million in total assets and $456 million in total debts.
Nicholas M. Miller, Esq., and Richard H. Engman, Esq., at Jones
Day represented the Debtors.  Jeffrey L. Cohen, Esq., Jay R.
Indyke, Esq., and Cathy Hershcopf, Esq., at Cooley Godward Kronish
LLP served as counsel to the Official Committee of Unsecured
Creditors.  During this period, the Debtors closed around 35
stores in the Northeast, California, Minnesota and Arizona.

PLVTZ Inc., a company created by Prentice Capital Management LP,
and Great American Group purchased substantially all the assets of
Levitz Home Furnishings in December 2005.  Initially, Prentice
owned all of the equity interests in PLVTZ.  On July 6, 2007,
PLVTZ was converted into a Delaware corporation, and Harbinger
Capital Partners Special Situations Fund, LP, Harbinger Capital
Partners Master Fund I, Ltd., and their affiliates became minority
shareholders.  Great American's stake in the acquisition was in
running the going-out-of-business sales for some 27 Levitz units.

PLVTZ, dba Levitz Furniture, continued to face decline in
financial performance since December 2005.  Liquidity issues and
the inability to obtain additional capital prompted PLVTZ to seek
protection under chapter 11 on Nov. 8, 2007 (Bankr. S.D.N.Y. Lead
Case No. 07-13532).  Paul D. Leake, Esq., and Brad B. Erens, Esq.,
at Jones Day represents the Debtors in their restructuring
efforts.  Kurtzman Carson Consultants LLC serves as the Debtors'
claims and noticing agent.  The Debtor's schedules show total
assets of $123,842,190 and total liabilities of $76,421,661.

The Debtors' exclusive period to file a chapter 11 plan expired on
March 7, 2008.  On March 28, 2008, the Court dismissed the chapter
11 cases of Levitz II (Levitz Home Furnishings Inc., and its
remaining six debtor-affiliates).

(Levitz Bankruptcy News, Issue No. 42; Bankruptcy Creditors'
Service Inc., http://bankrupt.com/newsstand/or 215/945-7000).


LEVITZ FURNITURE: Enters Into a Settlement Pact with WFNNB
----------------------------------------------------------
To avoid costly litigation, Levitz Furniture Inc., nka PVLTZ Inc.,
and World Financial Network National Bank ask the U.S. Bankruptcy
Court for the Southern District of New York to approve their
stipulation resolving the bank's administrative claim for
$1,892,587.

The claim represents payment of World Financial's fee for
processing postpetition chargebacks for the Debtor.  It consists
of $1,590,447 and $287,000, stemming from chargebacks of sales
before and after the bankruptcy filing.

Pursuant to the stipulation dated dated July 9, 2008, World
Financial will have an allowed administrative claim for $100,000,
to be paid by the Debtor within five days after approval of the
stipulation.  The administrative claim constitutes settlement of
the $287,000.  Meanwhile, the $1,590,447 is allowed as an
unsecured claim against the Debtor.

The parties agreed that the balance of $1,892,587 is not entitled
to administrative expense status.

The Troubled Company Reporter had related that the parties signed
a BankCard agreement dated Nov. 8, 2002, under which WFNNB agreed
to process the Visa and MasterCard credit card transactions
between the Debtor and its customers.

The types of transactions WFNNB processes for the Debtor include
credit card purchases and deposits and refunds, which facilitates
the transfer of funds between the customer's credit card bank and
the Debtor.  

WFNNB also processes chargebacks for the Debtor, and has the
right to charge back any amounts if the Debtor fails to comply
with the BankCard Agreement or the rules set by the credit card
companies.  Thus, when the Debtor takes prepayments or deposits
on merchandise and fails to deliver the product, the customer is
entitled to a chargeback, and the Debtor is ultimately
responsible for paying the chargeback.  WFNNB is entitled to
collect a fee for processing each chargeback.

On behalf of WFNNB, Philip C. Dublin, Esq., at Akin Gump Strauss
Hauer & Feld LLP, in New York, related that WFNNB is required to
respond to a chargeback within 30 days under the rules of the
credit card companies.

WFNNB invoiced the Debtor more than $15,140, for the services it
rendered after the Petition Date.  The Bank also identified:

   (i) about $1,590,447 worth of chargebacks that it processed
       for the Debtor postpetition; and

  (ii) about $287,000 in additional chargebacks that the Debtor
       considers invalid due to lack of supporting evidence and
       alleged customer fraud, among other things.

                  About Levitz Furniture/PVLTZ

Based in New York City, Levitz Furniture Inc., nka PVLTZ Inc. --
http://www.levitz.com/-- is a specialty retailer of furniture,
bedding and home furnishings in the United States.  It has 76
locations in major metropolitan areas, principally in the
Northeast and on the West Coast of the United States.

Levitz Furniture Inc. and 11 affiliates filed for chapter 11 on
Sept. 5, 1997.  In December 2000, the Court confirmed the Debtors'
Plan and Levitz emerged from chapter 11 on February 2001.  Levitz
Home Furnishings Inc. was created as the new holding company as a
result of the emergence.

Levitz Home Furnishings and 12 affiliates filed for chapter 11
protection on Oct. 11, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-
45189).  In their second filing, the Debtors disclosed about
$245 million in total assets and $456 million in total debts.
Nicholas M. Miller, Esq., and Richard H. Engman, Esq., at Jones
Day represented the Debtors.  Jeffrey L. Cohen, Esq., Jay R.
Indyke, Esq., and Cathy Hershcopf, Esq., at Cooley Godward Kronish
LLP served as counsel to the Official Committee of Unsecured
Creditors.  During this period, the Debtors closed around 35
stores in the Northeast, California, Minnesota and Arizona.

PLVTZ Inc., a company created by Prentice Capital Management LP,
and Great American Group purchased substantially all the assets of
Levitz Home Furnishings in December 2005.  Initially, Prentice
owned all of the equity interests in PLVTZ.  On July 6, 2007,
PLVTZ was converted into a Delaware corporation, and Harbinger
Capital Partners Special Situations Fund, LP, Harbinger Capital
Partners Master Fund I, Ltd., and their affiliates became minority
shareholders.  Great American's stake in the acquisition was in
running the going-out-of-business sales for some 27 Levitz units.

PLVTZ, dba Levitz Furniture, continued to face decline in
financial performance since December 2005.  Liquidity issues and
the inability to obtain additional capital prompted PLVTZ to seek
protection under chapter 11 on Nov. 8, 2007 (Bankr. S.D.N.Y. Lead
Case No. 07-13532).  Paul D. Leake, Esq., and Brad B. Erens, Esq.,
at Jones Day represents the Debtors in their restructuring
efforts.  Kurtzman Carson Consultants LLC serves as the Debtors'
claims and noticing agent.  The Debtor's schedules show total
assets of $123,842,190 and total liabilities of $76,421,661.

The Debtors' exclusive period to file a chapter 11 plan expired on
March 7, 2008.  On March 28, 2008, the Court dismissed the chapter
11 cases of Levitz II (Levitz Home Furnishings Inc., and its
remaining six debtor-affiliates).

(Levitz Bankruptcy News, Issue No. 42; Bankruptcy Creditors'
Service Inc., http://bankrupt.com/newsstand/or 215/945-7000).


LEVITZ FURNITURE: Sets Off $304,638 Debt Owed to DFS Services
-------------------------------------------------------------
Levitz Furniture, Inc., nka PLVTZ, Inc., and DFS Services LLC,
asked the U.S. Bankruptcy Court for the Southern District of New
York to approve their stipulation permitting DFS to exercise its
rights of set-off.

The stipulation dated July 8, 2008, allows DFS to set off
$304,638, owed to it by the Debtor against the $571,015, held in
the reserve account.  In return, DFS will return to the Debtor
$266,377 of the reserve fund within 10 days after the stipulation
becomes final and non-appealable.     

The reserve fund was put up to secure payment to DFS for
administering the sale transaction between the Debtor and its
customers who purchased its merchandise through cards.  About
$341,617 of the reserve fund secures DFS' proof of claim against
the Debtor.

The stipulation further provides that DFS' proof of claim will be
deemed paid and expunged without further court order, and that
the parties will release each other from all claims following the
set-off.

                  About Levitz Furniture/PVLTZ

Based in New York City, Levitz Furniture Inc., nka PVLTZ Inc. --
http://www.levitz.com/-- is a specialty retailer of furniture,
bedding and home furnishings in the United States.  It has 76
locations in major metropolitan areas, principally in the
Northeast and on the West Coast of the United States.

Levitz Furniture Inc. and 11 affiliates filed for chapter 11 on
Sept. 5, 1997.  In December 2000, the Court confirmed the Debtors'
Plan and Levitz emerged from chapter 11 on February 2001.  Levitz
Home Furnishings Inc. was created as the new holding company as a
result of the emergence.

Levitz Home Furnishings and 12 affiliates filed for chapter 11
protection on Oct. 11, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-
45189).  In their second filing, the Debtors disclosed about
$245 million in total assets and $456 million in total debts.
Nicholas M. Miller, Esq., and Richard H. Engman, Esq., at Jones
Day represented the Debtors.  Jeffrey L. Cohen, Esq., Jay R.
Indyke, Esq., and Cathy Hershcopf, Esq., at Cooley Godward Kronish
LLP served as counsel to the Official Committee of Unsecured
Creditors.  During this period, the Debtors closed around 35
stores in the Northeast, California, Minnesota and Arizona.

PLVTZ Inc., a company created by Prentice Capital Management LP,
and Great American Group purchased substantially all the assets of
Levitz Home Furnishings in December 2005.  Initially, Prentice
owned all of the equity interests in PLVTZ.  On July 6, 2007,
PLVTZ was converted into a Delaware corporation, and Harbinger
Capital Partners Special Situations Fund, LP, Harbinger Capital
Partners Master Fund I, Ltd., and their affiliates became minority
shareholders.  Great American's stake in the acquisition was in
running the going-out-of-business sales for some 27 Levitz units.

PLVTZ, dba Levitz Furniture, continued to face decline in
financial performance since December 2005.  Liquidity issues and
the inability to obtain additional capital prompted PLVTZ to seek
protection under chapter 11 on Nov. 8, 2007 (Bankr. S.D.N.Y. Lead
Case No. 07-13532).  Paul D. Leake, Esq., and Brad B. Erens, Esq.,
at Jones Day represents the Debtors in their restructuring
efforts.  Kurtzman Carson Consultants LLC serves as the Debtors'
claims and noticing agent.  The Debtor's schedules show total
assets of $123,842,190 and total liabilities of $76,421,661.

The Debtors' exclusive period to file a chapter 11 plan expired on
March 7, 2008.  On March 28, 2008, the Court dismissed the chapter
11 cases of Levitz II (Levitz Home Furnishings Inc., and its
remaining six debtor-affiliates).

(Levitz Bankruptcy News, Issue No. 42; Bankruptcy Creditors'
Service Inc., http://bankrupt.com/newsstand/or 215/945-7000).


LEXINGTON PRECISION: Has Until October 28 to File Chapter 11 Plan
-----------------------------------------------------------------
The Hon. Martin Glenn of the United States Bankruptcy Court for
the Southern District of New York further extended the exclusive
periods of Lexington Precision Corp. and Lexington Rubber Group,
Inc. to:

   a) file a Chapter 11 plan Oct. 28, 2008, and

   b) solicit acceptances of that plan until Dec. 27, 2008.

The Court notes that the Debtors are taking the necessary steps to
move the reorganization process by providing to the Official
Committee of Unsecured Creditors with financial projection to
evaluate a proposed Chapter 11 plan.  The financial projection was
available to the Committee on July 15, 2008.

As reported in the Troubled Company Reporter on July 3, 2008, the
Committee asked the Court for permission to file its own Chapter
11 plan on ground that the Debtors are not protecting their
creditors' interests.

The exclusivity extension will enable the Debtors and Committee to
assess and test the financial projection whether the panel can
support a proposed plan of reorganization.

The Court believes that the parties are in a position to undertake
serious plan negotiations by September 2008.

The Debtors' exclusive periods to file a Chapter 11 plan expired
on July 30, 2008.

                  About Lexington Precision

Headquartered in New York City, Lexington Precision Corp. --
http://www.lexingtonprecision.com/-- manufactures tight-tolerance     
rubber and metal components for use in medical, automotive, and
industrial applications.  As of Feb. 29, 2008, the companies
employed about 651 regular and 22 temporary personnel.

The company and its affiliate, Lexington Rubber Group Inc., filed
for Chapter 11 protection on April 1, 2008 (Bankr. S.D.N.Y. Lead
Case No.08-11153).  Richard P. Krasnow, Esq., at Weil, Gotshal &
Manges, represents the Debtors in their restructuring efforts.  
The Debtors selected Epiq Bankruptcy Solutions LLC as claims
agent.  The U.S. Trustee for Region 2 appointed seven creditors to
serve on an Official Committee of Unsecured Creditors.

When the Debtors filed for protection against their creditors,
they listed total assets of $52,730,000 and total debts of
$88,705,000.


MAJESTIC STAR: Moody's Cuts CFR to Caa2, Sees Weak Liquidity
------------------------------------------------------------
Moody's Investors Service lowered the ratings of Majestic HoldCo,
LLC and The Majestic Star Casino, LLC.  These ratings, originally
placed on review for downgrade on April 29, 2008, remain on review
for further possible downgrade.  At the same time, Moody's
assigned Majestic HoldCo, LLC an SGL-4 Speculative Grade Liquidity
Rating indicating weak liquidity.

Majestic HoldCo, LLC ratings lowered and kept on review for
further possible downgrade:

Corporate Family Rating to Caa2 from B3

Probability of Default Rating to Caa2 from B3

$55 million 12% discount notes due 2011 to Ca from Caa2

The Majestic Star Casino, LLC ratings lowered and kept on review
for further possible downgrade:

$300 million first lien senior secured notes due 2010 to Caa1 from
B2

$200 million second lien senior secured notes due 2011 to Caa3
from Caa2

The downgrade incorporates a combination of factors that will
continue to negatively impact Majestic Star's ability to service
its debt over the next twelve months. These factors include
intense competition in all of the gaming markets in which Majestic
Star operates, a smoking ban in casinos that went into effect in
Colorado on January 1, 2008, volatile capital markets, continued
weakness in the economy, and significant leverage. Debt/EBITDA for
the latest 12-month period ended March 31, 2008 was about 9 times
and has been increasing steadily since fiscal year 2006.

The review for further possible downgrade is based on Moody's
concern that enhancements to existing facilities of competitors in
northwest Indiana and Black Hawk, Colorado will significantly
heighten the level of competition in those markets. On a combined
basis, these two markets account for 75% of Majestic Star's
consolidated net revenue. Majestic Star's limited ability to
invest lessens its competitive position and could lead to a more
rapid decline in cash flows and further increase the company's
already significant leverage.

Key to the review will be an evaluation of the near-term impact on
Majestic Star from Harrah's renovation and expansion of its
Horseshoe Casino in Hammond, Indiana that is scheduled to open
next month. The facility is expected to more than double the size
of their existing facility, making it the largest gaming
establishment in the greater Chicago area.

The SGL-4 Speculative Grade Liquidity anticipates that a
significant portion of Majestic Star's liquidity could be absorbed
during the next twelve months by further declines in operating
cash flow. This could materially impact the company's ability to
obtain waivers, if necessary, under its credit facility. It could
also affect the company's ability to make its October 2008 and
April 2009 scheduled interest payments.

The Majestic Star Casino, LLC directly and indirectly owns and
operates riverboat casinos in Gary, Indiana; Tunica, Mississippi;
and Black Hawk, Colorado. Majestic HoldCo, LLC owns 100% of The
Majestic Star Casino, LLC. Consolidated net revenue for the period
ended March 31, 2008 was about $355 million.


MARINER HEALTH: Georgia Appeals Court Upholds $10MM PwC Ruling
--------------------------------------------------------------
The state of Georgia Court of Appeals affirmed a $10,000,000
verdict against PricewaterhouseCoopers, LLP, for negligent
misrepresentation in a series of financial audits related to the
merger of nursing-home companies Convalescent Services, Inc. and
Mariner Health Group, Inc.

William R. Bassett, Esq., at Smith Bassett Purcell & Koenig, as
trustee for the Charlotte R. Kellett Irrevocable Trust, as Trustee
for the Samuel B. Kellett, Jr. Irrevocable Trust, as Trustee for
the Stiles A. Kellett, III Irrevocable Trust and as Trustee for
the Barbara K. Kellett Irrevocable Trust, Kellett Family Partners,
L.P. f/k/a Kellett Partners, L.P., Samuel B. Kellett, Stiles A.
Kellett, Jr. and SSK Partners, L.P., filed an action in 2002
before the Superior Court of Cobb County, Georgia, against PwC, as
successor to Coopers & Lybrand, LLP, and several former officers
of Mariner Health Group based on claims arising out of MHG's
acquisition of Convalescent Services, Inc. in 1995.  The
plaintiffs in the Cobb County action sought damages in excess of
$200,000,000.

Stephen Taub at CFO.com, citing an Atlanta Constitution report,
relates that the merger deal included primarily Mariner stock and
cash.  The Kelletts, Mr. Taub says, claimed that they lost more
than $120,000,000 on the deal as a result of Mariner's bankruptcy
filing in 2000.  According to Mr. Taub, citing a Fulton County
Daily Report, the plaintiffs had asserted that they never would
have agreed to the deal had Coopers, two of its audit partners,
and Mariner CEO Stratton disclosed Mariner's financial problems.

The Individual Defendants added MHG as a third-party defendant in
the Cobb County action seeking to recover on indemnification
claims.  In November 2003, the Individual Defendants dismissed MHG
without prejudice from the Cobb County action.

Mr. Taub relates that in February 2007, the accounting firm was
cleared on charges of civil fraud and racketeering; a PwC partner
and three former Mariner executives were also absolved of various
charges.

The Cobb County jury later returned a $10,000,000 verdict against
PwC for negligently misrepresenting certain material.  PwC took an
appeal, contending the trial court erred in denying its motion for
a directed verdict and for judgment notwithstanding the verdict.  
PwC argued that Mr. Bassett failed to offer any evidence on an
essential element of the negligent misrepresentation claim,
specifically, that he actually and justifiably relied on Coopers'
alleged misrepresentations about the financial condition of a
corporation in which the trusts invested.  PwC further argued
there was no evidence that Coopers' alleged fraud debarred or
deterred Mr. Bassett from bringing the action within the statutory
limitation period and, therefore, the action was untimely.

According to Mr. Taub, the appeals court ruled that: "The evidence
authorized the jury to find that Coopers' partners knew that
potential investors like the Kelletts would rely on Coopers'
audits and 'clean' opinions regarding Mariner's financial
condition.  The evidence further authorized the jury to find that,
in the process of evaluating the proposed merger throughout 1994,
when the Kelletts were serving as the trusts' trustees, they
actually and justifiably relied on Coopers' opinions regarding
Mariner's financial condition. . . .  Thus, when Bassett took over
as the trustee in June 1995, the trusts (in the persons of the
Kelletts) had already been misled by Coopers' misconduct."

A spokesman for PwC did not immediately return a call seeking
comment, Mr. Taub says.


MEADE INSTRUMENTS: BofA Grants Waiver for Covenant Violations
-------------------------------------------------------------
Meade Instruments Corp. signed a Sixteenth Amendment to its
Amended and Restated Credit Agreement with its primary lender,
Bank of America N.A.  Under the Sixteenth Amendment, Bank of
America N.A. waived the company's non-compliance with certain
covenants under the credit agreement.

"We are pleased that Bank of America continues to be a supportive
partner to the company," Steve Muellner, president and chief
executive officer of Meade, said.  "We are now in compliance with
the covenants of the credit agreement.  Combined with the recent
balance sheet improvements, we have the cash to reinvest in the
core business, fund our restructuring efforts and underwrite
future growth initiatives. "

The Sixteenth Amendment makes these key changes to the credit
agreement:

   1) reduces the revolver line amount from $15 million to
      $12 million at Nov. 30, 2008; and $10 million at Dec. 31,
      2008;

   2) decreases certain amounts of collateral to be used in the
      borrowing base calculations; and

   3) sets minimum EBITDA, tangible net worth and capital
      expenditure requirements measured on a monthly basis and
      sets minimum fixed charge coverage ratio covenants.

                     About Meade Instruments

Based in Irvine, California, Meade Instruments Corp. (Nasdaq GM:
MEAD) -- http://www.meade.com/-- is a designer and manufacturer  
of optical products including telescopes and accessories for the
beginning to serious amateur astronomer.  The company distributes
its products worldwide through a network of specialty retailers,
mass merchandisers and domestic and foreign distributors.

                       Going Concern Doubt

Moss Adams LLP, in Irvine, California, expressed substantial doubt
about Meade Instruments Corp.'s ability to continue as a going
concern after auditing the company's consolidated financial
statements for the year ended Feb. 29, 2008.  The auditing firm
pointed to the company's declining revenues, recurring losses from
operations and accumulated deficit.


MERIDIAN AUTOMOTIVE: Asks Court to Close Chapter 11 Cases
---------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware entered a
final decree order in October 2007 closing the Chapter 11 cases of
Meridian Automotive Systems-Composites Operations, Inc., and its
eight debtor-affiliates.  In December 2007, the bankruptcy cases
were re-opened solely to allow the Court to consider the
settlement agreement entered into by the Reorganized Debtors and
Plastech Engineered Products, Inc.

Robert S. Bradey, Esq., at Young Conaway Stargatt & Taylor, LLP,
in Wilmington, Delaware, Meridian's counsel, asserts that it is
rightful to close the Reorganized Debtors' Chapter 11 cases since:

   (a) the Reorganized Debtors' estates have been fully
       administered and substantially consummated;

   (b) the order confirming the Debtors' bankruptcy plan has
       become final and the Effective Date of the Plan has
       occurred;

   (c) there are no deposit requirements in the Plan;

   (d) the property required to be transferred under the Plan has
       been transferred and the Reorganized Debtors have assumed
       the management of the property dealt with by the Plan;

   (e) distributions to be made pursuant to the Plan will be made
       by the litigation trust in accordance with the terms of
       the Litigation Trust Agreement;

   (f) the Debtors have no remaining motions, contested matters
       or adversary proceedings by or against them pending before
       the Court; and

   (g) all expenses arising from the administration of the
       Debtors' estates, including court fees, U.S. Trustee fees,
       professional fees, and expenses, have been paid.

Mr. Bradey relates that Plastech has withdrawn its certification
of counsel in support of entry of a vacatur order.  Plastech is
currently undergoing bankruptcy proceedings before the U.S.
Eastern District of Michigan (Detroit), Southern Division.  In
addition, the Reorganized Debtors have paid Sherwin Williams
Company's administrative claim, which was filed in March 2008.

In light of these, the Reorganized Debtors ask the Court to enter
a final decree closing their Chapter 11 cases pursuant to Section
350 of the Bankruptcy Code and Rule 3022 of the Federal Rules of
Bankruptcy Procedures:

   Case No.   Debtor Entity
   --------   -------------
   05-11168   Meridian Automotive
              Systems-Composites Operations, Inc.
   
   05-11169   Meridian Automotive Systems, Inc.
   
   05-11170   Meridian Automotive
              Systems-Angola Operations, Inc.
   
   05-11171   Meridian Automotive
              Systems-Construction, Inc.

   05-11172   Meridian Automotive
              Systems-Detroit Operations, Inc.
   
   05-11173   Meridian Automotive
              Systems-Grand Rapids Operation Inc.
   
   05-11174   Meridian Automotive
              Systems-Heavy Truck Operations Inc.
   
   05-11175   Meridian Automotive
              Systems-Shreveport Operations, Inc.
   
   05-11176   Meridian Automotive
              Systems-Mexico Operations, LLC

Headquartered in Dearborn, Mich., Meridian Automotive Systems
Inc. -- http://www.meridianautosystems.com/-- supplies    
technologically advanced front and rear end modules, lighting,
exterior composites, console modules, instrument panels and other
interior systems to automobile and truck manufacturers.  Meridian
operates 22 plants in the United States, Canada and Mexico,
supplying Original Equipment Manufacturers and major Tier One
parts suppliers.  The Company and its debtor-affiliates filed for
chapter 11 protection on April 26, 2005 (Bankr. D. Del. Case Nos.
05-11168 through 05-11176).  James F. Conlan, Esq., Larry J.
Nyhan, Esq., Paul S. Caruso, Esq., and Bojan Guzina, Esq., at
Sidley Austin Brown & Wood LLP, and Robert S. Brady, Esq., Edmon
L. Morton, Esq., Edward J. Kosmowski, Esq., and Ian S. Fredericks,
Esq., at Young Conaway Stargatt & Taylor, LLP, represent the
Debtors in their restructuring efforts.  Eric E. Sagerman, Esq.,
at Winston & Strawn LLP represents the Official Committee of
Unsecured Creditors.  The Committee also hired Ian Connor
Bifferato, Esq., at Bifferato, Gentilotti, Biden & Balick, P.A.,
to prosecute an adversary proceeding against Meridian's First Lien
Lenders and Second Lien Lenders to invalidate their liens.  When
the Debtors filed for protection from their creditors, they listed
$530 million in total assets and approximately $815 million in
total liabilities.  

The Hon. Mary Walrath confirmed Meridian's Revised Fourth Amended
Reorganization Plan on Dec. 6, 2006.  The company emerged from
chapter 11 protection on Dec. 29, 2006. (Meridian Bankruptcy News,
Issue No. 62; Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000).


MERIDIAN AUTOMOTIVE: Ford Terminates Lighting Biz Sale Contract
---------------------------------------------------------------
Meridian Automotive Systems, Inc., said Ford Motor Company and its
affiliate, Automotive Components Holdings, LLC, terminated a
Memorandum of Understanding, pursuant to which Meridian will
purchase ACH's Sandusky, Ohio, automotive lighting facility.

According to Meridian, ACH and Ford said that it will not be
possible to sell the Sandusky lighting business on the terms
under the MOU because of the "significant changes in the overall
business environment, including recent reductions in projected
industry volumes."

"The decision by ACH and Ford to terminate the MOU is
understandable, but is disappointing to all of us," Richard E.
Newsted, Meridian's president and chief executive officer, said.
"We would reconsider this opportunity should business conditions
improve.  Of course, we remain committed to our lighting
customers and will continue to serve them from our world-class
manufacturing facilities located in Grand Rapids, Michigan and
Muzquiz, Coahuila, Mexico."

The deal was contingent on reaching a new and long-term contract
with the United Autoworkers that would reduce operating costs at
the plant.  Kevin Furr, president of UAW Local 1216, related to
the Sandusky Register that Meridian's backing out will have a
positive impact on the Sandusky plant.  "We feel that Meridian
was not a good purchaser for our plant, relative to the employees
and the community," Sandusky Register quoted Mr. Furr as saying.

Meridian is currently a defendant in a lawsuit filed in the U.S.
District Court for the Southern District of Ohio by the United
Steelworkers on behalf of Meridian's workers at its Jackson, Ohio
facility.  The USW alleged that Meridian violated the Workers
Adjustment and Retraining Notification Act when the company failed
to notify Union-represented employees of its intent to close the
Jackson plant 60 days before the actions were executed.

Reuters related that the now-terminated sale had been part of a
push by Ford to unload the money-losing assets of its former
Visteon Corp. subsidiary.  In the past 18 months, Ford has
announced a series of deals to sell off plants it took back from
Visteon as part of a bailout that was completed in 2005, Reuters
added.

                         About Ford Motor

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

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

                            *   *   *

As reported in the Troubled Company Reporter on 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.

                About Meridian Automotive Systems

Headquartered in Dearborn, Mich., Meridian Automotive Systems
Inc. -- http://www.meridianautosystems.com/-- supplies    
technologically advanced front and rear end modules, lighting,
exterior composites, console modules, instrument panels and other
interior systems to automobile and truck manufacturers.  Meridian
operates 22 plants in the United States, Canada and Mexico,
supplying Original Equipment Manufacturers and major Tier One
parts suppliers.  The Company and its debtor-affiliates filed for
chapter 11 protection on April 26, 2005 (Bankr. D. Del. Case Nos.
05-11168 through 05-11176).  James F. Conlan, Esq., Larry J.
Nyhan, Esq., Paul S. Caruso, Esq., and Bojan Guzina, Esq., at
Sidley Austin Brown & Wood LLP, and Robert S. Brady, Esq., Edmon
L. Morton, Esq., Edward J. Kosmowski, Esq., and Ian S. Fredericks,
Esq., at Young Conaway Stargatt & Taylor, LLP, represent the
Debtors in their restructuring efforts.  Eric E. Sagerman, Esq.,
at Winston & Strawn LLP represents the Official Committee of
Unsecured Creditors.  The Committee also hired Ian Connor
Bifferato, Esq., at Bifferato, Gentilotti, Biden & Balick, P.A.,
to prosecute an adversary proceeding against Meridian's First Lien
Lenders and Second Lien Lenders to invalidate their liens.  When
the Debtors filed for protection from their creditors, they listed
$530 million in total assets and approximately $815 million in
total liabilities.  

The Hon. Mary Walrath confirmed Meridian's Revised Fourth Amended
Reorganization Plan on Dec. 6, 2006.  The company emerged from
chapter 11 protection on Dec. 29, 2006. (Meridian Bankruptcy News,
Issue No. 62; Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000).


MERITAGE HOMES: Moody's Assigns SGL-2 Rating; CFR is B1
-------------------------------------------------------
Moody's Investors Service assigned a speculative grade liquidity
rating of SGL-2 to Meritage Homes Corporation.  The SGL-2 rating
indicates good liquidity for the next 12 months, and takes into
consideration Meritage's internal and external liquidity, covenant
compliance, and access to alternative liquidity sources.

Meritage was one of the last publicly rated homebuilders to turn
cash flow positive on a trailing twelve month basis, having turned
the corner on this basis for the first time as of the quarter
ended March 31, 2008, after three consecutive quarters of positive
cash flow beginning the third quarter of 2007. For the first half
of 2008, the company has generated approximately $102 million of
cash flow from operations, and Moody's currently anticipates the
company to generate an additional $100 million in the second half
of 2008, with inventory reduction being the main driver of this
positive cash flow generation.

The company has been able to build cash and pay its revolver
balance down to zero, both from its positive cash flow generation
and from the approximately $83 million of proceeds from its recent
common stock offering. The company's second quarter-end cash
balance was $115 million compared to $26 million in the first
quarter. Meritage's total liquidity, comprised of cash and
revolver availability, stood at $408 million at the end of second
quarter 2008.

In July 2008, Meritage amended its senior unsecured revolving
credit facility, easing the interest coverage, debt leverage and
tangible net worth covenants, and providing for relief from
potential FAS 109 charges to impair deferred tax assets. The
facility's size, in turn, was reduced to $500 million from $800
million. If equity falls below $500 million, the revolver's size
will be permanently reduced by the amount of the shortfall, up to
a maximum of a $100 million reduction. Shareholders' equity at
June 30, 2008 was approximately $747 million. Moody's notes that
the amended facility has a tighter borrowing base calculation.

Meritage does not possess easy-to-monetize assets, such as a large
base of accounts receivable or equipment, which could be sold in
the event cash needed to be raised quickly.  The company could
sell land parcels to assuage liquidity pressures; however, it is
possible that these land sales would be at a loss.

Meritage's corporate family rating is B1, and the ratings outlook
is negative.


MERVYNS LLC: Gets Interim Approval of $465,000,000 DIP Financing
----------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware approved
all of Mervyns LLC first day motions.  The company received
interim Bankruptcy Court approval of its $465 million debtor-in-
possession financing facility, provided by Wachovia Capital
Finance Corporation (Western) as agent.  

The company will use the interim DIP financing and cash generated
from its operations to continue to pay vendors and to provide
operational and financial stability as it proceeds with its
restructuring.  The final DIP hearing is scheduled for Aug. 26,
2008.

In connection with the interim approval of its DIP financing
facility, Mervyns also reached an agreement with its existing
lenders on the terms of the consensual use of its cash collateral
during the company's Chapter 11 cases.

The company also received Bankruptcy Court approval to, among
other things, pay pre-petition employee wages, health benefits,
and other employee obligations during its restructuring under
Chapter 11.  Additionally, the company is authorized to pay
ordinary course post-petition expenses and to continue to honor
all of its current customer policies regarding merchandise returns
and all of its outstanding gift cards and loyalty programs without
seeking further Bankruptcy Court approval.

"With the Bankruptcy Court's prompt approval of our DIP financing
and first day motions, we are moving forward with our
reorganization under Chapter 11 while maintaining normal
operations in our stores," John Goodman, chief executive officer
of Mervyns, said.  "We are pleased that we can continue to serve
our customers and purchase goods and services from our vendors as
we seek to implement strategies to restructure our operations,
strengthen our balance sheet and position Mervyns to compete more
effectively."

                         About Mervyns LLC

Headquartered in the San Francisco Bay Area, Mervyns LLC --
http://www.mervyns.com/-- provides a mix of top national brands  
and exclusive private labels.  Mervyns has 176 locations in seven
states.  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.

The Debtor and its debtor-affiliates filed for Chapter 11
protection on July 29, 2008, (Bankr. D. Del. Lead Case No.: 08-
11586).  Howard S. Beltzer, Esq., and Wendy S. Walker, Esq., at
Morgan Lewis & Bockius LLP, and Mark D. Collins, Esq., Daniel J.
DeFranceschi, Esq., Christopher M. Samis, Esq. and L. Katherine
Good, Esq., at Richards Layton & Finger P.A., represent the
Debtors in their restructuring efforts.  Kurtzman Carson
Consultants LLC is the Debtors' claims agent.  The Debtors'
financial advisor is Miller Buckfire & Co. LLC.  Mervyn's LLC has
estimated assets of $500,000,000 to $1,000,000,000 and estimated
debts of $500,000,000 to $1,000,000,000 when it filed for
bankruptcy.


MRV COMMUNICATIONS: Says Review Continues, Restatement Likely
-------------------------------------------------------------
MRV Communications Inc. disclosed that the internal review of the
special committee appointed by its board of directors is ongoing
and the adjustments to MRV's historical financial statements have
yet to be determined.

On June 5, 2008, MRV's board of directors appointed a special
committee of independent directors to conduct an internal review
relating to the company's historical stock option grant practices
and related accounting and MRV's accounting for earn-outs and
profit sharing in two European subsidiaries.  The review of MRV's
stock option grant practices was prompted by the determination of
management that accounting measurement dates for certain stock
option grants differ from the measurement dates used for the
awards.  

As a result, the company expects to restate its financial
statements to record the effects of additional non-cash
compensation expenses and has determined that financial statements
and the related reports of MRV's independent public accountants,
earnings press releases, and similar communications issued by MRV
should not be relied upon as a consequence of the pending
restatement of its historical financial statements.

MRV Communications also reported selected preliminary financial
results for its second quarter and six months ended June 30, 2008.
The company stated that financial results, comparative information
from 2007 and 2008, have been included to provide a context in
which to assess MRV's performance for the current periods, and any
related disclosure regarding trends and guidance, must be
considered preliminary and subject to change, and such changes, if
made, could be material.

Revenue for the second quarter of 2008 was $147.6 million, above
guidance and an increase of 45% over revenue of $102 million in
the second quarter of 2007.  Growth was driven by a 28% increase
in the network equipment segment, a 17% increase in the network
integration segment and 112% in the optical components segment.
Revenue for the six months ended June 30, 2008, was $273.2
million, an increase of 43% from the six months ended June 30,
2007.

The company related that MRV Network Equipment segment posted the
strongest growth in recent history and its best quarter ever with
$33.6 million in revenue, compared with $26.4 million in the same
quarter of the previous year.  For the quarter ended June 30,
2008, MRV Network Integration reported $61.6 million in revenue
and Optical Components reported $56.2 million in revenue.

"We are very pleased with our achievement of obtaining significant
growth while improving the health of our operational structure,"
Noam Lotan, president and chief executive officer of MRV,
commented.  "Growth was driven by both our fiber optic group and
strong growth for our network equipment division, which
traditionally has been our higher margin business segment.  We
have an innovative product roadmap specifically focused on carrier
access and aggregation, packet optical transport and wireless
backhaul, which is clearly supporting our mission and contributing
to our success."

"We remain committed and focused on our strategy to generate
above-market revenue growth while improving our operating
performance in order to drive results to the bottom line," added
Mr. Lotan.

At June 30, 2008, MRV had combined cash, cash equivalents, time
deposits and short-term and long-term marketable securities of
$79.0 million, compared with $82.2 million at the end of the first
quarter of 2008.

As a result of the on-going review and the expected restatement,
the company is not able to present its detailed GAAP financial
results for the quarter or six months ended June 30, 2008, or
comment on the progress of the review.  The company does not
expect the Special Committee's review to be completed in time for
the company to file its Quarterly Report on Form 10-Q for the
quarter just ended by the SEC deadline of Aug. 11, 2008, or within
the five-day extension period provided by the SEC's rules and
accordingly does not expect that it will be filing the form
necessary to obtain the extension.  After the completion of the
Special Committee's review, the company intends to file its Form
10-Q for the quarter ended June 30, 2008.

                   Third Quarter of 2008 Outlook

MRV estimates that revenue for the third quarter of 2008 will be
in the range of $139 million to $144 million or 20% to 24% year-
over-year growth.

                  About MRV Communications Inc.

Headquartered in Chatsworth, California, MRV Communications Inc.  
-- http://www.mrv.com/and http//www.sourcephotonics.com/ --  
(Nasdaq:MRVC) provides network equipment and services, and optical
components.  MRV's network equipment business provides equipment
used by commercial customers, governments and telecommunications
service providers, and includes switches, routers, physical layer
products and out-of-band management products well as specialized
networking products for aerospace, defense and other applications
including voice and cellular communication.  MRV markets and sells
its products worldwide through a variety of channels, including a
dedicated direct sales force, manufacturers' representatives,
value-added-resellers, distributors and systems integrators.  MRV
also has operations in Europe that provide network system design,
integration and distribution services that include products
manufactured by third-party vendors, well as internally developed
and manufactured products.  The company's optical components
business, operating under the Source Photonics brand, includes
Source Photonics Inc. and Fiberxon Inc., both wholly owned
subsidiaries of MRV. Publicly traded since 1992.


NETWORK COMMUNICATIONS: Moody's Assigns SGL-3; Outlook Negative
---------------------------------------------------------------
Moody's affirmed all existing ratings of Network Communications,
Inc., including its B1 Corporate Family Rating, while assigning a
first time liquidity rating of SGL-3. The rating outlook was
changed to negative from stable to reflect the general
macroeconomic outlook as well as industry-wide trends within the
US housing industry. Moody's is concerned that the current housing
downtown could be protracted and lead to additional deterioration
in NCI's operating results. Double digit revenue growth and solid
performance in the Apartment Finder publication have only
partially offset the significant shortfall realized in the last
several quarters by The Real Estate Book, NCI's largest brand.

Moody's assigned a Speculative Grade Liquidity rating of SGL-3 to
NCI, indicating Moody's expectation that the company's liquidity
will be adequate over the next twelve months. Internally generated
cash flow should be sufficient to fund working capital
fluctuations, capital expenditures, earnout payments and debt
amortization requirements. The $35 million revolver was undrawn at
the quarter ended June 22, 2008 and Moody's projects that any
revolver drawings made for seasonal working capital needs will be
repaid within a short time period. Moody's also expects NCI to be
in compliance with its covenants in the next three quarters with
potential tightness in the interest coverage covenant in June
2009, when the minimum ratio is scheduled to step-up.

The B1 CFR reflects NCI's leading market position within its
industry niche, the brand value of its flagship publications, and
the partial hedge resulting from the diversification of the
company's revenues among the Rental & Leasing, Resale & New Sales,
and Remodeling & Home Improvement space. Because of continued
weakness in Resale & New Sales advertising volumes and escalating
paper and distribution costs, management implemented significant
cost containment measures during FY08. As a result, Moody's
projects free cash flow to remain positive in FY09 and interest
coverage to be solid for the rating category, despite very high
leverage.

These ratings (assessments) have been affirmed:

$35 million first lien revolver due 2010, Ba1 (LGD2, 13%)

$76 million first lien term loan due 2012, Ba1 (LGD2, 13%)

$175 million senior unsecured notes due 2013, B2 (LGD4, 63%) from
(LGD4, 65%)

Corporate Family Rating, B1

Probability of Default Rating, B1

The following rating was assigned:

Speculative Grade Liquidity Rating, SGL-3

The $36 million senior subordinated payment-in-kind notes issued
by NCI's parent, Gallarus Media Holdings, Inc., are not rated by
Moody's.

Network Communications, Inc., headquartered in Lawrenceville,
Georgia, is a leading publisher of printed and online real estate
information in North America. For the twelve months ended June 22,
2008, the company generated revenues of $219 million.


NEWBURY STREET: Moody's Rates $50.6MM Notes Due 2053 Caa3
---------------------------------------------------------
Moody's Investors Service has downgraded the ratings of three
classes of notes issued by Newbury Street CDO, Ltd., and left them
on review for possible further downgrade:

Class Description: U.S. $1,000,000,000 Class A-1 First Priority
Senior Secured Floating Rate Delayed Draw Notes due 2053

Prior Rating: Aa1, on review for possible downgrade

Current Rating: Aa3, on review for possible downgrade

Class Description: U.S. $800,000,000 Class A-2 Second Priority
Senior Secured Floating Rate Notes Due 2053

Prior Rating: Ba2, on review for possible downgrade

Current Rating: B1, on review for possible downgrade

Class Description: U.S. $50,625,000 Class A-3 Third Priority
Senior Secured Floating Rate Notes Due 2053

Prior Rating: Caa2, on review for possible downgrade

Current Rating: Caa3, on review for possible downgrade

Newbury Street CDO, Ltd. is a collateralized debt obligation
backed primarily by a portfolio of structured finance securities.
On March 4, 2008 the transaction experienced an event of default
caused by a failure of the Class A Sequential Pay Ratio to be
greater than or equal to the required amount set forth in Section
5.1(i) of the Indenture dated March 8, 2007. That event of default
is continuing.

The rating actions taken today reflect continuing deterioration in
the credit quality of the underlying portfolio and the increased
expected loss associated with the transaction. Losses are
attributed to diminished credit quality on the underlying
portfolio.

As provided in Article V of the Indenture during the occurrence
and continuance of an Event of Default, the Controlling Class may
be entitled to direct the Trustee to take particular actions with
respect to the Collateral. The severity of losses may depend on
the timing and choice of remedy to be pursued by the Controlling
Class. Because of this uncertainty, the ratings of Classes A-1, A-
2 and A-3 Notes issued by Newbury Street CDO, Ltd. are on review
for possible further action.


