TCR_Public/080909.mbx          T R O U B L E D   C O M P A N Y   R E P O R T E R

            Tuesday, September 9, 2008, Vol. 12, No. 215           

                             Headlines

8699 BISCAYNE: Case Summary & 20 Largest Unsecured Creditors
106-09 ROCKAWAY: Case Summary & Seven Largest Unsecured Creditors
AIRTRAN HOLDINGS: At High Risk of Bankruptcy in 2009
ALASKA AIRLINES: Might Place Up to 165 of its Pilots on Furlough
AMC ENTERTAINMENT: Earns $10.8 Million in 1st Quarter Ended July 3

AMR CORP: At High Risk of Bankruptcy in 2009, Aviation Week Says
BALLY TECHNOLOGIES: S&P Confirms 'BB' Corporate Credit Rating
BARBEQUES GALORE: Court Approves September 10 as Auction Date
B&B RESTAURANTS: Fox Sports Grill in Atlanta to Remain Open
BANKUNITED CAPITAL: Treasury Department Changes Capital Status

BARE ESCENTUALS: S&P Confirms 'B+' Corporate Credit Rating
BLACK DIAMOND: Has Until October 8 to Exclusively File Plan
BOOM DRILLING: Case Summary & 20 Largest Unsecured Creditors
BRIAN MILLER: Voluntary Chapter 11 Case Summary
BRIAN MILLER: Section 341(a) Meeting Scheduled for October 6

BRIDGEWATER ESTATES: Case Summary and Three Largest Creditors
BRYAN DANT: Voluntary Chapter 11 Case Summary
CADENCE INNOVATION: Court Bars Exxon from Halting Delivery
CADENCE INNOVATION: Files Amended List of 20 Largest Creditors
CADENCE INNOVATION: Wants to Hire Cole Schotz at Lead Counsel

CADENCE INNOVATION: Wants Katten Muchin as Special Counsel
CALIFORNIA COVE: Case Summary & 20 Largest Unsecured Creditors
CALPINE CORP: Names Jack Fusco as President and CEO
CHA HAWAII: Organizational Meeting Slated for September 11
COLLEGE LOAN: Cancels All Private Loan Disbursements

COMMERCIAL REALTY: Auctioning Hotels & Restaurants on Sept. 10
CONTINENTAL AIRLINES: At High Risk of Bankruptcy in 2009
CORPUS CHRISTI: New York Real Property Auction is Set for Sept. 29
DAVIDSON MOTOR: To Close Ford Lincoln Mercury Dealership
DIABLO GRANDE: Has Until Sept. 9 to Strike a Deal with World Int'l

ENCAP GOLF: Judge Winfield Denies Wachovia's Conversion Plea
FANNIE MAE: Placed by Government Under Conservatorship
FANNIE MAE: Fitch Affirms 'AAA' IDR; Lowers Preferred Stock
FANNIE MAE: Moody's Cuts Preferred Stock Rating to Ca
FANNIE MAE: S&P Cuts Rating on Preferred Stock to 'C'

FEDERAL-MOGUL: Court Defers Claims Objection Deadline to Dec. 27
FLAGSTAFF FAIRWAY: Case Summary & 3 Largest Unsecured Creditors
FREDDIE MAC: Placed by Government Under Conservatorship
FREDDIE MAC: Fitch Affirms 'AAA' IDR; Lowers Preferred Stock
FREDDIE MAC: Moody's Cuts Preferred Stock Rating to Ca

FREDDIE MAC: S&P Cuts Rating on Preferred Stock to 'C'
FRONTIER AIRLINES: Gets Final OK to Access $75MM DIP Financing
FRONTIER AIRLINES: Says Job Cuts Will Only Affect 20 Positions
GMAC COMMERCIAL: S&P Downgrades Rating on Class O Certs. to 'D'
GREEKTOWN CASINO: Plan-Filing Extension Hearing Set for Sept. 15

GREEKTOWN CASINO: Objections to Bid to Extend Exclusive Periods
GREEKTOWN CASINO: Conway Mackenzie Preparing Chapter 11 Plan
HARRY MARX CHEVROLET: Wants to Sell Business
HILANDER BOWL: Case Summary & 20 Largest Unsecured Creditors
IMMUNICON CORP: Hearing to Consider Disclosure Statement Today

INDYMAC BANCORP: Fitch Withdraws Ratings
ISCHUS CDO: Fitch Cuts C-1, C-2 Classes of Notes to 'B'
JHT HOLDINGS: In Settlement Talks with Creditor Consistuents
JPMORGAN TRUST: Fitch Holds BB Rating of 2007-A Asset-Back Certs.
KEY DEVELOPERS: Fisher Will Auction Firm's Assets

KIMBALL HILL: Can Hire Deloitte Tax as Tax Consultants
KIMBALL HILL: Wants to Employ Gardere Wynne as Special Counsel
LANDSOURCE COMMUNITIES: May Employ 2 Hoganwebb Personnel as CROs
LANDSOURCE COMMUNITIES: May Employ Lazard as Financial Advisor
LANDSOURCE COMMUNITIES: Dandeau Clarifies Client Representations

LBI MEDIA: S&P Confirms 'B' Corporate Credit Rating
LEHMAN BROTHERS: Among Nomura's Investment Options, WSJ Reports
LENYIE NGBOGBARA: Case Summary & 20 Largest Unsecured Creditors
LEOSTEIN LLC: Voluntary Chapter 11 Case Summary
LINENS N THINGS: Lifetime Wants Assets & Debts Schedules Amended

LOLA CANNON: Case Summary & 9 Largest Unsecured Creditors
LUMINENT MORTGAGE: Files for Bankruptcy, Inks Plan Support Pact
LUMINENT MORTGAGE: Voluntary Chapter 11 Case Summary
LYNNKOHN LLC: Legacy National Objects to Employment of Counsel
MACKLOWE PROPERTIES: Deutsche To Foreclosure $510 Million Loan

MARLIN HUKILL: Case Summary & 6 Largest Unsecured Creditors
MILA INC: Ch. 11 Trustee Seeks $16MM In Damages from Former CEO
MERVYN'S LLC: Sues Ex-Owners for Fraudulent Deal Causing Demise
MT. LAUREL: U.S. Trustee's Dismissal Plea Hearing Set for Sept. 24
NALCO CO: S&P Upgrades Corporate Credit Rating to 'BB'

NAVISTAR INT'L: Earns $272MM Net Income for Qtr Ended July 2008
NETEFFECT INC: Gets Initial Nod to Use $1.5MM Intel DIP Facility
NETEFFECT INC: Wants Proposed Sale Bidding Procedures Approved
NEW PARKWAY: Operating Certificate to Expire September 30
NEWPORT TELEVISION: S&P Confirms 'B' Corporate Credit Rating

NEW YORK TIMES: To Consolidate Sections by October 6
NORTHWEST AIRLINES: At High Risk of Bankruptcy in 2009
ORIOLE HOMES: Liquidating Unfinished Projects in Florida
PACIFICNET INC: Inks Settlement Agreement With Bondholders
PLIANT CORP: S&P Cuts First-Lien Senior Secured Notes to 'B-'

PORTOLA PACKAGING: Plan Confirmation Hearing Slated for October 6
PROPEX INC: Creditors Panel Challenges DIP Lenders' Liens
PROPEX INC: Wants Court Nod on $1.7 Million Pension Plan Payment
PROPEX INC: Wants to Amend Medical Program to Cease Coverage Offer
REHRIG INT'L: Case Summary & 30 Largest Unsecured Creditors

SASSABOOM SERVICES: Case Summary & 3 Largest Unsecured Creditors
SEA CONTAINERS: To Ink Scheme of Arrangement With Creditors
SECURITY CAPITAL: Fitch Withdraws Ratings
SEMGROUP LP: Canadian Court Extends CCAA Stay Until November 21
SHERMAG INC: Quebec Court Extends CCAA Stay to December 10

SHOE PAVILION: Wants to Start Talks on Going-Concern Sale
SHORES OF PANAMA: May Access Vision Bank's $2 Million DIP Fund
SILVER STATE: NFID Closes Bank, Nevada Bank to Insure Deposits
SKLAR PEPPLER: Declares Bankruptcy; 174 Workers to Lose Jobs
SOLAR COSMETIC: Seeks Until December 4 to File Chapter 11 Plan

SONICBLUE INC: Chapter 11 Trustee Files Revised Liquidating Plan
SOUTHWEST CHARTER: U.S. Trustee Seeks Dismissal of Chapter 11 Case
SOUTHWEST CHARTER: Court Okays Donald Powell as Bankruptcy Counsel
SPHERE DRAKE: Hearing on Scheme of Arrangement Tomorrow
STEVE & BARRY'S: Sec. 341 Meeting Adjourned to Sept. 23

STEVE & BARRY'S: Willowbrook Asks Court to Vacate Sale Order
STEVE & BARRY'S: Buyer Releases List of Stores to be Closed
STEVE & BARRY'S: Extra Plastic Asserts $347,248 In Total Claims
STEVE & BARRY'S: Weil Gotshal Reveals Bay Harbour Affiliate Client
SYNCORA HOLDINGS: Fitch Withdraws Ratings

TOUSA INC: Beacon Hill Wants to Set October 22 as Claims Bar Date
UAL CORP: To Furlough 1,550 Flight Attendants by October 31
URSTADT BIDDLE: Fitch Affirms & Withdraws 'BB' Ratings
US AIRWAYS: At High Risk of Bankruptcy in 2009, Aviation Week Says
YOUNG BROADCASTING: S&P Cuts Corporate Credit Rating to 'CCC'

* S&P Says US Sovereign Ratings Unaffected By GSE Conservatorship
* S&P Cuts Ratings of 25 Tranches From Cash Flow, Hybrid CDO Deals
* S&P Cuts 62 Certificates from U.S. Subprime RMBS

* U.S. Retail Sector Loses About 20,000 Jobs in August

* IWIRC Seeking Nominations for Woman of the Year in Restructuring

* Large Companies with Insolvent Balance Sheets

                             *********

8699 BISCAYNE: Case Summary & 20 Largest Unsecured Creditors
------------------------------------------------------------
Debtor: 8699 Biscayne, LLC
        1521 Alton Rd. P.M. Box 614
        Miami Beach, FL 33139

Bankruptcy Case No.: 08-22814

Chapter 11 Petition Date: September 4, 2008

Court: Southern District of Florida (Miami)

Judge: A. Jay Cristol

Debtor's Counsel: Paul DeCailly, Esq.
                  3111 W. Dr. Martin Luther King Jr. Blvd.,
                  Ste. 100
                  Tampa, FL 33607
                  Tel: (813) 286-2909

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

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

A copy of 8699 Biscayne, LLC's petition is available for free at:

      http://bankrupt.com/misc/flsb08-22814.pdf


106-09 ROCKAWAY: Case Summary & Seven Largest Unsecured Creditors
-----------------------------------------------------------------
Debtor: 106-09 Rockaway Owners Corp.
        106-09 Rockaway Boulevard
        Ozone Park, NY 11417

Bankruptcy Case No.: 08-45862

Type of Business: The Debtor is a homeowners' association.

Chapter 11 Petition Date: September 5, 2008

Court: Eastern District of New York (Brooklyn)

Judge: Jerome Feller

Debtor's Counsel: Roy J. Lester, Esq.
                  rlester@rlesterlaw.com
                  Lester & Associates, P.C.
                  600 Old Country Road, Suite 229
                  Garden City, NY 11530
                  Tel: (516) 357-9191
                  Fax: (516) 357-9281
                  http://rlesterlaw.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/nyeb08-45862.pdf
                       

AIRTRAN HOLDINGS: At High Risk of Bankruptcy in 2009
----------------------------------------------------
Michael Lowry, project manager for AVIATION WEEK's latest Top-
Performing Companies report, has ranked Northwest Airlines as a
"high risk" for a bankruptcy filing in 2009.

According to the report, American Airlines, AirTran and
Continental are also at risk in 2009, while USAirways may succumb
to a third Chapter 11 filing this winter due to inadequate
liquidity.

                              2007        2008       2009
                              ----        ----       ----
US Airways Group Inc.         
Financial Fitness Assessment Declining   High Risk  High Risk
Liquidity Assessment         Good        Inadequate Inadequate
Bankruptcy Risk              Low         High       High

AMR Corp.
Financial Fitness Assessment Low Risk    High Risk  High Risk
Liquidity Assessment         Good        Poor       Inadequate
Bankruptcy Risk              Low         Low        High

Northwest Airlines Corp.
Financial Fitness Assessment Low Risk    Declining  High Risk
Liquidity Assessment         Excellent   Fair       Inadequate
Bankruptcy Risk              Low         Low        High

AirTran Holdings Inc.
Financial Fitness Assessment Neutral     Declining  High Risk
Liquidity Assessment         Good        Fair       Poor
Bankruptcy Risk              Low         Low        High

Continental Airlines Inc.
Financial Fitness Assessment Neutral     Declining  High Risk
Liquidity Assessment         Good        Fair       Poor
Bankruptcy Risk              Low         Low        High

AVIATION WEEK's TPC report focuses on the global airline
industry, revealing which carriers are in the best shape to
prevail against the daunting economic challenges they face.

"The next 12 months will be shaky and there will be no return to
the status quo . . . airlines are in a morass," TPC adviser
Michael Dyment, of Nexa Capital Partners, said.

The TPC study shows that the best of the Asia-Pacific and
European airlines are head and shoulders above their peers among
the major legacy carriers, with Singapore Airlines at the
top of the list and Malaysia Airlines improving the most.  

The U.S. majors, meanwhile, are entrenched in the bottom half of
the table.  "The gap between the Asian and European top
performers and the U.S. airlines has only grown larger over the
past year," the article says.  U.S. airlines suffered most from
rising fuel rates and sinking demand, Mr. Lowry noted.

The Wall Street Journal, however, says that with the slow
passenger-traffic growth and high fuel prices, the International
Air Transport Association predicts a loss in the airline industry
of $5.2 billion world-wide for 2008, with the North American
carriers taking the lion's share at $5 billion.  This will be
followed by a $4.1 billion loss in 2009, IATA says.

IATA Director General Giovanni Bisignani also confirmed that many
airlines are indeed "at risk" of going bankrupt as the industry
heads into autumn.  "[F]asten your seatbelts for at least another
two years," Mr. Bisignani advised.

IATA's forecasts factor is an average oil price of $113 a barrel,
reports WSJ.  At present, crude oil is trading a little below
$110.

Ann Keeton of WSJ says UBS AG analysts said the airline industry
could break-even next year if oil prices were to average around
$95 a barrel.  However, if oil prices are higher, the industry's
losses would be greater than the predicted $5.2 billion.

UBS forecasts oil to average $120 a barrel in 2009, says Ms.
Keeton.

                      About AirTran Holdings

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

                          *     *     *

The Troubled Company Reporter said on Aug. 29, 2008, that Standard
& Poor's Ratings Services has lowered its ratings on AirTran
Holdings Inc., including the corporate credit rating, which it
lowered to 'CCC+' from 'B-'.  At the same time, S&P removed the
ratings from CreditWatch, where they had been placed with negative
implications on May 22, 2008.  The outlook is stable.


ALASKA AIRLINES: Might Place Up to 165 of its Pilots on Furlough
----------------------------------------------------------------
Elizabeth Bluemink of the Anchorage Daily News reports that Alaska
Airlines said this week that its recent decision to cut its
flights by as much as 10 percent in 2009 could could "put up to
165 pilots out of work."

Marianne Lindsey, speaking for Alaska Airlines, said the final
decision as to the number of flights that will be cut will be made
by mid- or late September.  

About 200 of the airline's 1,500 pilots are based in the city,
according to company officials.

The company disclosed in July that its mounting financial losses
would lead to layoffs of about 80 managers and an unspecified
number of employees in the operations.  It would also result to
flight reductions of 5 percent by the end of the fiscal year, and
an additional 5 percent by the end of 2009.

The pilots' contract with Alaska does not allow a "traditional"
layoff.  Instead, the airline's pilots are placed on furlough,  
meaning that they may return to work later once the company's
financial position improves.

The union and the airline said they are formulating an incentive
plan that gives the pilots the option to take early retirement, go
on extended leaves of absence, or reduce their flying hours, in
lieu of furloughs.  

                      About Alaska Airlines

Headquartered in Seattle, Washington, Alaska Airlines Inc. --
http://alaskaair.com/-- is a wholly owned subsidiary of Alaska    
Air Group Inc. (NYSE: ALK).  Air Group is also the parent company
of Horizon Air Industries Inc. and Alaska Air Group Leasing.  
Alaska Airlines and Horizon Air together serve 92 cities through
an expansive network in Alaska, the Lower 48, Hawaii, Canada and
Mexico.

At June 30, 2008, the company's consolidated balance sheet showed
$4.68 billion in total assets, $3.77 billion in total liabilities,
and $912.2 million in total stockholders' equity.


AMC ENTERTAINMENT: Earns $10.8 Million in 1st Quarter Ended July 3
------------------------------------------------------------------
AMC Entertainment Inc. reported net earnings of $10.8 million for
the thirteen weeks ended July 3, 2008, versus net earnings of
$22.1 million in the comparable period ended June 28, 2007.

Total revenues increased 4.1%, or $25.5 million, to $648.0 million
during the thirteen weeks ended July 3, 2008, compared to the
thirteen weeks ended June 28, 2007.  The increase in revenues was
mainly a result of the increase in Admissions revenue in the U.S.
and Canada.  Total costs and expenses increased 4.6%, or
$26.9 million, during the thirteen weeks ended July 3, 2008,
compared to the thirteen weeks ended June 28, 2007.  

U.S. and Canada theatrical exhibition costs and expenses increased
8.4%, or $39.2 million, during the thirteen weeks ended July 3,
2008, compared to the thirteen weeks ended June 28, 2007.  

U.S. and Canada film exhibition costs increased 7.9%, or
$16.6 million, during the thirteen weeks ended July 3, 2008,
compared to the thirteen weeks ended June 28, 2007, due to the
increase in admissions revenues and an increase in film exhibition
costs as a percentage of admission revenues.  U.S. and Canada
theatrical exhibition costs and expenses during the thirteen weeks
ended June 28, 2007, included $14.8 million of theatre and other
closure income, which were absent in 2008.  This was due primarily
to lease terminations negotiated on favorable terms for two of the
company's theatres that were closed during the thirteen weeks
ended June 28, 2007.

Merger, acquisition and transaction costs decreased to $17,000
during the thirteen weeks ended July 3, 2008, compared to
$2.0 million during the thirteen weeks ended June 28, 2007.  Prior
period costs are primarily comprised of preacquisition expenses
for casualty insurance losses related to the merger with Loews.

Management fees of $1.25 million were unchanged during the
thirteen weeks ended July 3, 2008.  

Other general and administrative expense decreased 32.8%, or
$4.3 million, during the thirteen weeks ended July 3, 2008,
compared to the thirteen weeks ended June 28, 2007.  The decrease
in other general and administrative expenses is primarily due to a
decrease in postretirement expense of $6.2 million related to an
amendment to the company's Postretirement Plan which resulted in a
curtailment gain of $6.0 million during the thirteen weeks ended
July 3, 2008.

Depreciation and amortization decreased 8.9%, or $5.7 million,
compared to the prior period due primarily to the closing of
theatres.

Other income decreased $725,000 to $2.7 million, and includes
$2.2 million and roughly $1.8 million of income related to the
derecognition of stored value card liabilities during the thirteen
weeks ended July 3, 2008, and June 28, 2007, respectively.  Other
income also includes insurance recoveries related to Hurricane
Katrina of $1.2 million for property losses in excess of property
carrying cost and $397,000 for business interruption during the
thirteen weeks ended June 28, 2007.  Other income also includes
$469,000 of income related to ineffectiveness of interest rate
swaps during the thirteen weeks ended July 3, 2008.

Interest expense decreased 11.7%, or $4.4 million, to
approximately $33.3 million primarily due to decreased interest
rates on the Senior Secured Credit Facility.

Equity in earnings of non-consolidated entities were $4.4 million
compared to roughly $2.3 million in the prior period.  Equity in
earnings related to the company's investment in National    
CineMedia, LLC were roughly $4.7 million and $1.8 million for the
thirteen weeks ended July 3, 2008, and June 28, 2007,
respectively.

Investment income was $705,000 for the thirteen weeks ended
July 3, 2008, compared to approximately $19.3 million for the
thirteen weeks ended June 28, 2007.  The thirteen weeks ended
June 28, 2007, includes a gain on the sale of the company's
investment in Fandango of $15.7 million.  

The provision for income taxes from continuing operations was
$4.2 million for the thirteen weeks ended July 3, 2008, and
$7.0 million for the thirteen weeks ended June 28, 2007, with the
reduction due primarily to the decrease in earnings before income
taxes, foreign rate differential and a release of previously
reserved foreign tax due to updated interpretation by authorities.

                 Liquidity and Capital Resources

The company's consolidated revenues are primarily collected in
cash, principally through box office admissions and theatre
concessions sales.  Exhibition costs are ordinarily paid to
distributors from 20 to 45 days following receipt of box office
admissions revenues.  This operating "float" allows the company to
operate with a limited amount of working capital.

Cash flows provided by operating activities were $116.7 million
and roughly $72.8 million during the  thirteen weeks ended July 3,
2008, and June 28, 2007, respectively.

The company had total corporate borrowings of $1.60 billion at
July 3, 2008.  As of July 3, 2008, the company was in compliance
with all financial covenants relating to the Senior Secured Credit
Facility, the Cinemex Credit Facility, the Notes due 2016, the
Notes due 2014, and the Fixed Notes due 2012.

The company's Senior Secured Credit Facility is with a syndicate
of banks and other financial institutions and provides financing
of up to $850.0 million, consisting of a $650.0 million term loan
facility with a maturity of seven years and a $200.0 million  
revolving credit facility with a maturity of six years.  As of
July 3, 2008, the company had no borrowings under the revolving
credit facility and roughly $633.7 million was outstanding under
the term loan facility at an interest rate of 4.23%.

The company believes that cash generated from operations and
existing cash and equivalents will be sufficient to fund
operations and planned capital expenditures and potential
acquisitions for at least the next twelve months.

                          Balance Sheet

At July 3, 2008, the company's consolidated balance sheet showed
$3.90 billion in total assets, $2.75 billion in total liabilities,
and $1.15 billion in total stockholders' equity.

The company's consolidated balance sheet at July 3, 2008, also
showed strained liquidity with $319.8 million in total current
assets available to pay $502.6 million in total current
liabilities.

Full-text copies of the company's consolidated financial
statements for the quarter ended July 3, 2008, are available for
free at http://researcharchives.com/t/s?31be

                     About AMC Entertainment

Based in Kansas City, Missouri, AMC Entertainment Inc.
-- http://www.amctheatres.com/-- is one of the world's largest    
theatrical exhibition companies.  As of July 3, 2008, the company  
owned, operated or had interests in 353 theatres and 5,117
screens, with 89% or 4,569 of its screens in the U.S. and Canada
and 11%, or 548 of its screens in Mexico, China (Hong Kong),
France and the United Kingdom.

The company's principal direct and indirect owned subsidiaries are
American Multi-Cinema Inc., Grupo Cinemex, S.A. de C.V. and AMC
Entertainment International Inc.   

                          *     *     *

To date, AMC Entertainment Inc. still carries Fitch Ratings'
'CCC+' senior subordinate rating assigned on Jan. 12, 2006.


AMR CORP: At High Risk of Bankruptcy in 2009, Aviation Week Says
----------------------------------------------------------------
Michael Lowry, project manager for AVIATION WEEK's latest Top-
Performing Companies report, has ranked Northwest Airlines as a
"high risk" for a bankruptcy filing in 2009.

According to the report, American Airlines, AirTran and
Continental are also at risk in 2009, while USAirways may succumb
to a third Chapter 11 filing this winter due to inadequate
liquidity.

                              2007        2008       2009
                              ----        ----       ----
US Airways Group Inc.         
Financial Fitness Assessment Declining   High Risk  High Risk
Liquidity Assessment         Good        Inadequate Inadequate
Bankruptcy Risk              Low         High       High

AMR Corp.
Financial Fitness Assessment Low Risk    High Risk  High Risk
Liquidity Assessment         Good        Poor       Inadequate
Bankruptcy Risk              Low         Low        High

Northwest Airlines Corp.
Financial Fitness Assessment Low Risk    Declining  High Risk
Liquidity Assessment         Excellent   Fair       Inadequate
Bankruptcy Risk              Low         Low        High

AirTran Holdings Inc.
Financial Fitness Assessment Neutral     Declining  High Risk
Liquidity Assessment         Good        Fair       Poor
Bankruptcy Risk              Low         Low        High

Continental Airlines Inc.
Financial Fitness Assessment Neutral     Declining  High Risk
Liquidity Assessment         Good        Fair       Poor
Bankruptcy Risk              Low         Low        High

AVIATION WEEK's TPC report focuses on the global airline
industry, revealing which carriers are in the best shape to
prevail against the daunting economic challenges they face.

"The next 12 months will be shaky and there will be no return to
the status quo . . . airlines are in a morass," TPC adviser
Michael Dyment, of Nexa Capital Partners, said.

The TPC study shows that the best of the Asia-Pacific and
European airlines are head and shoulders above their peers among
the major legacy carriers, with Singapore Airlines at the
top of the list and Malaysia Airlines improving the most.  

The U.S. majors, meanwhile, are entrenched in the bottom half of
the table.  "The gap between the Asian and European top
performers and the U.S. airlines has only grown larger over the
past year," the article says.  U.S. airlines suffered most from
rising fuel rates and sinking demand, Mr. Lowry noted.

The Wall Street Journal, however, says that with the slow
passenger-traffic growth and high fuel prices, the International
Air Transport Association predicts a loss in the airline industry
of $5.2 billion world-wide for 2008, with the North American
carriers taking the lion's share at $5 billion.  This will be
followed by a $4.1 billion loss in 2009, IATA says.

IATA Director General Giovanni Bisignani also confirmed that many
airlines are indeed "at risk" of going bankrupt as the industry
heads into autumn.  "[F]asten your seatbelts for at least another
two years," Mr. Bisignani advised.

IATA's forecasts factor is an average oil price of $113 a barrel,
reports WSJ.  At present, crude oil is trading a little below
$110.

Ann Keeton of WSJ says UBS AG analysts said the airline industry
could break-even next year if oil prices were to average around
$95 a barrel.  However, if oil prices are higher, the industry's
losses would be greater than the predicted $5.2 billion.

UBS forecasts oil to average $120 a barrel in 2009, says Ms.
Keeton.

                        About AMR Corporation

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

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

                           *     *     *

As reported in the Troubled Company Reporter on August 5, 2008,
the TCR said that Moody's Investors Service downgraded the
Corporate Family and Probability of Default Ratings of AMR Corp.
and its subsidiaries to Caa1 from B2, and lowered the ratings of
its outstanding corporate debt instruments and certain equipment
trust certificates and Enhanced Equipment Trust Certificates of
American Airlines Inc.  The company still carries Moody's Negative
Outlook.


BALLY TECHNOLOGIES: S&P Confirms 'BB' Corporate Credit Rating
-------------------------------------------------------------
Standard & Poor's Ratings Services assigned its issue-level and
recovery ratings to Bally Technologies Inc.'s proposed $300
million senior secured credit facilities.  The loans are rated
'BBB-' -- two notches higher than the 'BB' corporate credit rating
on the company -- with a recovery rating of '1', indicating that
lenders can expect very high (90% to 100%) recovery in the event
of a payment default.

At the same time, Standard & Poor's affirmed its 'BB' corporate
credit rating on Bally.  The rating outlook is stable.

Proceeds from the credit facilities, which will consist of a draw
of approximately $50 million on a $75 million revolving credit
facility and a $225 million term loan, will be used to refinance
the existing credit facilities.  The proposed bank facility is due
four years from the close of the transaction.

"The 'BB' rating reflects Bally's exposure to product sales
volatility, the importance of sustained research and development
spending in order to maintain the quality of its products, the
existence of a much larger and well-established competitor
(International Game Technology), and the expectation for a
moderation in the operating environment during the next few
quarters as a result of slower replacement sales and economic
weakness," said Standard & Poor's credit analyst Melissa Long.

"These factors are tempered by the company's No. 2 position in the
North American gaming equipment market, its expanding base of
gaming devices and systems, and strong credit measures
for the rating, which we expect provide ample cushion in a
slowdown."

"For the 12 months ended June 30, 2008, Bally reported EBITDA of
$272 million--up about 96% year over year," S&P said.  "Pro forma
for this transaction, we expect leverage to be in the 1x area,
which represents a significant  improvement over fiscal 2007, when
leverage was about 2.3x.  The credit  measures are currently
strong for the rating and afford some flexibility for share
repurchases, acquisitions, or a weakening operating environment,"
S&P related.


BARBEQUES GALORE: Court Approves September 10 as Auction Date
-------------------------------------------------------------
The U.S. Bankruptcy Court for the Central District of California
in Woodland Hills gave Barbeques Galore Inc. permission to sell
its barbeque equipment and supplies at an auction on Sept. 10,
2008, William Rochelle of Bloomberg News says.  The Court will
hold a sale hearing on September 11.

According to Mr. Rochelle, no buyer has been named in a sale
contract.  However, a supplier and creditor from Taiwan has   
offered to pay $12 million for the Debtor's assets, Mr. Rochelle
continues.

The Troubled Company Reporter said on Sept. 5, 2008, that Grand
Hall Enterprises Co. had planned to offer $12 million for 32 of 65
stores of Barbeques Galore.  The Debtor has proposed to pay a  
$50,000 break-up fee in the event it fails to consummate a sale
with Grand Hall.

                      About Barbeques Galore

Carlsbad, California-based Barbeques Galore Inc. --
http://www.bbqgalore.com/-- owns 65 retail stores selling    
barbeque equipment and supplies.  It has operations in Australia.  
It filed for Chapter 11 on Aug. 15, 2008, (Bank. C.D. Calif. Case
No. 08-16036).  Jeffrey W. Dulberg, Esq., at Pachulski Stang Ziehl
& Jones LLP, represents the Debtor in its restructuring efforts.  
The Debtor listed assets of $10 million to $50 million, and debts
of $10 million to $50 million.


B&B RESTAURANTS: Fox Sports Grill in Atlanta to Remain Open
-----------------------------------------------------------
B&B Restaurant Ventures LLC's largest revenue generator -- the Fox
Sports Grill in Atlanta, Georgia -- will remain open, despite the
company's bankruptcy filing in June.

J. Scott Trubey of the Atlanta Business Chronicle quotes Marc
Winthrop, a Los Angeles-based attorney for B&B, "We have closed
two stores in the chain but one of the keepers is the Atlanta
store."

The paper reports that B&B owns 80% equity stake in seven Fox
Sports Grill stores across the U.S. and Fox Broadcasting Co. holds
the remaining 20% of equity.

Based in Westlake Village, California, B&B Restaurant Ventures,
LLC dba Fox Sports Grill -- http://www.foxsportsgrill.com/--  
develops and operates the FOX Sports Grill chain, which offers a
menu of appetizers, sandwiches, burgers, and steaks in an
atmosphere showing sporting events through televisions.  The
company and its debtor-affiliates, B&B Restaurant Holdings LLC,
filed for Chapter 11 protection on July 2, 2008 (Bankr. C.D.
Calif. Case Nos. 08-14525 and 08-14527).  Garrick A. Hollander,
Esq., and Marc J. Winthrop, Esq., at Winthrop Couchot PC, in
Newport Beach, California, represent the Debtors.  When the
Debtors filed for protection from their creditors, they listed
assets between $1 million and $10 million and debts between
$10 million and $50 million.


BANKUNITED CAPITAL: Treasury Department Changes Capital Status
--------------------------------------------------------------
BankUnited Financial Corp.'s regulatory capital status has been
revised to "adequately capitalized" from "well capitalized" by the
Treasury Department's Office of Thrift Supervision.

As a result, the Bank is subject to restrictions on accepting
brokered deposits.

According to the Wall Street Journal, Stifel Nicolaus lowered the
stock to sell after regulators warned they would cancel the bank's
"well capitalized" status if it failed to obtain $400 million.

Recently, the bank's $14 billion banking unit has entered into
an agreement with the Office of Thrift Supervision over concerns
about capital levels, the WSJ relates.  Among other things, the
regulatory requests the bank to terminate its option adjustable-
mortgage and alternative mortgage businesses, the report notes.

The bank has indefinitely suspended its quarterly dividend on
common stock in August, the WSJ adds.

Headquartered in Coral Gables, Florida, BankUnited
Financial Corp. (NASDAQ:BKUNA) -- http://www.bankunited.com/-- is  
the parent company of BankUnited FSB.  BankUnited has assets of
$14.3 billion and deposits of $6.9 billion.


BARE ESCENTUALS: S&P Confirms 'B+' Corporate Credit Rating
----------------------------------------------------------
Standard & Poor's Ratings Services affirmed its ratings on San
Francisco, Calif.-based Bare Escentuals Beauty Inc., including the
company's 'B+' corporate credit rating.  At the same time, S&P
revised the company's outlook to positive from stable.  As of June
29, 2008, the company had about $247.9 million of total reported
debt.

Standard & Poor's revised outlook is based on Bare Escentuals'
sustained improvement of its financial risk profile, due to
ongoing debt reduction and strong operating performance that has
helped the company improve its key credit protection measures
through the first half of 2008, despite challenging economic
conditions.

"We could raise the ratings over the near to intermediate
term if the company continues to meet or exceed performance
expectations, while maintaining strong credit metrics and a
financial policy consistent with a higher rating," S&P said.

The ratings on Bare Escentuals reflect the company's narrow
product focus, participation in the highly competitive and
fragmented cosmetics industry, and the risks associated with
expanding and upgrading its operating platforms.  The company's
strong market position in the mineral-based cosmetics segment of
the cosmetics industry offsets these factors.

Bare Escentuals has a narrow product focus, as just under half of
its sales (46% of fiscal 2007 sales) are from mineral-based
foundation products.  Still, the company maintains good brand
loyalty in its expanding niche market.  In addition, Bare
Escentuals is achieving growth across its retail and wholesale
channels.

The outlook on Bare Escentuals is positive. "We could raise the
ratings if the company sustains our expectations for sales and
earnings growth, while continuing to demonstrate a more
conservative financial policy," noted Standard & Poor's credit
analyst Mark Salierno. We expect the company's credit measures to
remain above rating medians and close to current levels, including
debt to EBITDA below 2.5x, as it continues to develop its
infrastructure to fund future growth initiatives, leaving some
debt capacity for moderate acquisition and share repurchase
activity.

"Alternatively, we could revise the outlook to stable if the
company encounters roadblocks in expanding its business, if
operating results fall below plan and leverage increases beyond
this range, and if Bare Escentuals meaningfully pursues more
aggressive financial policy," he continued.


BLACK DIAMOND: Has Until October 8 to Exclusively File Plan
-----------------------------------------------------------
The U.S. Bankruptcy Court for the Eastern District of Kentucky
gave Black Diamond Mining Co., LLC and its debtor-affiliates a
one-month extension until Oct. 8, 2008, to exclusively file a
reorganization plan, according to William Rochelle of Bloomberg
News.

                        About Black Diamond

Headquartered in Pikeville, Kentucky, Black Diamond Mining Co.,
LLC, is a coal-mine operator and was formed in 2006.  The company
and seven of its affiliates filed for chapter 11 protection on
March 4, 2008 (Bankr. E.D. Ky. Lead Case No.08-70109).  David M.
Cantor, Esq., at Seiller Waterman, LLC, represents the Debtors in
these cases.  The U.S. Trustee for Region 8 appointed creditors to
serve on an Official Committee of Unsecured Creditors.  Foley &
Lardner LLP represents the Committee in these cases.

Prudential Insurance Co. of America and subsidiaries of CIT Group
Inc., C.I.T. Capital U.S.A., Inc. and The C.I.T Group/Commercial
Services Inc., filed involuntary Chapter 11 petitions against FCDC
Coal Inc., Black Diamond Mining Co., Martin Coal Processing Corp.,
Spurlock Energy Corp., Turner Elkhorn Mining Co., Wolverine
Resources, Inc. and Black Diamond Land Co. LLC on Feb. 19, 2008
(Bankr. E.D. Ky. Case Nos. 08-50369 to 08-50372 and 08-70066 to
08-70067).  Robert J. Brown, Esq., at Wyatt, Tarrant & Combs,
L.L.P., represent the petitioners.  According to the petitioners,
the Debtors owe them $150 million.  The Debtors schedules showed
$73,669,934 in total assets and $207,403,591 in total liabilities.

As reported in the Troubled Company Reporter on Feb. 25, 2008, the
petitioning creditors sought the appointment of a Chapter 11
trustee for the Debtors.  The petitioners alleged that the
Debtors' controlling equity owner Harold E. Sergent and other
shareholders are "hopelessly conflicted."  They insisted that the
company has no money since losing $25 million last year and they
had refused to dole out a single cent until a trustee assumes
control of the company and comes up with an appropriate budget.

The TCR on March 4, 2008, reported that the Court directed the
appointment of a chief restructuring officer -- either Ira Genser
or Steven Cohn from Alvarez & Marsal North America LLC -- for FCDC
Coal Inc. and Black Diamond Mining Co.  The Court said the CRO
will "have the same powers as a trustee," which will include
retention and termination of workers, and the investigation of the
Debtors' officers.


BOOM DRILLING: Case Summary & 20 Largest Unsecured Creditors
------------------------------------------------------------
Debtor: Boom Drilling Inc.
        PO Box 1087
        Woodward, OK 73802

Bankruptcy Case No.: 08-13941

Debtor-affiliates filing separate Chapter 11 petitions:

      Entity                                   Case No.
      ------                                   --------
Boomer Mud Pump LLC                            08-13942
J&J Air Drilling Inc.                          08-13943
Rocket Companies LLC                           08-13944

Chapter 11 Petition Date: September 8, 2008

Court: Western District of Oklahoma (Oklahoma City)

Debtor's Counsel: Stephen J. Moriarty, Esq.
                  sjmoriarty@andrewsdavis.com
                  Andrews Davis, PC
                  100 N. Broadway Ave., Suite 3300
                  Oklahoma City, OK 73102
                  Tel: (405) 272-9241
                  Fax: (405) 235-8786

Estimated Assets: $100 million to $500 million

Estimated Debts: $50 million to $100 million

Debtor's list of its 20 Largest Unsecured Creditors:

   Entity                        Nature of Claim   Claim Amount
   ------                        ---------------   ------------
Internal Revenue Service         Payroll taxes     $3,721,786
P.O. Box 2116
Philadelphia, PA 19114

Fluid End Sales Inc.                                $239,973
DBA Five Star Rig & Supply
Oklahoma City, OK 73143

Woodward Diesel                                     $165,758
P.O. Box 681
Woodward, OK 73802

Credit Card Center                                  $107,246

Human resource Services inc.                        $100,987

Woodward County Treasurer                            $97,314

Fluid Systems Inc.                                   $87,769

M.J.R. Investments Inc.                              $78,092

Red Rock oil Field
Hauling LLC                                          $76,500

Bluecross Blueshield of OK                           $71,917

Colburn Rig Eqpt. & Supply                           $64,280

Garvin County Treasurer                              $60,443

Schwab's Tinker Shop Int'l.                          $55,641

Pat McVicker Oilfield
Services LLC                                         $53,959

National Oilwell Varco                               $51,806

Wright Express                                       $51,104

Bond Trucking                                        $51,019

Ram Inc./We Allford L.P.                             $50,320

Tornado Trucking Inc.                                $39,500


BRIAN MILLER: Voluntary Chapter 11 Case Summary
-----------------------------------------------
Debtor: Brian G. Miller
        fdba Miller's Foreign Car Service
        fdba Miller's BP & Towing
        fdba Miller's Amoco
        2523 Lazy Lane
        Florence, SC 29506

        and

        Lucinda L. Miller

Bankruptcy Case No.: 08-05461

Chapter 11 Petition Date: September 3, 2008

Court: District of South Carolina (Columbia)

Judge: Helen E. Burris

Debtor's Counsel: Nancy E. Johnson, Eq.
                  (nej@njohnson-bankruptcy.com)
                  Law Office of Nancy E. Johnson, LLC
                  PO Box 146
                  Columbia, SC 29202-0146
                  Tel: (803) 343-3424

Estimated Assets: $1 million to $10 million

Estimated Debts: $1 million to $10 million

A copy of the Debtor's petition that includes a list of its
largest unsecured creditors is available for free at:

      http://bankrupt.com/misc/SC08-05461.pdf


BRIAN MILLER: Section 341(a) Meeting Scheduled for October 6
------------------------------------------------------------
The United States Trustee will hold a meeting of creditors of
Brian G. Miller, fdba Miller's Foreign Car Service, Miller's BP &
Towing, and Miller's Amoco, at 12:15 p.m., on Oct. 6, 2008, at
Columbia Meeting of Creditors.

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

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

Florence, South Carolina-based Brian G. Miller, fdba Miller's
Foreign Car Service, Miller's BP & Towing, fdba Miller's Amoco,
and Lucinda L. Miller filed their chapter 11 petition on Sept. 3,
2008 (Bankr. D.S.C. Case No. 08-05461).  Judge Helen E. Burris
presides over the case.  Nancy E. Johnson, Eq., at Law Office of
Nancy E. Johnson, LLC, represents the Debtors in their
restructuring efforts.  The Debtors estimated both their assets
and debts to be between $1 million and $10 million.


BRIDGEWATER ESTATES: Case Summary and Three Largest Creditors
-------------------------------------------------------------
Debtor: Bridgewater Estates, LP
        12810 D Willow Centre Drive
        Houston, TX 77069
        Tel: (281) 444-5646

Bankruptcy Case No.: 08-35854

Chapter 11 Petition Date: September 2, 2008

Court: Southern District of Texas (Houston)

Judge: Karen K. Brown

Debtor's Counsel: Yvette Marie Mastin
                  (mastinlaw@yahoo.com)
                  2323 South Voss Road, Suite 370
                  Houston, TX 77057
                  Tel: (832) 251-3663
                  Fax: (832) 971-7206

Estimated Assets: $1 million to $10 million

Estimated Debts: $1 million to $10 million

List of Largest Unsecured Creditors:

      Creditor                                Claim Amount
      --------                                ------------
      First Bank                              unknown
      c/o Charles B. Wolfe
      4605 Post Oak Place, Suite 227
      Houston, TX 77027

      Old Spec, Ltd.                          unknown
      C/o E. Patrick Chaudoir, Trustee
      2121 Sage, Suite 142
      Houston, TX 77056

      EFC, Inc.                               $150,000
      12841 Jones Road, Suite 101
      Houston, TX 77070


BRYAN DANT: Voluntary Chapter 11 Case Summary
---------------------------------------------
Debtor: Bryan Lee Dant
        1108 Claire Drive
        Spring Hill, TN 37174

Bankruptcy Case No.: 08-07934

Chapter 11 Petition Date: September 3, 2008

Court: Middle District of Tennessee (Columbia)

Judge: Keith M. Lundin

Debtor's Counsel: Elliott Warner Jones, Esq.
                  (ejones@dsattorneys.com)
                  Drescher & Sharp PC
                  1720 West End Avenue, Suite 300
                  Nashville, TN 37203
                  Tel: (615) 425-7121
                  Fax: (615) 425-7111

Estimated Assets: $1 million to $10 million

Estimated Debts: $1 million to $10 million

A copy of the Debtor's petition that includes a list of its
largest unsecured creditors is available for free at:

     http://bankrupt.com/misc/TNmb08-07934.pdf


CADENCE INNOVATION: Court Bars Exxon from Halting Delivery
----------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware issued a
temporary restraining order directing Exxon Mobil Chemical Company
to continue supplying Cadence Innovation LLC upon pre-payment by
the company pending the hearing on the preliminary injunction.