NORTHWEST AIRLINES: Pilots Vote on Delta Merger Through August 11
-----------------------------------------------------------------
Pilots of Delta Airlines Inc. and Northwest Airlines, Inc., began
voting July 14, 2008, on a joint labor agreement that will
essentially govern the terms of employment of both carrier's
pilots groups upon the closing of the Delta-Northwest merger, the
Atlanta Journal-Constitution reports.  Voting ends Aug. 11, 2008.

Voting results will be determined separately as the pilot groups
are represented by separate units of the Air Line Pilots
Association, AJC says.

The Tentative Agreement provides for, among others, Delta's
agreement to issue shares of its common stock equal to (i) 3.5% of
the fully-diluted shares outstanding of Delta to Delta pilots; and
(ii) 2.38% of the fully-diluted shares outstanding of Delta to
Northwest pilots, when the merger closes.

According to AJC, the Northwest pilots union informed its members
of certain meetings it held with Delta pilots in Chicago,
Illinois, to continue talks on the integration of their seniority
lists.

Absent an agreement within the 30-day negotiating period, Delta
and Northwest pilot groups will go into binding arbitration to
establish a combined seniority list in November 2008, says the
report.

                         About Delta Air

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

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

The Debtors filed a chapter 11 plan of reorganization and
disclosure statement explaining that plan on Dec. 19, 2007.  On
Jan. 19, 2007, they filed revisions to the plan and disclosure
statement, and submitted further revisions to the plan on
Feb. 2, 2007.  On Feb. 7, 2007, the Court approved the Debtors'
disclosure statement.  In April 25, 2007, the Court confirmed the
Debtors' plan.  That plan became effective on April 30, 2007.  The
Court entered a final decree closing 17 cases on Sept. 26, 2007.    
(Delta Air Lines Bankruptcy News; Bankruptcy Creditors' Service,
Inc., http://bankrupt.com/newsstand/or 215/945-7000).

                     About Northwest Airlines

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

The company and 12 affiliates filed for chapter 11 protection on
Sept. 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-17930).  Bruce
R. Zirinsky, Esq., and Gregory M. Petrick, Esq., at Cadwalader,
Wickersham & Taft LLP in New York, and Mark C. Ellenberg, Esq.,
at Cadwalader, Wickersham & Taft LLP in Washington, represent the
Debtors in their restructuring efforts.  The Official Committee
of Unsecured Creditors has retained Scott L. Hazan, Esq., at  
Otterbourg, Steindler, Houston & Rosen, P.C. as its bankruptcy  
counsel in the Debtors' chapter 11 cases.  When the Debtors filed
for bankruptcy, they listed $14.4 billion in total assets and
$17.9 billion in total debts.  On Jan. 12, 2007, the Debtors filed
with the Court their chapter 11 plan.  On Feb. 15, 2007, the
Debtors filed an amended plan and disclosure statement.  The Court
approved the adequacy of the Debtors' amended disclosure statement
on March 26, 2007.  On May 21, 2007, the Court confirmed the
Debtors' amended plan.  That amended plan took effect May 31,
2007.

(Northwest Airlines Bankruptcy News, Issue No. 97; Bankruptcy
Creditors' Service, Inc., http://bankrupt.com/newsstand/or  
215/945-7000).

                           *     *     *

As reported in the Troubled Company Reporter on July 29, 2008,
Standard & Poor's Ratings Services lowered its ratings on
Northwest Airlines Corp. and subsidiary Northwest Airlines Inc.
(both rated B/Negative/--), including lowering the long-term
corporate credit ratings on both entities to 'B' from 'B+', and
removed the ratings from CreditWatch, where they had been placed
with negative implications April 15, 2008.  The outlook is
negative.      

The downgrade reflects expected losses and reduced or negative
operating cash flow caused by high fuel prices.  S&P also lowered
our ratings on enhanced equipment trust certificates, in some
cases by more than one notch.


NORTHWEST AIRLINES: Merger to Hit Smaller Ports First, Critics Say
------------------------------------------------------------------
Even before Northwest Airlines Corp. and Delta Air Lines Inc.
confirmed their merger plan in April of this year, critics have
already noted that smaller airports would be the first casualties
after the consolidation, John Welbes at TwinCities.com remarks.

Delta has been discontinuing flights between cities in its
network, but denies that the cuts are connected with the proposed
tie up, Mr. Welbes states.  Delta insists that the flight
trimming is part of a "parking program" ensuing from escalating
oil costs, Mr. Welbes discloses.

Nevertheless, Delta's capacity cuts hint at what's in store for
regional airports after the merger, Mr. Welbes avers.

"This will be the lowest amount of service that we've had in the
last four years," said Debbie Gulliver, travel manager at
Michigan State University in Lansing, Michigan, reports
TwinCities.com.  Delta will be exiting Lansing come September 1,
according to Mr. Welbes.  Northwest currently controls about 55%
of the market at the Lansing airport, Mr. Welbes points out.  
Apart from Lansing, Delta has begun pulling out of other markets
where Northwest has a presence, including Green Bay, Wisconsin;
State College, Pennsylvania; Toledo, Ohio and Sioux Falls, South
Dakota.

Northwest reported in its second quarter results that its
capacity reductions will not affect its service to any cities;
however, frequency of flights to certain markets will be reduced.

In the end, Delta might end up holding on to more of its flights
than Northwest, due to Northwest's older fleet and higher
maintenance costs, Mr. Welbes says.  Despite this, Northwest's
operational performance for the summer of 2008 is a complete
turnaround from that of last year's, when the carrier canceled as
many as 100 flights in a day, due to problems in pilot staffing,
the Star Tribune relates.  Consequently, Northwest and its pilots
union agreed to implement new work rules which reduced pilots'
flight hours and providing them an incentive of 150% of their pay
rate for flying more than 80 hours a month.

U.S. airlines are continuing to battle spiraling fuel prices
which almost doubled from a year ago, causing losses in almost
all of the major airlines for the second quarter of 2008, says
Mr. Welbes.  Specifically, United Airlines, Inc., posted the
largest loss of $2.7 billion; American Airlines was hit by
$1.4 billion; Delta Air Lines lost $1.04 billion, US Airways
dropped $567 million and Northwest Airlines, posted a $377 million
loss.  The least hurt was Continental Airlines, which lost
$3 million.

                     About Northwest Airlines

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

The company and 12 affiliates filed for chapter 11 protection on
Sept. 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-17930).  Bruce
R. Zirinsky, Esq., and Gregory M. Petrick, Esq., at Cadwalader,
Wickersham & Taft LLP in New York, and Mark C. Ellenberg, Esq.,
at Cadwalader, Wickersham & Taft LLP in Washington, represent the
Debtors in their restructuring efforts.  The Official Committee
of Unsecured Creditors has retained Scott L. Hazan, Esq., at  
Otterbourg, Steindler, Houston & Rosen, P.C. as its bankruptcy  
counsel in the Debtors' chapter 11 cases.  When the Debtors filed
for bankruptcy, they listed $14.4 billion in total assets and
$17.9 billion in total debts.  On Jan. 12, 2007, the Debtors filed
with the Court their chapter 11 plan.  On Feb. 15, 2007, the
Debtors filed an amended plan and disclosure statement.  The Court
approved the adequacy of the Debtors' amended disclosure statement
on March 26, 2007.  On May 21, 2007, the Court confirmed the
Debtors' amended plan.  That amended plan took effect May 31,
2007.

(Northwest Airlines Bankruptcy News, Issue No. 97; Bankruptcy
Creditors' Service, Inc., http://bankrupt.com/newsstand/or  
215/945-7000).

                           *     *     *

As reported in the Troubled Company Reporter on July 29, 2008,
Standard & Poor's Ratings Services lowered its ratings on
Northwest Airlines Corp. and subsidiary Northwest Airlines Inc.
(both rated B/Negative/--), including lowering the long-term
corporate credit ratings on both entities to 'B' from 'B+', and
removed the ratings from CreditWatch, where they had been placed
with negative implications April 15, 2008.  The outlook is
negative.      

The downgrade reflects expected losses and reduced or negative
operating cash flow caused by high fuel prices.  S&P also lowered
our ratings on enhanced equipment trust certificates, in some
cases by more than one notch.


NORTHWEST AIRLINES: Court Approves Settlement with M. Foret
-----------------------------------------------------------
Northwest Airlines Corporation and its debtor-affiliates obtained
approval from the U.S. Bankruptcy Court for the Southern District
of New York on a settlement with Mickey Foret, a former executive
vice president and chief financial officer of Northwest Airlines,
Inc. and chairman and chief executive officer of Northwest
Airlines Cargo, Inc.

As said by the Troubled Company Reporter on July 2, 2008, the
parties engaged in arm's-length negotiations to resolve all of the
Claims filed by Mr. Foret and Aviation Consultants.  The terms of
the settlement agreement include:

   (a) Mr. Foret and his spouse will receive airline pass travel
       privileges, and will be eligible for certain group medical
       coverage benefits;

   (b) Aviation Consultant's rejection damages claim relating to
       the Consulting Agreement will be reduced and allowed for
       $1,020,000, with all its other Claims to be expunged;
       and

   (c) Mr. Foret's rights to indemnification pursuant the Plan
       will not be altered.

                     About Northwest Airlines

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

The company and 12 affiliates filed for chapter 11 protection on
Sept. 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-17930).  Bruce
R. Zirinsky, Esq., and Gregory M. Petrick, Esq., at Cadwalader,
Wickersham & Taft LLP in New York, and Mark C. Ellenberg, Esq.,
at Cadwalader, Wickersham & Taft LLP in Washington, represent the
Debtors in their restructuring efforts.  The Official Committee
of Unsecured Creditors has retained Scott L. Hazan, Esq., at  
Otterbourg, Steindler, Houston & Rosen, P.C. as its bankruptcy  
counsel in the Debtors' chapter 11 cases.  When the Debtors filed
for bankruptcy, they listed $14.4 billion in total assets and
$17.9 billion in total debts.  On Jan. 12, 2007, the Debtors filed
with the Court their chapter 11 plan.  On Feb. 15, 2007, the
Debtors filed an amended plan and disclosure statement.  The Court
approved the adequacy of the Debtors' amended disclosure statement
on March 26, 2007.  On May 21, 2007, the Court confirmed the
Debtors' amended plan.  That amended plan took effect May 31,
2007.

(Northwest Airlines Bankruptcy News, Issue No. 97; Bankruptcy
Creditors' Service, Inc., http://bankrupt.com/newsstand/or  
215/945-7000).

                           *     *     *

As reported in the Troubled Company Reporter on July 29, 2008,
Standard & Poor's Ratings Services lowered its ratings on
Northwest Airlines Corp. and subsidiary Northwest Airlines Inc.
(both rated B/Negative/--), including lowering the long-term
corporate credit ratings on both entities to 'B' from 'B+', and
removed the ratings from CreditWatch, where they had been placed
with negative implications April 15, 2008.  The outlook is
negative.      

The downgrade reflects expected losses and reduced or negative
operating cash flow caused by high fuel prices.  S&P also lowered
our ratings on enhanced equipment trust certificates, in some
cases by more than one notch.


NORTHWEST AIRLINES: CFO Disposes of 10,886 Common Shares
--------------------------------------------------------
In a regulatory filing with the U.S. Securities and Exchange
Commission dated July 25, 2008, David M. Davis, executive vice
president and chief financial officer of Northwest Airlines
Corp., reported that on July 23, he disposed of 10,886 shares of
Northwest common stock at $10 per share.  Mr. Davis disclosed
that he is deemed to beneficially own 197,296 shares of Northwest
common stock after the transaction.  

According to the SEC report, the shares were sold by Mr. Davis
pursuant to a Rule 10b5-1 trading plan dated May 29, 2008.

                     About Northwest Airlines

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

The company and 12 affiliates filed for chapter 11 protection on
Sept. 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-17930).  Bruce
R. Zirinsky, Esq., and Gregory M. Petrick, Esq., at Cadwalader,
Wickersham & Taft LLP in New York, and Mark C. Ellenberg, Esq.,
at Cadwalader, Wickersham & Taft LLP in Washington, represent the
Debtors in their restructuring efforts.  The Official Committee
of Unsecured Creditors has retained Scott L. Hazan, Esq., at  
Otterbourg, Steindler, Houston & Rosen, P.C. as its bankruptcy  
counsel in the Debtors' chapter 11 cases.  When the Debtors filed
for bankruptcy, they listed $14.4 billion in total assets and
$17.9 billion in total debts.  On Jan. 12, 2007, the Debtors filed
with the Court their chapter 11 plan.  On Feb. 15, 2007, the
Debtors filed an amended plan and disclosure statement.  The Court
approved the adequacy of the Debtors' amended disclosure statement
on March 26, 2007.  On May 21, 2007, the Court confirmed the
Debtors' amended plan.  That amended plan took effect May 31,
2007.

(Northwest Airlines Bankruptcy News, Issue No. 97; Bankruptcy
Creditors' Service, Inc., http://bankrupt.com/newsstand/or  
215/945-7000).

                           *     *     *

As reported in the Troubled Company Reporter on July 29, 2008,
Standard & Poor's Ratings Services lowered its ratings on
Northwest Airlines Corp. and subsidiary Northwest Airlines Inc.
(both rated B/Negative/--), including lowering the long-term
corporate credit ratings on both entities to 'B' from 'B+', and
removed the ratings from CreditWatch, where they had been placed
with negative implications April 15, 2008.  The outlook is
negative.      

The downgrade reflects expected losses and reduced or negative
operating cash flow caused by high fuel prices.  S&P also lowered
our ratings on enhanced equipment trust certificates, in some
cases by more than one notch.


NORTHWEST AIRLINES: Posts $377MM Net Loss in Second Quarter 2008
----------------------------------------------------------------
Northwest Airlines Corporation reported a second quarter 2008 net
loss of $377 million, or $1.43 per share.  Reported results
include a net non-cash impairment charge of $547 million and a
$250 million gain associated with marking-to-market out-of-period
fuel hedges.  

These results compare to the second quarter of 2007 when
Northwest reported net income of $2.1 billion, which included
$1.9 billion related to reorganization items.

Excluding the net non-cash impairment charge, Northwest reported
second quarter 2008 net income of $170 million versus the second
quarter of 2007 when the airline reported net income of $205
million before the impact of reorganization items.

Excluding taxes and out-of-period mark-to-market adjustments on
fuel hedges, Northwest paid $3.45 per gallon for jet fuel in
the second quarter compared to $2.04 a gallon in the second
quarter of 2007, an increase of 69.3 percent.  Northwest's total
fuel costs, excluding out-of-period hedge gains, increased by
$637 million versus the prior year.

In commenting on second quarter results, Doug Steenland,
Northwest's president and chief executive officer said, "The
unprecedented run-up in oil prices continues to pose great
challenges for Northwest Airlines and the entire airline
industry.  In response, we have acted swiftly to reduce capacity,
preserve liquidity, aggressively manage our costs and grow
revenue through fare actions and additional fees and charges."

                Northwest and Delta Progress Toward
                   DOJ Approval and Integration;    
           Merger Expected to Close in 4th Quarter 2008

In April, Northwest announced an agreement to merge with Delta Air
Lines.  This merger is even more compelling in the current
environment and brings together two airlines that have both
successfully restructured and have unique and non-replicable
assets.

Since the merger announcement, integration planning teams
comprised of leaders from both Northwest and Delta have been
created.  These teams are making significant progress in the
efforts to integrate the two carriers after the merger closes,
which is expected to occur in the 4th quarter of 2008.

Since the merger announcement in April, these progress have been
made:

     -- Joint pilot contract.  Northwest and Delta announced
        that, subject to ratification, a joint pilot agreement
        that includes full seniority integration will be in
        place by the close of the merger.

     -- Combined Corporate Leadership Team.  Northwest and Delta
        recently announced the Senior Leadership team that will
        lead the new combined carrier when the merger is closed.
        Additionally, key Northwest and Delta leaders were
        identified who will continue to lead the two teams as
        the two airlines transition to a single operating
        certificate over the next 18-24 months.

     -- Shareholder approval vote.  It was announced that the
        shareholder approval vote for the merger will take place
        at Northwest's annual meeting on September 25th.

     -- Increased annual synergies estimate.  Northwest and Delta
        increased to $2.0 billion the estimate of annualized
        steady-state synergies created by the merger.

     -- Decreased one-time transition costs.  The estimated one-
        time transition costs of the merger have been reduced to
        approximately $600 million.

Mr. Steenland said, "When we first contemplated this merger at
the end of 2007, as oil was approaching $100 a barrel, we knew
then that the right transaction would better position us to cope
with the fuel challenges that lay ahead. Based on our due
diligence, this deal met all the tests of the right transaction -
one that would benefit our employees, customers, shareholders and
communities over the long-term.  Now, given the current fuel
environment, the merger makes even more sense as the resulting
synergies and cost-savings will better allow the combined carrier
to manage through these challenges as a stronger, global
competitor."

Upon completion of the transaction, the merged carrier will
benefit from among the following competitive advantages: a
global, end-to-end network with little overlap; proven joint
venture relationships across the Trans-Atlantic; a strong balance
sheet and competitive cost structure; significant revenue and
cost synergies; manageable integration costs and the harmonious
integration of employee groups.

Mr. Steenland concluded, "Unlike previous airline mergers,
Northwest-Delta is a merger of choice.  Northwest and Delta are
the two strongest network airlines, with the strongest balance
sheets, liquidity positions and best-in-class cost structures in
the industry."

                Second Quarter Financial Overview
                        Operating Revenues

Northwest's operating revenues for the second quarter rose to
$3.6 billion, up 12.4% from last year.  Consolidated passenger
revenue increased by 10.0% versus the second quarter 2007 to $3.1
billion on 3.6% more available seat miles (ASMs), resulting in a
6.1% improvement in revenue per available seat mile (RASM).  This
revenue growth was among the best in the industry during the
quarter.  Excluding the impact of fresh-start accounting,
consolidated RASM increased 4.7%.

Mainline passenger revenue increased by 5.4% versus the second
quarter 2007 to $2.6 billion on 0.1% more mainline available seat
miles (ASMs), resulting in a 5.3%  improvement in revenue per
available seat mile (RASM) and a 0.1 percentage point increase in
load factor.  Excluding the impact of fresh-start accounting,
mainline RASM increased 3.8%.

Commenting on the airline's revenue performance, Tim Griffin,
Northwest's executive vice president of marketing and
distribution said, "Northwest continues to deliver strong revenue
performance.  The airline achieved a length-of-haul adjusted
domestic RASM that is 111.4% of the industry average based on the
most recent comparative data available." Griffin added, "We are
encouraged by the unit revenue growth we experienced during the
quarter.  Additional unit revenue growth is expected due in part
to the capacity reductions previously announced, which will help
to offset higher fuel expenses."

                        Operating Expenses

Second quarter operating expenses of $3.3 billion, excluding the
net non-cash impairment charge, were up $504 million, or 17.8%
year-over-year as the result of the $637 million increase
in year-over-year fuel expense.  Excluding fuel costs, the gain
associated with marking-to-market out-of-period fuel hedges, and
the net non-cash impairment charge, operating expenses increased
by $123 million year-over-year.  For the quarter, Northwest's
mainline unit costs per available seat mile (CASM), excluding
fuel and non-recurring items, increased 4.7% year-over-year, which
was favorable to prior guidance.  The increase was primarily due
to the continued impact of non-cash emergence-related items and
integration expenses related to the merger with Delta.  Excluding
the impact of these items, second quarter CASM excluding fuel
increased 1.0%.

Dave Davis, Northwest's executive vice-president and chief
financial officer, said, "Our strong second quarter ex-fuel CASM
performance demonstrates Northwest's continued focus on prudent
cost control."

Fuel continues to be Northwest's single largest cost, representing
43.7 percent of the company's second quarter operating expenses,
excluding the net non-cash impairment charge and out-of-period
mark-to-market adjustments on fuel hedges.  Northwest had
previously hedged approximately 40 percent of its fuel exposure
for the quarter and realized $43 million in value from settled
fuel hedge contracts during the quarter.  As of July 21st,
Northwest has hedged approximately 63% of its third quarter
requirements, 56% of its fourth quarter requirements and 215 of
its first quarter 2009 fuel requirements.

              $547 Million Non-cash Accounting Charge

Northwest finalized the goodwill impairment testing that resulted
in the $3.9 billion charge reflected in the first quarter of 2008.  
As a result, it was determined that an additional net non-cash
impairment charge of $547 million was required.

            Strong Total Cash Position of $3.7 billion

Northwest ended the quarter with $3.3 billion in unrestricted cash
and $424 million in restricted cash.  The restricted cash balance
includes a funded tax trust of $255 million that was established
in 2002.  On July 15th, Northwest closed a financing of
unencumbered aircraft and engines that generated approximately
$180 million in additional liquidity.  These proceeds will be
reflected in Northwest's third quarter ending cash balance.

In addressing Northwest's liquidity, Davis said, "Despite the
significant year-over-year increase in fuel related expenses
during the quarter, Northwest has maintained among the strongest
liquidity positions in the industry.  Including the value of
Northwest's funded tax trust that was established in 2002, the
airline's quarter ending liquidity was $3.5 billion, or 26.6% of
trailing 12 months revenue."

                Northwest's Continued Response to
                     Extraordinary Fuel Costs

In response to the record increases in fuel-related costs, during
the second quarter, Northwest announced these initiatives:

     1. Fourth Quarter 2008 Capacity, Fleet and Personnel
        Reductions

        -- Capacity Reductions.  Northwest will reduce its
           fourth quarter 2008 system mainline capacity
           (domestic and international) 8.5 percent - 9.5
           percent versus the fourth quarter of 2007.

        -- Fleet Changes.  As a result of the reduced capacity,
           Northwest is removing a combination of 14 B757s and
           Airbus narrowbody aircraft from the fleet.  In
           addition, the DC9 fleet will be reduced from 94
           aircraft at the start of 2008 to 61 aircraft
           (20 DC9-30s and 41 DC9-40s/50s) by year-end.  The
           airline also continues to take delivery of its 76-
           seat regional aircraft.  The 76-seat fleet, which
           will grow to 36 Embraer EMB-175s and 36 Bombardier
           CRJ900s by year-end, is approximately 30 percent
           more fuel efficient than the DC9s.

        -- Personnel Reductions.  As a result of the fuel price
           driven flight reductions, Northwest is reducing its
           frontline and management personnel by 2,500.  All
           Northwest employee groups will be affected.  The
           reductions are being achieved first through a variety
           of voluntary programs including early-out programs,
           voluntary leaves, work rule modifications and
           attrition.  Furloughs will be employed if voluntary
           means fail to achieve the targeted reductions.

     2. Revenue Enhancements/Fees Expect to Generate $250
        million to $300 million annually

        -- Fees for Checked Bags.  Northwest matched
           competitors' plans to charge $15 for the customer's
           first checked bag.  The new policy applies to tickets
           sold on or after July 10, for travel starting
           August 28, throughout the United States as well as
           travel between the U.S. and Canada.  Northwest also
           charges $25 for a second checked bag and $100 for the
           third and subsequent additional checked bags.  
           Frequent flier elites are exempt from the policy,
           along with full-fare coach passengers.

        -- Fees for Award Tickets.  Northwest also implemented a
           fuel-related service fee for WorldPerks(R) award
           tickets.  For WorldPerks(R) Award tickets issued in
           North America on or after September 15, 2008,
           Northwest will charge $25 for domestic tickets, $50
           for Trans-Atlantic tickets, and $100 for Trans-
           Pacific travel.

        -- Fees for Ticket Changes.  Northwest also increased
           fees for ticket changes.  Starting July 9, the fee
           for domestic non-refundable ticket changes increased
           from $100 to $150.  International ticket change fees
           increased by an additional $50 to $150 per ticket,
           depending on class of service and other restrictions.

                     About Northwest Airlines

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

The company and 12 affiliates filed for chapter 11 protection on
Sept. 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-17930).  Bruce
R. Zirinsky, Esq., and Gregory M. Petrick, Esq., at Cadwalader,
Wickersham & Taft LLP in New York, and Mark C. Ellenberg, Esq.,
at Cadwalader, Wickersham & Taft LLP in Washington, represent the
Debtors in their restructuring efforts.  The Official Committee
of Unsecured Creditors has retained Scott L. Hazan, Esq., at  
Otterbourg, Steindler, Houston & Rosen, P.C. as its bankruptcy  
counsel in the Debtors' chapter 11 cases.  When the Debtors filed
for bankruptcy, they listed $14.4 billion in total assets and
$17.9 billion in total debts.  On Jan. 12, 2007, the Debtors filed
with the Court their chapter 11 plan.  On Feb. 15, 2007, the
Debtors filed an amended plan and disclosure statement.  The Court
approved the adequacy of the Debtors' amended disclosure statement
on March 26, 2007.  On May 21, 2007, the Court confirmed the
Debtors' amended plan.  That amended plan took effect May 31,
2007.

(Northwest Airlines Bankruptcy News, Issue No. 97; Bankruptcy
Creditors' Service, Inc., http://bankrupt.com/newsstand/or  
215/945-7000).

                           *     *     *

As reported in the Troubled Company Reporter on July 29, 2008,
Standard & Poor's Ratings Services lowered its ratings on
Northwest Airlines Corp. and subsidiary Northwest Airlines Inc.
(both rated B/Negative/--), including lowering the long-term
corporate credit ratings on both entities to 'B' from 'B+', and
removed the ratings from CreditWatch, where they had been placed
with negative implications April 15, 2008.  The outlook is
negative.      

The downgrade reflects expected losses and reduced or negative
operating cash flow caused by high fuel prices.  S&P also lowered
our ratings on enhanced equipment trust certificates, in some
cases by more than one notch.


NOVASTAR FINANCIAL: Files Suit Against HQ Building Owner
--------------------------------------------------------
Kansas City Business Journal reports that NovaStar Financial Inc.
commenced a lawsuit against EHMD LLC -- the owner of its
headquarters at 8140 Ward Parkway, Kansas City -- for raising
direct expenses NovaStar incurred even though the number of
employees it kept at the office dropped in 2007 due to subprime
mortgage-related woes.  The lawsuit was filed before the Jackson
County Circuit Court on Wednesday.

According to Business Journal, direct expenses, as defined in the
parties' lease, are costs that exceed the monthly base rent to
cover the tenant's percentage of expenditures like building
maintenance, repair, janitorial service, security, lawn care,
trash removal, utilities and other costs.

NovaStar, in its lawsuit, indicated that it now has less than 40
employees at the building, from 550 in July 2007, Business Journal
says.  NovaStar said EHMD raised its 2007 direct expenses more
than $150,000 from the year before, even though the company's
employee count started dwindling in 2007, Business Journal says.  
NovaStar also alleges that maintenance and repair cost charges
were 50% higher in 2008 than in 2007, the report adds.

An attorney for EHMD could not immediately be reached for comment,
Business Journal notes.

NovaStar seeks an accounting of the direct expenses and accuses
EHMD of breach of contract, according to Business Journal.  The
lawsuit does not specify how much NovaStar seeks in total damages,
the report notes.

                        About NovaStar

Headquartered in Kansas City, Missouri, NovaStar Financial Inc.
(NYSE: NFI) -- http://www.novastarmortgage.com/-- prior to     
significant changes in its business during 2007 and the first
quarter of 2008, the company originated, purchased, securitized,
sold, invested in and serviced residential nonconforming mortgage
loans and mortgage backed securities.  

The company retained, through its mortgage securities investment
portfolio, significant interests in the nonconforming loans it
originated and purchased, and through its servicing platform,
serviced all of the loans in which it retained interests.  

During 2007 and early 2008, the company discontinued its mortgage
lending operations and sold its mortgage servicing rights which
subsequently resulted in the abandonment of its servicing
operations.

Historically, the company had elected to be taxed as a REIT under
the Code.  During 2007, the company announced that it would not be
able to pay a dividend on its common stock with respect to its  
2006 taxable income, and as a result, its status as a REIT
terminated retroactive to Jan. 1, 2006.

Novastar Financial Inc.'s consolidated balance sheet at March 31,
2008, showed $2.7 billion in total assets, $3.2 billion in total
liabilities, and $494.5 million in total stockholders' deficit.

                          *     *     *

As reported in the Troubled Company Reporter on April 4, 2008,
Deloitte & Touche LLP, in Kansas City, Missouri, expressed
substantial doubt about Novastar Financial 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 deficit in
shareholders' equity, the disruption in the credit markets and
related liquidity issues, the sale of its loan servicing
operations and the decision to cease all of its mortgage lending
operations.


OK LUMBER: Case Summary & 20 Largest Unsecured Creditors
--------------------------------------------------------
Debtor: OK Lumber Co., Inc.
        272 Illinois St.
        Fairbanks, AK 99701

Bankruptcy Case No.: 08-00451

Type of Business: The Debtor owns and manages a hardware store.  
                  See http://www.www.okace.com/

Chapter 11 Petition Date: July 31, 2008

Court: District of Alaska (Fairbanks)

Judge: Donald MacDonald IV

Debtor's Counsel: Alfred Dovbish, Esq.
                  98 Main St., Ste. 216
                  Tiburon, CA 94920
                  Tel: (415) 924-0808

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

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

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

      http://bankrupt.com/misc/akb08-00451.pdf


PACIFIC LUMBER: Emerges from Chapter 11 on July 30
--------------------------------------------------
The Pacific Lumber Company, Scotia Pacific Company LLC, Scotia
Development LLC, Britt Lumber Co., Inc., Salmon Creek LLC, and
Scotia Inn Inc. emerged from bankruptcy protection on July 30,
2008.

The effective date of the Modified First Amended Joint Plan of
Reorganization for the restructuring of the PALCO Entities
occurred on July 30, the Plan Proponents informed parties-in-
interest in a notice to the U.S. Bankruptcy Court for the Southern
District of Texas.

The Marathon/Mendocino Plan contemplates the transfer of the
PALCO and Scopac assets, on the plan effective date, to Marathon
and Mendocino in exchange for certain amounts, including the
provision of more than $500 million to the timber noteholders.

MRC fulfilled the remaining condition for the Plan to become
effective as it "paid [on July 30] more than $550 million to
creditors to gain control of 210,000 acres of Humboldt County
timberlands and a sawmill by Pacific Lumber," The Associated
Press reports.

The 130-year old timber company will soon be turned over to MRC,
marking an end to its 18-month bankruptcy case.  The PALCO name
will be changed to Humboldt Redwood Co. under MRC's management,
AP relates.

"We are going to manage the forest and cut down some trees . . .
but we'll be doing it in a way that's sustainable that balances
the health of the forest with the health of the business," AP
quotes MRC Chairman Sandy Dean as saying.

Humboldt Redwood Co. intends to extend jobs to 275 to 300 PALCO
employees, according to AP.

The PALCO Entities filed for bankruptcy in January 2007.  Several
competing plans for the PALCO reorganization were considered by
the Court.  In the end, it was the Marathon/Mendocino Plan that
the Court confirmed on July 8, 2008.  

Several parties, including the Bank of New York Trust Company,
N.A, as Indenture Trustee for the Timber Notes, Scopac, certain
noteholders, and certain California State Agencies Bank
previously took appeals of the Confirmation Order and sought a
stay pending the resolution of the appeals.  The Appellants also
sought to have the Court of Appeals for the Fifth Circuit to
directly review the appeal.

Both the Bankruptcy Court and the Fifth Circuit, however, denied
the imposition of a stay to delay any implementation of the
Confirmation Order.

As of the Effective Date, the confirmed Plan is binding on the
PALCO Entities and any creditor or equity security holder of the
PALCO Entities.

Pursuant to the Effective Date and the confirmed  
Marathon/Mendocino Plan:

   (a) a party seeking claims arising from the rejection of
       executory contracts or unexpired leases or arising from
       administrative expenses have until August 29, 2008, to
       file a proof of claim for those claims; and

   (b) any professional retained in the Debtors' Chapter 11 cases
       has until September 29, 2008, to file a final application
       for the allowance of fees for services rendered and
       reimbursement of expenses incurred through the Effective
       Date.  

Proofs of claim must be filed by mail with the Reorganized
Debtors' Balloting and Claims Agent at:

                 Logan & Company, Inc.
                 546 Valley Road
                 Upper Montclair, New Jersey 07043

Proofs of Claim must also be served on counsel for the PALCO
Entities, the Marathon/Mendocino Plan Proponents, the PLC
Litigation Trustee, and the SPC Litigation Trustee.  Claims not
filed before the Bar Dates for Rejection Claims, Administrative
Expense Claims and Professional Claims will be forever barred and
will not be enforceable against the PALCO Entities.  

                        Plan Supplements

The Marathon Plan Proponents have further amended their Plan
Supplements on July 25, which included an amended list of
executory contracts and unexpired leases to be assumed under the
Plan, estimated cure costs and the deletion of certain contracts
and leases from the original schedule.

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

  A list of the Additional Contracts & Leases is available for
  free at http://bankrupt.com/misc/PALCO_PlanSupAdlContracts.pdf

  A list of the Deleted Contracts and Leases is available for
  free at http://bankrupt.com/misc/PALCO_PlanSupDelContracts.pdf  

                        BoNY's Statement

The Bank of New York Mellon Trust Company, N.A., formerly known
as The Bank of New York Trust Company N.A. and as Timber Notes
Indenture Trustee, tells the Court that it does not seek any
further relief from the Court or any hearing regarding the Notice
of Effective Date.

In a Court filing dated July 30, the Indenture Trustee, however,
makes clear that it reserves all of its rights and remedies to
avoid an assertion by any party that its failure to respond
should be taken as waiver of any of its right to assert any issue
related to the Confirmation Order and the Effective Date Notice.

BoNY has a pending appeal of the Confirmation Order before the
Fifth Circuit.

                       About Pacific Lumber

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

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

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

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

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

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

On July 8, 2008 the Court confirmed the Modified First Amended
Joint Plan of Reorganization With Technical Modifications for the
Debtors proposed by Marathon Structured Finance Fund L.P.,
Mendocino Redwood Company, LLC, and the Official Committee of
Unsecured Creditors.  

The Debtors' exclusive plan filing period expired on Feb. 29,
2008. (Scotia/Pacific Lumber Bankruptcy News, Issue No. 66;
http://bankrupt.com/newsstand/or 215/945-7000).


PACIFIC LUMBER: BoNY Appeals Confirmation Order to District Court
-----------------------------------------------------------------
The Bank of New York Trust Company, N.A., as Indenture Trustee
for the Timber Noteholders; Scotia Pacific Company LLC; and
Noteholders Scotia Redwood Foundation, Inc., Angelo, Gordon & Co.
L.P., Aurelius Capital Management, L.P., Davidson Kempner Capital
Management, LLC and CSG Investments, Inc., notified the U.S.
Bankruptcy Court for the Southern District of Texas, Corpus
Christi Division, that they have taken separate appeals to the
U.S. District Court for the Southern District of Texas from the
Hon. Richard Schmidt's order dated July 8, 2008:

   -- confirming the Modified First Amended Joint Plan of
      Reorganization filed by plan proponents Marathon Structured
      Finance Fund L.P., Mendocino Redwood Company, LLC and the
      Official Committee of Unsecured Creditors;

   -- denying confirmation of the First Amended Chapter 11 Plan
      for Scopac as proposed by BoNY; and

   -- denying BoNY's request for the appointment of a Chapter 11
      trustee.

Among other things, the Appellants want the District Court to
review whether Judge Schmidt erred in entering the Confirmation
Order:

   (a) citing that the Marathon/Mendocino Plan "discriminates
       unfairly" and is not "fair and equitable" and thus, fails
       to comply with the requirements set forth in Section
       1129(b)(2)(A) of the Bankruptcy Code;

   (b) citing that the novel "cash out" theory proposed in the
       Marathon/Mendocino Plan and accepted by the Bankruptcy
       Court fails to provide BoNY with the indubitable
       equivalent of its secured claim as required by Section
       1129(b)(2)(A)(iii);

   (c) based on the cramdown provisions of Section 1129(b)(2)(A)
       through a combination of cash, purportedly as the
       indubitable equivalent of BoNY's collateral, and the
       retention of its lien on Scopac's interest in the
       Headwaters Litigation, purportedly "securing" BoNY's
       unsecured deficiency claim;
   
   (d) concluding that the Marathon/Mendocino Plan was a
       "transfer" rather than a sale;

   (e) citing that the Marathon/Mendocino Plan transfers the
       value of Scopac's assets to Mendocino for a pre-determined
       price without first paying Scopac's secured and unsecured
       creditors, and without subjecting that transfer to a
       market test; and

   (f) after the Plan Proponents made material modifications to
       the Marathon/Mendocino Plan without re-soliciting votes on
       the Plan.

Pending a final ruling of their appeals, the Appellants asked the
Bankruptcy Court to stay the Confirmation Order.

BoNY asserted that granting a stay pending appeal is appropriate
since (1) there is a substantial likelihood of success on the
merits of its Appeal; (2) there will be irreparable injury if the
stay is not granted; (3) the granting of a stay will not  
substantially harm other parties; and (4) the granting of the
stay would serve the public interest.

BoNY contended that unlike the  Marathon/Mendocino Plan, its
proposed competing Plan meets all of the requirements of Section
1129 and provides that Scopac's assets would be sold through an
open, competitive auction process, with a "stalking horse" bid of
$603 million as the floor, rather than $517 million as the
ceiling as proposed by the Marathon/Mendocino Plan Proponents.

The Confirmation Order was the result of numerous other errors
that are reversible on appeal, Zack A. Clement, Esq., at
Fulbright & Jaworski LLP, in Houston, Texas, argued, on BoNY's
behalf.  He pointed out that Judge Schmidt confirmed the
Marathon/Mendocino Plan based on the vote of:

   * a single secured creditor, Bank of America, NT&SA, the
     holder of a $36.37 million secured claim who accepted both
     Plans and was indifferent as between the two plans; and

   * a separate "trade" class consisting of less than $250,000 in
     voted claims against Scopac.

Scopac, for its part, insisted that a stay pending Appeal would  
protect the Debtors' creditors against the risk that Mendocino
decides not to consummate the Marathon/Mendocino Plan; the appeal
is unsuccessful; and creditors who would have received payments
under the Marathon/Mendocino Plan are damaged as a result.

                      Fifth Circuit Appeal

The Appellants also sought permission to appeal the Confirmation
Order directly to U.S. Court of Appeals for the Fifth Circuit.

On BoNY's behalf, Zack A. Clement, Esq., at Fulbright & Jaworski
LLP, in Houston, Texas, noted that recent amendments to Section
158(d) of the Judiciary and Judicial Procedures Code provides for
a direct appeal to the Court of Appeals from a bankruptcy court
or district court, if the bankruptcy court or district court
certifies that either (i) the order involves a question of law as
to which there is no controlling decision or involves a matter of
public importance; (ii) the order involves a question of law
requiring resolution of conflicting decisions; or (iii) an
immediate appeal from the order may materially advance the
progress of the case.  The Appellants maintained that all these
circumstances are present in their request.

Among other things, the Appellants asserted that the Confirmation
Order fundamentally contravened decades of well-settled
bankruptcy jurisprudence and overlooked the irremediable flaws
and legal inadequacies inherent in the Marathon/Mendocino Plan,
which creates a conflict on several key questions of law.

The Appellants believe that a decision from the Fifth Circuit
will instill a sense of confidence in the Confirmation Order, or
its reversal, that will effectively end the contentious
litigation in the Debtors' bankruptcy cases.

                    Marathon, et al., Talk Back

Marathon, Mendocino, the Creditors Committee, the California
Resources Agency, the California Department of Forestry and Fire
Protection, the California Department of Fish and Game, the
California Wildlife Conservation Board, the California Regional
Water Quality Control Board, North Coast Region, and the State
Water Resources Control Board disputed that BoNY was not able to
prove that it will suffer irreparable harm if it did not obtain a
stay pending Appeal.  "[T]his alone compelled denial of BoNY's
Motion," the Marathon Parties and the California State Agencies
averred.

The Marathon Parties further contended that BoNY failed to meet a
single criteria of Section 158(b) and thus, does not merit
certification to appeal directly to the Fifth Circuit.    

On Marathon and Mendocino's behalf, John D. Penn, Esq., at Haynes
and Boone LLP, in Fort Worth, Texas, argued that the Appeals and
the Stay Request represent yet another attempt by BoNY to
sabotage implementation of the Marathon/Mendocino Plan and force
the Debtors into liquidation despite the overwhelming rejection
of the BoNY Plan by creditors.  

                       Stay Request Denied

The Hon. Richard Schmidt denied the Apellants' request for a Stay
Pending Appeal on July 15, 2008, but stayed the finality of the
Confirmation Order to allow the Appellants to seek further relief
from the Fifth Circuit.

The issues that the Appellants intend to raise on appeal were all
raised and considered at the Confirmation Hearing, Judge Schmidt
opined.  The key issue during the Confirmation Hearing that
resulted in confirmation of the Marathon/Mendocino Plan was the
determination of the value of the Scopac Timberlands, Judge
Schmidt noted.  He emphasized that BoNY is being paid the present
value of its secured claim in cash as that value was found by the
Bankruptcy Court.  

The Bankruptcy Court found that an auction for the Scopac assets
would not result in a higher recovery to BoNY than under the
Marathon/Mendocino Plan.  Any harm to BoNY is speculative and
BoNY has not demonstrated irreparable harm absent a stay, Judge
Schmidt stated.  

Moreover, the Bankruptcy Court disputed BoNY's argument that only
harm to Scopac should be considered.  "This is not correct,"
Judge Schmidt asserted.  "The Confirmation Order and the
Marathon/Mendocino Plan provide for reorganization of all of the
Debtors and a stay of the Confirmation Order will therefore
impact many parties, not just creditors of Scopac."  If the
Marathon/Mendocino Plan is stayed pending appeal, there is a
substantial risk that Marathon and Mendocino may be unwilling or
unable to proceed with the Plan at or before the conclusion of
any appeal, Judge Schmidt said.

Even if the Appellants are able to prove that a stay pending
appeal is warranted, the Court would have condition a stay on
BoNY providing some security for potential damages caused by the
delay in consummating the Marathon/Mendocino Plan, Judge Schmidt
averred.  BoNY, he noted, will have to insure the continued
operation of both PALCO and Scopac during the appeal by providing
a $25 million DIP facility for Scopac, a $5 million DIP facility
for PALCO, and a bond for $176 million.

In light of the multitude of important public issues affected by
the Confirmation Order which will impact a host of communities
and the Plan confirmation being recognized as materially
advancing a case to its conclusion, the Bankruptcy Court granted
the Apellants' request for direct certification to pursue an
appeal before the Fifth Circuit so that the parties can gain
closure regarding the Confirmation Order.

A full-text copy of the Bankruptcy Court's Findings of Fact and
Conclusions of Law on the BoNY Parties' Stay Request Pending
Appeal is available for free at:

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

                         BoNY Responds

BoNY asserts that the law does not require an appealing party to
imagine, and then secure, against any and all theoretical
possibilities and hypothetical risks.  

If the Court extends BoNY' duty to post a security to incorporate
speculative, albeit theoretically "possible" losses, the
extension would constitute a significant departure from
established law and would provide appellees precisely the type of
"windfall" that courts have expressly instructed should not
occur, BoNY contends.

                       Fifth Circuit Decision

In a separate report, Bloomberg News relate that a quorum of two
out of three judges at the Fifth Circuit denied the Appellants
stay request.  The Fifth Circuit did not detail the explanation
for the decision, according to the news source.  

The Fifth Circuit, however, granted the Appellants' request for
an expedited review of the Appeal, Bloomberg said.

                       About Pacific Lumber

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

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

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

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

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

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

On July 8, 2008, the Court confirmed the Modified First Amended
Joint Plan of Reorganization With Technical Modifications for the
Debtors proposed by Marathon Structured Finance Fund L.P.,
Mendocino Redwood Company, LLC, and the Official Committee of
Unsecured Creditors.  

The Debtors emerged from bankruptcy protection on July 30, 2008.

The Debtors' exclusive plan filing period expired on Feb. 29,
2008. (Scotia/Pacific Lumber Bankruptcy News, Issue No. 66;
http://bankrupt.com/newsstand/or 215/945-7000).


PACIFIC LUMBER: Asks Court to Compel Enforcement of Conf. Order
---------------------------------------------------------------
The Pacific Lumber Company, Mendocino Redwood Company LLC,
Marathon Structured Finance Fund LLP, and the Official Committee
of Unsecured Creditors ask the U.S. Bankruptcy Court for the
Southern District of Texas to compel the Debtors to:

   (a) comply with the Bankruptcy Court Order confirming the
       Modified First Amended Joint Plan of Reorganization
       proposed by Marathon, Mendocino and the Creditors
       Committee; and

   (b) consummate the Marathon/Mendocino Plan.

The PALCO Parties inform the Court that The Bank of New York
Trust Company, N.A., as Indenture Trustee for the Timber
Noteholders, and Scotia Pacific Company LLC have indicated that
they will refuse to cooperate in any consummation of the
Marathon/Mendocino Plan.

Nathaniel Peter Holzer, Esq., at Jordan, Hyden, Womble, Culbreth
& Holzer, P.C., in Corpus Christi, Texas, tells the Hon. Richard  
Schmidt that immediately after the U.S. Court of Appeals for the
Fifth Circuit denied various parties' motions for stay pending
appeal of the Confirmation Order, BoNY sent a letter asserting
that despite the denial of the Stay Motions, the
Marathon/Mendocino Plan cannot be consummated.  BoNY contended
that the definition of the term "Effective Date" in the
Marathon/Mendocino Plan requires that the Confirmation Order be a
Final Order and that the definition of "Final Order" requires that
BoNY's appeals be exhausted.

"That contention is meritless," Mr. Holzer argues.  He maintains
that the Confirmation Order expressly stated that it is a final
order and that the Confirmation Order provides that it will
govern in the event of any inconsistency with the
Marathon/Mendocino Plan.

"All parties understood that the Confirmation Order was a Final
Order within the meaning of the MRC/Marathon Plan," Mr. Holzer
points out.  "[BoNY] is wrong in its assertion that the
requirements for consummation of the MRC/Marathon Plan are not
satisfied."

                           BoNY Objects

The express terms of the Marathon/Mendocino Plan unequivocally
provide that the 'Effective Date' of that Plan will not occur so
long as any appeal from the Confirmation Order remains pending,
BoNY contends.

On BoNY's behalf, William Greendyke, Esq., at Fulbright &
Jaworski LLP, in Houston, Texas, notes that there are two
requirements for the Effective Date to occur -- (1) there must be
a Final Order confirming the plan, and (2) all conditions to the
consummation of the Plan must have been satisfied or waived.  
"The Confirmation Order cannot be a Final Order if any appeal is
pending," Mr. Greendyke emphasizes.

In this light, BoNY asks the Court to deny the request of the
PALCO Parties.

                        Court's Ruling

Judge Schmidt finds that the Marathon/Mendocino Plan and the
Confirmation Order direct the Debtors, their estates, the
Litigation Trusts, the Litigation Trust Boards, and the
Litigation Trustees to take all necessary and appropriate steps
and perform all necessary or appropriate acts to consummate the
terms and conditions of the Marathon/Mendocino Plan.

The parties are bound by the terms of the Confirmation Order and
failure to abide by its terms risks contempt, Judge Schmidt
opines.

The Court clarifies that the Confirmation Order is no longer
stayed at present time.  If the Plan Proponents want to establish
an effective date, they should do so by the means set out in the
Plan, the Court notes.

"If and when any party affirmatively refuses to act, the Court
will take up enforcement requests," Judge Schmidt makes clear.

The Court affirms that the Confirmation Order is a Final Order.

                    Scopac in Contempt of Court,
                     the PALCO Parties Assert

The PALCO Parties informs Judge Schmidt that despite the
Bankruptcy Court affirming that the Confirmation Order is a Final
Order, Scopac refuses execute any documents in connection with
the closing of the Marathon/Mendocino Plan.

Scopac and its officers and directors have indicated that they
will refuse to comply with the Court's Orders until the Fifth
Circuit rules on their request for Stay Pending an Appeal,
Nathaniel Peter Holzer, Esq., at Jordan Hyden, Womble & Culbreth,
P.C., in Corpus Christi, Texas, relates.  Scopac seems to have
given itself a stay of the Court's Orders without any basis or
judicial sanction, Mr. Holzer points out.

Mr. Holzer notes that the Fifth Circuit has denied the
Appellants' Motion for Stay Pending an Appeal.  There can be no
further basis to fail to comply with the orders of the Court, he
points out.

Against this backdrop, the PALCO Parties ask Judge Schmidt to
hold Scopac in contempt of the Bankruptcy Court's Orders.

                        Parties Stipulate

Subsequently, to resolve their disputes, PALCO, Marathon,
Mendocino and Scopac agree that:

   (1) Scopac and its officers and directors will deliver
       immediately all requested documents necessary to
       consummate, implement or effectuate the Marathon/Mendocino
       Plan;

   (2) Mendocino would hold the documents in escrow until July 29;

   (3) Scopac and its board of directors, officers, directors,
       employees will direct, authorize execute and deliver all
       applicable transfer documents in connection with the
       consummation of the Marathon/Mendocino Plan; and

   (4) In the event Scopac and its officers and directors fail
       to comply with the Stipulation, the Court will treat the
       non-compliance as contempt of the Court, and will
       entertain an immediate motion for sanctions against Scopac
       and its officers and directors.

Judge Schmidt approves the parties' stipulation.

                       About Pacific Lumber

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

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

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

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

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

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

On July 8, 2008, the Court confirmed the Modified First Amended
Joint Plan of Reorganization With Technical Modifications for the
Debtors proposed by Marathon Structured Finance Fund L.P.,
Mendocino Redwood Company, LLC, and the Official Committee of
Unsecured Creditors.  

The Debtors emerged from bankruptcy protection on July 30, 2008.

The Debtors' exclusive plan filing period expired on Feb. 29,
2008. (Scotia/Pacific Lumber Bankruptcy News, Issue No. 66;
http://bankrupt.com/newsstand/or 215/945-7000).


PHOENIX LABS: Voluntary Chapter 11 Case Summary
-----------------------------------------------
Debtor: Phoenix Labs Rising, LLC
        Attn: Forchelli, Curto, Crowe, Deegan, Schwartz, Mineo &
        Cohn, LLP
        330 Old Country Rd.
        P.O. Box 31
        Mineola, NY 11501
        Tel: (516) 248-1700

Bankruptcy Case No.: 08-74063

Chapter 11 Petition Date: July 30, 2008

Court: Eastern District of New York (Central Islip)

Judge: Alan S. Trust

Debtor's Counsel: Gary M. Kushner, Esq.
                     Email: gkushner@fcsmcc.com
                  Forchelli, Curto, Crowe, Deegan, Schwartz, Mineo
                  & Cohn, LLP
                  330 Old Country Rd.
                  P.O. Box 31
                  Mineola, NY 11501
                  Tel: (516) 248-1700
                  Fax: (516) 248-1729
                  http://www.fcsmcc.com/

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

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

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


PHOENIX 2002-1: Moody's Downgrades Class C Euronotes to Ba3
-----------------------------------------------------------
Moody's Investors Service downgraded three classes of notes issued
by Phoenix 2002-1.

These rating actions are the result of negative credit migration
in the underlying pool of corporate reference credits and AIG's
downgrade to Aa3.

Today's rating actions are:

Phoenix 2002-1:

(1) Series 1 USD 49,748,415 Floating Rate Euronotes Class A due
2010

Current Rating: Aa3

Prior Rating: Aa2, on review for downgrade

(2) Series 1 USD 58,161,660 Floating Rate Euronotes Class B due
2010

Current Rating: A1

Prior Rating: Aa3, on review for downgrade

(3) Series 1 USD 86,626,350 Floating Rate Euronotes Class C due
2010

Current Rating: Ba3

Prior Rating: Ba1, on review for downgrade


POLYMER GROUP: S&P Trims Corp. Credit Rating to 'B+' from 'BB-'
---------------------------------------------------------------
Standard & Poor's Ratings Services lowered its corporate credit
rating on Polymer Group Inc. to 'B+' from 'BB-' and the rating on
Polymer's senior secured bank loan to 'BB-' from 'BB'.  The
outlook is negative.
     
"The downgrade reflects our expectation that the company will not
be able to strengthen its financial profile to the level necessary
to support the former ratings because of escalating raw material
costs, difficult economic conditions, and competitive pricing in
some markets," said Standard & Poor's credit analyst Cynthia
Werneth.
     
Although S&P are increasingly concerned about the effect of
extraordinarily high raw material costs on liquidity, S&P believes
that the company can continue to pass on those cost increases to
customers with a lag and maintain sufficient liquidity by lowering
capital spending.  At March 29, 2008, total debt, adjusted to
include capitalized operating leases and modest off-balance-sheet
receivables financing and postretirement obligations, was about
$460 million.
     
The ratings on Charlotte, North Carolina-based Polymer Group
reflect a vulnerable business risk profile and highly leveraged
financial profile.
     
S&P could lower the ratings if raw material cost inflation or
other operating challenges cause liquidity to narrow to
unacceptable levels.  A downgrade could also result if operating
performance deteriorates to the extent that the funds from
operations to debt ratio drops to the 10% area, or if the company
unexpectedly initiates acquisitions or shareholder rewards before
the financial profile has strengthened.  Conversely, S&P could
revise the outlook to stable if operating performance stabilizes
at about current levels and liquidity concerns abate.


PREMIER PROPERTIES: Founder's Personal Assets for Auction Aug. 9
----------------------------------------------------------------
The personal properties of Christopher P. White, founder of
Bridgwater Falls Shopping Center developer, Premier Properties
USA, will be auctioned at 8:00 a.m. to 10:00 a.m. on Aug. 9, 2008,
at the Hamilton County Fairgrounds in Noblesville, Indiana,
Trading Markets says.

The assets for sale include Mr. White's Harley-Davidson bike, six
Italian scooters, 22-foot pontoon boat, 15 flat panel televisions,
and a 14-seater home theater, TM reports.

The Troubled Company Reporter said on June 18, 2008, that Mr.
White was charged with fraud and theft purportedly committed in
January 2008.  TM relates that he was captured on June 25, 2008.
                                                                                                                             
                     About Premier Properties

Indianapolis-based Premier Properties USA -- http://www.ppusa.com/   
-- is founded in 1993 and holds about $1 billion in real estate
projects that are currently under development.  Premier is the
developer of Bridgwater Falls Shopping Center, --
http://www.shopbridgewaterfalls.com/-- a 635,000-square-foot,      
open-air "power village" center off Ohio Bypass 4 and Princeton
Road in Hamilton, Ohio.  Target, Dicks Sporting Goods, JCPenney,
Best Buy, Old Navy, TJ Maxx, Bed Bath & Beyond, Books-A-Million,
Michaels and PetSmart are some of Bridwater Falls' tenants.  
Additionally, the village at Bridgewater Falls, further enhances
the center's draw with fashion shops, restaurants and
entertainment features.

The Debtor filed for chapter 11 bankruptcy protection on April 23,
2008 (Bankr. S.D. Ind. Case No. 08-04607).  The Debtor faced an
$80-million foreclosure action by Wachovia Bank.  William J.
Tucker, Esq., represents the Debtor.  When it filed for
bankruptcy, the Debtor reported estimated assets and debts between
$1 million and $10 million.

The Court converted the Debtor's chapter 11 case to a chapter 7
liquidation proceeding in May 2008.  The Debtor's founder,
Christopher P. White, was charged with fraud and theft on June 16,
2008.


QUEBECOR WORLD: CCAA Stay Extended Until September 30
-----------------------------------------------------
Quebecor World Inc. and its debtor-affiliates sought and obtained
extension of the Companies' Creditors Arrangement Act stay until
Sept. 30, 2008, from the Quebec Superior Court of Justice.

In support of the Applicants' request, Louis J. Gouin, Esq., at
Ogilvy Renault, LLP, in Montreal, Canada, told the Canadian Court
that the extension of the Stay Period is necessary for the
Applicants to continue the discussions of their business plan
with stakeholders and develop one or more restructuring plans to
maximize long term value for the benefit of all stakeholders.  
Mr. Gouin assured the CCAA Court that no creditor will suffer any
material prejudice by the extension of the Stay Period.  He added
that it is a condition precedent to the Applicants' financing
under the DIP Documents that the Initial Order and stay, at all
times, be in full force and effect.

Ernst & Young Inc., the Court-appointed monitor of the CCAA
Applicants, supported the Applicants' extension request.
                                                                                                                             
                       About Quebecor World

Based in Montreal, Quebec, Quebecor World Inc. (TSX: IQW) (NYSE:
IQW), -- http://www.quebecorworldinc.com/-- provides market
solutions, including marketing and advertising activities, well
as print solutions to retailers, branded goods companies,
catalogers and to publishers of magazines, books and other
printed media.  It has 127 printing and related facilities
located in North America, Europe, Latin America and Asia.  In
the United States, it has 82 facilities in 30 states, and is
engaged in the printing of books, magazines, directories, retail
inserts, catalogs and direct mail.

The company has operations in Mexico, Brazil, Colombia, Chile,
Peru, Argentina and the British Virgin Islands.

Quebecor World and 53 of its subsidiaries, including those in
Canada, filed a petition under the Companies' Creditors
Arrangement Act before the Superior Court of Quebec, Commercial
Division, in Montreal, Canada, on Jan. 20, 2008.  The Honorable
Justice Robert Mongeon oversees the CCAA case.  Francois-David
Pare, Esq., at Ogilvy Renault, LLP, represents the Company in
the CCAA case.  Ernst & Young Inc. was appointed as Monitor.

On Jan. 21, 2008, Quebecor World (USA) Inc., its U.S.
subsidiary, along with other U.S. affiliates, filed for chapter
11 bankruptcy on Jan. 21, 2008 (Bankr. S.D.N.Y Lead Case No. 08-
10152).  Anthony D. Boccanfuso, Esq., at Arnold & Porter LLP
represents the Debtors in their restructuring efforts.   The
Official Committee of Unsecured Creditors is represented by Akin
Gump Strauss Hauer & Feld LLP.

Based in Corby, Northamptonshire, Quebecor World PLC --
http://www.quebecorworldplc.com/-- is the U.K. subsidiary of
Quebecor World Inc. that specializes in web offset magazines,
catalogues and specialty print products for marketing and
advertising campaigns.  The company employs around 290 people.
Quebecor PLC was placed into administration with Ian Best and
David Duggins of Ernst & Young LLP appointed as joint
administrators effective Jan. 28, 2008.

As of Sept. 30, 2007, Quebecor World's unaudited consolidated
balance sheet showed total assets of $5,554,900,000, total
liabilities of $3,964,800,000, preferred shares of $175,900,000,
and total shareholders' equity of $1,414,200,000.

The Debtors have until Sept. 30, 2008, to file a plan of
reorganization in the chapter 11 case.  The Debtors' CCAA stay
has been extended to Sept. 30, 2008.  (Quebecor World Bankruptcy
News, Issue No. 22; Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000).


QUEBECOR WORLD: Ernst & Young Provides CCAA Status Report
---------------------------------------------------------
Ernst & Young, Inc., the Court-appointed monitor of Quebecor
World Inc., and certain of its affiliates' reorganization
proceedings under the Canadian Companies' Creditors Arrangement
Act, filed reports to the Quebec Superior Court of Justice with
respect to the activities of the companies and certain events
occurring since May 2008.

                    Stabilization of Operations

The Monitor reported that the Applicants are finalizing the
reconciliation of their prepetition trade liabilities.  The
analysis is ongoing as payments are issued in respect of the
prepetition liabilities permitted by the U.S. Chapter 11
Proceedings, the receipt and investigation of certain 20-day
administrative and reclamation claims, and clarification of
certain consignment arrangements and the set-off rights claimed
by certain customers must be taken into consideration.

* Banking

The Applicants are continuing their discussions with CIBC to
widen the services offered by CIBC as well as explore alternative
solutions to reduce the levels of redundant work being done by
the Applicants' personnel.  As of July 14, 2008, the Applicants
have deposited $30,000,000, in the cash account at Bank of
America to hold proceeds realized from the disposition of QW
Memphis inventory held on site as of January 21, 2008.

Certain services are being re-established with BofA, like
automatic zero-balancing between the deposit lock box and
concentration account; however, not all of the previously
provided services have been re-established.  Management continues
to work with BofA to find ways to reduce the level of redundant
manual work currently being done by the Companies' staff.

* Intercompany Transactions

According to E&Y, the intercompany transactions have largely been
limited to the automatic centralized accounting transfer of
accounts payable and accounts receivable funding of
EUR19,000,000, for the Applicants' European operations, of which
EUR5,700,000, was reimbursed from the proceeds of the sale of the
European Operations and $6,000,000, to the Latin American
affiliates as authorized by the Initial Order and the Final DIP
Order.

* Financial Statements and Reporting Issues

The Applicants expect to be in a position to release their
quarterly financial statements for the six-month period ended
June 30, 2008, on August 12, 2008.  The Applicants are also
working to develop financial statements for each of the U.S.
Debtors at specific points in time, as requested by the Official
Committee of Unsecured Creditors.  E&Y relates that an extensive
analysis is required to allocate certain transactions that have
not been pushed down to the legal entity level in the past as the
Applicants have not historically prepared financial statements on
an entity by entity basis.  Management expects to deliver these
financial statements with the Canadian Court by the end of July
2008.

                     Restructuring Initiatives

* Reclamation Claims

The U.S. Debtors received a total of 68 reclamation claims having
an aggregate face value of $73,900,000.  The U.S. Debtors expect
to complete their review of the reclamation claims received
within a few weeks, the Monitor said.  They will then seek to
reach agreement with their reclamation creditors and prepare and
submit appropriate stipulations to the U.S. Court allowing the
valid claims.

* Sale of Real Property or Equipment

Before the Petition Date, the Applicants initiated various
marketing efforts to dispose redundant assets, which became non-
productive largely as a result of the closing of operations at
certain facilities over time, including facilities in Montreal,
Ottawa, Brookfield and Lincoln.  The Monitor related that the
Montreal and Ottawa facilities are currently sublet to parties
outside of the Quebecor World Group.  The Applicants will consult
with the Committees and file motions to obtain the authorization
to execute any transaction for the sale of real property or
equipment.

                           DIP Financing

As of July 6, 2008, Quebecor World, Inc., drew C$27,000,000,  
under the Revolving Loan Facility to fund its Canadian
operations.  As of July 6, 2008, the U.S. Debtors had excess
available unrestricted cash from the Term Loan Facility totaling
$140,000,000.  The imbalance between Canada and the U.S. creates
unnecessary interest expense to the Canadian operations and an
inefficient use of U.S. liquidity, the Monitor said.

As of July 14, 2008, the Applicants have not been able to use the
funds already drawn under the Term Loan Facility and allocated to
the U.S. Debtors prior to using the Revolving Loan Facility.  The
Applicants intend to continue their discussions with the
financial' advisors to the Committees to resolve the issue.

       Current Financial Performance & Cash Flow Forecast

* Cash Flow Results for the 10-Week Period Ended July 6, 2008

For the ten weeks ended July 6, 2008, the consolidated North
American operations of the Applicants produced positive cash flow
of $17,000,000, which is approximately $108,000,000 better than
that projected for the same period in the cash flow forecast
prepared by the Applicants.  The $108,000,000 favorable variance
includes an additional $7,000,000 in drawings under the Revolving
Loan Facility.  The Monitor said that the Applicants' management
advised that the favorable variance is attributable to a number
of factors including (i) the sale of their European operations,
(ii) higher than projected accounts receivable collections, (iii)
drawings under the Revolving Loan Facility, and (iv) a deferral
of the funding of the Latin American non-petitioners' financing
requirements.

A full-text copy of the Cash Flow Forecast is available for free
at http://ResearchArchives.com/t/s?2feb

* Cash Flow Forecast for the 13-Week Period Ending Oct. 5, 2008

To assist in assessing the Applicants' short term financial
performance and ongoing financing requirements, they prepared a
revised cash flow forecast for the 13-week period ending
Oct. 5, 2008.  The Monitor said the Applicants' management
expects that the consolidated North American operations will
incur negative cash flow of $71,000,000 for the period.

The Applicants had an unrestricted cash balance of $140,000,000,
on July 6, 2008.  The liquidity available to the Applicants is
currently $385,000,000, and is forecasted to be at least
$315,000,000 throughout Sept. 30, 2008.  The Monitor related
that since Jan. 1, 2008, about $31,300,000 of professional
fees have been reported as expenses to the income statement.

                Status of Latin American Operations

According to the Monitor, the Applicants are working on a
transfer of $4,000,000 to the Colombian operations, which would
completely utilize the $10,000,000 basket for non-petitioner
liabilities for the Latin American Group, but would not consume
any of the additional $5,000,000 basket for non-petitioner
liabilities that relate to the operations of non-petitioners
other than for the European operations.

The Monitor related that Quebecor World Bogota, S.A., received a
notice from a lender indicating that its existing lines of credit
of approximately $8,000,000 needed to be renewed as they were
overdue.  A proposal to renew $6,000,000 of the Colombia Loans
under a five-year agreement is under discussion with the lender.  
To execute the renewal, the Colombia Loans need to be repaid in
full by QW Bogota.  To refund the Colombia Loans, the Applicants
will need to transfer $8,000,000 to QW Bogota, of which
$2,000,000 will be on a temporary basis.  The $2,000,000 advance
will be refunded to the Applicants with the proceeds of the new
$6,000,000 loan.  The transfer is expected to be made by the end
of July 2008.

The Applicants' legal counsel confirmed that, to the extent the
$8,000,000 transfer to QW Bogota is made from funds permitted for
Latin America from the $10,000,000, and $5,000,000, baskets, the
transfer will not create any defaults with the Final DIP Order,
the Monitor told the CCAA Court.

                Status of the European Operations
                                                                                     
The Applicants had transferred a total of EUR19,000,000, to
finance their European Operations.  Of this amount, EUR5,700,000,
has been refunded as part of the gross proceeds of sale of
certain of its European assets.

                   Applicants' Business Plan

The Monitor related that the Applicants organized a three-day
presentation in early July 2008 of its five-year business plan,
including the visit of two plants located near Philadelphia, in
the United States.  An overview of the Business Plan was
presented and the details of the business plan for each of the
major business segments were presented by the management of each
of the business segments.  Since receiving the Business Plan, the
financial advisors to the Committee have been conducting due
diligence on the Business Plan.  E&Y said the delivery of the
Business Plan has been completed early in the restructuring
proceedings.  

The Monitor added that the Applicants require more time to work
with the Ad Hoc Bond Committee and Bank Syndicate to establish
terms in which representatives of each committee would sign
confidentiality agreements and obtain confidential information
for purposes of negotiating the terms of the restructuring plan.

The Monitor told the CCAA Court that it has made progress with
respect to the requests from advisors for the Committee to
conduct a factual investigation of information concerning the
status of the intercompany accounts of Quebecor World group.  
However, the Monitor said the work is not yet completed, due to a
number of factors, including, the complexity of the corporate
structure and the very high level of interaction between the
affiliates, and the fact that the employees who could assist the
Monitor in performing the review had a heavy workload requiring
them to direct their attention to other high priority projects
like preparing monthly operating reports and other financial
statements.

As the Monitor, however, issued an interim report on its
findings, a copy of which is available for free at:

            http://ResearchArchives.com/t/s?2fed
                                                                                                                            
                       About Quebecor World

Based in Montreal, Quebec, Quebecor World Inc. (TSX: IQW) (NYSE:
IQW), -- http://www.quebecorworldinc.com/-- provides market
solutions, including marketing and advertising activities, well
as print solutions to retailers, branded goods companies,
catalogers and to publishers of magazines, books and other
printed media.  It has 127 printing and related facilities
located in North America, Europe, Latin America and Asia.  In
the United States, it has 82 facilities in 30 states, and is
engaged in the printing of books, magazines, directories, retail
inserts, catalogs and direct mail.

The company has operations in Mexico, Brazil, Colombia, Chile,
Peru, Argentina and the British Virgin Islands.

Quebecor World and 53 of its subsidiaries, including those in
Canada, filed a petition under the Companies' Creditors
Arrangement Act before the Superior Court of Quebec, Commercial
Division, in Montreal, Canada, on Jan. 20, 2008.  The Honorable
Justice Robert Mongeon oversees the CCAA case.  Francois-David
Pare, Esq., at Ogilvy Renault, LLP, represents the Company in
the CCAA case.  Ernst & Young Inc. was appointed as Monitor.

On Jan. 21, 2008, Quebecor World (USA) Inc., its U.S.
subsidiary, along with other U.S. affiliates, filed for chapter
11 bankruptcy on Jan. 21, 2008 (Bankr. S.D.N.Y Lead Case No. 08-
10152).  Anthony D. Boccanfuso, Esq., at Arnold & Porter LLP
represents the Debtors in their restructuring efforts.   The
Official Committee of Unsecured Creditors is represented by Akin
Gump Strauss Hauer & Feld LLP.

Based in Corby, Northamptonshire, Quebecor World PLC --
http://www.quebecorworldplc.com/-- is the U.K. subsidiary of
Quebecor World Inc. that specializes in web offset magazines,
catalogues and specialty print products for marketing and
advertising campaigns.  The company employs around 290 people.
Quebecor PLC was placed into administration with Ian Best and
David Duggins of Ernst & Young LLP appointed as joint
administrators effective Jan. 28, 2008.

As of Sept. 30, 2007, Quebecor World's unaudited consolidated
balance sheet showed total assets of $5,554,900,000, total
liabilities of $3,964,800,000, preferred shares of $175,900,000,
and total shareholders' equity of $1,414,200,000.

The Debtors have until Sept. 30, 2008, to file a plan of
reorganization in the chapter 11 case.  The Debtors' CCAA stay
has been extended to Sept. 30, 2008.  (Quebecor World Bankruptcy
News, Issue No. 22; Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000).


QUEBECOR WORLD: Committee Revised After Cellmark's Resignation
--------------------------------------------------------------
Diana G. Adams, the United States Trustee for Region 2, has
amended the list of members of the Official Committee of Unsecured
Creditors after the resignation of Cellmark Paper, Inc., and
Catalyst Pulp & Paper Sales, Inc.

The Committee is now composed of:

  (1) Wilmington Trust Company
       Attn: Suzanne Macdonald
       520 Madison Avenue, 33rd floor
       New York, NY 10022
       Tel: (212) 415-0500

   (2) Pension Benefit Guaranty Corp.
       Attn: Suzanne Kelly
       1200 K Street, NW
       Washington, DC 20005
       Tel: (212) 326-4070 x6367

   (3) The Bank of New York Mellon
       Attn: David M. Kerr
       101 Barclay Street - 8 West
       New York, NY 10286
       Tel: (212) 815-5650
  
   (4) MEGTEC Systems Inc.
       Attn: Gregory R. Linn
       830 Prosper Rd.
       De Pere, WI 54115
       Tel: (920) 337-1568

   (5) Abitibi Consolidated Sales Corp.
       Attn: Madeleine Fequiere
       1155 Metcalfe Street, Suite 800
       Montreal, Quebec
       H3B 5H2 CANADA
       Tel: (514) 394-3638

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

Based in Montreal, Quebec, Quebecor World Inc. (TSX: IQW) (NYSE:
IQW), -- http://www.quebecorworldinc.com/-- provides market
solutions, including marketing and advertising activities, well
as print solutions to retailers, branded goods companies,
catalogers and to publishers of magazines, books and other
printed media.  It has 127 printing and related facilities
located in North America, Europe, Latin America and Asia.  In
the United States, it has 82 facilities in 30 states, and is
engaged in the printing of books, magazines, directories, retail
inserts, catalogs and direct mail.

The company has operations in Mexico, Brazil, Colombia, Chile,
Peru, Argentina and the British Virgin Islands.

Quebecor World and 53 of its subsidiaries, including those in
Canada, filed a petition under the Companies' Creditors
Arrangement Act before the Superior Court of Quebec, Commercial
Division, in Montreal, Canada, on Jan. 20, 2008.  The Honorable
Justice Robert Mongeon oversees the CCAA case.  Francois-David
Pare, Esq., at Ogilvy Renault, LLP, represents the Company in
the CCAA case.  Ernst & Young Inc. was appointed as Monitor.

On Jan. 21, 2008, Quebecor World (USA) Inc., its U.S.
subsidiary, along with other U.S. affiliates, filed for chapter
11 bankruptcy on Jan. 21, 2008 (Bankr. S.D.N.Y Lead Case No. 08-
10152).  Anthony D. Boccanfuso, Esq., at Arnold & Porter LLP
represents the Debtors in their restructuring efforts.   The
Official Committee of Unsecured Creditors is represented by Akin
Gump Strauss Hauer & Feld LLP.

Based in Corby, Northamptonshire, Quebecor World PLC --
http://www.quebecorworldplc.com/-- is the U.K. subsidiary of
Quebecor World Inc. that specializes in web offset magazines,
catalogues and specialty print products for marketing and
advertising campaigns.  The company employs around 290 people.
Quebecor PLC was placed into administration with Ian Best and
David Duggins of Ernst & Young LLP appointed as joint
administrators effective Jan. 28, 2008.

As of Sept. 30, 2007, Quebecor World's unaudited consolidated
balance sheet showed total assets of $5,554,900,000, total
liabilities of $3,964,800,000, preferred shares of $175,900,000,
and total shareholders' equity of $1,414,200,000.

The Debtors have until Sept. 30, 2008, to file a plan of
reorganization in the chapter 11 case.  The Debtors' CCAA stay
has been extended to Sept. 30, 2008.  (Quebecor World Bankruptcy
News, Issue No. 22; Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000).


QUEBECOR WORLD: Panel Taps Lowenstein Sandler as Conflicts Counsel
------------------------------------------------------------------
The Official Committee of Unsecured Creditors sought the
permission of the U.S. Bankruptcy Court for the Southern District
of New York to retain Lowenstein Sandler PC as its conflicts
counsel, nunc pro tunc June 30, 2008.

Webb Stanley, director of risk management at Abitibi-Consolidated
Sales Corp., and co-chairman of the Creditors' Committee, related
that the Committee's lead counsel, Akin Gump Strauss Hauer &
Feld, LLP, has advised the Committee that certain entities who
may be defendants in avoidance actions to be filed by the Debtors
are or were the firm's clients, thus giving rise to potential or
actual conflicts.

The Committee told the Court that it needs to retain Lowenstein
Sandler to prosecute the Avoidance Actions against those
defendants that Akin Gump represents, as well as with future
matters where Akin Gump may have a conflict.

As the Committee's conflicts counsel,  Lowenstein Sandler is
expected to:

    (a) provide legal advice as necessary with respect to the
        Committee's powers and duties;
   
    (b) assist the Committee in investigating potential claims
        in connection with the Debtors' Chapter 11 cases
        including claims related to the Avoidance Actions;
    
    (c) prepare on behalf of the Committee, as necessary,
        applications, motions, complaints, answers, orders,
        agreements and other legal papers in connection with
        the Chapter 11 cases;
        
    (d) appear in Court and other courts on behalf of the
        Committee to prosecute necessary motions, applications,
        complaints and other pleadings, and otherwise to protect
        the interests of the Debtors' unsecured creditors in
        instances where Akin Gump has a conflict; and
      
    (e) perform other legal services as may be required by the
        Committee.
        
With respect to the Avoidance Actions, Akin Gump and Lowenstein
Sandler will be working to jointly represent the Committee,
Mr. Stanley said.  Akin Gump and Lowenstein Sandler have advised
the Committee that they will coordinate their activities to avoid
any duplication of effort between the two law firms.

Lowenstein Sandler's customary hourly rates are:

     Professional                     Hourly Rates
     ------------                     ------------
     Principals                       $400 - $765
     Senior Counsel                   $310 - $520
     Counsel                          $335 - $405
     Associates                       $220 - $340
     Paralegals and Assistants        $120 - $195

Lowenstein Sandler will also seek reimbursement of actual and
necessary expenses it will incur during its servicing.

Kenneth A. Rosen, a member at Lowenstein Sandler, maintained that
his firm is a "disinterested person" as the term is defined in
Section 101(14) of the Bankruptcy Code, and that it does not
represent any interest adverse to the Debtors or their estates.

The U.S. Trustee has notified the Court that it does not have any
objection to the retention application.
                                                                                                                             
                       About Quebecor World

Based in Montreal, Quebec, Quebecor World Inc. (TSX: IQW) (NYSE:
IQW), -- http://www.quebecorworldinc.com/-- provides market
solutions, including marketing and advertising activities, well
as print solutions to retailers, branded goods companies,
catalogers and to publishers of magazines, books and other
printed media.  It has 127 printing and related facilities
located in North America, Europe, Latin America and Asia.  In
the United States, it has 82 facilities in 30 states, and is
engaged in the printing of books, magazines, directories, retail
inserts, catalogs and direct mail.

The company has operations in Mexico, Brazil, Colombia, Chile,
Peru, Argentina and the British Virgin Islands.

Quebecor World and 53 of its subsidiaries, including those in
Canada, filed a petition under the Companies' Creditors
Arrangement Act before the Superior Court of Quebec, Commercial
Division, in Montreal, Canada, on Jan. 20, 2008.  The Honorable
Justice Robert Mongeon oversees the CCAA case.  Francois-David
Pare, Esq., at Ogilvy Renault, LLP, represents the Company in
the CCAA case.  Ernst & Young Inc. was appointed as Monitor.

On Jan. 21, 2008, Quebecor World (USA) Inc., its U.S.
subsidiary, along with other U.S. affiliates, filed for chapter
11 bankruptcy on Jan. 21, 2008 (Bankr. S.D.N.Y Lead Case No. 08-
10152).  Anthony D. Boccanfuso, Esq., at Arnold & Porter LLP
represents the Debtors in their restructuring efforts.   The
Official Committee of Unsecured Creditors is represented by Akin
Gump Strauss Hauer & Feld LLP.

Based in Corby, Northamptonshire, Quebecor World PLC --
http://www.quebecorworldplc.com/-- is the U.K. subsidiary of
Quebecor World Inc. that specializes in web offset magazines,
catalogues and specialty print products for marketing and
advertising campaigns.  The company employs around 290 people.
Quebecor PLC was placed into administration with Ian Best and
David Duggins of Ernst & Young LLP appointed as joint
administrators effective Jan. 28, 2008.

As of Sept. 30, 2007, Quebecor World's unaudited consolidated
balance sheet showed total assets of $5,554,900,000, total
liabilities of $3,964,800,000, preferred shares of $175,900,000,
and total shareholders' equity of $1,414,200,000.

The Debtors have until Sept. 30, 2008, to file a plan of
reorganization in the chapter 11 case.  The Debtors' CCAA stay
has been extended to Sept. 30, 2008.  (Quebecor World Bankruptcy
News, Issue No. 22; Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000).


RAD RESTAURANTS: Voluntary Chapter 11 Case Summary
--------------------------------------------------
Debtor: RAD Restaurants, Inc.
        501 Red Robin Road
        Virginia Beach, VA 23451

Bankruptcy Case No.: 08-72516

Type of Business: Donald Monosam holds 5%, Ronald A. De Angelis VA
                  holds 63%, Shawn Adams holds 10%, Thomas Elsner
                  holds 10%, and William Cairns holds 12% in the
                  Debtor.

Related Information: William Cairns, president, filed the petition
                     on the Debtor's behalf.

Chapter 11 Petition Date: July 29, 2008

Court: Eastern District of Virginia (Norfolk)

Judge: Stephen C. St. John

Debtor's Counsel: Kelly Megan Barnhart
                  Marcus Crowley & Liberatore, P.C.
                  1435 Crossways Boulevard, Suite 300
                  Chesapeake, VA 23320
                  Tel: (757) 333-4500
                  Fax: 757-333-4501
                  (kbarnhart@mclfirm.com)

Estimated Assets: $1 million to $10 million

Estimated Debts: $500,000 to $1 million

A list of the Debtor's largest unsecured creditors is available
for free at http://bankrupt.com/misc/VAeb08-72516.pdf


RAINBOW VEGAS: Voluntary Chapter 11 Case Summary
------------------------------------------------
Debtor: Rainbow Vegas Hotel, L.P.
        401 W. Imperial Hwy.
        La Habra, CA 90631
        Tel: (714) 459-7514

Bankruptcy Case No.: 08-14464

Chapter 11 Petition Date: July 30, 2008

Court: Central District Of California (Santa Ana)

Debtor's Counsel: Helen R Frazer, Esq.
                  Email: hfrazer@aalrr.com
                  Atkinson Andelson Loya Ruud & Romo
                  17871 Park Plaza Dr. Ste. 200
                  Cerritos, CA 90703
                  Tel: (562) 653-3417
                  Fax: (562) 653-3333
                  http://www.aalrr.com/

Total Assets: $2,600,000

Total Debts:  $2,750,000

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



RESIDENTIAL CAPITAL: GMAC LLC Posts Prelim $2.5BB Prelim Net Loss
-----------------------------------------------------------------
GMAC LLC's wholly owned subsidiary GMAC Financial Services
reported a 2008 second quarter net loss of $2.5 billion, compared
to net income of $293 million in the second quarter of 2007.  
Affecting results in the quarter were a $716 million impairment of
vehicle operating lease assets in the automotive finance business
as a result of declining vehicle sales and lower used vehicle
prices for certain segments, as well as significant losses at
Residential Capital, LLC related to asset sales, valuation
adjustments, and loan loss provisions.  These items were partially
offset by profitable results in the insurance and international
auto finance businesses.

"A soft economic environment and continued volatility in the
mortgage and credit markets have significantly affected results
for the second quarter," GMAC Chief Executive Officer Alvaro G. de
Molina said.  "While conditions such as higher fuel prices and
weaker consumer credit prove to be headwinds, we continue to
aggressively manage through this economic disruption to position
GMAC for longer-term success.

"Despite the current obstacles, we are encouraged by some key wins
such as successfully completing our global refinancing and bond
exchange, preserving long-term ownership of GMAC Bank, and de-
risking the balance sheet at ResCap.  There is still more to do
and the management team is committed to taking the steps needed to
ensure a solid foundation for the company, including continued
realignment and streamlining of the mortgage business and better
optimization of the risk and reward model in auto financing."

                Second Quarter Net Income/(Loss)
                           ($ in millions)

                                   Q208     Q207       Change
                                   ----     ----       ------
    Global Automotive Finance     ($717)    $395      ($1,112)
    Insurance                       135      131            4
    ResCap                       (1,860)    (254)      (1,606)
    Other(1)                        (40)      21          (61)
    Net Income/(Loss)           ($2,482)    $293      ($2,775)


     (1) Includes Commercial Finance operating segment, 21%
         ownership of former commercial mortgage unit and other
         corporate activities.

                        Liquidity and Capital

GMAC's consolidated cash and cash equivalents were $14.3 billion
as of June 30, 2008, down slightly from the cash balance of $14.8
billion at March 31, 2008.  Of these total balances, ResCap's cash
and cash equivalents balance was $6.6 billion at quarter-end, up
from $4.2 billion at March 31, 2008.  The change in consolidated
cash is related to repayment of GMAC and ResCap debt maturities,
offset by new secured funding, lower asset levels and growth in
deposits at GMAC Bank.

In June, GMAC and ResCap announced a comprehensive series of
transactions, which included extending key bank facilities,
increasing the amount of available funding and further enhancing
liquidity positions. The transactions included:

   -- GMAC obtaining a new, globally syndicated $11.4 billion
      secured revolving credit facility with a multi-year maturity
      which steps down to $7.9 billion after two years, and
      renewing the one-year, syndicated commercial paper back-up
      facility, New Center Asset Trust, in the amount of
      $10 billion.

   -- ResCap extending for one year the maturity on substantially
      all of its bilateral bank facilities totaling approximately
      $11.6 billion and obtaining a new $2.5 billion syndicated
      whole loan repurchase facility.

   -- ResCap executing private exchange and cash tender offers for
      U.S. dollar equivalent of $14.0 billion in aggregate
      principal amount of its outstanding debt, thereby reducing
      debt outstanding by $2.9 billion in principal and extending
      maturities.

   -- GMAC providing a $3.5 billion two-year senior secured credit
      facility to ResCap, which includes $750 million of first
      loss protection from General Motors Corp. and Cerberus
      ResCap Financing LLC, an affiliate of FIM Holdings LLC.

   -- Significantly reducing ResCap's tangible net worth covenants
      related to its credit facilities from the previous level of
      $5.4 billion to $250 million (excluding GMAC Bank) with
      consolidated liquidity of $750 million.