Cadence Innovation LLC filed a lawsuit against Exxon Mobil for
planning to stop supplying goods to the company.  In a complaint
dated Sept. 2, 2008, Cadence Innovation alleged that Exxon Mobil
violated their contract when it said it will stop supplying goods
to the company by Sept. 3, 2008.  Exxon Mobil is Cadence
Innovation's principal supplier of resin pellets, which the Debtor
uses as raw materials for manufacturing the plastic parts it
supplies to auto manufacturers.  Cadence Innovation seeks a ruling
from the Bankruptcy Court, enjoining Exxon Mobil from refusing to
supply the company as well as payment for damages that may result.

Proposed counsel for Cadence Innovation, Norman Pernick, Esq., at
Cole, Schotz, Meisel, Forman & Leonard P.A., in Wilmington,
Delaware, said that under the contract, Exxon Mobil is obligated
to continue to supply the company even if the contract has expired
or has been terminated.  According to Mr. Pernick, Exxon Mobil's
decision would affect Cadence Innovation's business operations as
well as its customers.

"If Cadence Innovation stops manufacturing, the assembly lines at
the auto manufacturers that use its products will also be forced
to shut down," Mr. Pernick said, pointing out that Cadence
Innovation is the exclusive manufacturer and supplier of those
plastic parts.  He further said that Cadence Innovation has no
other supplier of resin pellets.

Cadence Innovation reached a temporary settlement with Exxon
Mobil, permitting it to continue receiving supplies from Exxon,
according to a report by Bloomberg News.  Exxon, at the Sept. 3
hearing, agreed to continue supplying resin pellets until the next
hearing on Sept. 22, provided Cadence pays in advance, Bloomberg
News reported.

At the Sept. 22 hearing, the Court will rule on Cadence
Innovation's request for a preliminary injunction compelling Exxon
to continue supplying the company.  The parties are required to
submit legal memoranda in connection with the Injunction Motion on
or before Sept. 19, at 4:00 p.m.

                    About Cadence Innovation

Headquartered in Troy, Michigan, Cadence Innovation LLC --
http://www.cadenceinnovation.com/-- manufactures and sells auto  
parts to its customers GM and Chrysler.  The company has at least
4,200 employees in the United States and Europe, including Hungary
and Czech Republic.  The company and its debtor-affiliate, New
Venture Real Estate Holdings, LLC, filed for Chapter 11
reorganization on Aug. 26, 2008 (Bankr. D. Del. Lead Case No. 08-
11973).  Norman L. Pernick, Esq. and Patrick J. Reilley, Esq., at
Cole, Schotz, Meisel, Forman & Leonard, represent the Debtors as
counsel.  When the Debtor filed for protection from its creditors,
it listed assets of between $10 million and $50 million, and debts
of between $100 million to $500 million.  


CADENCE INNOVATION: Files Amended List of 20 Largest Creditors
--------------------------------------------------------------
Cadence Innovation LLC, and its affiliate, New Venture Real Estate
Holdings LLC, filed with the U.S. Bankruptcy Court for the
District of Delaware, an amended list of their 20 largest
creditors:

   Creditors                Nature of Claim       Claim Amount
   ---------                ---------------       ------------
Chrysler LLC
Attention: Doug Doran             Money Lent         $9,932,698
CIMS 48401 10
Auburn Hills, MI

Ventra c/o CoAmerica Bark         Trade              $2,616,013
Attn: Kim Boyer
Mail Code
411 West Lafayette
Detroit, MI 48275-3328

Recticel Interiors North          Trade              $1,637,527
America, LLC
5600 Bow Pointe Drive
Clarkston, MI 48346

Bayer Material Science            Trade              $1,622,906
P.O. BOX 223 105
Pittsburgh, PA 15251-2105

Blackhawk Automotive Plastics     Trade              $1,034,574
Salem Division
1159 Paysphere Circle
Chicago, IL 60674

Exxon Mobil Chemical              Trade                $954,105
P.O. Box 371127M
Pittsburgh, PA 15251

Michigan Staffing LLC             Trade                $895,147
29400 Van Dyke
Suite 222
Warren, MI 48093

O'Sullivan Films, Inc.            Trade                $744,102
1310 Paysphere Circle
Chicago, IL 60674

Summit Polymers                   Trade                $679,075
67 I5 South Sprinkle Road
Portage, MI 49002

Let's Unique Fabricating
800 Standard Parkway              Trade                $650,598
Auburn Hills, MI 48326

ADAC Plastics                     Trade                $551,113
P.O. Box 888375
Grand Rapids, MI 49588-8375

Michigan Department of Treasury   Tax                  $533,217
Department 78172
P.O. Box 78000
Detroit, MI48278-0172

Advanced Composites, Inc.         Trade                $528,651
3066 Sidco Drive
Nashville, TN 37204

Coastal Container                 Trade                $517,797
c/o Vericorr Packaging
1201 Industrial Ave.
Holland, MI 49423

Emhart Teknologies Inc            Trade                $430,012
12337 Collections Center Dr.
Chicago, IL 60693

City of Fraser                    Tax                  $408,908
P.O. Box 26032
Fraser, MI 48026

Anchor Bay                        Trade                $382,554
3090523 Mile Road
New Baltimore, MI 48047

Mico Industries, Inc.
1425 Burlingame Ave SW            Trade                $367,858
Grand Rapids, MI 49509

Complete Prototype                Trade                $367,593
44783 Morley Drive
Clinton TWP, MI 48036

Charter Township of Chesterfield  Tax                  $353,837
Pamela R. Harris, Treasurer
47275 Sugarbush Road
Chesterfieid, MI 48047

                    About Cadence Innovation

Headquartered in Troy, Michigan, Cadence Innovation LLC --
http://www.cadenceinnovation.com/-- manufactures and sells auto  
parts to its customers GM and Chrysler.  The company has at least
4,200 employees in the United States and Europe, including Hungary
and Czech Republic.  The company and its debtor-affiliate, New
Venture Real Estate Holdings, LLC, filed for Chapter 11
reorganization on Aug. 26, 2008 (Bankr. D. Del. Lead Case No. 08-
11973).  Norman L. Pernick, Esq. and Patrick J. Reilley, Esq., at
Cole, Schotz, Meisel, Forman & Leonard, represent the Debtors as
counsel.  When the Debtor filed for protection from its creditors,
it listed assets of between $10 million and $50 million, and debts
of between $100 million to $500 million.  


CADENCE INNOVATION: Wants to Hire Cole Schotz at Lead Counsel
-------------------------------------------------------------
Cadence Innovation LLC, and its affiliate, New Venture Real Estate
Holdings LLC, seek the U.S. Bankruptcy Court for the District of
Delaware's authority to employ Cole, Schotz, Meisel, Forman &
Leonard, P.A., as their lead bankruptcy counsel.

The Debtors selected the firm because of its extensive experience
and knowledge in business reorganizations under Chapter 11, as
well as its familiarity with the Debtors' business operations.

As counsel, Cole Schotz is expected to:

    (1) advise the Debtors of their rights, powers and duties
        as debtors-in-possession as well as advise them
        regarding matters of bankruptcy law;

    (2) represent the Debtors in proceedings and hearings;

    (3) prepare legal papers on behalf of the Debtors;

    (4) provide assistance, advice, and representation
        concerning the confirmation of any proposed plan and
        solicitation of acceptances for that plan, or
        responding to objections to those plans;

    (5) advise the Debtors and assist them in the negotiations
        concerning financing agreements, debt restructuring,
        cash collateral arrangements, and related transactions;

    (6) provide assistance, advice, and representation
        concerning any possible sale of the Debtors' assets;

    (7) review the nature and validity of liens asserted
        against the Debtors' property, and advise them
        concerning the enforceability of those liens;

    (8) provide assistance, advice and representation
        concerning any further investigation of the Debtors'
        assets, liabilities and financial condition that may be
        required under local, state, or federal law;

    (9) prosecute and defend litigation matters; and

   (10) provide counseling and representation with respect to
        the assumption or rejection of executory contracts and
        leases, asset sale, among other things.

In exchange for Cole Schotz' services, the firm will be paid on
an hourly basis and reimbursed for the expenses incurred.  The
firm's professionals and their hourly rates are:

       Members        $320 - $625
       Associates     $195 - $325
       Paralegals     $130 - $190

Cole Schotz received a $626,039 retainer from the Debtors for
the planning, preparation of documents and proposed employment
during the Debtors' bankruptcy.  Of that amount, $230,977 was
applied to pay pre-bankruptcy fees and expenses incidental to the
preparation and filing of the cases, and $2,078 for the filing
fees.

Norman Pernick, Esq., at Cole Schotz, assures the Court that
the firm does not hold or represent any interest adverse to the
Debtors.  He adds that the firm is a "disinterested person" as
defined in Section 101(14) of the Bankruptcy Code.

                    About Cadence Innovation

Headquartered in Troy, Michigan, Cadence Innovation LLC --
http://www.cadenceinnovation.com/-- manufactures and sells auto  
parts to its customers GM and Chrysler.  The company has at least
4,200 employees in the United States and Europe, including Hungary
and Czech Republic.  The company and its debtor-affiliate, New
Venture Real Estate Holdings, LLC, filed for Chapter 11
reorganization on Aug. 26, 2008 (Bankr. D. Del. Lead Case No. 08-
11973).  Norman L. Pernick, Esq. and Patrick J. Reilley, Esq., at
Cole, Schotz, Meisel, Forman & Leonard, represent the Debtors as
counsel.  When the Debtor filed for protection from its creditors,
it listed assets of between $10 million and $50 million, and debts
of between $100 million to $500 million.  


CADENCE INNOVATION: Wants Katten Muchin as Special Counsel
----------------------------------------------------------
Cadence Innovation LLC, and its affiliate, New Venture Real Estate
Holdings LLC, seek the U.S. Bankruptcy Court for the District of
Delaware's approval to employ Katten Muchin Rosenman LLP, as their
special counsel.

The Debtors selected the firm because of its extensive experience
and knowledge in business reorganizations under Chapter 11.  The
Debtors said Katten Muchin is also familiar with their business
since it has served as counsel for them prior to their bankruptcy
filing.

As special counsel, Katten Muchin is expected to:

    (1) negotiate and prepare documents relating to the
        disposition of assets as requested by the Debtors;

    (2) advise the Debtors on finance as well as on matters
        related to finance and the sale of the Debtors' assets;

    (3) advise the Debtors concerning their rights, powers and
        duties as debtor-in-possession in the continued
        management and operation of their business;

    (4) counsel and prepare the Debtors' plan of reorganization
        or liquidation, disclosure statement, and related
        documents;

    (5) assist Cole, Schotz, Meisel, Forman & Leonard, P.A., in
        matters concerning the administration of the Debtors'
        estate; and

    (6) perform other legal services when necessary.

In return for Katten Muchin's services, the Debtors will pay the
firm its fees on an hourly basis as well as reimburse for the
expenses incurred in connection with its employment.  The firm's
professionals expected to provide legal assistance to the Debtors
and their hourly rates are:

       Howard Lanznar     $625
       John Sieger        $565
       Peter Siddiqui     $410
       Andrew Wool        $365

Katten Muchin received from the Debtors a $373,637 retainer for
the planning and preparation of the documents, and for its
proposed employment during the Debtors' bankruptcy.  As of
Aug. 26, 2008, the firm is holding about $265,000 as retainer.  
Howard Lanznar, Esq., at Katten Muchin, assures the Court that
the firm does not hold or represent any interest adverse to the
Debtors.

                    About Cadence Innovation

Headquartered in Troy, Michigan, Cadence Innovation LLC --
http://www.cadenceinnovation.com/-- manufactures and sells auto  
parts to its customers GM and Chrysler.  The company has at least
4,200 employees in the United States and Europe, including Hungary
and Czech Republic.  The company and its debtor-affiliate, New
Venture Real Estate Holdings, LLC, filed for Chapter 11
reorganization on Aug. 26, 2008 (Bankr. D. Del. Lead Case No. 08-
11973).  Norman L. Pernick, Esq. and Patrick J. Reilley, Esq., at
Cole, Schotz, Meisel, Forman & Leonard, represent the Debtors as
counsel.  When the Debtor filed for protection from its creditors,
it listed assets of between $10 million and $50 million, and debts
of between $100 million to $500 million.  


CALIFORNIA COVE: Case Summary & 20 Largest Unsecured Creditors
--------------------------------------------------------------
Debtor: California Cove at San Elijo LLC
        No. 800, 8105 Irvine Center Drive
        Irvine, CA 92618

Bankruptcy Case No.: 08-15506

Chapter 11 Petition Date: September 5, 2008

Court: Central District Of California (Santa Ana)

Judge: Erithe A. Smith

Debtor's Counsel: David M Poitras, Esq.
                  dpoitras@jmbm.com
                  1900 Ave Of The Stars 7Th Flr
                  Los Angeles, CA 90067
                  Tel: (310) 203-8080
                  
Estimated Assets: $50 million to $100 million

Estimated Debts: $10 million to $50 million

Debtor's list of its 20 Largest Unsecured Creditors:

   Entity                        Nature of Claim   Claim Amount
   ------                        ---------------   ------------
Nissho of California             Contract          $724,091
1902 South Santa Fe Ave.
Vista, CA 92083

Builders Showcase Interiors      Contract          $539,217
9225 Brown Deer Road
San Diego, CA 92121

Vallecitos Water District        Water/Sewer Fess  $396,299
201 Vallecitos De Oro
San Marcos, CA 92069-1453

Merit Masonry Inc.               Contract          $373,465
33915 Almond Street
Wildomar, CA 92595

JD Miller Conbstruction          Contract          $329,024
31735 Riverside Dr., Ste. C292
Lake Elsinore, CA 92530

Eurodesign Inc.                  Contract          $263,485
13428 Benson Ave.
Chino, CA 91710

Schilling Corporation            Contract          $224,946

Heintschel Platering Inc.        Contract          $188,734

California Building

Specialties Inc.                 Contract          $180,504

Valleycrest Landscape Dev't.     Contract          $174,554

Taylor Trim & Supply             Contract          $165,217

Verdugo Concrete Specialist Inc. Contract          $134,343

Macord Construction Corp.        Contract          $121,955

Platinum Painting Inc.           Contract          $112,444

Mayer Roofing Inc.               Contract          $100,899

OJ Insulation Inc.               Contract           $96,668

Stone Etc.                       Contract           $94,883

Sue Young & Brown Inc.           Contract           $89,197

Hunsaker & Associates SD Inc.    Contract           $79,175

FCO Gilbert Grading              Contract           $73,006


CALPINE CORP: Names Jack Fusco as President and CEO
---------------------------------------------------
Calpine Corp.'s Board of Directors appointed Jack A. Fusco as
President and Chief Executive Officer.  Mr. Fusco will
also serve as a member of Calpine's Board of Directors.

Mr. Fusco succeeds Robert P. May, who had served as Calpine's
Chief Executive Offer since December 2005 and earlier this year
announced his intention to retire when his successor was in
place.

"We are very pleased to welcome Jack to Calpine as our CEO," said
William J. Patterson, Chairman of Calpine's Board.  "Jack is the
right person to lead us forward, and he possesses a unique blend
of leadership skills, strategic insights, and industry expertise
built over a nearly 25-year career.

"I would also like to thank Bob once more for his many positive
contributions to Calpine and his leadership through one of the
largest and most complex reorganizations in corporate history.  He
led a very talented team, and his guidance and strategic decisions
made an enormous difference," concluded Mr. Patterson.

"With its streamlined balance sheet, portfolio of clean, fuel-
efficient assets and dedicated workforce, I firmly believe Calpine
is well positioned for future success," said Mr. Fusco.  "Together
with Calpine's talented employees and managers, I am eager to
build upon the positive momentum of the past year to further
improve operating efficiencies and to implement a strategy for
future growth.  These steps will enable us to better serve our
customers and create value for Calpine shareholders."

Mr. Fusco brings nearly 25 years of industry experience to
Calpine.  A California native who started his career as an
operator in power plants there, Mr. Fusco recently served as
Chairman and Chief Executive Officer of Texas Genco Inc. until
2006.  From 2002 until July 2004, Mr. Fusco was the exclusive
energy investment advisor to Texas Pacific Group.  Earlier in his
career, Mr. Fusco helped to found Orion Power, an independent
power producer, serving as a Board member and the Company's Chief
Executive Officer until 2002.

Prior to the establishment of Orion Power, Mr. Fusco was a vice
president in Goldman, Sachs & Co., where he focused on wholesale
electric commodity trading and marketing.  Before joining Goldman
Sachs, Mr. Fusco was executive director for International
Development and Operations for Pacific Gas & Electric's
nonregulated subsidiary.  In that role, Mr. Fusco was responsible
for the development and implementation of PG&E's international
business strategy and the launching of International Generating
Company (InterGen), an international independent power producer
focused on emerging markets.

               Employment & Stock Option Agreement

Subsequent to his appointment as Calpine's president and CEO, Mr.
Fusco and Calpine entered into an employment and stock option
agreement under which:

   (a) Mr. Fusco's employment with Calpine is for five years;

   (b) Mr. Fusco is entitled to a $1,000,000 annual base salary
       and an annual cash target performance bonus equal to 100%
       of annual base salary, with a maximum annual performance
       bonus opportunity of 200% of base salary;

   (c) for fiscal 2008, Mr. Fusco will receive a prorated bonus
       based on actual achievement of 2008 performance targets,
       with a guaranteed minimum; and

   (d) Mr. Fusco will receive a $500,000 one-time cash bonus.

Mr. Fusco is also granted a sign-on option to purchase 5,394,000
shares of Calpine Common Stock, of which (i) 1,250,000 shares
were granted pursuant to Calpine's 2008 Equity Incentive Plan,
and (ii) 4,144,000 shares were granted outside of the equity plan
but are subject to the same terms and conditions as set forth in
the equity plan.  The Option was granted in four tranches of
1,075,000, 1,271,000, 1,435,000 and 1,613,000 shares of company
Common Stock, with each tranche having a corresponding per share
exercise price of $15.99, $19.19, $21.59 and $23.99,
respectively.  The Option has a seven-year term and will vest
ratably on the first, second, third, fourth and fifth
anniversaries of the date of grant, August 10, 2008, subject
generally to Mr. Fusco's continued employment.

A full-text copy of Fusco's Employment and Stock Option Agreement
is available for free at http://researcharchives.com/t/s?31bf

                          About Calpine

Based in San Jose, California, Calpine Corporation (OTC Pink
Sheets: CPNLQ) -- http://www.calpine.com/-- supplies customers
and communities with electricity from clean, efficient, natural
gas-fired and geothermal power plants.  Calpine owns, leases and
operates integrated systems of plants in 21 U.S. states and in
three Canadian provinces.  Its customized products and services
include wholesale and retail electricity, gas turbine components
and services, energy management and a wide range of power plant
engineering, construction and maintenance and operational
services.

The company and its affiliates filed for chapter 11 protection on
Dec. 20, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-60200).  Richard
M. Cieri, Esq., Matthew A. Cantor, Esq., Edward Sassower, Esq.,
and Robert G. Burns, Esq., Kirkland & Ellis LLP represent the
Debtors in their restructuring efforts.  Michael S. Stamer, Esq.,
at Akin Gump Strauss Hauer & Feld LLP, represents the Official
Committee of Unsecured Creditors.  As of Aug. 31, 2007, the
Debtors disclosed total assets of $18,467,000,000, total
liabilities not subject to compromise of $11,207,000,000, total
liabilities subject to compromise of $15,354,000,000 and
stockholders' deficit of $8,102,000,000.

On Feb. 3, 2006, two more affiliates, Geysers Power Company, LLC,
and Silverado Geothermal Resources, Inc., filed voluntary chapter
11 petitions (Bankr. S.D.N.Y. Case Nos. 06-10197 and 06-10198).
On Sept. 20, 2007, Santa Rosa Energy Center, LLC, another
affiliate, also filed a voluntary chapter 11 petition (Bankr.
S.D.N.Y. Case No. 07-12967).

On June 20, 2007, the Debtors filed their Chapter 11 Plan and
Disclosure Statement.  On Aug. 27, 2007, the Debtors filed their
Amended Plan and Disclosure Statement.  Calpine filed a Second
Amended Plan on Sept. 19, 2007 and on Sept. 24, 2007, filed a
Third Amended Plan.  On Sept. 25, 2007, the Court approved the
adequacy of the Debtors' Disclosure Statement and entered a
written order on September 26.  On Dec. 19, 2007, the Court
confirmed the Debtors' Plan.  The Amended Plan was deemed
effective as of Jan. 31, 2008.


CHA HAWAII: Organizational Meeting Slated for September 11
----------------------------------------------------------
Roberta A. DeAngelis, the acting United States Trustee for Region
3, will hold an organizational meeting in the Chapter 11 cases of
CHA Hawaii, LLC, and its debtor-affiliates on Sept. 11, 2008, at
1:00 p.m. at the J. Caleb Boggs Federal Building, 844 King
Street, Room 2112, in Wilmington, Delaware.

The sole purpose of the meeting will be to form a committee or
committees of unsecured creditors in the Debtors' cases.

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 CHA Hawaii

Based in Wichita, Kans., CHA Hawaii, LLC runs a health care
business.  The Debtor and three of its debtor-affiliates filed for
Chapter 11 reorganization on Aug. 29, 2008 (Bankr. D. Del. Lead
Case No. 08-12027).  When the Debtor filed for protection from its
creditors, it listed assets of between $1 million and $10 million,
and debts of between $50 million and $100 million.


COLLEGE LOAN: Cancels All Private Loan Disbursements
----------------------------------------------------
Anne Marie Chaker of the Wall Street Journal reports that College
Loan Corp. has suspended the remaining part of its student-lending
business but will continue to operate other existing loan
portfolio.

The company's chief executive, Cary Katz, said in a statement it
will cease all private loan disbursements, effective immediately,
because it lost its funding after Citigroup Inc. canceled
financing on Friday.

About 9,000 pending applications from students have been canceled,
the WSJ says.  In school year 2006-2007, undergraduate students
acquired at least $14.5 million in private loan, a 15% increase
compared a year earlier, the WSJ notes.

Recent credit crisis, the WSJ relates, has plagued the student
loan industry, wherein at least 138 lenders have now departed from
federal and private loan programs.

Headquartered in San Diego, California, College Loan Corporation
offers student loans.  The company is one of the largest student-
loan companies in the United States.


COMMERCIAL REALTY: Auctioning Hotels & Restaurants on Sept. 10
--------------------------------------------------------------
Commercial Realty and Development Company, Towne House Inn, Inc.,
and Towne House Enterprises, Inc. have employed Hostetter
Auctioneers of Beaver Falls, Pa., to conduct a public auction of
the their real and personal property on Sept. 10, 2008 in St.
Marys, Pennsylvania, in accordance with the terms of an auction
contract and under the confirmed Chapter 11 Plan for the Debtors.

The property to be sold includes real estate located in St. Marys,
Pa., at 138 Center Street, 140 Center Street (which includes two
buildings) and 152 Center Street (which also includes two
buildings), together with the hotel liquor license, fixtures,
furnishings, equipment, food inventory, beverage inventory, name,
and miscellaneous personal property situate therein and or used in
the operation of the hotel, restaurant and bar business; 116
Center Street (Sunder House); 122 Center Street (Kime House); 126
Center Street (Chambers Building); 129 North Michael Street
(office building); 117 North Michael Street (Babin Building); and,
123 North Michael Street (a portion of the driveway and parking
lot), all of which is more fully described in papers delivered to
the Bankruptcy Court.  

Examination of the property and further information can be
obtained from the Auctioneer:

     Hostetter Auctioneers
        cassie@sherm.biz      
     903 Constitution Blvd.
     Beaver Falls, PA 15010
     Telephone (724) 847-1887
     http://www.hostetterauctioneers.com/

or the Reorganized Debtors' counsel:

     Guy C. Fustine, Esq.
      (gfustine@kmgslaw.com)
     KNOX McLAUGHLIN GORNALL & SENNETT, P.C.
     120 West 10th Street
     Erie, PA 16501-1461
     Telephone (814) 459-2800
     http://www.kmgslaw.com

                  About Commercial Realty

Headquartered in St. Marys, Pa., Commercial Realty and Development
Company operates a 59-room hotel and inn, complete with Executive
and VIP Suites.  Its Towne House Inn Dining Room is open to the
public and offers a full country breakfast, luncheon menu and
dinner menu.  

The company and two affiliates -- Towne House Inn Inc. and
Towne House Enterprises Inc. -- sought chapter 11 protection on
November 8, 2006 (Bankr. W.D. Pa. Lead Case No. 06-11436).  
Guy C. Fustine, Esq., at Knox McLaughlin Gornall & Sennett, P.C.
represents the Debtors in their restructuring efforts.  The
debtors successfully prosecuted their chapter 11 plan to
confirmation and emerged from chapter 11 within the past year.
No Official Committee of Unsecured Creditors was appointed in
the Debtors' case.  When Commercial Realty sought protection from
its creditors, it listed assets and debts between
$1 million and $100 million.


CONTINENTAL AIRLINES: At High Risk of Bankruptcy in 2009
--------------------------------------------------------
Michael Lowry, project manager for AVIATION WEEK's latest Top-
Performing Companies report, has ranked Northwest Airlines as a
"high risk" for a bankruptcy filing in 2009.

According to the report, American Airlines, AirTran and
Continental are also at risk in 2009, while USAirways may succumb
to a third Chapter 11 filing this winter due to inadequate
liquidity.

                              2007        2008       2009
                              ----        ----       ----
US Airways Group Inc.         
Financial Fitness Assessment Declining   High Risk  High Risk
Liquidity Assessment         Good        Inadequate Inadequate
Bankruptcy Risk              Low         High       High

AMR Corp.
Financial Fitness Assessment Low Risk    High Risk  High Risk
Liquidity Assessment         Good        Poor       Inadequate
Bankruptcy Risk              Low         Low        High

Northwest Airlines Corp.
Financial Fitness Assessment Low Risk    Declining  High Risk
Liquidity Assessment         Excellent   Fair       Inadequate
Bankruptcy Risk              Low         Low        High

AirTran Holdings Inc.
Financial Fitness Assessment Neutral     Declining  High Risk
Liquidity Assessment         Good        Fair       Poor
Bankruptcy Risk              Low         Low        High

Continental Airlines Inc.
Financial Fitness Assessment Neutral     Declining  High Risk
Liquidity Assessment         Good        Fair       Poor
Bankruptcy Risk              Low         Low        High

AVIATION WEEK's TPC report focuses on the global airline
industry, revealing which carriers are in the best shape to
prevail against the daunting economic challenges they face.

"The next 12 months will be shaky and there will be no return to
the status quo . . . airlines are in a morass," TPC adviser
Michael Dyment, of Nexa Capital Partners, said.

The TPC study shows that the best of the Asia-Pacific and
European airlines are head and shoulders above their peers among
the major legacy carriers, with Singapore Airlines at the
top of the list and Malaysia Airlines improving the most.  

The U.S. majors, meanwhile, are entrenched in the bottom half of
the table.  "The gap between the Asian and European top
performers and the U.S. airlines has only grown larger over the
past year," the article says.  U.S. airlines suffered most from
rising fuel rates and sinking demand, Mr. Lowry noted.

The Wall Street Journal, however, says that with the slow
passenger-traffic growth and high fuel prices, the International
Air Transport Association predicts a loss in the airline industry
of $5.2 billion world-wide for 2008, with the North American
carriers taking the lion's share at $5 billion.  This will be
followed by a $4.1 billion loss in 2009, IATA says.

IATA Director General Giovanni Bisignani also confirmed that many
airlines are indeed "at risk" of going bankrupt as the industry
heads into autumn.  "[F]asten your seatbelts for at least another
two years," Mr. Bisignani advised.

IATA's forecasts factor is an average oil price of $113 a barrel,
reports WSJ.  At present, crude oil is trading a little below
$110.

Ann Keeton of WSJ says UBS AG analysts said the airline industry
could break-even next year if oil prices were to average around
$95 a barrel.  However, if oil prices are higher, the industry's
losses would be greater than the predicted $5.2 billion.

UBS forecasts oil to average $120 a barrel in 2009, says Ms.
Keeton.

                    About Continental Airlines

Based in Houston, Texas, Continental Airlines Inc. (NYSE: CAL)
-- http://continental.com/-- is the world's fifth largest    
airline.  Continental, together with Continental Express and
Continental Connection, has more than 3,000 daily departures
throughout the Americas, Europe and Asia, serving 140 domestic and
139 international destinations.  More than 550 additional points
are served via SkyTeam alliance airlines.  With more than 46,000
employees, Continental has hubs serving New York, Houston,
Cleveland and Guam, and together with Continental Express, carries
approximately 69 million passengers per year.

                          *     *     *

The Troubled Company Reporter said on Aug. 13, 2008, that Standard
& Poor's Ratings Services took various actions on its ratings on
Continental Airlines Inc. (B/Negative/B-3).  S&P affirmed its 'B'
long-term corporate credit rating, 'B-3' short-term corporate
credit rating, all ratings on unsecured debt and on selected
enhanced equipment trust certificates. S&P  lowered S&P's ratings
on other enhanced equipment trust certificates, particularly those
secured by regional jets, and raised other ratings.  All ratings
were removed from CreditWatch, where they were placed with
negative implications May 22, 2008, as part of an industrywide
review. The rating outlook is negative.


CORPUS CHRISTI: New York Real Property Auction is Set for Sept. 29
------------------------------------------------------------------
An auction for Corpus Christi Resources LLC's real property in
Brooklyn, New York, is set at 2:00 p.m. (Central Time), on
Sept. 29, 2008, before the Honorable Richard S. Schmidt of the
U.S. Bankruptcy Court for the Southern District of Texas, at 1133
North Shoreline Boulevard, # 208, in Corpus Christi, Texas.

The New York real property is located at 186-200 Morgan Avenue in
Brooklyn, New York, which includes Block 2942, Lots 101, 157, 160,
220, and 207, but only to the extent of the Debtor's interest in
Lot 207.

Deadline for bidders is at 5:00 p.m. (Eastern Standard Time), on
Sept. 15, 2008.

Based in Corpus Christi, Texas, Corpus Christi Resources LLC, is a
privately owned real estate development company that seeks to
develop raw land and to remediate property in New York.  The
company filed for Chapter 11 protection on Oct. 29, 2007 (Bankr.
S.D. Tex. Case No. 07-20576).  Rhett G. Campbell, Esq., at
Thompson & Knight LLP represents the Debtor in its restructuring
efforts.  When it filed for bankruptcy, the company disclosed
estimated assets of less than $10,000 but disclosed estimated
debts between $1 million and $100 million.  The Debtor's list of
its five largest unsecured creditors showed claims aggregating to
more than $15 million.


DAVIDSON MOTOR: To Close Ford Lincoln Mercury Dealership
--------------------------------------------------------
Davidson Motor Co. of Gettysburg is closing, reports Jamie McCune
of The Evening Sun (Penn.).

Davidson Motor filed for Chapter 11 bankruptcy liquidation on
April 15, 2008 with the United States Bankruptcy Court for the
Middle District of Pennsylvania.

In early April, Flex Fund Financial Services, a firm providing
financial backing to the dealership, seized the new-inventory
vehicles off the lot, according to Mr. McCune's report.  The Court
ordered the vehicles returned, but only after the company had
filed for bankruptcy protection, Mr. McCune reports.

Davidson Motor Company of Gettysburg --
http://www.davidsonmotorco.com-- a Ford Lincoln Mercury dealer in  
Gettysburg, Pennsylvania offers Ford Lincoln Mercury Cars, Trucks,
SUVs and Crossovers.

Markian R. Slobodian, Esq., at the Law Offices of Markian R.
Slobodian, represents the Debtor in its liquidation proceedings.


DIABLO GRANDE: Has Until Sept. 9 to Strike a Deal with World Int'l
------------------------------------------------------------------
The U.S. Bankruptcy Court for the Eastern District of California,
at the request of Diablo Grande, LP, extended the period for the
Debtor to complete a sale agreement with World International, LLC,
and settlement among the Debtor's creditors to September 9, 2008,
reports Tim Moran of The Modesto Bee.

World International LLC is a corporation reportedly formed by
partners who are Mexican nationals with broad experience in
resort, hotel and industrial development, with properties in
Cancun, Mexico City and Cabo San Lucas, says Mr. Moran. It offered
$21 million for the Debtor, Mr. Moran notes. However, Mr. Moran
notes, this bid was $5 million less than the minimum bid specified
by the Debtor. The Bank of Scotland, which is the biggest creditor
in the bankruptcy, and the two partners in the Debtor -- Donald
Panoz and Morton Davis -- agreed to come up with the shortfall to
get other creditors to agree to the sale, according to Mr.
Moran.

The Court has express concerns about the sale and settlement
agreement, which defines how the money from the sale is
distributed among creditors, including an $850,000 pool of money
for unsecured creditors, says Mr. Moran. It said the settlement
bypasses the absolute priority rule provided in the Bankruptcy
Code, according to Mr. Moran.

Mr. Moran says that the Court was concerned about how insiders
such as Panoz, Davis and various corporations they control are
treated in the settlement. More than $11 million owed to the
Debtor by insiders is released in the agreement, Mr. Moran reports
the Court as stating.

Michael H. Ahrens, Esq., the Debtor's counsel, said that that
wasn't the case and told the Court the deal came together under
intense time pressure with hectic telephone negotiations between
the major creditors, the partners and the resort, Mr. Moran
reports.

Attorneys for several creditors pleaded with the Court to accept
the sale and settlement, saying the alternative was a Chapter 7
liquidation, with disastrous results for homeowners at the resort,
Mr. Moran adds. A Chapter 7 likely would result in years of
litigation, a government takeover of the water system and
continued health issues with water quality, Mr. Moran notes the
attorneys as saying.

Mr. Ahrens said that the Debtor was running out of money to
operate and needed an additional $900,000 to continue through the
end of September, 2008, according to Mr. Moran.

Patterson, California-based Diablo Grande LP owns 33,000-acre real
property and runs a resort hotel with golf courses and convention
center. Diablo Grande LP's general partner is Diablo Grande Inc.
with Donald Panoz as president. It filed for chapter 11 protection
on March 10, 2008 (Bankr. E.D. Calif. Case No. 08-90365). Judge
Robert S. Bardwil is presiding the case. Ori Katz, Esq., and
Michael H. Ahrens, Esq., at Sheppard Mullin Richter & Hampton LLP,
represent the Debtor in its restructuring efforts.  When the
Debtor filed for bankruptcy, it listed assets of between $50
million and $100 million and debts of between $50 million and
$100 million.


ENCAP GOLF: Judge Winfield Denies Wachovia's Conversion Plea
------------------------------------------------------------
The Hon. Novalyn L. Winfield of the United States Bankruptcy Court
for the District of New Jersey denied a motion filed by Wachovia
Bank, N.A., to convert the Chapter 11 cases of EnCap Golf Holdings
LLC and NJM Capital LLC to Chapter 7 liquidation or, to the extent
possible, dismiss their cases.

As reported in the Troubled Company Reporter on June 19, 2008,
Wachovia Bank argued that the Debtors' Chapter 11 voluntary
petitions were filed in "bad faith."

Wachovia Bank, as agent for a group of financial institutions,
said that it holds the first mortgage of the Debtors' real
property in Bergen County, in New Jersey, which asset secures its
claims against the Debtors for at least $155 million.

Wachovia Bank also alleged that the Debtors have mismanaged the
landfill project located in the Meadowlands in New Jersey.  About
a year ago, the Debtors revealed to their stakeholders that they
have incurred at least $75 million in cost overruns on the
projects which was originally projected would cost roughly $113
million to complete.  As a result, the Debtors have:

-- breached their obligations under their redevelopment
    agreement with the States of New Jersey,

-- defaulted their financial obligations with Wachovia Bank,
    and

-- breached their obligations to pay their subcontractors
    who have cease all work on the project in September 2007.

As the Debtors failed to cure the defaults, Wachovia Bank
commenced on Jan. 3, 2008, a foreclosure action before the New
Jersey Superior Court against the Debtors' real property but the
foreclosure was stayed -- including NJM Capital's attempt to
terminate EnCap's rights to develop the project -- when the
Debtors filed for bankruptcy on May 8, 2008.

Wachovia Bank related that the Debtors have no working capital
and, above all, the possibility of obtaining additional financing
from lenders to finance and complete the project is impossible.  

                          About EnCap Golf

Headquartered in East Rutherford, New Jersey, EnCap Golf
Holdings, LLC, a subsidiary of Cherokee Investment Partners of
North Carolina, develops closed landfills and other brownfield
properties into golf courses.  The company and its affiliate,
NJM Capital LLC, filed for Chapter 11 protection on May 8, 2008
(Bankr. D. N.J. Lead Case No.08-18581).  Michael D. Sirota, Esq.,
at Cole, Schotz, Meisel, Forman & Leonard, P.A., in Hackensack,
New Jersey, represents the Debtor.  The U.S. Trustee for Region 3
appointed five creditors to serve on an Official Committee of
Unsecured Creditors.  Alyson M. Fiedler, Esq., and Louis T.
DeLucia, Esq., at Greenberg Traurig, LLP, represent the Committee
in these cases.  When the Debtors filed for protection against
their creditors, they listed asset and debts between $100 million
and $500 million.


FANNIE MAE: Placed by Government Under Conservatorship
------------------------------------------------------
The U.S. Treasury Department and the Federal Housing Finance
Agency, with support from the Federal Reserve, on Sunday announced
actions regarding the housing government sponsored enterprises,
Fannie Mae and Freddie Mac, to protect the financial system, to
support the housing market, and to protect the taxpayers.  The
U.S. government is taking direct responsibility for the GSEs,
placing Fannie Mae and Freddie Mac under conservatorship.

James B. Lockhart, director of Federal Housing Finance Agency,
said that Fannie Mae and Freddie Mac share the critical mission of
providing stability and liquidity to the housing market.  Between
them, the Enterprises have $5.4 trillion of guaranteed mortgage-
backed securities (MBS) and debt outstanding, which is equal to
the publicly held debt of the United States.  Their market share
of all new mortgages reached over 80 percent earlier this year,
but it is now falling.

During the turmoil last year, they played a very important role in
providing liquidity to the conforming mortgage market.  That has
required a very careful and delicate balance of mission and safety
and soundness.  A key component of this balance has been their
ability to raise and maintain capital.  Given recent market
conditions, the balance has been lost.  Unfortunately, as house
prices, earnings and capital have continued to deteriorate, their
ability to fulfill their mission has deteriorated.

In particular, the capacity of their capital to absorb further
losses while supporting new business activity is in doubt.  
[Sun]day's action addresses safety and soundness concerns.  FHFA's
rating system is called GSE Enterprise Risk or G-Seer.  It stands
for Governance, Solvency, Earnings and Enterprise Risk which
includes credit, market and operational risk.  There are pervasive
weaknesses across the board, which have been getting worse
in this market.

Over the last three years OFHEO, and now FHFA, have worked hard to
encourage the Enterprises to rectify their accounting, systems,
controls and risk management issues.  They have made good progress
in many areas, but market conditions have overwhelmed that
progress.  The result has been that they have been unable to
provide needed stability to the market.  They also find themselves
unable to meet their affordable housing mission.  Rather than
letting these conditions fester and worsen and put our markets in
jeopardy, FHFA, after painstaking review, has decided to take
action now.

Key events over the past six months have demonstrated the
increasing challenge faced by the companies in striving to balance
mission and safety and soundness, and the ultimate disruption of
that balance that led to [Sun]day's announcements.  In
the first few months of this year, the secondary market showed
significant deterioration, with buyers demanding much higher
prices for mortgage backed securities.

Mr. Lockhart said "In February, in recognition of the remediation
progress in financial reporting, we removed the portfolio caps on
each company, but they did not have the capital to use that
flexibility.  In March, we announced with the Enterprises an
initiative to increase mortgage market liquidity and market
confidence.  We reduced the OFHEO-directed capital requirements in
return for their commitments to raise significant capital and to
maintain overall capital levels well in excess of requirements."

"In April, we released our Annual Report to Congress, identifying
each company as a significant supervisory concern and noting, in
particular, the deteriorating mortgage credit environment and the
risks it posed to the companies.  In May OFHEO lifted its 2006
Consent Order with Fannie Mae after the company completed the
terms of that order.  Subsequently, Fannie Mae successfully raised
$7.4 billion of new capital, but Freddie Mac never completed the
capital raise promised in March," Mr. Lockhart relates.

Since then credit conditions in the mortgage market continued to
deteriorate, with home prices continuing to decline and mortgage
delinquency rates reaching alarming levels.  FHFA intensified its
reviews of each company's capital planning and capital position,
their earnings forecasts and the effect of falling house prices
and increasing delinquencies on the credit quality of their
mortgage book.

"In getting to [Sun]day, the supervision team has spent countless
hours reviewing with each company various forecasts, stress tests,
and projections, and has evaluated the performance of their
internal models in these analyses," Mr. Lockhart said.  "We have
had many meetings with each company's management teams, and have
had frank exchanges regarding loss projections, asset valuations,
and capital adequacy.  More recently, we have gone the extra step
of inviting the Federal Reserve and the OCC to have some of their
senior mortgage credit experts join our team in these
assessments."
                                                                                    
"The conclusions we reach today, while our own, have had the added
benefit of their insight and perspective.  After this exhaustive
review, I have determined that the companies cannot continue
to operate safely and soundly and fulfill their critical public
mission, without significant action to address our concerns, which
are:

-- the safety and soundness issues I mentioned, including current
    capitalization;

-- current market conditions;

-- the financial performance and condition of each company;

-- the inability of the companies to fund themselves according to
    normal practices and prices; and

-- the critical importance each company has in supporting the
    residential mortgage market in this country,
    Therefore, in order to restore the balance between safety and
    soundness and mission, FHFA has placed Fannie Mae and Freddie
    Mac into conservatorship.

"That is a statutory process designed to stabilize a troubled
institution with the objective of returning the entities to normal
business operations.  FHFA will act as the conservator to operate
the Enterprises until they are stabilized.

"The Boards of both companies consented yesterday to the
conservatorship.  I appreciate the cooperation we have received
from the boards and the management of both Enterprises.  These
individuals did not create the inherent conflict and flawed
business model embedded in the Enterprises' structure.  The goal
of these actions is to help restore confidence in Fannie Mae and
Freddie Mac, enhance their capacity to fulfill their mission, and
mitigate the systemic risk that has contributed directly to the
instability in the current market.  The lack of confidence has
resulted in continuing spread widening of their MBS, which means
that virtually none of the large drop in interest rates over the
past year has been passed on to the mortgage markets.