During the second quarter, GMAC and certain affiliates of Cerberus
disclosed approximately $2.4 billion of intended actions to
support ResCap's near term liquidity. In addition, GMAC
contributed to ResCap approximately $250 million (principal
amount) of ResCap debt, which was subsequently retired.  In
exchange for the capital contribution, GMAC received additional
shares of ResCap preferred equity equal to the market value of the
debt as of March 31, 2008.  As of June 30, 2008, ResCap's total
equity base was $4.1 billion.

The Federal Deposit Insurance Corporation granted a 10-year
extension of GMAC Bank's current ownership on July 21, 2008.  This
action enables GMAC to strengthen the bank over the long-term,
which is an important source of funding for mortgage and
automotive financing activities.

                    Global Automotive Finance

GMAC's global automotive finance business reported a net loss of
$717 million in the second quarter of 2008, compared to net income
of $395 million in the year-ago period.  Weaker performance was
primarily driven by a $716 million pre-tax impairment on operating
leases in the North American operation, which more than offset
profits in the international business.  In measuring the
accounting impairment, the company was able to consider expected
cash flows from various arrangements with General Motors Corp.,
including approximately $750 million related to the risk-sharing
arrangement; approximately $800 million related to the residual
support program; and approximately $350 of residual-related
settlement payments.  Additional factors affecting results were an
increase in the provision for credit losses due to loss severity
and lower gains on sales.

The North American lease portfolio included approximately
$30 billion in assets as of June 30, 2008 with approximately
$12 billion in sport-utility vehicle leases, $6 billion in truck
leases and $12 billion in car leases.  The impairment of operating
leases resulted from the sharp decline in demand and used vehicle
sale prices for sport-utility vehicles and trucks in the U.S. and
Canada, which has affected GMAC's remarketing proceeds for these
vehicles.  As a result of these market trends, GMAC is taking
steps to reduce the volume of new lease originations in the U.S.
The company will also discontinue the SmartBuy balloon contract
program, suspend all incentivized lease programs in Canada and
increase pricing and returns on other lending activities.  GMAC's
lease portfolio outside of North America has not experienced the
same decrease in market value.

New vehicle financing originations for the second quarter of 2008
decreased to $12.4 billion of retail and lease contracts from
$14.0 billion in the second quarter of 2007, due to lower industry
sales levels in North America.

Credit losses have increased in the second quarter of 2008 to
1.40% of managed retail assets, versus 0.92% in the second quarter
of 2007.  The sharp increase is related to the current trends in
used vehicle prices, which drove higher loss severity.  While
losses trended up, delinquencies decreased in the second quarter
of 2008 to 2.30% of managed retail assets, versus 2.46% in the
prior year period.  The decrease reflects the recent measures
taken to tighten underwriting criteria and increased customer
servicing activities as the U.S. economy remains weak.

                            Insurance

GMAC's insurance business recorded net income of $135 million, up
slightly from net income of $131 million in the second quarter of
2007.  Results primarily reflect a non-recurring tax benefit,
which offset higher weather-related losses.

The insurance investment portfolio was $7.1 billion at June 30,
2008, compared to $7.4 billion at June 30, 2007.  The decrease in
the portfolio is due primarily to the repayment of intercompany
loans related to the funding of the Provident Insurance
acquisition.  The majority of the investment portfolio is in fixed
income securities with less than 10 percent invested in equity
securities.
In July, GMAC's plan to dividend 100 percent of the voting
interest in the insurance business to GMAC's shareholders was
completed.  GMAC continues to hold 100 percent of the economic
interest in GMAC Insurance.  This action was taken in the interest
of maintaining the current financial strength rating and,
therefore, preserving the value of the operation.

                     Real Estate Finance

ResCap reported a net loss of $1.9 billion for the second quarter
of 2008, compared to a net loss of $254 million in the year-ago
period.  Results are primarily attributable to significant losses
from asset sales as ResCap reduced the size and risk of its
balance sheet and higher loan loss provisions due to continued
deterioration in certain European markets.  Partially offsetting
losses was a $647 million gain recognized from ResCap's tender
offer and the retirement of debt.

ResCap continues to implement an aggressive realignment of its
business amid a vastly changing mortgage market, despite the
negative impact to short-term earnings.  Recent actions include
significantly reducing the size and risk of its balance sheet,
originating only mortgages with market liquidity, winding down the
business lending portfolio, leveraging the world-class servicing
platform, and continuing to rationalize the cost base.

ResCap's U.S. residential finance business is beginning to
stabilize as the company reduces balance sheet risk and continues
to realign operations.  While prime conforming loan production
decreased modestly year-over-year with $12.2 billion in the second
quarter of 2008 versus $12.7 billion in the year- ago period,
production of higher-margin government loans increased to
$3.8 billion this quarter compared to $800 million in the second
quarter of 2007.  In addition, operating expense targets were
achieved.

The international mortgage business experienced a decline in net
income in the second quarter related to illiquidity in the global
capital markets and the continued weakening of consumer credit in
key markets.  This drove significant realized and unrealized
losses on loans held for sale.  As a result of the market
environment, ResCap has currently suspended all production outside
of the U.S. with the exception of Canadian insured loans.  The
business lending operations also experienced continued pressure in
the second quarter related to the decline in home sales and
residential real estate values.

                            Outlook

GMAC continues to manage through a softer economic environment and
a global market disruption with significant actions geared toward
achieving longer-term financial health.  Recent actions include:

   -- Stabilizing liquidity by refinancing bank lines, extending
      debt maturities, and preserving long-term ownership of GMAC
      Bank;

   -- Significantly reducing ResCap's balance sheet;

   -- Taking steps to increase pricing and improve returns for all
      automotive leasing and lending activities;

   -- Reducing the volume of new lease originations in the U.S.
      and suspending all incentivized lease programs in Canada;

   -- Executing a plan to preserve the value of the insurance
      business; and

   -- Leveraging the proven servicing platforms in mortgage and
      auto finance to mitigate frequency and severity of losses.

Looking ahead, the company is focused on executing strategies that
restore profitability and longer-term financial health including
improving funding costs, evaluating opportunities to shed non-core
operations, and taking steps that move GMAC toward an independent,
bank-funded lender and servicer.

                         About GMAC LLC

GMAC LLC -- http://www.gmacfs.com/-- formerly General Motors           
Acceptance Corporation, is a global, diversified financial
services company that operates in approximately 40 countries in
automotive finance, real estate finance, insurance and other
commercial businesses.  GMAC was established in 1919 and employs
approximately 26,700 people worldwide.

GMAC Financial Services is in turn wholly owned by GMAC LLC.

Cerberus Capital Management LP led a group of investors that
bought a 51% stake in GMAC LLC from General Motors Corp. in
December 2006 for $14 billion.

                          About ResCap

Headquartered in Minneapolis, Minnesota, Residential Capital LLC
-- http://www.rescapholdings.com/-- is the home mortgage unit
of GMAC Financial Services, which is in turn wholly owned by GMAC
LLC.

                            *     *     *

As disclosed in the Troubled Company Reporter on June 18, 2008,
Moody's Investors Service assigned ratings of Caa2 and Caa3 to
Residential Capital LLC (ResCap)'s senior secured and junior
secured bonds, respectively.  These bonds were issued as part of
ResCap's bond exchange which was completed on June 4, 2008.  The
ratings of ResCap's unsecured senior debt and unsecured
subordinate debt were affirmed at Ca and C, respectively.  Ratings
are under review for downgrade.  Separately the senior unsecured
rating of GMAC LLC was downgraded to B3 from B2 with a negative
outlook.

As disclosed in the Troubled Company Reporter on June 9, 2008,
Fitch Ratings has downgraded Residential Capital LLC's long- and
short-term Issuer Default Ratings to 'D' from 'C' following
completion of the company's distressed debt exchange.  Fitch has
also removed ResCap from Rating Watch Negative, where it was
originally placed on May 2.


RESIDENTIAL CAPITAL: S&P's 'CCC+' Rtng Unmoved by $1.9BB Net Loss
-----------------------------------------------------------------
Standard & Poor's Ratings Services said that Residential Capital
LLC's (CCC+/Negative/C) quarterly results will not affect its
ratings on the company.  Residential Capital LLC reported a
$1.9 billion net loss in second-quarter 2008, driven by losses on
asset sales ($1.4 billion pretax) and higher provision and reserve
charges ($591 million pretax).  

Although Residential Capital LLC has made significant strides in
reducing risk and continues to do so, the scale and scope of the
deterioration in the housing and mortgage markets have overwhelmed
Residential Capital LLC's progress.  

Importantly, the company completed a debt exchange in the quarter
and obtained, restructured, or renewed various debt or liquidity
facilities.  Covenants are consequently more accommodative than
under previous agreements and the company's liquidity position is
stabilized, as no material debt maturities occur until 2010.
Although it results in relief for the company, S&P considers the
transaction a distressed debt exchange.  S&P expects pressures to
continue in the housing and mortgage markets into 2009.  S&P
therefore anticipate Residential Capital LLC continuing to suffer
from high levels of provisioning, impairment charges, and asset
sale losses.  

S&P factored these considerations into our 'CCC+' rating assigned
on July 15, 2008, following the downgrade to 'SD' (selective
default as a result of the above mentioned distressed debt
exchange) on June 4, 2008.


RITCHIE RISK: Disclosure Statement OK'd; Plan Hearing Set Sept. 11
------------------------------------------------------------------
The Hon. Burton Lifland of the U.S. Bankruptcy Court for the
Southern District of New York on Wednesday, July 30, 2008,
approved a disclosure statement explaining the modified
liquidation plan filed by Ritchie Risk-Linked Strategies Trading
(Ireland) Ltd. and Ritchie Risk-Linked Strategies Trading
(Ireland) II Ltd., The Deal's Terry Brennan relates.

The Deal says that distribution to creditors heavily depends on
proceeds from future settlements.

Under the plan, Ritchie I creditor ABN AMRO Bank NV will initially
get an undisclosed amount of cash after the plan's effectivity,
plus some of the proceeds from an ongoing policy rights lawsuit
between the Debtors and co-investor, Coventry First LLC.

Ritchie II's unsecured creditors will be paid from the Coventry
suit proceeds on a pro rated basis.

Judge Lifland has set Sept. 11, 2008, as confirmation hearing on
the plan, according to The Deal.

                        Feud with Coventry

The Deal reports that the Debtors, together with ABN Amro Bank,
and various creditors, are expected to sue Coventry over rights to
secondary life-insurance policies.

Based on the report, the Coventry suit is likely to be presented
before the U.S. District Court for the Southern District of New
York.  The Deal adds that the Conventry suit is expected to be
filed before the bankruptcy judge confirms the Debtors' plan.

The plaintiffs in the Coventry suit are seeking the difference
between $700.0 million for acquired policies and $452.5 million
proceeds of the sale of the policies.

The Troubled Company Reporter related on March 7, 2008, that the
Hon. Denise Cote of the U.S. District Court for the Southern
District of New York rejected a request of Ritchie I and Ritchie
II to reconsider a dismissal of claims of breach of fiduciary
duty, fraud, and RICO violations filed against Coventry in a
February 29 hearing.  Judge Cote granted Coventry First's request
to dismiss these claims filed by the Debtors on the same day.

As a result, all of Ritchie's claims against Coventry have been
dismissed by the District Court.  The only remaining issue to be
resolved is a breach of contract claim.  The TCR said on March 20,
2008, that this allegation has been voluntary withdrawn by the
Debtors and the entire case has now been dismissed.

The Deal notes that in May 2007, Ritchie Capital sued Coventry for
a $2 billion fraud and breach of contract.

                     About Ritchie Risk-Linked

Based in Dublin, Ireland, Ritchie Risk-Linked Strategies Trading
(Ireland) Ltd. and Ritchie Risk-Linked Strategies Trading
(Ireland) II Ltd. -- http://www.ritchiecapital.com/-- are Dublin-
based funds of hedge fund group Ritchie Capital Management.  The
Debtors were formed as special purpose vehicles to invest in life
insurance policies in the life settlement market.

The Debtors filed for chapter 11 protection on June 20, 2007
(Bankr. S.D.N.Y. Case Nos. 07-11906 and 07-11907).  Allison H.
Weiss, Esq., David D. Cleary, Esq., and Lewis S. Rosenbloom, Esq.,
at LeBoeuf, Lamb, Greene & MacRae, LLP represent the Debtors in
their restructuring efforts.  No Official Committee of Unsecured
Creditors has been appointed to date.  When the Debtors filed for
bankruptcy, they listed estimated assets and debts of more than
$100 million.

                       About Ritchie Capital

Headquartered in Lisle, Illinois, Ritchie Capital Management
Ltd. -- http://www.ritchiecapital.com/-- is a private asset
management firm founded in 1997 by former college football
linebacker Thane Ritchie.  The company has offices in New York
and Menlo Park, California.


SEA CONTAINERS: Files Joint Ch. 11 Plan and Disclosure Statement
----------------------------------------------------------------
Sea Containers Caribbean Inc., Sea Containers Ltd., and Sea
Containers Services Ltd. delivered a joint plan of reorganization
and disclosure statement to the U.S. Bankruptcy Court for the
District of Delaware on July 31, 2008.

The Plan contemplates the transfer of the Debtors' direct and
indirect interests in their marine and land container leasing
business to Newco, the entity to which SCL will transfer its
remaining container interests, and certain additional
consideration, in exchange for Newco (i) equity, and (ii) cash,
which will be funded from an exit facility, that will be used
for, among other things, repayment of the Debtors' DIP Facility.

SCL's Container Interests include equity interests in SPC
Holdings, Ltd., and SCL's indirect ownership of Classes A and B
Quotas in GE SeaCo SRL, the joint-venture entity between SCL and
General Electric Capital Corporation.

The Newco Equity, which value derives in large part from the
value of SCL's interests in GE SeaCo, will be subject to
holdbacks and trusts set aside for certain claims, and will be
distributed on a pro rata basis to holders of allowed claims.  By
lending its cash to Reorganized SCL, Newco will receive the Newco
Repatriation Note from Reorganized SCL.  Subject to any priority
claims and the post-emergence costs, the Newco Repatriation Note
will be payable by Reorganized SCL from proceeds received on
account of certain intercompany claims and interests, and other
property of the bankruptcy estates, including any residual value
that reverts to Reorganized SCL from the trusts and reserves
established under the Plan.

Prior to the date of bankruptcy, the Debtors initiated a
restructuring program, and divested themselves of various non-
container-leasing businesses, which included passenger rail
transportation, passenger ferry operation, and hotel operation.  
Subsequent to the bankruptcy filing, they continued their
prepetition restructuring initiatives, including selling Non-
Container-Leasing Businesses during the Chapter 11 cases.  While
SCL has completed a significant portion of the divestitures and
asset sales, under the Plan, the Debtors expect to complete the
sale of their remaining Non-Container-Leasing Businesses and wind-
down and liquidate the remaining Non-Debtor Subsidiaries.

The Debtors anticipate that, under the Plan, the assets of Newco
primarily will consist of the Container Interests, causes of
action relating to Container Interests, and a note issued to
Newco for repayment of certain cash lent by Newco enabling the
Reorganized SCL to repay the balance of the DIP Facility, and
fund Reorganized SCL's wind-down costs.

                    Establishment of Reserves

To ensure that directors from Non-Debtor Subsidiary do not seek
to enforce Intercompany Claims, the Plan contemplates the
establishment of a Non-Debtor Subsidiary Reserve, which will be
held by the Non-Debtor Subsidiary Trustees, and will consist of
certain cash and Newco Equity that will be available to fund
payments to certain currently known creditors of the Non-Debtor
Subsidiaries.  The Plan provides that any residual property other
than Newco Equity from the reserve will revert to the Reorganized
SCL, and, after payment of the Post-Emergence Costs, be used to
pay down the Newco Repatriation Note.

The Plan also contemplates the establishment of the Equalization
Claim Reserve, which will be administered by the Equalization
Trustees, to be used to satisfy any valid Equalization Claim and
certain other employee claims related to equalization of the
Pension Schemes.

Any residual property other than Newco Equity from the
Equalization Claim and Non-Debtor Subsidiary Reserves will revert
to Reorganized SCL, and, after payment of the Post-Emergence
Costs, will be applied to pay down the Newco Repatriation Note.  
Any residual Newco Equity contained in the reserves will be
canceled.

After distribution of Newco Equity, the Reorganized SCL will be
wound-down and dissolved in accordance with Bermuda law, where
SCL was incorporated, and the residual cash realizations, if any,
after payment of the Newco Repatriation Note, will be distributed
to the holders of Allowed Claims.

              U.K. and Bermuda Scheme of Arrangements

In light of SCL being incorporated in Bermuda, and SCSL being
registered under the laws of England & Wales, the Debtors
determined that certain arrangements are necessary to ensure that
their joint plan of reorganization can be implemented under the
laws of Bermuda, and England & Wales.

The Debtors note that the effectiveness of the Bermuda Scheme of
Arrangement and the U.K. Scheme of Arrangement is a condition to
consummation of the Plan.

To recall, after commencement of the Chapter 11 cases, the
Debtors filed winding-up proceedings in Bermuda, and the Supreme
Court of Bermuda appointed John C. McKenna and Gareth H. Hughes
to serve as joint provisional liquidators to monitor the general
progress of the cases.

To implement the Plan with respect to SCL, the Debtors will seek
the approval of the Bermuda Scheme of Arrangement from the
Bermuda Court. The arrangement, together with the Disclosure
Statement and other materials, will be circulated to all of SCL's
known unsecured creditors, except for any employees that have or
may assert claims that give rise to equalization-related employee
claims as these claims will not be compromised under the Bermuda
Arrangement.

The UK. Scheme of Arrangement, along with certain other measures,
will ensure that the Pension Settlement and certain aspects of
the Plan are implemented in the U.K.  The U.K. Arrangement, along
with schemes in relation to certain Non-Debtor Subsidiaries are
necessary as a result of English regulatory requirements.  The
U.K. Arrangement, together with a separate explanatory statement
will be submitted to the High Court of England & Wales for
approval, and will be circulated to creditors, whose claims will
be compromised under the U.K. Arrangement.

Creditors under each of the Bermuda Scheme of Arrangement and the
U.K. Scheme of Arrangement will receive the same treatment they
received under the Plan.  The Bermuda Scheme of Arrangement and
the U.K. Scheme of Arrangement provide for distributions to
Creditors on the same terms as the Plan.

                 Newco Common Stock Certificates

Newco intends to initially issue the Newco Equity in book entry
form only, and will be deposited in the form of common stock
certificates registered in the name of The Depository Trust
Company.  Holders of Allowed Claims may hold their beneficial
interests in the Newco certificates directly through the
Depository, or indirectly through organizations with accounts
with the Depository, a limited-purpose trust company organized
under the laws of the State New York, and a member of the Federal
Reserve System.

         Ongoing Negotiations with Creditors Committees

The Debtors and their two creditors committees -- the Official
Committee of Unsecured Creditors of Sea Containers Ltd., and the
Official Committee of Unsecured Creditors of Sea Containers
Services Ltd. -- continue to discuss certain corporate governance
matters with respect to Newco.  The terms of the corporate
governance will be reflected in the Plan supplement documents to
filed prior to the Plan's confirmation, and certain additional
documents may be prepared to reflect any potential resolutions.  
If confirmation issues are not resolved to the Creditors
Committees' satisfaction, all parties reserve their rights,
including the right to address them at the Confirmation Hearing.

              Pension Settlement and Implementation

Under the Pension Settlement, which is in full and final
satisfaction of all of the Pension Claims against SCL, SCSL, and
the Non-Debtor Subsidiaries, the 1983 Pension Scheme will receive
a $153,800,000 allowed unsecured claim against SCL, and the 1990
Pension Scheme will receive a $40,200,000 allowed unsecured claim
against SCL, plus the establishment of an Equalization Claim
Reserve on account of a $69,000,000 Equalization Claim.

The Debtors expect that the Court will issue an opinion regarding
the Pension Settlement shortly.  They disclose that they have
prepared the Plan and the Disclosure Statement assuming that the
Court will approve the settlement.  The Debtors believe that
consummation of the Plan is highly unlikely absent settlement of
the Pension Claims, and that under that circumstances, projected
recoveries and actual distributions would be materially reduced
from those reflected in the Disclosure Statement.

                       Establishing Newco

Prior to the Plan's effective date, the Debtors will take the
steps necessary to form Newco as a valid and legally existing
Bermudian corporation.  Newco's specific formation documents will
be included in the Plan Supplement.  On the Effective Date, the
Debtors will transfer and assign all rights, title, and interests
in the Container Interests to Newco, free and clear of any claims
or liens.

After its establishment, Newco will issue all Newco Equity,
certificates and other documents as required by the Plan.  The
Plan Administrator will be authorized to, among other things,
distribute Newco Equity on a pro rata basis to holders of Allowed
SCL Other Unsecured Claims and Holders of Allowed Pension Schemes
Unsecured Claims.

The board of directors of Newco will consist of seven members,
provided that no director may be a person, whose appointment is
prohibited under the terms of the GE SeaCo Framework Agreement.  
The Debtors will disclose in the Plan Supplement the identities
and affiliations of any person proposed to serve as a board
member of Newco, and the nature of compensation for any member of
the board, who is an insider.

After the Plan Effective Date, operation, management and control
of Reorganized SCL will be the general responsibility of the
Bermuda Court-appointed joint provisional liquidators, Messrs.
McKenna and Hughes, pursuant to the Bermuda Scheme of Arrangement
and Bermuda law.

Reorganized SCSL will be managed by SCSL liquidators or
administrators, which will take appropriate steps to implement
the U.K. Scheme of Arrangement and liquidate Reorganized SCSL in
accordance with English law.  After the Effective Date,
Reorganized SCC and Non-Debtor Subsidiaries will also be managed
by their liquidators.

                          Exit Facility

On the Effective Date, Newco will enter into an exit facility (i)
to obtain the funds necessary to acquire the Container Interests
from SCL at fair value and to provide a loan to Reorganized SCL
for the satisfaction of the DIP Facility, (ii) to pay expenses in
connection with the Exit Facility, and (c) for working capital
and capital expenditures.

The Debtors note that they have not yet received a commitment
with respect to the Exit Facility but they are engaged in
extensive negotiations with regards the Facility, which terms
remain subject to further negotiation and entry into a binding
term sheet.  

Therefore, although they believe that they will be able to obtain
the Exit Facility on acceptable terms, there can be no assurance
that they will ultimately be able to do so, the Debtors further
noted.  The Exit Facility and the supporting documentation will
be executed prior to the Effective Date.

Confirmation of the Plan will be deemed approval of the Exit
Facility, and authorization for Newco to enter into and execute  
Exit Facility documents.

If the Debtors cannot secure exit financing, the Plan cannot be
confirmed.

         Dissolution of the Non-Debtor Subsidiary Trust

On the earlier of Dec. 31, 2010, or two days after the date
when each Non-Debtor Subsidiary Trust Claimant has received its
payment, the trust will be dissolved, and all the trust's
remaining assets, excluding Newco Equity, will be transferred to
the Reorganized SCL for payment of the Newco Repatriation Note
and other distribution.  All Newco Equity in the trust will be
canceled.

                    Schedules and Deadlines

The Debtors have notified parties-in-interest that the Court will
convene a hearing on Sept. 4, 2008, at 10:00 a.m., to consider
approval of the Disclosure Statement.  Parties have until August
28 to file objections to the Disclosure Statement's approval.

The Debtors further note that the hearing to consider confirmation
of their Plan will be on Nov. 10, 2008, with objections due on
November 1.

A full-text copy of the Debtors' Joint Plan of Reorganization is
available for free at:

               http://researcharchives.com/t/s?305e

A full-text copy of the Debtors' Joint Disclosure Statement is
available for free at:

               http://researcharchives.com/t/s?305f

                       About Sea Containers

Based in Hamilton, Bermuda, Sea Containers Ltd. --
http://www.seacontainers.com/-- provides passenger and freight
transport and marine container leasing. Registered in Bermuda,
the company has regional operating offices in London, Genoa, New
York, Rio de Janeiro, Sydney, and Singapore. The company is
owned almost entirely by United States shareholders and its
primary listing is on the New York Stock Exchange (SCRA and
SCRB) since 1974. On Oct. 3, the company's common shares and
senior notes were suspended from trading on the NYSE and NYSE
Arca after the company's failure to file its 2005 annual report
on Form 10-K and its quarterly reports on Form 10-Q during 2006
with the U.S. Securities and Exchange Commission.

Through its GNER subsidiary, Sea Containers Passenger Transport
operates Britain's fastest railway, the Great North Eastern
Railway, linking England and Scotland. It also conducts ferry
operations, serving Finland and Estonia as well as a commuter
service between New York and New Jersey in the U.S.
Sea Containers Ltd. and two subsidiaries filed for chapter 11
protection on Oct. 15, 2006 (Bankr. D. Del. Case No. 06-11156).
Edmon L. Morton, Esq., Edwin J. Harron, Esq., Robert S. Brady,
Esq., Sean Matthew Beach, Esq., and Sean T. Greecher, Esq., at
Young, Conaway, Stargatt & Taylor, represent the Debtors in
their restructuring efforts.

The Official Committee of Unsecured Creditors and the Financial
Members Sub-Committee of the Official Committee of Unsecured
Creditors of Sea Containers Ltd. is represented by William H.
Sudell, Jr., Esq., and Thomas F. Driscoll, Esq., at Morris,
Nichols, Arsht & Tunnell LLP. Sea Containers Services, Ltd.'s
Official Committee of Unsecured Creditors is represented by
attorneys at Willkie Farr & Gallagher LLP.

In its schedules filed with the Court, Sea Containers disclosed
total assets of $62,400,718 and total liabilities of
$1,545,384,083. (Sea Containers Bankruptcy News, Issue No. 46;
Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000)



SEA CONTAINERS: Discloses Classification & Treatment of Claims
--------------------------------------------------------------
Under the Joint Plan of Reorganization, all claims against the
Sea Containers Ltd. and its debtor-affiliates, other than DIP
Facility Claims, Administrative Claims and Priority Tax Claims,
are classified into five classes:

                            Estimated
Class   Description         Recovery    Plan Treatment
-----   ------------        -------     --------------
    1    Other Secured          100%     Paid in full, in cash
         Claims                          or satisfied in full by
                                         return of collateral

   2A    SCL Other              100%     Paid in full in cash
         Priority Claims

   2B    SCL Other           47%-61%     Pro Rata share of SCL
         Unsecured Claims                unsecured distribution

   2C    SCL Pension         47%-61%     Per Pension Settlement,
         Schemes Claims                  pro rata share of SCL
                                         unsecured distribution

   3A    SCSL Other          45%-60%     Pro Rata share of SCL
         Unsecured Claims                unsecured distribution

   3B    SCSL Pension        47%-61%     Per Pension Settlement,
         Schemes Claims                  pro rata share of SCL
                                         unsecured distribution

   4A    SCC Pension         47%-61%     Per Pension Settlement,
         Schemes Claims                  pro rata share of SCL
                                         unsecured distribution

   4B    SCC Interests          100%     Reinstated under the
                                         Plan

    5    SCL Common Stock        N/A     Not entitled to receive
         Interests                       any distribution or
                                         retain any property

The holders of Allowed Claims in Classes 2B, 2C, 3A, 3B and 4A,
which are impaired, are entitled to vote to accept or reject the
Plan.  Holders of Allowed Claims in Classes 1, 2A and 4B, which
are not impaired, are deemed to accept the Plan and, therefore,
are not entitled to vote on the Plan.  

Holders of claims in Class 5 will not receive any distribution
under the Plan and are, therefore, deemed to reject the Plan.
They are likewise not entitled to vote to accept of reject the
Plan.

The projected recoveries are based on certain assumptions
contained in the Plan's recovery analysis, including an assumed
value of Newco Equity of $323,000,000 to $403,000,000 in
aggregate, based on commonly accepted valuation techniques.

The range of recovery for holder of most Classes of unsecured
claims is based on various assumptions, including total assets
available to pay the holders of approximately $331,000,000 to
$431,000,000, and approximately $705,000,000 of final unsecured
claims against Sea Containers Ltd., including a $69,000,000
Equalization Claim.

The Debtors believe that the Plan is in the best interest of all
of their creditors.  The Debtors recommend that all holders of
claims against, and interests in, the Debtors, whose votes are
being solicited submit ballots to accept the Plan.

                       About Sea Containers

Based in Hamilton, Bermuda, Sea Containers Ltd. --
http://www.seacontainers.com/-- provides passenger and freight
transport and marine container leasing. Registered in Bermuda,
the company has regional operating offices in London, Genoa, New
York, Rio de Janeiro, Sydney, and Singapore. The company is
owned almost entirely by United States shareholders and its
primary listing is on the New York Stock Exchange (SCRA and
SCRB) since 1974. On Oct. 3, the company's common shares and
senior notes were suspended from trading on the NYSE and NYSE
Arca after the company's failure to file its 2005 annual report
on Form 10-K and its quarterly reports on Form 10-Q during 2006
with the U.S. Securities and Exchange Commission.

Through its GNER subsidiary, Sea Containers Passenger Transport
operates Britain's fastest railway, the Great North Eastern
Railway, linking England and Scotland. It also conducts ferry
operations, serving Finland and Estonia as well as a commuter
service between New York and New Jersey in the U.S.
Sea Containers Ltd. and two subsidiaries filed for chapter 11
protection on Oct. 15, 2006 (Bankr. D. Del. Case No. 06-11156).
Edmon L. Morton, Esq., Edwin J. Harron, Esq., Robert S. Brady,
Esq., Sean Matthew Beach, Esq., and Sean T. Greecher, Esq., at
Young, Conaway, Stargatt & Taylor, represent the Debtors in
their restructuring efforts.

The Official Committee of Unsecured Creditors and the Financial
Members Sub-Committee of the Official Committee of Unsecured
Creditors of Sea Containers Ltd. is represented by William H.
Sudell, Jr., Esq., and Thomas F. Driscoll, Esq., at Morris,
Nichols, Arsht & Tunnell LLP. Sea Containers Services, Ltd.'s
Official Committee of Unsecured Creditors is represented by
attorneys at Willkie Farr & Gallagher LLP.

In its schedules filed with the Court, Sea Containers disclosed
total assets of $62,400,718 and total liabilities of
$1,545,384,083. (Sea Containers Bankruptcy News, Issue No. 46;
Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000)


SEMGROUP LP: Taps Richards Layton as Bankruptcy Co-Counsel
----------------------------------------------------------
SemGroup L.P. sought authority from the U.S. Bankruptcy Court for
the District of Delaware to employ Richards, Layton & Finger,
P.A., as their bankruptcy co-counsel under an evergreen retainer,
nunc pro tunc to the bankruptcy filing.

Richards Layton had rendered legal services and advice to the
Debtors since July 15, 2008, and has acquired knowledge of the
Debtors' businesses, financial affairs, and capital structure,
Terrence Ronan, SemGroup, L.P.'s acting president and chief
executive officer, relates.  The Debtors selected Richards Layton
because of its experience and knowledge in the rights of debtors
and creditors, and Chapter 11 business reorganizations.

As the Debtors' co-counsel, Richards Layton will:

   (a) advise the Debtors of their rights, powers and duties
       as debtors and debtors-in-possession;

   (b) take all necessary action to protect and preserve the
       Debtors' estates, including the prosecution on behalf of
       the Debtors' estates, the defense of any actions commenced
       against those estates, negotiation of disputes, and the
       preparation of objections to  claims filed against the
       estates;

   (c) prepare, on the Debtors' behalf, necessary motions,
       applications, answers, orders, reports and other legal
       papers necessary to the administration of the
       Debtors' estates; and

   (d) perform other necessary legal services in connection with
       the Debtors' Chapter 11 cases.

The Debtors will pay these Richards Layton professionals
according to their customary hourly rates:

     Professional                       Hourly Rate
     ------------                       -----------
     Mark D. Collins                       $600      
     John H. Knight                        $550
     Maris J. Finnegan                     $300
     L. Katherine Good                     $275
     Ann Jerominski                        $185

The Debtors will also reimburse Richards Layton for any necessary
out-of-pocket expenses the firm incurs while providing services
for the Debtors.  Prior to the bankruptcy filing, the Debtors had
advanced $175,000 to Richards Layton as an evergreen retainer.

John H. Knight, Esq., director at Richards Layton, stated that
the members, counsel and associates of Richards Layton:

   -- do not have any connection with any of the Debtors, their
      affiliates, their creditors, or any other party in interest
      and their respective attorneys or accountants, the U.S.
      Trustee, the U.S. District Court for the District of
      Delaware, or any person employed in the said offices;

   -- are "disinterested persons" as the term is defined under
      Section 101(14) of the Bankruptcy Code; and

   -- do not represent any interest adverse to the Debtors and
      their estates.
                                                                                                                            
                        About SemGroup L.P.

SemGroup L.P. -- http://www.semgrouplp.com/-- is a midstream       
service company providing the energy industry means to move
products from the wellhead to the wholesale marketplace.  SemGroup
provides diversified services for end users and consumers of crude
oil, natural gas, natural gas liquids, refined products and
asphalt.  Services include purchasing, selling, processing,
transporting, terminaling and storing energy.  SemGroup serves
customers in the United States, Canada, Mexico, Wales, Switzerland
and Vietnam.

SemGroup L.P. and its debtor-affiliates filed for Chapter 11  
protection on July 22, 2008 (Bankr. D. Del. Lead Case No. 08-
11525).  These represent the Debtors' restructuring efforts: John  
H. Knight, Esq., L. Katherine Good, Esq. and Mark D. Collins, Esq.  
at Richards Layton & Finger; Harvey R. Miller, Esq., Michael P.  
Kessler, Esq. and Sherri L. Toub, Esq. at Weil, Gotshal & Manges  
LLP; and Martin A. Sosland, Esq. and Sylvia A. Mayer, Esq. at Weil  
Gotshal & Manges LLP.  Kurtzman Carson Consultants L.L.C. is the  
Debtors' claims agent.  The Debtors' financial advisors are The  
Blackstone Group L.P. and A.P. Services LLC.  Margot B.  
Schonholtz, Esq., and Scott D. Talmadge, Esq., at Kaye Scholer  
LLP; and Laurie Selber Silverstein, Esq., at Potter Anderson &  
Corroon LLP, represent the Debtors' prepetition lenders.

SemGroup L.P.'s affiliates, SemCAMS ULC and SemCanada Crude
Company, sought protection under the Companies' Creditors
Arrangement Act (Canada) on July 22, 2008.  Ernst & Young, Inc.  
The CCAA stay expires on Aug. 20, 2008.

SemGroup L.P.'s consolidated, unaudited financial conditions as of  
June 30, 2007, showed $5,429,038,000 in total assets and  
$5,033,214,000 in total debts.  In their petition, they showed  
more than $1,000,000,000 in estimated total assets and more than  
$1,000,000,000 in total debts.

(SemGoup Bankruptcy News, Issue No. 4; Bankruptcy Creditors'  
Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000).    

                          *     *    *

On July 25, 2008, the Troubled Company Reported that Fitch Ratings   
downgraded the ratings of SemGroup, L.P., SemCrude L.P, and  
SemCAMS Midstream Co. and simultaneously withdrawn all ratings.   
The withdrawn ratings include Issuer default Rating D assigned to  
SemGroup, L.P., SemCrude, L.P., and SemCAMS Midstream Co.  Fitch  
Ratings has downgraded, removed from Rating Watch Negative,  
and simultaneously withdrawn (a) SemGroup, L.P.'s Senior unsecured  
to 'C' from'B/RR3'; (b) SemCrude L.P.'s Senior secured working  
capital facility to 'CCC' from 'BB-/RR1'; Senior secured revolving  
credit facility to 'CC' from 'B+/RR1'; and Senior secured term  
loan B to 'CC' from 'B+/RR1'; and (c) SemCAMS Midstream Co.  
(SemCAMS) Senior secured working capital facility to 'CCC' from  
'BB-/RR1'; Senior secured revolving credit facility to 'CC' from  
'B+/RR1'; and Senior secured term loan B to 'CC' from 'B+/RR1'.

Also, Moody's Investors Service downgraded SemGroup, L.P.'s  
Corporate Family Rating to Ca from Caa2, its Probability of  
Default Rating to D from Caa3, its senior unsecured rating to C  
(LGD 5; 86%) from Ca (LGD 4; 69%), and its first secured bank  
facilities to Caa3 (LGD 3; 38%) from B3 (LGD 2; 21%).  These  
actions affect rated cross guaranteed debt at parent SemGroup and  
its subsidiaries SemCams Holding Company and SemCrude, L.P.

Further, Fitch Ratings lowered the Issuer Default Ratings of  
SemGroup, L.P., SemCrude L.P, and SemCAMS Midstream Co. to 'D'  
following the bankruptcy petition by SemGroup and most of units on  
July 22, 2008.  These ratings are removed from Rating Watch where  
they were placed on July 17, 2008.  The bank facility and  
securities ratings of SemGroup and units remain on Rating Watch  
Negative pending a review of the bankruptcy court petition.


SEMGROUP LP: Wants to Hire Hall Estill as Special Counsel
---------------------------------------------------------
SemGroup L.P. sought authority from the U.S. Bankruptcy Court for
the District of Delaware to employ Hall, Estill, Hardwick, Gable,
Golden & Nelson, P.C., as special corporate and litigation
counsel, nunc pro tunc to the bankruptcy filing.

The Debtors selected Hall Estill as special corporate and
litigation counsel because of the firm's considerable experience
in representing the Debtors in their general corporate,
transactional and litigation matters.

As the Debtors' counsel, Hall Estill will represent the Debtors
with respect to their organizational structure, general business
issues and governance issues, past, pending and future
transactions and litigation, intercompany relationships and
transactions, domestic and international patent, trademark,
licensing and other intellectual property matters, tax and ERISA
matters, and other regulatory and investigatory matters.

The Debtors will pay the firm's professionals according to their
customary hourly rates:

     Professional                       Hourly Rate
     ------------                       -----------
     Michael D. Cooke                      $375      
     W. Deke Canada                        $230
     Genevieve L. Neff                     $200
     Matthew T. Crook                      $200
     Kenneth L. Hunt                       $350
     Adam D. Grandon                       $180
     Kyle D. Freeman                       $230
     B. Kenneth Cox, Jr.                   $310
     Richard Edmondson                     $350
     Mark K. Blongewicz                    $310
     Michael T. Keester                    $310
     John F. Hiel, III                     $230
     Michael D. Graves                     $375
     Thomas A. Creekmore III               $350
     Steven W. Soule                       $285
     Pamela H. Goldberg                    $280
     Anthony J. Jorgensen                  $245
     James M. Reed                         $335
     Stuart E. Van De Wiele                $225
     Bonnie N. Hackler                     $230
     John T Richer                         $200

The Hall Estill legal assistants charge between $130 to $140 per
hour.  Prior to the bankruptcy filing, the Debtors paid Hall
Estill a retainer deposit of $200,000 for fees and $35,000 for
expenses in connection with the firm's representation of the
Debtors.

Michael D. Cooke, Esq., at Hall Estill, assured the Court that
the members, counsel and associates of his firm are "disinterested
persons" as the term is defined under Section 101(14) of the
Bankruptcy Code.
                                                                                                                            
                        About SemGroup L.P.

SemGroup L.P. -- http://www.semgrouplp.com/-- is a midstream       
service company providing the energy industry means to move
products from the wellhead to the wholesale marketplace.  SemGroup
provides diversified services for end users and consumers of crude
oil, natural gas, natural gas liquids, refined products and
asphalt.  Services include purchasing, selling, processing,
transporting, terminaling and storing energy.  SemGroup serves
customers in the United States, Canada, Mexico, Wales, Switzerland
and Vietnam.

SemGroup L.P. and its debtor affiliates filed for Chapter 11  
protection on July 22, 2008 (Bankr. D. Del. Lead Case No. 08-
11525).  These represent the Debtors' restructuring efforts: John  
H. Knight, Esq., L. Katherine Good, Esq. and Mark D. Collins, Esq.  
at Richards Layton & Finger; Harvey R. Miller, Esq., Michael P.  
Kessler, Esq. and Sherri L. Toub, Esq. at Weil, Gotshal & Manges  
LLP; and Martin A. Sosland, Esq. and Sylvia A. Mayer, Esq. at Weil  
Gotshal & Manges LLP.  Kurtzman Carson Consultants L.L.C. is the  
Debtors' claims agent.  The Debtors' financial advisors are The  
Blackstone Group L.P. and A.P. Services LLC.  Margot B.  
Schonholtz, Esq., and Scott D. Talmadge, Esq., at Kaye Scholer  
LLP; and Laurie Selber Silverstein, Esq., at Potter Anderson &  
Corroon LLP, represent the Debtors' prepetition lenders.

SemGroup L.P.'s affiliates, SemCAMS ULC and SemCanada Crude
Company, sought protection under the Companies' Creditors
Arrangement Act (Canada) on July 22, 2008.  Ernst & Young, Inc.  
The CCAA stay expires on Aug. 20, 2008.

SemGroup L.P.'s consolidated, unaudited financial conditions as of  
June 30, 2007, showed $5,429,038,000 in total assets and  
$5,033,214,000 in total debts.  In their petition, they showed  
more than $1,000,000,000 in estimated total assets and more than  
$1,000,000,000 in total debts.

(SemGoup Bankruptcy News, Issue No. 4; Bankruptcy Creditors'  
Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000).    

                          *     *    *

On July 25, 2008, the Troubled Company Reported that Fitch Ratings   
downgraded the ratings of SemGroup, L.P., SemCrude L.P, and  
SemCAMS Midstream Co. and simultaneously withdrawn all ratings.   
The withdrawn ratings include Issuer default Rating D assigned to  
SemGroup, L.P., SemCrude, L.P., and SemCAMS Midstream Co.  Fitch  
Ratings has downgraded, removed from Rating Watch Negative,  
and simultaneously withdrawn (a) SemGroup, L.P.'s Senior unsecured  
to 'C' from'B/RR3'; (b) SemCrude L.P.'s Senior secured working  
capital facility to 'CCC' from 'BB-/RR1'; Senior secured revolving  
credit facility to 'CC' from 'B+/RR1'; and Senior secured term  
loan B to 'CC' from 'B+/RR1'; and (c) SemCAMS Midstream Co.  
(SemCAMS) Senior secured working capital facility to 'CCC' from  
'BB-/RR1'; Senior secured revolving credit facility to 'CC' from  
'B+/RR1'; and Senior secured term loan B to 'CC' from 'B+/RR1'.

Also, Moody's Investors Service downgraded SemGroup, L.P.'s  
Corporate Family Rating to Ca from Caa2, its Probability of  
Default Rating to D from Caa3, its senior unsecured rating to C  
(LGD 5; 86%) from Ca (LGD 4; 69%), and its first secured bank  
facilities to Caa3 (LGD 3; 38%) from B3 (LGD 2; 21%).  These  
actions affect rated cross guaranteed debt at parent SemGroup and  
its subsidiaries SemCams Holding Company and SemCrude, L.P.

Further, Fitch Ratings lowered the Issuer Default Ratings of  
SemGroup, L.P., SemCrude L.P, and SemCAMS Midstream Co. to 'D'  
following the bankruptcy petition by SemGroup and most of units on  
July 22, 2008.  These ratings are removed from Rating Watch where  
they were placed on July 17, 2008.  The bank facility and  
securities ratings of SemGroup and units remain on Rating Watch  
Negative pending a review of the bankruptcy court petition.


SEMGROUP LP: Organizational Meeting to Form Panel Held August 1
---------------------------------------------------------------
An organization meeting for the purpose of forming an official
committee of unsecured creditors in the Chapter 11 cases of
SemGroup, L.P., and its 24 debtor affiliates was held on
August 1, 2008, at 1:00 p.m., at The Double Tree Hotel, located
at 700 King Street, Salon K, in Wilmington, Delaware.

The sole purpose of the meeting was to form a committee or
committees of unsecured creditors in the Debtors' cases.

No committee has been appointed as of press time.

The organizational meeting is not the meeting of creditors
pursuant to Section 341 of the Bankruptcy Code.  A representative
of the Debtor, however, may attend the Organizational Meeting,
and provide background information regarding the bankruptcy
cases.

                        About SemGroup L.P.

SemGroup L.P. -- http://www.semgrouplp.com/-- is a midstream       
service company providing the energy industry means to move
products from the wellhead to the wholesale marketplace.  SemGroup
provides diversified services for end users and consumers of crude
oil, natural gas, natural gas liquids, refined products and
asphalt.  Services include purchasing, selling, processing,
transporting, terminaling and storing energy.  SemGroup serves
customers in the United States, Canada, Mexico, Wales, Switzerland
and Vietnam.

SemGroup L.P. and its debtor-affiliates filed for Chapter 11  
protection on July 22, 2008 (Bankr. D. Del. Lead Case No. 08-
11525).  These represent the Debtors' restructuring efforts: John  
H. Knight, Esq., L. Katherine Good, Esq. and Mark D. Collins, Esq.  
at Richards Layton & Finger; Harvey R. Miller, Esq., Michael P.  
Kessler, Esq. and Sherri L. Toub, Esq. at Weil, Gotshal & Manges  
LLP; and Martin A. Sosland, Esq. and Sylvia A. Mayer, Esq. at Weil  
Gotshal & Manges LLP.  Kurtzman Carson Consultants L.L.C. is the  
Debtors' claims agent.  The Debtors' financial advisors are The  
Blackstone Group L.P. and A.P. Services LLC.  Margot B.  
Schonholtz, Esq., and Scott D. Talmadge, Esq., at Kaye Scholer  
LLP; and Laurie Selber Silverstein, Esq., at Potter Anderson &  
Corroon LLP, represent the Debtors' prepetition lenders.

SemGroup L.P.'s affiliates, SemCAMS ULC and SemCanada Crude
Company, sought protection under the Companies' Creditors
Arrangement Act (Canada) on July 22, 2008.  Ernst & Young, Inc.  
The CCAA stay expires on Aug. 20, 2008.

SemGroup L.P.'s consolidated, unaudited financial conditions as of  
June 30, 2007, showed $5,429,038,000 in total assets and  
$5,033,214,000 in total debts.  In their petition, they showed  
more than $1,000,000,000 in estimated total assets and more than  
$1,000,000,000 in total debts.

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

                          *     *    *

On July 25, 2008, the Troubled Company Reported that Fitch Ratings   
downgraded the ratings of SemGroup, L.P., SemCrude L.P, and  
SemCAMS Midstream Co. and simultaneously withdrawn all ratings.   
The withdrawn ratings include Issuer default Rating D assigned to  
SemGroup, L.P., SemCrude, L.P., and SemCAMS Midstream Co.  Fitch  
Ratings has downgraded, removed from Rating Watch Negative,  
and simultaneously withdrawn (a) SemGroup, L.P.'s Senior unsecured  
to 'C' from'B/RR3'; (b) SemCrude L.P.'s Senior secured working  
capital facility to 'CCC' from 'BB-/RR1'; Senior secured revolving  
credit facility to 'CC' from 'B+/RR1'; and Senior secured term  
loan B to 'CC' from 'B+/RR1'; and (c) SemCAMS Midstream Co.  
(SemCAMS) Senior secured working capital facility to 'CCC' from  
'BB-/RR1'; Senior secured revolving credit facility to 'CC' from  
'B+/RR1'; and Senior secured term loan B to 'CC' from 'B+/RR1'.

Also, Moody's Investors Service downgraded SemGroup, L.P.'s  
Corporate Family Rating to Ca from Caa2, its Probability of  
Default Rating to D from Caa3, its senior unsecured rating to C  
(LGD 5; 86%) from Ca (LGD 4; 69%), and its first secured bank  
facilities to Caa3 (LGD 3; 38%) from B3 (LGD 2; 21%).  These  
actions affect rated cross guaranteed debt at parent SemGroup and  
its subsidiaries SemCams Holding Company and SemCrude, L.P.

Further, Fitch Ratings lowered the Issuer Default Ratings of  
SemGroup, L.P., SemCrude L.P, and SemCAMS Midstream Co. to 'D'  
following the bankruptcy petition by SemGroup and most of units on  
July 22, 2008.  These ratings are removed from Rating Watch where  
they were placed on July 17, 2008.  The bank facility and  
securities ratings of SemGroup and units remain on Rating Watch  
Negative pending a review of the bankruptcy court petition.


SOMERSET MEDICAL: Moody's Affirms Ba2 Rating on Series 2003 Bonds
-----------------------------------------------------------------
Moody's Investors Service has affirmed the Ba2 rating assigned to
Somerset Medical Center's outstanding Series 2003 bonds issued by
the New Jersey Health Care Facilities Financing Authority.  This
update is in conjunction with annual surveillance and the
refinancing out SMC's outstanding Series A (1994) bonds ($27.2
million) with approximately $26 million of VRDO bonds supported by
a letter of credit from TD Bank, N.A. Moody's Investors Service
has assigned a rating of Aa2/VMIG 1 to the Series 2008 (Variable
Rate) Bonds based upon the letter of credit (LOC) provided by TD
Bank, N.A.; the structure and legal protections of the
transaction, which ensures timely payment of debt service and
purchase price to bondholders; and Moody's evaluation of the
credit quality of the bank issuing the letter of credit.  Moody's
currently rates TD Bank, N.A. Aa2 for its long-term obligations
and Prime-1 for its short-term obligations.  The rating outlook on
TD Bank N.A. is stable.

The affirmation of the rating and negative outlook, despite a very
recent trend of improved financial performance and the addition of
$10 million to its balance sheet from the sale of its cancer
center, incorporates the introduction of put risk associated with
the Series 2008 bonds combined with the weak liquidity of this
single site hospital located in Somerville, NJ.

LEGAL SECURITY: First mortgage on the medical center physical
plant; Gross revenues pledge; Debt Service Reserve Fund. Cross
default provisions for the 2008 bonds and 2003 bonds. Bank
covenants match bond covenants for days cash on hand test and MADS
coverage when consultant is required. However, an inability to
meet the 1.0 times coverage test is an event of default under the
letter of credit and an immediate termination of the bonds.

INTEREST RATE DERIVATIVES: None following refunding of Series A
bonds.

STRENGTHS

*Favorable geographic location and demographics in affluent
Somerset County contribute to its dominant inpatient market share
as the only hospital in the County

*A modern and attractive physical plant that has been fully
upgraded and should require modest routine capital investment
through the intermediate term. Service enhancements have been made
to the oncology program (new cancer center opened during 2006),
sleep center program (largest program in tri-state area), wound
care (including hyperbaric treatment), dedicated stroke unit,
addition of intensivists to staff, and expansion of inpatient
behavioral health service.

*Sale of its cancer center retires $15 million of debt and adds
$10 million of cash to balance sheet, although a lease of this
space from the new owner will result in similar annual expenses.

*Renegotiated managed care contracts included sizable rate
increases that bring contracts to market rates over time.

*Recent closure of Muhlenberg Hospital, located in the secondary
service area, should provide for additional needed volume to SMC
and help cover costs. Credentialing applications from current
Muhlenberg physicians have increased.

CHALLENGES

*Inability to take advantage of its attractive location and
position as the only hospital in Somerset County. Strategic
initiatives and service line enhancements have been slow to
demonstrate results that favorably impact bottom line performance.
Competitive ambulatory centers opening in its market that are
impacting financial performance and redirecting ambulatory
surgical volume from SMC.

*Historical inability to meet budgeted expectation from core
operations due to annual extraordinary and unanticipated factors
each year.

*Inpatient volume decline of 3.3% in FY2007 offsets the improved
revenue generated from renegotiated managed care contracts.
Outpatient surgical volume declined by 17% in 2007 following the
opening of a competing same day surgery center located nearby and
surgeons who have chosen to be out of network.

*Historically inconsistent and modest operating performance and
cashflow culminated in large, $10 million operating loss for
FY2007 (before investment income of $2.5 million) and 45%
reduction in operating cashflow. Pressing need to increase
cashflow to offset debt service requirements and MADS coverage.

*Leveraged balance sheet highlighted by weak and declining days of
cash on hand (43 days at FYE2007) required consultant to be hired
since cash covenant (50 days of cash on hand) and MADS coverage
test (1.1 times) not met; cash to debt is very weak at 30.1% (pro
forma) and cash to puttable debt is a weak 1.3 times with modest
excess liquidity.

RECENT DEVELOPMENTS/RESULTS

Fiscal 2007 was completed with a $10 million operating deficit
before investment income of $2.5 million, which includes $6
million of additional third party reserves taken during the year.
Nonetheless, even if these reserves were excluded, the performance
in 2007 would mark a low point in operating performance over the
last five years and materially increased from operating losses
that hovered around $1.4 million. Volume is down materially on
both an inpatient admissions (3.32% decline) and same day surgical
volume (17.7% decline) compared to the prior year, contributing to
the 41.7% decline in total cashflow for fiscal 2007. Volume has
always been a critical issue for SMC given the high capital
structure of the facility and the leveraged balance sheet it must
support. Moody's and management expected better financial results
in FY 2007 as a result of growth in clinical programs, physician
development and the opening of emergency room that were expected
to sufficiently offset the impact of a new ambulatory surgery
center that opened in April 2007. Emergency room visits were up
but did not translate into admissions as more of the volume was
non-acute and ambulatory and did not ultimately require
hospitalization. Increasing bad debt expense has also hindered
improvement to financial performance. The volume declines were not
offset by the double digit rate increases that went into effect
during FY 2007 from United/Oxford, Aetna and Blue Cross. Surgical
volume has also been impacted by SMC's surgeons who chose to
remain out of network during the year. Outpatient volumes are
expected to be further impacted during 2008 when another same day
surgery center opens that is owned by SMC's neurosurgeons and
orthopedists opens. Volume declines as a result of that facility's
opening can be expected from the southern part of the service area
which management expects to impact providers in New Brunswick more
than at SMC due to the proximity to that facility.

SMC is expecting to benefit from the imminent closure of
Muhlenberg Regional Medical Center (MRMC). Already, applications
to join its staff have increased from current Muhlenberg
physicians and MRMC's chief operating officer has been hired by
SMC to recruit additional physicians and aid in their transition
to SMC. While SMC does not expect to gain the bulk of MRMC's 9,500
admissions, it has budgeted 500 admissions from MRMC to SMC
beginning in the second half of the calendar year and expects 20-
30 of MRMC's physicians to become active admitters to SMC. SMC
also owns the ambulance service that operates in MRMC's primary
market which should result in increased transports from that
service area to SMC.

The sale of SMC's cancer center for $25 million to a health care
REIT in a sale/leaseback transaction will reduce debt and add a
much needed $10 million to unrestricted cash. Annual expenses will
increase by $300 thousand but the reduction in debt improves some
key debt ratios. Balance sheet measures have been weakening over
the last two years, with cash declining to $26.5 million (43 days)
from $32.8 million (including Foundation) at FYE 2006 due to
operating performance, causing cash days to decline materially
from 59.7 days at FYE06. SMC did not meet its 50 days cash on hand
covenant at year end 2007 or its 1.10 times MADs coverage test and
a consultant has been hired. The addition of $10 million from the
proceeds of the cancer center improves days cash on hand to 60
days (pro forma) and improves cash-to-debt to 30.1% from a weak
19.4% at FYE07 when excluding the cancer center debt and adding
the cash to the balance sheet. By refinancing its Series A bonds,
SMC will be terminating its swaps, a favorable credit factor.

The Letter of Credit from TD Bank , N.A. expires on August 7, 2013
unless extended and is sized for full principal plus 36 days of
interest at the maximum rate applicable to the Bonds (12%). A debt
service coverage ratio of 1.25 times and 50 days of cash on hand
are the financial covenants included in the LOC. Failure to meet
these tests is an event of default. Any purchase draw on the
letter of credit must be repaid within 367 days of the draw date.
Material adverse event covenant has been excluded as an event of
default.
Outlook

The negative outlook, despite the positive impact of the sale of
the cancer center on the balance sheet and early indications that
operating performance is improving, is based on our need for the
medical center to meet its budget, and incorporates the potential
impact of put risk included in the 2008 bonds. The outlook will
not be revised to stable until liquidity increases to higher
levels and is maintained.

What could change the rating--UP

Trend of improving operating performance; balance sheet
improvement that is sustained; trend of meeting expectations

What could change the rating--DOWN

Additional debt, inability to meet budgeted expectations, any
reduction in liquidity, inability to reverse trend of operating
deficits

KEY INDICATORS

Assumptions & Adjustments:

-Based on financial statements for Somerset Medical Center

-First number reflects audit year ended December 31, 2006

-Second number reflects audit year December 31, 2007

-Investment returns normalized at 6% unless otherwise noted

*Inpatient admissions: 16,413; 15,868

*Total operating revenues: $211.7 million; $224.4 million

*Moody's-adjusted net revenue available for debt service: $19.8
million; $11.5 million

*Total debt outstanding: $141.6 million; $136.2 million

*Maximum annual debt service (MADS): $12.142 million

*MADS Coverage with reported investment income: 1.58 times; 1.0
times

*Moody's-adjusted MADS Coverage with normalized investment income:
1.63 times; 0.93 times

*Debt-to-cash flow: 10.62 times; 29.15 times

*Days cash on hand: 59.7 days; 43.6 days

*Cash-to-debt: 23.2%; 19.4%

*Operating margin: (0.7) %; (4.5)%

*Operating cash flow margin: 8.3%; 4.3%

RATED DEBT (debt outstanding as of July 23, 2008)

Series 2003, $81.39 million outstanding, Ba2 rating

Series 2008, $26.0 million (preliminary), Ba2 rating


STANFIELD/RMF: Moody's Hikes 3 Classes of Notes to Baa2 from B1
---------------------------------------------------------------
Moody's Investors Service has upgraded these notes issued by
Stanfield / RMF Transatlantic CDO Ltd.:

Class Description: U.S.$15,000,000 Class C Floating Rate Notes Due
2015

Prior Rating: A2

Current Rating: Aaa

Class Description: U.S.$19,500,000 Class D-1 Floating Rate Notes
Due 2015

Prior Rating: B1

Current Rating: Baa2

Class Description: U.S.$9,000,000 Class D-2 Floating Rate Target
Yield Notes Due 2015

Prior Rating: B1

Current Rating: Baa2

Class Description: U.S.$5,000,000 Class D-3 Fixed Rate Target
Yield Notes Due 2015

Prior Rating: B1

Current Rating: Baa2

In addition, Moody's has withdrawn the ratings on the following
notes:

Class Description: U.S.$512,000,000 Class A-1 Floating Rate Notes
Due 2015

Prior Rating: Aaa

Current Rating: WR

Class Description: U.S.$50,000,000 Class A-2 Fixed Rate Notes Due
2015

Prior Rating: Aaa

Current Rating: WR

Class Description: U.S.$23,000,000 Class A-3 Floating Rate Notes
Due 2015

Prior Rating: Aaa

Current Rating: WR

Class Description: U.S.$36,500,000 Class B-1 Floating Rate Notes
Due 2015

Prior Rating: Aaa

Current Rating: WR

Class Description: U.S.$20,000,000 Class B-2 Fixed Rate Notes Due
2015

Prior Rating: Aaa

Current Rating: WR

According to Moody's, these rating actions are as a result of
ongoing delevering of the transaction.


SUN-TIMES MEDIA: Polar Securities Declares 10.7% Equity Stake
-------------------------------------------------------------
Polar Securities Inc. beneficially owns 8,768,163 shares of the
Sun-Times Media Group Inc. common stock, constituting
approximately 10.7% of the shares of the common stock.

South Pole Capital Master Fund beneficially owns 3,676,500 shares
of the Sun-Times common stock, constituting approximately 4.4% of
the Shares of the common stock outstanding.

South Pole Capital LP beneficially owns 5,091,663 shares of the
Sun-Times common stock, constituting approximately 6.2% of the
Shares of the common stock outstanding.

Polar Fund Management III Inc. beneficially owns 5,091,663 shares
of the Sun-Times common stock, constituting approximately 6.2% of
the shares of the common stock outstanding.

Headquartered in Chicago, Sun-Times Media Group Inc. (NYSE: SVN) -
- http://www.thesuntimesgroup.com/-- is dedicated to being the     
premier source of local news and information for the greater
Chicago area.  Its media properties include the Chicago Sun-Times
and Suntimes.com as well as newspapers and Web sites serving more
than 200 communities throughout the Chicago area.

Based in Toronto, Ontario, Hollinger Inc. (TSX: HLG.C)(TSX:
HLG.PR.B) -- http://www.hollingerinc.com/-- which owns   
approximately 70.1% voting and 19.7% equity interest in Sun-Times
Media Group Inc., along with two affiliates, 4322525 Canada Inc.
and Sugra Limited, filed separate Chapter 15 petitions on Aug. 1,
2007 (Bankr. D. Del. Case Nos. 07-11029 through 07-11031).  
Hollinger also initiated Court-supervised restructuring under the
Companies' Creditors Arrangement Act (Canada) on the same day.

As reported in the Troubled Company Reporter on April 3, 2008,
Sun-Times Media Group Inc.'s consolidated balance sheet at
Dec. 31, 2007, showed $791.6 million in total assets and
$866.6 million in total liabilities, resulting in a total
stockholders' deficit of $75.0 million.


TANSY LTD: Voluntary Chapter 11 Case Summary
--------------------------------------------
Debtor: Tansy Ltd.
        P.O. Box 50556
        Santa Barbara, CA 93150

Bankruptcy Case No.: 08-11766

Related Information: Malcolm Levinthal, vice president and
                     secretary, filed the petition on the Debtor's
                     behalf.

Chapter 11 Petition Date: July 28, 2008

Court: Central District Of California (Santa Barbara)

Judge: Robin Riblet

Debtor's Counsel: Stephen M. Feldman, Esq.
                  15915 Ventura Boulevard Suite 201
                  Encino, CA 91436
                  Tel: (818) 907-0334

Estimated Assets: $1 million to $10 million

Estimated Debts: $500,000 to $1 million

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


THOMAS MECHANICAL: Case Summary & 20 Largest Unsecured Creditors
----------------------------------------------------------------
Debtor: Thomas Mechanical Corp.
        7115 N. Ave., Ste. 524
        Oak Park, IL 60302

Bankruptcy Case No.: 08-00451

Chapter 11 Petition Date: July 30, 2008

Court: Northern District of Illinois (Chicago)

Debtor's Counsel: Forrest L. Ingram, Esq.
                  Email: fingram@fingramlaw.com
                  79 W. Monroe St., Ste. 900
                  Chicago, IL 60603
                  Tel: (312) 759-2838
                  Fax: (312) 759-0298
                  http://www.fingramlaw.com

Total Assets: $261,303

Total Debts:  $2,138,143

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

      http://bankrupt.com/misc/ilnb08-00451.pdf


TIMBERWOLF I: Moody's Junks Ratings of 2011 and 2039 FR Notes
-------------------------------------------------------------
Moody's Investors Service has downgraded the rating of two classes
of notes issued by Timberwolf I, Ltd. and left one of these
classes on review for further possible downgrade.  The notes
affected by today's rating action are:

Class Description: U.S. $9,000,000 Class S-1 Floating Rate Notes
Due 2011

Prior Rating: Aa2, on review for possible downgrade

Current Rating: Caa1, on review for possible downgrade

Class Description: U.S. $100,000,000 Class A-1a Floating Rate
Notes Due 2039

Prior Rating: Caa2, on review for possible downgrade

Current Rating: C

The transaction experienced an Event of Default, as reported by
the Trustee on March 10, 2008, caused by a default in the payment,
when due and payable, of interest on the Class S-2 Notes, Class A
Notes and Class B Notes, which default has continued for a period
of seven days, as described in Section 5.1(a) of the Indenture
dated March 27, 2007.  This event of default is still continuing.
Timberwolf I, Ltd. is a collateralized debt obligation backed
entirely by a portfolio CDO securities and synthetic securities in
the form of credit default swaps.  Reference obligations for the
credit default swaps CDO securities.

As provided in Article 5 of the Indenture during the occurrence
and continuance of an Event of Default, certain parties to the
transaction may be entitled to direct the Trustee to take
particular actions with respect to the Collateral Debt Securities
and the Notes.  In this regard the Trustee reports that a
supramajority of the Controlling Class and the Cashflow Swap
Counterparty have directed the Trustee to sell and liquidate all
of the Collateral pursuant to the applicable provisions of the
Indenture and that the Collateral has been sold and liquidated.

The rating downgrade taken today reflects the increased expected
loss associated with the Class S-1 and Class A-1a Notes. Losses
are attributed to diminished credit quality on the underlying
portfolio.


TIMOTHY BARNETT: Case Summary & Six Largest Unsecured Creditors
---------------------------------------------------------------
Debtor: Timothy Barnett
        Kimberly Barnett  
        6203 E. Cliffway Drive
        Orange, CA 92689

Bankruptcy Case No.: 08-14475

Chapter 11 Petition Date: July 30, 2008

Court: Central District Of California (Santa Ana)

Judge: Robert N. Kwan

Debtors' Counsel: Todd B Becker, Esq.
                   (veloz@toddbeckerlaw.com)
                  Law Offices of Todd B Becker
                  3750 E Anaheim St., Ste. 100
                  Long Beach, CA 90804
                  Tel: (562) 495-1500
                  Fax: (562) 494-8904
                  http://toddbeckerlaw.com/

Estimated Assets: $1 million to $10 million

Estimated Debts:  $1 million to $10 million

A list of the Debtor's largest unsecured creditors is available
for free at:

            http://bankrupt.com/misc/califcb08-14475.pdf


TRONOX INC: Earnings Decline Prompts S&P to Junk Credit Rating
--------------------------------------------------------------
Standard & Poor's Ratings Services lowered its ratings on chemical
company Tronox Inc., including its corporate credit rating to
'CCC+' from 'B'.  At the same time S&P placed the ratings on
CreditWatch with negative implications.  As of March 31, 2008,
Tronox had about $800 million in debt.
     
The downgrade follows Tronox's recent announcement of a
significant decline in earnings for the quarter ended June 30,
2008 and increased concerns regarding the company's ability to
comply with, or successfully amend, the financial covenants within
its credit facilities.  Based on the most recent quarter's results
and ongoing difficult market conditions, S&P now believes that
a breach of financial covenants is increasingly likely this year
unless additional flexibility can be negotiated.  

The company's EBITDA declined to about $7 million for the quarter
ended June 30, 2008 from about $30 million in the previous
quarter, more than offsetting expected improvements to liquidity
from a previous amendment to covenants.  The earnings decline was
driven by production problems in some plants, rising input costs,
and weaknesses in demand.  The overall market for titanium dioxide
continues to be weak, with the potential to continue to negatively
affect earnings and cash flow, although demand in the Asia-Pacific
region is higher in 2008, and despite the fact that the company
has instituted several price increases in the past few weeks, and
resolved most of the production problems that affected earnings.

Tronox also announced on its earnings call that it has appointed
an investment bank to advise it on strategic alternatives, and
that it has reclassified its long-term debt as current
liabilities.  The reclassification reflects the ongoing
uncertainty in the TiO2 markets and management's inability to
state with a high degree of confidence that the company will be
able to meet tightening financial covenant requirements during the
next year.
     
The CreditWatch listing reflects the uncertainty associated with
these recent disclosures and indicates that another downgrade is
likely if operating performance and liquidity management does not
improve, or if the outcome of the company's review of strategic
alternatives results in actions with potentially negative
implications for credit quality.
     
S&P expects that the weak operating environment for TiO2 will
offset potential benefits from the company's steps to improve
operating efficiency and cash flow, including a cost-reduction and
working capital improvement program, and the suspension of its
dividend.  The weakness in Tronox's operating environment is
driven by the ongoing slowdown in a key end-market, the North
American residential housing market, which has contributed to
lower North American volumes and a less favorable pricing
environment at a time of rapidly increasing costs for key inputs,
including process chemicals.  Although volumes in Tronox's Asia-
Pacific markets have increased relative to the previous year,
these increases have not offset weakness in Tronox's operating
environment.
     
S&P will resolve the CreditWatch within the next three months when
it becomes clearer what steps the company plans to undertake as
part of its strategic review and after it can reassess prospects
for improving operating performance and access to the credit
facilities.


UNI-MARTS LLC: Files Schedules of Assets And Liabilities
--------------------------------------------------------
Uni-Marts LLC and its debtor-affiliates delivered to the United
States Bankruptcy Court for the District of Delaware their
schedules of assets and liabilities disclosing:

   Name of Schedule                   Assets      Liabilities
   ----------------                -----------    -----------
   A. Real Property                $ 3,559,405
   B. Personal Property             45,837,412
   C. Property Claimed
      as Exempt
   D. Creditors Holding                           $14,542,435
      Secured Claims
   E. Creditors Holding                             1,513,779
      Unsecured Priority
      Claims
   F. Creditors Holding                            51,661,178
      Unsecured Nonpriority
      Claims
                                   -----------    -----------
      TOTAL                        $49,396,817    $67,717,392

                          About Uni-Marts

Headquartered in State College, Pennsylvania, Uni-Marts LLC sells
consumer goods.  The company and six of its affiliates filed for
Chapter 11 protection on May 29, 2008 (Bankr. D. Del. Lead Case
No.08-11037).  Michael Gregory Wilson, Esq., at Hunton & Williams
LLP represents the Debtors in their restructuring efforts.  The
Debtor selected Epiq Bankruptcy Solutions LLC as their claims,
noticing and balloting agent.  The U.S. Trustee for Region 3
appointed seven creditors to serve on an Official Committee of
Unsecured Creditors.  The Committee selected Blank Rome LLP as its
counsel in these cases.


US AIRWAYS: Incurs $567MM Net Loss in Second Quarter Ended June 30
------------------------------------------------------------------
US Airways Group, Inc., on July 22, 2008, reported a net loss for
its second quarter 2008 of $567 million, or $6.16 per share,
compared to a net profit of $263 million, or $2.77 per diluted
share for the same period last year.  Excluding net special items
of $466 million, the Company reported a net loss of $101 million,
or $1.11 per share for its second quarter 2008.  This compares to
a net profit excluding special items of $261 million, or $2.74
per diluted share for the second quarter of 2007, which included
$2 million of net special items.

US Airways Chairman and CEO Doug Parker said, "Our second quarter
results reflect the unprecedented rise in fuel prices that are
impacting our industry.  We are working diligently to reduce
capacity and costs and execute on the new revenue programs
recently announced by US Airways and other airlines.  Despite our
disappointing results, we are pleased with the early performance
of our a la carte initiatives as we are seeing strong early sales
in our Choice Seats program and encouraging revenue trends from
our new first and second checked bag policies.  We are also
encouraged by our industry's response to the current economic
environment.

"On the liquidity front, we ended the quarter with a strong total
cash and investments balance of $2.8 billion.  While pleased with
this position relative to our peers, in light of the industry
environment, we are working productively with all of our
stakeholders to further enhance liquidity.

"Last but certainly not least, US Airways' operational turnaround
has been nothing short of spectacular.  Following six consecutive
months of top-three finishes in on-time performance among the ten
largest U.S. airlines, our team of 35,000 employees is to be
congratulated.  As a result of their hard work, US Airways is
leading the major airlines in on-time performance in 2008,"
continued Parker.

                   Revenue and Cost Comparisons

Mainline passenger revenue per available seat mile (PRASM) in the
second quarter was 11.42 cents, up 1.6% over the same period last
year.  Express PRASM was 20.60 cents, down 0.6% over the second
quarter 2007.  Total mainline and Express PRASM for US Airways
Group was 12.96 cents, which was up 2.0% over the second quarter
2007 on a 0.9% increase in total available seat miles (ASMs).

Mainline cost per available seat mile (CASM) was 15.33 cents, up
35.2 percent versus the same period last year on a decrease in
mainline capacity of 0.7 percent versus the second quarter of
2007.  The non-cash goodwill impairment contributed 3.21 cents,
or 80 percent of the period-over-period CASM increase.  
Additionally, fuel expense continues to be a significant
contributing factor to the CASM increase as the average mainline
fuel price per gallon excluding realized gains/losses on fuel
hedging instruments increased 69.2% year-over-year.  Excluding
fuel, unrealized and realized gains/losses on fuel hedging
instruments, and net special items, mainline CASM was 8.32 cents,
up 4.0% from the same period last year.

Chief Financial Officer Derek Kerr stated, "Although our second
quarter results reflect the staggering increase in the price of
fuel, our fuel hedging strategy resulted in significant realized
gains of $192 million during the quarter.  Had the average price
per gallon remained constant from the second quarter 2007, our
total fuel expense, including realized gains/losses on fuel
hedging instruments, would have been approximately $390 million
lower.  In addition, during the second quarter we also saw an
increase in non-fuel unit costs that was primarily driven by
higher engine maintenance expense as well as a reduction in
mainline capacity of 0.7%."

                            Liquidity

As of June 30, 2008, the Company had $2.8 billion in total cash
and investments, of which $2.3 billion was unrestricted.

As previously announced, in order to preserve liquidity, US
Airways has reduced its forecasted capital expenditure plan for
2008 by approximately $90 million since the beginning of the
year.  This brings the total 2008 estimated non-aircraft capital
expenditures to $225 million.

As of June 30, 2008, the company listed $8.0 billion in total
assets, $7.4 billion in total liabilities, and $593 million in
stockholders' equity.

                        Capacity Reductions

In response to the continued and unprecedented surge in oil
prices, the airline will reduce its fourth quarter and 2009
capacity by an additional one to two percent on a year-over-year
basis.  The airline had previously planned on a three to five
percent decrease in system capacity for both its fourth quarter
2008 and full-year 2009.

                   Second Quarter Special Items

During its second quarter, the company recognized $466 million of
net special items.  These special items included a non-cash
accounting charge of $622 million to write off all of the
goodwill created by the merger of US Airways Group, Inc. and
America West Holdings Corporation in September 2005, a non-cash
accounting charge of $18 million related to the decline in fair
market value of certain spare parts associated with the company's
Boeing 737 aircraft, $10 million in merger related transition
costs, and a $6 million charge for lease return costs and lease
cancellation penalties related to certain Airbus aircraft as a
result of the fleet reductions announced in June 2008.  These
expenses were offset by a $190 million non-cash unrealized net
gain associated with the change in fair value of the company's
outstanding fuel hedge contracts.

                     Notable Accomplishments

People

     * Signed contracts with the airline's fleet service,
       maintenance training instructors, and mechanic-and-related
       employees represented by the International Association of
       Machinists and Aerospace Workers (IAM).  US Airways now
       has ratified contracts with all 11,000 of its IAM-
       represented employees.

     * Distributed approximately $10 million over the first six
       months of 2008 to the airline's 35,000 employees through
       its Triple Play program, which measures US Airways'
       operational performance against the 10 largest U.S.
       airlines.

Finance

     * Announced several significant changes to the airline's
       business model including the fourth quarter 2008 and full-
       year 2009 domestic mainline capacity reductions of six to
       eight percent and eight to ten percent, respectively.

     * Implemented an a la carte pricing strategy, which was
       originally expected to generate approximately $300 to $400
       million annually in incremental revenue; the Company
       recently revised its estimates by $100 million based on
       positive results thus far.  The Company now anticipates it
       will generate $400 to $500 million in incremental revenue
       on an annualized basis.

Marketing

     * Introduced upgraded and enhanced Envoy (trans-Atlantic
       premium class) product with more personalized in-flight
       service, better-quality menus and greater choice.

     * Successfully began offering Choice Seats, where customers
       can reserve window and aisle seat assignments in the first
       few rows in the main cabin during web check-in for a small
       fee.

     * Signed new codeshare agreements with Swiss International
       Air Lines and Air China.  The new agreements allow for
       more convenient connectivity options for US Airways
       customers to both Europe and Asia.

     * Introduced redesigned and updated flight attendant and
       airport customer service employee uniforms.

Operations

     * For six consecutive months, US Airways has ranked as one
       of the top three airlines in on-time performance (among
       the 10 largest U.S. carriers).  This includes three number
       one finishes in December, January and March.

     * Broke ground on a new, state-of-the-art, environmentally        
       friendly, 58,000 square foot ground service equipment
       facility at Philadelphia International Airport.

US Airways further notes it anticipates recording additional
accounting charges in future quarters related to its capacity
reductions, including severance and costs associated with fleet
reductions.  Mr. Kerr says as of July 14, 2008, US Airways was
unable to reasonably estimate the amount and timing of these
charges.

A full-text copy of the Company's second quarter 2008 results on
Form 10-Q is available for free at:

              http://ResearchArchives.com/t/s?3055

                         About US Airways

Based in Tempe, Arizona, US Airways Group Inc.'s (NYSE: LCC) -
http://www.usairways.com/-- primary business activity is the
ownership of the common stock of US Airways, Inc., Allegheny
Airlines, Inc., Piedmont Airlines, Inc., PSA Airlines, Inc.,
MidAtlantic Airways, Inc., US Airways Leasing and Sales, Inc.,
Material Services Company, Inc., and Airways Assurance Limited,
LLC.

Under a chapter 11 plan declared effective on March 31, 2003,
USAir emerged from bankruptcy with the Retirement Systems of
Alabama taking a 40% equity stake in the deleveraged carrier in
exchange for $240 million infusion of new capital.

US Airways and its subsidiaries filed another chapter 11 petition
on Sept. 12, 2004 (Bankr. E.D. Va. Case No. 04-13820).  Brian P.
Leitch, Esq., Daniel M. Lewis, Esq., and Michael J. Canning, Esq.,
at Arnold & Porter LLP, and Lawrence E. Rifken, Esq., and Douglas
M. Foley, Esq., at McGuireWoods LLP, represent the Debtors in
their restructuring efforts.  In the companies' second bankruptcy
filing, they listed $8,805,972,000 in total assets and
$8,702,437,000 in total debts.  The Debtors' chapter 11 plan for
its second bankruptcy filing became effective on Sept. 27, 2005.  
The Debtors completed their merger with America West on the same
date.

(US Airways Bankruptcy News, Issue No. 163; Bankruptcy Creditors'
Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000).

                          *     *     *

As reported in the Troubled Company Reporter on June 2, 2008,
Fitch Ratings has downgraded the debt ratings of US Airways Group,
Inc. as: Issuer Default Rating to 'CCC' from 'B-'; Secured term
loan rating to 'B/RR1' From 'BB-/RR1'; and Senior unsecured rating
to 'CC/RR6' from 'CCC/RR6'.  Fitch's ratings apply to about
$1.7 billion in outstanding debt.  The Rating Outlook is Negative.

The TCR said on July 24, 2008, that 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.


US AIRWAYS: Registers 6,700,000 Shares for Equity Incentive Plan
----------------------------------------------------------------
In a regulatory filing with the U.S. Securities and Exchange
Commission, Derek J. Kerr, senior vice president and chief
financial officer of US Airways Group, Inc., disclosed that
US Airways is registering with the SEC 6,700,000, shares of
common stock pursuant to the US Airways Group, Inc., 2008 Equity
Incentive Plan.

US Airways may (i) issue an undetermined number of additional
shares, or (ii) combine the shares being registered into an
undetermined lesser number of shares, as a result of events like
stock splits, stock dividends or similar transactions pursuant to
the terms of the Plan, Mr. Kerr says.

Mr. Kerr further disclosed that US Airways estimated the offering
price for the shares pursuant to Rule 457(c) and (h) of the
Securities Act of 1933, as amended, solely for the purpose of
calculating the registration fee, and the Company based the
Offering Price upon the average of the high and low prices of the
Company's common stock on June 27, 2008, as quoted on the New
York Stock Exchange.

The purpose of the 2008 Incentive Plan is to further the
long-term stability and financial success of US Airways and its
related companies by attracting and retaining employees and other
service providers through the use of cash and stock incentives,
Mr. Kerr explained.

US Airways believe that ownership of its common stock and the use
of cash incentives will stimulate the efforts of its service
providers upon whose judgment and interests US Airways are and
will be largely dependent for the successful conduct of its
business.  The Company also believes that the awards will
strengthen the desire of its service providers to remain with
them and will further identify its interests with the interests
of its shareholders.  US Airways intend to use the 2008 Incentive
Plan to grant stock incentives to compensate non-employee members
of its Board of Directors.

The 2008 Incentive Plan replaces and supersedes the US Airways
Group, Inc., 2005 Equity Incentive Plan, effective as of
September 27, 2005.  Upon approval of the Plan by the Company's
shareholders, no additional awards will be made under the 2005
Incentive Plan, although outstanding awards previously made under
the 2005 Incentive Plan will continue to be governed by the terms
and conditions of the 2005 Incentive Plan.  US Airways forfeits
shares that are subject to outstanding awards under the 2005
Incentive Plan that expire.  Otherwise, the shares terminate.  
Unexercised shares may be subjected to new awards under the 2008
Incentive Plan.

A full-text copy of the US Airways Group, Inc., 2008 Equity
Incentive Plan is available for free at:

               http://ResearchArchives.com/t/s?3054

                         About US Airways

Based in Tempe, Arizona, US Airways Group Inc.'s (NYSE: LCC) -
http://www.usairways.com/-- primary business activity is the
ownership of the common stock of US Airways, Inc., Allegheny
Airlines, Inc., Piedmont Airlines, Inc., PSA Airlines, Inc.,
MidAtlantic Airways, Inc., US Airways Leasing and Sales, Inc.,
Material Services Company, Inc., and Airways Assurance Limited,
LLC.

Under a chapter 11 plan declared effective on March 31, 2003,
USAir emerged from bankruptcy with the Retirement Systems of
Alabama taking a 40% equity stake in the deleveraged carrier in
exchange for $240 million infusion of new capital.

US Airways and its subsidiaries filed another chapter 11 petition
on Sept. 12, 2004 (Bankr. E.D. Va. Case No. 04-13820).  Brian P.
Leitch, Esq., Daniel M. Lewis, Esq., and Michael J. Canning, Esq.,
at Arnold & Porter LLP, and Lawrence E. Rifken, Esq., and Douglas
M. Foley, Esq., at McGuireWoods LLP, represent the Debtors in
their restructuring efforts.  In the companies' second bankruptcy
filing, they listed $8,805,972,000 in total assets and
$8,702,437,000 in total debts.  The Debtors' chapter 11 plan for
its second bankruptcy filing became effective on Sept. 27, 2005.  
The Debtors completed their merger with America West on the same
date.

(US Airways Bankruptcy News, Issue No. 163; Bankruptcy Creditors'
Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000).

                          *     *     *

As reported in the Troubled Company Reporter on June 2, 2008,
Fitch Ratings has downgraded the debt ratings of US Airways Group,
Inc. as: Issuer Default Rating to 'CCC' from 'B-'; Secured term
loan rating to 'B/RR1' From 'BB-/RR1'; and Senior unsecured rating
to 'CC/RR6' from 'CCC/RR6'.  Fitch's ratings apply to about
$1.7 billion in outstanding debt.  The Rating Outlook is Negative.

The TCR said on July 24, 2008, that 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.


US AIRWAYS: Wellington Management Discloses 4.53% Stake
-------------------------------------------------------
In a regulatory filing with the U.S. Securities and Exchange
Commission dated July 10, 2008, Wellington Management Company,
LLP, disclosed that as of June 30, 2008, it beneficially owned
4,168,331, shares of US Airways Group, Inc.'s common stock
representing 4.53% of the USAir Group shares outstanding.

Wellington has shared voting power on 3,257,207 shares, and
shared dispositive power on 4,168,331 shares.

There are 92,173,934 total shares outstanding of US Airways
Group, Inc.'s, common stock as of July 16, 2008.

                         About US Airways

Based in Tempe, Arizona, US Airways Group Inc.'s (NYSE: LCC) -
http://www.usairways.com/-- primary business activity is the
ownership of the common stock of US Airways, Inc., Allegheny
Airlines, Inc., Piedmont Airlines, Inc., PSA Airlines, Inc.,
MidAtlantic Airways, Inc., US Airways Leasing and Sales, Inc.,
Material Services Company, Inc., and Airways Assurance Limited,
LLC.

Under a chapter 11 plan declared effective on March 31, 2003,
USAir emerged from bankruptcy with the Retirement Systems of
Alabama taking a 40% equity stake in the deleveraged carrier in
exchange for $240 million infusion of new capital.

US Airways and its subsidiaries filed another chapter 11 petition
on Sept. 12, 2004 (Bankr. E.D. Va. Case No. 04-13820).  Brian P.
Leitch, Esq., Daniel M. Lewis, Esq., and Michael J. Canning, Esq.,
at Arnold & Porter LLP, and Lawrence E. Rifken, Esq., and Douglas
M. Foley, Esq., at McGuireWoods LLP, represent the Debtors in
their restructuring efforts.  In the companies' second bankruptcy
filing, they listed $8,805,972,000 in total assets and
$8,702,437,000 in total debts.  The Debtors' chapter 11 plan for
its second bankruptcy filing became effective on Sept. 27, 2005.  
The Debtors completed their merger with America West on the same
date.

(US Airways Bankruptcy News, Issue No. 163; Bankruptcy Creditors'
Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000).