"On top of that, Freddie Mac and Fannie Mae, in order to try to
build capital, have continued to raise prices and tighten credit
standards.  FHFA has not undertaken this action lightly.          

"We have consulted with the Chairman of the Board of Governors of
the Federal Reserve System, Ben Bernanke, who was appointed a
consultant to FHFA under the new legislation.  We have also
consulted with the Secretary of the Treasury, not only as an FHFA
Oversight Board member, but also in his duties under the law to
provide financing to the GSEs.  They both concurred with me that
conservatorship needed to be undertaken now," Mr. Lockhart added.

There are several key components of this conservatorship:

First, Monday morning the businesses will open as normal, only
with stronger backing for the holders of MBS, senior debt and
subordinated debt.

Second, the Enterprises will be allowed to grow their guarantee
MBS books without limits and continue to purchase replacement
securities for their portfolios, about $20 billion per month
without capital constraints.

Third, as the conservator, FHFA will assume the power of the Board
and management.

Fourth, the present CEOs will be leaving, but we have asked them
to stay on to help with the transition.
                                                                                   
Fifth, FHFA has selected Herb Allison to be the new CEO of Fannie
Mae and David Moffett the CEO of Freddie Mac.  Herb has been the
Vice Chairman of Merrill Lynch and for the last eight years
chairman of TIAA-CREF.  David was the Vice Chairman and CFO of US
Bancorp.  the agency appreciate the willingness of these two men
to take on these tough jobs during these challenging times.  Their
compensation will be significantly lower than the outgoing CEOs.  
They will be joined by equally strong non-executive chairmen.

Sixth, at this time any other management action will be very
limited.  In fact, the new CEOs have agreed with me that it is
very important to work with the current management teams and
employees to encourage them to stay and to continue to make
important improvements to the Enterprises.

Seventh, in order to conserve over $2 billion in capital every
year, the common stock and preferred stock dividends will be
eliminated, but the common and all preferred stocks will continue
to remain outstanding.  Subordinated debt interest and principal
payments will continue to be made.

Eighth, all political activities -- including all lobbying -- will
be halted immediately.  The agency will review the charitable
activities.

Lastly and very importantly, there will be the financing and
investing relationship with the U.S. Treasury, which Secretary
Henry Paulson will be discussing.  FHFA believes that these
facilities will provide the critically needed support to Freddie
Mac and Fannie Mae and importantly the liquidity of the mortgage
market.  One of the three facilities he will be mentioning is a
secured liquidity facility which will be not only for Fannie Mae
and Freddie Mac, but also for the 12 Federal Home Loan Banks that
FHFA also regulates.  The Federal Home Loan Banks have performed
remarkably well over the last year as they have a different
business model than Fannie Mae and Freddie Mac and a different
capital structure that grows as their lending activity grows.  
They are joint and severally liable for the Bank System's debt
obligations and all but one of the 12 are profitable.

Therefore, it is very unlikely that they will use the facility.
During the conservatorship period, FHFA will continue to work
expeditiously on the many regulations needed to implement the new
law.  Some of the key regulations will be minimum capital
standards, prudential safety and soundness standards and portfolio
limits.  It is critical to complete these regulations so that any
new investor will understand the investment proposition.
                                                                                   
This decision was a tough one for the FHFA team as they have
worked so hard to help the Enterprises remain strong suppliers of
support to the secondary mortgage markets.  Unfortunately, the
antiquated capital requirements and the turmoil in housing markets
over-whelmed all the good and hard work put in by the FHFA teams
and the Enterprises' managers and employees.

"Conservatorship will give the Enterprises the time to restore
the balances between safety and soundness and provide affordable
housing and stability and liquidity to the mortgage markets," Mr.
Lockhart said.  "I want to thank the FHFA employees for their work
during this intense regulatory process.  They represent the best
in public service.  I would also like to thank the employees of
Fannie Mae and Freddie Mac for all their hard work.  Working
together we can finish the job of restoring confidence in the
Enterprises and with the new legislation build a stronger and
safer future for the mortgage markets, homeowners and renters in
America," He related.

White & Case's Washington, DC financial restructuring partner Sam
Alberts does not find the federal government's take-over
surprising. "To him, the issue was more of a question of when and
how, rather than if and whether, a bail-out would occur," Reilly
Starr, Media Relations Manager at White & Case LLP in New York.  
"With the take-over freshly in place, questions now turn to how
this will effect the home ownership and mortgage market in
general, and the moral hazard precedent set by such an enormous
bail out."

"Holders of Fannie and Freddie debt are breathing easier, however,
no one should assume the take-over is a panacea or without
consequences," said Mr. Alberts. "Hopefully, the take-over reduce
mortgage interest rates and soften the drop in housing prices.
However, the mortgage market remains messy." Alberts expects not
only a battle over the long term existence of Fannie and Freddie
Mac, but "whether the government will be called upon to bail outs
of other large ailing entities."

Federal National Mortgage Association -- Fannie Mae (NYSE: FNM) --
is a publicly held, federally chartered US Government-Sponsored
Enterprise.  It is the largest conduit for residential mortgage
finance in the USA, and is regulated by the Federal Housing
Finance Agency.  As of June 30, 2008, Fannie Mae's retained
portfolio and book of business was $750 billion and $3.0 trillion,
respectively.


FANNIE MAE: Fitch Affirms 'AAA' IDR; Lowers Preferred Stock
-----------------------------------------------------------
Fitch Ratings has affirmed the long- and short-term Issuer Default
Ratings (IDR) and senior debt ratings of Fannie Mae (FNM) and
Freddie Mac (FRE) at 'AAA' and 'F1+', respectively . The 'AAA'
IDRs reflect the government support rating of '1'. The Rating
Outlook on the long-term IDR for both government-sponsored
enterprises (GSEs) is Stable.

Fitch has also affirmed the U.S. federal government 'AAA/F1+'
sovereign credit ratings with a Stable Outlook. Though the fiscal
risks associated with Treasury support for the GSEs are
substantial, in themselves they do not imperil the US 'AAA'
status. Despite the marked deterioration in budgetary performance
and rise in government debt, overall indebtedness remains
comparable with other large 'AAA' sovereigns such as France and
Germany.

Fitch has also downgraded FNM and FRE's preferred stock to 'C/RR6'
from 'BBB-'. The downgrade of the preferred stock reflects the
subordination of the preferred to any Treasury interest and
interest payments are unlikely to resume in the foreseeable
future. Thus, any recovery is expected to be minimal.

Additionally, Fitch has placed the 'AA-' subordinated debt ratings
for both FNM and FRE on Rating Watch Evolving. Treasury's
preferred securities will rank below subordinated debt-holders.
FHFA management stated that interest will continue to be paid on
the subordinated debt and the deferral requirements now in place
will be waived. Fitch will evaluate the terms and conditions of
Treasury's agreement to determine the appropriate subordinated
debt rating.

Fitch's rating actions follow the Federal Housing Finance Agency's
(FHFA) declaration of conservatorship over the two institutions.
Treasury has enacted a plan to inject preferred stock in these
entities as needed to maintain solvency that will be senior to
existing preferred stock. Dividends will cease for preferred and
common stockholders. Interest paid to Treasury in exchange for its
support will result in continued subordination of preferred shares
to Treasury's interest since the interest rate is substantially
above either firm's current rate of return.

Fitch believes Treasury's actions are meant to ensure the GSEs
maintain continued access to debt markets to allow them to
refinance maturing debt and stabilize the mortgage market as a
whole. The growth cap is expected to minimize interest rate risk
assumption but provide ongoing liquidity in the short term.
Execution to impart market confidence in such crisis environments
is of some concern since actions may have unintended consequences.

Fitch has downgraded these ratings:

Fannie Mae
   -- Preferred stock to 'C/RR6' from 'BBB-'.

Freddie Mac
   -- Preferred stock to 'C/RR6' from 'BBB-'.

The preferred stock is removed from Rating Watch Negative.

Fitch has assigned the following Recovery Ratings (RRs):

Fannie Mae
   -- Preferred stock 'RR6'.

Freddie Mac
   -- Preferred stock 'RR6'.

Fitch has also placed the following debt on Rating Watch Evolving:

Fannie Mae
   -- Subordinated debt 'AA-'.

Freddie Mac
   -- Subordinated debt 'AA-'.

Additionally, Fitch has affirmed the following ratings:

Freddie Mac
   -- Long-term IDR at 'AAA';
   -- Senior unsecured at 'AAA;
   -- Short-term IDR at 'F1+';
   -- Subordinated Debt at 'AA-'.
   -- Support rating at '1';
   -- Support floor at 'AAA'.

Fannie Mae
   -- Long-term IDR at 'AAA';
   -- Senior unsecured at 'AAA';
   -- Short-term IDR at 'F1+';
   -- Subordinated Debt at 'AA-'.
   -- Support rating at '1';
   -- Support floor at 'AAA'.


FANNIE MAE: Moody's Cuts Preferred Stock Rating to Ca
-----------------------------------------------------
Moody's Investors Service affirmed the Aaa senior long-term debt,
Prime-1 short-term debt, and Aa2 subordinated debt ratings of
Federal National Mortgage Association (Fannie Mae) and Federal
Home Loan Mortgage Corporation (Freddie Mac) following the actions
taken by the U.S Treasury to support both companies and their
placement into conservatorship by the Federal Housing Finance
Agency. At the same time, Moody's lowered the preferred stock
ratings for both companies to Ca from Baa3 and lowered their Bank
Financial Strength Ratings (BFSR) to E+ from D+. The ratings
outlook is stable for both companies.

Fannie Mae's and Freddie Mac's Aaa senior long-term, Prime-1
short-term and Aa2 subordinated debt ratings were affirmed based
on Moody's view the actions provide further evidence of the very
high degree of systemic support for both entities because of their
central role in mortgage finance in the United States, as well as
the importance of housing within in the U.S. economy. The
conservatorship of both firms does not limit in any way their
ability to service their senior or subordinated debt obligations.
Moody's believes that the extensive capital and liquidity support
provided by the U.S. Treasury, together with the public statements
of the Treasury and the Federal Housing Finance Agency, provides a
clear indication of Treasury's and FHFA's intention that these
obligations will continue to be paid on a timely basis.

The downgrade of the preferred stock ratings reflects the
conservator's decision to suspend the noncumulative preferred
stock dividends at both firms, as well as Moody's expectation that
those dividends will likely be suspended for several years.
Nonetheless, Moody's believes that a liquidation of either firm
remains unlikely, and thus the expected loss on the preferred
stock is not total.

Moody's said the downgrade of the BFSRs reflects Moody's view that
Fannie Mae's and Freddie Mac's financial flexibility has become
extremely limited, a fact that led the Federal Housing Finance
Agency to place these firms into conservatorship and the U.S.
Treasury to provide additional equity and liquidity commitments in
order to ensure they can pursue their public policy mission of
providing liquidity, stability and affordability to the US housing
market. Similarly, the Baseline Credit Assessment for each of
Fannie Mae and Freddie Mac was lowered to 15 from 10. A Baseline
Credit Assessment of 15 maps to a B2 rating on the Moody's long-
term debt rating scale. Moody's BFSR and Baseline Credit
Assessment reflects a firm's intrinsic financial strength and does
not incorporate any form of external support that such a firm may
receive.

Moody's also placed the Aa2 preferred stock ratings of Home
Ownership Funding Corporation and Home Ownership Funding
Corporation II on review with direction uncertain. Both companies
are REIT subsidiaries of Freddie Mac. The review will consider
whether or not the actions taken by the US Treasury will affect
the ability of the REITs to distribute dividends, and will also
consider the extent to which the high degree of over
collateralization at both REITS benefits its preferred
shareholders.

These ratings were affirmed with a stable outlook:

Fannie Mae and Freddie Mac - Senior long-term debt at Aaa; Short-
term debt at Prime-1; Subordinated debt at Aa2.

These ratings were downgraded:

Fannie Mae and Freddie Mac -- Bank financial strength rating to E+
from D+; Preferred stock to Ca from Baa3; all with a stable
outlook

These ratings were placed on review with direction uncertain:

Home Ownership Funding Corporation and Home Ownership Funding
Corporation II -- Preferred Stock at Aa2.

Moody's last rating action on Fannie Mae and Freddie Mac occurred
on August 22, 2008.

Federal Home Loan Mortgage Corporation -- Freddie Mac (NYSE: FRE)
-- is a publicly held, federally chartered US Government-Sponsored
Enterprise. It is one of the largest conduits for residential
mortgage finance in the USA, and is regulated by the Federal
Housing Finance Agency. As of June 30, 2008, Freddie Mac's
retained portfolio and total mortgage portfolio was $792 billion
and $2.2 trillion, respectively.

Federal National Mortgage Association -- Fannie Mae (NYSE: FNM) --
is a publicly held, federally chartered US Government-Sponsored
Enterprise. It is the largest conduit for residential mortgage
finance in the USA, and is regulated by the Federal Housing
Finance Agency. As of June 30, 2008, Fannie Mae's retained
portfolio and book of business was $750 billion and $3.0 trillion,
respectively.

Moody's will host a teleconference today, September 9, 2008 at
11:00 a.m. EDT.


FANNIE MAE: S&P Cuts Rating on Preferred Stock to 'C'
-----------------------------------------------------
Standard & Poor's Ratings Services affirmed its long-term 'AAA'
and short-term 'A-1+' senior unsecured debt ratings on Fannie Mae
and Freddie Mac. The outlook is stable.

S&P said "At the same time, we lowered our risk-to-the-government
standalone issuer credit ratings on Fannie Mae and Freddie Mac to
'R' (regulatory supervision) from 'A-' and withdrew the ratings.  
We have also revised the CreditWatch listing of the 'BBB+'
subordinated debt ratings on these entities to positive  from
negative.  In addition, we lowered the preferred stock ratings to
'C' from  'BBB-' and removed the ratings from CreditWatch with
negative implications.  The subordinated debt and preferred stock
ratings were originally placed on  CreditWatch Aug. 26, 2008."

These rating actions follow the announcement by the U.S. Treasury
that Fannie Mae and Freddie Mac have been placed in
conservatorship by their regulator, the Federal Housing Finance
Agency (FHFA).

"Our affirmation of the long-term 'AAA' and short-term 'A-1+'
senior unsecured debt ratings reflects the explicit government
support under the terms of the conservatorship and Treasury's
establishment of a preferred stock purchase agreement," said
Standard & Poor's credit analyst Victoria Wagner.

"We believe the government has now clearly reinforced its support
of the two government-sponsored enterprises (GSEs).  The
government's action underscores the importance it places on the
GSEs, as well as its apparent  belief that their mortgage
franchises are viable and critical to the financing  of the U.S.
mortgage market and the overall economy," S&P said.

"We lowered and withdrew the risk-to-the-government ratings
because of the  conservatorship, with the FHFA acting as
conservator with full control and  oversight of the GSEs'
businesses.  Under a conservatorship, the FHFA takes  over the
assets of and operates the GSEs with all of the powers of the
shareholders, the directors, and the officers and conducts all
business  including authorizing the payment of valid obligations
as outlined in the  recently passed Housing and Economic Recovery
Act of 2008.

"The CreditWatch positive on the subordinated debt reflects our
view that  there is strong regulatory support for the continued
timely payment of this debt.  If regulatory capital drops to a
level that would breach regulatory  minimum levels, we expect that
the subordinated debt's interest deferral covenant will be waived,
increasing the likelihood of timely payment.

"Furthermore, there are no covenants restricting the payment of
interest on the  subordinated debentures while the preferred
dividends are suspended. We could  raise the subordinated debt
ratings once further information is available on  the support that
may be provided to Fannie Mae's and Freddie Mac's  subordinated
debtholders while the GSEs remain in conservatorship and post
conservatorship.  Alternatively, upon final review of the status
and support  for subordinated debt payments, we could affirm these
ratings," S&P related.

The CreditWatch listing of the subordinated debt will be resolved
upon review of the final terms of support outlined in Treasury's
backstop plan for the GSEs.

The downgrade of the preferred stock ratings reflects FHFA's
announcement that dividends on the preferred stock are being
eliminated in view of the GSEs' weak near-term earnings prospects
and the need to preserve capital.


FEDERAL-MOGUL: Court Defers Claims Objection Deadline to Dec. 27
----------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware extended
until Dec. 27, 2008, the deadline by which Federal-Mogul Corp. and
its debtor-affiliates may filed objections to administrative
expense claims.

James E. O'Neill, Esq., at Pachulski Stang Ziehl & Jones LLP, in
Wilmington, Delaware, on behalf of the Reorganized Debtors filed
a certificate of no objection to the extension request.

Federal-Mogul Corporation -- http://www.federal-mogul.com/--
(OTCBB: FDMLQ) is a global supplier, serving the world's foremost
original equipment manufacturers of automotive, light commercial,
heavy-duty, agricultural, marine, rail, off-road and industrial
vehicles, as well as the worldwide aftermarket.  Founded in
Detroit in 1899, the company is headquartered in Southfield,
Michigan, and employs 45,000 people in 35 countries.  Aside from
the U.S., Federal-Mogul also has operations in other locations
which includes, among others, Mexico, Malaysia, Australia, China,
India, Japan, Korea, and Thailand.

The Company filed for chapter 11 protection on Oct. 1, 2001
(Bankr. Del. Case No. 01-10582).  Lawrence J. Nyhan Esq., James F.
Conlan Esq., and Kevin T. Lantry Esq., at Sidley Austin Brown &
Wood, and Laura Davis Jones Esq., at Pachulski, Stang, Ziehl &
Jones, P.C., represent the Debtors in their restructuring efforts.
When the Debtors filed for protection from their creditors, they
listed $10.15 billion in assets and $8.86 billion in liabilities.
Federal-Mogul Corp.'s U.K. affiliate, Turner & Newall, is based at
Dudley Hill, Bradford.  Peter D. Wolfson, Esq., at Sonnenschein
Nath & Rosenthal; and Charlene D. Davis, Esq., Ashley B. Stitzer,
Esq., and Eric M. Sutty, Esq., at The Bayard Firm represent the
Official Committee of Unsecured Creditors.

On March 7, 2003, the Debtors filed their Joint Chapter 11 Plan.
They submitted a Disclosure Statement explaining that plan on
April 21, 2003.  They submitted several amendments and on June 6,
2004, the Bankruptcy Court approved the Third Amended Disclosure
Statement for their Third Amended Plan.  On July 28, 2004, the
District Court approved the Disclosure Statement.  The estimation
hearing began on June 14, 2005.  The Debtors submitted a Fourth
Amended Plan and Disclosure Statement on Nov. 21, 2006, and the
Bankruptcy Court approved that Disclosure Statement on Feb. 6,
2007.  The Fourth Amended Plan was confirmed by the Bankruptcy
Court on Nov. 8, 2007, and affirmed by the District Court on
November 14.  Federal-Mogul emerged from chapter 11 on Dec. 27,
2007.

(Federal-Mogul Bankruptcy News, Issue No. 171; Bankruptcy
Creditors' Service Inc., http://bankrupt.com/newsstand/or
215/945-7000)


FLAGSTAFF FAIRWAY: Case Summary & 3 Largest Unsecured Creditors
---------------------------------------------------------------
Debtor: Flagstaff Fairway Estates Partners, LLC
        6400 N 48th Street
        Paradise Valley, AZ 85253

Bankruptcy Case No.: 08-11697

Chapter 11 Petition Date: September 4, 2008

Court: District of Arizona (Phoenix)

Debtor's Counsel: Anthony W. Clark, Esq.
                  (awcesq@hotmail.com)
                  Clark & Associates
                  1212 W. Camelback, #104
                  Phoenix, AZ 85013
                  Tel: (602) 266-9596
                  Fax: (602) 266-6774
                  
Estimated Assets: $0 to $50,000

Estimated Debts: $1 million to $10 million

A copy of Debtor's petition, which includes a list of its 3
largest unsecured creditors, is available for free at:

           http://bankrupt.com/misc/azb08-11697.pdf


FREDDIE MAC: Placed by Government Under Conservatorship
-------------------------------------------------------
The U.S. Treasury Department and the Federal Housing Finance
Agency, with support from the Federal Reserve, on Sunday announced
actions regarding the housing government sponsored enterprises,
Fannie Mae and Freddie Mac, to protect the financial system, to
support the housing market, and to protect the taxpayers.  The
U.S. government is taking direct responsibility for the GSEs,
placing Fannie Mae and Freddie Mac under conservatorship.

James B. Lockhart, director of Federal Housing Finance Agency,
said that Fannie Mae and Freddie Mac share the critical mission of
providing stability and liquidity to the housing market.  Between
them, the Enterprises have $5.4 trillion of guaranteed mortgage-
backed securities (MBS) and debt outstanding, which is equal to
the publicly held debt of the United States.  Their market share
of all new mortgages reached over 80 percent earlier this year,
but it is now falling.

During the turmoil last year, they played a very important role in
providing liquidity to the conforming mortgage market.  That has
required a very careful and delicate balance of mission and safety
and soundness.  A key component of this balance has been their
ability to raise and maintain capital.  Given recent market
conditions, the balance has been lost.  Unfortunately, as house
prices, earnings and capital have continued to deteriorate, their
ability to fulfill their mission has deteriorated.

In particular, the capacity of their capital to absorb further
losses while supporting new business activity is in doubt.  
[Sun]day's action addresses safety and soundness concerns.  FHFA's
rating system is called GSE Enterprise Risk or G-Seer.  It stands
for Governance, Solvency, Earnings and Enterprise Risk which
includes credit, market and operational risk.  There are pervasive
weaknesses across the board, which have been getting worse
in this market.

Over the last three years OFHEO, and now FHFA, have worked hard to
encourage the Enterprises to rectify their accounting, systems,
controls and risk management issues.  They have made good progress
in many areas, but market conditions have overwhelmed that
progress.  The result has been that they have been unable to
provide needed stability to the market.  They also find themselves
unable to meet their affordable housing mission.  Rather than
letting these conditions fester and worsen and put our markets in
jeopardy, FHFA, after painstaking review, has decided to take
action now.

Key events over the past six months have demonstrated the
increasing challenge faced by the companies in striving to balance
mission and safety and soundness, and the ultimate disruption of
that balance that led to [Sun]day's announcements.  In
the first few months of this year, the secondary market showed
significant deterioration, with buyers demanding much higher
prices for mortgage backed securities.

Mr. Lockhart said "In February, in recognition of the remediation
progress in financial reporting, we removed the portfolio caps on
each company, but they did not have the capital to use that
flexibility.  In March, we announced with the Enterprises an
initiative to increase mortgage market liquidity and market
confidence.  We reduced the OFHEO-directed capital requirements in
return for their commitments to raise significant capital and to
maintain overall capital levels well in excess of requirements."

"In April, we released our Annual Report to Congress, identifying
each company as a significant supervisory concern and noting, in
particular, the deteriorating mortgage credit environment and the
risks it posed to the companies.  In May OFHEO lifted its 2006
Consent Order with Fannie Mae after the company completed the
terms of that order.  Subsequently, Fannie Mae successfully raised
$7.4 billion of new capital, but Freddie Mac never completed the
capital raise promised in March," Mr. Lockhart relates.

Since then credit conditions in the mortgage market continued to
deteriorate, with home prices continuing to decline and mortgage
delinquency rates reaching alarming levels.  FHFA intensified its
reviews of each company's capital planning and capital position,
their earnings forecasts and the effect of falling house prices
and increasing delinquencies on the credit quality of their
mortgage book.

"In getting to [Sun]day, the supervision team has spent countless
hours reviewing with each company various forecasts, stress tests,
and projections, and has evaluated the performance of their
internal models in these analyses," Mr. Lockhart said.  "We have
had many meetings with each company's management teams, and have
had frank exchanges regarding loss projections, asset valuations,
and capital adequacy.  More recently, we have gone the extra step
of inviting the Federal Reserve and the OCC to have some of their
senior mortgage credit experts join our team in these
assessments."
                                                                                    
"The conclusions we reach today, while our own, have had the added
benefit of their insight and perspective.  After this exhaustive
review, I have determined that the companies cannot continue
to operate safely and soundly and fulfill their critical public
mission, without significant action to address our concerns, which
are:

-- the safety and soundness issues I mentioned, including current
    capitalization;

-- current market conditions;

-- the financial performance and condition of each company;

-- the inability of the companies to fund themselves according to
    normal practices and prices; and

-- the critical importance each company has in supporting the
    residential mortgage market in this country,
    Therefore, in order to restore the balance between safety and
    soundness and mission, FHFA has placed Fannie Mae and Freddie
    Mac into conservatorship.

"That is a statutory process designed to stabilize a troubled
institution with the objective of returning the entities to normal
business operations.  FHFA will act as the conservator to operate
the Enterprises until they are stabilized.

"The Boards of both companies consented yesterday to the
conservatorship.  I appreciate the cooperation we have received
from the boards and the management of both Enterprises.  These
individuals did not create the inherent conflict and flawed
business model embedded in the Enterprises' structure.  The goal
of these actions is to help restore confidence in Fannie Mae and
Freddie Mac, enhance their capacity to fulfill their mission, and
mitigate the systemic risk that has contributed directly to the
instability in the current market.  The lack of confidence has
resulted in continuing spread widening of their MBS, which means
that virtually none of the large drop in interest rates over the
past year has been passed on to the mortgage markets.

"On top of that, Freddie Mac and Fannie Mae, in order to try to
build capital, have continued to raise prices and tighten credit
standards.  FHFA has not undertaken this action lightly.          

"We have consulted with the Chairman of the Board of Governors of
the Federal Reserve System, Ben Bernanke, who was appointed a
consultant to FHFA under the new legislation.  We have also
consulted with the Secretary of the Treasury, not only as an FHFA
Oversight Board member, but also in his duties under the law to
provide financing to the GSEs.  They both concurred with me that
conservatorship needed to be undertaken now," Mr. Lockhart added.

There are several key components of this conservatorship:

First, Monday morning the businesses will open as normal, only
with stronger backing for the holders of MBS, senior debt and
subordinated debt.

Second, the Enterprises will be allowed to grow their guarantee
MBS books without limits and continue to purchase replacement
securities for their portfolios, about $20 billion per month
without capital constraints.

Third, as the conservator, FHFA will assume the power of the Board
and management.

Fourth, the present CEOs will be leaving, but we have asked them
to stay on to help with the transition.
                                                                                   
Fifth, FHFA has selected Herb Allison to be the new CEO of Fannie
Mae and David Moffett the CEO of Freddie Mac.  Herb has been the
Vice Chairman of Merrill Lynch and for the last eight years
chairman of TIAA-CREF.  David was the Vice Chairman and CFO of US
Bancorp.  the agency appreciate the willingness of these two men
to take on these tough jobs during these challenging times.  Their
compensation will be significantly lower than the outgoing CEOs.  
They will be joined by equally strong non-executive chairmen.

Sixth, at this time any other management action will be very
limited.  In fact, the new CEOs have agreed with me that it is
very important to work with the current management teams and
employees to encourage them to stay and to continue to make
important improvements to the Enterprises.

Seventh, in order to conserve over $2 billion in capital every
year, the common stock and preferred stock dividends will be
eliminated, but the common and all preferred stocks will continue
to remain outstanding.  Subordinated debt interest and principal
payments will continue to be made.

Eighth, all political activities -- including all lobbying -- will
be halted immediately.  The agency will review the charitable
activities.

Lastly and very importantly, there will be the financing and
investing relationship with the U.S. Treasury, which Secretary
Henry Paulson will be discussing.  FHFA believes that these
facilities will provide the critically needed support to Freddie
Mac and Fannie Mae and importantly the liquidity of the mortgage
market.  One of the three facilities he will be mentioning is a
secured liquidity facility which will be not only for Fannie Mae
and Freddie Mac, but also for the 12 Federal Home Loan Banks that
FHFA also regulates.  The Federal Home Loan Banks have performed
remarkably well over the last year as they have a different
business model than Fannie Mae and Freddie Mac and a different
capital structure that grows as their lending activity grows.  
They are joint and severally liable for the Bank System's debt
obligations and all but one of the 12 are profitable.

Therefore, it is very unlikely that they will use the facility.
During the conservatorship period, FHFA will continue to work
expeditiously on the many regulations needed to implement the new
law.  Some of the key regulations will be minimum capital
standards, prudential safety and soundness standards and portfolio
limits.  It is critical to complete these regulations so that any
new investor will understand the investment proposition.
                                                                                   
This decision was a tough one for the FHFA team as they have
worked so hard to help the Enterprises remain strong suppliers of
support to the secondary mortgage markets.  Unfortunately, the
antiquated capital requirements and the turmoil in housing markets
over-whelmed all the good and hard work put in by the FHFA teams
and the Enterprises' managers and employees.

"Conservatorship will give the Enterprises the time to restore
the balances between safety and soundness and provide affordable
housing and stability and liquidity to the mortgage markets," Mr.
Lockhart said.  "I want to thank the FHFA employees for their work
during this intense regulatory process.  They represent the best
in public service.  I would also like to thank the employees of
Fannie Mae and Freddie Mac for all their hard work.  Working
together we can finish the job of restoring confidence in the
Enterprises and with the new legislation build a stronger and
safer future for the mortgage markets, homeowners and renters in
America," He related.

White & Case's Washington, DC financial restructuring partner Sam
Alberts does not find the federal government's take-over
surprising. "To him, the issue was more of a question of when and
how, rather than if and whether, a bail-out would occur," Reilly
Starr, Media Relations Manager at White & Case LLP in New York.  
"With the take-over freshly in place, questions now turn to how
this will effect the home ownership and mortgage market in
general, and the moral hazard precedent set by such an enormous
bail out."

"Holders of Fannie and Freddie debt are breathing easier, however,
no one should assume the take-over is a panacea or without
consequences," said Mr. Alberts. "Hopefully, the take-over reduce
mortgage interest rates and soften the drop in housing prices.
However, the mortgage market remains messy." Alberts expects not
only a battle over the long term existence of Fannie and Freddie
Mac, but "whether the government will be called upon to bail outs
of other large ailing entities."

Federal Home Loan Mortgage Corporation -- Freddie Mac (NYSE: FRE)
-- is a publicly held, federally chartered US Government-Sponsored
Enterprise.  It is one of the largest conduits for residential
mortgage finance in the USA, and is regulated by the Federal
Housing Finance Agency.  As of June 30, 2008, Freddie Mac's
retained portfolio and total mortgage portfolio was $792 billion
and $2.2 trillion, respectively.


FREDDIE MAC: Fitch Affirms 'AAA' IDR; Lowers Preferred Stock
------------------------------------------------------------
Fitch Ratings has affirmed the long- and short-term Issuer Default
Ratings (IDR) and senior debt ratings of Fannie Mae (FNM) and
Freddie Mac (FRE) at 'AAA' and 'F1+', respectively . The 'AAA'
IDRs reflect the government support rating of '1'. The Rating
Outlook on the long-term IDR for both government-sponsored
enterprises (GSEs) is Stable.

Fitch has also affirmed the U.S. federal government 'AAA/F1+'
sovereign credit ratings with a Stable Outlook. Though the fiscal
risks associated with Treasury support for the GSEs are
substantial, in themselves they do not imperil the US 'AAA'
status. Despite the marked deterioration in budgetary performance
and rise in government debt, overall indebtedness remains
comparable with other large 'AAA' sovereigns such as France and
Germany.

Fitch has also downgraded FNM and FRE's preferred stock to 'C/RR6'
from 'BBB-'. The downgrade of the preferred stock reflects the
subordination of the preferred to any Treasury interest and
interest payments are unlikely to resume in the foreseeable
future. Thus, any recovery is expected to be minimal.

Additionally, Fitch has placed the 'AA-' subordinated debt ratings
for both FNM and FRE on Rating Watch Evolving. Treasury's
preferred securities will rank below subordinated debt-holders.
FHFA management stated that interest will continue to be paid on
the subordinated debt and the deferral requirements now in place
will be waived. Fitch will evaluate the terms and conditions of
Treasury's agreement to determine the appropriate subordinated
debt rating.

Fitch's rating actions follow the Federal Housing Finance Agency's
(FHFA) declaration of conservatorship over the two institutions.
Treasury has enacted a plan to inject preferred stock in these
entities as needed to maintain solvency that will be senior to
existing preferred stock. Dividends will cease for preferred and
common stockholders. Interest paid to Treasury in exchange for its
support will result in continued subordination of preferred shares
to Treasury's interest since the interest rate is substantially
above either firm's current rate of return.

Fitch believes Treasury's actions are meant to ensure the GSEs
maintain continued access to debt markets to allow them to
refinance maturing debt and stabilize the mortgage market as a
whole. The growth cap is expected to minimize interest rate risk
assumption but provide ongoing liquidity in the short term.
Execution to impart market confidence in such crisis environments
is of some concern since actions may have unintended consequences.

Fitch has downgraded these ratings:

Fannie Mae
   -- Preferred stock to 'C/RR6' from 'BBB-'.

Freddie Mac
   -- Preferred stock to 'C/RR6' from 'BBB-'.

The preferred stock is removed from Rating Watch Negative.

Fitch has assigned the following Recovery Ratings (RRs):

Fannie Mae
   -- Preferred stock 'RR6'.

Freddie Mac
   -- Preferred stock 'RR6'.

Fitch has also placed the following debt on Rating Watch Evolving:

Fannie Mae
   -- Subordinated debt 'AA-'.

Freddie Mac
   -- Subordinated debt 'AA-'.

Additionally, Fitch has affirmed the following ratings:

Freddie Mac
   -- Long-term IDR at 'AAA';
   -- Senior unsecured at 'AAA;
   -- Short-term IDR at 'F1+';
   -- Subordinated Debt at 'AA-'.
   -- Support rating at '1';
   -- Support floor at 'AAA'.

Fannie Mae
   -- Long-term IDR at 'AAA';
   -- Senior unsecured at 'AAA';
   -- Short-term IDR at 'F1+';
   -- Subordinated Debt at 'AA-'.
   -- Support rating at '1';
   -- Support floor at 'AAA'.


FREDDIE MAC: Moody's Cuts Preferred Stock Rating to Ca
------------------------------------------------------
Moody's Investors Service affirmed the Aaa senior long-term debt,
Prime-1 short-term debt, and Aa2 subordinated debt ratings of
Federal National Mortgage Association (Fannie Mae) and Federal
Home Loan Mortgage Corporation (Freddie Mac) following the actions
taken by the U.S Treasury to support both companies and their
placement into conservatorship by the Federal Housing Finance
Agency. At the same time, Moody's lowered the preferred stock
ratings for both companies to Ca from Baa3 and lowered their Bank
Financial Strength Ratings (BFSR) to E+ from D+. The ratings
outlook is stable for both companies.

Fannie Mae's and Freddie Mac's Aaa senior long-term, Prime-1
short-term and Aa2 subordinated debt ratings were affirmed based
on Moody's view the actions provide further evidence of the very
high degree of systemic support for both entities because of their
central role in mortgage finance in the United States, as well as
the importance of housing within in the U.S. economy. The
conservatorship of both firms does not limit in any way their
ability to service their senior or subordinated debt obligations.
Moody's believes that the extensive capital and liquidity support
provided by the U.S. Treasury, together with the public statements
of the Treasury and the Federal Housing Finance Agency, provides a
clear indication of Treasury's and FHFA's intention that these
obligations will continue to be paid on a timely basis.

The downgrade of the preferred stock ratings reflects the
conservator's decision to suspend the noncumulative preferred
stock dividends at both firms, as well as Moody's expectation that
those dividends will likely be suspended for several years.
Nonetheless, Moody's believes that a liquidation of either firm
remains unlikely, and thus the expected loss on the preferred
stock is not total.

Moody's said the downgrade of the BFSRs reflects Moody's view that
Fannie Mae's and Freddie Mac's financial flexibility has become
extremely limited, a fact that led the Federal Housing Finance
Agency to place these firms into conservatorship and the U.S.
Treasury to provide additional equity and liquidity commitments in
order to ensure they can pursue their public policy mission of
providing liquidity, stability and affordability to the US housing
market. Similarly, the Baseline Credit Assessment for each of
Fannie Mae and Freddie Mac was lowered to 15 from 10. A Baseline
Credit Assessment of 15 maps to a B2 rating on the Moody's long-
term debt rating scale. Moody's BFSR and Baseline Credit
Assessment reflects a firm's intrinsic financial strength and does
not incorporate any form of external support that such a firm may
receive.

Moody's also placed the Aa2 preferred stock ratings of Home
Ownership Funding Corporation and Home Ownership Funding
Corporation II on review with direction uncertain. Both companies
are REIT subsidiaries of Freddie Mac. The review will consider
whether or not the actions taken by the US Treasury will affect
the ability of the REITs to distribute dividends, and will also
consider the extent to which the high degree of over
collateralization at both REITS benefits its preferred
shareholders.

These ratings were affirmed with a stable outlook:

Fannie Mae and Freddie Mac - Senior long-term debt at Aaa; Short-
term debt at Prime-1; Subordinated debt at Aa2.

These ratings were downgraded:

Fannie Mae and Freddie Mac -- Bank financial strength rating to E+
from D+; Preferred stock to Ca from Baa3; all with a stable
outlook

These ratings were placed on review with direction uncertain:

Home Ownership Funding Corporation and Home Ownership Funding
Corporation II -- Preferred Stock at Aa2.

Moody's last rating action on Fannie Mae and Freddie Mac occurred
on August 22, 2008.

Federal National Mortgage Association -- Fannie Mae (NYSE: FNM) --
is a publicly held, federally chartered US Government-Sponsored
Enterprise. It is the largest conduit for residential mortgage
finance in the USA, and is regulated by the Federal Housing
Finance Agency. As of June 30, 2008, Fannie Mae's retained
portfolio and book of business was $750 billion and $3.0 trillion,
respectively.

Federal Home Loan Mortgage Corporation -- Freddie Mac (NYSE: FRE)
-- is a publicly held, federally chartered US Government-Sponsored
Enterprise. It is one of the largest conduits for residential
mortgage finance in the USA, and is regulated by the Federal
Housing Finance Agency. As of June 30, 2008, Freddie Mac's
retained portfolio and total mortgage portfolio was $792 billion
and $2.2 trillion, respectively.

Moody's will host a teleconference today September 9, 2008 at
11:00 a.m. EDT.


FREDDIE MAC: S&P Cuts Rating on Preferred Stock to 'C'
-----------------------------------------------------
Standard & Poor's Ratings Services affirmed its long-term 'AAA'
and short-term 'A-1+' senior unsecured debt ratings on Fannie Mae
and Freddie Mac. The outlook is stable.

S&P said "At the same time, we lowered our risk-to-the-government
standalone issuer credit ratings on Fannie Mae and Freddie Mac to
'R' (regulatory supervision) from 'A-' and withdrew the ratings.  
We have also revised the CreditWatch listing of the 'BBB+'
subordinated debt ratings on these entities to positive  from
negative.  In addition, we lowered the preferred stock ratings to
'C' from  'BBB-' and removed the ratings from CreditWatch with
negative implications.  The subordinated debt and preferred stock
ratings were originally placed on  CreditWatch Aug. 26, 2008."

These rating actions follow the announcement by the U.S. Treasury
that Fannie Mae and Freddie Mac have been placed in
conservatorship by their  regulator, the Federal Housing Finance
Agency (FHFA).

"Our affirmation of the long-term 'AAA' and short-term 'A-1+'
senior unsecured debt ratings reflects the explicit government
support under the terms of the conservatorship and Treasury's
establishment of a preferred stock purchase agreement," said
Standard & Poor's credit analyst Victoria Wagner.

"We believe the government has now clearly reinforced its support
of the two government-sponsored enterprises (GSEs).  The
government's action underscores the importance it places on the
GSEs, as well as its apparent  belief that their mortgage
franchises are viable and critical to the financing  of the U.S.
mortgage market and the overall economy," S&P said.

"We lowered and withdrew the risk-to-the-government ratings
because of the  conservatorship, with the FHFA acting as
conservator with full control and  oversight of the GSEs'
businesses.  Under a conservatorship, the FHFA takes  over the
assets of and operates the GSEs with all of the powers of the
shareholders, the directors, and the officers and conducts all
business  including authorizing the payment of valid obligations
as outlined in the  recently passed Housing and Economic Recovery
Act of 2008.

"The CreditWatch positive on the subordinated debt reflects our
view that  there is strong regulatory support for the continued
timely payment of this debt.  If regulatory capital drops to a
level that would breach regulatory  minimum levels, we expect that
the subordinated debt's interest deferral covenant will be waived,
increasing the likelihood of timely payment.

"Furthermore, there are no covenants restricting the payment of
interest on the  subordinated debentures while the preferred
dividends are suspended. We could  raise the subordinated debt
ratings once further information is available on  the support that
may be provided to Fannie Mae's and Freddie Mac's  subordinated
debtholders while the GSEs remain in conservatorship and post
conservatorship.  Alternatively, upon final review of the status
and support  for subordinated debt payments, we could affirm these
ratings," S&P related.

The CreditWatch listing of the subordinated debt will be resolved
upon review of the final terms of support outlined in Treasury's
backstop plan for the GSEs.

The downgrade of the preferred stock ratings reflects FHFA's
announcement that dividends on the preferred stock are being
eliminated in view of the GSEs' weak near-term earnings prospects
and the need to preserve capital.


FRONTIER AIRLINES: Gets Final OK to Access $75MM DIP Financing
--------------------------------------------------------------
The U.S Bankruptcy Court for the Southern District of New York
permits Frontier Airlines Holdings, Inc. and its debtor-
affiliates, on a final basis, to obtain a secured superpriority
debtor-in-possession credit financing of up to $75,000,000 from a
lender group of three major creditors, consisting of Republic
Airways Holdings Inc., Credit Suisse Securities (USA) LLC, and
AQR Capital, LLC, with Wells Fargo Bank Northwest, National
Association, as the administrative and collateral agent for the
Lenders.

Judge Robert D. Drain held that the DIP Credit Facility is
necessary to provide working capital for the Debtors and to pay
interest, fees and expenses in accordance with the DIP Loan
documents.

The Court issued an interim DIP order dated August 5, 2008,
authorizing the Debtors to borrow from the DIP Lenders up to
$30,000,000.  On Aug. 8, 2008, Republic Airways disclosed that it
has funded $12,500,000 of the $30,000,000 commitment.

                       DIP Obligations

Judge Drain authorized the Debtors to make all required payments
to Wells Fargo and the DIP Lenders, including, without
limitation, (i) the Commitment Fee of $1,500,000, plus reasonable
expenses, and (ii) fees and expenses of certain professionals
that are retained pursuant to the terms of the DIP Loan
Documents.

Pursuant to Section 364(c)(1) of the Bankruptcy Code, all of the
DIP Obligations will be treated as allowed claims, with priority
over any and all other claims against the Debtors.  However, the
superpriority claims of Wells Fargo and the DIP Lenders, arising
under the DIP Loan Documents, will be pari passu to the
superpriority claims of First Data Merchant Services Corporation.