                          *     *     *

As reported in the Troubled Company Reporter on June 2, 2008,
Fitch Ratings has downgraded the debt ratings of US Airways Group,
Inc. as: Issuer Default Rating to 'CCC' from 'B-'; Secured term
loan rating to 'B/RR1' From 'BB-/RR1'; and Senior unsecured rating
to 'CC/RR6' from 'CCC/RR6'.  Fitch's ratings apply to about
$1.7 billion in outstanding debt.  The Rating Outlook is Negative.

The TCR said on July 24, 2008, that 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.


US AIRWAYS: Pilots Group Presses for Probe on Fueling Practices
---------------------------------------------------------------
Concerns over the adequacy of fueling practices at US Airways were
raised on national news by allegations from the US Airline Pilots
Association, which said that the airline was pressuring pilots to
carry less fuel.  USAPA said that the issue emerged when US
Airways singled-out eight Senior Trans-Oceanic International
Captains for mandatory "training," based on the Captains using
their judgment to add additional fuel.  USAPA considers this to be
retaliatory discipline.

USAPA stated that the affected pilots were targeted as a result of
previous decisions to add fuel, and were called-in on their days
off and subjected to hours of simulator work and classroom
lectures; neither of which are part of any FAA approved US Airways
Pilot Training Program.  USAPA believes that the message being
communicated to the US Airways pilots is that, if they request
additional fuel, they will be subject to retaliatory discipline.

USAPA President, Steve Bradford, said, "US Airways Pilots are
seasoned professionals who are well aware of the fact that
carrying fuel adds weight to the aircraft.  But they also know
that the FAA minimum fuel reserves are just that, a bare minimum,
and akin to driving your car with the low fuel light flashing;
few drivers would be comfortable with that situation."  The
US Airways Pilots believe that it is important for the public to
realize that using just one gallon of the FAA minimum reserve
fuel may cause a Pilot to declare a "Fuel Emergency."
Air traffic delays, bad weather and unforeseen events are just
some of the reasons why the FAA grants Captains the authority to
decide how much fuel is carried on their aircraft.

"It smacks of intimidation and harassment; a pilot training
department should never be used as a tool for pilot discipline"
said President Bradford.  "If Management were really interested
in fuel conservation, they would adopt the training for all
pilots, not just a few.  In our view, our pilots are being
pressured into loading less fuel in order to avoid what we
consider to be retaliatory discipline.  We consider Management's
attempt to influence pilots' safety-related decisions based on
cost-considerations as setting a dangerous precedent for the
airline industry."

In a letter to the FAA dated July 16, 2008, USAPA requested a full
investigation stating that they consider Management's actions a
"dangerous intrusion on Captain's Authority which has the effect
of eroding flight safety standards."

USAPA represents over 5,000 US Airways pilots in seven domiciles
across the United States.

                       FAA and USAir Respond

Federal Aviation Administration spokesman Les Dorr said FAA was
aware of USAPA's charges against US Airways management and was
looking into the issue, Max Jarman of The Arizona Republic
reports.

US Airways acknowledged the pilot's right to request additional
fuel; however, the airline believed it was appropriate to ask the
pilots to meet with the training department so they could study
their experiences and see to it that the airline's guidelines are
sufficient, The Arizona Republic says.

                         About US Airways

Based in Tempe, Arizona, US Airways Group Inc.'s (NYSE: LCC) -
http://www.usairways.com/-- primary business activity is the
ownership of the common stock of US Airways, Inc., Allegheny
Airlines, Inc., Piedmont Airlines, Inc., PSA Airlines, Inc.,
MidAtlantic Airways, Inc., US Airways Leasing and Sales, Inc.,
Material Services Company, Inc., and Airways Assurance Limited,
LLC.

Under a chapter 11 plan declared effective on March 31, 2003,
USAir emerged from bankruptcy with the Retirement Systems of
Alabama taking a 40% equity stake in the deleveraged carrier in
exchange for $240 million infusion of new capital.

US Airways and its subsidiaries filed another chapter 11 petition
on Sept. 12, 2004 (Bankr. E.D. Va. Case No. 04-13820).  Brian P.
Leitch, Esq., Daniel M. Lewis, Esq., and Michael J. Canning, Esq.,
at Arnold & Porter LLP, and Lawrence E. Rifken, Esq., and Douglas
M. Foley, Esq., at McGuireWoods LLP, represent the Debtors in
their restructuring efforts.  In the companies' second bankruptcy
filing, they listed $8,805,972,000 in total assets and
$8,702,437,000 in total debts.  The Debtors' chapter 11 plan for
its second bankruptcy filing became effective on Sept. 27, 2005.  
The Debtors completed their merger with America West on the same
date.

(US Airways Bankruptcy News, Issue No. 163; Bankruptcy Creditors'
Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000).

                          *     *     *

As reported in the Troubled Company Reporter on June 2, 2008,
Fitch Ratings has downgraded the debt ratings of US Airways Group,
Inc. as: Issuer Default Rating to 'CCC' from 'B-'; Secured term
loan rating to 'B/RR1' From 'BB-/RR1'; and Senior unsecured rating
to 'CC/RR6' from 'CCC/RR6'.  Fitch's ratings apply to about
$1.7 billion in outstanding debt.  The Rating Outlook is Negative.

The TCR said on July 24, 2008, that 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.


US AIRWAYS: Inks Maintenance Pact with IAE; Ends Two Flights
------------------------------------------------------------
According to Pittsburgh Business Times, US Airways Group Inc.
inked a long-term maintenance agreement with IAE International
Aero Engines, a multinational aero-engine consortium based in
Connecticut.

The pact, which covers engines used on the airline's fleet of
Airbus A320 aircraft, will initially cover 74 V2500-A5 powered
aircraft already in service and engines for 78 aircraft that US
Airways ordered last year, says the report.

The Agreement ends on 2032.  Financial terms were not provided.

"The V2500 offers significant advantages in terms of fuel burn
and lowest total emissions, and IAE's comprehensive support
package will ensure that we can maximize the associated
benefits," said Hal Heule, US Airways' senior vice president of
technical operations, reports the Pittsburgh Times.

Meanwhile, Sacramento Business Journal says in line with the
carrier's plan to cut domestic mainline capacity in the fourth
quarter by 6 to 8% from year-earlier levels, US Airways will end
its recently launched daily service to Charlotte from Sacramento
International Airport on Aug. 18, 2008.

The carrier will likewise end daily nonstop service to Panama
City, Florida, starting Sept. 2, says the report.

                         About US Airways

Based in Tempe, Arizona, US Airways Group Inc.'s (NYSE: LCC) -
http://www.usairways.com/-- primary business activity is the
ownership of the common stock of US Airways, Inc., Allegheny
Airlines, Inc., Piedmont Airlines, Inc., PSA Airlines, Inc.,
MidAtlantic Airways, Inc., US Airways Leasing and Sales, Inc.,
Material Services Company, Inc., and Airways Assurance Limited,
LLC.

Under a chapter 11 plan declared effective on March 31, 2003,
USAir emerged from bankruptcy with the Retirement Systems of
Alabama taking a 40% equity stake in the deleveraged carrier in
exchange for $240 million infusion of new capital.

US Airways and its subsidiaries filed another chapter 11 petition
on Sept. 12, 2004 (Bankr. E.D. Va. Case No. 04-13820).  Brian P.
Leitch, Esq., Daniel M. Lewis, Esq., and Michael J. Canning, Esq.,
at Arnold & Porter LLP, and Lawrence E. Rifken, Esq., and Douglas
M. Foley, Esq., at McGuireWoods LLP, represent the Debtors in
their restructuring efforts.  In the companies' second bankruptcy
filing, they listed $8,805,972,000 in total assets and
$8,702,437,000 in total debts.  The Debtors' chapter 11 plan for
its second bankruptcy filing became effective on Sept. 27, 2005.  
The Debtors completed their merger with America West on the same
date.

(US Airways Bankruptcy News, Issue No. 163; Bankruptcy Creditors'
Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000).

                          *     *     *

As reported in the Troubled Company Reporter on June 2, 2008,
Fitch Ratings has downgraded the debt ratings of US Airways Group,
Inc. as: Issuer Default Rating to 'CCC' from 'B-'; Secured term
loan rating to 'B/RR1' From 'BB-/RR1'; and Senior unsecured rating
to 'CC/RR6' from 'CCC/RR6'.  Fitch's ratings apply to about
$1.7 billion in outstanding debt.  The Rating Outlook is Negative.

The TCR said on July 24, 2008, that 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.


VERANO CCS: Moody's Rates $180MM Mezzanine Notes Due 2016 B2
------------------------------------------------------------
Moody's Investors Service has assigned these ratings to Notes
issued by Verano CCS, Ltd.:

A3 to the U.S. $1,352,600,000 Senior Notes due 2016;

B2 to the U.S. $180,400,11011 Mezzanine Notes due 2016

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 risk of diminishment of cash flow from the
underlying assets due to defaults, the safety of the transaction's
legal structure, including the possibility of the Issuer being
treated as a creditor upon a bankruptcy of a participating
institution in respect of a participation , and the
characteristics of the underlying assets. The ratings of the Notes
may change as a result of any changes in the foregoing.

The transaction is a static balance sheet CLO sponsored and
arranged by Lehman Brothers Inc.


VIE SALON: Voluntary Chapter 11 Case Summary
--------------------------------------------
Debtor: Vie Salon and Spa, LLC
        955 West Chandler Heights Road, Building C
        Chandler, AZ 85248

Bankruptcy Case No.: 08-09418

Related Information: Jennifer Wady, managing member, filed the
                     petition on the Debtor's behalf.

Chapter 11 Petition Date: July 28, 2008

Court: District of Arizona (Phoenix)

Judge: Randolph J. Haines

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

Estimated Assets: $397,240

Estimated Debts: $2,647,322

A list of the Debtor's largest unsecured creditors is available
for free at http://bankrupt.com/misc/AZb08-09418.pdf


VINTAGE PROPS: Halts Scheduled Passenger Operations
---------------------------------------------------
Vintage Props & Jets, Inc., ceased all scheduled passenger
operations mid-July 2008.

In a notice dated July 18, 2008, Vintage said that over the past
few months, it has been faced with excruciating fuel prices and
increased expenses from its scheduled passenger network.  Vintage
said its financial burdens have exceeded its ability to continue
operations as usual.

Bob Koslow at News-Journal Online says record-high fuel costs,
rising business expenses and fewer travelers have forced Vintage
Prop to abandon its twice-a-day flights between Daytona Beach
International Airport and The Bahamas.

"It is the plan of the company to seek reorganization and resume
operations as soon as possible," Vintage said.

About 40 employees lost jobs, News-Journal Online reports.

The airline company said its current plan is to issue vouchers for
all un-flown reservations.  All passengers who currently are owed
refunds or already been issued travel vouchers will be mailed
written confirmation for the records.

"We completely understand that this may be no consolation to
[customers] at this current time," Vintage Props said.  "However,
until we are able to restructure, this is the best solution to
record what the company owes [customers]."

New Smyrna Beach, Florida-based Vintage Props & Jets had been
flying to Abacos, an island in The Bahamas, for 16 years from
various Florida airports, including Daytona Beach International
Airport since 1999, according to News-Journal Online, citing
airport officials.  Vintage accounts for 70% of the airport's
customs clearances, News-Journal Online says, citing Stephen
Cooke, DBIA director of business development.

Vintage also provided limited charter and cargo services.

Vintage's president Tom Crevasse, News-Journal Online relates,
said talks have stalled with a potential investment/buyer and that
left him with few options. Mr. Crevasse, the report adds, said he
had "exhausted" his checking and savings accounts, and mortgaged
his home and property to keep the company going.

News-Journal Online says Vintage is the second commercial carrier
to halt flights at Daytona Beach.  AirTran Airways ceased
operations in May, the report says.


VISTEON CORP: June 30 Balance Sheet Upside-Down by $207 Million
---------------------------------------------------------------
Visteon Corporation's consolidated balance sheet at June 30, 2008,
showed $7.02 billion in total assets, $6.93 billion in total
liabilities, and $295.0 million in minority interests, resulting
in a $207.0 million stockholders' deficit.

The company reported a net loss of $42.0 million for the second
quarter ended June 30, 2008.  For second quarter 2007, Visteon
reported a net loss of $67.0 million.

Results for second quarter 2008 include $18.0 million of
unreimbursed restructuring and other qualifying costs,
$11.0 million of asset impairments and $49.0 million of income tax
expense.  Second quarter 2007 results included $11.0 million of
asset impairments and $28.0 million of income tax expense.  

EBIT-R, which represents net (loss) income before net interest
expense and provision for income taxes and excludes asset
impairments, gains and losses on business divestitures and net
unreimbursed restructuring expenses and other reimbursable costs,  
was $78.0 million, an improvement of $63.0 million over second
quarter 2007.

"Our second quarter and first half results demonstrate Visteon's
geographic diversification, as we improved our financial
performance despite a difficult North American market," said
Donald J. Stebbins, president and chief executive officer.  "We
expanded gross margins by almost 50 percent and increased
operating income nearly five-fold due to steady progress on our
restructuring plan, our focus on reducing overhead costs and our
drive to improve operational efficiency.  We have also addressed
our UK manufacturing losses through divestitures and commercial
arrangements."

Total sales for second quarter 2008 were $2.91 billion, a decrease
of $69.0 million from the same period a year ago, including
$17.0 million of lower services revenue.  Second quarter 2008
total product sales were $2.78 billion, a decrease of
$52.0 million from second quarter 2007.  Divestitures and plant
closures decreased product sales by $222.0 million, which was
partially offset by favorable currency of $163.0 million.  Lower
production volumes in North America were offset by increases in
Europe and Asia, reflecting Visteon's geographic diversification.

Product gross margin for second quarter 2008 was $230.0 million,
representing an increase of $76.0 million from the same period a
year ago.  This increase reflects net cost performance of
$41.0 million and favorable currency of $43.0 million, partially
offset by the impact of divestitures, plant closures and other
items.

For second quarter 2008, Visteon's operating income of
$53.0 million was an improvement of $44.0 million from the same
period in 2007.  This improvement was driven by increased product
gross margin, partially offset by unreimbursed restructuring and
other qualifying costs and implementation costs associated with
the company's overhead cost reduction initiative.  Unreimbursed
restructuring and other qualifying costs include $12.0 million
related to the sale of the Swansea operation.

Operating income for second quarter 2008 also included
$7.0 million of asset impairment related to the Swansea sale.

Cash provided by operating activities for second quarter 2008 was
$133.0 million, $13.0 million lower than second quarter 2007.
Capital expenditures for second quarter 2008 were $80.0 million,
unchanged from the same period a year ago.  Free cash flow for
second quarter 2008 was $53.0 million, compared with $66.0 million
in the same period of 2007.  The decrease is attributable to net
restructuring cash use, higher interest payments and other items,
partially offset by improved trade working capital and changes in
receivables sold under the company's securitization facility.

During second quarter 2008, Visteon issued $206.0 million in
aggregate principal amount of new 12.25 percent notes due in 2016
and repurchased $344.0 million of its 8.25 percent notes due in
August 2010.  This reduced the amount outstanding on the 2010
notes to $206.0 million.

As of June 30, 2008, Visteon's cash balances totaled
$1.51 billion compared with $1.76 billion as of Dec. 31, 2007, and
total debt was $2.67 billion, approximately $180.0 million lower
than year-end 2007.

                         First Half 2008

For the first six months of 2008, Visteon narrowed its net loss by
$73.0 million to $147.0 million.  Total sales for first half 2008
of $5.77 billion were lower by $97.0 million from the same period
2007.  Total product sales of $5.52 billion were $71.0 million
lower.  First half 2008 results include $41.0 million of
restructuring expenses and other qualifying costs in excess of
escrow account reimbursement and a $55.0 million increase in the
company's tax provision.

EBIT-R for first half 2008 increased $160.0 million over the first
six months of 2007 to $129.0 million.  Cash from operations was
positive $7.0 million for the first six months of 2008, slightly
below the $15.0 million reported in the same period a year ago.
Capital expenditures of $154.0 million were $10.0 million higher
than the first six months of 2007.  Free cash flow was a use of
$147.0 million for first half 2008, compared with $129.0 million
for the same period the previous year.

                  Restructuring and Divestitures

Visteon continues to make solid progress implementing its three-
year plan.  During the second quarter, Visteon ceased production
at its Bedford, Ind. facility, and closed two fuel tank facilities
in Germany.  Additionally in July, the company divested its
Swansea, UK, facility and ceased production at its Concordia, Mo.
facility.

By completing the sale of its Swansea chassis manufacturing
operation, effective July 7, Visteon divested its largest UK
operation, which generated negative gross margin of approximately
$40.0 million on sales of approximately $80.0 million during 2007.
The company expects to record losses of approximately
$47.0 million in connection with the sale, of which $32.0 million
was recorded during second quarter 2008 - including $18.0 million
of employee severance and termination benefits, $7.0 million of
pension curtailment losses and $7.0 million of asset impairment.
These losses were partially offset by $13.0 million of escrow
account reimbursement.

Visteon said it continues to address its remaining operations in
the UK and commercial agreements are in place to address the
operating losses at the company's other UK manufacturing
facilities.  To date, 27 of the 30 targeted facility actions —
including nine during 2008 — have been accomplished.

"Last fall we highlighted the significant losses in our UK
operations and indicated it was our top priority to address these
operations during 2008," Stebbins said.  "With the sale of Swansea
and the agreements reached regarding our other UK facilities, we
are delivering on this commitment."

In addition to the actions under the company's three-year plan,
Visteon also announced that it will be closing its interiors
facility in Durant, Miss., and will be consolidating that
production in other facilities.  In January Visteon stated it
expects to generate cumulative savings of approximately
$215.0 million over three years as part of its overhead cost-
reduction initiative and remains on track to generate the expected
savings.

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?3053

                    About Visteon Corporation

Headquartered in Van Buren Township, Michigan, Visteon Corporation
(NYSE: VC) -- http://www.visteon.com/-- is an automotive supplier     
that designs, engineers and manufactures innovative climate,
interior, electronic and lighting products for vehicle
manufacturers, and also provides a range of products and services
to aftermarket customers.  The company also has corporate offices
in Shanghai, China; and Kerpen, Germany; the company has
facilities in 26 countries and employs approximately 38,500
people.

                          *     *     *

Fitch Ratings has affirmed Visteon Corporation's ratings as: (i)
issuer default rating (IDR) at 'CCC'; (ii) senior secured bank
facilities at 'B/RR1'; and (iii) unsecured notes at 'CC/RR6'.
Fitch has also assigned a rating of 'CC/RR6' to Visteon's new
12.25% senior unsecured notes being issued as part of the
company's debt exchange offer. The ratings cover approximately
$2.8 billion in debt.  The rating outlook is negative.


WELLMAN INC: Beefs Up Chapter 11 Plan and Disclosure Statement
--------------------------------------------------------------
Wellman Inc. and its affiliates filed with the U.S. Bankruptcy
Court for the Southern District of New York revised versions of
their Joint Plan of Reorganization, and attached disclosure
statement explaining the terms of the Plan.

The Revised Plan provides that first lien lenders are expected to
38.4% on account of their claims, while second lien lenders will
receive 18.9%.  The recovery of these lenders, however, may be
adjusted depending the Court's determination of the first lien
lenders' collateral.  The Debtors say that any recovery of
general unsecured creditors will depend on the success of the
prosecution of their litigation claims.

The Debtors primarily revised their Disclosure Statement in
response to the issues raised by Eastman Chemical Company and
Bank of New York, N.A.  To recall, Eastman Chemical and BNY urged
the Bankruptcy Court to deny approval of the Disclosure Statement
on grounds that it does not provide adequate information, which
is required under Section 1125(a) of the Bankruptcy Code.

Eastman Chemical complained the Debtors provided inaccurate
information about their claims for infringement against the
company while BNY, agent to lenders owed $185,000,000 as of the
Petition Date, alleged the Debtors did not provide adequate
information concerning their secured debt to the bank.  Wellman
has earlier sought the Court's determination that the BNY-led
lenders, who assert first priority security interests in certain
of the Debtors' assets, are undersecured.

Jonathan Henes, Esq., at Kirkland & Ellis LLP, in New York, says
the Debtors were able to resolve the objection of Eastman
Chemical by agreeing on certain revisions to the Disclosure
Statement.

With respect to BNY, Mr. Henes says the Disclosure Statement now
contains all critical terms of the Plan including a description
of the valuation litigation in light of the revisions made.

"The disclosure statement provides each type of information that
courts have identified as adequate information in a manner that
gives the holders of impaired claims the necessary information to
make an informed judgment about the Plan," Mr. Henes says.  He
urges the Court to overrule BNY's objection to the Plan's  
feasibility saying the hearing to consider approval of the  
Disclosure Statement is not the appropriate forum to address the
issue.   

                      Proposed Revisions   

The revised Disclosure Statement provides that under the Plan,
the litigation against Eastman Chemical will not be held by the
distribution trust.  Proceeds of the cost and taxes of the
litigation, however, will go to the distribution trust.  The
Debtors also changed the estimated amount of Wellman's
infringement claims against Eastman Chemical from $60,000,000 to
a range of $15,000,000 to $60,000,000 or more.

Keith Phillips, chief financial officer of Wellman, says no
distributions may be made from the trust if the Debtors do not
succeed in prosecuting litigation claims.

"Because interests in the distribution trust are the only
consideration being distributed to holders of general unsecured     
claims, there is possibility that those holders will not receive
any discovery," Mr. Phillips says, adding that a portion of the
second lien lenders' recovery is also at risk.

Pursuant to the Plan, 90% of the beneficial interests from the
distribution trust will be issued to lenders owed $265,000,000 as
of the Petition Date, and who hold a second lien on certain of
the Debtors assets, while the remaining 10% will be issued to
general unsecured creditors.
   
                       Valuation Litigation

According to Mr. Phillips, there is a potential litigation with
the First Lien Lenders concerning the valuation of their
collateral.  The First Lien Lenders assert liens on certain of
the Debtors' property, plant and equipment (PP&E), consisting of
machinery, equipment and real estate located in the Debtors'
plants in St. Louis, Mississippi, and in Darlington and
Johnsonville, South Carolina.  The PP&E serves as collateral for
the $185,000,000 the Debtors loaned off under the First Lien
Credit Agreement dated Feb. 10, 2004, with Bank of New York as
administrative agent.

Mr. Phillips says that under the Plan, Wellman will retain the
PP&E and that holders of the First Lien Term Loan will receive a
secured note with a present value equal to the value of their
interest in the PP&E.

The new first lien notes will be issued by reorganized Wellman
for $70,000,000 and be secured by a first lien in the PP&E.  The
new first lien notes will mature 15 years after the effective
date and pay interest at the rate of 11% per annum.  Pursuant to
the New First Lien Notes Agreement, reorganized Wellman will make
total payments of principal and interest to the first lien
lenders of $184,625,000.  The present value of these payments
will be $70,827,000.

"If the first lien lenders object to the Plan, then Wellman may
confirm the Plan so long as the first lien lenders retain their
liens in the PP&E and Wellman makes cash payments to the first
lien lenders equal to the amount of their secured claims,"
Mr. Phillips says.

The results of the valuation litigation will determine the
principal amount of the New First Lien Notes and consequently,
the equity value of reorganized Wellman.  If the Court determines
that the value of the PP&E is greater than $70,827,000, the
principal amount of the New First Lien Notes will be increased to
the value of the PP&E, Mr. Phillips notes.  Meanwhile, the equity
value of reorganized Wellman will be reduced by the amount of the
New First Lien Notes.

"In the event the Debtors are not successful in the valuation
litigation, and the Court adopts a higher valuation for the PP&E,
the reorganized Debtors' equity value will be reduced on a dollar
for dollar basis," Mr. Phillips points out.  He adds that this
would reduce recoveries for the Second Lien Lenders and holders
of the Second Lien Term Loan debt signatory to the Backstop
Commitment Agreement.

The range of potential valuations for the PP&E is between
$70,827,000 and $221,100,000.

      Party                     Valuation of PP&E
      -----                     -----------------
      Wellman                   $70,827,000
      First Lien Lenders        $158,660,000 to $221,100,00
      Second Lien Lenders       $74,301,000     

               First Lien Lenders 1111(b) Election

The revised Disclosure Statement provides that a class of
unsecured creditors may elect to have its entire claims treated
as secured pursuant to Section 1111(b) of the Bankruptcy Code.  
In case an undersecured creditor makes an election, the sum of
the stream of payments made to that creditor is (i) equal to the
amount of its allowed secured claim, and (ii) has a present value
equal to the value of the collateral on which it has a lien.  

Meanwhile, the First Lien Lenders are required to make their
election within two days after the Court issues its ruling on the
proposed valuation of the PP&E.  In case the First Lien Lenders
do not make the election, the new first lien notes will be
modified.  The maturity of the notes will be reduced from 15
years to a range of five to eight years with the same principal
amount.  In addition, the First Lien Lenders will have a secured
claim for $70,827,000 and an unsecured deficiency claim for
$113,798,000.  The unsecured deficiency claim will be included in
Class 4 (general unsecured claims).  Consequently, any recovery
to holders of general unsecured claims will be diluted.

A full-text copy of the revised Disclosure Statement and Plan is
available for free at:   
   
   http://bankrupt.com/misc/WellmanRevisedDisclosureStatement.pdf

                          About Wellman

Headquartered in Fort Mill, South Carolina, Wellman Inc. ([OTC]:
WMANQ.OB) -- http://www.wellmaninc.com/-- manufactures and            
markets packaging and engineering resins used in food and
beverage packaging, apparel, home furnishings and
automobiles.  They manufacture resins and polyester staple fiber
a three major production facilities.

The company and its debtor-affiliates filed for Chapter 11
protection on Feb. 22, 2008 (Bankr. S.D. N.Y. Case No.
08-10595).  Jonathan S. Henes, Esq., at Kirkland & Ellis, LLP,
in New York City, represents the Debtors.  Lazard Freres & Co.,
LLC, acts as the Debtors' financial advisors.

The United States Trustee for Region 2 has appointed seven members
to the Official Committee of Unsecured Creditors.  Mark R.
Somerstein, Esq., at Ropes & Gray LLP, serves as the Committee's
bankruptcy counsel.  FTI Consulting, Inc., acts as the panel's
financial advisors.

Wellman Inc., in its bankruptcy petition, listed total assets
of $124,277,177 and total liabilities of $600,084,885, as of
Dec. 31, 2007, on a stand-alone basis.  Debtor-affiliate ALG,
Inc., listed assets between $500 million and $1 billion on a
stand-alone basis at the time of the bankruptcy filing.  
Debtor-affiliates Fiber Industries Inc., Prince Inc., and
Wellman of Mississippi Inc., listed assets between $100 million
and $500 million at the time of their bankruptcy filings.

On a consolidated basis, Wellman Inc., and its debtor-affiliates
listed $561,200,000 in total assets and $774,100,000 in
liabilities as of March 31, 2008.

(Wellman Bankruptcy News, Issue No. 19; Bankruptcy Creditors'
Service Inc., http://bankrupt.com/newsstand/or 215/945-7000)   


WELLMAN INC: Claims Classification & Treatment Under Ch. 11 Plan
----------------------------------------------------------------
The July 25, 2008 version of Joint Chapter 11 Plan of
Reorganization and attached Disclosure Statement of Wellman Inc.
and its debtor-affiliates has identified the estimated recovery of
holders of claims in Classes 2 and 3.  The Debtors say that the
recovery of unsecured creditors will depend on the success of the
prosecution of the Debtors' litigation claims.

Class  Description           Claim Treatment          Recovery
-----  -----------           ---------------          -------
  N/A   DIP Facility Claims   Repaid In full             100%

  N/A   Admin. Claims         Paid in full               100%

  N/A   Priority Tax Claims   Will be treated            100%
                              Pursuant to 11 U.S.C.
                              Section 1129(a)(9)(C)

   1    Other Secured Claims  Paid in full               100%
                              (Unimpaired)

   2    First Lien Term       Receive pro rata share     38.4%
        Loan Claims           of the note issued by
                              reorganized Wellman
                              pursuant to the New
                              First Lien Note
                              Agreement (Impaired)

   3    Second Lien Term      Receive pro rata share     18.9%
        Loan Claims           of (i) 100% of new common
                              stock; and (ii) 90% of
                              the beneficial interests
                              in the Distribution Trust
                              (Impaired)
   
   4    General Unsecured     Receive pro rata share of
        Claims                10% of the beneficial       N/A
                              interests in the
                              Distribution Trust    
                              (Impaired)

   5    Old Preferred         No distribution              0%
        Interests             (Impaired)

   6    Old Common            No distribution              0%
        Interests             (Impaired)

   7    Intercompany          Legal, equitable, and      
        Interests             contractual rights of       N/A
                              the holders will be
                              unaltered (Unimpaired)

The estimated 18.9% recovery by Second Lien Lenders assumes the
conversion of the convertible Notes upon emergence and does not
take into account any potential recovery from the Distribution
Trust.

The Debtors note that the sole source of potential recoveries for
Holders of General Unsecured Claims in class4 is their pro rata
share of the Distribution Trust which will include certain causes
of action and the proceeds from their litigation against Eastman
Chemical Company.

Keith Phillips, chief financial officer of Wellman, says that no
distributions may be made from the trust if the Debtors do not
succeed in prosecuting litigation claims.  "Because interests in
the distribution trust are the only consideration being
distributed to holders of general unsecured claims, there is
possibility that those holders will not receive any discovery."

                          About Wellman

Headquartered in Fort Mill, South Carolina, Wellman Inc. ([OTC]:
WMANQ.OB) -- http://www.wellmaninc.com/-- manufactures and            
markets packaging and engineering resins used in food and
beverage packaging, apparel, home furnishings and
automobiles.  They manufacture resins and polyester staple fiber
a three major production facilities.

The company and its debtor-affiliates filed for Chapter 11
protection on Feb. 22, 2008 (Bankr. S.D. N.Y. Case No.
08-10595).  Jonathan S. Henes, Esq., at Kirkland & Ellis, LLP,
in New York City, represents the Debtors.  Lazard Freres & Co.,
LLC, acts as the Debtors' financial advisors.

The United States Trustee for Region 2 has appointed seven members
to the Official Committee of Unsecured Creditors.  Mark R.
Somerstein, Esq., at Ropes & Gray LLP, serves as the Committee's
bankruptcy counsel.  FTI Consulting, Inc., acts as the panel's
financial advisors.

Wellman Inc., in its bankruptcy petition, listed total assets
of $124,277,177 and total liabilities of $600,084,885, as of
Dec. 31, 2007, on a stand-alone basis.  Debtor-affiliate ALG,
Inc., listed assets between $500 million and $1 billion on a
stand-alone basis at the time of the bankruptcy filing.  
Debtor-affiliates Fiber Industries Inc., Prince Inc., and
Wellman of Mississippi Inc., listed assets between $100 million
and $500 million at the time of their bankruptcy filings.

On a consolidated basis, Wellman Inc., and its debtor-affiliates
listed $561,200,000 in total assets and $774,100,000 in
liabilities as of March 31, 2008.

(Wellman Bankruptcy News, Issue No. 19; Bankruptcy Creditors'
Service Inc., http://bankrupt.com/newsstand/or 215/945-7000)


WELLMAN INC: To Use $205MM Exit Financing to Pay Admin. Claims
--------------------------------------------------------------
In their revised Joint Chapter 11 Plan of Reorganization and
Disclosure Statement, filed July 25, 2008, Wellman, Inc., and its
debtor-affiliates disclosed that they received indications of
interest from five financing sources to fund their ongoing
business operations as well as the distributions under the Plan.

"The new credit facility is expected to be a $200,000,000
revolving facility with a first lien on accounts receivables and
inventory.  The Debtors anticipate a firm commitment from at
least one financing source by July 30, 2008," Mr. Phillips
reveals.

The Debtors expect to receive $204,700,000 from their new credit
facility and proceeds from their rights offering to pay off their
DIP Credit Facility and other administrative claims:

              Sources and Uses of Cash at Emergence
                          ($ in millions)

Sources                            Uses
-------                            ----
New Credit Facility      $124.7    DIP Credit Facility    $115.7
Rights Offering Proceeds   80.0    Exit Facility
                                     Fees and Costs          8.0
                                    Professional Fees        16.0
                                    Cure Payments and
                                      Sec. 503(b)(9) claims  65.0
                          ------                           ------
    Total Sources         $204.7      Total Uses           $204.7
                          ======                           ======

Wellman assumes it will emerge from bankruptcy at the end of
September 2008.  Following its emergence, Wellman expects to have
5,000,000 shares of stock outstanding, which 4,900,00 of new
common stock, par value $0.001 per share, and 100,000 shares of
preferred stock.

                          About Wellman

Headquartered in Fort Mill, South Carolina, Wellman Inc. ([OTC]:
WMANQ.OB) -- http://www.wellmaninc.com/-- manufactures and            
markets packaging and engineering resins used in food and
beverage packaging, apparel, home furnishings and
automobiles.  They manufacture resins and polyester staple fiber
a three major production facilities.

The company and its debtor-affiliates filed for Chapter 11
protection on Feb. 22, 2008 (Bankr. S.D. N.Y. Case No.
08-10595).  Jonathan S. Henes, Esq., at Kirkland & Ellis, LLP,
in New York City, represents the Debtors.  Lazard Freres & Co.,
LLC, acts as the Debtors' financial advisors.

The United States Trustee for Region 2 has appointed seven members
to the Official Committee of Unsecured Creditors.  Mark R.
Somerstein, Esq., at Ropes & Gray LLP, serves as the Committee's
bankruptcy counsel.  FTI Consulting, Inc., acts as the panel's
financial advisors.

Wellman Inc., in its bankruptcy petition, listed total assets
of $124,277,177 and total liabilities of $600,084,885, as of
Dec. 31, 2007, on a stand-alone basis.  Debtor-affiliate ALG,
Inc., listed assets between $500 million and $1 billion on a
stand-alone basis at the time of the bankruptcy filing.  
Debtor-affiliates Fiber Industries Inc., Prince Inc., and
Wellman of Mississippi Inc., listed assets between $100 million
and $500 million at the time of their bankruptcy filings.

On a consolidated basis, Wellman Inc., and its debtor-affiliates
listed $561,200,000 in total assets and $774,100,000 in
liabilities as of March 31, 2008.

(Wellman Bankruptcy News, Issue No. 19; Bankruptcy Creditors'
Service Inc., http://bankrupt.com/newsstand/or 215/945-7000)


WESCOLD INC: Case Summary & 20 Largest Unsecured Creditors
----------------------------------------------------------
Debtor: Wescold, Inc.
        dba W.E. Stone & Co.
        dba Western Engineers
        dba Wescold Engineered Products
        4220 22nd Avenue West
        Seattle, WA 98199
        Tel: (206) 284-5710

Bankruptcy Case No.: 08-14902

Type of Business: The Debtor makes and sells air conditioning and
                  ventilation equipment.
                  See: http://www.wescold.com

Chapter 11 Petition Date: July 31, 2008

Court: Western District of Washington (Seattle)

Debtors' Counsel: John R. Knapp, Jr., Esq.
                   (jknapp@cairncross.com)
                  Cairncross & Hempelmann PS
                  524 2nd Avenue, Ste. 500
                  Seattle, WA 98104-2323
                  Tel: (206) 587-0700
                  http://cairncross.com/

Estimated Assets: $1 million to $100 million

Estimated Debts:  $1 million to $100 million

A list of the Debtor's largest unsecured creditors is available
for free at:

            http://bankrupt.com/misc/waswb08-14902.pdf


WHITING PETROLEUM: S&P Holds 'BB-' Rating; Revises Outlook to Pos.
------------------------------------------------------------------
Standard & Poor's Ratings Services revised its outlook on Whiting
Petroleum Corp. to positive from stable and affirmed its 'BB-'
corporate credit rating on the company.
     
"The positive outlook reflects the company's improving production
levels, our greater level of confidence surrounding the company's
drilling program and its tertiary recovery projects, as well as
expectations for strong near-term results given robust commodity
prices," said Standard & Poor's credit analyst Amy Eddy.  "The
ratings also reflect the company's high lifting costs, weak
reserve replacement metrics, and aggressive leverage," she
continued.  As of June 30, 2008, Denver, Colorado-based Whiting
had more than $1.1 billion in total adjusted debt.

The outlook on Whiting is positive.  S&P could consider an upgrade
in the next two to four quarters if the company successfully
continues to execute on its plan of expanding production levels
and profitably adding reserves.  Conversely, S&P could revise the
outlook to stable or negative if the operational performance
suffers or if the company makes a materially leveraging
acquisition.


WINDSOR QUALITY: Moody's Lowers Corporate Family Rating to B1
-------------------------------------------------------------
Moody's Investors Service downgraded the ratings of Windsor
Quality Food Company, Ltd., including its corporate family rating
to B1 from Ba3, and its probability of default rating to B2 from
B1.  The rating outlook is stable. This rating action concluded
the review for possible downgrade begun on May 8, 2008.

Ratings lowered:

Corporate family rating at B1

Probability of default rating at B2

$100 million senior secured revolving credit agreement expiring in
November 2011 to B1 (LGD3, 38%) from Ba3 (LGD3,37%)

$140 million senior secured term loan maturing in November 2012 to
B1 (LGD3, 38%) from Ba3 (LGD3,37%)

The downgrade is based on Moody's expectation that the continued
increase in commodity prices, especially in grains and some
proteins, will further erode Windsor's profit margins and the
cushion under its bank covenants. In the first quarter of fiscal
2008, reported EBIT margin fell to 2.7%, down from 5% in the prior
year. As a result, Windsor's credit metrics in fiscal 2008 are
likely to trail those appropriate for its prior rating level.

Windsor Quality Food Company, Ltd. is a privately held frozen food
manufacturer based in Houston, Texas. The company's two major
divisions are Windsor Foods, which specializes in ethnic and other
frozen food categories (e.g., Italian, Asian, Mexican, and coated
appetizers) sold through foodservice, consumer and industrial
distribution channels; and Quality Sausage, which produces pre-
cooked meats for industrial and foodservice channels. The
company's sales for the twelve months ended April 5, 2008 were
approximately $654 million.


* Fitch Updates Q-IFS Rtngs on 564 Property/Casualty Insurance Cos
------------------------------------------------------------------
Fitch Ratings has updated its Quantitative Insurer Financial
Strength ratings for 564 U.S. property/casualty insurance
companies.  At the same time, Fitch has assigned new Q-IFS ratings
to 37 U.S. property/casualty insurers.