                          DIP Liens

As security for the DIP Obligations, the Court grants security
interests to Wells Fargo for its own benefit and the benefit of
the DIP Lenders, subject to the Carve-Out funds, which will be
used to satisfy any unpaid fees pursuant to Section 1930 of the
Judiciary and Judicial Procedures Code, and Sections 330, 331 and
726(b) of the Bankruptcy Code.

The Security Interests include:

   (a) first lien on unencumbered property, which provides for a
       valid, binding, continuing, enforceable, fully-perfected
       first priority senior security interest in and lien upon
       or pledge of all collateral under the DIP Facility; and

   (b) liens junior to certain other liens, which provides for a
       fully-perfected security interest in, and liens upon, that
       portion of the DIP Collateral that is subject to liens in
       existence prior to the closing of the DIP Facility.

All DIP Collateral will be free and clear of other liens, claims
and encumbrances, except for those that are expressly permitted
under the DIP Loan Documents.

      Section 1110 Beneficiaries' and DIP Lenders' Rights

According to Judge Drain, the Final DIP Order does not prejudice,
or constitute a waiver of the rights of, among others, any
secured party, lessor or vendor under any aircraft lease or
mortgage, under Section 1110 of the Bankruptcy Code.

To the extent required by certain agreements, assets that are
held under Section 1110 of the Bankruptcy Code will be treated as
"silent" liens.  Accordingly, Wells Fargo and the DIP Lenders are
precluded from exercising any remedies with respect to the
Section 1110 Assets until the obligations under the Section 1110
Agreements have been satisfied and paid in full.

As protection to Wells Fargo and the DIP Lenders, they will not
be subject to equitable doctrines that would deny them any of the
rights and benefits under the DIP Loan Documents, including,
among others:

   -- the equitable doctrine of "marshaling;" and

   -- an "equities of the case" claim under Section 552(b) of the
      Bankruptcy Code, against Wells Fargo or the DIP Lenders,
      with respect to proceeds, product, offspring or profits of
      the DIP Collateral.

The Court vacates and modifies the automatic stay imposed by
Section 362 of the Bankruptcy Code to permit Wells Fargo and the
DIP Lenders to, among others, accelerate all Obligations due
under the DIP Loan Documents upon an Event of Default.  The DIP
Obligations will bear interest at the Default rate during an
Event of Default, which will be payable under the terms of the
DIP Credit Agreement.

The Court also authorizes, but does not require, Wells Fargo to
to, among others, file or record financing statements or notices
of lien in order to validate and perfect the DIP Liens.  The
Debtors are authorized to take, execute and deliver the
instruments to enable Wells Fargo to validate, perfect, preserve
and enforce DIP Liens.

The Court rules that any lease or contract agreements that
require third party's consent or approval, or the payment of any
fees or obligations to any governmental entity, are deemed
inconsistent with the provisions of the Bankruptcy Code.  The
Restricted Agreements will have no effect with respect to the
transactions granting postpetition liens, in favor of the
Administrative Agent and the DIP Lenders.

Pursuant to Section 546(c) of the Bankruptcy Code, Qwest
Communications Corporation is entitled to a valid reclamation
claim against the Debtors.

                     No Prejudice to CBAs

The DIP Loan Documents will not constitute an agreement,
admission or acknowledgment by any union that any concessions
with respect to any collective bargaining agreement are necessary
or appropriate.  All unions reserve all rights with respect to
all issues relating to the CBAs.

Furthermore, the Final DIP Order does not relieve the Debtors of
any obligation with respect to the requirements of Section 1113
of the Bankruptcy Code, with respect to the CBAs.

According to Judge Drain, the DIP Credit Agreement and DIP Loan
Documents may from time to time be amended by the lender parties
without further Court order, as Debtors, Wells Fargo and the DIP
Lenders may agree; provided that, a notice of the modification or
amendment will be provided to (i) the Official Committee of
Unsecured Creditors and the United States Trustee, and (ii) to
parties-in-interest that may be affected, with respect to the
treatment of Excluded Collateral or security interests.

The DIP Loan Documents will not be modified, impaired or
discharged by (i) the conversion of the Debtors' cases to Chapter
or (b) the confirmation of a plan of reorganization.

The New DIP Credit Agreement will mature on the earlier of:

   (i) the effective date of Frontier's Chapter 11 plan of
       reorganization, and

  (ii) April 1, 2009.

A full-text copy of the Court's Final DIP Order is available for
free at http://bankrupt.com/misc/Frontier_FinalDIPOrder.pdf.

               No Objections to Interim DIP Order

In a declaration filed with the Court, and in accordance with
Section 1746 of the Judiciary and Judicial Procedures Code,
Damian S. Schaible, Esq., at Davis Polk & Wardwell, in New York,  
disclosed that as of September 2, 2008, there were no answers,
objections or responsive pleadings to the Court's Interim DIP
Order dated August 5.

                About Frontier Airlines Inc.

Headquartered in Denver, Colorado, Frontier Airlines Inc. --
http://www.frontierairlines.com/-- provide air transportation
for passengers and freight.  They operate jet service carriers
linking their Denver, Colorado hub to 46 cities coast-to-coast,
8 cities in Mexico, and 1 city in Canada, well as provide
service from other non-hub cities, including service from 10
non-hub cities to Mexico.

The Debtor and its debtor-affiliates filed for Chapter 11
protection on April 10, 2008, (Bankr. S.D. N.Y. Case No.: 08-
11297 thru 08-11299.)  Benjamin S. Kaminetzky, Esq., and Hugh R.
McCullough, Esq., at Davis Polk & Wardwell, represent the
Debtors in their restructuring efforts.  Togul, Segal & Segal
LLP is the Debtors' Conflicts Counsel, Faegre & Benson LLP is
the Debtors' Special Counsel, and Kekst and Company is the
Debtors' Communications Advisors.

(Frontier Airlines Bankruptcy News, Issue No. 21; Bankruptcy
Creditors' Service, Inc., http://bankrupt.com/newsstand/or
215/945-7000)


FRONTIER AIRLINES: Says Job Cuts Will Only Affect 20 Positions
-------------------------------------------------------------
Contrary to its planned job cuts that would affect more than 600
employees, Frontier said only 200 of its workers will actually be
let go, Rocky Mountain News reports.

Frontier spokesman Steve Snyder said the Company has achieved
most of the necessary reductions in their operations through
attrition, voluntary leaves of absence and early retirement.  As
a result, certain employees have agreed to leave the Company
voluntarily.

"Only 200 jobs will actually have to be cut.  Employees who will
now keep their jobs cover a range of positions," Mr. Snyder told
the newspaper.

Frontier announced in July 2008, that it was a "difficult but
necessary move" to lay off 606 workers, mostly from their Mexico
and Colorado operations, given the record fuel prices that the
airline is facing.  Frontier also said it planned to reduce seat
capacity by 17% and phase out various aircraft from its fleet to
save on costs.

                About Frontier Airlines Inc.

Headquartered in Denver, Colorado, Frontier Airlines Inc. --
http://www.frontierairlines.com/-- provide air transportation
for passengers and freight.  They operate jet service carriers
linking their Denver, Colorado hub to 46 cities coast-to-coast,
8 cities in Mexico, and 1 city in Canada, well as provide
service from other non-hub cities, including service from 10
non-hub cities to Mexico.

The Debtor and its debtor-affiliates filed for Chapter 11
protection on April 10, 2008, (Bankr. S.D. N.Y. Case No.: 08-
11297 thru 08-11299.)  Benjamin S. Kaminetzky, Esq., and Hugh R.
McCullough, Esq., at Davis Polk & Wardwell, represent the
Debtors in their restructuring efforts.  Togul, Segal & Segal
LLP is the Debtors' Conflicts Counsel, Faegre & Benson LLP is
the Debtors' Special Counsel, and Kekst and Company is the
Debtors' Communications Advisors.

(Frontier Airlines Bankruptcy News, Issue No. 22; Bankruptcy
Creditors' Service, Inc., http://bankrupt.com/newsstand/or
215/945-7000)


GMAC COMMERCIAL: S&P Downgrades Rating on Class O Certs. to 'D'
---------------------------------------------------------------
Standard & Poor's Ratings Services lowered its ratings on nine
classes of commercial mortgage pass-through certificates from GMAC
Commercial Mortgage Securities Inc.'s series 2005-C1.  At the same
time, we affirmed our ratings on 13 other classes from this series

S&P said "The downgrades reflect the anticipated credit support
erosion upon the eventual resolution of the Two Detroit Center
Garage loan, which is one of three assets with the special
servicer, Helios AMC (Helios).  "We downgraded class O to 'D'
because we expect it to continue to experience interest payment
interruptions related to the $16.6 million appraisal reduction
amount (ARA) in effect on the real estate owned (REO) asset until
the class eventually sustains a principal loss when the asset is
liquidated," S&P related.

The affirmed ratings reflect credit enhancement levels that
provide adequate support through various stress scenarios.

Details concerning the three assets ($32.2 million) with the
special servicer are as follows:

-- The largest exposure with the special servicer and 10th-
    largest exposure in the pool, the Two Detroit Center Garage
    loan, has a total exposure of $26.8 million (2%).  The master
    servicer, Capmark Finance Inc. (Capmark), transferred the
    asset to the special servicer in March 2007 due to imminent
    default, and the loan became REO in November 2007.  The loan
    is secured by a 1,007-space, 336,000 sq.-ft. parking garage,
    built in 2002 in Detroit, Mich.  The garage is one of three
    parking garages that services Detroit's central business
    district (CBD), including the Comerica Tower, a one million-
    sq.-ft. office building. The subject property suffered a
    significant loss of business  due to increased office vacancy
    in the immediate area, which decreased monthly
    income, and the loss of transient business to competitors. A
    potential sale for approximately $14 million was not completed
    after a prospective buyer was unable to secure financing. The
    property is back on the market, and the special servicer has
    ordered a new appraisal.  The previously mentioned ARA of
    $16.6 million is based on a June 2007 as-is appraisal of $11
    million. Standard & Poor's considered a draft appraisal and
    recent purchase offers for the property as part of its
    analysis.

-- The remaining two loan exposures with the special servicer,  
    Raleigh Boulevard Plaza and Walgreens (Berkeley Heights),
    which have respective total exposures of $4.9 million and $2.6
    million, have the same managing member and were transferred to
    the special servicer in June 2006 after the New Jersey
    State court removed the managing member and appointed a fiscal
    agent (Agent) to liquidate the collateral. The Raleigh
    Boulevard Plaza loan is secured by a 79,232-sq.-ft. anchored-
    retail property built in 1989 in Raleigh, N.C.; the
    loan's payment status is in its grace period.  The Walgreens
    (Berkeley Heights) is secured by a 15,254-sq.-ft. retail site
    newly constructed by Walgreens in Berkeley Heights, N.J.; the
    loan is 30-days delinquent.  The agent is currently
    negotiating with potential buyers of the properties and has
    had preliminary discussions with the special servicer about   
    the assumption of both loans.  The special servicer has
    ordered updated appraisals for the properties and a
    broker's opinion of value (BOV) for the Raleigh Boulevard
    Plaza loan.  Standard & Poor's expects minimal losses upon the
    resolution of these two assets.

As of Aug. 11, 2008, the collateral pool consisted of 85 loans and
one REO asset with an aggregate balance of $1.476 billion,
compared with 91 loans totaling $1.598 billion at issuance.  
Excluding the defeased loans ($197.6 million, 13%), the master
servicer reported financial information for 99% of the pool.  
Ninety-two percent of the servicer-reported information was full-
year 2007 financial data. Based on this information, Standard &
Poor's calculated a weighted average debt service coverage (DSC)
of 1.51x for the pool, which has not changed since issuance.

Four loans totaling $49.6 million (3%) have reported DSCs below
1.0x but are not current credit concerns because they are secured
by properties that have seen improved occupancy or by properties
that are undergoing renovations. The four loans are secured by two
multifamily properties, one warehouse property, and one retail
property.  The loans have an average balance of $12.5 million and
have experienced an average decline in DSC of 47% since issuance.
In addition, one loan ($13.6 million) will have a DSC of less than
0.9x when its initial interest-only (IO) period ends in 19 months,
but is not currently a credit concern.

The only delinquent assets in the pool are two of the three assets
with the special servicer, while an ARA of $16.6 million is in
effect on one of the assets as referenced above.  The trust has
experienced two losses totaling $7.7 million to date.

The top 10 loans secured by real estate have an aggregate
outstanding balance of $614.8 million (42%) and a weighted average
DSC of 1.57x, up from 1.44x at issuance.  Standard & Poor's
reviewed property inspections provided by the master servicer for
all of the assets underlying the top 10 loans, and all
of the properties were characterized as "good."

There are 15 loans with an aggregate balance of $209.2 million
(14%) on the master servicer's watchlist as of the Aug. 10, 2008,
remittance date.  City Center Square ($43 million, 3%) is the
largest loan on the watchlist and the seventh-largest loan in the
pool.  The loan is secured by a 650,097-sq.-ft. office complex,
built in 1979 in the CBD of Kansas City, Mo.  The loan appears
on the watchlist due to a reported low DSC of 1.06x as of March
31, 2008.  Occupancy was 60% as of June 30, 2008. The low
occupancy and DSC are the result of one tenant vacating 143,000
sq. ft. in September 2007.

Standard & Poor's stressed the loans on the watchlist and other
loans with credit issues as part of its analysis. The resultant
credit enhancement levels support the lowered and affirmed
ratings.

Ratings Lowered
   
GMAC Commercial Mortgage Securities Inc.
Commercial mortgage pass-through certificates series 2005-C1
             Rating
Class     To         From  Credit enhancement (%)
-----     --         ----  ----------------------
F         BBB        BBB+                    5.57
G         BBB-       BBB                     4.49
H         BB-        BB+                     3.13
J         B          BB                      2.73
K         B-         B                       2.32
L         CCC        B-                      1.78
M         CCC-       CCC+                    1.51
N         CCC-       CCC                     1.24
O         D          CCC-                    0.97
   
Ratings Affirmed
   
GMAC Commercial Mortgage Securities Inc.
Commercial mortgage pass-through certificates series 2005-C1
   
Class     Rating    Credit enhancement (%)
-----     ------    ----------------------
A-1A      AAA                        31.96
A-2       AAA                        31.96
A-3       AAA                        31.96
A-4       AAA                        31.96
A-5       AAA                        31.96
A-M       AAA                        21.14
A-J       AAA                        12.47
B         AA                         10.17
C         AA-                         9.36
D         A                           7.73
E         A-                          6.65
X-1       AAA                          N/A
X-2       AAA                          N/A
   
N/A\u2014Not applicable.


GREEKTOWN CASINO: Plan-Filing Extension Hearing Set for Sept. 15
----------------------------------------------------------------
At the behest of Greektown Casino LLC and its debtor-affiliates,
the Honorable Walter Shapero of the U.S. Bankruptcy Court for the
Eastern District of Michigan ordered that:

   * An evidentiary hearing concerning the Debtors' request for
     extension of their exclusive periods will be held on
     Sept. 15, 2008;

   * The Debtors and interested parties objecting to the request
     have until September 11, to conclude discovery with respect
     to the Exclusivity Motion;

   * Any exhibits and lists to be used at the evidentiary hearing
     must be filed with the Court no later than September 12; and

   * Regardless of the outcome of the evidentiary hearing, the
     Debtors' exclusive plan filing period is extended through
     Oct. 30, 2008, and the Debtors' exclusive solicitation
     period is extended through Dec. 30, 2008.

The Court held a hearing on the Debtors' Exclusivity Motion
Aug. 18, 2008.  In attendance at the hearing were counsel to,
and representatives of, the Debtors; the Official Committee of
Unsecured Creditors; Merrill Lynch; the City of Detroit,
Michigan; the Michigan Gaming Control Board; Deutsche Bank Trust
Company Americas; Jenkins/Skanska Venture, L.L.C.; Ted and Maria
Gatzaros; Dimitrios and Viola Papas; and Renaissance Man Food
Services.

The Debtors have sought an eight-month extension, through June 1,
2009, of their exclusive plan filing period.

Daniel J. Weiner, Esq., at Schafer & Weiner, in Bloomfield Hills,
Michigan, related at the August 18 hearing that the Debtors have
engaged with certain parties who filed objections to their
extension request.  "[W]ithout prejudice to seeking additional
extensions . . . I think the debtor today is prepared with those
reservations to ask the Court for an extension of what -- I'm
going to day 75 days," Mr. Weiner said at the hearing.  

Several objectors took the stand at the August 18 hearing to
voice their contentions.  Counsel to the U.S. Trustee took issue
with the non-filing of the Debtors' monthly operating reports to
the Court.  The Creditors Committee said it does not believe the
Debtors have made progress whatsoever.  Nevertheless, Robert
Gordon, Esq., at Clark Hill, in Detroit, Michigan, told Judge
Shapero that the Committee did agree to a February 12 extension
of the exclusive plan filing period but would not object to a
shorter period than that.  The Pappas are agreeable to a 60-day
extension only.

Representing Deutsche Bank, Mark Parry, Esq., at Moses & Singer
LLP, in New York, suggested to Judge Shapero that the Exclusivity
Motion be adjourned until September 15, "at which time the
debtors can make progress toward plan negotiations."  

Upon hearing the parties' arguments, Judge Shapero said, "[M]y
feeling at this point is . . . to set an evidentiary hearing for
sometime in September, let the process of discussion and whatever
takes place in these situations go forward, and then if it's
unproductive in terms of resolution of all the objections,
we'll have an evidentiary hearing in plenty of time for me to be
able to make the decision [on the Debtors' request] by September
26th. . . ."

Mr. Weiner, the Debtors' counsel, expressed apprehensions on the
Court issuing its ruling on September 26 yet.  He said if the
Court issued a denial order, the Debtors could be pressed for
time to file the required Chapter 11 plan.  He thus asked for a
temporary 30-day extension of the Debtors' exclusive plan filing
period after the September 26 hearing.  Judge Shapero consented
to Mr. Weiner's proposal.

The Debtors delivered to the Court on Aug. 25, 2008, a proposed
order on their extension request, taking note of all agreed terms
at the August 18 hearing.  A full-text copy of
the proposed order is available for free at:

               http://researcharchives.com/t/s?31bd

However, Judge Shapero vacated his Initial Exclusive Period
Extension Order on Aug. 28, 2008.  No reason was cited for the
withdrawal.

                      About Greektown Casino

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

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

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

When the Debtor filed for protection from its creditors, it listed
consolidated estimated assets and debts of $100 million to $500
million.  (Greektown Casino Bankruptcy News, Issue No. 11;
Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000).


GREEKTOWN CASINO: Objections to Bid to Extend Exclusive Periods
---------------------------------------------------------------
Before the Honorable Walter Shapero of the U.S. Bankruptcy Court
for the Eastern District of Michigan vacated his interim exclusive
period order in the bankruptcy cases of Greektown Casino LLC and
its debtor-affiliates, about seven parties, including Daniel M.
McDermott, the United States Trustee for Region 9, Jenkins/Skanska
Venture, L.L.C., Ted and Maria Gatzaros, the City of Detroit,
Michigan, and Deutsche Bank Trust Company Americas, expressed
their opposition to the Debtors' proposed exclusive period
extension order.

1. The U.S. Trustee

The U.S. Trustee's counsel, Leslie K. Berg, Esq., in Detroit,
Michigan, argues that the Proposed Order goes beyond the
resolutions that the concerned parties agreed at the August 18
hearing.

Mr. Berg points out that the Proposed Order does not reference
the U.S. Trustee's objection to the Motion; it does not include
the U.S. Trustee as one of the objecting parties; and it
misstates the docket number of the Official Committee of
Unsecured Creditors' objection.

Mr. Berg adds that the Proposed Order:

  (a) purports to grant the relief requested in the Debtors'
      Exclusivity Motion;

  (b) contains findings to show that the factual and legal bases
      for relief as alleged in the Motion establish cause for the
      relief requested in the Motion; and

  (c) carves out additional opportunity for the Debtors to seek
      extensions of exclusivity within the deadlines set by the
      Proposed Order and limits objections to the Motion to just
      the objecting parties.

Mr. Berg contends that provisions of the Proposed Order were
never articulated or proposed by the Court and thus, raise due
process concerns.

Accordingly, the U.S. Trustee asks the Court to deny the Debtors'
Exclusivity Motion.

2.  Jenkins/Skanska

Pursuant to a contract dated October 3, 2002, with the Debtors,  
Jenkins/Skanska has been providing continuing construction
services to the Debtors.

The Debtors owe at least $30,000,000 to Jenkins/Skanska, which
includes unpaid postpetition construction costs and services and
retentions of a portion of the value of services that are held
back by the owner pursuant to the terms of the Contract,
according to Ronald L. Rose, Esq., at Dykema Gossett PLLC, in
Bloomfield Hills, Michigan.

When the exclusive period extension request was filed, the
Debtors and Jenkins/Skanska were engaged in good faith
negotiations to modify the Contract so that a guaranteed maximum
price and completion date would be reached.  The negotiations
eventually failed to produce a GMP and completion date, explains
Mr. Rose.

Mr. Rose argues that the Exclusive Period Proposed Order would
exclude Jenkins/Skanska from seeking discovery or participating
in discovery in relation to the extension request.  It would also
exclude Jenkins/Skanska in fully participating in discovery
relating to the extension request.  Moreover, the Order is a
violation of Section 1121(d) of the Bankruptcy Code, which
requires notice and hearing to parties-in-interest, Mr. Rose adds.

Therefore, Jenkins/Skanska proposes that if confidential
information will be provided during discovery, it will enter into
a reasonable confidentiality agreement with the Debtors in order
to protect any privileged information.

Jenkins/Skanska asks the Court to deny the Debtors' Exclusivity
Motion and Proposed Order and to schedule a hearing with respect
to that Order.

3. Ted and Maria Gatzaros

Ted and Maria Gatzaros assert that the Court should deny the
Debtors' Proposed Order because several of its provisions are
inconsistent with the Court's findings.

Stephen P. Stella, Esq., at Simon, Stella & Zingas, in Detroit,
Michigan, says the Gatzaroses have a secured claim of more than
$60,000,000 against the Debtors.

Mr. Stella argues that the Court never made any determination
that "the legal and factual basis set forth in the Motion and at
the hearing on the Motion establish just cause for the relief
granted herein."  

The Proposed Order also states that the "Motion is granted."  Mr.
Stella clarifies the extension was not granted.  With respect to
the phrase "the Court orders this extension regardless of the
outcome of the Evidentiary Hearing" in the Proposed Order, Mr.
Stella elaborates that the Court has never made any finding
related to an evidentiary hearing.

The Court has not made made determinations of extending, for
cause, the Debtors' plan filing and plan solicitation periods,
Mr. Stella argues.  Also, the Court has never made any
determination nor did it address any provisions of Section 1121
of the Bankruptcy Code, he adds.

In a separate filing, the City of Detroit, Michigan, joins and
concurs with the arguments of the U.S. Trustee and the Gatzaroses
in their objections to the Debtors' Proposed Order.

4. Deutsche Bank

Deutsche Bank Trust Company Americas is a member of the Creditors
Committee and is the indenture trustee for certain prepetition
notes, aggregating $185,000,000, issued by Greektown Holdings LLC
and Greektown Holdings II, Inc.

On behalf of Deutsche Bank, Mark N. Parry, Esq., at Moses &
Singer LLP, in New York, notes that the Proposed Order fails to
accurately reflect the decision of the Court.  He clarifies that
the Court has only scheduled an evidentiary hearing on
September 15, 2008, for the extension request -- not a hearing to
approve or deny the request.  

While the Court did extend the Debtors' exclusive periods until
October 30, 2008, the Proposed Order purports to permit the
Debtors' the right to seek additional extensions of the exclusive
periods.  Mr. Perry argues that language to that effect is
premature.  "[The Debtors] should await the Court's decision on
the extension request at the conclusion of the September 15
evidentiary hearing."

Accordingly, Deutsche Bank asks the Court to deny the Debtors'
extension request.

                      About Greektown Casino

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

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

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

When the Debtor filed for protection from its creditors, it listed
consolidated estimated assets and debts of $100 million to $500
million.  (Greektown Casino Bankruptcy News, Issue No. 11;
Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000).


GREEKTOWN CASINO: Conway Mackenzie Preparing Chapter 11 Plan
------------------------------------------------------------
According to a report by Margarita Bauza of The Detroit Free
Press, an officer at Conway Mackenzie & Dunleavy told the Michigan
Gaming Control Board at an Aug. 12, 2007 meeting that it is
currently preparing a Chapter 11 Plan for Greektown Casino LLC and
its debtor-affiliates.

The Debtors obtained permission from the U.S. Bankruptcy Court for
the Eastern District of Michigan to employ Conway Mackenzie &
Dunleavy, as their financial advisors, nunc pro tunc to May 29,
2008.

The Detroit Free Press quoted the Conway officer as saying that a
main obstacle to the plan is a purchase agreement by
Entertainment Interests Group.

Before Greektown Casino filed for bankruptcy, EIG offered to buy
a 40% stake in the company for $100 million.  Under the parties'
agreement, EIG is protected by a provision that bars Greektown
Casino from entertaining other buyers.  EIG had until Aug. 31,
2008, to close the proposed sale offer.

                      About Greektown Casino

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

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

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

When the Debtor filed for protection from its creditors, it listed
consolidated estimated assets and debts of $100 million to $500
million.  (Greektown Casino Bankruptcy News, Issue No. 11;
Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000).


HARRY MARX CHEVROLET: Wants to Sell Business
--------------------------------------------
Paradiso Automotive Service, which does business as Harry Marx
Chevrolet Cadillac Buick Pontiac GMC, is facing financial woes,
and is in the process of being sold, owner Harry Marx confirmed on
August 29, 2008, reports Todd Guild and Adriana Valadez of the
Register Pajaronian.  Mr. Marx didn't say whether the dealership
has a potential buyer, notes Mr. Guild and Ms. Valadez.

The Debtor's attorney, Charles Greene, reportedly said that
Paradiso Automotive sought Chapter 11 bankruptcy protection in May
after Wells Fargo Bank, which financed the vehicles at the
dealership, threatened to take them after Mr. Marx fell behind in
payments.

Chapter 11 protection would have stopped the bank from taking the
vehicles while the dealership reorganized its finances, Mr. Guild
and Ms. Valadez point out.  But the United States Bankruptcy Court
for the Northern District of California dismissed the case on July
25, 2008, which essentially removed protections afforded by
bankruptcy filings, says Mr. Guild and Ms. Valadez.

As part of the resulting agreement between Guarantee Chevrolet and
Wells Fargo, Mr. Marx could keep both his Watsonville and Los
Banos dealerships open, but must pay what he owes by Dec. 15.  
Despite this, Mr. Marx said he made the decision to close.

Watsonville, California-based Paradiso Automotive Service is a car
dealeship.  On July 3, 2008, the Debtor sought Chapter 11
bankruptcy protection from the United States Bankruptcy Court for
the Northern District of California.  Charles B. Greene, Esq.,
represents the Debtor in its restructuring efforts.  When it filed
for bankruptcy protection, it listed less than $50,000 in
estimated assets and $50,000 in estimated debts.


HILANDER BOWL: Case Summary & 20 Largest Unsecured Creditors
------------------------------------------------------------
Debtor: Hilander Bowl, Inc.
        200 Kelso Drive
        Kelso, WA 98626

Bankruptcy Case No.: 08-44430

Chapter 11 Petition Date: September 5, 2008

Court: Western District of Washington (Tacoma)

Judge: Paul B. Snyder

Debtor's Counsel: Timothy J. Dack, Esq.
                   (bkfile@dackoffice.com)
                  Timothy J. Dack
                  1201 Main Street
                  P.O. Box 61645
                  Vancouver, WA 98666-1645
                  Tel: (360) 694-4227

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/wawb08-44430.pdf


IMMUNICON CORP: Hearing to Consider Disclosure Statement Today
--------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware will
convene a hearing at 4:00 p.m. today in Wilmington to consider a
request by Immunicon Corporation and its debtor-affiliates to
consider approval of the Debtors' disclosure statement as well as
procedures and deadlines relating to the solicitation and
tabulation of plan votes.

Immunicon Corp., now known as IMMC Corporation, and its affiliates
submitted a first amended plan of liquidation and accompanying
disclosure statement on August 8, 2008.

As reported in the Troubled Company Reporter on Aug. 5, 2008,
Immunicon completed the sale of substantially all of their assets
to Veridex LLC.  The Asset Purchase Agreement provides for, among
other things, Veridex to pay a cash purchase price of $31 million
at closing, and to release and discharge at closing $2,087,500 in
allowed trial instrument loans, for a total purchase price of
$33,087,500.

As a consequence, the Debtors' business no longer operates in
chapter 11.

                First Amended Plan of Liquidation

The First Amended Plan of Liquidation groups claims against and
interests in the Debtors into five classes:

                  Type of           Impaired/     Voting
  Class           Claim             Unimpaired    Status           
  -----           -------           ---------    ---------
  Unclassified    Administrative    Unimpaired   Deemed to Accept-
                  Claims and                     Vote Not
                  Priority Tax                   Solicited
                  Claims

  Class 1         Priority Claims   Unimpaired   Deemed to
Accept-                                         
                  (Other than                    Vote Not
                  Priority Tax                   Solicited
                  Claims

  Class 2         General           Unimpaired   Deemed to Accept-
                  Unsecured Claims               Vote Not
                                                 Solicited

  Class 3         Director &        Impaired     Entitled to Vote
                  Officer Liability
                  Claims

  Class 4         Existing Common   Impaired     Entitled to Vote
                  Stock

  Class 5         Existing Options  Impaired     Deemed to Reject-
                  and Existing                   Vote Not
                  Warrants                       Solicited

Holders of allowed Claims in Classes 1 and 2 will receive 100% of
the amount they're owed.

Director and Officer Liability Claims in Class 3 -- including any
defense costs and attorneys' fees -- are contingent upon any
Director or Officer of the Debtors being held liable for acts or
omissions while serving in their official capacities for the
Debtors and such liability exceeding the amount available under
the Directors and Officers Liability Policies.  A D&O Reserve will
be maintained by the Liquidating Estate and any distributions made
from the D&O Reserve to holders of Allowed Director and Officer
Liability Claims will be in full satisfaction of such Allowed
Director and Officer Liability Claims.  

On the Effective Date of the Plan, Existing Common Stock will be
cancelled.  A disbursing agent to be appointed pursuant to the
Plan will pay to the holders of Existing Common Stock in Class 5
the Pro Rata share of the balance of funds remaining in the
Liquidating Estate.

All Existing Options and Existing Warrants will be cancelled.  The
holder of an Existing Option or an Existing Warrant will get
nothing.

Acceptance of the Plan requires the affirmative vote of two-thirds
in amount and a majority in number of Allowed Claims or a majority
of the Interests actually voted in each Class of Impaired Claims
and Interests entitled to vote.  Only entities holding Class 3
Claims and Existing Common Stock, which is in Classes 3 and 4, are
entitled to vote.  If a Class rejects the Plan, however, the
Bankruptcy court nevertheless may confirm the Plan if the cramdown
requirements of Bankruptcy Code section 1129(b) are satisfied.

                 Riverside's Request for Examiner

On Sept. 4, 2008, Riverside Contracting, LLC, an equity security
holder, filed an objection to the disclosure statement stating,
that:

a) the Debtors have not addressed the interest of certain holders    
    of commmon stock;

b) the Disclosure Statement should disclose that it filed a     
    motion for the appointment of an examiner to investigate     
    various issues;

c) the Disclosure Statement has failed to describe potential  
    conflicts involving the D&O Reserve and the proposed selection
    of the Liquidating Trustee by the Creditors' Committee.  
    Specifically, as set forth in its Examiner Motion, the D&O
    Reserve is being created by the Debtor, which is controlled
    by the very same directors and officers benefiting from such a
    reserve.  Riverside states that the selection of the
    Liquidating Trustee by the Creditors' Commitee will have no
    bearing on the general unsecured creditors, who are to be paid
    in full, but will impact greatly in the recoveries of the
    equity holders; and

d) the Disclosure Statement inadequately describes potential
    litigation, including litigation relating to the D&O Reserve
    as well as the Change of Control Agreements, and furthermore,
    the Noteholders, who comprise two-thirds of the Creditors'
    Committee, and the Estate may be involved in litigation
    relating to the payments of unmatured interest with the Notes.

              Other Disclosure Statement Objections

On Sept. 4, 2008, Scoggin Capital Management, LP II and Scoggin
International Fund, whose noteholder claims are classified as
disputed general unsecured non-priority claims by the Debtor,
filed limited objections to the disclosure Statement, claiming
that the Plan does not classify and the Disclosure Statement does
not address the treatment of late filed claims.  Scoggin Capital
and Scoggin International filed their proofs of claim, each in the
amount of $1,902,000.59, on Aug. 29, 2008.  Scoggin adds, however,
that if the Debtors agree that their Claims shall be treated as
timely filed Class 2 claims under the Plan, which are unimpaired
and will be paid in full, then they do not object to the
Disclosure Statement.

Specifically, Scoggin objects to the Disclosure Statement for its
failure to provide adquate information since it does not state (i)
whether late filed Class 2 claims will be treated as unimpaired;
or (ii) in the alternative, whether late filed Class 2 claims will
be paid before any postpetition interest is paid on account of
unsecured claims or before distributions are made on account of
holders of equity interests.

            Major Liabilities as of the Petition Date

Based upon its unaudited balance sheet, as of May 31, 2008, the
consolidated principal liabilities of the Debtors comprised: (i)
21,000,000 in principal and interest on the unsecured subordinated
convertible 6% interest notes due Dec. 5, 2009, and (ii)
approximately $3,462,000 in trade debt.

As of the Petition Date, the Debtors had no secured liabilities
and have incurred no secured debt since the Petition Date.

IMMC Corporation has approximately $21 million owing under certain
Notes issued pursuant to an agreement for the sale and issuance of
$30 million in aggregate principal amount of the Notes.  As of the
Petition Date the holders of the Notes were: SF Capital Partners,
Ltd., Portside Growth and Opportunity Fund and JGB Capital LP.  SF
Capital Partners, Ltd. and Portside Growth and Opportunity Fund
also have served as members of the Creditors' Committee in the
Cases.  As of the Petition Date, the Debtors owed its non-
noteholder unsecured creditors approximately $3.4 million.

                   About Immunicon Corporation

Headquartered in Huntington Valley, Pennsylvania, Immunicon
Corporation and its debtor-affiliates -- http://www.immunicon.com/    
-- offers products and services for cell analysis and molecular
research.  The Debtors filed for Chapter 11 protection on June 11,
2008 (Bankr. D. Del. Lead Case No. 08-11178).  Sheldon K. Rennie,
Esq., at Fox Rothschild LLP, represents the Debtors in their  
restructuring efforts.  Schulte Rote & Zabel LLP is the Official
Committee of Unsecured Creditors' proposed bankrupcy counsel.  

When Immunicon Corp. filed for protection against its creditors,
it listed estimated assets of $9,231,264 and estimated debts of
$24,309,838.


INDYMAC BANCORP: Fitch Withdraws Ratings
----------------------------------------
Fitch Ratings has withdrawn the long- and short-term Issuer
Default Ratings (IDR) and outstanding debt ratings on Indymac
Bancorp Inc. and subsidiaries:

Indymac Bancorp Inc.
   -- Long-term IDR at 'D';
   -- Short-term IDR at 'D';
   -- Individual Rating at 'F'.

Indymac Bank F.S.B.
   -- Long-term IDR at 'D'
   -- Short-term IDR at 'D'
   -- Individual at 'F';
   -- Long-term deposits at 'CCC/RR3';
   -- Short-term deposits of 'D';
   -- Preferred stock at 'C/RR6'.

Indymac Capital Trust I
   -- Preferred stock at 'C/RR6'.

Fitch will no longer provide ratings or analytical coverage on
Indymac Bancorporation Inc. and subsidiaries.


ISCHUS CDO: Fitch Cuts C-1, C-2 Classes of Notes to 'B'
-------------------------------------------------------
Fitch Ratings has downgraded ratings on five classes and has
removed from Rating Watch Negative three classes of notes issued
by Ischus CDO I, Ltd. and Ischus CDO I, LLC.  These rating actions
are effective immediately:

  -- $130,575,079 Class A-1 Notes downgraded to 'A' from 'AAA';

  -- $47,000,000 Class A-2 Notes downgraded to 'BBB' from 'AAA';

  -- $39,000,000 Class B Notes downgraded to 'BB' from 'AA',
removed from Rating Watch Negative;

  -- $11,142,617 Class C-1 Notes downgraded to 'B' from 'BBB',
removed from Rating Watch Negative;

  -- $4,642,757 Class C-2 Notes downgraded to 'B' from 'BBB',
removed from Rating Watch Negative.

Ischus I is a static cash flow structured finance (SF)
collateralized debt obligation (CDO) that closed in December 2004.
Currently, 67.6% of the $242 million portfolio is comprised of
U.S. subprime RMBS, 11.9% consists of CDOs containing non-SF
portfolios, 9.6% consists of commercial mortgage-backed
securities, and the remaining 10.8% of the portfolio consists of
prime and Alt-A RMBS assets, U.S. SF CDOs with underlying exposure
to subprime RMBS, and asset-backed securities.

Fitch's rating action reflects the continued credit deterioration
in U.S. subprime mortgage market. Since May 2006, approximately
48.4% of the portfolio has been downgraded with 4.4% of the
portfolio currently on Rating Watch Negative. Additionally, 32.5%
of the portfolio is now rated below investment grade, of which
4.0% of the portfolio is rated 'CCC+' or below. The negative
credit migration experienced since the last review in May 2006 has
resulted in the Weighted Average Rating Factor deteriorating to
'BBB-'/'BB+' from 'BBB', breaching its covenant of 'BBB'/'BBB-',
as of the June 27, 2008 trustee report. Overcollateralization and
interest coverage ratios continue to meet their corresponding
covenants.

These rating actions incorporate Fitch's current view on default,
correlation and recoveries for structured finance assets as
outlined in the criteria report entitled 'Global Criteria for the
Review of Structured Finance CDOs with Exposure to U.S. Subprime
RMBS', dated Nov. 15, 2007. Fitch is reviewing its SF CDO approach
and will comment separately on any changes and potential rating
impact at a later date. Fitch will continue to monitor and review
this transaction for future rating adjustments.

The ratings of the class A-1, A-2 and B notes address the
likelihood that investors will receive full and timely payments of
interest, as per the governing documents, as well as the stated
balance of principal by the legal final maturity date. The ratings
of the class C-1 and C-2 notes address the likelihood that
investors will receive ultimate and compensating interest
payments, as per the governing documents, as well as the stated
balance of principal by the legal final maturity date.


JHT HOLDINGS: In Settlement Talks with Creditor Consistuents
------------------------------------------------------------
JHT Holdings Inc. and its debtor-affiliates, according to William
Rochelle of Bloomberg News, is in settlement discussion with its
secured lenders and the Official Committee of Unsecured Creditors
on a contested Oct. 7, 2008 confirmation hearing on the Debtor's
reorganization plan.

The Troubled Company Reporter said on Aug. 11, 2008, that the
United States Bankruptcy Court for the District of Delaware
approved an amended disclosure statement explaining an amended
chapter 11 plan of liquidated filed by the Debtors on July 25,
2008.

The Debtors state that the plan maximizes their value and that
any alternative to confirmation of the plan, such as liquidation
or an alternative plan, would result in significant delays,
litigation and additional costs.

The plan reflects certain agreements between the Debtors and
the prepetition lenders including General Electric Capital
Corporation; Highland Capital Management L.P.; Spectrum Partners
L.P.; and D.B. Zwim Special Opportunities Fund Ltd., owed in the
aggregate amount of $136,000,000 in secured debt.  The plan
further contemplates:

   a) the payment in full, in cash, of the allowed prepetition
      advance claims, debtor-in-possession facility claims,
      administrative claims and priority claims;

   b) exchange of the prepetition lenders' secured claims for,
      among other things:

      -- the exit second-lien loan in the principal amount of
         $60,000,000, and

      -- 70% of the new stock of reorganized holdings;

   c) reinstatement of intercompany claims and interests; and

   d) discharge of all other claims without recovery, and
      cancellation of all other equity interests.

Under the settlement with creditors, the creditors agreed to waive
any objection to the plan in exchange for secured creditors
reserving $1.35 million for unsecured claims, Mr. Rochelle
relates.  Mr. Rochelle notes that under the amended disclosure
statement, unsecured creditors will get 4.5% recovery.  Secured
creditors further waived deficiency claims of around $65 million,
enhancing the recovery of unsecured creditors, the report adds.  
The Committee promised not to run after secured creditors or
invalidate security interests.

Also, the Debtors agreed not to sue any creditors for receiving
prepetition payments, the report says.  

The Court is set to hold a confirmation hearing on Oct. 7, 2008.

                        About JHT Holdings

Headquartered in Kenosha, Wisconsin, JHT Holdings Inc. --
http://www.jhtholdings.com/-- and its affiliates provide over-
the-road transportation of various types of motor vehicles,
including commercial trucks and cars.

The Debtors have non-debtor foreign affiliates in Canada and
Mexico.  Another Mexican affiliate, Mexicana Logistics, S.A. de
C.V. is owned 50% by JHT Holdings and 50% by Gustavo Vildosola, a
Mexican national with no connection to the Debtors.

JHT Acquisition Corp. owns all of the outstanding stock of JHT
Holdings.  JHT Acquisition is a holding company owned by a group
of investors, MTGLQ Investors, L.P., D.B. Zwirn Special
Opportunities Fund, L.P., ZM Private Equity Fund I, Spectrum
Investment Partners, L.P. and Stonehouse Investment Company LLC.

The company and 16 of its affiliates filed for chapter 11
protection on June 24, 2008 (Bankr. D. Del. Lead Case No. 08-
11267).  David B. Stratton, Esq., and Evelyn J. Meltzer, Esq., at
Pepper Hamilton, LLP, represent the Debtors in their restructuring
efforts.  The U.S. Trustee has appointed members to the Official
Committee of Unsecured Creditors to serve in this case.  Pachulski
Stang Ziehl & Jones LLP represents the Creditors' Committee.  When
the Debtors filed for protection against their creditors, they
listed assets and debts between $100 million to $500 million.


JPMORGAN TRUST: Fitch Holds BB Rating of 2007-A Asset-Back Certs.
-----------------------------------------------------------------
Fitch affirms JPMorgan Auto Receivables Trust (JPMART) 2007-A
asset-backed notes:

   -- Class A-2 asset-backed notes at 'AAA';
   -- Class A-3 asset-backed notes at 'AAA';
   -- Class A-4 asset-backed notes at 'AAA';
   -- Class B asset-backed notes at 'AA';
   -- Class C asset-backed notes at 'BBB+';
   -- Asset-backed certificates at 'BB'.

The securities issued from the owner trust structure are backed by
a pool of retail installment sales contracts secured by new and
used automobiles and light-duty trucks originated by MB Financial
Bank (MBFB) and NetBank.

The collateral continues to perform within Fitch's expectations.
Currently under the credit enhancement structure, the securities
can withstand stress scenarios consistent with the rating
categories and still make full payments of interest and principal
in accordance with the term of the documents. The ratings of the
securities reflect the high quality of the underlying retail
installment sales contracts, available credit enhancement, the
sound legal and cash flow structure, and the underwriting strength
of MBFB and NetBank.


KEY DEVELOPERS: Fisher Will Auction Firm's Assets
-------------------------------------------------
The U.S. Bankruptcy Court for the Middle District of Florida has
authorized Fisher Auction Co. Inc. to auction Key Developers Group
LLC assets.

Fisher will auction Key Developers' The Place at Channelside,
which include 171 Condominiums at 911 & 918 Channelside Drive, in
Tampa, Florida.  

The Place at Channelside had 245 units, about 171 units unsold.   
It has two buildings and parking garage, and 12,930 plus SF retail
leasable space.  

Property tours will be on Oct. 15, 2008, at 11:00 a.m.  For
details, terms, property prospectus, visit
http://fisherauction.com,or call (800) 331-6620.

                      About Key Developers

Tampa, Florida-based Key Developers Group LLC is a real estate
developer.  Its developments include a 469-unit, The Place at
Channelside I and II.  The Place at Channelside I, an-8-floor
building, was completed in 2007, while The Place at Channelside
II, a 32-floor building, was never built.  Its president is Fida
Sirdar Hussain.  Key Developers filed for chapter 11 on March 5,
2008 (Bankr. M.D. Fla. Cas No. 08-02929).  Scott A. Stichter,
Esq., at Stichter, Riedel, Blain & Prosser PA, represents the
Debtor in its restructuring efforts.

When it filed for bankruptcy, the Debtor disclosed $100 million to
$500 million in estimated assets, and $50 million to $100 million
in estimated debts.


KIMBALL HILL: Can Hire Deloitte Tax as Tax Consultants
------------------------------------------------------
Kimball Hill Inc. and its debtor-affiliates obtained authority
from the U.S. Bankruptcy Court for the Northern District of
Illinois to employ Deloitte Tax LLP as their tax consultants and
advisors effective as of the date of bankruptcy.

As the Debtors' tax consultants and advisors, Deloitte Tax is
expected to:

   (a) advise the Debtors regarding the tax aspects of the
       restructuring and bankruptcy emergence process, including
       analysis of the tax workplan;

   (b) advise the Debtors on the cancellation of debt income for
       tax purposes under Section 108 of the Internal Revenue
       Code;

   (c) advise the Debtors on post-restructuring tax attributes
       and the absorption of those attributes based on the
       Debtors' operating projections;

   (d) assist the Debtors in the preparation of tax-basis   
       balance sheets;

   (e) advise the Debtors on the potential effect of
       "Alternative Minimum Tax" in various post-emergence
       scenarios; and

   (f) advise the Debtors on the effects of tax rules pertaining
       to the post-bankruptcy net operating loss carryovers and
       limitations on their utilization.

A full-text copy of the Deloitte Tax Letter of Engagement is
available for free at:

              http://researcharchives.com/t/s?3031

To assist them with respect to tax refunds received prior to the
Petition Date, the Debtors asked Deloitte Tax to prepare their
consolidated federal and state income tax returns, including
those of their affiliates and joint-ventures.

Deloitte Tax will be paid for its services on an hourly basis
according to these rates, subject to the Court's approval:

           Professional         Hourly Rate
           ------------         -----------
           Partner/Director        $680
           Senior Manager          $550     
           Manager                 $460              
           Senior Associate        $340

David Hoffman, a partner at Deloitte Tax, assured the Court that
his firm does not hold any prepetition claims against the
Debtors, and is a "disinterested person" as the term is defined
pursuant to Section 101(14) of the U.S. Bankruptcy Code.

In a supplemental declaration dated Aug. 15, 2008, David Hoffman,
a partner at Deloitte Tax LLP, clarified that the professional
fees his firm bills the Debtors will not have any direct bearing
on the retirement benefits of Michael Sonderby, a former partner
at Deloitte & Touche LLP and the brother of the judge overseeing
the Debtors' cases, Judge Susan Pierson Sonderby.

"Under the remote circumstance that the fees generated by the
services for the Debtors have any effect on the retirement
benefits of Mr. Sonderby, such effect would likely be de minimis,
if not immeasurably small," Mr. Hoffman told the Court.

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, Fort 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 Oct. 20, 2008, to exclusively file a
bankruptcy plan.  (Kimball Hill Bankruptcy News, Issue No. 11;
Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000).


KIMBALL HILL: Wants to Employ Gardere Wynne as Special Counsel
--------------------------------------------------------------                       
Kimball Hill Inc. and its debtor-affiliates ask permission from
the U.S. Bankruptcy Court for the Northern District of Illinois to
employ Gardere Wynne Sewell LLP as their special counsel, nunc pro
tunc to July 22, 2008.

As special counsel to the Debtors, Gardere is contemplated to
provide legal services related to the Debtors' disposition of
certain mineral interests in a mineral estate in Arlington,
Texas.  In this light, the firm will:

   (a) develop a list of bidders who are anticipated to have a
       strong interest and financial ability to bid on the
       Mineral Estate;

   (b) prepare information and diligence packages regarding the
       Mineral Estate;

   (c) develop terms and conditions for the sale of the Mineral
       Estate; and

   (d) assist the Debtors in evaluating and negotiating bids for
       the Mineral Estate.

Gardere will also assist the Debtors in the sale of certain
municipal utility district receivables related to the Debtors'
Texas operations.  MUDs are established to finance certain
housing development infrastructure costs like water, sewage, or
drainage costs.  They allow developers to recover most of these
costs over time as homes in the subdivision are sold.  MUD  
Receivables represent collective income streams from the recovery
of those costs.  

Gardere is already familiar with the unique attributes of these
types of assets as well as the market for and transactions
involving these types of assets, the Debtors tell the Court.  
They believe Gardere has extensive energy practice and is highly
experienced in transactions involving the Barnett Shale, an
extensive shale zone in North Texas.  The Debtors also relate
that the firm has counseled them regarding all aspects of their
Texas operations.  

"Retaining Gardere will help maximize the values of the Texas
Assets while saving the time and expense of bringing other
advisors up to speed," the Debtors assert.  

In exchange for the firm's services, the Debtors will pay Gardere
according to the firm's standard hourly rates:

        Professional                   Hourly Rate
        ------------                   -----------
        Partners                       $380 - $520
        Associates                     $210 - $360
        Paraprofessionals              $95 - $210

The Debtors will also reimburse the firm for its actual and
necessary out-of-pocket expenses.

D. Steven Henry, Esq., a partner at Gardere Wynne Sewell, in
Dallas, Texas, discloses that within 90 days before the Petition
Date, his firm received $15,820 from the Debtors for services it
performed and expenses it incurred in the ordinary course of
business.  Gardere filed Claim No. 532 for $17,731 for unpaid
prepetition legal fees and services in the Debtors' cases, he
relates.  Moreover, the firm received $22,892 for postpetition
services it rendered in the ordinary course of the business, Mr.
Henry adds.

Mr. Henry adds that Gardere likely represents a number of the
creditors and parties-in-interest in the Debtors' cases.  
Although his firm has not reviewed its records to ascertain
whether or not it currently represents or has represented these
creditors and parties-in-interest, Mr. Henry assures the Court
that his firm cannot have a conflict of interest in regard to
these clients, given the nature of its representation.  Also, the
firm has not yet fully determined if the MUD receivables are
encumbered, he says.

The Debtors assure the Court that there will be no duplication of
work with the employment of Gardere as they will integrate any
work rendered by professionals in their cases.

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, Fort 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 Oct. 20, 2008, to exclusively file a
bankruptcy plan.  (Kimball Hill Bankruptcy News, Issue No. 11;
Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000).


LANDSOURCE COMMUNITIES: May Employ 2 Hoganwebb Personnel as CROs
----------------------------------------------------------------
In accordance with Section 363 of the Bankruptcy Code, the Hon.  
Kevin J. Carey of the U.S. Bankruptcy Court for the District of
Delaware authorized LandSource Communities Development LLC, and
its debtor-affiliates to enter into the CRO Agreement, nunc pro
tunc to July 1, 2008.

The Debtors are authorized to employ Timothy P. Hogan and H.
Lawrence Webb of HoganWebb LLC, as their Chief Restructuring
Officers on the terms provided in the Application and the CRO
Agreement, nunc pro tunc to July 1, 2008, and, until the
termination of the CRO Agreement, the CROs will be deemed
officers of the Debtors.

HoganWebb and its affiliates will not act in any other capacity
in connection with the Debtors' Chapter 11 cases.

The monthly fees payable to HoganWebb pursuant to the CRO
Agreement will be increased by $50,000, respectively, nunc pro
tunc to July 1, 2008, the budget under the DIP Credit Agreement
will be increased to incorporate payment of the increased monthly
fees, and the monthly fees will not be part of the "Carve-Out"
under the DIP Credit Agreement.

The $50,000 of each monthly fee paid will be credited against the
ultimate award of compensation described in the CRO Agreement.

The CRO Agreement will be amended to provide that, in addition to
the other conditions provided in the CRO Agreement, the
compensation stated in the CRO Agreement is payable only if (i)
all classes of creditors, other than creditors that are insiders
of the Debtors, voting on the Debtors' plan of reorganization
have voted to accept the plan, or (ii) at least one class of
unsecured creditors, excluding the voted of the first lien
lenders to the extent they have an unsecured deficiency claim and
excluding convenience class, has voted to accept the plan.

The compensation provided in the CRO Agreement will be approved
by the Court at the conclusion of the Debtors' Chapter 11 cases
on a reasonableness standard and is not being pre-approved by the
Court.

Messrs. Webb and Hogan will be indemnified by the Debtors for any
action taken in their capacity as Chief Restructuring Officers to
the fullest extent the indemnification is available to any
officer or other employee of the Debtors.

Messrs. Webb and Hogan will have the benefit of, and be deemed to
be covered by, any insurance available to any officer or other
employee of the Debtors with respect to any action taken in their
capacities as Chief Restructuring Officers.

The Debtors are authorized to reimburse HoganWebb up to $100,000
for the cost of obtaining up to $5,000,000 in third party
insurance to protect against any liability or reimbursement
obligations the Chief Restructuring Officers may be exposed to as
a result of their services to the Debtors during the First Phase.

Unless otherwise ordered by the Court, upon the consent of the
Chief Restructuring Officers, the CRO Agreement will terminate on
the earlier of the effective date of a confirmed plan of
reorganization and July 1, 2009, and following termination, the
CROs will have no further obligations to the Debtors.

For a period of three years after the conclusion of the
engagement, neither HoganWebb nor the CROs will make any
investments in the Debtors.

                    About LandSource Communities

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

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

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

The Debtors' exclusive plan filing period expires on Oct. 6, 2008.
(LandSource Bankruptcy News, Issue No. 11;
http://bankrupt.com/newsstand/or 215/945-7000).


LANDSOURCE COMMUNITIES: May Employ Lazard as Financial Advisor
--------------------------------------------------------------
The Hon. Kevin J. Carey of the U.S. Bankruptcy Court for the
District of Delaware approved LandSource Communities Development
LLC, and its debtor-affiliates' application to employ Lazard
Freres & Co. LLC, as their financial advisor nunc pro tunc to
June 28, 2008.

Judge Carey ordered that Lazard's fees and expenses will be
subject to Court approval in accordance with the standard
provided in Section 328(a) of the Bankruptcy Code.

The Engagement Letter is modified to provide that:

  -- the monthly fee will be $150,000; and

  -- the schedule stating the fees for Sale Transactions will
     provide:

     $50 or lower          2.05%
            100.0          1.50%
          1,000.0          0.65%
          1,500.0          0.60%
          2,000.0          0.50%
          3,000.0          0.45%
          4,000.0          0.40%
          5,000.0          0.35%
          6,000.0          0.34%
          7,000.0          0.32%
          7,500.0          0.30%
          8,000.0          0.29%
          9,000.0          0.27%
         10,000.0          0.25%
         12,500.0          0.23%
         15,000.0          0.20%
   20,000 or more          0.17%

The United State Trustee for Region 3 and the Official Committee
of Unsecured Creditors will have the rights to object to the
Restructuring Fee, the Sale Transaction Fee and the Minority Sale
Transaction Fee based on the reasonableness standard provided for
in Section 330 of the Bankruptcy Code, but only with respect to
aggregate fees in excess of $7,000,000, provided, however, that
the number of hours expended by Lazard will not be the primary
determinant of the reasonableness.

The Court also approves the parties' Indemnification Letter.

                    About LandSource Communities

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

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

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

The Debtors' exclusive plan filing period expires on Oct. 6, 2008.
(LandSource Bankruptcy News, Issue No. 11;
http://bankrupt.com/newsstand/or 215/945-7000).


LANDSOURCE COMMUNITIES: Dandeau Clarifies Client Representations
----------------------------------------------------------------
Subsequent to the filing of Debra A. Dandeau, Esq.'s declaration
in support of the employment of Weil, Gotshal & Manges LLP, as
counsel for LandSource Communities Development LLC, and its
debtor-affiliates, it was brought to her attention that Weil
Gotshal has represented, and currently represents, Citigroup
Global Markets Realty Corp., individually as lender and as lead
arranger and administrative agent for itself and other lenders
from time to time, in connection with a loan made to MS Rialto
Residential Holdings, LLC, an entity wholly owned by MSR Holding
Company LLC, a joint venture whose owners include non-debtor
affiliates of Lennar Corporation.

Ms. Dandeau affirms that none of the Debtors is a direct or
indirect member of the JV.  According to Ms. Dandeau, Weil
Gotshal has been advised that one or more properties sold by
Newhall Land & Farming to Lennar was, in turn, transferred by
Lennar to the MS Rialto JV.

In accordance with the requirements of the MS Rialto Loan,
Newhall entered into a Subordination Agreement in favor of the MS
Rialto Administrative Agent.  Moreover, the MS Rialto JV may
assert that it has a claim against Newhall for post-closing
obligations arising under Newhall's agreements with Lennar.

Ms. Dandeau says that Weil Gotshal is adverse to the MS Rialto JV
and it does not believe a conflict exists in connection with its
ongoing representation of the MS Rialto Administrative Agent or
any of the Debtors.

Nevertheless, to avoid any appearance of impropriety, Weil
Gotshal will not represent any of the Debtors or the MS Rialto
Administrative Agent in connection with claims by or against the
MS Rialto JV or the MS Rialto Administrative Agent.  Weil Gotshal
will continue to represent the MS Rialto Administrative Agent in
connection with other matters relating to the MS Rialto Loan, and
it may represent the Debtors in connection with the properties
that were the subject of the Transfer.

In response to an inquiry by the U.S. Trustee for Region 3, Weil
Gotshal has determined that 1.3% of its annual revenues over the
past 12 months is represented by amounts paid to Weil Gotshal by
Merrill Lynch & Co., an entity that may be a lender to the
Debtors under the First Lien Credit Agreements or the Second Lien
Credit Agreements.

In a separate filing, Ms. Dandeau also disclosed that RBS Asset
Finance, and GE Capital Solutions, two of the parties-in-interest
in the Debtors' Chapter 11 cases, are current clients or an
affiliate of a current client of Weil Gotshal.  Ms. Dandeau
firmly avers that neither her, Weil Gotshal, nor any members of
the firm represents RBS, GE, or any of their affiliates in
connection with the Debtors' Chapter 11 cases.

Accordingly, Ms. Dandeau maintains that her firm does not hold or
represent an interest adverse to the Debtors' estates in matters
upon which Weil Gotshal has been employed, and it is
"disinterested" as the term is defined in Section 101(14) of the
Bankruptcy Code and as modified by Section 1107(b).

                    About LandSource Communities

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

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

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

The Debtors' exclusive plan filing period expires on Oct. 6, 2008.
(LandSource Bankruptcy News, Issue No. 11;
http://bankrupt.com/newsstand/or 215/945-7000).


LBI MEDIA: S&P Confirms 'B' Corporate Credit Rating
---------------------------------------------------
Standard & Poor's Rating Services revised its rating outlook on
Burbank, Calif.-based LBI Media Inc. to negative from stable.
Ratings on the company, including the 'B' corporate credit rating,
were affirmed.

"The outlook revision reflects our concern over the company's high
debt leverage and negative discretionary cash flow, in light of
the onset of cash interest payments on its 11% discount notes
starting April 15, 2009," said Standard & Poor's credit analyst
Michael Altberg.

The 'B' rating reflects LBI's high leverage, cash flow
concentration in a small number of large U.S. Hispanic markets,
intense competition for audiences and advertisers from much larger
rivals, and its acquisitive debt-financed growth strategy.  The
company's niche position as an operator of Spanish-language radio
and TV stations, its high EBITDA margin relative to peers, broadly
favorable Spanish-language advertising trends, and largely
resilient station asset values minimally offset these risks.

LBI is a Spanish-language radio and TV broadcaster that owns 22
radio stations and five television stations in Los Angeles
(including Riverside-San Bernardino) and San Diego, Calif; Houston
and Dallas-Fort Worth, Texas; and Salt Lake City, Utah.


LEHMAN BROTHERS: Among Nomura's Investment Options, WSJ Reports
---------------------------------------------------------------
The Wall Street Journal's Alison Tudor reports that Kenichi
Watanabe, president of Nomura Holdings Inc. from Japan, told
Yomiuri Shimbun that the company might use at least $1.87 billion
to invest in U.S. and European financial institutions.

The WSJ relates that Yomiuri said Lehman Brothers is "one of the
several candidates" for such investments.

According to Yomiuri, Nomura Holdings will evaluate next week
Lehman Brothers' June-August results due out before it decides
whether to execute the investment.

As reported in the Troubled Company Reporter on Sept. 4, 2008,
Korea Development Bank proposed to acquire a 25% stake in U.S.
investment bank Lehman Brothers.  Dow Jones reports that KDB was
prepared to pay at least $4.4 billion for the stake.  Associate
Press said KDB could offer as much as $5.3 billion.

Korea Development Bank was in talks to buy a stake in the
securities firm, Chief Executive Officer Min Euoo Sung said,
according to Bloomberg News.

According to Dow Jones, KDB proposed to ask for the right to
subsequently increase its stake in Lehman Brothers to 40% to 50%
and for the separation of Lehman's bad assets.  The segregation
will be done by creating a "bad bank" and write down as much as
possible on non-risk assets through due diligence before
investing, Dow Jones reports citing Chosun Ilbo.

Observers are advising KDB to bid with caution.  As reported by
the TCR on Aug. 28, 2008, analyst told the Wall Street Journal
that Lehman Brother may incur at least $2 billion in net loss and
more than $3 billion in write-downs in the present quarter that
would subject Richard Fuld Jr., chairman and chief executive
officer of Lehman Brothers, under pressure to improve the firm's
financial health by mid-September.

KDB could bid against one of the top three major U.S.-based hedge
funds, HSBC and a Chinese bank to acquire a stake in Lehman, the
report said.

Lehman has been struggling to keep up with the losses it had to
take in marking to market its mortgage assets, and is exploring
options to raise capital.

                       About Lehman Brothers

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


LENYIE NGBOGBARA: Case Summary & 20 Largest Unsecured Creditors
---------------------------------------------------------------
Debtors: Lenyie Ngbogbara
         Christiana M. Ngbogbara
         5593 Warrenshire Drive
         West Bloomfield, MI 48322

Bankruptcy Case No.: 08-61372

Chapter 11 Petition Date: September 3, 2008

Court: Eastern District of Michigan (Detroit)

Judge: Thomas J. Tucker

Debtor's Counsel: Debra Beth Pevos, Esq.
                  (dpevos@swappc.com)
                  25800 Northwestern Hwy. Suite 1000
                  Southfield, MI 48075
                  Tel: (248) 746-2842
                  Fax: (248) 746-2760

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

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

A list of the Debtor's 20 largest unsecured creditors is available
for free at http://bankrupt.com/misc/mieb08-61372.pdf


LEOSTEIN LLC: Voluntary Chapter 11 Case Summary
-----------------------------------------------
Debtor: Leostein, LLC
        211-33 Jamaica Avenue
        Queens Village, NY 11429

Bankruptcy Case No.: 08-45856

Related Information: Marjory DeBrosse, vice president, filed the
                     petition on the Debtor's behalf.

Chapter 11 Petition Date: September 4, 2008

Court: Eastern District of New York (Brooklyn)

Judge: Elizabeth S. Stong

Debtor's Counsel: John W Freeman, Esq.
                  111-36 Farmers Boulevard
                  Jamaica, NY 11412
                  (347) 581-4485
                  Fax : (917) 386-2569
                  spedlit625@aol.com

Estimated Assets: $1 million to $10 million

Estimated Debts: $1 million to $10 million

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


LINENS N THINGS: Lifetime Wants Assets & Debts Schedules Amended
----------------------------------------------------------------
Lifetime Brands, Inc., and its divisions ask the United States
Bankruptcy Court for the District of Delaware to compel Linens 'n
Things, Inc., and its debtor-affiliates to amend their schedules
of assets and liablities pursuant to Rule 1009(a) of the Federal
Rules of Bankruptcy Procedure. Lifetime Brands relates that
certain of its claims were scheduled on Schedule F of LNT
Merchandising Company' schedules of assets and liabilities in the
total amount of $4,184,316.

Prior to the Petition Date, Lifetime Brands entered into a vendor
agreement with LNT Merchandising and its affiliates, including
Linens 'n Things, Inc. In connection with the Vendor Agreement,
Lifetime Brands and Credit Suisse entered into a Master Claims
Purchase Agreement and Letter Agreement.

On June 24, 2008, Lifetime Brands filed a general unsecured proof
of claim -- Claim No. 520 -- against Linens 'n Things, Inc., for
$4,036,166. Lifetime Brands subsequently filed an amended proof of
claim -- Claim No. 597 -- to clarify that its claim is against
Linens 'n Things.

In accordance with the Master Agreement, Lifetime Brands entered
into and executed an Assignment of Claim Agreement on August 11,
2008, and sold its claim to Credit Suisse.

Ronald S. Gellert, Esq., at Eckert Seamans Cherin & Mellott, LLC,
in Wilmington, Delaware, contends that the Debtors should be
required to amend their schedules, so that the claim listed on LNT
Merchandising's Schedule F is also listed on Linens 'n Things'
Schedule F.

Mr. Gellert contends that Lifetime Brands "is clearly a party-in-
interest" because it is one of the Debtors' vendors, and they have
recognized that it is a creditor with a valid claim.

However, he says, for unknown reasons, the Debtors scheduled its
claim on LNT Merchandising's schedules and not on Linens 'n
Things'.

It is important to Lifetime Brands that its claim against Linens
'n Things be properly scheduled, Mr. Gellers asserts. He informs
the Court that Credit Suisse will only perform under the Master
and Letter Agreements if Lifetime Brands can demonstrate that the
claim is against Linens 'n Things. He adds that Lifetime Brands
cannot afford to wait for the claims process to bear itself out,
which could take years.

Clifton, New Jersey-based Linens 'n Things, Inc. --
http://www.lnt.com/-- is the second largest specialty retailer of  
home textiles, housewares and home accessories in North America
operating 589 stores in 47 U.S. states and seven Canadian
provinces as of Dec. 29, 2007. The company is a destination
retailer, offering one of the broadest and deepest selections of
high quality brand-name as well as private label home furnishings
merchandise in the industry. Linens 'n Things has some 585
superstores (33,000 sq. ft. and larger), emphasizing low-priced,
brand-name merchandise, in more than 45 states and about seven
Canadian provinces. Brands include Braun, Krups, Calphalon, Laura
Ashley, Croscill, Waverly, and the company's own label. Linens 'n
Things was acquired by private equity firm Apollo Management in
2006.

On May 2, 2008, these Linens entities filed chapter 11 petition
(Bankr. D. Del.): Linens Holding Co. (08-10832), Linens 'n Things,
Inc. (08-10833), Linens 'n Things Center, Inc. (08-10834),
Bloomington, MN., L.T., Inc. (08-10835), Vendor Finance, LLC (08-
10836), LNT, Inc. (08-10837), LNT Services, Inc. (08-10838), LNT
Leasing II, LLC (08-10839), LNT West, Inc. (08-10840), LNT
Virginia LLC (08-10841), LNT Merchandising Company LLC (08-10842),
LNT Leasing III, LLC (08-10843), and Citadel LNT, LLC (08-10844).
Judge Christopher S. Sontchi presides over the case.

Mark D. Collins, Esq., John H. Knight, Esq., and Jason M. Madron,
Esq., at Richards, Layton & Finger, P.A., provide Linens 'n Things
with bankruptcy counsel.  The Debtors' special corporate counsel
are Holland N. O'Neil, Esq., Ronald M. Gaswirth, Esq., Stephen A.
McCaretin, Esq., Randall G. Ray, Esq., and Michael S. Haynes,
Esq., at Morgan, Lewis & Bockius, LLP. The Debtors' restructuring
management services provider is Conway Del Genio Gries & Co., LLC.
The Debtors' CRO and Interim CEO is Michael F. Gries, co-founder
of Conways Del Genio Gries & Co., LLC. The Debtors' claims agent
is Kurtzman Carson Consultants, LLC. The Debtors' consultants are
Asset Disposition Advisors, LLC, and Protivit, Inc. The Debtors'
investment bankers are Financo, Inc., and Genuity Capital Markets.  
(Bankruptcy News About Linens 'n Things; Bankruptcy Creditors'
Service Inc., http://bankrupt.com/newsstand/or 215/945-7000)  


LOLA CANNON: Case Summary & 9 Largest Unsecured Creditors
---------------------------------------------------------
Debtor: Lola R. Cannon
        950 Cranbrook Glen Lane
        Snellville, GA 30078

Bankruptcy Case No.: 08-77505

Type of Business: The Debtor operates a turn key business.

Chapter 11 Petition Date: September 3, 2008

Court: Northern District of Georgia (Atlanta)

Debtor's Counsel: Dorna Jenkins Taylor, Esq.
                  (dorna.taylor@taylorattorneys.com)
                  Taylor & Associates, LLC
                  1401 Peachtree Street, Suite 500
                  Atlanta, GA 30309
                  Tel: (404) 870-3560
                  Fax: (404) 745-0136

Total Assets: $914,900

Total Liabilities: $1,072,276

A copy of the Debtor's petition, which includes a list of its 9
largest creditors, is available for free at:

         http://bankrupt.com/misc/ganb08-77505.pdf


LUMINENT MORTGAGE: Files for Bankruptcy, Inks Plan Support Pact
---------------------------------------------------------------
Luminent Mortgage Capital, Inc. and its wholly-owned subsidiaries
on September 5, 2008, filed for relief under Chapter 11 of the U.S
Bankruptcy Code in the United States Bankruptcy Court for the
District of Maryland, Baltimore Division.  Immediately prior to
the filing, the Companies executed a Plan Support and Forbearance
Agreement with its secured creditor, Arco Capital Corporation,
Ltd., WAMU Capital Corp. and convertible noteholders representing
100% of the outstanding principal amount of its convertible notes.

Under the Agreement, each of the parties has agreed to vote in
favor of a Chapter 11 plan of reorganization for the Companies
containing terms specified in the Agreement.  The Plan is required
to provide for the cancellation of all outstanding common and
preferred shares in the Companies, the cancellation of all
subordinated debt instruments, and for the distribution to allowed
unsubordinated general unsecured creditors (including the
Companies' convertible noteholders, but excluding Arco and its
affiliates) of 41% of the common stock of the reorganized
Companies and $2.75 million.  The Agreement contemplates that the
Companies will fund the cash portion of the distribution to
unsubordinated general unsecured creditors by issuing preferred
stock to Arco or its designees. The Agreement also commits Arco to
provide, subject to terms and conditions, including adherence to
an operating budget, the Company with up to $3.2 million in
debtor-in-possession financing and up to $2.8 million in post-
confirmation financing.

The Company does not expect any value to be available to the
existing common stock holders or subordinated creditors and it
does not expect them to share in the ownership of the newly
reorganized company.

On June 24, 2008, Luminent said it was faced with the necessity to
restructure and recapitalize its balance sheet to ensure its
ability to continue to operate.  On July 1, 2008, the company
suspended all payments to unsecured creditors while it analyzed
restructuring options. The company has been unable to file its
Form 10-Q for the period ended June 30, 2008, with the Securities
and Exchange Commission within the prescribed time period.  
Luminent said its Form 10-Q quarterly report for the three and six
months ended June 30, 2008, will report a significant change from
its report as of June 30, 2007, due to its sale of assets to repay
debt since June 30, 2007.

Luminent was obligated on June 16, 2008, to make a quarterly
interest payment of approximately $700,000 applicable to $41.2
million of Luminent's junior subordinated notes dated December 15,
2005.  Luminent did not make the payment and a payment default
under the indenture occurred.  Luminent was unable to meet the
obligation before July 16, 2008, the expiration of the 30-day
grace period to cure the payment default. On August 15, 2008,
Luminent received a demand letter for payment from the junior
subordinated notes indenture trustee declaring the notes to be
immediately due and payable in an amount of approximately $41.2
million plus accrued interest of approximately $1.2 million.

On July 11, 2008, a repurchase agreement lender that is an
affiliate of Arco, declared an event of default to have occurred
in respect of alleged failures by Luminent and its affiliates to
deliver additional purchased securities or cash necessary to
fulfill its obligations under a master repurchase agreement.  This
event of default declared under the master repurchase agreement
caused a default to occur under the indenture relating to $90
million of Luminent's 8.125% Convertible Senior Notes due 2027, in
respect of which those notes may be declared to be immediately due
and payable. Due to defaults on convertible notes Luminent is
contractually prohibited from making principal and interest
payments on $92.8 million of outstanding junior subordinated
notes.

"The decision to file for Chapter 11 bankruptcy relief was made by
the board of directors only after careful consideration of the
alternatives available to the Company," said Zachary H Pashel,
President and Chief Executive Officer. "The dramatic disruptions
in the mortgage industry resulted in significant declines in the
value of the Company's mortgage assets. Although we made progress,
we do not have sufficient cash flow to satisfy the Company's
legacy liabilities. The Plan Support and Forbearance Agreement
represents the most equitable arrangements possible under the
circumstances and provides for some recovery for the majority of
our creditors. In addition, the Agreement provides for financing
that we expect to be sufficient both to complete the Chapter 11
process and to provide a runway for the implementation of the
Companies' post-confirmation business plan."

Peter S. Partee, Sr. of Hunton & Williams LLP's New York office
serves as lead restructuring counsel to the Companies in
connection with their Chapter 11 cases.

                     About Luminent Mortgage

Luminent Mortgage Capital, Inc. (OTCBB: LUMCE) is a real estate
investment trust, or REIT, which, together with its subsidiaries,
has historically invested in two core mortgage investment
strategies. Under its Residential Mortgage Credit strategy, the
Company invests in mortgage loans purchased from selected high-
quality providers within certain established criteria as well as
subordinated mortgage-backed securities and other asset-backed
securities that have credit ratings below AAA.  Under its Spread
strategy, the Company invests primarily in U.S. agency and other
highly-rated single-family, adjustable-rate and hybrid adjustable-
rate mortgage-backed securities.

Luminent reported $3,757,205,000 in total assets, $3,980,269,000
in total debts, resulting in $223,212,000 in stockholders' deficit
as of March 31, 2008.

Bloomberg News reports that Luminent listed debts of $484.1
million and assets of $13.4 million as of July 31, 2008.  Nine
affiliates also filed for bankruptcy.  Bloomberg adds that 30
largest unsecured creditors are owed a total of $221.8 million.  
Wells Fargo & Co., indenture trustee for Luminent's 8-1/8% bonds
due in 2027, is listed as the largest unsecured creditor. The
principal amount owed under the bonds is $90 million, Bloomberg
says.

Luminent and its debtor-subsidiaries continue to operate their
business as debtors-in-possession under the jurisdiction of the
Bankruptcy Court and in accordance with the applicable provisions
of the Bankruptcy Code and orders of the Bankruptcy Court.


LUMINENT MORTGAGE: Voluntary Chapter 11 Case Summary
----------------------------------------------------
Debtor: Luminent Mortgage Capital Inc.
        1515 Market Street, Suite 2000
        Philadelphia, PA 19102

Bankruptcy Case No.: 08-21389

Debtor-affiliates filing separate Chapter 11 petitions:

      Entity                                   Case No.
      ------                                   --------
   Luminent Capital Management Inc.               08-21390
   Maia Mortgage Finance Statutory Trust          08-21391
   Mercury Mortgage Finance Statutory Trust       08-21392
   Minerva CDO Delaware SPV LLC                   08-21393
   Minerva Mortgage Finance Corporation           08-21394
   OT Realty Trust                                08-21395
   Pantheon Holding Company Inc.                  08-21396
   Proserpine LLC                                 08-21397
   Saturn Portfolio Management Inc.               08-21398

Chapter 11 Petition Date: September 5, 2008

Court: District of Maryland (Baltimore)

Judge: Duncan W. Keir

Debtor's Counsel: Joel I. Sher, Esq.
                  bankruptcy@shapirosher.com
                  Shapiro Sher Guinot & Sandler
                  Suite 2000, 36 S. Charles Street
                  Baltimore, MD 21201
                  Tel: (410) 385-0202
                  Fax: (410) 539-7611
                  
Estimated Assets: $10 million to $50 million

Estimated Debts: $100 million to 500 million

Luminent Mortgage Capital reported $3,757,205,000 in total assets,
$3,980,269,000 in total debts, resulting in $223,212,000 in
stockholders' deficit as of March 31, 2008.

Bloomberg News reports that Luminent listed debts of
$484.1 million and assets of $13.4 million as of July 31, 2008.  
Nine affiliates also filed for bankruptcy.  Bloomberg adds that 30
largest unsecured creditors are owed a total of $221.8 million.  
Wells Fargo & Co., indenture trustee for Luminent's 8-1/8% bonds
due in 2027, is listed as the largest unsecured creditor. The
principal amount owed under the bonds is $90 million, Bloomberg
says.


LYNNKOHN LLC: Legacy National Objects to Employment of Counsel
--------------------------------------------------------------
Legacy National Bank's legal counsel objected to Lynnkohn LLC's
motion to employ Vaughn K. Knight, Esq., as attorney in the
company's ongoing bankruptcy case, The Morning News reported
Wednesday.

Mr. Knight represents Lynnkohn LLC, including Brandon Barber,
Kerri Barber, Seth and Laura Kaffka, in other pending litigations
filed in Washington County Circuit Court against Legacy National
Bank.

Brandon Barber is the sole owner of Lynnkohn LLC, which filed for
Chapter 11 reorganization to halt Legacy National Bank's
foreclosure of the Legacy Building, the Debtor's high-end
condominium development in downtown Fayetteville.

According to the report, Legacy Bank holds two mortgages on the
building totaling $18.7 million.  Legacy National is represented
by Mitchell, Williams, Selig, Gates & Woodyard of Little Rock in
Lynnkohn's bankruptcy case.  Marshall Ney, Esq. represents the
bank in other pending litigation against Brandon Barber and
Lynnkohn.

Legacy National claims that Mr. Knight does not meet the Court's
definition of a disinterested party, as he is seeking to represent
both the Debtor in the Bankruptcy Court as well as Mr. Barber's
other pending cases.

The Hon. Ben T. Barry of the U.S. Bankruptcy Court for the Western
District of Arkansas has set a Sept. 26, 2008 hearing to discuss
the concerns raised by both sides, including a dismissal motion
made by Legacy National's counsel and Lynnkohn's motion for an
exclusive right to sell.

                       About Lynnkohn, LLC

Based in Fayetteville, Arkansas, Lynnkohn, LLC develops real
estate in northwest Arkansas.  The company filed for Chapter 11
bankruptcy petition on August 20, 2008 (Bankr. W.D. Ark. Case No.
08-73301).  K. Vaughn Knight, Esq., at Knight Law Firm, PLC,
represents the Debtor in its restructuring efforts.  When the
company filed for bankruptcy, it listed $35,365,102 in total
assets and $31,618,598 in total debts.


MACKLOWE PROPERTIES: Deutsche To Foreclosure $510 Million Loan
--------------------------------------------------------------
The Wall Street Journal's Alex Frangos reports that a group of
lenders led by Deutsche Bank AG filed request to foreclose
the real estate of Macklowe Properties Inc. before the New York
Supreme Court.

The foreclosure targets on a $510 million loan that MacKlowe
Properties obtained to construct on the Drake Hotel's site
located in Park Avenue, the WSJ says.  Macklowe Properties was
in default on the loan since November 2007, but the lenders
gave an extension while the company searched for an new equity
partner to share the risk and expenses, report adds.

The WSJ relates that it is unclear why Deutsche Bank initiated
a foreclosure on Macklowe Properties' assets.

Macklowe Properties gave up, other than the General Motors
Building, seven Manhattan skycrappers worth $7 billion to Deutche
Bank earlier this year, the WSJ says.  The bank is the process of
selling the skyscrappers, the report notes.

As previously reported in the Troubled Company Reporter, the GM
building and other assets were sold to Boston Properties Limited
Partnership for $3.9 billion.

Macklowe Properties bought Drake Hotel for $418 million in 2006,
the WSJ says.

                     About Macklowe Properties

Headquartered in New York City, Macklowe Properties --
http://www.macklowe.com/-- is a real estate investment firm that   
buys, develops, manages, and leases commercial office properties
and apartment buildings primarily in Manhattan.  The company was
founded in the mid-1960s by chairman and CEO Harry B. Macklowe,
whose son, William Macklowe, serves as the company's president.  
The company currently owns about 12,000,000 square feet of office
space and 900 apartment units.

                    Lenders Waive Loan Default

As reported in the Troubled Company Reporter on May 5, 2008,  
A spokesperson for Macklowe Properties founder stated Feb. 15,
2008, that Mr. Macklowe obtained a waiver extending the maturity
of his billions of dollars in debts owed to two major lenders,
Deutsche Bank AG and Fortress.

As previously reported by the TCR, Mr. Macklowe owes Deutsche Bank
about $5,800,000,000, and Fortress about $1,200,000,000, plus
accrued interest.  Both of the debts, secured by Mr. Macklowe's
$7,000,000,000 real property in Manhattan, originally matured
Feb. 9, 2008.


MARLIN HUKILL: Case Summary & 6 Largest Unsecured Creditors
-----------------------------------------------------------
Debtor: Marlin Eugene Hukill
        dba Hukill Investments
        P.O. Box 466
        Seymour, IN 47274
        
Bankruptcy Case No.: 08-92422

Type of Business: The Debtor operates a auto lubricant business.

Chapter 11 Petition Date: September 3, 2008

Court: Southern District of Indiana (New Albany)

Judge: Basil H. Lorch III

Debtor's Counsel: Gary Lynn Hostetler, Esq.
                  (glh@hostetler-kowalik.com)
                  Hostetler & Kowalik, P.C.
                  101 W Ohio St Ste 2100
                  Indianapolis, IN 46204
                  Tel: (317) 262-1001
                  Fax: (317) 262-1010

Total Assets: $3,800,310

Total Liabilities: $3,149,453

A copy of the Debtor's petition, which includes a list of its 6
largest unsecured creditors, is available for free at:

          http://bankrupt.com/misc/insb08-92422.pdf


MILA INC: Ch. 11 Trustee Seeks $16MM In Damages from Former CEO
---------------------------------------------------------------
The Chapter 11 trustee of MILA Inc., dba as Mortgage Investments
Lending Associates, Inc., is asking for $16 million in damages
against the Debtor's former chief executive officer Layne Sapp,
who allegedly looted the mortgage lending company before it closed
in April 2007, Kirsten Grind of the Puget Sound Business Journal
in Seattle, Washington, reports.

According to the report, the complaint claims that Mr. Sapp, who
held a 90% equity stake in the company, received a total of
$8.5 million in dividends in 2004 and 2005.  The company, despite
being insolvent, paid stockholders cash dividends of $3.2 million
in 2005.  In addition, Mr. Sapp charged millions of dollars of
personal expenses to the company.

The complaint suggests that, in 2005, Mr. Sapp received $11.5
million in wages, regardless of lack of funding from investors,
Ms. Grind notes.  Mr. Sapp also made poor management decisions
without the approval of unbiased directors or shareholders that
led to pay out of milions of dollars to other companies.

The paper reports that the lawsuit, which was filed in the U.S.
Bankruptcy Court for the Western District of Washington, is
seeking a jury trial, and also names Mr. Sapp's wife and six
limited liability companies affiliated with the Sapps as co-
defendants.

Mr. Sapp has denied all of the allegations against him.

Based in Mountlake Terrace, Washington, M.I.L.A. Inc., dba
Mortgage Investment Lending Associates, Inc. --
http://www.mila.com/-- is an e-commerce mortgage solutions  
provider who utilizes AccessPoint, a proprietary e-commerce
portal, to help mortgage brokers, realtors and bankers fulfill
customized residential home loans.  The company filed for Chapter
11 protection on July 2, 2007 (Bankr. W.D. Wash. Case No. 07-
13059).  Christine M. Tobin, Esq. and James L. Day, Esq., at Bush,
Strout, & Kornfeld, represent the Debtor in its restructuring
efforts.

The Court appointed Geoffrey Groshong as chapter 11 trustee on
July 6, 2007.  Mr. Groshong is represented by David W. Hercher,
Esq., at Miller Nash LLP.

When the Debtor filed for protection from its creditors, it listed
total assets of $7,886,962, and total liabilities of $174,730,413.  


MERVYN'S LLC: Sues Ex-Owners for Fraudulent Deal Causing Demise
---------------------------------------------------------------
Mervyn's LLC has sued 38 entities for alleged fraudulent
transactions in 2004, which purportedly led to its Chapter 11
filing.

The 38 entities named in the complaint are:

   * KLA/Mervyn's LLC; Cerberus Mervyn's Investors, LLC; SCSF
     Mervyn's (US), LLC; and SCSF Mervyn's (Offshore), Inc., as
     the Private Equity Sponsors -- "PE Sponsors," which
     organized Mervyn's Holdings, LLC, a Delaware limited
     liability company for the purpose of acquiring Mervyn's.

   * Lubert-Adler Real Estate Fund IV, LP; Lubert-Adler Real
     Estate Parallel Fund IV, LP; Lubert-Adler Capital Real
     Estate Fund IV, LP; Acadia Mervyn's Investor I, LLC; Acadia
     Mervyn's Investor II, LLC; Mervyn's Klaff Equity, LLC;
     Mervyu's Opportunities, LLC; Lubert-Adler and Klaff
     Partners, LP; Cerberus Partners, LP; Gabriel Capital, LP;
     Cerberus Capital Management, LP; Cerberus Associates, LLC;
     Sun Capital Securities Offshore Fund, Ltd.; Sun Capital
     Securities Fund, LP; and Sun Capital Partners, Inc., as the
     "PE Owners."