  -- Direct General Insurance Company of Mississippi
     (MS)/10889/'BBq';

  -- Direct Insurance Company (TN)/37220/'BBBq';
  -- Donegal Mutual Insurance Company (PA)/13692/'Aq';
  -- Dorchester Mutual Fire Insurance Company (MA)/13706/'BBBq';
  -- DTRIC Insurance Company, Limited (HI)/37265/'BBBq';
  -- Eagle West Insurance Company (CA)/12890/'Aq';
  -- Electric Insurance Company (MA)/21261/'BBBq';
  -- EMC Property & Casualty Company (IA)/25186/'Aq';
  -- Emcasco Insurance Company (IA)/21407/'Aq';
  -- Employers Compensation Insurance Company (CA)/11512/'Aq';
  -- Employers Insurance Company of Nevada (NV)/10640/'Aq';
  -- Employers Mutual Casualty Company (IA)/21415/'Aq';
  -- Erie & Niagra Insurance Association (NY)/10374/'BBBq';
  -- Erie Insurance Company (PA)/26263/'Aq';
  -- Erie Insurance Company of New York (NY)/16233/'Aq';
  -- Erie Insurance Exchange (PA)/26271/'Aq';
  -- Explorer Insurance Company (CA)/40029/'Aq';
  -- Farm & City Insurance Company (IA)/11053/'Aq';
  -- Farm Bureau General Insurance Company of Michigan
     (MI)/21547/'BBBq';

  -- Farm Bureau Mutual Insurance Company of Arkansas, Inc.
     (AR)/13757/'BBBq';

  -- Farm Bureau Town & Country Insurance Company of Missouri
     (MO)/26859/'BBBq';

  -- Farm Family Casualty Insurance Company (NY)/13803/'Aq';
  -- Farmers Automobile Insurance Association (IL)/24201/'Aq';
  -- Farmers Casualty Company Mutual (IA)/13811/'Aq';
  -- Farmers Mutual Fire Insurance Company of Salem County
     (NJ)/13854/'BBBq';

  -- Farmers Mutual Hail Insurance Company of Iowa
     (IA)/13897/'Aq';

  -- Farmers Mutual Insurance Company of Nebraska (NE)/13889/'Aq';
  -- Farmers Union Mutual Insurance Company (ND)/32670/'BBBq';
  -- FCCI Insurance Company (FL)/10178/'BBBq';
  -- Federated Mutual Insurance Company (MN)/13935/'Aq';
  -- Federated Rural Electric Insurance Exchange (KS)/11118/'Aq';
  -- Federated Service Insurance Company (MN)/28304/'Aq';
  -- FFVA Mutual Insurance Company (FL)/10385/'Aq';
  -- Fidelity Mohawk Insurance Company (NJ)/15750/'Aq';
  -- Financial Pacific Insurance Company (CA)/31453/'BBBq';
  -- First Commercial Insurance Company (FL)/10347/'BBq';
  -- First Dakota Indemnity Company (SD)/10351/'BBBq';
  -- First Financial Insurance Company (IL)/11177/'Aq';
  -- First Mercury Insurance Company (IL)/10657/'Aq';
  -- Firstcomp Insurance Company (NE)/27626/'BBBq';
  -- Fitchburg Mutual Insurance Company (MA)/13943/'BBBq';
  -- Florida Farm Bureau Casualty Insurance Company
     (FL)/31216/'BBBq';

  -- Florida Hospitality Mutual Insurance Company
     (FL)/10699/'BBBq';

  -- Florists Mutual Insurance Company (IL)/13978/'BBBq';
  -- FMI Insurance Company (NJ)/37699/'Aq';
  -- Founders Insurance Company (IL)/14249/'BBBq';
  -- Frankenmuth Mutual Insurance Company (MI)/13986/'Aq';
  -- Franklin Mutual Insurance Company (NJ)/16454/'Aq';
  -- Franklin Insurance Company (PA)/10728/'BBBq';
  -- Fremont Insurance Company (MI)/13994/'BBBq';
  -- Georgia Farm Bureau Mutual Insurance Company
     (GA)/14001/'BBBq';

  -- GeoVera Insurance Company (CA)/10799/'Aq';
  -- Geovera Specialty Insurance Company (CA)/10182/'Aq';
  -- Germania Farm Mutual Insurance Association (TX)/29610/'BBBq';
  -- Germania Insurance Company (TX)/36854/'BBBq';
  -- Germantown Insurance Company (PA)/11282/'BBBq';
  -- Germantown Mutual Insurance Company (WI)/14036/'BBBq';
  -- Goodville Mutual Casualty Company (PA)/14044/'Aq';
  -- Grain Dealers Mutual Insurance Company (IN)/22098/'BBq';
  -- Grange Indemnity Insurance Company (OH)/10322/'Aq';
  -- Grange Insurance Association (WA)/22101/'BBBq';
  -- Grange Insurance Company of Michigan (OH)/11136/'Aq';
  -- Grange Mutual Casualty Company (OH)/14060/'Aq';
  -- Graphic Arts Mutual Insurance Company (NY)/25984/'Aq';
  -- Gray Insurance Company (LA)/36307/'BBBq';
  -- Greater New York Mutual Insurance Company (NY)/22187/'Aq';
  -- Grinnell Mutual Reinsurance Company (IA)/14117/'Aq';
  -- Grinnell Select Insurance Company (IA)/16144/'BBBq';
  -- Guilford Insurance Company (IL)/10956/'Aq';
  -- Gulf States Insurance Company (OK)/26808/'BBBq';
  -- Hamilton Mutual Insurance Company (IA)/14125/'Aq';
  -- Hastings Mutual Insurance Company (MI)/14176/'Aq';
  -- Haulers Insurance Company, Inc. (TN)/31550/'BBBq';
  -- Hawaii Employers Mutual Insurance Company (HI)/10781/'Aq';
  -- Hingham Mutual Fire Insurance Company (MA)/14192/'BBq';
  -- Hochheim Prairie Farm Mutual Insurance Association
     (TX)/31054/'BBBq';

  -- Holyoke Mutual Insurance Company in Salem (MA)/14206/'Aq';
  -- Home & Farm Insurance Company (IN)/17639/'BBBq';
  -- Home-Owners Insurance Company (MI)/26638/'Aq';
  -- Homesite Indemnity Company (KS)/20419/'BBBq';
  -- Homesite Insurance Company (CT)/17221/'BBBq';
  -- Homesite Insurance Company of California (CA)/11005/'BBBq';
  -- Homesite Insurance Company of Pennsylvania (PA)/10745/'BBBq';
  -- Homesite Insurance Company of the Midwest (ND)/13927/'BBBq';
  -- Hospitals Insurance Company Inc (NY)/30317/'BBq';
  -- Housing Authority Property Insurance, A Mutual Company
     (VT)/10069/'Aq';

  -- Housing Authority Risk Retention Group, Inc.
     (VT)/26797/'BBBq';

  -- IFA Insurance Company (NJ)/31062/'BBq';
  -- Illinois Casualty Company (A Mutual Insurance Company)
     (IL)/15571/'BBBq';

  -- Illinois Emcasco Insurance Company (IA)/32808/'Aq';
  -- Imperial Fire & Casualty Insurance Company (LA)/44369/'BBBq';
  -- IMT Insurance Company Mutual (IA)/14257/'Aq';
  -- Independence American Insurance Company (DE)/26581/'BBq';
  -- Independence Casualty & Surety Company (TX)/10024/'Aq';
  -- Indiana Farmers Mutual Insurance Company (IN)/22624/'BBBq';
  -- Indiana Lumbermens Mutual Insurance Company
     (IN)/14265/'BBBq';

  -- Insurance Company of Greater New York (NY)/22195/'Aq';
  -- Insurance Company of the West (CA)/27847/'Aq';
  -- Integrity Mutual Insurance Company (WI)/14303/'Aq';
  -- Interinsurance Exchange of the Automobile Club
     (CA)/15598/'Aq';

  -- International Fidelity Insurance Company (NJ)/11592/'BBBq';
  -- Iowa American Insurance Company (IA)/31577/'Aq';
  -- Iowa Mutual Insurance Company (IA)/14338/'Aq';
  -- Island Insurance Company, Limited (HI)/22845/'Aq';
  -- Ismie Mutual Insurance Company (IL)/32921/'BBBq';
  -- James River Insurance Company (OH)/12203/'Aq';
  -- Jewelers Mutual Insurance Company (WI)/14354/'BBBq';
  -- Kansas Medical Mutual Insurance Company (KS)/34703/'BBBq';
  -- Kentucky Employers Mutual Insurance Authority
     (KY)/10320/'Aq';

  -- Kentucky Farm Bureau Mutual Insurance Company
     (KY)/22993/'Aq';

  -- Keystone Insurance Company (PA)/11681/'BBBq';
  -- Lafayette Insurance Company (LA)/18295/'Aq';
  -- Lawyers' Mutual Insurance Company (CA)/36706/'Aq';
  -- Lemic Insurance Company (LA)/10708/'BBq';
  -- Liberty American Insurance Company (FL)/10955/'Aq';
  -- Liberty American Select Insurance Company, Inc.
     (FL)/32760/'Aq';

  -- Lightning Rod Mutual Insurance Company (OH)/26123/'BBBq';
  -- Lincoln General Insurance Company (PA)/33855/'BBq';
  -- Lititz Mutual Insurance Company (PA)/14400/'BBBq';
  -- Louisiana Farm Bureau Mutual Insurance Company
     (LA)/14427/'BBq';

  -- Louisiana Workers Compensation Corporation (LA)/22350/'Aq';
  -- Loya Insurance Company (TX)/11198/'BBBq';
  -- Lumbermen's Underwriting Alliance - U.S. epperson
     underwriting co.,atty. (MO)/23108/'BBBq';

  -- Madison Mutual Insurance Company (IL)/14443/'BBBq';
  -- MAG Mutual Insurance Company (GA)/42617/'Aq';
  -- Majestic Insurance Company (CA)/42269/'BBBq';
  -- MCIC Vermont Inc. (A Risk Retention Group) (VT)/10697/'Bq';
  -- Medical Insurance Exchange of California (CA)/32433/'BBBq';
  -- Medical Liability Mutual Insurance Company (NY)/34231/'CCCq';
  -- Medical Mutual Insurance Company of North Carolina
     (NC)/32522/'Aq';

  -- Medical Mutual Liability Insurance Society of Maryland
     (MD)/32328/'BBBq';

  -- Memberselect Insurance Company (MI)/21229/'BBBq';
  -- Mercer Insurance Company (PA)/14478/'BBBq';
  -- Mercer Insurance Company of New Jersey, Inc.
     (NJ)/43540/'BBBq';

  -- Merchants Bonding Company (Mutual) (IA)/14494/'BBBq';
  -- Meridian Citizens Mutual Insurance Company (IN)/10502/'Aq';
  -- Merrimack Mutual Fire Insurance Company (MA)/19798/'Aq';
  -- MHA Insurance Company (MI)/33111/'Aq';
  -- Miami Mutual Insurance Company (OH)/16764/'BBBq';
  -- Michigan Construction Industry Mutual Insurance Company
     (MI)/10998/'BBBq';

  -- Michigan Millers Mutual Insurance Company (MI)/14508/'BBBq';
  -- Middlesex Insurance Company (WI)/23434/'Aq';
  -- Middlesex Mutual Assurance Company (CT)/14532/'Aq';
  -- Midwest Family Mutual Insurance Company (MN)/23574/'BBBq';
  -- Milbank Insurance Company (SD)/41653/'Aq';
  -- Millers Capital Insurance Company (PA)/14575/'BBBq';
  -- Minnesota Lawyers Mutual Insurance Company (MN)/42234/'BBBq';
  -- Mississippi Farm Bureau Casualty Insurance Company
     (MS)/27669/'BBBq';

  -- Missouri Employers Mutual Insurance Company
     (MO)/10191/'BBBq';

  -- MMG Insurance Company (ME)/15997/'BBBq';
  -- Monterey Insurance Company (CA)/23540/'Aq';
  -- Motorists Mutual Insurance Company (OH)/14621/'Aq';
  -- Mountain States Mutual Casualty Company (NM)/14648/'BBBq';
  -- Mountain Valley Indemnity Company (NH)/10205/'BBBq';
  -- Mountain West Farm Bureau Mutual Insurance Company
     (WY)/29440/'Aq';

  -- Mutual Benefit Insurance Company (PA)/14664/'BBBq';
  -- Mutual of Enumclaw Insurance Company (WA)/14761/'BBBq';
  -- National American Insurance Company (OK)/23663/'BBBq';
  -- National Lloyds Insurance Company (TX)/15474/'Aq';
  -- National Mutual Insurance Company (OH)/20184/'BBBq';
  -- National Security Fire & Casualty Company (AL)/12114/'BBBq';
  -- NCMIC Insurance Company (IA)/15865/'Aq';
  -- Nevada Capital Insurance Company (NV)/11165/'Aq';
  -- New England Guaranty Insurance Company, Inc.
     (VT)/25852/'BBBq';

  -- New Jersey Casualty Insurance Company (NJ)/10732/'BBBq';
  -- New Jersey Manufacturers Insurance Company (NJ)/12122/'Aq';
  -- New Jersey Re-Insurance Company (NJ)/35432/'Aq';
  -- New London County Mutual Insurance Company (CT)/14826/'BBBq';
  -- New Mexico Mutual Casualty Company (NM)/40627/'BBBq';
  -- New York Central Mutual Fire Insurance Company
     (NY)/14834/'BBBq';

  -- New York Municipal Insurance Reciprocal (NY)/20690/'BBBq';
  -- Nodak Mutual Insurance Company (ND)/34592/'BBBq';
  -- Norcal Mutual Insurance Company (CA)/33200/'BBBq';
  -- Norfolk & Dedham Mutual Fire Insurance Company      
     (MA)/23965/'BBBq';

  -- North Carolina Farm Bureau Mutual Insurance Company
     (NC)/14842/'Aq';

  -- North Star Mutual Insurance Company (MN)/14850/'Aq';
  -- Nuclear Electric Insurance Limited (DE)/34215/'BBBq';
  -- Occidental Fire & Casualty Company of North Carolina
     (NC)/23248/'BBBq';

  -- Ocean Harbor Casualty Insurance Company (FL)/12360/'BBBq';
  -- Ohio Farmers Insurance Company (OH)/24104/'Aq';
  -- Ohio Indemnity Company (OH)/26565/'BBBq';
  -- Oklahoma Farm Bureau Mutual Insurance Company
     (OK)/21563/'BBBq';

  -- Old Guard Insurance Company (OH)/17558/'Aq';
  -- Old United Casualty Company (KS)/37060/'Aq';
  -- Ophthalmic Mutual Insurance Company (A Risk Retention Group)      
     (VT)/44105/'Aq';

  -- Oregon Mutual Insurance Company (OR)/14907/'BBBq';
  -- Owners Insurance Company (OH)/32700/'Aq';
  -- Pacific Select Property Insurance Company (CA)/10887/'Aq';
  -- Pacific Specialty Insurance Company (CA)/37850/'Aq';
  -- Palisades Safety & Insurance Association (NJ)/22050/'BBBq';
  -- Paramount Insurance Company (NY)/40177/'BBBq';
  -- Partners Mutual Insurance Company (WI)/13439/'BBq';
  -- Patrons Oxford Insurance Company (ME)/28290/'Aq';
  -- Pekin Insurance Company (IL)/24228/'Aq';
  -- Pemco Insurance Company (WA)/18805/'BBBq';
  -- Pemco Mutual Insurance Company (WA)/24341/'BBBq';
  -- Peninsula Insurance Company (MD)/14958/'BBBq';
  -- Penn Millers Insurance Company (PA)/14982/'BBBq';
  -- Penn National Security Insurance Company (PA)/32441/'Aq';
  -- Penn Patriot Insurance Company (VA)/10121/'Aq';
  -- Penn-America Insurance Company (PA)/32859/'Aq';
  -- Penn-Star Insurance Company (PA)/10673/'Aq';
  -- Pennsylvania Lumbermens Mutual Insurance Company
     (PA)/14974/'Aq';

  -- Pennsylvania National Mutual Casualty Insurance Company
     (PA)/14990/'Aq';

  -- Permanent General Assurance Corporation (TN)/37648/'BBBq';
  -- Permanent General Assurance Corporation of Ohio
     (OH)/22906/'BBBq';

  -- Personal Service Insurance Company (PA)/12289/'BBq';
  -- Pharmacists Mutual Insurance Company (IA)/13714/'BBBq';
  -- Philadelphia Contributionship for the Insurance of Houses
     From Loss by Fire (The) (PA)/17930/'BBBq';

  -- Philadelphia Contributionship Insurance Company
     (PA)/17914/'BBBq';

  -- Philadelphia Indemnity Insurance Company (PA)/18058/'Aq';
  -- Philadelphia Insurance Company (PA)/23850/'Aq';
  -- Phoenix Indemnity Insurance Company (AZ)/34037/'BBBq';
  -- Physicians Liability Insurance Company (OK)/39594/'CCCq';
  -- Pioneer State Mutual Insurance Company (MI)/18309/'Aq';
  -- Platte River Insurance Company (NE)/18619/'Aq';
  -- Plymouth Rock Assurance Corporation (MA)/14737/'BBBq';
  -- Pmslic Insurance Company (PA)/35114/'BBBq';
  -- Podiatry Insurance Company of America, A Mutual Company
     (IL)/14460/'BBBq';

  -- Preferred Mutual Insurance Company (NY)/15024/'BBBq';
  -- Preferred Professional Insurance Company (NE)/36234/'BBBq';
  -- Pre-Paid Legal Casualty, Inc. (OK)/37869/'BBBq';
  -- Preserver Insurance Company (NJ)/15586/'BBBq';
  -- PrInceton Insurance Company (NJ)/42226/'BBBq';
  -- Proformance Insurance Company (NJ)/10100/'BBBq';
  -- Property-Owners Insurance Company (IN)/32905/'Aq';
  -- Protective Insurance Company (IN)/12416/'Aq';
  -- Providence Mutual Fire Insurance Company (RI)/15040/'BBBq';
  -- Public Service Mutual Insurance Company (NY)/15059/'BBBq';
  -- Quincy Mutual Fire Insurance Company (MA)/15067/'Aq';
  -- Ram Mutual Insurance Company (MN)/16330/'BBBq';
  -- Republic Mutual Insurance Company (OH)/20192/'BBBq';
  -- Republic-Franklin Insurance Company (OH)/12475/'Aq';
  -- Residence Mutual Insurance Company (CA)/15776/'Aq';
  -- Rider Insurance Company (NJ)/34509/'BBBq';
  -- Rochdale Insurance Company (NY)/12491/'BBBq';
  -- Rockford Mutual Insurance Company (IL)/27065/'BBBq';
  -- Rockhill Insurance Company (AZ)/28053/'BBBq';
  -- RSUI Indemnity Company (NH)/22314/'Aq';
  -- Rural Mutual Insurance Company (WI)/15091/'Aq';
  -- RVOS Farm Mutual Insurance Company (TX)/21733/'BBBq';
  -- Safe Auto Insurance Company (OH)/25405/'BBBq';
  -- Safety Indemnity Insurance Company (MA)/33618/'Aq';
  -- Safety Insurance Company (MA)/39454/'Aq';
  -- Safeway Direct Insurance Company (CA)/10939/'BBBq';
  -- Safeway Insurance Company (IL)/12521/'BBBq';
  -- Safeway Insurance Company of Alabama, Inc. (IL)/11223/'BBBq';
  -- Safeway Insurance Company of Georgia (GA)/25640/'BBBq';
  -- Safeway Insurance Company of Louisiana (LA)/10248/'BBBq';
  -- Sagamore Insurance Company (IN)/40460/'BBBq';
  -- SAIF Corporation (OR)/36196/'BBBq';
  -- Secura Insurance, A Mutual Company (WI)/22543/'Aq';
  -- Secura Supreme Insurance Company (WI)/10239/'Aq';
  -- Security Mutual Insurance Company (NY)/15113/'BBq';
  -- Select Risk Insurance Company (PA)/17752/'BBBq';
  -- Seminole Casualty Insurance Company (FL)/33545/'BBq';
  -- Sentry Insurance A Mutual Company (WI)/24988/'Aq';
  -- Sentry Select Insurance Company (WI)/21180/'Aq';
  -- Service Lloyds Insurance Company (TX)/43389/'Aq';
  -- Shelter General Insurance Company (MO)/23361/'BBBq';
  -- Shelter Mutual Insurance Company (MO)/23388/'Aq';
  -- Society Insurance, A Mutual Company (WI)/15261/'BBBq';
  -- Sonnenberg Mutual Insurance Association (OH)/10271/'BBBq';
  -- Southeastern U.S. Captive Insurance, Inc. (GA)/11184/'Bq';
  -- Southern Farm Bureau Casualty Insurance Company
     (MS)/18325/'Aq';

  -- Southern General Insurance Company (GA)/37141/'BBq';
  -- Southern Insurance Company of Virginia (VA)/26867/'BBBq';
  -- Southern-Owners Insurance Company (MI)/10190/'Aq';
  -- Standard Mutual Insurance Company (IL)/15199/'BBq';
  -- State Auto Insurance Company of Ohio (OH)/11017/'Aq';
  -- State Auto National Insurance Company (OH)/19530/'BBBq';
  -- State Auto Property & Casualty Insurance Company
     (IA)/25127/'Aq';

  -- State Automobile Mutual Insurance Company (OH)/25135/'Aq';
  -- State Volunteer Mutual Insurance Company (TN)/33049/'BBBq';
  -- Sterling Insurance Company (NY)/15210/'BBBq';
  -- Stonetrust Commercial Insurance Company (LA)/11042/'BBBq';
  -- Stonewood Insurance Company (NC)/11828/'Aq';
  -- Stratford Insurance Company (NH)/40436/'Aq';
  -- Strathmore Insurance Company (NY)/11024/'Aq';
  -- SUA Insurance Company (IL)/40134/'BBBq';
  -- Summit Insurance Company (CT)/37354/'BBBq';
  -- Technology Insurance Company (NH)/42376/'Aq';
  -- Tennessee Farmers Assurance Company (TN)/41220/'Aq';
  -- Tennessee Farmers Mutual Insurance Company (TN)/15245/'Aq';
  -- Texas Mutual Insurance Company (TX)/22945/'Aq';
  -- Topa Insurance Company (CA)/18031/'BBBq';
  -- Transguard Insurance Company of America, Inc.
     (IL)/28886/'BBBq';

  -- Trustgard Insurance Company (OH)/40118/'Aq';
  -- Tudor Insurance Company (NH)/37982/'Aq';
  -- U.S. Security Insurance Company (FL)/21300/'BBq';
  -- Ulico Casualty Company (DE)/37893/'BBBq';
  -- Union Insurance Company of Providence (IA)/21423/'Aq';
  -- Union Mutual Fire Insurance Company (VT)/25860/'BBBq';
  -- United Automobile Insurance Company (FL)/35319/'BBq';
  -- United Educators Insurance, A Reciprocal Risk Retention Group
     (VT)/10020/'Aq';

  -- United Farm Family Insurance Company (NY)/29963/'Aq';
  -- United Farm Family Mutual Insurance Company
     (IN)/15288/'BBBq';

  -- United Fire & Casualty Co. (IA)/13021/'Aq';
  -- United Fire & Indemnity Company (TX)/19496/'Aq';
  -- United Fire Lloyds (TX)/43559/'Aq';
  -- Universal Casualty Company (IL)/42862/'BBBq';
  -- Utah Medical Insurance Association (UT)/36676/'BBBq';
  -- Utica Mutual Insurance Company (NY)/25976/'Aq';
  -- Utica National Assurance Company (NY)/10687/'Aq';
  -- Utica National Insurance Company of Texas (TX)/43478/'Aq';
  -- Vanliner Insurance Company (MO)/21172/'BBBq';
  -- Vermont Mutual Insurance Company (VT)/26018/'Aq';
  -- Viking Insurance Company of Wisconsin (WI)/13137/'Aq';
  -- Vinings Insurance Company (SC)/16632/'Aq';
  -- Virginia Farm Bureau Fire & Casualty Insurance Company
     (VA)/26026/'BBBq';

  -- Virginia Farm Bureau Mutual Insurance Company
     (VA)/26034/'BBBq';

  -- Virginia Farm Bureau Town & Country Insurance Company
     (VA)/10086/'BBBq';

  -- Wawanesa General Insurance Company (CA)/10683/'BBBq';
  -- Wawanesa Mutual Insurance Company (CA)/31526/'Aq';
  -- West Bend Mutual Insurance Company (WI)/15350/'Aq';
  -- Western General Insurance Company (CA)/27502/'BBq';
  -- Western Mutual Insurance Company (CA)/13625/'Aq';
  -- Western National Mutual Insurance Company (MN)/15377/'Aq';
  -- Western Reserve Mutual Casualty Company (OH)/26131/'BBBq';
  -- Western United Insurance Company (CA)/37770/'Aq';
  -- Western World Insurance Company (NH)/13196/'Aq';
  -- Westfield Insurance Company (OH)/24112/'Aq';
  -- Westfield National Insurance Company (OH)/24120/'Aq';
  -- Wilshire Insurance Company (NC)/13234/'BBBq';
  -- Wilson Mutual Insurance Company (WI)/19950/'Aq';
  -- Wisconsin Mutual Insurance Company (WI)/27022/'BBBq';
  -- Wisconsin Reinsurance Corporation (WI)/30260/'BBBq';
  -- Wolverine Mutual Insurance Company (MI)/15407/'BBq';
  -- Workers Compensation Fund (UT)/10033/'Aq';
  -- Workmen's Auto Insurance Company (CA)/13250/'BBq';

Fitch has withdrawn these Q-IFS ratings:

Entity/NAIC Code/Prior Rating
  -- American Healthcare Indemnity Company (DE)/39152/'BBBq';
  -- American Healthcare Specialty Insurance Company
     (AR)/38920/'BBBq';

  -- American Mining Insurance Company (AL)/15911/'BBBq';
  -- Argonaut Great Central Insurance Company (IL)/19860/'BBBq';
  -- Argonaut Limited Risk Insurance Company (IL)/26409/'BBBq';
  -- Argonaut-Midwest Insurance Company (IL)/19828/'BBBq';
  -- Argonaut-Southwest Insurance Company (LA)/19844/'BBBq';
  -- Builders Insurance Company, Inc. (NV)/11025/'BBq';
  -- California Healthcare Insurance Company, Inc., A Risk
     Retention Group (HI)/44504/'BBBq';

  -- Capital City Insurance Company, Inc. (SC)/30589/'BBBq';
  -- Center Mutual Insurance Company (ND)/34606/'BBBq';
  -- Community Hospital Alternative For Risk Transfer (A
     Reciprocal Risk Retention Group) (VT)/11259/'BBBq';

  -- Golden Bear Insurance Company (CA)/39861/'BBBq';
  -- Insurance Company of the Americas (FL)/33030/'BBBq';
  -- Montpelier US Insurance Company (OK)/36838/'BBq';
  -- Mountain States Indemnity Company (NM)/10177/'BBBq';
  -- Nevada Mutual Insurance Company, Inc. (NV)/11260/'BBq';
  -- North Pointe Insurance Company (MI)/27740/'BBq';
  -- Nova Casualty Company (NY)/42552/'BBBq';
  -- Oklahoma Farmers Union Mutual Insurance Company
     (OK)/41475/'BBBq';

  -- Patriot Insurance Company (ME)/32069/'BBq';
  -- Patrons Fire Insurance Company of Rhode Island
     (CT)/30937/'BBq';

  -- SCPIE Indemnity Company (CA)/10352/'BBBq';
  -- Seaworthy Insurance Company (MD)/37923/'BBBq';
  -- Select Markets Insurance Company (IL)/19836/'BBBq';
  -- St. Johns Insurance Company, Inc. (FL)/11844/'Bq';
  -- State-Wide Insurance Company (NY)/25275/'BBBq';
  -- Sutter Insurance Company (CA)/32107/'BBBq'


* S&P: Defaults in the US to Escalate Through the Rest of 2008
--------------------------------------------------------------
Defaults in the U.S. have begun to climb visibly as expected, with
37 defaults in the first half of the year, said an article
published by Standard & Poor's.  The article, which is titled
"U.S. Corporate Default Outlook: Corporate Hatchet Meter Kicks
Into Motion (Premium)," says that this is almost equivalent to the
combined 16 and 22 defaults in 2007 and 2006, respectively.  If
the six defaults in July through the 28th were included, the total
for the year easily exceeds the total in the two prior years.
      
"We expect defaults to continue to gain momentum through the rest
of 2008 and 2009," said Diane Vazza, head of Standard & Poor's
Global Fixed Income Research Group.  "Given the prevailing high
levels of market volatility, a material risk remains that defaults
could be significantly more pronounced and severe, especially if
this recession is deeper and longer than expected."
     
Therefore, S&P simulates the default-rate impact under two
alternative economic scenarios, one worse than the baseline and
one better, both of which have an estimated 20% chance of
occurring.  In its baseline scenario (to which we've assigned a
60% probability), S&P expects the U.S. speculative-grade default
rate to escalate to a mean forecast of 4.9% in the next 12 months
(through June 2009).  To reach the baseline forecast of 4.9%, 79
issuers must default in the next 12 months.
     
Under S&P's two alternative economic scenarios, the pessimistic
scenario yields a mean 12-month default rate of 8.5%, nearly
double the long-term average of 4.4% but still below the peak of
10.8% in 2001-2002.  The optimistic scenario yields an average
default rate of 3.4%, below the long-term average.


* S&P Says Slowing Economic Conditions Pressure S&P 500
-------------------------------------------------------
Slowing economic conditions and stress in capital markets have put
pressure on earnings and raised the credit risk of the members in
the S&P 500 index, according to an article published by Standard &
Poor's.  The article, which is titled "Credit Profile Of The S&P
500: More Credit Downgrades On The Horizon (Premium)," says that
operating earnings per share for the S&P 500 fell to $16.60 in the
first quarter of 2008 from $22.40 in the first quarter of 2007, a
26% decline.
      
"Our macroeconomic research team expects operating earnings to
decline to $79.40/share for the 2008 and $76 in 2009 from $82.5 in
2007," noted Diane Vazza, head of Standard & Poor's Global Fixed
Income Research Group.  However, earnings have been dragged down,
principally in the financials, homebuilders, and automotive
sectors.
     
Excluding financials, homebuilders, automotives, and the high-
performing energy sector reported earnings are on pace to increase
5.4% in the second quarter.  "Nevertheless, the difficult economic
and financial market environment has already caused a slight slide
in credit quality," Ms. Vazza added.  The number of downgrades in
the first half of 2008 is almost double in the number of
downgrades in the first half of 2007.


* S&P Puts Default Ratings on 32 Classes of Notes
-------------------------------------------------
Standard & Poor's Ratings Services lowered its ratings on 32
classes of notes from Careel Bay CDO Ltd., STACK 2005-2 Ltd.,
Static Residential CDO 2006-C Ltd., and Timberwolf I Ltd.
following the liquidation of their portfolio collateral.  Careel
Bay CDO Ltd., STACK 2005-2 Ltd., and Static Residential CDO 2006-C
Ltd. are all hybrid collateralized debt obligation transactions
backed predominantly by mezzanine residential mortgage-backed
securities, while Timberwolf I Ltd. is a hybrid CDO of structured
finance CDO.  The deals had previously experienced events of
default and, subsequently, the controlling noteholders voted to
accelerate the maturity of the notes and to liquidate the
collateral assets.

The downgrades follow notice from the trustees for the deals that
the liquidation of the portfolio assets is complete and that the
available proceeds have been distributed to the noteholders.  The
trustees have indicated that the proceeds of the liquidation for
all four transactions were insufficient to pay down the balances
of any of the notes in full.


                          Rating Actions

                                              Rating
                                              ------
  Transaction                         Class  To     From
  -----------                         -----  --     ----
  Careel Bay CDO Ltd.                 A1S    D      CCC-/Watch Neg
  Careel Bay CDO Ltd.                 A1J    D      CC
  Careel Bay CDO Ltd.                 A2     D      CC
  Careel Bay CDO Ltd.                 A3     D      CC
  Careel Bay CDO Ltd.                 B      D      CC
  Careel Bay CDO Ltd.                 C      D      CC
  STACK 2005-2 Ltd.                   A-1    D      B-
  STACK 2005-2 Ltd.                   A-2    D      B-
  STACK 2005-2 Ltd.                   B      D      CC
  STACK 2005-2 Ltd.                   C      D      CC
  STACK 2005-2 Ltd.                   D      D      CC
  STACK 2005-2 Ltd.                   E      D      CC
  STACK 2005-2 Ltd.                   F      D      CC
  STatic Residential CDO 2006-C Ltd.  A-1a   D      CC
  STatic Residential CDO 2006-C Ltd.  A-1b   D      CC
  STatic Residential CDO 2006-C Ltd.  A-2    D      CC
  STatic Residential CDO 2006-C Ltd.  B-1    D      CC  
  STatic Residential CDO 2006-C Ltd.  B-2    D      CC
  STatic Residential CDO 2006-C Ltd.  C      D      CC
  STatic Residential CDO 2006-C Ltd.  D-1a   D      CC
  STatic Residential CDO 2006-C Ltd.  D-1b   D      CC
  STatic Residential CDO 2006-C Ltd.  D-2    D      CC
  Timberwolf I Ltd.                   S-1    D      B-/Watch Neg
  Timberwolf I Ltd.                   S-2    D      CC
  Timberwolf I Ltd.                   A-1a   D      CCC-/Watch Neg
  Timberwolf I Ltd.                   A-1b   D      CC
  Timberwolf I Ltd.                   A-1c   D      CC
  Timberwolf I Ltd.                   A-1d   D      CC
  Timberwolf I Ltd.                   A-2    D      CC  
  Timberwolf I Ltd.                   B      D      CC
  Timberwolf I Ltd.                   C      D      CC
  Timberwolf I Ltd.                   D      D      CC


* Cadwalader Axes 96 Real Estate Finance and Securitizations Jobs
-----------------------------------------------------------------
Cadwalader Wickersham & Taft will terminate 96 salaried lawyers
mostly in the real-estate finance and securitizations practices in
the firm's offices in New York, Charlotte, North Carolina,
Washington and London, various reports say.

WSJ states that in January, Cadwalader also terminated 35 lawyers.

According to Wall Street Journal, the job cut which included
first-year associates to counsel, was the biggest that struck the
legal society in this financial-markets downturn.  Law firms that
specialized in structured finance have slowed down in business
after having bulked up and reaped profits from big deals during
the five years, WSJ adds.

Compared with the thousands of jobs that have been cut on Wall
Street, the number of reported law-firm layoffs is small, but what
made the layoffs notable was the job security that many equate
with a legal career, WSJ points out.

WSJ, citing Gregory A. Markel, the head of Cadwalader's litigation
practice, says the 96 lawyers will get severance pay through the
end of the year.  By September, he said, the firm will have
580 lawyers, the same number it had in January 2006, WSJ adds.

WSJ relates that Cadwalader isn't the only large firm to lay off
lawyers this year.  The Journal notes that in January, Clifford
Chance LLP laid off six associates in its structured-finance
group; in May, Sonnenschein Nath & Rosenthal LLP laid off
37 lawyers, consisting of partners and associates, saying demand
was down for some of the company's practices, particularly real
estate.

                  About Cadwalader Wickersham

Cadwalader, Wickersham & Taft LLP -- http://www.cadwalader.com/--   
established in 1792, is one of the world's leading international
law firms, with offices in New York, London, Charlotte, Washington
and Beijing.  Cadwalader serves a diverse client base, including
many of the world's top financial institutions, undertaking
business in more than 50 countries in six continents.

The firm offers legal expertise in antitrust, banking, business
fraud, corporate finance, corporate governance, environmental,
healthcare, insolvency, insurance and reinsurance,  intellectual
property, litigation, mergers and acquisitions, private client,
private equity, real estate, regulation, securitization,
structured finance, and tax.


* BOND PRICING: For the Week of July 28, 2008 to August 1, 2008
---------------------------------------------------------------