   * MDS Realty Holdings I, LLC; MDS Realty Holdings II, LLC; MDS
     Realty I, LLC; MDS Realty II, LLC; MDS Realty III, LLC;
     MDS Realty IV, LLC; MDS Texas Realty I, LP; MDS Texas
     Realty II, LP; MDS Texas Realty I, LLC; MDS Texas Realty II,
     LLC; MDS Texas Properties I, LLC; and MDS Texas Properties
     II, LLC as the "MDS Companies."

   * Greenwich Capital Financial Products, Inc.; Archon
     Financial, LP; Goldman Sachs Mortgage Company; and LaSalle
     Bank National Association as the "Real Estate Secured
     Lenders."

   * The Target Corporation, the corporation which sold Mervyn's
     to Mervyn's Holdings -- MH -- the acquisition vehicle owned
     by the PE Sponsors and controlled by the PE Owners, in the
     2004 transaction and which had knowledge of, participated in,
     or acquiesced in all of the arrangements comprising the
     transaction.

   * Ableco Finance LLC and Madeleine LLC, affiliates of
     Cerberus, and potential lenders for the 2004 transaction.

                     The 2004 Transaction

In 2004, Target decided to sell Mervyn's, says Neil B. Glassman,
Esq., at Bayard, P.A., in Wilmington, Delaware.  Target engaged
Goldman Sachs as its investment banker, prepared a confidential
offering memorandum, and eventually accepted a bid from affiliates
of Sun Capital, Cerberus, and Lubert-Adler and Klaff Partners.

On August 27, 2004, Target converted Mervyn's from a corporation
into a California limited liability company in conjunction with
the transaction between Target and MH.

Mr. Glassman notes that the PE Sponsors, through MH, purchased
Mervyn's from Target pursuant to a plan they conceived for a
series of simultaneous, integrated transactions that, as a matter
of economic substance, were similar to a leveraged buyout.  In a
traditional LBO structure, Mervyn's would have retained its assets
and incurred the debt normally associated with a leveraged
transaction, and Mervyn's also would have retained, for its own
benefit, the residual value of its assets in excess of the debt
placed against those assets.  In addition, those assets would have
remained with Mervyn's following repayment of the debt.  

Here, however, Mr. Glassman says, while the financing did not
directly result in debt being placed on Mervyn's, its real estate
assets and the residual value of those assets were stripped away
from Mervyn's and Mervyn's incurred substantial additional
obligations in order to pay the substantial debt that was incurred
to finance the transaction.  After repayment of the debt, the
assets will not be returned to Mervyn's.  Those assets are gone,
he notes.

Moreover, under the Equity purchase agreement with Target, MH
acquired all of the outstanding equity securities of Mervyn's from
Target. The purchase price paid by MH to Target for securities was
$1,175,000,000 in cash, subject to adjustments.  Of the $1,263,853
distributed at the closing of the EPA, $1,175,230,000 was paid to
Target and only $8,300,000 was allocated to Mervyn's despite
losing all of its real estate assets.

Mr. Glassman further notes that to effect the complete separation
of Mervyn's valuable real estate assets from Mervyn's, the PE
Sponsors formed the MDS Companies -- bankruptcy remote entities
specially created by the PE Sponsors for delivery of Mervyn's real
estate assets -- and, at the closing of the 2004 transaction,
caused Mervyn's to transfer virtually all of its real estate
assets -- leasehold interests and fee interests -- to the newly-
formed MDS Companies.  

The MDS Companies, in concurrent and related transactions,
encumbered those transferred assets in exchange for loans made by
the Real Estate Secured Lenders to the MDS Companies.  All or
substantially all of the loan proceeds were paid over to Target.  
None of the loan proceeds were paid or delivered to Mervyn's or
used for its benefit, Mr. Glassman explains.  The remaining real
estate assets, consisting of certain leases that were not
assignable stayed with Mervyn's.

As a consequence of the interrelated transfers that were
implemented at the closing of the 2004 transaction by and for the
benefit of the PE Sponsors, all of Mervyn's retail store locations
were made subject to three unitary leases that were created in the
2004 transaction.  The Unitary Leases were created by the transfer
of all of Mervyn's real estate assets from Mervyn's to the MDS
Companies, the simultaneous bundling of those assets together into
the Unitary Leases, and the leasing of the right to occupy those
same premises back to Mervyn's.

As a result to the increased rent burden imposed upon Mervyn's by
reason of the mark-ups embedded in the Unitary Leases and the
national rent payments with respect to the leases, Mervyn's has
aggregate annual rent expense in excess of $172,000,000, which far
exceeds what its annual occupancy expenses would have been had its
real estate assets not been transferred, bundled and leased back
to it at higher rates.

                        Negative Effects

According to Mr. Glassman, Mervyn's was disadvantaged in that:

   * it was stripped of valuable real estate assets.

   * store occupancy costs were increased for no reason other
     than to support the debt heaped onto the MDS Companies and
     to line the pockets of the owners of the MDS Companies --
     the PE Sponsors -- who were also the ultimate owners of
     Mervyn's.

   * because there was excess value in the real estate assets
     above the debt owed to the Real Estate Secured Lenders, by
     physically stripping the real estate assets out of Mervyn's,
     the excess value was no longer part of Mervyn's capital and
     was not available to Mervyn's or its creditors.

   * with respect to the Unitary Leases, improper distributions
     under the guise of rent mark-ups were required by the PE
     Sponsors to be made by Mervyn's to MH for the benefit of the
     PE Sponsors each month to enable the MDS Companies to meet
     debt service and to make distributions to the owners of the
     MDS Companies.

   * with respect to the Restricted Leases, improper
     distributions in the form of notional rent were required by
     the PE Sponsors to be made by Mervyn's to MH for the benefit
     of the PE Sponsors each month for delivery to the MDS
     Companies to enable the MDS Companies to meet debt service.

Through their control of MH, the PE Sponsors used Mervyn's most
valuable assets -- its real estate leases, many of which were
below market due, in part, to Mervyn's status as an anchor tenant
and due, in part, to the age of the leases, and its valuable owned
real estate -- to borrow $800,000,000 of the Purchase Price from
the Real Estate Secured Lenders, Mr. Glassman asserts.

Rather than simply maintaining Mervyn's retail operations and the
integrated real estate assets at which the retail stores were
operated intact within Mervyn's and leveraging the real estate
assets as would have been done under a traditional LBO
transaction, instead, the PE Sponsors insisted upon physically
separating the real estate assets from Mervyn's at the moment of
the closing of the EPA thereby converting Mervyn's from a retailer
with valuable below market leases and valuable owned real estate
into a shrunken operating company whose remaining capital
consisted largely of inventory, cash, credit card receipts, and
intellectual property.

For these reasons, Mervyn's asks the Court to award it:

   (a) judgment against:

       -- the MDS Companies, PE Sponsors, PE Owners and Target,
          avoiding Mervyn's transfer of its real estate assets to
          the MDS Companies, or, alternatively, award it
          judgment against these parties, jointly and severally,
          for the value of the real estate assets transferred by
          Mervyn's in an amount to be determined at trial, or,
          alternatively, as to Target, award it an amount equal
          to $1,175,000,000 or the proceeds of the loans made by
          the Real Estate Secured Lenders that were borrowed
          using Mervyn's real estate assets as collateral;

       -- the Real Estate Secured Lenders avoiding the transfer
          to those Lenders of liens on Mervyn's real property
          assets, or, alternatively, award it judgment against
          the Real Estate Secured Lenders, the MDS Companies, the
          PE Sponsors, the PE Owners and Target, jointly and
          severally, for the value of those liens in an amount to
          be determined at trial;

       -- the PE Sponsors and PE Owners, avoiding the transfer of
          fees and other expenses paid to, or for the benefit of,
          those defendants in connection with the 2004 buyout of
          Mervyn's and related transactions, or, alternatively,
          award it judgment against these parties, jointly and
          severally, for the value of the fees and other expenses
          in an amount to be determined at trial;

       -- the PE Sponsors and PE Owners, avoiding the transfer
          of "notional rent" and other dividend payments paid to,
          or for the benefit of, those defendants to the extent
          those payments were fraudulent as to unsecured
          creditors, or, alternatively, award it judgment
          against the PE Sponsors and PE Owners, jointly and
          severally, for the value of the payments.

       -- Target, the PE Sponsors and the PE Owners for damages
          in amounts to be determined at trial; and

   (b) interest, costs, and its attorney's fees.

The 2004 transaction led to Mervyn's bankruptcy and is a
fraudulent transfer that cannot withstand scrutiny, Mr. Glassman
avers.

                        Vivid Imagination

Chicago Tribune's Becky Yerak relates that Hersch Klaff of Klaff
Realty commented that "[f]iling a suit of this nature requires a
pretty vivid imagination and a lawyer who is having a quiet week."

According to Ms. Yerak, the lawsuit comes as Mr. Klaff heads one
of five groups picked to continue in a second round of bidding for
Tribune Co.'s Cubs and related properties, including Wrigley
Field. Tribune Co. also owns the Chicago Tribune.

Ms. Yerak says Lubert-Adler, a private-equity firm focusing on
real estate, declined to comment. Both Sun and Cerberus said the
suit was without merit, the report adds.

Ms. Yerak also notes that Target "emphatically disagrees" with the
lawsuit's claims.  "Our 2004 sale of Mervyn's was an arm's-length
transaction that was the result of a competitive bidding process,"
a spokeswoman said, Ms. Yerak relates.

                          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 company and its 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.


MT. LAUREL: U.S. Trustee's Dismissal Plea Hearing Set for Sept. 24
------------------------------------------------------------------
A hearing on request of U.S. Trustee Peter C. Anderson for the
dismissal of Mt. Laurel Investments Inc.'s Chapter 11 case or its
conversion to a Chapter 7 proceeding is set for Sept. 24, 2008, at
2:30 p.m. in Courtroom 302 at 3420 Twelfth Street in Riverside,
California.

The U.S. Trustee's counsel, Timothy Farris, Esq., establishes
cause for the motion, indicating that the Debtor has failed to
comply with reporting requirements of the United States Trustee
and the Local Bankruptcy Rules by failing to provide documents and
financial reports.

Mr. Farris also declares that there is no reasonable possibility
of the Debtor's effective reorganization.  He adds that the Debtor
is unable to effectuate a plan, delaying the proceedings, which
prejudices the rights of the creditors.

Based in Palm Springs, California, Mt. Laurel Investments LP and
211 Investments LP filed for Chapter 11 bankruptcy protection on
June 2, 2008 (C.D. Calif. Lead Case No. 08-16491).  William G.
Barrett, Esq., represents the Debtors as counsel.  When the
Debtors filed for restructuring under Chapter 11, they listed
assets between $10 million to $50 million and debts between $10
million to $50 million.


NALCO CO: S&P Upgrades Corporate Credit Rating to 'BB'
------------------------------------------------------
Standard & Poor's Ratings Services raised its corporate credit
rating on Naperville, Ill.-based Nalco Co. to 'BB-' from 'B+'.  
The outlook is stable.  The upgrade reflects prospects for steady
earnings and solid free cash generation and financial policies
that support Nalco maintaining appropriate credit measures, with
funds from operations (FFO) as a percent of total adjusted debt
close to 15% on average.   

The rating on Nalco, a subsidiary of Nalco Holding Co., reflects
aggressive debt leverage and challenging industry conditions in
the mature paper chemicals business, especially in Western Europe.

"Partially offsetting these weaknesses are Nalco's strong
competitive position in water treatment and process chemicals,
respectable operating margins, and its ability to generate
meaningful discretionary cash flows, which have been used in a
balanced fashion to support growth and shareholder distributions,"
said Standard & Poor's credit analyst Liley Mehta.

The rating incorporates Nalco's position as a global leader in
providing raw water and wastewater treatment, process improvement
services, and chemicals and equipment programs for offerings that
are technology- and service-intensive.  Nalco's well-established,
defensible business position underpins a solid track record of
operating profitability.

Even when key end markets experience cyclical downturns,
results exhibit a meaningful degree of stability, indicating the
resilience of this specialty chemicals and service business.  The
industrial and institutional business is solid, and Nalco's
energy services customers are experiencing strong industry
conditions.

However, overall revenue and earnings prospects are tempered by
difficult operating conditions in the paper services segment,
especially in Europe.  The company also benefits from good
customer diversity, with the largest customer representing 3% of
sales.

The outlook is stable.  Ongoing cost-saving projects, the energy
services business operating at a high rate, and organic growth in
industrial and institutional services, especially in international
markets, enhance Nalco's proven cash-generating capability.

"We expect the company to limit share repurchases and acquisitions
to maintain credit measures at appropriate levels, with the key
funds from operations to total adjusted debt at around 15%, and
consistent free cash flow generation," S&P said.  "The company's
significant debt load limits upside rating potential.  While not
expected at this time, we could lower the ratings if the ratio of
FFO to total debt deteriorated to 10% without clear prospects for
recovery," S&P related.


NAVISTAR INT'L: Earns $272MM Net Income for Qtr Ended July 2008
---------------------------------------------------------------
Navistar International Corporation reported $272 million net
income for the three months ended July 31, 2008, on sales and
revenues of $3.8 billion.

As of July 31, 2008, Navistar $11.5 billion in total assets, $11.7
billion in total liabilities and $228 million in shareholders'
deficit.

In July 2008, Navistar announced a share repurchase program as
authorized by its Board of Directors to acquire up to $36 million
of its common stock. This repurchase program expires in July 2009.
As of July 31, 2008, the company has not repurchased any of its
common stock under the program.

In the third quarter of 2008, certain current and former employees
of the company exercised 1,289,302 stock options. As a result of
these exercises, Navistar received proceeds of $26 million,
retained 357,226 shares as settlements in lieu of cash, and issued
932,076 shares of treasury stock.  As of July 31, 2008,
Stockholders' deficit decreased by $21 million, due to the
exercise of these options.

Navistar experienced a decline in unit volumes in both the Truck
and Engine segments during the nine month period ended July 31,
2008, compared to the same period in 2007 despite an increase in
unit volumes within the Truck segment for the third quarter of
2008, primarily due to growth in U.S. military units.

During the third quarter of 2008, to match Ford's production
schedules, the Engine segment's Indianapolis plant laid off over
400 employees. A prolonged reduction in Ford's demand for Navistar
engines or the early termination or non-renewal of the company's
agreement with Ford could have a material impact on its financial
position, results of operations, or cash flows.

During the quarter ended July 31, 2008, the "traditional" truck
retail industry, as well as the heavy duty pickup market, remained
depressed, which is reflected in the 62,700 retail units sold
during this period compared to 63,300 units sold in the third
quarter of 2007. Total "traditional" truck industry units sold
during the nine month period ended July 31, 2008, amounted to
181,000 compared to 255,300 units for the same nine month period
in 2007. The depressed sales in the retail truck industry and
heavy duty diesel pick-up truck market decreased Navistar's total
engine volumes in the third quarter of 2008 but were partially
offset by volume growth with OEMs other than Ford.

Despite the continuation of the downturn experienced throughout
the "traditional" truck markets during the third quarter of 2008,
Navistar attained consolidated net sales and revenues for the
quarter and the nine month period ended July 31, 2008, of $4.0
billion and $10.9 billion, respectively.

Navistar disclosed that Navistar Financial Corp. received a series
of waivers under its Revolving Credit Agreement, as amended in
March 2007, extending through December 31, 2007, which waived any
default or event of default that would result solely from NFC's
and NIC's failure to meet filing requirements with the Securities
and Exchange Commission, with respect to their Annual Reports on
Form 10-K for 2005 and 2006 and certain of their Quarterly Reports
on Form 10-Q.

                  NFC Revolving Credit Agreement

NFC's Revolving Credit Agreement has two primary components, a
term loan of $620 million and a revolving bank loan of $800
million.  The latter has a Mexican sub-revolver ($100 million),
which may be used by NIC's Mexican financial services operations.  
NIC and NFC's failure to file reports with the SEC would also give
rise to a cross-default to NIC's $1.5 billion five-year term loan
facility and synthetic revolving facility.

In December 2007, NFC received a fifth waiver to the Credit
Agreement extending the waiver period through November 30, 2008.  
This waiver expands the scope of certain reporting default
conditions to include the Annual Report on Form 10-K for 2007 and
the Quarterly Reports on Form 10-Q for 2008. The fifth waiver
continues the 0.25% rate increase through the waiver's expiration.

In November and December 2007, NFC obtained waivers for the
private retail securitizations and the VFC portion of the
wholesale note securitizations. These waivers are similar in scope
to the Credit Agreement waivers and expire upon the earlier of
November 30, 2008, or the date on which NIC and NFC each will have
timely filed a report on Form 10-K or Form 10-Q with the SEC.

A full-text copy of Navistar's Form 10-Q report is available at no
charge at:

               http://ResearchArchives.com/t/s?31c7

Navistar International Corporation (NYSE: NAV) produces
International(R) brand commercial and military vehicles,
MaxxForce(TM) brand diesel engines, IC brand school and commercial
buses, and Workhorse(R) brand chassis for motor homes and step
vans, and is a private label designer and manufacturer of diesel
engines for the pickup truck, van and SUV markets.  Navistar is
also a provider of truck and diesel engine parts.  Another
affiliate offers financing services. On the Net:
http://www.navistar.com/


NETEFFECT INC: Gets Initial Nod to Use $1.5MM Intel DIP Facility
----------------------------------------------------------------
The Hon. Kevin J. Carey of the United States Bankruptcy Court for
the District of Delaware authorized NetEffect Inc. to obtain, on
an interim basis, up to $1.5 million of the $3 million debtor-in-
possession financing from Intel Corporation, as lender, pursuant
to a DIP credit agreement dated Aug. 27, 2008.

Judge Carey also authorized the Debtor to access, on the interim
basis, cash collateral securing repayment of secured loan of
$2.7 million plus interest under a loan and security agreement
dated May 23, 2007, with Hercules Technology II L.P.

A hearing is set for Sept. 12, 2008, at 2:00 p.m., to consider
final approval of the requests.  Objections, if any, are due on
the same date.  The hearing will take place at 824 Market Street,
5th floor, courtroom #5 in Wilmington, Delaware.

The Debtor tells the Court that it has an urgent need to access
cash to continue operations and to administer and preserve the
value of its estate.  The Debtor says it would suffer immediate
and irreparable harm in the absence of the lender's DIP facility.

The DIP facility will incur interest rate at 12% per annum.

The DIP facility is subject to a $75,000 carve-out for payment of
any unpaid fees and expenses incurred by professional advisors
retained by the Debtor.

To secure its DIP obligation, the lender will be granted
superpriority administrative claims status with priority and
otherwise over all administrative expense claims and unsecured
claims against the Debtor and its estate.

The lender will be paid $150,000 transaction fee payable upon the
commitment termination date as part of the agreement.

The DIP lien contains customary and appropriate events of
defaults.

A full-text copy of the Debtor's DIP credit agreement date
Aug. 27, 2008, is available for free at:

          Part One: http://ResearchArchives.com/t/s?31a8
          Part Two: http://ResearchArchives.com/t/s?31a9

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

               http://ResearchArchives.com/t/s?31a7

Based in Austin, Texas, NetEffect Inc. is engaged in the Data
Network Solutions business.  The company filed for Chapter 11
reorganization on Aug. 27, 2008 (Bankr. D. Del. 08-12008).  Curtis
A. Hehn, Esq., Laura Davis Jones, Esq., and Timothy P. Cairns,
Esq., at Pachulski Stang Ziehl & Jones LLP, represent the Debtors
as counsel.  The U.S. Trustee for Region 3 has not appointed
creditors to serve on an Official Committee of Unsecured
Creditors.  When the Debtor filed for protection from its   
creditors, it listed assets of between $500,000 and $1,000,000,
and debts of between $10,000,000 to $50,000,000.


NETEFFECT INC: Wants Proposed Sale Bidding Procedures Approved
--------------------------------------------------------------
NetEffect Inc. asks the United States Bankruptcy Court for the
District of Delaware to approve proposed bidding procedures for
the sale of substantially all of their assets, free and clear of
all liens and interests, subject to better and higher offers.

A hearing is set for Sept. 11, 2008, at 11:00 a.m., to consider
approval of the motion.  Objections, if any, are due Sept. 9,
2008.

Intel Corporation has agreed to purchase all of the Debtor's
assets for $8 million, pursuant to an asset purchase agreement
dated Aug. 27, 2008.

All bids along with a good faith deposit of at least $100,000 must
be delivered by Sept. 30, 2008, to the Debtor and its counsel,
Pachulski Stang Ziehl & Jones LLP.  An auction will follow on Oct.
2, 2008, at 10:00 a.m.  A sale hearing is set for Oct. 3, 2008.

In the event the Debtor consummates the sale with another bidder,
the stalking-horse bidder will be paid $240,000 break-up fee and
expense reimbursement of up to $80,000, as part of the agreement.

A full-text copy of the Debtor's bidding procedures for the sale
of all their assets is available for free at:

               http://ResearchArchives.com/t/s?31ae

A full-text copy of the Debtor and Intel's asset purchase
agreement dated Aug. 27, 2008, is available for free at:

          Part One: http://ResearchArchives.com/t/s?31af
          Part Two: http://ResearchArchives.com/t/s?31b0

Based in Austin, Texas, NetEffect Inc. is engaged in the Data
Network Solutions business.  The company filed for Chapter 11
reorganization on Aug. 27, 2008 (Bankr. D. Del. 08-12008).  Curtis
A. Hehn, Esq., Laura Davis Jones, Esq., and Timothy P. Cairns,
Esq., at Pachulski Stang Ziehl & Jones LLP, represent the Debtors
as counsel.  The U.S. Trustee for Region 3 has not appointed
creditors to serve on an Official Committee of Unsecured
Creditors.  When the Debtor filed for protection from its
creditors, it listed assets of between $500,000 and $1,000,000,
and debts of between $10,000,000 to $50,000,000.


NEW PARKWAY: Operating Certificate to Expire September 30
---------------------------------------------------------
The New York State Department of Health is reviewing future plans
for New Parkway Hospital, f/k/a Parkway Hospital Inc., as the
hospital's operating certificate is set to expire at the end of
the month, Ben Hogwood, assistant editor with the Queen's
Chronicle, reported Thursday.  

Fred Stewart, a spokesman for Parkway, said the hospital has
submitted a restructuring plan with the state, in addition to its
closure plan, to determine what types of services it may be able
to offer after Sept. 30.

According to the news article, the hospital will remain open as a
surgical facility and offer a full range of diagnostic services,
including rehabilitation capabilities and post-operation beds.  
"It is possible there may still be some acute care and medical
beds in the facility," Stewart said.  

Diane Mathis, a DOH spokesperson, said that the 251-bed facility
could continue to offer alternative services, such as
rehabilitation or nursing services if approved by the state.

                     About Parkway Hospital

The New Parkway Hospital, f/k/a Parkway Hospital Inc., operates a
as a surgical facility in Forest Hills, New York.  Dr. Robert
Aquino purchased the financially troubled hospital in June 2005,
which was then known as Parkway Hospital Inc.  The hostpital filed
for chapter 11 protection on July 1, 2005 (Bankr. S.D. N.Y. Case
No. 05-14876).  Timothy W. Walsh, Esq., at DLA Piper Rudnick Gray
Cary US LLP, represented the Debtor in its restructuring efforts.  
The Trumbull Group, nka Wells Fargo Trumbull, served as the
Debtor's claims agent.  The firm of Alston & Bird LLP served as
substitute bankruptcy counsel to the Official Committee of
Unsecured Creditors.  When the Debtor filed for protection from
its creditors, it listed $28,859,000 in total assets and
$47,566,000 in total debts.

As reported in the Troubled Company Reporter on March 10, 2008,
The Parkway Hospital Inc. officially exited from chapter 11
protection on Feb. 28, 2008, ending its three-year term in
bankruptcy.  When it emerged, the state gave Parkway a number of
extensions to remain open.  


NEWPORT TELEVISION: S&P Confirms 'B' Corporate Credit Rating
------------------------------------------------------------
Standard & Poor's Ratings Services revised its rating outlook on
Kansas City, Mo.-based Newport Television Holdings LLC and its
operating subsidiary, Newport Television LLC, to negative from
stable.  Ratings on the company, including the 'B' corporate
credit rating, were affirmed.

"The outlook change reflects our increasing concern about the
company's ability to reduce its very high leverage amid weak
broadcast TV advertising demand and the lack of further progress
in planned asset sales," explained Standard & Poor's credit
analyst Deborah Kinzer.

The 'B' rating reflects Newport's high debt leverage, low EBITDA
margins compared with the peer average, weak conversion of EBITDA
into discretionary cash flow because of increased interest
expense, generally weak competitive positions in the company's TV
markets, sensitivity to election cycles, and TV broadcasting's
mature revenue growth prospects.  These factors are minimally
offset by Newport's revenue and geographic diversification across
network affiliations and states, broadcasting's good margin and
discretionary cash flow potential, and largely resilient station
asset values.

Newport owns and operates 50 TV stations, including 17 digital
multicast stations, in 22 markets, with designated market area
(DMA) rankings ranging from No. 6 (San Francisco/Oakland/San Jose,
Calif.) to No. 203 (Fairbanks, Alaska).  The company's station
affiliations are fairly evenly distributed among the top four
networks.

Seven stations are affiliated with NBC, six stations with Fox, six
with ABC, and four with CBS. Few of the company's stations have
the top revenue rankings in their markets, although ownership of
multiple stations in some markets improves the company's overall
ranking in some cases.

In May 2008, Newport sold five noncore stations and used the
proceeds to pay down its term loan.  The company wants to divest
an additional 11 small noncore stations, but the sale process is
taking longer than previously anticipated, which is delaying the
company's plan to reduce debt.


NEW YORK TIMES: To Consolidate Sections by October 6
----------------------------------------------------
The New York Times is planning to merge several sections of its
newspaper to minimize costs beginning Oct. 6, 2008, Russell Adams
of The Walls Street Journal reports.

According to a memo from Arthur Sulzberger Jr., publisher and
chairman of the company, its metro section will be merged into
the main news section from Monday to Saturday, and sports will be
placed in the business section from Tuesday to Friday, the WSJ
says.

Mr. Sulzberger, the WSJ relates, pointed out that the move is
expected to result in "significant" cost savings from having a
single print run.  However, the move was tagged "pretty
demoralizing" for the sports and metro reporters, an employee
of the company lamented, the report says.

Several publications -- including Tribune Co.'s Baltimore Sun,
McClatchy Co.'s News & Observer in North Carolina and Plan
Dealer -- have also cut few sections in their newspapers in the
middle of soaring prices for newsprints, the WSJ says.

"We feel this is an effective way to reduce expenses while
providing our readers the breadth and depth of high quality
coverage they expect from us and we are committed to giving
them," the WSJ quoted Mr. Sulsberger as saying.

The New York Times Co. -- http://www.nytimes.com/-- operates
as a diversified media company in the United States.  It
operates in two segments, News Media and About Group.  The
Company was founded in 1896.


NORTHWEST AIRLINES: At High Risk of Bankruptcy in 2009
------------------------------------------------------
Michael Lowry, project manager for AVIATION WEEK's latest Top-
Performing Companies report, has ranked Northwest Airlines as a
"high risk" for a bankruptcy filing in 2009.

According to the report, American Airlines, AirTran and
Continental are also at risk in 2009, while USAirways may succumb
to a third Chapter 11 filing this winter due to inadequate
liquidity.

                              2007        2008       2009
                              ----        ----       ----
US Airways Group Inc.         
Financial Fitness Assessment Declining   High Risk  High Risk
Liquidity Assessment         Good        Inadequate Inadequate
Bankruptcy Risk              Low         High       High

AMR Corp.
Financial Fitness Assessment Low Risk    High Risk  High Risk
Liquidity Assessment         Good        Poor       Inadequate
Bankruptcy Risk              Low         Low        High

Northwest Airlines Corp.
Financial Fitness Assessment Low Risk    Declining  High Risk
Liquidity Assessment         Excellent   Fair       Inadequate
Bankruptcy Risk              Low         Low        High

AirTran Holdings Inc.
Financial Fitness Assessment Neutral     Declining  High Risk
Liquidity Assessment         Good        Fair       Poor
Bankruptcy Risk              Low         Low        High

Continental Airlines Inc.
Financial Fitness Assessment Neutral     Declining  High Risk
Liquidity Assessment         Good        Fair       Poor
Bankruptcy Risk              Low         Low        High

AVIATION WEEK's TPC report focuses on the global airline
industry, revealing which carriers are in the best shape to
prevail against the daunting economic challenges they face.

"The next 12 months will be shaky and there will be no return to
the status quo . . . airlines are in a morass," TPC adviser
Michael Dyment, of Nexa Capital Partners, said.

The TPC study shows that the best of the Asia-Pacific and
European airlines are head and shoulders above their peers among
the major legacy carriers, with Singapore Airlines at the
top of the list and Malaysia Airlines improving the most.  

The U.S. majors, meanwhile, are entrenched in the bottom half of
the table.  "The gap between the Asian and European top
performers and the U.S. airlines has only grown larger over the
past year," the article says.  U.S. airlines suffered most from
rising fuel rates and sinking demand, Mr. Lowry noted.

The Wall Street Journal, however, says that with the slow
passenger-traffic growth and high fuel prices, the International
Air Transport Association predicts a loss in the airline industry
of $5.2 billion world-wide for 2008, with the North American
carriers taking the lion's share at $5 billion.  This will be
followed by a $4.1 billion loss in 2009, IATA says.

IATA Director General Giovanni Bisignani also confirmed that many
airlines are indeed "at risk" of going bankrupt as the industry
heads into autumn.  "[F]asten your seatbelts for at least another
two years," Mr. Bisignani advised.

IATA's forecasts factor is an average oil price of $113 a barrel,
reports WSJ.  At present, crude oil is trading a little below
$110.

Ann Keeton of WSJ says UBS AG analysts said the airline industry
could break-even next year if oil prices were to average around
$95 a barrel.  However, if oil prices are higher, the industry's
losses would be greater than the predicted $5.2 billion.

UBS forecasts oil to average $120 a barrel in 2009, says Ms.
Keeton.

                     Northwest Stocks Rally

Various reports dated September 2, 3 and 4, 2008, disclosed that
stocks of Northwest Airlines Corp. have been gaining ground due
to lowering oil prices, resulting in increased investor
confidence.  Moreover, the weaker-than-expected impact of
hurricane Gustav on oil operations in the Gulf of Mexico
triggered a sharp decrease in fuel costs, the reports said.

To note, U.S. airlines have been working hard to cope with the
escalating costs of fuel in the past couple of months.  Northwest
has implemented job cuts, cancelled several routes and have begun
implementing surcharges and extra fees, including charging $15
per passengers' first checked in bag, the Detroit Free Press
noted.

Other airlines whose stocks have gone up are UAL Corp., parent of
United Air Lines, Inc., Delta Airlines, Inc., Continental, US
Airways, American Airlines, Southwest Airlines, AirTran and
JetBlue.

                     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. 99; 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.


ORIOLE HOMES: Liquidating Unfinished Projects in Florida
--------------------------------------------------------
Oscar Pedro Musibay and Susan R. Miller of Orlando Business
Journal report that Boca Raton, Florida-based homebuilder Oriole
Homes Corp. filed an assignment for the benefit of creditors in
Palm Beach County and plans to liquidate its assets.

According to the report, Phil von Kahle, managing director of
Michael Moecker & Associates, an insolvency firm handling the
action, said that Oriole made the filing as an alternative to
bankruptcy.  Creditors could get more money in that way, according
to him.

Oriole Homes' major assets include several subsidiaries, are
communities in various stages of development, including Terraces
at Reunion condos in Osceola County and Spring Park Terraces in
Celebration.  Michael Moecker & Associates are looking to sell the
unfinished developments.

Oriole Homes' subsidiaries are in charged of finishing the
project.  But, Oriole Homes guaranteed the loans, according to Mr.
von Kahle.  Ocean Bank financed the construction.  It is owed
$26 million.

Oriole Homes,  founded in 1963, is owned by the Levy family and
led by Mark Levy.  It lists $344,000 in liabilities.


PACIFICNET INC: Inks Settlement Agreement With Bondholders
----------------------------------------------------------
PacificNet Inc. entered into a settlement agreement with certain
bondholders who had filed an involuntary petition seeking Chapter
11 relief in the United States Bankruptcy Court fort the District
of Delaware earlier this year.

Pursuant to the terms of the settlement agreement, the company
amended and restated the terms of certain convertible debentures
in the aggregate principal amount of approximately $6.2 million.  
Upon entering into the settlement agreement, the company paid
$150,000 of the obligations under the Debentures in cash and
issued 668,322 shares of common stock to the bondholders upon
conversion of a portion of the Debentures.

The remaining outstanding Debentures in the aggregate principal
amount of approximately $5.5 million are convertible at a
conversion price of $2.00 per share, subject to the terms and
conditions of the Debentures.

The settlement agreement provides that the company will make ten
monthly payments under the debentures and also apply sums due
under certain receivables toward payment.  All obligations of the
company to the bondholders under the debentures are due on or
before July 15, 2009.  Additionally, pursuant to the terms of the
settlement agreement, the bondholders received a security interest
and collateral assignment in receivables of the
company and certain of its subsidiaries.

Moreover, the company issued to the bondholders new debentures
representing additional amounts owed to them, which will be due in
the event that the company does not comply with the terms of the
debentures.  The parties have further agreed that the bankruptcy
action and all related pending litigation will be dismissed
without prejudice immediately.  On Dec. 15, 2008, provided there
are no defaults under the settlement documents, these dismissals
would be with prejudice.

Victor Tong, president of the company, discussed the settlement,
stating, "We are very glad to settle our differences with the
bondholders so we can move forward to focus on the Asian Gaming
Technology Strategy.  We'd like to thank them for their support
while PacificNet has been transforming itself throughout the
years.  We will continue to strive for the best return for our
shareholders in this turbulent market.  We believe gaming is
recessionary proof due to the increased wealth across Asia and
China and that PacificNet is well-positioned to take advantage of
the market in the future."

A full-text copy of the company's settlement and release agreement
dated Aug. 29, 2008, available for free at:

               http://ResearchArchives.com/t/s?31c0

A full-text copy of the company's form of second amended and
restated variable rate secured convertible debenture due July
2009, is available for free at:

               http://ResearchArchives.com/t/s?31c1

A full-text copy of the company's form of amended and restated
variable rate secured convertible debenture due July 2009, is
available for free at:

               http://ResearchArchives.com/t/s?31c2

A full-text copy of the company's Form of PacificNet Inc. 7%
debenture is available for free at:

               http://ResearchArchives.com/t/s?31c3

A full-text copy of the company's security agreement dated
Aug. 29, 2008, is available for free at:

               http://ResearchArchives.com/t/s?31c4

                         About PacificNet

Headquartered in Beijing, China, PacificNet Inc., (NasdaqGM:
PACT) -- http://www.pacificnet.com-- provides gaming and mobile    
game technology worldwide.  The company, through its
subsidiaries, offers solutions in casino equipment supply; and
the development, installation, and support of systems and game
content for the casino, lottery, and amusement with prizes (AWP)
markets.  The company was founded in 1987 and has additional
offices in Hong Kong, Shanghai, Shenzhen, Guangzhou, Macau, and
Zhuhai, China; the United States; and the Philippines.  Iroquois
Master Fund Ltd., Whalehaven Capital Fund Ltd. and Alpha Capital
AG filed for involuntary Chapter 11 petition against the Debtor on
March 22, 2008, (Bank. D. Del. Case No. 08-10528.)  Adam Friedman,
Esq. at Olshan Grundman, et al. and Robert S. Brady, Esq. and Ian
S. Fredericks, Esq. at Young Conaway, et al. represent the
petitioners in this case. The company's consolidated balance
sheets' posted total assets of $23,356,000 and total liabilities
of $19,527,000, for the quarterly period ended June 30, 2008.


PLIANT CORP: S&P Cuts First-Lien Senior Secured Notes to 'B-'
-------------------------------------------------------------
Standard & Poor's Ratings Services placed its ratings on Pliant
Corp., including its 'B-' corporate credit rating, on CreditWatch
with negative implications.  At the same time, Standard & Poor's
lowered the issue rating on the company's first-lien senior
secured notes to 'B-' from 'B' and revised the recovery rating to
'3' from '2'.

The revised ratings reflect S&P's expectation that first-lien
senior secured noteholders are likely to realize meaningful (50%
to 70%) recovery in the event of a default.  The 'CCC' issue
rating and '6' recovery rating on the second-lien secured notes
remain unchanged, reflecting our expectation for negligible (0% to
10%) recovery in the event of a default.  The issue ratings on the
notes were also placed on CreditWatch with negative implications.

"The CreditWatch listing reflects concerns regarding Pliant's
ability to refinance pending debt maturities during the next
several quarters, particularly given the company's highly
leveraged financial profile and challenging credit market
conditions," said Standard & Poor's credit analyst Ket Gondha.

At June 30, 2008, total debt (including the present value of
operating leases and unfunded postretirement obligations) was
about $823 million.  This includes $367 million of first-lien
senior notes due June 15, 2009, and $250 million of second-lien
notes due Sept. 1, 2009.  With management focused on strategic
acquisitions and operating improvements, it looks increasingly
unlikely that the refinancing of the notes will be completed by
the end of 2008.  If Pliant is unable to refinance one month
before either set of notes mature, borrowings under the company's
revolving credit facility (otherwise due July 2011) accelerate and
immediately become due.  We are concerned about the company's
ability to refinance in a strained credit environment and the
potential for meaningfully higher interest costs if a refinancing
is completed.

Pliant is focused on several deleveraging acquisitions within the
next 12 months and has retained two investment banks as advisors.  
The company plans to add to its product portfolio while achieving
synergies through cost reductions and operational consolidations.  
The first target Pliant hopes to close is an acquisition of
certain assets related to Atlantis Plastics Inc.'s films business
following Atlantis' recent filing for Chapter 11 bankruptcy
proceedings.  To secure these assets, Pliant will have to compete
against AEP Industries Inc., which currently holds an agreement
with Atlantis to purchase these assets.

Pliant's planned acquisitions come at a time when earnings have
weakened, although a potential refinancing associated with these
deals, if completed, would be a meaningful positive.  The
acquisitions would likely bolster Pliant's business profile while
providing important relief from pending debt maturities.  Although
the company has implemented cost savings and operational
improvements, sharply higher resin prices depressed earnings and
cash flow in the first half of the year.

"We will resolve the CreditWatch listing within the next two
months as we monitor the company's progress on its refinancing and
acquisition plans," S&P said.  "In the absence of any material
developments, we also plan to reassess the company's operating
prospects and ability to preserve sufficient liquidity until
business conditions improve."  


PORTOLA PACKAGING: Plan Confirmation Hearing Slated for October 6
-----------------------------------------------------------------
Portola Packaging Inc. and its debtor-affiliates will appear
before the U.S. Bankruptcy Court in Delaware on Oct. 6, 2008, for
a confirmation hearing of the Debtors' reorganization plan, Mr.
Rochelle of Bloomberg News relates.

The Troubled Company Reporter said on Sept. 1, 2008, that in
connection with the Debtors' bankruptcy filing, the Debtors
confirmed that all of its secured lenders and holders of
approximately 90% in aggregate principal amount of its 8-1/4%
Senior Notes due 2012 agreed to a voluntary and consensual
restructuring of the company pursuant to the restructuring support
agreement dated July 24, 2008.  Pursuant to the proposed plan of
reorganization, holders of the Senior Notes will receive 100% of
the common stock of reorganized Portola in exchange for their
claims.

The company reached agreement with its existing secured lenders
to provide the Company with debtor-in-possession financing of
$79 million to pay off the outstanding indebtedness under the
company's existing secured facilities and to finance its ongoing
operations.

Mr. Rochelle notes that Wayzata Investment Partners LLC, a
private-equity investor in Wayzata, Minnesota, will hold a
controlling interest in the reorganized company.

Portola, according to Mr. Rochelle, defaulted on a $60 million
revolving credit loan from General Electric Capital Corp.
following Portola's announcement of a probe on accounting
irregularities at its subsidiaries in China.

                     About Portola Packaging

Portola Packaging Inc. -- http://www.portpack.com/-- designs,   
manufactures, and markets a full line of tamper-evident plastic
closures, bottles, and equipment for the beverage and food
industries, as well as plastic closures and containers for the
cosmetics industry.

The company and 6 of its debtor-affiliates filed for Chapter 11
reorganization on Aug. 27, 2008 (Bankr. D. Del. Lead Case No. 08-
12001).  Edmon L. Morton, Esq., Robert S. Brady, Esq., and Sean T.
Greecher, Esq., at Young, Conaway, Stargatt & Taylor, represent
the Debtors as counsel.  When the Debtors filed for protection
from their creditors, they listed assets of between $50 million
and $100 million, and debts of between $100 million and
$500 million.


PROPEX INC: Creditors Panel Challenges DIP Lenders' Liens
---------------------------------------------------------
The Official Committee of Unsecured Creditors appointed in the
bankruptcy cases of Propex Inc. and its debtor-affiliates notified
the U.S. Bankruptcy Court for the Eastern District of Tennessee
that it will take an appeal to the U.S. District Court for the
Eastern District of Tennessee from the Hon. John C. Cook's
Aug. 21, 2008 order confirming the granting to the DIP Lenders of
liens on all of the Debtors' Foreign Subsidiaries.

As disclosed in the Troubled Company Reporter on Aug. 27, 2008,
the Debtors filed a Security Agreement Amendment/Foreign Stock
Pledge Motion, whereby they asked the Court to (i) permit them to
amend a Security Agreement related to their DIP Credit Agreement,
and (ii) confirm that the liens granted to the DIP Lenders on 100%
of the Debtors' foreign capital stock is in accordance with the
terms of the Final DIP Order and the DIP Credit Agreement.

In line with that request, the Debtors, the Official Committee of
Unsecured Creditors, and BNP Paribas, on behalf of the DIP
Lenders, entered into a Court-approved stipulation for the filing
under seal of any pleadings or documents relating to the Security
Agreement Motion that may be deemed to contain confidential
information.    

BNP Paribas Securities Corp., as administrative agent for the DIP  
Lenders, expressed its support of the Debtors' request.  BNP
Paribas asserted that the DIP documents plainly and
unequivocally                                      
include the 100% Foreign Stock Pledge as part of the collateral
package granted to the DIP lenders and as part of their adequate
protection package to the prepetition lenders.  

Counsel to BNP Paribas, Gene L. Humphreys, Esq., at Bass, Berry &
Sims, PLC, in Nashville, Tennessee, maintained that even if there
is any ambiguity on the amount of equity of the Debtors' foreign
subsidiaries that pledged as collateral under the DIP facility,
the ambiguity is completely mooted by the uncontested fact that
both the Interim and the Final DIP Orders provide a superpriority
administrative claim to the DIP obligations pursuant to Section
364(c)(1) of the Bankruptcy Code.

"The DIP lenders have loaned the Debtors tens of millions of
dollars in reliance upon the fundamental premise of the full
collateral package, including the 100% Foreign Stock Pledge," Mr.
Humphreys said.  

On the other hand, the Creditors Committee filed an objection
to the Debtors' Security Agreement Amendment under seal.

BNP Paribas countered that the Committee's attempt to renegotiate
the DIP Facility has no basis in law or fact and cannot be
sustained.

                         About Propex Inc.

Headquartered in Chattanooga, Tennessee, Propex Inc. --
http://www.propexinc.com/-- produces geosynthetic, concrete,
furnishing, and industrial fabrics and fiber.  It also produces
primary and secondary carpet backing.  Propex operates in North
America, Europe, and Brazil.

The company and its debtor-affiliates filed for Chapter 11
protection on Jan. 18, 2008 (Bankr. E.D. Tenn. Case No. 08-
10249).  The Debtors have selected Edward L. Ripley, Esq., Henry
J. Kaim, Esq., and Mark W. Wege, Esq. at King & Spalding, in
Houston, Texas, to represent them.  The Official Committee of
Unsecured Creditors have tapped Ira S. Dizengoff, Esq., at Akin
Gump Strauss Hauer & Feld, LLP, in New York, to be its counsel.

The Court extended the exclusive plan filing period of the Debtors
through Oct. 20, 2008, and their exclusive solicitation period
through Dec. 19, 2008.

As of June 29, 2008, the Debtors' balance sheet showed total
assets of $562,700,000, and total debts of $551,700,000.

(Propex Bankruptcy News, Issue No. 16; Bankruptcy Creditors'
Service Inc., http://bankrupt.com/newsstand/or 215/945-7000)   


PROPEX INC: Wants Court Nod on $1.7 Million Pension Plan Payment
----------------------------------------------------------------
Propex Inc. and its debtor-affiliates are sponsors of two defined
benefit pension plans -- the Propex Inc. Cash Value Retirement
Plan and the Propex Inc. Balance Retirement Plan.  The Pension
Plans are funded solely through employer contributions.  

The benefits accruals under the Cash Value Plan was frozen
effective September 1, 2005.  Benefit accruals under the Balance
Plan was frozen as of August 1, 2006.

As a result of the decline in the equity markets, the Pension
Plans are significantly underfunded and ongoing obligations to
the Pension Plans will place a significant financial burden on
the Debtors over the next several year, Henry J. Kaim, Esq., at
King & Spalding LLP, in Houston, Texas, informs the U.S.
Bankruptcy Court for the Eastern District of Tennessee.

Mr. Kaim says the Debtors have considered all alternatives to
alleviate the problem, including the termination of the Pension
Plans.  The termination of the Pension Plan though would create a
large claim against the Debtors' estate in favor of the Pension
Benefit Guaranty Corporation and possibly result in the
imposition of large liabilities on the Debtors' overseas
affiliates, he points out.

According to Mr. Kaim, the Pension Plan actuary estimates that
there will be a liquidity shortfall in the Cash Value Plan of
approximately $3,100,000 as of Sept. 30, 2008.  This liquidity
shortfall payment will have to be paid as part of the Oct. 15,
2008 quarterly minimum funding contribution, he notes.

The liquidity shortfall, however, can be avoided altogether by
making additional plan contribution before Sept. 15, 2008 since
the contributions are counted as plan assets for purposes of
Jan. 1, 2008 plan valuation, Mr. Kaim states.  

Thus, pursuant to Section 363 of the Bankruptcy Code, the Debtors
seek the Court's authority to make additional payment of up to
$1,700,000 on or before Sept. 15, 2008, in addition to the
regularly scheduled and previously authorized minimum payments of
$279,937 and $660,840 on Oct. 15, 2008.

Mr. Kaim contends that the additional payments will increase the
Cash Value Plan's funded status sufficiently to avoid having a
liquidity shortfall on Jan. 1, 2008 plan.

                         About Propex Inc.

Headquartered in Chattanooga, Tennessee, Propex Inc. --
http://www.propexinc.com/-- produces geosynthetic, concrete,
furnishing, and industrial fabrics and fiber.  It also produces
primary and secondary carpet backing.  Propex operates in North
America, Europe, and Brazil.

The company and its debtor-affiliates filed for Chapter 11
protection on Jan. 18, 2008 (Bankr. E.D. Tenn. Case No. 08-
10249).  The Debtors have selected Edward L. Ripley, Esq., Henry
J. Kaim, Esq., and Mark W. Wege, Esq. at King & Spalding, in
Houston, Texas, to represent them.  The Official Committee of
Unsecured Creditors have tapped Ira S. Dizengoff, Esq., at Akin
Gump Strauss Hauer & Feld, LLP, in New York, to be its counsel.

The Court extended the exclusive plan filing period of the Debtors
through Oct. 20, 2008, and their exclusive solicitation period
through Dec. 19, 2008.

As of June 29, 2008, the Debtors' balance sheet showed total
assets of $562,700,000, and total debts of $551,700,000.

(Propex Bankruptcy News, Issue No. 16; Bankruptcy Creditors'
Service Inc., http://bankrupt.com/newsstand/or 215/945-7000)   


PROPEX INC: Wants to Amend Medical Program to Cease Coverage Offer
------------------------------------------------------------------
Propex Inc. and its debtor-affiliates sponsor the Propex Medical
Program pursuant to which they provide certain medical benefits to
their employees, including health insurance.

The Medical Program currently provides medical coverage for sale
to certain eligible employees and their dependents upon the
employee's retirement.  The Debtors aver that the cost to the
retiree ranges from $470 to $1,220 per month and is generally
cost-prohibitive to the retirees.

As of Aug. 12, 2008, only six retirees have purchased medical
coverage, the Debtors relate.  The Debtors clarify they do not
seek to modify any benefits provided to these Current
Participants.    

The Debtors, however, seek to eliminate the medical coverage for  
Eligible Employees and Retirees because they are required to
carry on their books the actuarial cost of $4,400,000.

About 398 potentially eligible retirees have not elected to
purchase medical coverage, the Debtors note.  Despite the fact
that the Eligible Retirees are not taking advantage of this
benefit, the Debtors relate that they are required to reserve
significant assets to account for the possibility that the
retirees will elect to purchase medical coverage.

In addition to the cost carried on their books, the Debtors
forecast spending in the future an estimated $4,765 per employee
per year for each Eligible Employee and Retiree who elects to
purchase medical coverage.  "The cost of the medical coverage is
disproportionate to the benefit it provides and should be
terminated, except as to the current six participants," the
Debtors contend.

Pursuant to Sections 105 and 363 of the Bankruptcy Code, the
Debtors seek authority from the U.S. Bankruptcy Court for the
Eastern District of Tennessee to amend their Medical Program
to eliminate the option to purchase Medical Coverage by employees
and retirees other than the Current Participants.  

The Debtors say the proposed amendment will allow them to remove
$4,400,000 in liabilities from their balance sheet.

The Debtors inform the Court that no employee who declined to
purchase Medical Coverage, upon retiring, has ever subsequently
elected to purchase Medical Coverage.  The Debtors say they are
unaware of any retired employee that will be adversely impacted
if their request is granted.

The Debtors add that on Aug. 12, 2008, the Board of Directors
entered a resolution to amend the Medical Program to cease to
offer Medical Coverage to employees other than the Current
Participants who receive benefits under the Medical Program.

                         About Propex Inc.

Headquartered in Chattanooga, Tennessee, Propex Inc. --
http://www.propexinc.com/-- produces geosynthetic, concrete,
furnishing, and industrial fabrics and fiber.  It also produces
primary and secondary carpet backing.  Propex operates in North
America, Europe, and Brazil.

The company and its debtor-affiliates filed for Chapter 11
protection on Jan. 18, 2008 (Bankr. E.D. Tenn. Case No. 08-
10249).  The Debtors have selected Edward L. Ripley, Esq., Henry
J. Kaim, Esq., and Mark W. Wege, Esq. at King & Spalding, in
Houston, Texas, to represent them.  The Official Committee of
Unsecured Creditors have tapped Ira S. Dizengoff, Esq., at Akin
Gump Strauss Hauer & Feld, LLP, in New York, to be its counsel.

The Court extended the exclusive plan filing period of the Debtors
through Oct. 20, 2008, and their exclusive solicitation period
through Dec. 19, 2008.

As of June 29, 2008, the Debtors' balance sheet showed total
assets of $562,700,000, and total debts of $551,700,000.

(Propex Bankruptcy News, Issue No. 16; Bankruptcy Creditors'
Service Inc., http://bankrupt.com/newsstand/or 215/945-7000)   


REHRIG INT'L: Case Summary & 30 Largest Unsecured Creditors
-----------------------------------------------------------
Debtor: Rehrig International Incorporated
        1301 Battery Brooke Parkway
        Richmond, VA 23237

Bankruptcy Case No.: 08-12064

Debtor-affiliates filing separate Chapter 11 petitions:

      Entity                                   Case No.
      ------                                   --------
   Woodside-United Acquisition LLC                08-12065
   Woodside RU Holdings Inc.                      08-12066

Chapter 11 Petition Date: September 5, 2008

Court: District of Delaware (Delaware)

Judge: Kevin J. Carey

Debtor's Counsel: Richard W. Riley, Esq.
                  rwriley@duanemorris.com
                  Duane Morris LLP
                  Suite 1200, 1100 North Market Street
                  Wilmington, DE 19801
                  Tel:(302) 657-4900
                  Fax: (302)-657-4901
                  
Estimated Assets: $10 million to $50 million

Estimated Debts: $10 million to $50 million

Debtor's list of its 30 Largest Unsecured Creditors:

   Entity                        Nature of Claim   Claim Amount
   ------                        ---------------   ------------

Muehlstein                       Trade             $822,895
800 Connecticut
Norwalk, CT 06854

Ningbo  Jiulong Hardware Co.     Trade             $594,664
No. B-8 Technology
Industrial Park, Nighai
315600 Ningbo, Zhejiang, China

Enspire energy LLC               Utility           $354,775
229 West Bute Street, Ste. 250
Norfolk, VA 23510-1405

J&P Keegan LP                    Landlord          $362,297
c/o George J. Van OS
3131 Eastside, Ste. 105
Houston,TX 77098

US&W Real Estate LLC             Landlord          $340,000
646 Country Club Drive
Battle Creek, MI 49015

Roadway Express                  Trade             $304,314
P.O. Box 905587
Charlotte, NC 28290-5587

Vincent R. Gurzo                 Litigation Claim  $300,000
413 Stuart Circle, No. 4C
Richmond, VA 23220

Pinchal & Co. LLC                Trade             $296,693
P.O. Box 41027
Houstion, TX 77241

Entee Polymers LLC               Trade             $249,371

Pan Mac international            Trade             $207,849

McGuie Woods LLP                 Legal Fees        $173,829

Calhoun County Treasurer         Taxes             $153,412

Dominion Virginia Power          Utility           $149,710

James River Rapid Logis          Trade             $131,941

Tectroin Tube Corp.              Trade             $127,994

United Parcel Services           Trade             $120,419

Safe-Strap Compnay Inc.          Trade             $114,411

Meigao Plastic & Metal Mfg.
Co. Ltd.                         Trade             $104,564

RC Plastics Inc.                 Trade             $101,257

Chautauqua Metal                 Trade              $95,094

Natcity Investment Inc.          Trade              $91,240

Livonia Tool & Laser             Trade              $88,674

Mintz Levin                      Legal Fees         $78,858

Industrial Supply                Trade              $77,028

R&K Metal processing             Trade              $74,360

Valley Crane & Rigging Inc.      Trade              $70,095

Anthem Health Keepers            Trade              $67,684

Stephen E. Garcia PC2            Legal Fees         $66,972

Value Stream Solutions LLC       Trade              $60,447

Rotonics Mfg. Inc.               Trade              $29,758


SASSABOOM SERVICES: Case Summary & 3 Largest Unsecured Creditors
----------------------------------------------------------------
Debtor: Sassaboom Services LLC
        1296 Beaver Creek Road
        Farmington, NY 14425

Bankruptcy Case No.: 08-22307

Chapter 11 Petition Date: Sept. 7, 2008

Court: Western District of New York (Rochester)

Debtor's Counsel: Raymond C. Stilwell, Esq.
                  rcstilwell@roadrunner.com
                  The Law Center Building
                  17 Beresford Court
                  Buffalo, NY 14221
                  Tel: (716) 634-8307
                  
Estimated Assets: $500,000 to $1,000,000

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

Debtor's 3 Largest Unsecured Creditors:

   Entity                      Nature of Claim       Claim Amount
   ------                      ---------------       ------------
US Small Business                                    $548,000
Administration
26 Federal Plaza Suite 3100
New York, NY 10278

Ontario County                 Property taxes        $36,700
20 Ontario Street
Canandaigua, NY 14424

Martin Marianetti/Maureen      Monies loaned         $14,000
O' Donnell
2285 Macedon Road
Canandaigua, NY 14424


SEA CONTAINERS: To Ink Scheme of Arrangement With Creditors
-----------------------------------------------------------
Sea Containers Ltd. said that it will enter into a scheme of
arrangement with certain creditors, pursuant to Section 99 of the
Companies Act 1981 of Bermuda.  The Debtor will set up the scheme
for the purposes of implementing its Chapter 11 plan of
reorganization in Bermuda.

SCL said that it is likely that an application to the Supreme
Court of Bermuda will be made during September 2008 to convene one
or more meetings of creditors.  The Debtor further proposes that,
if approved, the scheme will become effective in or around mid to
late November 2008, and have a scheme bar date in or around
December 2008.

The scheme bar date is the deadline by which any claims against
SCL that is not currently filed in the Chapter 11 proceedings,
must be submitted by creditors to be taken into account for
distribution purposes.

Creditors who have not yet filed proofs of claim against SCL may
obtain more information from:

      BMC Group Inc.
      Attn: Sea Containers Ltd. Claims and
      Solicitation Agent
      31 Southampton Row, 4th Floor
      Holborn, WC1B 5HJ
      England
      Tel: +44 20 7000 1214

            -- or --

      BMC Group Inc.
      Attn: Sea Containers Ltd. Claims and
      Solicitation Agent
      444 Nash Street
      El Segundo, CA 90245
      Tel: (888) 909 0100
      http://www.bmcgroup.com/scl

                       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., and Sean T. Greecher, Esq., at Young, Conaway, Stargatt
and 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.

The Debtors filed their joint Chapter 11 plan of reorganization
and disclosure statement on July 31, 2008.


SECURITY CAPITAL: Fitch Withdraws Ratings
-----------------------------------------
Fitch Ratings has announced that it has withdrawn the ratings of
Syncora Holdings Ltd. (Syncora, formerly Security Capital
Assurance Ltd.) and its financial guaranty subsidiaries.

Fitch has withdrawn these ratings, which were on Rating Watch
Positive:

Syncora Guarantee Inc. (SGI, formerly XL Capital Assurance Inc.)
Syncora Guarantee (U.K.) Ltd. (SG-UK, formerly XL Capital
Assurance (U.K.) Ltd.)
Syncora Guarantee Re Ltd. (SGRe, formerly XL Financial Assurance
Ltd.)
   -- Insurer financial strength (IFS) 'CCC'.

Syncora Holding Ltd.
   -- Long-term issuer rating 'CCC-';
   -- $250 million fixed/floating series A perpetual non-
cumulative preference shares 'CCC-'.

Twin Reefs Pass-Through Trust
   -- $200 million pass-through trust securities 'CCC-'.

Fitch believes Syncora's financial guaranty franchise is
effectively in run-off at the present time and that there is
greatly reduced investor interest in continued coverage of this
rating. Consistent with the 8-K filed by Syncora yesterday, the
company will no longer be providing Fitch with non-public
information in order to maintain the ratings.

Syncora's ratings have been on Rating Watch Positive since Aug.
11, 2008, reflecting the favorable implications of enhancements to
Syncora's financial and capital position given the execution of
the settlement agreements announced July 29, 2008 and the
possibility that Syncora's ratings could be upgraded upon full
assessment of the remaining insured portfolio. Syncora's future
credit profile will reflect both the company's capital position
resulting from its financial settlements with Merrill Lynch & Co.
and XL Capital Ltd., as well as a view of various qualitative
factors including Syncora's franchise value and business outlook,
which appear to be highly uncertain due to the negative
implications from the company's exposure to mortgage-related
credits.

Syncora is a Bermuda domiciled holding company whose primary
operating subsidiaries, SGI and SGRe, provide insurance,
reinsurance, and financial products and services throughout the
United States and internationally. For June 30, 2008, the company
reported consolidated GAAP assets of $3.7 billion and shareholders
equity of negative ($182.1) million. On an aggregated basis net
par outstanding totaled $130 billion as of June 30, 2008.


SEMGROUP LP: Canadian Court Extends CCAA Stay Until November 21
---------------------------------------------------------------
The Honorable Madame Justice Romaine in the Court of Queen's Bench
of Alberta, in the Judicial District of Calgary, Canada, at the
behest of SemCanada Crude Company, SemCAMS ULC, SemCanada
Energy Company, A.E. Sharp, Ltd., CEG Energy Options, Inc.,
319278 Nova Scoatia Company, and 1380331 Alberta ULC, extended
the stay period prohibiting creditors and parties-in-interest
from commencing or continuing any action, through and including
Nov. 21, 2008.

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


SHERMAG INC: Quebec Court Extends CCAA Stay to December 10
----------------------------------------------------------
Reuters reports that the Quebec Superior Court extended Shermag
Inc.'s creditor protection status until December 10, 2008, to
allow it to develop a plan of arrangement to propose to its
creditors.  Shermag, according to Reuters, said the extension will
give it time to file its plan of arrangement and hold a meeting
with its creditors.

The Superior Court also approved the liquidation of surplus
inventory and equipment, as well as the sale of Shermag's head
office building, Reuters says.

Reuters notes that in April, investment firm Clarke Inc. withdrew
its offer to buy Shermag after the company's independent directors
decided against the bid.

Headquartered in Sherbrooke, Quebec, Shermag Inc. (TSX: SMG)
designs, produces, markets and distributes high-quality
residential furniture.  The company employs approximately 729
people and is a manufacturer and importer with its own
manufacturing operations and worldwide sourcing division.

Shermag has been operating under the protection of the Companies'
Creditors Arrangement Act (Canada) since May 5, 2008.

RSM Richter, Inc., has been appointed monitor in the case.


SHOE PAVILION: Wants to Start Talks on Going-Concern Sale
---------------------------------------------------------
Shoe Pavilion Inc. related to the U.S. Bankruptcy Court for the
Central District of California that it wants to negotiate a going-
concern sale of its 63 stores still in operation, William Rochelle
of Bloomberg News says.

Mr. Rochelle notes that the Debtor is liquidating its other stores
in a going-out-of-business basis.

Headquartered in Sherman Oaks, California, Shoe Pavilion, Inc.
(NasdaqGM: SHOE) -- http://www.shoepavilion.com/-- sells branded
footwear and accessories.  The company operates 115 stores in
Washington, Oregon, California, Arizona, Nevada, Texas and New
Mexico.

The company and its affiliate, Shoe Pavilion Corporation filed for
Chapter 11 protection on July 15, 2008 (Bankr. C.D. Calif. Case
No. 08-14939).  Ron Bender, Esq., at Levene, Neale, Bender, Rankin
& Brill L.L.P. represents the Debtors in their restructuring
efforts.  When the Debtors filed for protection from its creditors
it listed $60,994,000 in total assets and $27,000,000 in total
debts.


SHORES OF PANAMA: May Access Vision Bank's $2 Million DIP Fund
--------------------------------------------------------------
Shores of Panama Inc. obtained from the U.S. Bankruptcy Court for
the Northern District of Florida to access up to $2 million in
postpetition funding from Vision Bank, its prepetition secured
lender, William Rochelle of Bloomberg News relates.  The Debtor
may also access Vision Bank's $600,000 cash collateral.

Vision Bank is owed at least $73.3 million, including
$55.9 million on a first lien, Mr. Rochelle notes.

Based in Spanish Fort, Alabama, Shores of Panama, Inc. owns and
manages condominiums.  The company filed for Chapter 11 protection
on Feb. 26, 2008 (Bankr. N.D. Fla. Case No. 08-50066).  John E.
Venn, Jr., P.A., represents the Debtor in its restructuring
efforts.  The Debtor disclosed $173,568,452 in total assets and
$113,255,773 in total debts.


SILVER STATE: NFID Closes Bank, Nevada Bank to Insure Deposits
--------------------------------------------------------------
Silver State Bank, Henderson, Nevada, was closed Friday by the
Nevada Financial Institutions Division, and the Federal Deposit
Insurance Corporation was named Receiver.  To protect the
depositors, the FDIC entered into a Purchase and Assumption
Agreement with Nevada State Bank, Las Vegas, Nevada, to assume the
Insured Deposits of Silver State Bank.

The branches of Silver State Bank will open on Monday as Nevada
State Bank in Nevada and National Bank of Arizona in Arizona.  
Depositors of the failed bank will automatically become depositors
of Nevada State Bank or National Bank of Arizona.  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.

Over the weekend, customers of Silver State Bank 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, Silver State Bank had total assets of $2.0
billion and total deposits of $1.7 billion.  Nevada State Bank
agreed to purchase the insured deposits for a premium of 1.3
percent.  At the time of closing, there were approximately $20
million in uninsured deposits held in approximately 500 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.

Silver State Bank also had approximately $700 million in brokered
deposits that are not part of [Fri]day's transaction.  The FDIC
will pay the brokers directly for the amount of their insured
funds.

Customers with accounts in excess of $100,000 should contact the
FDIC toll-free at 1-800-523-8177 to set up an appointment to
discuss their deposits.  This phone number will be operational
this evening until 9:00 p.m. PDT; on Saturday and Sunday from 9:00
a.m. to 6:00 p.m. PDT; and on Monday and thereafter from
8:00 a.m. to 8:00 p.m. PDT.

Customers who would like more information on Friday's transaction
should visit the FDIC's Web site at
http://www.fdic.gov/bank/individual/failed/silverstate.html.
Beginning Monday, depositors of Silver State Bank with more than
$100,000 at the bank may visit the FDIC's Web page, "Is My Account
Fully Insured?" at http://www2.fdic.gov/dip/Index.aspto determine  
their insurance coverage

In addition to assuming the failed bank's insured deposits, Nevada
State Bank will purchase a small amount of assets comprised of
cash and securities. The FDIC will retain the remaining assets for
later disposition.

The transaction is the least costly resolution option, and the
FDIC estimates that the cost to its Deposit Insurance Fund is
between $450 and $550 million.  Silver State Bank is the second
bank to fail in Nevada in 2008.  First National Bank of Nevada,
Reno failed on July 25, 2008.  This year, a total of eleven FDIC-
insured institutions have been closed.

                        About Silver State

Headquartered in Henderson, NevadaSilver State Bancorp (NASDAQ:
SSBX) -- http://www.silverstatebank.com/-- through its wholly-
owned subsidiary, Silver State Bank, currently operates thirteen
full service branches in southern Nevada and four full service
branches in the Phoenix/Scottsdale market area.  Silver State Bank
also operates loan production offices located in Nevada,
California, Washington, Oregon, Utah, Colorado and Florida.


SKLAR PEPPLER: Declares Bankruptcy; 174 Workers to Lose Jobs
------------------------------------------------------------
United Steelworkers' Ontario/Atlantic Director Wayne Fraser said
Friday the declared bankruptcy of Sklar Furniture in Ajax comes at
a time when members of USW Local 50U had given the company
numerous concessions to keep the operation, part of the US-based
Sklar Peppler Furniture Corporation, in Canada.  The union was
notified late Thursday that the company is bankrupt and 174
workers will lose their jobs.

Sklar entered bankruptcy protection two years ago under the
Companies Creditors Arrangement Act (Canada) and within months it
had restructured, with creditors and employees agreeing to accept
more concessions.  In a move that violated the collective
agreement, the company discontinued the employees' benefits
package.  Entitlement to benefits was established through
arbitration although they were not restored prior to Thursday's
announcement.

Mr. Fraser said the USW will use recent amendments to the
Bankruptcy and Insolvency Act, the Wage Protection Bill, which
ensures employees wages and vacation pay will be guaranteed in the
event of a bankruptcy.

Local 50U President Sam Onofrio said his members "are grateful for
the work the union has done to get wage protection into law,
especially since the last paycheques issued by the company
bounced."

"The union is committed to fight for every last penny owed to
these workers," said Mr. Fraser.  "This company has been in
business for more than 60 years and the name Sklar Peppler is well
known in the furniture industry.

In addition to the shabby treatment of our members by Sklar, this
situation is yet another example of how manufacturing in Ontario
has been allowed to all but vanish while all levels of government
do nothing to prevent it.  Meanwhile, furniture made in China is
easily finding its way into stores and showrooms.  The lack of
action by Queen's Park and Ottawa is a national disgrace."

All Local 50U members at Sklar Furniture are urged to contact
their local executive at 905-576-6262 to provide information
needed by the union to process their claims.

Whitby, Ontario-based Sklar Peppler Furniture Corporation --  
http://www.sklarpeppler.com/-- manufactures upholstered  
furniture.


SOLAR COSMETIC: Seeks Until December 4 to File Chapter 11 Plan
--------------------------------------------------------------
Solar Cosmetic Labs Inc. and its debtor-affiliate, Solar Packaging
Corp., ask the United States Bankruptcy Court for the Southern
District of Florida to extend their exclusive periods to:

  -- file a Chapter 11 plan until Dec. 4, 2008, and

  -- solicit acceptances of that plan until Feb. 2, 2009.

The Debtors' initial exclusive period to file a plan expired on
Sept. 5, 2008.

The Debtors tell the Court that they have initiated talks with
Key Bank, N.A. and the Official Committee of Unsecured Creditors
regarding the structure of a consensual Chapter 11 plan.  However,
the Debtors need more time to continue its negotiation with their
creditors and to prepare adequate information needed to file a
plan.

Peter E. Shapiro, Esq., at Shutts & Bowen LLP, relates the Debtors
have showed progress during the Chapter 11 cases.  As reported in
the Troubled Company Reporter on Aug. 6, 2008, the Court
authorized the Debtors to sell their intellectual property --
including trademarked logos, patents and copyrights -- to Sun &
Skin Care Research Inc. for $8,500,000.

                      About Solar Cosmetic

Miami Gardens, Florida-based Solar Cosmetic Labs Inc. --
http://www.solarcosmetics.com/-- and --       
http://www.bodyandearth.com/-- manufacture, markets and sells       
perfumes, cosmetics, and other toilet preparations.  Solar
Packaging Corp. is the holder of certain operating licenses and is
a guarantor of certain of Solar Cosmetic's obligations.  

The company and Solar Packaging Corp. filed chapter 11 petition on
May 6, 2008 (Bankr. S.D. Fla. Case Nos. 08-15793 and 08-15796).  
Judge Laurel Isicoff presides the case.  Peter E. Shapiro, Esq.,
at Shutts & Bowen, LLP represents the Debtors in their
restructuring efforts.  The U.S. Trustee for Region 21 appointed
creditors to serve on an Official Committee of Unsecured
Creditors.  The Committee is represented by Jeffrey P. Bast, Esq.  
The Debtors' schedule showed total assets of $13,925,425 and total
liabilities of $50,928,780.


SONICBLUE INC: Chapter 11 Trustee Files Revised Liquidating Plan
----------------------------------------------------------------
Dennis J. Connolly, the Chapter 11 trustee of SONICblue Inc. and
its debtor-affiliates, made revisions to his plan of liquidation
for the Debtor and accompanying disclosure statement.

The first revision to the plan and disclosure statement was
delivered to the U.S. Bankruptcy Court for the Northern District
of California on August 22, 2008.  The second revision to the plan
documents was filed September 4.

The Official Committee of Unsecured Creditors of SONICblue, as
reconstituted, is a co-proponent to the liquidation plan.

Substantially all of the Debtors' assets other than certain estate
litigation claims have already been reduced to cash. If any assets
have not been liquidated by the effective date of the Plan, a plan
administrator, in consultation with a post-confirmation committee,
will liquidate those Assets in accordance with the terms of the
First Amended Plan. The Plan Administrator will distribute the
Cash and the proceeds of the Assets (net of expenses) to creditors
in accordance with the Plan's terms.

The Chapter 11 Trustee will initially serve as Plan Administrator.

The Plan Proponents anticipate that roughly $77,000,000 will be
available for distribution to Holders of Allowed Claims as part of
an initial distribution.  Holders of Allowed Administrative
Claims, Priority Tax Claims, and Priority Claims, as well as
Holders of Allowed Secured Claims, will be paid in full.

Holders of 7-3/4% Secured Senior Subordinated Convertible
Debentures issued by SONICblue in 2002 and due in 2005, in an
aggregate principal amount not to exceed $75,000,000, will receive
roughly 56% of the Allowed Amount of their Claims.  Trade and
other general unsecured creditors are expected to receive cash
equal to roughly 38.0% of the Allowed Unsecured Claim.

General Unsecured Creditors may receive payments as additional
Assets become available for distribution.  The principal source of
those additional payments, if any, will be Estate Litigation
Claims, including claims against counsel who formerly represented
the Debtors and the initial creditors committee in the case.

Holders of SONICblue's 5-3/4% Convertible Subordinated Notes
issued in 1996 and due in 2003 are subordinated to the payment in
full of the 2002 Noteholders. Because there are insufficient
Assets in the Debtors' Estates to repay the 2002 Notes in full,
the Plan Proponents believe that no Assets are available to repay
the 1996 Notes.

However, as part of as part of a settlement among the Chapter 11
Trustee, the Reconstituted Creditors Committee and the 2002
Noteholder, Holders of 1996 Notes may receive under the First
Amended Plan roughly 0.9% of the Allowed Claim in the event:

   -- the Settlement is approved as part of the First Amended
      Plan, and the Plan is confirmed and becomes effective,

   -- Holders of 1996 Notes votes to accept the First Amended
      Plan, and

   -- no Holder of a 1996 Notes or the 1996 Notes Indenture
      Trustee objects to confirmation of the First Amended Plan.

Pursuant to the Settlement, the 2002 Noteholders will contribute
at least roughly $8.2 million in initial Cash distributions to
Unsecured Creditors under the First Amended Plan, and more if
additional distributions become available.

Shareholders get nothing.

The Plan Proponents also disclose that they have investigated the
actual cash received by the Debtors from the 2003 sale of their
Go-Video Product Line to Opta Systems, LLC.  The Debtors have
reported that Opta paid them roughly $6.2 million as the purchase
price calculated at the time of closing.

The Plan Proponents relate that the amounts paid by Opta may have
been higher than the amounts reported by the Debtors.  Based upon
their analysis, the Plan Proponents believe that the amounts paid
by Opta may have been as high as $7.7 million.  The Plan
Proponents note that the discrepancy will have no impact on any
creditor of any of the Estates if an inter-estate settlement
proposed in the First Amended Plan is approved. If the inter-
estate settlement is not approved, depending on the results of
litigation, the discrepancy could materially reduce the recovery
for creditors of Debtor Sensory Science.

The Plan Proponents also note that the Debtors' have earlier
reported that they paid Congress Financial Corporation roughly
$5.9 million. Sensory Science owed Congress approximately $5.9
million on a revolving loan facility.  The Plan Proponents, in
conjunction with employees of SONICblue, have investigated the
payment. At this time, the Plan Proponents have only been able to
verify approximately $4.2 million in payments made to Congress.  
The Plan Proponents are continuing to investigate this
discrepancy.

The Plan Proponents relate that the discrepancy will have no
impact on any Creditor of any of the Estates if the inter-estate
settlement proposed in the First Amended Plan is approved. If the
inter-estate settlement is not approved, depending
on the results of litigation, the discrepancy could materially
reduce the recovery for creditors of Sensory Science.

Pillsbury Winthrop Shaw Pittman LLP and the Indenture Trustee to
the 1996 Notes have objected to the earlier versions of the
disclosure statement.

The Hon. Marilyn Morgan initially scheduled an August 28 hearing
to consider approval of the disclosure statement.  The Court has
yet to rule on the disclosure statement.  At the disclosure
statement hearing, the Court will examine whether the disclosure
statement contains adequate information pursuant to Sec. 1125 of
the Bankruptcy Code to "enable a hypothetical, reasonable investor
typical of Holders of Claims against the Debtors to make an
informed judgment as to whether to accept or reject" the First
Amended Plan.

As of June 30, 2008, the Chapter 11 Trustee held approximately
$85.8 million in Cash.

A full-text copy of the First Amended Plan is available for a fee
at:

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

A full-text copy of the First Amended Disclosure Statement is
available for a fee at:

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

                       About SONICblue Inc.

SONICblue Inc. was a consumer electronics company.  Prior to
January 2001, SONICblue's primary business was to supply graphics
and multimedia accelerator subsystems for personal computers.  
SONICblue completed the acquisition of ReplayTV, Inc., a developer
of personal television technology, on August 1, 2001.  SONICblue
completed the acquisition of Sensory Science, a developer of
consumer electronics products, including dual deck videocassette
player/recorders and DVD players, on June 27, 2001.  Debtor
Diamond Multimedia Systems Inc. was an established PC original
equipment manufacturer and retail provider of communications and
home networking solutions, PC graphics and audio add-in boards and
digital audio players.

SONICblue Inc. and its debtor-affiliates filed for chapter 11
bankruptcy on March 21, 2003, before the U.S. Bankruptcy Court for
the Northern District of California (Lead Case No. 03-51775).

The Debtors employed Pillsbury Winthrop Shaw Pittman LLP f/k/a
Pillsbury Winthrop LLP as their bankruptcy counsel. Houlihan Lokey
Howard & Zukin Capital served as their financial advisors.

Early into the case, the U.S. Trustee appointed an official
creditors' committee in the case. On October 4, 2007, the
Bankruptcy Court directed the U.S. Trustee to reconstitute the
Initial Creditors' Committee.

The Initial Creditors' Committee retained Levene, Neale, Bender,
Rankin & Brill LLP as bankruptcy counsel; and Alliant Partners, as
financial advisors.

On March 26, 2007, the Bankruptcy Court disqualified Pillsbury as
the Debtors' bankruptcy counsel and ordered the appointment of a
chapter 11 trustee for the Debtors.

On April 17, 2007, the Court granted the U.S. Trustee's request to
appoint Dennis J. Connolly, Esq., as the Chapter 11 Trustee.

The U.S. Trustee filed a notice dissolving the Initial Creditors'
Committee on October 10, 2007.  The U.S. Trustee appointed on
October 23, 2007, the Reconstituted Creditors' Committee -- Korea
Export Insurance Corporation, Riverside Contracting LLC &
Riverside Claims LLC, Synnex K.K., TLI Holdings, Inc., Michelle
Miller, and York Capital Opportunity Fund. York Capital
Opportunity Fund was later appointed Chair of the Reconstituted
Creditors' Committee and Synnex K.K. subsequently resigned as a
member.

GRANT T. STEIN, ESQ., at ALSTON & BIRD LLP in Atlanta, Georgia;
and CECILY A. DUMAS, ESQ., at FRIEDMAN DUMAS & SPRINGWATER LLP in
San Francisco, California, represent the Chapter 11 Trustee.  
Grobstein Horwath serves as accountants to the Chapter 11 Trustee.  
ARON M. OLINER, ESQ., MIKEL R. BISTROW, ESQ., and GEOFFREY A.
HEATON, ESQ., at DUANE MORRIS LLP, in San Francisco,represent the
Reconstituted Creditors' Committee.



SOUTHWEST CHARTER: U.S. Trustee Seeks Dismissal of Chapter 11 Case
------------------------------------------------------------------
Ilene J. Lashinsky, U.S. Trustee for the District of Arizona,
seeks authority from the U.S. Bankruptcy Court for the District of
Arizona to dismiss the Chapter 11 case of Southwest Charter Lines
Inc. or converted it under Chapter 11 liquidation.

The United States Trustee asserts that sufficient cause exists to
dismiss the case.  The Debtor's administrative deficiencies are:

   (1) failure to timely file June and July monthly operating
       reports; and

   (2) failure to timely remit first quarterly fee of $325 for the
       second quarter of 2008; and

In addition, the U.S. Trustee also suggests that the Debtor
appears to be administratively insolvent.  There are several
motions for stay relief that have been filed by various creditors
in this case.  Each motion alleges postpetition defaults by the
Debtor.  One motion has already been granted and the Debtor has
not filed responses to any of the remaining motions.  It appears
that the Debtor does not have the financial ability to pay its
creditors on an ongoing basis and is administratively insolvent.

Furthermore, the Debtor's counsel failed to appear at the meeting
of creditors held on Aug. 14, 2008.

Headquartered in Gilbert, Arizona, Southwest Charter Lines Inc.
-- http://www.swcl.com/-- provides transportation services.  The   
company filed for Chapter 11 bankruptcy protection on May 29, 2008
(D. Ariz. Case No. 08-06252).  Michael T. Reynolds, Esq. and
Theodore P. Witthoft, Esq., at Collins, May, Potenza, Baran &
Gillespie, represent the Debtor as bankruptcy counsel.  When the
Debtor filed for Chapter 11 restructuring, it listed total assets
of $12,907,933 and total debts of $12,352,275.


SOUTHWEST CHARTER: Court Okays Donald Powell as Bankruptcy Counsel
------------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Arizona authorized
Southwest Charter Lines Inc. to employ Donald W. Powell of the law
firm of Carmichael & Powell PC as its bankruptcy counsel.

The professional services to be rendered by Mr. Powell will
include, but not limited to, the providing of legal advice with
respect to the powers, duties and responsibilities of the Debtor
concerning its business, continued operations, and management of
applicable property; the preparation of all necessary and required
applications, orders, answers, reports, and other needed legal
documents; and the performance of any and all other legal services
for the Debtor, as Debtor-in-Possession, which will become
necessary and required.

On August 8, 2008, the Court authorized the request of Collins,
May, Potenza, Baran & Gillespie, P.C., to withdraw as counsel for
the Debtor due to a discovered potential conflict.

Mr. Powell represents no interest adverse to the Debtor or the
estate in this case, and his employment would be in the best
interest of the Debtor's estate.

Headquartered in Gilbert, Arizona, Southwest Charter Lines Inc.
-- http://www.swcl.com/-- provides transportation services.  The   
company filed for Chapter 11 bankruptcy protection on May 29, 2008
(D. Ariz. Case No. 08-06252).  Michael T. Reynolds, Esq. and
Theodore P. Witthoft, Esq., at Collins, May, Potenza, Baran &
Gillespie, represent the Debtor as bankruptcy counsel.  When the
Debtor filed for Chapter 11 restructuring, it listed total assets
of $12,907,933 and total debts of $12,352,275.


SPHERE DRAKE: Hearing on Scheme of Arrangement Tomorrow
-------------------------------------------------------
The United States Bankruptcy Court for the Southern District of
New York will convene a hearing in the chapter 15 cases of Sphere
Drake Insurance, Ltd., tomorrow, September 10, 2008, at 10:00
a.m., to consider:

   a) entry of an order giving full force and effect in the United
      States to the Scheme of Arrangement proposed by the Debtor
      and sanctioned pursuant to Sec. 425 of the Companies Act of
      1985 of the U.K. by the High Court of Justice of England and
      Wales, a permanent injunction and related relief; and

   b) recognition of a foreign main proceeding, as well as a
      permanent injuction and related relief.

Any parties in interest who wants to respond or object to the
Debtor's request must file their responses with:

      The Office of the Clerk
      The United States Bankruptcy Court for
      the Southern District of New York
      Room 534, One Bowling Green
      New York, New York 10004-1408

and served on:

      Howard Seife, Esq.
      Francisco Vazquez, Esq.
      Chadbourne & Parke, LLP
      30 Rockefeller Plaza
      New York, New York 10112
      Tel: (212) 408-5100

Together with Sovereign Marine & General Insurance Co. Ltd. and
other insurance companies, Sphere Drake Insurance, Ltd.,
underwrote insurance and reinsurance business in pooling
arrangements through Willis Faber (Underwriting Management),Ltd.,
Willis Faber & Dumas, Ltd., and Devonport Underwriting Agency,
Ltd. in the U.K.

On July 22, 2008, the Company filed for Chapter 15 bankruptcy
protection with the United States Bankruptcy Court for the
Southern District of New York (Bankr. S.D. N.Y. Case No. 08-
12832).  PRO Insurance Solutions, Ltd. served as the Debtor's
petitioner.  Howard Seife, Esq., at Chadbourne & Parke, LLP,
represented the petitioner.  When it filed for bankruptcy, it
listed between $50,000 to $100,000 in estimated assets and between
$1,000,000 to $10,000,000 in estimated debts.


STEVE & BARRY'S: Sec. 341 Meeting Adjourned to Sept. 23
-------------------------------------------------------
The meeting of the creditors of Steve & Barry's, LLC, and its
debtor-affiliates pursuant to Section 341 of the Bankruptcy Code
has been adjourned to September 23, 2008, at 2:00 p.m., Eastern
Time, at 80 Broad Street, Fourth Floor, in New York.

The Section 341 Meeting was previously scheduled for August 12,
2008.

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

Based in Port Washington, New York, Steve and Barry LLC --
http://www.steveandbarrys.com/-- is a national casual apparel    
retailer that offers high quality merchandise at low prices for
men, women and children.  Founded in 1985, the company operates
276 anchor and junior anchor shopping center and mall-based
locations throughout the U.S.  At STEVE & BARRY'S (R) stores,
shoppers will find brands they can't find anywhere else, including
the BITTEN(TM) collection, the first-ever apparel line created by
actress and global fashion icon Sarah Jessica Parker, and the
STARBURY(TM) collection of athletic and lifestyle apparel and
sneakers created with NBA (R) star Stephon Marbury.

Steve & Barry's, LLC, and 63 affiliates filed separate voluntary
petitions under Chapter 11 on July 9, 2008 (Bankr. S.D. N.Y. Lead
Case No. 08-12579). Lori R. Fife, Esq., and Shai Waisman, Esq., at
Weil, Gotshal & Manges, LLP, represent the Debtors in their
restructuring efforts.

Diana G. Adams, United States Trustee for Region 2, has appointed
seven members to the Official Committee of Unsecured Creditors in
the Debtors' Chapter 11 cases.

On August 22, 2008, the Debtors obtained permission from the Court
to sell substantially all of their assets for $168 million to a
joint venture by Bay Harbour Management and York Capital, BHY S&B
Holdings, LLC.  Under the terms of the purchase agreement,
majority  of the Debtors' 276 stores will remain open.

When the Debtors filed for bankruptcy, they listed $693,492,000 in
total assets and $638,086,000 in total debts.  (Steve & Barry's
Bankruptcy News, Issue No. 10; Bankruptcy Creditors' Service Inc.,
http://bankrupt.com/newsstand/or 215/945-7000)


STEVE & BARRY'S: Willowbrook Asks Court to Vacate Sale Order
------------------------------------------------------------
The Commons at Willowbrook Inc. asks the United States Bankruptcy
Court for the Southern District of New York to vacate the
August 22, 2008 Sale Order approving the sale of the Debtors'
assets for the limited purpose of amending the "Designation
Deadline" with respect to its Standard Commercial Shopping Center
Lease with Steve & Barry's Texas LLC, dated May 15, 2008.  Linens
'n Things Inc. and its debtor-affiliates lease real property
located in Houston, Texas.