Issuer                           Coupon    Maturity    Bid Price
------                           ------    --------    ---------
ABC RAIL PRODUCT                  10.500%  1/15/2004         0.00
ABC RAIL PRODUCT                  10.500%  12/31/2004       99.98
ACCURIDE CORP                      8.500%  2/1/2015         67.50
ADVANCED MED OPT                   3.250%  8/1/2026         67.70
AIRTRAN HOLDING                    5.500%  4/15/2015        67.58
AIRTRAN HOLDINGS                   7.000%  7/1/2023         69.80
ALERIS INTL INC                   10.000%  12/15/2016       73.54
ALESCO FINANCIAL                   7.625%  5/15/2027        34.00
ALION SCIENCE                     10.250%  2/1/2015         72.00
ALLEGIANCE TEL                    11.750%  2/15/2008         0.00
ALLEGIANCE TEL                    12.875%  5/15/2008         0.00
AMBAC INC                          6.150%  2/7/2087         30.00
AMBASSADORS INTL                   3.750%  4/15/2027        53.00
AMD                                5.750%  8/15/2012        63.41
AMD                                6.000%  5/1/2015         54.15
AMER & FORGN PWR                   5.000%  3/1/2030         50.02
AMER AXLE & MFG                    5.250%  2/11/2014        66.64
AMER AXLE & MFG                    7.875%  3/1/2017         65.00
AMERICREDIT CORP                   0.750%  9/15/2011        63.65
AMERICREDIT CORP                   2.125%  9/15/2013        57.00
AMES TRUE TEMPER                  10.000%  7/15/2012        58.25
AMR CORP                           9.000%  8/1/2012         64.48
AMR CORP                           9.000%  9/15/2016        63.75
AMR CORP                           9.750%  8/15/2021        50.06
AMR CORP                           9.800%  10/1/2021        59.50
AMR CORP                           9.880%  6/15/2020        52.00
AMR CORP                          10.000%  4/15/2021        59.00
AMR CORP                          10.150%  5/15/2020        49.95
AMR CORP                          10.200%  3/15/2020        52.63
AMR CORP                          10.450%  3/10/2011        57.75
ANTIGENICS                         5.250%  2/1/2025         61.50
ASBURY AUTO GRP                    3.000%  9/15/2012        68.42
ASHTON WOODS USA                   9.500%  10/1/2015        60.00
ASPECT MEDICAL                     2.500%  6/15/2014        57.38
ATHEROGENICS INC                   1.500%  2/1/2012          5.25
ATHEROGENICS INC                   4.500%  3/1/2011         11.50
AVENTINE RENEW                    10.000%  4/1/2017         65.50
AVIS BUDGET CAR                    7.625%  5/15/2014        71.13
AVIS BUDGET CAR                    7.750%  5/15/2016        66.00
BALLY TOTAL FITN                  13.000%  7/15/2011        45.00
BANK NEW ENGLAND                   8.750%  4/1/1999          8.00
BANK NEW ENGLAND                   9.500%  2/15/1996        17.00
BANK NEW ENGLAND                   9.875%  9/15/1999         6.62
BANKUNITED CAP                     3.125%  3/1/2034         41.00
BB&T CAPT TR IV                    6.820%  6/12/2057        69.00
BEAZER HOMES USA                   6.500%  11/15/2013       71.00
BEAZER HOMES USA                   6.875%  7/15/2015        66.65
BELL MICROPRODUC                   3.750%  3/5/2024         70.00
BERRY PLASTICS                    10.250%  3/1/2016         65.13
BON-TON DEPT STR                  10.250%  3/15/2014        52.50
BORDEN INC                         7.875%  2/15/2023        54.00
BORDEN INC                         8.375%  4/15/2016        38.06
BORDEN INC                         9.200%  3/15/2021        45.00
BOWATER INC                        6.500%  6/15/2013        58.13
BOWATER INC                        9.500%  10/15/2012       63.00
BOYD GAMING CORP                   6.750%  4/15/2014        75.50
BOYD GAMING CORP                   7.125%  2/1/2016         75.50
BRODER BROS CO                    11.250%  10/15/2010       69.50
BUDGET GROUP INC                   9.125%  4/1/2006          0.01
BUFFETS INC                       12.500%  11/1/2014         4.50
BURLINGTON NORTH                   3.200%  1/1/2045         48.16
CAPITALSOURCE                      3.500%  7/15/2034        70.00
CAPITALSOURCE                      4.000%  7/15/2034        68.50
CCH I LLC                          9.920%  4/1/2014         54.00
CCH I LLC                         10.000%  5/15/2014        52.75
CCH I LLC                         11.125%  1/15/2014        53.00
CCH I/CCH I CP                    11.000%  10/1/2015        76.25
CELL THERAPEUTIC                   5.750%  12/15/2011       20.50
CHAMPION ENTERPR                   2.750%  11/1/2037        49.46
CHARMING SHOPPES                   1.125%  5/1/2014         66.43
CHARTER COMM HLD                  11.125%  1/15/2011        56.16
CHARTER COMM HLD                  11.750%  5/15/2011        65.00
CHARTER COMM LP                    5.875%  11/16/2009       64.00
CHARTER COMM LP                    6.500%  10/1/2027        42.00
CHENIERE ENERGY                    2.250%  8/1/2012         30.00
CIT GROUP INC                      5.125%  9/30/2014        71.00
CIT GROUP INC                      5.200%  6/15/2015        54.20
CIT GROUP INC                      5.400%  3/7/2013         72.50
CIT GROUP INC                      5.400%  1/30/2016        71.75
CIT GROUP INC                      5.650%  2/13/2017        72.00
CIT GROUP INC                      5.800%  12/15/2016       62.00
CIT GROUP INC                      5.850%  9/15/2016        71.00
CIT GROUP INC                      5.850%  3/15/2022        53.00
CIT GROUP INC                      5.900%  3/15/2022        51.51
CIT GROUP INC                      5.950%  9/15/2016        56.00
CIT GROUP INC                      5.950%  2/15/2017        68.58
CIT GROUP INC                      6.000%  3/15/2016        59.88
CIT GROUP INC                      6.000%  11/15/2016       59.48
CIT GROUP INC                      6.000%  4/1/2036         65.73
CIT GROUP INC                      6.050%  5/15/2013        67.50
CIT GROUP INC                      6.050%  9/15/2016        57.05
CIT GROUP INC                      6.100%  3/15/2067        44.50
CIT GROUP INC                      6.150%  9/15/2021        55.46
CIT GROUP INC                      6.250%  9/15/2021        56.00
CIT GROUP INC                      6.250%  11/15/2021       52.85
CIT GROUP INC                      7.250%  3/15/2013        68.68
CITIZENS UTIL CO                   7.000%  11/1/2025        69.00
CITIZENS UTIL CO                   7.050%  10/1/2046        65.71
CITIZENS UTIL CO                   7.450%  7/1/2035         68.00
CLAIRE'S STORES                    9.250%  6/1/2015         43.50
CLAIRE'S STORES                    9.625%  6/1/2015         31.50
CLAIRE'S STORES                   10.500%  6/1/2017         30.00
CLEAR CHANNEL                      4.900%  5/15/2015        52.00
CLEAR CHANNEL                      5.000%  3/15/2012        64.75
CLEAR CHANNEL                      5.500%  9/15/2014        52.38
CLEAR CHANNEL                      5.500%  12/15/2016       51.00
CLEAR CHANNEL                      5.750%  1/15/2013        62.75
CLEAR CHANNEL                      6.875%  6/15/2018        48.00
CLEAR CHANNEL                      7.250%  10/15/2027       51.72
CMP SUSQUEHANNA                    9.875%  5/15/2014        63.50
COGENT COMMUNICA                   1.000%  6/15/2027        56.72
COLLINS & AIKMAN                  10.750%  12/31/2011        0.00
COLUMBIA/HCA                       7.500%  11/15/2095       69.00
COMERICA CAP TR                    6.576%  2/20/2037        66.05
COMPLETE MGMT                      8.000%  8/15/2003        99.98
COMPUCREDIT                        3.625%  5/30/2025        45.00
COMPUCREDIT                        5.875%  11/30/2035       39.00
CONSTAR INTL                      11.000%  12/1/2012        49.75
CONSTELLATION BR                   8.125%  1/15/2012       100.63
CONTL AIRLINES                     8.750%  12/1/2011        71.10
DECODE GENETICS                    3.500%  4/15/2011        32.10
DELPHI CORP                        6.197%  11/15/2033        0.88
DELPHI CORP                        6.500%  8/15/2013        12.88
DELPHI CORP                        8.250%  10/15/2033        0.01
DELTA AIR LINES                    8.000%  12/1/2015        35.00
DEX MEDIA INC                      8.000%  11/15/2013       61.50
DILLARD DEPT STR                   7.750%  5/15/2027        64.00
DIVA SYSTEMS                      12.625%  3/1/2008          0.00
EPICOR SOFTWARE                    2.375%  5/15/2027        67.12
EPIX MEDICAL INC                   3.000%  6/15/2024        61.00
EQUISTAR CHEMICA                   7.550%  2/15/2026        65.50
EXODUS COMM INC                    4.750%  7/15/2008         0.00
EXPRESSJET HLDS                   11.250%  8/1/2023         44.00
FEDDERS NORTH AM                   9.875%  3/1/2014          1.43
FIBERTOWER CORP                    9.000%  11/15/2012       69.00
FIFTH THIRD BANC                   4.500%  6/1/2018         68.37
FIFTH THIRD CAP                    6.500%  4/15/2037        64.50
FINLAY FINE JWLY                   8.375%  6/1/2012         41.50
FINOVA GROUP                       7.500%  11/15/2009       10.00
FIRST DATA CORP                    4.700%  8/1/2013         43.00
FIRST DATA CORP                    4.850%  10/1/2014        32.50
FIRST DATA CORP                    4.950%  6/15/2015        40.10
FIRST DATA CORP                    5.625%  11/1/2011        52.00
FIVE STAR QUALIT                   3.750%  10/15/2026       64.72
FORD HOLDINGS                      9.300%  3/1/2030         51.77
FORD HOLDINGS                      9.375%  3/1/2020         55.69
FORD MOTOR CO                      4.250%  12/15/2036       67.50
FORD MOTOR CO                      6.375%  2/1/2029         40.00
FORD MOTOR CO                      6.500%  8/1/2018         46.50
FORD MOTOR CO                      6.625%  2/15/2028        45.00
FORD MOTOR CO                      6.625%  10/1/2028        46.50
FORD MOTOR CO                      7.125%  11/15/2025       50.00
FORD MOTOR CO                      7.400%  11/1/2046        38.73
FORD MOTOR CO                      7.450%  7/16/2031        48.50
FORD MOTOR CO                      7.500%  8/1/2026         41.15
FORD MOTOR CO                      7.700%  5/15/2097        38.56
FORD MOTOR CO                      7.750%  6/15/2043        42.35
FORD MOTOR CO                      8.875%  1/15/2022        53.32
FORD MOTOR CO                      8.900%  1/15/2032        54.20
FORD MOTOR CO                      9.215%  9/15/2021        53.25
FORD MOTOR CO                      9.950%  2/15/2032        55.96
FORD MOTOR CO                      9.980%  2/15/2047        51.25
FORD MOTOR CRED                    5.000%  2/22/2011        68.46
FORD MOTOR CRED                    5.200%  3/21/2011        66.94
FORD MOTOR CRED                    5.250%  9/20/2011        66.97
FORD MOTOR CRED                    5.300%  3/21/2011        64.00
FORD MOTOR CRED                    5.350%  2/22/2011        67.83
FORD MOTOR CRED                    5.400%  1/20/2011        69.52
FORD MOTOR CRED                    5.400%  9/20/2011        63.19
FORD MOTOR CRED                    5.400%  10/20/2011       64.03
FORD MOTOR CRED                    5.400%  10/20/2011       66.50
FORD MOTOR CRED                    5.450%  6/21/2010        69.00
FORD MOTOR CRED                    5.450%  4/20/2011        69.18
FORD MOTOR CRED                    5.450%  10/20/2011       67.23
FORD MOTOR CRED                    5.500%  4/20/2011        67.65
FORD MOTOR CRED                    5.500%  9/20/2011        64.03
FORD MOTOR CRED                    5.500%  10/20/2011       64.92
FORD MOTOR CRED                    5.550%  8/22/2011        64.60
FORD MOTOR CRED                    5.600%  4/20/2011        66.05
FORD MOTOR CRED                    5.600%  8/22/2011        66.15
FORD MOTOR CRED                    5.600%  9/20/2011        67.40
FORD MOTOR CRED                    5.600%  11/21/2011       64.39
FORD MOTOR CRED                    5.600%  11/21/2011       59.25
FORD MOTOR CRED                    5.650%  7/20/2011        63.94
FORD MOTOR CRED                    5.650%  11/21/2011       68.08
FORD MOTOR CRED                    5.650%  1/21/2014        51.80
FORD MOTOR CRED                    5.700%  3/22/2010        69.78
FORD MOTOR CRED                    5.700%  5/20/2011        69.00
FORD MOTOR CRED                    5.700%  12/20/2011       62.97
FORD MOTOR CRED                    5.750%  8/22/2011        68.43
FORD MOTOR CRED                    5.750%  12/20/2011       63.08
FORD MOTOR CRED                    5.750%  2/21/2012        66.45
FORD MOTOR CRED                    5.750%  1/21/2014        50.80
FORD MOTOR CRED                    5.750%  2/20/2014        57.86
FORD MOTOR CRED                    5.750%  2/20/2014        56.66
FORD MOTOR CRED                    5.800%  8/22/2011        65.00
FORD MOTOR CRED                    5.850%  7/20/2011        67.77
FORD MOTOR CRED                    5.850%  1/20/2012        65.28
FORD MOTOR CRED                    5.900%  7/20/2011        67.03
FORD MOTOR CRED                    5.900%  2/21/2012        65.17
FORD MOTOR CRED                    5.900%  2/20/2014        53.30
FORD MOTOR CRED                    6.000%  1/20/2012        64.18
FORD MOTOR CRED                    6.000%  1/21/2014        59.02
FORD MOTOR CRED                    6.000%  3/20/2014        58.61
FORD MOTOR CRED                    6.000%  3/20/2014        65.87
FORD MOTOR CRED                    6.000%  3/20/2014        47.88
FORD MOTOR CRED                    6.000%  3/20/2014        53.11
FORD MOTOR CRED                    6.000%  11/20/2014       48.00
FORD MOTOR CRED                    6.000%  11/20/2014       53.41
FORD MOTOR CRED                    6.000%  11/20/2014       50.50
FORD MOTOR CRED                    6.000%  1/20/2015        52.62
FORD MOTOR CRED                    6.000%  2/20/2015        47.73
FORD MOTOR CRED                    6.050%  6/20/2011        67.13
FORD MOTOR CRED                    6.050%  2/20/2014        54.00
FORD MOTOR CRED                    6.050%  3/20/2014        53.01
FORD MOTOR CRED                    6.050%  4/21/2014        49.50
FORD MOTOR CRED                    6.050%  12/22/2014       51.18
FORD MOTOR CRED                    6.050%  12/22/2014       54.67
FORD MOTOR CRED                    6.050%  2/20/2015        47.88
FORD MOTOR CRED                    6.100%  6/20/2011        68.00
FORD MOTOR CRED                    6.100%  2/20/2015        51.12
FORD MOTOR CRED                    6.150%  5/20/2011        67.67
FORD MOTOR CRED                    6.150%  12/22/2014       50.55
FORD MOTOR CRED                    6.150%  1/20/2015        58.00
FORD MOTOR CRED                    6.200%  5/20/2011        69.04
FORD MOTOR CRED                    6.200%  6/20/2011        69.69
FORD MOTOR CRED                    6.200%  4/21/2014        53.00
FORD MOTOR CRED                    6.200%  3/20/2015        55.00
FORD MOTOR CRED                    6.250%  6/20/2011        68.44
FORD MOTOR CRED                    6.250%  6/20/2011        68.75
FORD MOTOR CRED                    6.250%  2/21/2012        64.10
FORD MOTOR CRED                    6.250%  12/20/2013       60.00
FORD MOTOR CRED                    6.250%  12/20/2013       56.97
FORD MOTOR CRED                    6.250%  4/21/2014        54.16
FORD MOTOR CRED                    6.250%  1/20/2015        48.00
FORD MOTOR CRED                    6.250%  3/20/2015        55.00
FORD MOTOR CRED                    6.300%  5/20/2014        51.70
FORD MOTOR CRED                    6.300%  5/20/2014        49.74
FORD MOTOR CRED                    6.350%  4/21/2014        53.00
FORD MOTOR CRED                    6.500%  12/20/2013       59.01
FORD MOTOR CRED                    6.500%  2/20/2015        57.20
FORD MOTOR CRED                    6.500%  3/20/2015        54.00
FORD MOTOR CRED                    6.520%  3/10/2013        52.79
FORD MOTOR CRED                    6.550%  12/20/2013       63.91
FORD MOTOR CRED                    6.550%  7/21/2014        53.04
FORD MOTOR CRED                    6.600%  10/21/2013       55.80
FORD MOTOR CRED                    6.650%  10/21/2013       53.48
FORD MOTOR CRED                    6.650%  6/20/2014        58.25
FORD MOTOR CRED                    6.750%  10/21/2013       60.79
FORD MOTOR CRED                    6.750%  6/20/2014        57.25
FORD MOTOR CRED                    6.800%  6/20/2014        55.00
FORD MOTOR CRED                    6.800%  6/20/2014        53.00
FORD MOTOR CRED                    6.800%  3/20/2015        50.70
FORD MOTOR CRED                    6.850%  9/20/2013        58.65
FORD MOTOR CRED                    6.850%  5/20/2014        51.52
FORD MOTOR CRED                    6.850%  6/20/2014        57.06
FORD MOTOR CRED                    6.950%  5/20/2014        55.88
FORD MOTOR CRED                    7.000%  8/15/2012        59.00
FORD MOTOR CRED                    7.000%  10/1/2013        68.00
FORD MOTOR CRED                    7.050%  9/20/2013        58.00
FORD MOTOR CRED                    7.100%  9/20/2013        63.55
FORD MOTOR CRED                    7.100%  9/20/2013        57.85
FORD MOTOR CRED                    7.250%  7/20/2017        80.40
FORD MOTOR CRED                    7.300%  1/23/2012        66.44
FORD MOTOR CRED                    7.300%  4/20/2015        51.16
FORD MOTOR CRED                    7.350%  9/15/2015        59.44
FORD MOTOR CRED                    7.400%  8/21/2017        59.18
FORD MOTOR CRED                    7.550%  9/30/2015        98.84
FORD MOTOR CRED                    7.900%  5/18/2015        62.71
FORD MOTOR CRED                    8.000%  12/15/2016       69.00
FRANKLIN BANK                      4.500%  5/1/2027         31.65
FREMONT GEN CORP                   7.875%  3/17/2009        48.00
FRONTIER AIRLINE                   5.000%  12/15/2025       25.00
GENERAL MOTORS                     6.750%  5/1/2028         38.02
GENERAL MOTORS                     7.125%  7/15/2013        51.85
GENERAL MOTORS                     7.200%  1/15/2011        62.25
GENERAL MOTORS                     7.375%  5/23/2048        41.15
GENERAL MOTORS                     7.400%  9/1/2025         39.50
GENERAL MOTORS                     7.700%  4/15/2016        49.70
GENERAL MOTORS                     8.100%  6/15/2024        44.96
GENERAL MOTORS                     8.250%  7/15/2023        47.00
GENERAL MOTORS                     8.375%  7/15/2033        47.00
GENERAL MOTORS                     8.800%  3/1/2021         44.00
GENERAL MOTORS                     9.400%  7/15/2021        50.00
GEORGIA GULF CRP                  10.750%  10/15/2016       52.50
GLOBAL INDUS LTD                   2.750%  8/1/2027         66.59
GLOBALSTAR INC                     5.750%  4/1/2028         66.25
GMAC                               5.250%  1/15/2014        52.29
GMAC                               5.350%  1/15/2014        42.08
GMAC                               5.700%  6/15/2013        44.36
GMAC                               5.700%  10/15/2013       49.73
GMAC                               5.700%  12/15/2013       45.86
GMAC                               5.750%  1/15/2014        54.68
GMAC                               5.850%  5/15/2013        55.27
GMAC                               5.850%  6/15/2013        44.00
GMAC                               5.850%  6/15/2013        49.25
GMAC                               5.850%  6/15/2013        46.49
GMAC                               5.900%  12/15/2013       47.03
GMAC                               5.900%  12/15/2013       48.25
GMAC                               5.900%  1/15/2019        46.00
GMAC                               5.900%  1/15/2019        39.50
GMAC                               5.900%  2/15/2019        40.16
GMAC                               5.900%  10/15/2019       46.00
GMAC                               6.000%  1/15/2010        70.00
GMAC                               6.000%  2/15/2010        69.12
GMAC                               6.000%  7/15/2013        51.62
GMAC                               6.000%  11/15/2013       45.00
GMAC                               6.000%  12/15/2013       48.38
GMAC                               6.000%  2/15/2019        40.20
GMAC                               6.000%  2/15/2019        41.01
GMAC                               6.000%  2/15/2019        41.10
GMAC                               6.000%  3/15/2019        42.00
GMAC                               6.000%  3/15/2019        41.50
GMAC                               6.000%  3/15/2019        42.00
GMAC                               6.000%  3/15/2019        39.00
GMAC                               6.000%  3/15/2019        42.00
GMAC                               6.000%  4/15/2019        41.05
GMAC                               6.000%  9/15/2019        42.00
GMAC                               6.000%  9/15/2019        41.05
GMAC                               6.050%  3/15/2010        70.00
GMAC                               6.050%  8/15/2019        44.75
GMAC                               6.050%  8/15/2019        48.91
GMAC                               6.050%  10/15/2019       40.50
GMAC                               6.100%  11/15/2013       47.92
GMAC                               6.100%  9/15/2019        42.00
GMAC                               6.125%  10/15/2019       43.00
GMAC                               6.150%  9/15/2013        79.98
GMAC                               6.150%  11/15/2013       43.00
GMAC                               6.150%  12/15/2013       46.58
GMAC                               6.150%  8/15/2019        46.48
GMAC                               6.150%  9/15/2019        44.00
GMAC                               6.150%  10/15/2019       41.50
GMAC                               6.200%  11/15/2013       51.00
GMAC                               6.200%  4/15/2019        45.50
GMAC                               6.250%  3/15/2013        52.00
GMAC                               6.250%  7/15/2013        51.88
GMAC                               6.250%  10/15/2013       42.00
GMAC                               6.250%  11/15/2013       50.12
GMAC                               6.250%  12/15/2018       49.14
GMAC                               6.250%  1/15/2019        43.50
GMAC                               6.250%  4/15/2019        44.00
GMAC                               6.250%  5/15/2019        43.76
GMAC                               6.250%  7/15/2019        42.00
GMAC                               6.300%  3/15/2013        51.97
GMAC                               6.300%  10/15/2013       51.00
GMAC                               6.300%  11/15/2013       61.74
GMAC                               6.300%  8/15/2019        45.00
GMAC                               6.300%  8/15/2019        50.00
GMAC                               6.350%  5/15/2013        44.66
GMAC                               6.350%  4/15/2019        45.50
GMAC                               6.350%  7/15/2019        45.00
GMAC                               6.350%  7/15/2019        44.26
GMAC                               6.375%  8/1/2013         51.00
GMAC                               6.375%  1/15/2014        45.31
GMAC                               6.400%  3/15/2013        50.65
GMAC                               6.400%  12/15/2018       46.85
GMAC                               6.400%  11/15/2019       43.00
GMAC                               6.400%  11/15/2019       42.00
GMAC                               6.450%  2/15/2013        52.11
GMAC                               6.500%  7/15/2012        52.50
GMAC                               6.500%  2/15/2013        52.75
GMAC                               6.500%  3/15/2013        47.25
GMAC                               6.500%  4/15/2013        49.25
GMAC                               6.500%  5/15/2013        52.75
GMAC                               6.500%  6/15/2013        43.00
GMAC                               6.500%  8/15/2013        53.25
GMAC                               6.500%  11/15/2013       43.80
GMAC                               6.500%  6/15/2018        39.50
GMAC                               6.500%  11/15/2018       46.00
GMAC                               6.500%  12/15/2018       45.63
GMAC                               6.500%  12/15/2018       44.50
GMAC                               6.500%  5/15/2019        40.63
GMAC                               6.500%  1/15/2020        46.46
GMAC                               6.500%  2/15/2020        43.50
GMAC                               6.550%  12/15/2019       46.06
GMAC                               6.550%  12/15/2019       44.00
GMAC                               6.600%  8/15/2016        42.00
GMAC                               6.600%  5/15/2018        44.00
GMAC                               6.600%  6/15/2019        44.05
GMAC                               6.600%  6/15/2019        44.80
GMAC                               6.625%  10/15/2011       58.11
GMAC                               6.650%  2/15/2013        52.35
GMAC                               6.650%  6/15/2018        44.00
GMAC                               6.650%  10/15/2018       52.86
GMAC                               6.650%  10/15/2018       44.00
GMAC                               6.650%  2/15/2020        47.74
GMAC                               6.700%  5/15/2014        40.82
GMAC                               6.700%  5/15/2014        43.83
GMAC                               6.700%  6/15/2014        47.84
GMAC                               6.700%  8/15/2016        44.16
GMAC                               6.700%  6/15/2018        39.44
GMAC                               6.700%  6/15/2018        39.50
GMAC                               6.700%  11/15/2018       46.43
GMAC                               6.700%  6/15/2019        45.18
GMAC                               6.700%  12/15/2019       42.75
GMAC                               6.750%  9/15/2011        64.05
GMAC                               6.750%  10/15/2011       60.64
GMAC                               6.750%  10/15/2011       60.46
GMAC                               6.750%  9/15/2012        50.50
GMAC                               6.750%  9/15/2012        54.50
GMAC                               6.750%  10/15/2012       50.14
GMAC                               6.750%  4/15/2013        55.64
GMAC                               6.750%  4/15/2013        50.70
GMAC                               6.750%  6/15/2014        51.36
GMAC                               6.750%  12/1/2014        55.00
GMAC                               6.750%  7/15/2016        47.40
GMAC                               6.750%  8/15/2016        42.00
GMAC                               6.750%  9/15/2016        39.88
GMAC                               6.750%  6/15/2017        51.87
GMAC                               6.750%  3/15/2018        48.00
GMAC                               6.750%  7/15/2018        43.85
GMAC                               6.750%  9/15/2018        46.35
GMAC                               6.750%  10/15/2018       42.00
GMAC                               6.750%  11/15/2018       45.46
GMAC                               6.750%  5/15/2019        45.56
GMAC                               6.750%  5/15/2019        44.00
GMAC                               6.750%  6/15/2019        44.00
GMAC                               6.750%  6/15/2019        40.84
GMAC                               6.750%  3/15/2020        42.73
GMAC                               6.800%  2/15/2013        50.86
GMAC                               6.800%  4/15/2013        51.23
GMAC                               6.800%  9/15/2018        43.26
GMAC                               6.800%  10/15/2018       45.00
GMAC                               6.850%  5/15/2018        44.62
GMAC                               6.875%  8/28/2012        59.00
GMAC                               6.875%  10/15/2012       58.54
GMAC                               6.875%  4/15/2013        47.59
GMAC                               6.875%  8/15/2016        46.00
GMAC                               6.875%  7/15/2018        41.25
GMAC                               6.900%  6/15/2017        47.10
GMAC                               6.900%  7/15/2018        46.00
GMAC                               6.900%  8/15/2018        44.00
GMAC                               6.950%  6/15/2017        48.75
GMAC                               7.000%  10/15/2011       56.20
GMAC                               7.000%  9/15/2012        51.00
GMAC                               7.000%  10/15/2012       50.71
GMAC                               7.000%  11/15/2012       50.11
GMAC                               7.000%  12/15/2012       49.25
GMAC                               7.000%  1/15/2013        49.61
GMAC                               7.000%  6/15/2017        44.16
GMAC                               7.000%  7/15/2017        42.40
GMAC                               7.000%  2/15/2018        47.82
GMAC                               7.000%  2/15/2018        43.49
GMAC                               7.000%  2/15/2018        45.10
GMAC                               7.000%  3/15/2018        41.58
GMAC                               7.000%  5/15/2018        42.00
GMAC                               7.000%  8/15/2018        38.91
GMAC                               7.000%  9/15/2018        47.16
GMAC                               7.000%  2/15/2021        45.00
GMAC                               7.000%  9/15/2021        45.25
GMAC                               7.000%  9/15/2021        45.70
GMAC                               7.000%  6/15/2022        42.00
GMAC                               7.000%  11/15/2023       40.35
GMAC                               7.000%  11/15/2024       38.00
GMAC                               7.000%  11/15/2024       42.75
GMAC                               7.000%  11/15/2024       38.00
GMAC                               7.050%  3/15/2018        45.11
GMAC                               7.050%  3/15/2018        47.00
GMAC                               7.050%  4/15/2018        39.50
GMAC                               7.100%  9/15/2012        51.75
GMAC                               7.100%  1/15/2013        61.74
GMAC                               7.100%  1/15/2013        52.65
GMAC                               7.125%  8/15/2012        57.47
GMAC                               7.125%  12/15/2012       49.90
GMAC                               7.125%  10/15/2017       50.00
GMAC                               7.150%  11/15/2012       56.20
GMAC                               7.150%  9/15/2018        42.00
GMAC                               7.150%  1/15/2025        45.00
GMAC                               7.150%  3/15/2025        51.00
GMAC                               7.200%  10/15/2017       41.50
GMAC                               7.200%  10/15/2017       43.00
GMAC                               7.250%  8/15/2012        52.03
GMAC                               7.250%  12/15/2012       62.65
GMAC                               7.250%  12/15/2012       55.91
GMAC                               7.250%  9/15/2017        42.58
GMAC                               7.250%  9/15/2017        41.29
GMAC                               7.250%  9/15/2017        39.12
GMAC                               7.250%  9/15/2017        45.43
GMAC                               7.250%  1/15/2018        49.94
GMAC                               7.250%  4/15/2018        44.00
GMAC                               7.250%  4/15/2018        46.00
GMAC                               7.250%  8/15/2018        45.50
GMAC                               7.250%  8/15/2018        40.00
GMAC                               7.250%  9/15/2018        52.94
GMAC                               7.250%  1/15/2025        41.00
GMAC                               7.250%  2/15/2025        44.00
GMAC                               7.250%  3/15/2025        44.00
GMAC                               7.300%  12/15/2017       42.25
GMAC                               7.300%  1/15/2018        47.82
GMAC                               7.300%  1/15/2018        41.10
GMAC                               7.350%  4/15/2018        40.59
GMAC                               7.375%  11/15/2016       40.00
GMAC                               7.375%  4/15/2018        43.00
GMAC                               7.400%  12/15/2017       46.87
GMAC                               7.500%  10/15/2012       50.85
GMAC                               7.500%  11/15/2016       42.18
GMAC                               7.500%  8/15/2017        46.45
GMAC                               7.500%  11/15/2017       49.18
GMAC                               7.500%  11/15/2017       41.58
GMAC                               7.500%  12/15/2017       41.94
GMAC                               7.500%  12/15/2017       59.95
GMAC                               7.500%  3/15/2025        41.70
GMAC                               7.625%  11/15/2012       49.79
GMAC                               7.750%  10/15/2012       56.36
GMAC                               7.750%  10/15/2017       49.91
GMAC                               7.875%  11/15/2012       58.00
GMAC                               8.000%  6/15/2010        66.25
GMAC                               8.000%  8/15/2015        52.04
GMAC                               8.000%  10/15/2017       46.50
GMAC                               8.000%  11/15/2017       43.50
GMAC                               8.000%  3/15/2025        48.78
GMAC                               8.125%  11/15/2017       44.00
GMAC                               8.250%  9/15/2012        56.36
GMAC                               8.400%  8/15/2015        48.33
GMAC                               8.650%  8/15/2015        47.38
GMAC                               9.000%  7/15/2015        53.00
GMAC                               9.000%  7/15/2020        48.44
GMAC                               9.000%  7/15/2020        61.50
GMAC LLC                           6.000%  4/1/2011         60.38
GMAC LLC                           6.000%  12/15/2011       60.50
GMAC LLC                           6.500%  5/15/2012        63.86
GMAC LLC                           6.500%  6/15/2012        64.06
GMAC LLC                           6.500%  6/15/2012        64.06
GMAC LLC                           6.600%  6/15/2012        64.33
GMAC LLC                           6.600%  6/15/2012        64.33
GMAC LLC                           6.625%  5/15/2012        61.25
GMAC LLC                           6.700%  7/15/2012        64.09
GMAC LLC                           6.750%  7/15/2012        50.50
GMAC LLC                           7.000%  7/15/2012        64.90
GMAC LLC                           7.100%  7/15/2012        65.18
GMAC LLC                           7.150%  7/15/2012        59.26
GOLDEN BOOKS PUB                  10.750%  12/31/2004        0.01
HARRAHS OPER CO                    5.375%  12/15/2013       56.00
HARRAHS OPER CO                    5.625%  6/1/2015         46.52
HARRAHS OPER CO                    5.750%  10/1/2017        47.50
HARRAHS OPER CO                    6.500%  6/1/2016         49.00
HARRAHS OPER CO                    8.000%  2/1/2011         60.10
HAWAIIAN TELCOM                    9.750%  5/1/2013         38.20
HAWAIIAN TELCOM                   12.500%  5/1/2015         21.50
HERBST GAMING                      7.000%  11/15/2014       21.50
HERBST GAMING                      8.125%  6/1/2012         23.50
HINES NURSERIES                   10.250%  10/1/2011        53.38
HNG INTERNORTH                     9.625%  3/15/2006        14.16
HUNTINGTON CAPIT                   6.650%  5/15/2037        65.00
IDEARC INC                         8.000%  11/15/2016       41.50
INDALEX HOLD                      11.500%  2/1/2014         59.00
ION MEDIA                         11.000%  7/31/2013        29.00
IRIDIUM LLC/CAP                   10.875%  7/15/2005         0.72
IRIDIUM LLC/CAP                   11.250%  7/15/2005         1.50
IRIDIUM LLC/CAP                   13.000%  7/15/2005         0.72
IRIDIUM LLC/CAP                   14.000%  7/15/2005         0.00
ISLE OF CAPRI                      7.000%  3/1/2014         69.25
ISOLAGEN INC                       3.500%  11/1/2024         9.50
ISTAR FINANCIAL                    5.850%  3/15/2017        65.00
ISTAR FINANCIAL                    5.875%  3/15/2016        69.50
JAZZ TECHNOLOGIE                   8.000%  12/31/2011       69.13
JONES APPAREL                      6.125%  11/15/2034       66.00
K HOVNANIAN ENTR                   6.250%  1/15/2015        62.56
K HOVNANIAN ENTR                   6.250%  1/15/2016        61.00
K HOVNANIAN ENTR                   6.375%  12/15/2014       62.00
K HOVNANIAN ENTR                   6.500%  1/15/2014        63.06
K HOVNANIAN ENTR                   7.500%  5/15/2016        63.88
K HOVNANIAN ENTR                   7.750%  5/15/2013        60.15
K HOVNANIAN ENTR                   8.625%  1/15/2017        67.00
K HOVNANIAN ENTR                   8.875%  4/1/2012         62.25
KAISER ALUMINUM                    9.875%  2/15/2002         0.01
KAISER ALUMINUM                   12.750%  2/1/2003          7.00
KELLSTROM INDS                     5.500%  6/15/2003         0.01
KELLWOOD CO                        7.625%  10/15/2017       62.50
KEMET CORP                         2.250%  11/15/2026       41.81
KEYCORP CAP VII                    5.700%  6/15/2035        75.00
KEYSTONE AUTO OP                   9.750%  11/1/2013        43.50
KIMBALL HILL INC                  10.500%  12/15/2012        1.00
KNIGHT RIDDER                      4.625%  11/1/2014        69.50
KNIGHT RIDDER                      5.750%  9/1/2017         57.00
KNIGHT RIDDER                      6.875%  3/15/2029        48.87
KNIGHT RIDDER                      7.150%  11/1/2027        66.26
KRATON POLYMERS                    8.125%  1/15/2014        54.00
LAZYDAYS RV                       11.750%  5/15/2012        60.00
LEHMAN BROS HLDG                   4.800%  6/24/2023        57.94
LEHMAN BROS HLDG                   5.000%  5/28/2023        58.60
LEHMAN BROS HLDG                   5.000%  6/10/2023        59.40
LEHMAN BROS HLDG                   5.000%  6/17/2023        62.58
LEHMAN BROS HLDG                   5.100%  2/15/2020        68.13
LEHMAN BROS HLDG                   5.200%  5/13/2020        67.24
LEHMAN BROS HLDG                   5.250%  5/20/2023        58.50
LEHMAN BROS HLDG                   5.350%  6/14/2030        60.26
LEHMAN BROS HLDG                   5.375%  5/6/2023         61.80
LEHMAN BROS HLDG                   5.400%  3/6/2020         64.63
LEHMAN BROS HLDG                   5.400%  3/20/2020        67.29
LEHMAN BROS HLDG                   5.400%  3/30/2029        56.86
LEHMAN BROS HLDG                   5.400%  6/21/2030        56.50
LEHMAN BROS HLDG                   5.450%  3/15/2025        56.22
LEHMAN BROS HLDG                   5.450%  4/6/2029         53.88
LEHMAN BROS HLDG                   5.450%  2/22/2030        55.94
LEHMAN BROS HLDG                   5.450%  7/19/2030        51.50
LEHMAN BROS HLDG                   5.450%  9/20/2030        55.50
LEHMAN BROS HLDG                   5.500%  2/19/2018        67.03
LEHMAN BROS HLDG                   5.500%  2/27/2020        67.11
LEHMAN BROS HLDG                   5.500%  3/14/2023        64.57
LEHMAN BROS HLDG                   5.500%  4/8/2023         63.61
LEHMAN BROS HLDG                   5.500%  4/15/2023        60.00
LEHMAN BROS HLDG                   5.500%  4/23/2023        57.92
LEHMAN BROS HLDG                   5.500%  10/7/2023        62.00
LEHMAN BROS HLDG                   5.500%  1/27/2029        66.93
LEHMAN BROS HLDG                   5.500%  2/3/2029         60.53
LEHMAN BROS HLDG                   5.500%  8/2/2030         60.00
LEHMAN BROS HLDG                   5.550%  3/9/2029         56.88
LEHMAN BROS HLDG                   5.550%  1/25/2030        60.37
LEHMAN BROS HLDG                   5.550%  9/27/2030        54.29
LEHMAN BROS HLDG                   5.550%  12/31/2034       51.78
LEHMAN BROS HLDG                   5.600%  2/17/2029        55.96
LEHMAN BROS HLDG                   5.600%  2/24/2029        59.80
LEHMAN BROS HLDG                   5.600%  3/2/2029         57.38
LEHMAN BROS HLDG                   5.600%  2/25/2030        54.50
LEHMAN BROS HLDG                   5.600%  5/3/2030         54.63
LEHMAN BROS HLDG                   5.625%  3/15/2030        59.32
LEHMAN BROS HLDG                   5.650%  11/23/2029       58.66
LEHMAN BROS HLDG                   5.650%  8/16/2030        60.28
LEHMAN BROS HLDG                   5.700%  2/10/2029        60.08
LEHMAN BROS HLDG                   5.700%  4/13/2029        65.73
LEHMAN BROS HLDG                   5.700%  9/7/2029         55.61
LEHMAN BROS HLDG                   5.700%  12/14/2029       57.01
LEHMAN BROS HLDG                   5.750%  3/27/2023        62.75
LEHMAN BROS HLDG                   5.750%  10/15/2023       65.89
LEHMAN BROS HLDG                   5.750%  10/21/2023       66.35
LEHMAN BROS HLDG                   5.750%  11/12/2023       61.75
LEHMAN BROS HLDG                   5.750%  11/25/2023       64.00
LEHMAN BROS HLDG                   5.750%  12/16/2028       68.85
LEHMAN BROS HLDG                   5.750%  12/23/2028       59.55
LEHMAN BROS HLDG                   5.750%  8/24/2029        62.00
LEHMAN BROS HLDG                   5.750%  9/14/2029        59.32
LEHMAN BROS HLDG                   5.750%  10/12/2029       62.47
LEHMAN BROS HLDG                   5.750%  3/29/2030        54.14
LEHMAN BROS HLDG                   5.800%  10/25/2030       60.31
LEHMAN BROS HLDG                   5.900%  5/4/2029         66.00
LEHMAN BROS HLDG                   5.900%  2/7/2031         58.50
LEHMAN BROS HLDG                   5.950%  12/20/2030       69.63
LEHMAN BROS HLDG                   6.000%  10/23/2028       66.38
LEHMAN BROS HLDG                   6.000%  11/18/2028       58.40
LEHMAN BROS HLDG                   6.000%  5/11/2029        62.72
LEHMAN BROS HLDG                   6.000%  7/20/2029        60.91
LEHMAN BROS HLDG                   6.000%  2/24/2036        59.08
LEHMAN BROS HLDG                   6.100%  8/12/2023        67.14
LEHMAN BROS HLDG                   6.200%  5/25/2029        65.88
LEHMAN BROS HLDG                   6.250%  5/9/2031         60.50
LEHMAN BROS HLDG                   7.000%  4/22/2038        68.20
LEHMAN BROS HLDG                   7.250%  2/27/2038        69.92
LEINER HEALTH                     11.000%  6/1/2012         10.00
LIBERTY MEDIA                      3.250%  3/15/2031        63.00
LIBERTY MEDIA                      3.500%  1/15/2031        45.00
LIBERTY MEDIA                      3.750%  2/15/2030        50.60
LIBERTY MEDIA                      4.000%  11/15/2029       56.00
LIFECARE HOLDING                   9.250%  8/15/2013        60.00
MAGNA ENTERTAINM                   7.250%  12/15/2009       47.00
MAGNA ENTERTAINM                   8.550%  6/15/2010        52.00
MAJESTIC STAR                      9.750%  1/15/2011        29.00
MANNKIND CORP                      3.750%  12/15/2013       58.75
MASONITE CORP                     11.000%  4/6/2015         37.88
MBIA INC                           6.400%  8/15/2022        41.50
MBIA INC                           6.625%  10/1/2028        50.27
MEDIANEWS GROUP                    6.375%  4/1/2014         42.00
MEDIANEWS GROUP                    6.875%  10/1/2013        42.00
MERIX CORP                         4.000%  5/15/2013        50.50
MERRILL LYNCH                      8.100%  6/4/2009         10.20
MERRILL LYNCH                     10.000%  3/6/2009         20.85
MERRILL LYNCH                     11.000%  4/28/2009        23.00
MERRILL LYNCH                     11.860%  7/14/2009         8.55
MERRILL LYNCH                     12.000%  3/26/2010        24.80
MERRILL LYNCH                     12.100%  6/25/2009         9.98
METALDYNE CORP                    10.000%  11/1/2013        48.00
METALDYNE CORP                    11.000%  6/15/2012        25.25
MICRON TECH                        1.875%  6/1/2014         63.81
MILLENNIUM AMER                    7.625%  11/15/2026       49.00
MORGAN STANLEY                     8.000%  7/20/2009        11.70
MORGAN STANLEY                    10.000%  4/20/2009        17.50
MORGAN STANLEY                    10.000%  5/20/2009        20.64
MORGAN STANLEY                    12.000%  7/20/2009        10.55
MORRIS PUBLISH                     7.000%  8/1/2013         53.00
MOVIE GALLERY                     11.000%  5/1/2012         14.95
MRS FIELDS                         9.000%  3/15/2011        61.50
MRS FIELDS                        11.500%  3/15/2011        55.50
NATL CITY BANK                     4.625%  5/1/2013         67.00
NATL CITY BANK                     6.200%  12/15/2011       69.87
NATL CITY BANK                     6.250%  3/15/2011        80.00
NATL CITY BK KEN                   6.300%  2/15/2011        80.32
NATL CITY CORP                     4.900%  1/15/2015        58.25
NATL CITY CORP                     6.875%  5/15/2019        59.00
NATL FINANCIAL                     0.750%  2/1/2012         64.58
NEFF CORP                         10.000%  6/1/2015         36.50
NETWORK COMMUNIC                  10.750%  12/1/2013        68.00
NETWORK EQUIPMNT                   3.750%  12/15/2014       59.25
NEW ORL GRT N RR                   5.000%  7/1/2032         57.97
NEW PLAN EXCEL                     7.500%  7/30/2029        64.34
NEW PLAN REALTY                    6.900%  2/15/2028        62.90
NEW PLAN REALTY                    6.900%  2/15/2028        61.65
NEW PLAN REALTY                    7.650%  11/2/2026        63.00
NEW PLAN REALTY                    7.680%  11/2/2026        62.90
NEW PLAN REALTY                    7.970%  8/14/2026        62.90
NEWARK GROUP INC                   9.750%  3/15/2014        70.00
NORTEK INC                         8.500%  9/1/2014         57.00
NORTH ATL TRADNG                   9.250%  3/1/2012         55.00
NORTHERN PAC RY                    3.000%  1/1/2047         47.99
NORTHERN PAC RY                    3.000%  1/1/2047         52.00
NORTHWESTERN CRP                   7.960%  12/21/2026        3.75
NORTHWST STL&WIR                   9.500%  6/15/2001         0.00
NTK HOLDINGS INC                   0.000%  3/1/2014         41.63
NUTRITIONAL SRC                   10.125%  8/1/2009         12.50
NUVEEN INVEST                      5.500%  9/15/2015        62.50
OAKWOOD HOMES                      7.875%  3/1/2004          0.00
OAKWOOD HOMES                      8.125%  3/1/2009          0.13
OSCIENT PHARM                      3.500%  4/15/2011        34.75
OSI RESTAURANT                    10.000%  6/15/2015        66.63
OSI RESTAURANT                    10.000%  6/15/2015        62.84
OVERSTOCK.COM                      3.750%  12/1/2011        63.50
PAC-WEST TELECOM                  13.500%  2/1/2009          1.50
PACKAGING DYNAMI                  10.000%  5/1/2016         67.31
PALM HARBOR                        3.250%  5/15/2024        63.90
PANAMSAT CORP                      9.000%  8/15/2014        65.02
PARK PLACE ENT                     8.125%  5/15/2011        74.75
PEGASUS SATELLIT                   9.750%  12/1/2006         0.13
PEGASUS SATELLIT                  12.375%  8/1/2008          0.00
PIEDMONT AVIAT                    10.250%  1/15/2049         0.00
PIERRE FOODS INC                   9.875%  7/15/2012         8.00
PIXELWORKS INC                     1.750%  5/15/2024        70.00
PLY GEM INDS                       9.000%  2/15/2012        51.00
POPE & TALBOT                      8.375%  6/1/2013          0.13
POPE & TALBOT                      8.375%  6/1/2013          0.13
PORTOLA PACKAGIN                   8.250%  2/1/2012         42.00
PRIMUS TELECOM                     3.750%  9/15/2010        43.00
PRIMUS TELECOM                     5.000%  6/30/2009        64.50
PRIMUS TELECOM                     8.000%  1/15/2014        36.00
PROPEX FABRICS                    10.000%  12/1/2012         0.00
PSINET INC                        10.000%  2/15/2005         0.00
PSINET INC                        11.500%  11/1/2008         0.01
QUALITY DISTRIBU                   9.000%  11/15/2010       55.13
RADIAN GROUP                       5.625%  2/15/2013        55.42
RADIAN GROUP                       7.750%  6/1/2011         64.00
RADNOR HOLDINGS                   11.000%  3/15/2010         0.00
RAFAELLA APPAREL                  11.250%  6/15/2011        48.50
READER'S DIGEST                    9.000%  2/15/2017        60.00
REALOGY CORP                      10.500%  4/15/2014        64.00
REALOGY CORP                      12.375%  4/15/2015        46.88
REGIONS FIN TR                     6.625%  5/15/2047        47.00
RESIDENTIAL CAP                    8.000%  2/22/2011        28.00
RESIDENTIAL CAP                    8.375%  6/30/2010        30.50
RESIDENTIAL CAP                    8.500%  6/1/2012         33.06
RESIDENTIAL CAP                    8.500%  4/17/2013        27.45
RESIDENTIAL CAP                    8.875%  6/30/2015        29.44
RESIDENTIAL CAP                    9.625%  5/15/2015        40.22
RESTAURANT CO                     10.000%  10/1/2013        59.75
RF MICRO DEVICES                   1.000%  4/15/2014        69.40
RH DONNELLEY                       6.875%  1/15/2013        47.75
RH DONNELLEY                       6.875%  1/15/2013        47.75
RH DONNELLEY                       6.875%  1/15/2013        48.25
RH DONNELLEY                       8.875%  1/15/2016        48.00
RH DONNELLEY                       8.875%  10/15/2017       47.00
RH DONNELLEY                       8.875%  10/15/2017       48.16
RITE AID CORP                      6.875%  8/15/2013        63.00
RITE AID CORP                      6.875%  12/15/2028       46.80
RITE AID CORP                      7.700%  2/15/2027        52.38
RITE AID CORP                      8.625%  3/1/2015         64.50
RITE AID CORP                      9.375%  12/15/2015       65.50
RITE AID CORP                      9.500%  6/15/2017        65.00
RJ TOWER CORP                     12.000%  6/1/2013          0.00
ROTECH HEALTHCA                    9.500%  4/1/2012         65.42
SANDISK CORP                       1.000%  5/15/2013        64.75
SEARS ROEBUCK AC                   6.500%  12/1/2028        56.75
SEARS ROEBUCK AC                   6.750%  1/15/2028        64.39
SERVICEMASTER CO                   7.100%  3/1/2018         50.00
SERVICEMASTER CO                   7.250%  3/1/2038         52.00
SERVICEMASTER CO                   7.450%  8/15/2027        43.25
SIX FLAGS INC                      4.500%  5/15/2015        40.00
SIX FLAGS INC                      9.625%  6/1/2014         47.00
SIX FLAGS INC                      9.750%  4/15/2013        51.50
SLM CORP                           4.800%  12/15/2028       65.42
SLM CORP                           5.000%  6/15/2019        59.39
SLM CORP                           5.000%  6/15/2019        68.00
SLM CORP                           5.000%  6/15/2028        67.49
SLM CORP                           5.150%  12/15/2028       68.85
SLM CORP                           5.190%  4/24/2019        69.04
SLM CORP                           5.250%  3/15/2028        68.96
SLM CORP                           5.250%  6/15/2028        61.14
SLM CORP                           5.250%  12/15/2028       55.50
SLM CORP                           5.300%  9/15/2030        57.00
SLM CORP                           5.350%  6/15/2025        65.11
SLM CORP                           5.350%  6/15/2028        55.00
SLM CORP                           5.400%  3/15/2023        61.16
SLM CORP                           5.400%  3/15/2030        60.36
SLM CORP                           5.400%  6/15/2030        56.63
SLM CORP                           5.400%  6/15/2030        57.97
SLM CORP                           5.450%  3/15/2023        63.90
SLM CORP                           5.500%  6/15/2019        69.21
SLM CORP                           5.500%  9/15/2019        64.12
SLM CORP                           5.500%  6/15/2029        58.72
SLM CORP                           5.500%  6/15/2029        60.00
SLM CORP                           5.500%  3/15/2030        58.56
SLM CORP                           5.500%  3/15/2030        58.00
SLM CORP                           5.500%  6/15/2030        60.93
SLM CORP                           5.500%  12/15/2030       62.30
SLM CORP                           5.500%  12/15/2030       60.48
SLM CORP                           5.550%  6/15/2025        64.62
SLM CORP                           5.550%  3/15/2028        55.00
SLM CORP                           5.550%  3/15/2029        69.62
SLM CORP                           5.600%  3/15/2018        66.16
SLM CORP                           5.600%  3/15/2022        64.85
SLM CORP                           5.600%  3/15/2024        59.89
SLM CORP                           5.600%  12/15/2028       60.25
SLM CORP                           5.600%  3/15/2029        67.45
SLM CORP                           5.600%  6/15/2029        62.24
SLM CORP                           5.600%  12/15/2029       59.00
SLM CORP                           5.600%  12/15/2029       60.92
SLM CORP                           5.625%  1/25/2025        65.54
SLM CORP                           5.650%  6/15/2022        62.00
SLM CORP                           5.650%  6/15/2022        68.54
SLM CORP                           5.650%  3/15/2029        58.86
SLM CORP                           5.650%  3/15/2029        58.32
SLM CORP                           5.650%  12/15/2029       61.92
SLM CORP                           5.650%  12/15/2029       63.72
SLM CORP                           5.650%  12/15/2029       57.63
SLM CORP                           5.650%  3/15/2030        60.15
SLM CORP                           5.650%  9/15/2030        58.80
SLM CORP        &nbs