Under the Sale, the approved Asset Purchase Agreement, as
amended, provides that the purchaser, BH S&B Holdings LLC, has
until January 31, 2009, to designate each real estate lease as a
"Purchased Lease," a "Designee Lease," or an "Excluded Lease,"
Robert W. Dremluk, Esq., at Seyfarth Shaw LLP, in New York,
notes.

Any lease not designated by January 31, 2009, will be deemed
rejected by the Debtors pursuant to Section 365 of the Bankruptcy
Code.

Mr. Dremluk points out that the Shopping Center Lease is not
listed on the Purchase Agreement schedules for the Excluded
Leases and Purchased Leases.

Pursuant to Section 365(d)(4)(i) of the Bankruptcy Code, the
Debtors have until November 6, 2008, to assume or reject the
Shopping Center Lease, he notes.

Mr. Dremluk says that it is unclear from the terms of the Sale
Order and the Purchase Agreement whether these are intended to
supersede the provisions of Section 365(d)(4)(i).

To avoid unnecessarily incurring more than $1,000,000 in
construction costs or risk a breach of the Lease for failure to
timely deliver the premises, Willowbrook's counsel attempted to
reach a stipulation with the Debtors with respect to the
treatment of the Shopping Center Lease, subject to Court
approval.  The Debtors, however, were unwilling to agree to any
stipulations that were acceptable to the Landlord, Mr. Dremluk
relates.

To avoid unjust harm, Willowbrook seeks to amend the Designation
Deadline to require BH S&B Holdings and the Debtors to assume or
reject the lease before September 30, 2008, and to extend the
"Estimated Completion Date" in the Lease to a date four months
subsequent to the entry of an order assuming the Lease.

The Court authorized the Debtors on August 22, 2008, to sell
substantially all of their assets to BH S&B for $163
million.  Prior to Court approval, Scott Sozio and Douglas
Teitelbaum of Bay Harbour Management L.C. filed declarations in
support of the sale.  Subsequently, the Sale hearing was
adjourned from Aug. 19, to Aug. 21 and 22.  Following the
Debtors' submission of clean and blacklined copies of their final
proposed Sale Order, the Court gave his stamp of approval on the
asset sale.

                     About Steve & Barry's

Based in Port Washington, New York, Steve and Barry LLC --
http://www.steveandbarrys.com/-- is a national casual apparel    
retailer that offers high quality merchandise at low prices for
men, women and children.  Founded in 1985, the company operates
276 anchor and junior anchor shopping center and mall-based
locations throughout the U.S.  At STEVE & BARRY'S (R) stores,
shoppers will find brands they can't find anywhere else, including
the BITTEN(TM) collection, the first-ever apparel line created by
actress and global fashion icon Sarah Jessica Parker, and the
STARBURY(TM) collection of athletic and lifestyle apparel and
sneakers created with NBA (R) star Stephon Marbury.

Steve & Barry's, LLC, and 63 affiliates filed separate voluntary
petitions under Chapter 11 on July 9, 2008 (Bankr. S.D. N.Y. Lead
Case No. 08-12579). Lori R. Fife, Esq., and Shai Waisman, Esq., at
Weil, Gotshal & Manges, LLP, represent the Debtors in their
restructuring efforts.

Diana G. Adams, United States Trustee for Region 2, has appointed
seven members to the Official Committee of Unsecured Creditors in
the Debtors' Chapter 11 cases.

On August 22, 2008, the Debtors obtained permission from the Court
to sell substantially all of their assets for $168 million to a
joint venture by Bay Harbour Management and York Capital, BHY S&B
Holdings, LLC.  Under the terms of the purchase agreement,
majority  of the Debtors' 276 stores will remain open.

When the Debtors filed for bankruptcy, they listed $693,492,000 in
total assets and $638,086,000 in total debts.  (Steve & Barry's
Bankruptcy News, Issue No. 10; Bankruptcy Creditors' Service Inc.,
http://bankrupt.com/newsstand/or 215/945-7000)


STEVE & BARRY'S: Buyer Releases List of Stores to be Closed
-----------------------------------------------------------
BH S&B Holdings has purportedly released a list of Steve &
Barry's stores to be closed, according to various reports.

Doris Hajewski of Milwaukee Journal Sentinel says this includes
two locations in Wisconsin: in Rice Lake and Marshfield.  Steve &
Barry's located in Enid, Oklahoma will also be closed.

Keiko Morris of newsday.com says the Debtors' Long Island stores
will remain open specifically the ones in Hicksville, Lake Grove,
Massapequa, Westbury, and Medford.

Meanwhile, several reports note that the 170 stores that will
remain open include, among others:

   * the store at Waikele Center, in Hawaii,

   * the stores in Marketplace Mall on Peters Creek Parkway in
     Winston-Salem and the Oak Hollow Mall in High Point, and

   * the store in Oklahoma City.

Based in Port Washington, New York, Steve and Barry LLC --
http://www.steveandbarrys.com/-- is a national casual apparel    
retailer that offers high quality merchandise at low prices for
men, women and children.  Founded in 1985, the company operates
276 anchor and junior anchor shopping center and mall-based
locations throughout the U.S.  At STEVE & BARRY'S (R) stores,
shoppers will find brands they can't find anywhere else, including
the BITTEN(TM) collection, the first-ever apparel line created by
actress and global fashion icon Sarah Jessica Parker, and the
STARBURY(TM) collection of athletic and lifestyle apparel and
sneakers created with NBA (R) star Stephon Marbury.

Steve & Barry's, LLC, and 63 affiliates filed separate voluntary
petitions under Chapter 11 on July 9, 2008 (Bankr. S.D. N.Y. Lead
Case No. 08-12579). Lori R. Fife, Esq., and Shai Waisman, Esq., at
Weil, Gotshal & Manges, LLP, represent the Debtors in their
restructuring efforts.

Diana G. Adams, United States Trustee for Region 2, has appointed
seven members to the Official Committee of Unsecured Creditors in
the Debtors' Chapter 11 cases.

On August 22, 2008, the Debtors obtained permission from the Court
to sell substantially all of their assets for $168 million to a
joint venture by Bay Harbour Management and York Capital, BHY S&B
Holdings, LLC.  Under the terms of the purchase agreement,
majority  of the Debtors' 276 stores will remain open.

When the Debtors filed for bankruptcy, they listed $693,492,000 in
total assets and $638,086,000 in total debts.  (Steve & Barry's
Bankruptcy News, Issue No. 10; Bankruptcy Creditors' Service Inc.,
http://bankrupt.com/newsstand/or 215/945-7000)


STEVE & BARRY'S: Extra Plastic Asserts $347,248 In Total Claims
---------------------------------------------------------------
Sderot, Israel-based retail bag manufacturer Extra Plastic U.S.A.
asserts three claims aggregating $347,248 against Steve & Barry's,
LLC, and its debtor-affiliates, including the asserted $125,426
administrative expense claim.

Henry M. Karwowski, Esq., at Trenk, DiPasquale, Webster, Della
Fera & Sodono, P.C., in West Orange, New Jersey, maintains that
the indefinite delay in payment of Extra Plastic's reclamation
claim has adversely affected and will continue to adversely
affect the manufacturer's cash flow.

Mr. Karwowski asserts that there are additional factors
supporting immediate payment of Extra Plastic's claim:

     * Less than a month before the Prepetition Date, the
       Debtors, in response to an inquiry about payment,
       expressly represented to the vendor that, among other
       things, "[a]ll plans are in place to maintain the payment
       schedule that we have agreed upon."  On the basis of their
       representations, the Debtors "recommend[ed] that Extra
       Plastic and [the Debtors] continue to work together as
       normal, considering that [the Debtors'] need for plastic
       bags will continue to grow with our increased transactions
       and rapid store opening schedule."

     * On July 7, 2008, the Debtors represented to Extra Plastic
       that they were still interested in acquiring the bags
       previously ordered.  The Debtors asserted that they "still
       plan on working with [Extra Plastic] to supply [the
       Debtors'] bag needs, and intend to work with [Extra
       Plastic] to acquire the product that [Extra Plastic has]
       already produced."

The Debtors now refuse to accept the bags previously ordered and
are ordering bags from a new vendor, Mr. Karwowski tells the
Court.

Mr. Karwowski points out that the Debtors do not dispute that
Extra Plastic's administrative claim represents a significant
portion of the dollar amount of all potential claims pursuant to
Section 503(b)(9) of the Bankruptcy Code.  Hence, Extra Plastic
is the primary Section 503(b)(9) creditor, he notes.

Furthermore, Extra Plastic's payment request is dwarfed by the
$2,500,000 carve-out for professional fees, Mr. Karwowski tells
the Court.

Against this backdrop, Extra Plastic asks the United States
Bankruptcy Court for the Southern District of New York to compel
immediate payment of its $125,426 reclamation claim.

Judge Gropper approved the Debtors' proposed procedures for
resolving Section 503(b)(9) Claims on July 31, 2008.  The Court
held that the Section 503(b)(9) Claims Procedure would stand for
anyone seeking an administrative expense claim save for Extra
Plastic, which has filed an objection to the procedures.  

At the hearing, the Court directed the Debtors to give claimants
40 days from the Objection Deadline to file responses to any
objections to their Section 503(b)(9) Claims, saying "in view of
the fact that we have so many foreign entities and were enjoined
by the new rules to take into account that fact, why don't we
change the 20 to 40. . . ."

                     About Steve & Barry's

Based in Port Washington, New York, Steve and Barry LLC --
http://www.steveandbarrys.com/-- is a national casual apparel    
retailer that offers high quality merchandise at low prices for
men, women and children.  Founded in 1985, the company operates
276 anchor and junior anchor shopping center and mall-based
locations throughout the U.S.  At STEVE & BARRY'S (R) stores,
shoppers will find brands they can't find anywhere else, including
the BITTEN(TM) collection, the first-ever apparel line created by
actress and global fashion icon Sarah Jessica Parker, and the
STARBURY(TM) collection of athletic and lifestyle apparel and
sneakers created with NBA (R) star Stephon Marbury.

Steve & Barry's, LLC, and 63 affiliates filed separate voluntary
petitions under Chapter 11 on July 9, 2008 (Bankr. S.D. N.Y. Lead
Case No. 08-12579). Lori R. Fife, Esq., and Shai Waisman, Esq., at
Weil, Gotshal & Manges, LLP, represent the Debtors in their
restructuring efforts.

Diana G. Adams, United States Trustee for Region 2, has appointed
seven members to the Official Committee of Unsecured Creditors in
the Debtors' Chapter 11 cases.

On August 22, 2008, the Debtors obtained permission from the Court
to sell substantially all of their assets for $168 million to a
joint venture by Bay Harbour Management and York Capital, BHY S&B
Holdings, LLC.  Under the terms of the purchase agreement,
majority  of the Debtors' 276 stores will remain open.

When the Debtors filed for bankruptcy, they listed $693,492,000 in
total assets and $638,086,000 in total debts.  (Steve & Barry's
Bankruptcy News, Issue No. 10; Bankruptcy Creditors' Service Inc.,
http://bankrupt.com/newsstand/or 215/945-7000)


STEVE & BARRY'S: Weil Gotshal Reveals Bay Harbour Affiliate Client
------------------------------------------------------------------
In a supplemental affidavit filed with the United States
Bankruptcy Court for the Southern District of New York, Lori R.
Fife, Esq., a member at Weil, Gotshal & Manges LLP, counsel to
Steve & Barry's and its debtor-affiliates, disclosed that:

   * an affiliate of BH S&B Holdings, LLC, the purchaser of
     substantially all of the Debtors' assets -- Bay Harbour --
     is a current client of the firm.  Weil Gotshal represents
     Bay Harbour in matters wholly unrelated to the Debtors'
     Chapter 11 cases.

   * 408-420 Fulton Street LLC, one of the Debtors' landlords,  
     is an affiliate of Jeff Sutton and EJFI Fulton Street LLC.  
     EJFI is a current client of Weil Gotshal, and the firm may
     represent Mr. Sutton and EJFI in matters wholly unrelated to
     the Debtors' bankruptcy cases.

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

                     About Steve & Barry's

Based in Port Washington, New York, Steve and Barry LLC --
http://www.steveandbarrys.com/-- is a national casual apparel    
retailer that offers high quality merchandise at low prices for
men, women and children.  Founded in 1985, the company operates
276 anchor and junior anchor shopping center and mall-based
locations throughout the U.S.  At STEVE & BARRY'S (R) stores,
shoppers will find brands they can't find anywhere else, including
the BITTEN(TM) collection, the first-ever apparel line created by
actress and global fashion icon Sarah Jessica Parker, and the
STARBURY(TM) collection of athletic and lifestyle apparel and
sneakers created with NBA (R) star Stephon Marbury.

Steve & Barry's, LLC, and 63 affiliates filed separate voluntary
petitions under Chapter 11 on July 9, 2008 (Bankr. S.D. N.Y. Lead
Case No. 08-12579). Lori R. Fife, Esq., and Shai Waisman, Esq., at
Weil, Gotshal & Manges, LLP, represent the Debtors in their
restructuring efforts.

Diana G. Adams, United States Trustee for Region 2, has appointed
seven members to the Official Committee of Unsecured Creditors in
the Debtors' Chapter 11 cases.

On August 22, 2008, the Debtors obtained permission from the Court
to sell substantially all of their assets for $168 million to a
joint venture by Bay Harbour Management and York Capital, BHY S&B
Holdings, LLC.  Under the terms of the purchase agreement,
majority  of the Debtors' 276 stores will remain open.

When the Debtors filed for bankruptcy, they listed $693,492,000 in
total assets and $638,086,000 in total debts.  (Steve & Barry's
Bankruptcy News, Issue No. 10; Bankruptcy Creditors' Service Inc.,
http://bankrupt.com/newsstand/or 215/945-7000)


SYNCORA HOLDINGS: Fitch Withdraws Ratings
-----------------------------------------
Fitch Ratings has announced that it has withdrawn the ratings of
Syncora Holdings Ltd. (Syncora, formerly Security Capital
Assurance Ltd.) and its financial guaranty subsidiaries.

Fitch has withdrawn these ratings, which were on Rating Watch
Positive:

Syncora Guarantee Inc. (SGI, formerly XL Capital Assurance Inc.)
Syncora Guarantee (U.K.) Ltd. (SG-UK, formerly XL Capital
Assurance (U.K.) Ltd.)
Syncora Guarantee Re Ltd. (SGRe, formerly XL Financial Assurance
Ltd.)
   -- Insurer financial strength (IFS) 'CCC'.

Syncora Holding Ltd.
   -- Long-term issuer rating 'CCC-';
   -- $250 million fixed/floating series A perpetual non-
cumulative preference shares 'CCC-'.

Twin Reefs Pass-Through Trust
   -- $200 million pass-through trust securities 'CCC-'.

Fitch believes Syncora's financial guaranty franchise is
effectively in run-off at the present time and that there is
greatly reduced investor interest in continued coverage of this
rating. Consistent with the 8-K filed by Syncora yesterday, the
company will no longer be providing Fitch with non-public
information in order to maintain the ratings.

Syncora's ratings have been on Rating Watch Positive since
Aug. 11, 2008, reflecting the favorable implications of
enhancements to Syncora's financial and capital position given the
execution of the settlement agreements announced July 29, 2008 and
the possibility that Syncora's ratings could be upgraded upon full
assessment of the remaining insured portfolio. Syncora's future
credit profile will reflect both the company's capital position
resulting from its financial settlements with Merrill Lynch & Co.
and XL Capital Ltd., as well as a view of various qualitative
factors including Syncora's franchise value and business outlook,
which appear to be highly uncertain due to the negative
implications from the company's exposure to mortgage-related
credits.

Syncora is a Bermuda domiciled holding company whose primary
operating subsidiaries, SGI and SGRe, provide insurance,
reinsurance, and financial products and services throughout the
United States and internationally. For June 30, 2008, the company
reported consolidated GAAP assets of $3.7 billion and shareholders
equity of negative ($182.1) million. On an aggregated basis net
par outstanding totaled $130 billion as of June 30, 2008.


TOUSA INC: Beacon Hill Wants to Set October 22 as Claims Bar Date
-----------------------------------------------------------------
TOUSA Inc. and its debtor-affiliates do not expect a significant
number of claims to be filed in the Chapter 11 case of Beacon Hill
at Mountain's Edge LLC.  However, establishing a bar date for
Beacon Hill is an essential part of the Chapter 11 process.

By this motion, Beacon Hill asks the U.S. Bankruptcy Court for the
Southern District of Florida to fix Oct. 22, 2008, at 5:00 p.m.
,as the last date and time by which parties-in-interest may file
proofs of claim against it.

The Debtors also ask the Court to establish Jan. 26, 2009, as
the deadline for all governmental units to file a proof of claim
in Beacon Hill's Chapter 11 case.

The Debtors seek to permit creditors to rely on the Schedules of
Assets and Liabilities of Beacon Hill in preparing their proofs
of claim.

The Debtors propose that each person or entity that asserts a
claim that arose before the Petition Date against Beacon Hill
will be required to file a proof of claim form no later than
October 22, 2008.  

The form of the proof of claim must substantially be in
accordance with Official Form No.  Each Proof of Claim must (i)
be written in English; (ii) include a claim amount denominated in
United States dollars; (iii) state a claim against only Beacon
Hill; and (iv) be signed by the Claimant or if the Claimant is
not an individual, by an authorized agent of the Claimant.  It
must also include supporting documentation.

All Proofs of Claim must be timely filed with the Clerk of the
Court or must be delivered to Kurtzman Carson Consultants LLC,
the Debtors' claims and noticing agent, by first class mail,
overnight delivery or hand delivery at:

              TOUSA Claims Processing Center
              c/o Kurtzman Carson Consultants LLC
              2335 Alaska Avenue
              El Segundo, California 90245

Only original Proofs of Claim will be deemed acceptable for
purposes of claims administration.

Any claimant who failed to file a Proof of Claim by the Bar Date
is forever barred, estopped and enjoined from asserting that
claim against Beacon Hill.

The Bar Date does not apply to, among others, claims that were
listed in the Schedules; claims whose holders have already filed
a proof of claim; claims that have been paid in full;
intercompany claims; administrative claims; and claims for equity
interests.

The Debtors propose to mail no later than September 22, 2008, a
written notice of the Bar Date to parties-in-interest.  

The Debtors also intend to publish the Bar Date Notice in The
Wall Street Journal, the Las Vegas Review-Journal and the Las
Vegas Sun.  The proposed Publication Notice will include a
telephone number that creditors may call to obtain copies of a
proof of claim form, the URL for a web site at which the
creditors may obtain a copy of a Proof of Claim Form, and
information concerning the procedures and appropriate deadlines
for filing Proofs of Claim.

Paul Steven Singerman, Esq., at Berger Singerman, P.A., in Miami
Florida, asserts that the proposed procedures would allow the
Debtor to provide comprehensive notice and clear instructions to
creditors, and would allow Beacon Hill's Chapter 11 case to move
forward with minimum of administrative expense and delay.

The Debtors relate that they also anticipate establishing
supplemental bar dates in Beacon Hill's Chapter 11 case on a very
limited basis.

The Debtors further propose that any holder of a claim arising
from the rejection of an unexpired lease or executory contract of
Beacon Hill be required to file a proof of claim no later than:

   (i) October 22, 2008; or

  (ii) the date provided in any order authorizing Beacon Hill to
       reject the Agreement or, if no date is provided, then 30
       days after the date of any order authorizing Beacon Hill
       to reject an Agreement.

                         About TOUSA Inc.

Headquartered in  Hollywood, Florida, TOUSA Inc. (Pink Sheets:
TOUS) -- http://www.tousa.com/-- fka Technical Olympic
U.S.A. Inc., dba Technical U.S.A., Inc., Engle Homes, Newmark
Homes L.P., TOUSA Homes Inc. and Newmark Homes Corp. is a leading
homebuilder in the United States, operating in various
metropolitan markets in 10 states located in four major geographic
regions: Florida, the Mid-Atlantic, Texas, and the West.  TOUSA
designs, builds, and markets high-quality detached single-family
residences, town homes, and condominiums to a diverse group of
homebuyers, such as "first-time" homebuyers, "move-up" homebuyers,
homebuyers who are relocating to a new city or state, buyers of
second or vacation homes, active-adult homebuyers, and homebuyers
with grown children who want a smaller home.  It also provides
financial services to its homebuyers and to others through its
subsidiaries, Preferred Home Mortgage Company and Universal Land
Title Inc.

The Debtor and its debtor-affiliates filed for separate Chapter 11
protection on Jan. 29, 2008. (Bankr. S.D. Fla. Case No. 08-10928).
The Debtors have selected M. Natasha Labovitz, Esq., Brian S.
Lennon, Esq., Richard M. Cieri, Esq. and Paul M. Basta, Esq., at
Kirkland & Ellis LLP; and Paul Steven Singerman, Esq., at Berger
Singerman, to represent them in their restructuring efforts.  
Lazard Freres & Co. LLC is the Debtors' investment banker.  Ernst
& Young LLP is the Debtors' independent auditor and tax services
provider.  Kurtzman Carson Consultants LLC acts as the Debtors'
Notice, Claims & Balloting Agent.

TOUSA's direct subsidiary, Beacon Hill at Mountain's Edge LLC dba
Eagle Homes, filed for Chapter 11 Protection on July 30, 2008,
(Bankr. S.D. Fla. Case No.: 08-20746).  It listed assets between
$1 million and $10 million, and debts between $1 million and
$10 million.

The Official Committee of Unsecured Creditors hired Patricia A.
Redmond, Esq., and the law firm Stearns Weaver Weissler Alhadeff &
Sitterson, P.A., as its local counsel.

TOUSA Inc.'s balance sheet at June 30, 2008, showed total assets
of $1,734,422,756 and total liabilities of $2,300,053,979.

TOUSA's Exclusive Plan Filing Period expires Oct. 25, 2008.  
(TOUSA Bankruptcy News, Issue No. 19; Bankruptcy Creditors'
Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000).


UAL CORP: To Furlough 1,550 Flight Attendants by October 31
-----------------------------------------------------------
In line with its plan to reduce its flights for the autumn lean
season, United Airlines Inc. disclosed that it will furlough
1,550 flight attendants, Bloomberg News reports.

The furloughs will involve 10% of United's attendants and will be
implemented on October 31, 2008, the Association of Flight
Attendants-CWA said in its Web site.  

AFA explained in its statement that its collective bargaining
agreement with United requires the airline to first offer the
benefits associated with a voluntary furlough to offset and
potentially eliminate forcing any AFA Member into an involuntary
furlough.  Bidding for the voluntary furlough will open September
8 and close September 22, 2008.  The AFA encouraged attendants
who can afford to volunteer for a furlough to do so.

Jeff Kovick, United's spokesperson told Bloomberg in an
interview, that the furloughs exclude the 290 most-senior
attendants who accepted the company's buyouts in June 2008.

"As we reduce the size of our fleet and take actions to enable
United to compete in an environment of record fuel prices, we
must take the difficult and necessary steps to reduce the number
of people we have to run our operation," Bloomberg quotes Mr.
Kovick, as saying.

                      About UAL Corporation

Based in Chicago, Illinois, UAL Corporation (NASDAQ: UAUA)
-- http://www.united.com/-- is the holding company for United
Airlines, Inc.  United Airlines is the world's second largest
air carrier.  The airline flies to Brazil, Korea and Germany.

The company filed for chapter 11 protection on Dec. 9, 2002
(Bankr. N.D. Ill. Case No. 02-48191).  James H.M. Sprayregen,
Esq., Marc Kieselstein, Esq., David R. Seligman, Esq., and
Steven R. Kotarba, Esq., at Kirkland & Ellis, represented the
Debtors in their restructuring efforts.  Fruman Jacobson, Esq.,
at Sonnenschein Nath & Rosenthal LLP represented the Official
Committee of Unsecured Creditors before the Committee was
dissolved when the Debtors emerged from bankruptcy.

Judge Eugene R. Wedoff confirmed the Debtors' Second Amended
Plan on Jan. 20, 2006.  The company emerged from bankruptcy
protection on Feb. 1, 2006.

(United Airlines Bankruptcy News, Issue No. 164, 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 UAL
Corp. and subsidiary United Air Lines 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 May 22, 2008, as part of an industrywide review.  The
outlook is negative.


URSTADT BIDDLE: Fitch Affirms & Withdraws 'BB' Ratings
------------------------------------------------------
Fitch Ratings affirms and simultaneously withdraws the ratings of
Urstadt Biddle Properties, Inc.:

   -- Issuer Default Rating (IDR) affirmed at 'BB+';
   -- Preferred Stock affirmed at 'BB'

The Rating Outlook is Stable.

Fitch will no longer provide analytical coverage of this issuer.


US AIRWAYS: At High Risk of Bankruptcy in 2009, Aviation Week Says
------------------------------------------------------------------
Michael Lowry, project manager for AVIATION WEEK's latest Top-
Performing Companies report, has ranked Northwest Airlines as a
"high risk" for a bankruptcy filing in 2009.

According to the report, American Airlines, AirTran and
Continental are also at risk in 2009, while USAirways may succumb
to a third Chapter 11 filing this winter due to inadequate
liquidity.

                              2007        2008       2009
                              ----        ----       ----
US Airways Group Inc.         
Financial Fitness Assessment Declining   High Risk  High Risk
Liquidity Assessment         Good        Inadequate Inadequate
Bankruptcy Risk              Low         High       High

AMR Corp.
Financial Fitness Assessment Low Risk    High Risk  High Risk
Liquidity Assessment         Good        Poor       Inadequate
Bankruptcy Risk              Low         Low        High

Northwest Airlines Corp.
Financial Fitness Assessment Low Risk    Declining  High Risk
Liquidity Assessment         Excellent   Fair       Inadequate
Bankruptcy Risk              Low         Low        High

AirTran Holdings Inc.
Financial Fitness Assessment Neutral     Declining  High Risk
Liquidity Assessment         Good        Fair       Poor
Bankruptcy Risk              Low         Low        High

Continental Airlines Inc.
Financial Fitness Assessment Neutral     Declining  High Risk
Liquidity Assessment         Good        Fair       Poor
Bankruptcy Risk              Low         Low        High

AVIATION WEEK's TPC report focuses on the global airline
industry, revealing which carriers are in the best shape to
prevail against the daunting economic challenges they face.

"The next 12 months will be shaky and there will be no return to
the status quo . . . airlines are in a morass," TPC adviser
Michael Dyment, of Nexa Capital Partners, said.

The TPC study shows that the best of the Asia-Pacific and
European airlines are head and shoulders above their peers among
the major legacy carriers, with Singapore Airlines at the
top of the list and Malaysia Airlines improving the most.  

The U.S. majors, meanwhile, are entrenched in the bottom half of
the table.  "The gap between the Asian and European top
performers and the U.S. airlines has only grown larger over the
past year," the article says.  U.S. airlines suffered most from
rising fuel rates and sinking demand, Mr. Lowry noted.

The Wall Street Journal, however, says that with the slow
passenger-traffic growth and high fuel prices, the International
Air Transport Association predicts a loss in the airline industry
of $5.2 billion world-wide for 2008, with the North American
carriers taking the lion's share at $5 billion.  This will be
followed by a $4.1 billion loss in 2009, IATA says.

IATA Director General Giovanni Bisignani also confirmed that many
airlines are indeed "at risk" of going bankrupt as the industry
heads into autumn.  "[F]asten your seatbelts for at least another
two years," Mr. Bisignani advised.

IATA's forecasts factor is an average oil price of $113 a barrel,
reports WSJ.  At present, crude oil is trading a little below
$110.

Ann Keeton of WSJ says UBS AG analysts said the airline industry
could break-even next year if oil prices were to average around
$95 a barrel.  However, if oil prices are higher, the industry's
losses would be greater than the predicted $5.2 billion.

UBS forecasts oil to average $120 a barrel in 2009, says Ms.
Keeton.

                         About US Airways

Based in Tempe, Arizona, US Airways Group Inc.'s (NYSE: LCC) -
http://www.usairways.com/-- primary business activity is the
ownership of the common stock of US Airways, Inc., Allegheny
Airlines, Inc., Piedmont Airlines, Inc., PSA Airlines, Inc.,
MidAtlantic Airways, Inc., US Airways Leasing and Sales, Inc.,
Material Services company, Inc., and Airways Assurance Limited,
LLC.

Under a Chapter 11 plan declared effective on March 31, 2003,
USAir emerged from bankruptcy with the Retirement Systems of
Alabama taking a 40% equity stake in the deleveraged carrier in
exchange for $240 million infusion of new capital.

US Airways and its subsidiaries filed another chapter 11 petition
on Sept. 12, 2004 (Bankr. E.D. Va. Case No. 04-13820).  Brian P.
Leitch, Esq., Daniel M. Lewis, Esq., and Michael J. Canning, Esq.,
at Arnold & Porter LLP, and Lawrence E. Rifken, Esq., and Douglas
M. Foley, Esq., at McGuireWoods LLP, represent the Debtors in
their restructuring efforts.  In the company's second bankruptcy
filing, it lists $8,805,972,000 in total assets and $8,702,437,000
in total debts.

The Debtors' Chapter 11 plan for its second bankruptcy filing
became effective on Sept. 27, 2005.  The Debtors completed their
merger with America West on the same date.

                           *     *     *

As reported in the Troubled company Reporter on July 24, 2008,
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.


YOUNG BROADCASTING: S&P Cuts Corporate Credit Rating to 'CCC'
-------------------------------------------------------------
Standard & Poor's Ratings Services lowered its corporate credit
rating and issue-level ratings on New York City-based Young
Broadcasting Inc.  The corporate credit rating was lowered to
'CCC' from 'CCC+'.  The rating outlook is negative.  The company
had about $826 million of outstanding debt as of June 30, 2008.

"The downgrade reflects our concern about the company's dwindling
cash balances against the backdrop of a soft economy as it
continues to seek a buyer for KRON-TV, its underperforming
MyNetworkTV affiliate in San Francisco," said Standard & Poor's
credit analyst Deborah Kinzer.

The rating on Young reflects the company's significant debt
burden, discretionary cash flow deficits, dwindling cash balances,
ongoing challenges at KRON-TV, and advertising's vulnerability to
economic downturns and variability during the election cycle.  

These factors are minimally offset by Young's portfolio of major
network TV affiliates in small and midsize markets, and the asset
values of its stations--particularly KRON-TV, a VHF station in a
top-10 market.  The negative outlook reflects our concern that
cash balances could fall short of levels stipulated by covenants
by early 2009.

On Jan. 10, 2008, the company announced that it had hired a
financial advisor to help sell KRON-TV, with a view to concluding
a sale agreement before the end of March.  A sale agreement has
still not been announced, and in the second quarter of 2008, the
company recorded a $139 million impairment charge for KRON-TV,
reflecting the weakness and continued underperformance of
the TV station.

Given the absence of news about a sale of the station and its
deteriorating value, we believe the probability is diminishing
that Young will find a buyer and obtain sufficient proceeds to
reduce its debt and interest burden to a manageable level.


* S&P Says US Sovereign Ratings Unaffected By GSE Conservatorship
-----------------------------------------------------------------
Standard & Poor's Ratings Services said that neither its 'AAA/A-
1+' sovereign credit rating on the United States of America, nor
its stable outlook on these ratings is affected by the U.S.
Treasury's decision to put Fannie Mae and Freddie Mac into
conservatorship.

"In our view, the U.S. government's credit quality continues to be
upheld by its high-income, highly diversified, and exceptionally
flexible economy, relative to those of other 'AAA' rated
sovereigns, together with the U.S. public sector's fiscal
flexibility and the unique advantages coming from the dollar's
preeminent place among currencies," S&P says.



* S&P Cuts Ratings of 25 Tranches From Cash Flow, Hybrid CDO Deals
------------------------------------------------------------------
Standard & Poor's Ratings Services lowered its ratings on 119
tranches from 25 U.S. cash flow and hybrid collateralized debt
obligation (CDO) transactions.  S&P removed 34 of the lowered
ratings from CreditWatch with negative implications.  At the same
time,  S&P placed five other ratings from five transactions on
CreditWatch negative.

S&P said "In addition, we affirmed two ratings from Fortress ABS
Opportunities Ltd. and removed them from CreditWatch negative.
Lastly, we withdrew our rating on one tranche from Lancer Funding
Ltd.  The ratings on 85 of the downgraded tranches remain on
CreditWatch with negative implications, indicating a significant
likelihood of further downgrades (see list).  The CreditWatch
placements primarily affect transactions for which a significant
portion of the collateral assets have ratings that are currently
on CreditWatch negative or have significant exposure to assets
rated in the 'CCC' category.

The 119 downgraded U.S. cash flow and hybrid tranches have a total
issuance amount of $14.525 billion.  Eleven of the 25 affected
transactions are mezzanine structured finance (SF) CDOs of asset-
backed securities (ABS), which are collateralized in large part by
mezzanine tranches of residential mortgage-backed securities
(RMBS) and other SF securities.  Twelve of the 25 transactions are
high-grade SF CDOs of ABS, which were collateralized at
origination primarily by 'AAA' through 'A' rated tranches of RMBS
and other SF securities.  The other two transactions are CDOs of
CDOs that were collateralized at origination primarily by notes
from other CDOs, as well as by tranches from RMBS and other SF
transactions.

Friday's CDO downgrades reflect a number of factors, including
credit deterioration and recent negative rating actions on U.S.
subprime RMBS securities.

In addition, Standard & Poor's reviewed the ratings assigned to
Porter Square CDO I Ltd., and based on the current credit support
available to the tranches, has left the ratings at their current
rating levels.

S&P said "At the same time, we lowered our ratings on two tranches
from two U.S. synthetic CDO transactions.  One of the ratings
remains on CreditWatch negative. The downgraded U.S. synthetic CDO
tranches have a total issuance amount of $90 million."

"To date, including the CDO tranches listed below and including
actions on  both publicly and confidentially rated tranches, we
have lowered our ratings on 3,599 tranches from 838 U.S. cash
flow, hybrid, and synthetic CDO transactions as a result of stress
in the U.S. residential mortgage market and credit deterioration
of U.S. RMBS.  In addition, 1,458 ratings from 483 transactions
are currently on CreditWatch negative for the same reasons.

"In all, we have downgraded $407.936 billion of CDO issuance.
Additionally, our ratings on $38.499 billion in securities have
not been lowered but are currently on CreditWatch negative,
indicating a high likelihood of future
downgrades," S&P related

Standard & Poor's will continue to monitor the CDO transactions it
rates and take rating actions, including CreditWatch placements,
when appropriate.

For additional information and updates on Standard & Poor's
residential mortgage-related rating actions on U.S. CDO
transactions, please visit RatingsDirect, at
http://www.ratingsdirect.com,or http://www.spviews.com.

Rating actions
                                             Rating      
Transaction                  Class      To                  From
-----------                  -----      --                  ----
ABCDS 2006-1 Ltd.            A-2        CC                  CCC-/Watch
Neg
ABCDS 2006-1 Ltd             SupSrSwap  CCC-srb/Watch Neg   B-srb/Watch
Neg
Amadeus Repackaging 2007-I   Def Nts    D
B-            
Bernoulli High Grade CDO I   A-1B       BB/Watch Neg        AA-/Watch
Neg
Bernoulli High Grade CDO I   A-2        CCC-/Watch Neg      BBB+/Watch
Neg
Bernoulli High Grade CDO I   B          CC                  BB+/Watch
Neg
Bernoulli High Grade CDO I   C          CC                  BB/Watch
Neg  
Bernoulli High Grade CDO I   D          CC                  CCC/Watch
Neg
Buckingham CDO II Ltd.       A CP       A+/A-1+/Watch Neg AAA/A-1
+/WatchNeg    
Buckingham CDO II Ltd.       B          BBB+/Watch Neg      AA/Watch
Neg  
Buckingham CDO II Ltd.       C          BBB-/Watch Neg      AA-/Watch
Neg
Buckingham CDO II Ltd.       D          BB-/Watch Neg       A-/Watch
Neg  
Buckingham CDO II Ltd.       E          B-/Watch Neg        BBB-/Watch
Neg
Duke Funding High Grade IV   A-1        AA/Watch Neg        AAA/Watch
Neg
Duke Funding High Grade IV   A-2        A/Watch Neg         AA+/Watch
Neg
Duke Funding High Grade IV   B-1        BBB+/Watch Neg      AA/Watch
Neg  
Duke Funding High Grade IV   B-2        BBB-/Watch Neg      A+/Watch
Neg  
Duke Funding High Grade IV   C-1        B+/Watch Neg        A-/Watch
Neg  
Duke Funding High Grade IV   C-2        CCC/Watch Neg       B/Watch
Neg   
Duke Funding High Grade IV   D          CC                  CCC-/Watch
Neg
ESP Funding I Ltd.           A-1R       A/Watch Neg         AAA/Watch
Neg
ESP Funding I Ltd.           A-1T1      A/Watch Neg         AAA/Watch
Neg
ESP Funding I Ltd.           A-1T2      BBB-/Watch Neg      AAA/Watch
Neg
ESP Funding I Ltd.           A-2        CCC+/Watch Neg      BBB+/Watch
Neg
ESP Funding I Ltd.           A-3        CCC-/Watch Neg      B+/Watch
Neg  
ESP Funding I Ltd.           A-4        CC                  CCC/Watch
Neg
Fort Dearborn CDO I Ltd.     A-1LB      BBB-/Watch Neg      AA/Watch
Neg  
Fort Dearborn CDO I Ltd.     A-2L       B/Watch Neg         BBB/Watch
Neg
Fort Dearborn CDO I Ltd.     A-3L       CCC+/Watch Neg      BBB-/Watch
Neg
Fort Dearborn CDO I Ltd.     B-1L       CC                  B+/Watch
Neg  
Fort Dearborn CDO I Ltd.     X          AAA/Watch Neg
AAA           
Fort Point CDO I Ltd.        A-2a       AA-/Watch Neg       AAA/Watch
Neg
Fort Point CDO I Ltd.        A-2b       AA-/Watch Neg       AAA/Watch
Neg
Fort Point CDO I Ltd.        A-3a       BB/Watch Neg        AA-/Watch
Neg
Fort Point CDO I Ltd.        A-3b       BB/Watch Neg        AA-/Watch
Neg
Fort Point CDO I Ltd.        B          CCC/Watch Neg       BBB/Watch
Neg
Fort Point CDO I Ltd.        C          CCC-/Watch Neg      BB/Watch
Neg  
Fort Sheridan ABS CDO Ltd.   A-1        A+/Watch Neg
AAA           
Fort Sheridan ABS CDO Ltd.   A-2        BBB+/Watch Neg
AAA           
Fort Sheridan ABS CDO Ltd.   B          BB-/Watch Neg       AA/Watch
Neg  
Fort Sheridan ABS CDO Ltd.   C-1        CCC-/Watch Neg      BBB/Watch
Neg
Fort Sheridan ABS CDO Ltd.   C-2        CCC-/Watch Neg      BBB/Watch
Neg
Fort Sheridan ABS CDO Ltd.   C-3        CCC-/Watch Neg      BBB/Watch
Neg
Fortress ABS Opportunities   B          BBB                 BBB/Watch
Neg
Fortress ABS Opportunities   Ba         BBB                 BBB/Watch
Neg
Hereford Street ABS CDO I    A-2        AA/Watch Neg        AAA/Watch
Neg
Hereford Street ABS CDO I    B          A+/Watch Neg        AA/Watch
Neg  
Hereford Street ABS CDO I    C          BBB-/Watch Neg      A-/Watch
Neg  
Hereford Street ABS CDO I    D          BB/Watch Neg        BBB/Watch
Neg
Independence VI CDO Ltd.     A1         AA-/Watch Neg       AAA/Watch
Neg
Independence VI CDO Ltd.     A2         BBB/Watch Neg       AA/Watch
Neg  
Independence VI CDO Ltd.     B          B+/Watch Neg        BBB/Watch
Neg
Independence VI CDO Ltd.     C          CC                  BB/Watch
Neg  
Independence VI CDO Ltd.     D          CC                  BB-/Watch
Neg
Independence VI CDO Ltd.     E          CC                  CCC+/Watch
Neg
Lancer Funding Ltd.          A1J        BB/Watch Neg        A+/Watch
Neg  
Lancer Funding Ltd.          A1S1       AA/Watch Neg        AAA/Watch
Neg
Lancer Funding Ltd.          A1S2       BBB/Watch Neg       AA/Watch
Neg  
Lancer Funding Ltd.          A2         B/Watch Neg         BBB/Watch
Neg
Lancer Funding Ltd.          A3         CC                  B/Watch
Neg   
Lancer Funding Ltd.          Combo Sec  NR
AAA           
Lexington Capital Funding    A-1ANV     AA/Watch Neg        AAA/Watch
Neg
Lexington Capital Funding    A-1AV      AA/Watch Neg        AAA/Watch
Neg
Lexington Capital Funding    A-1B       AA/Watch Neg        AAA/Watch
Neg
Lexington Capital Funding    A-2        BBB-/Watch Neg      AAA/Watch
Neg
Lexington Capital Funding    B          B+/Watch Neg        AA/Watch
Neg  
Lexington Capital Funding    C          CCC+/Watch Neg      A/Watch
Neg   
Lexington Capital Funding    D          CC                  BBB-/Watch
Neg
Lexington Capital Funding    E          CC                  BB+/Watch
Neg
Longshore CDO Funding 2006-1 A-1        A+/Watch Neg        AAA/Watch
Neg
Longshore CDO Funding 2006-1 A-2        BB-/Watch Neg       AA+/Watch
Neg
Longshore CDO Funding 2006-1 B          CC                  A+/Watch
Neg  
Longshore CDO Funding 2006-1 C          CC                  BB/Watch
Neg  
Longshore CDO Funding 2006-1 D          CC                  CCC-/Watch
Neg
Los Robles CDO Ltd.          A-2        CCC+/Watch Neg      B-/Watch
Neg  
Los Robles CDO Ltd.          A-3        CC                  CCC-/Watch
Neg
McKinley II Funding Ltd.     A-1        BB+/Watch Neg       AA-/Watch
Neg
McKinley II Funding Ltd.     A-2        CCC+/Watch Neg      BBB+/Watch
Neg
McKinley II Funding Ltd      ABCP     AA-/A-1+/Watch Neg    AAA/A-
                                                            1
+/WatchNeg   
Mulberry Street CDO II Ltd.  A-1A       AAA/Watch Neg
AAA           
Nautilus RMBS CDO II Ltd.    A-1S       AAA/Watch Neg
AAA           
Nautilus RMBS CDO II Ltd.    A-1J       AA+/Watch Neg       AAA/Watch
Neg
Nautilus RMBS CDO II Ltd.    A-2        AA-/Watch Neg       AA/Watch
Neg  
Nautilus RMBS CDO II Ltd.    A-3        BBB/Watch Neg       A/Watch
Neg   
Nautilus RMBS CDO II Ltd.    B          BB/Watch Neg        BBB-/Watch
Neg
Nautilus RMBS CDO II Ltd.    C          CCC-/Watch Neg      BB-/Watch
Neg
Orient Point CDO Ltd.        A-1NVA     BB+/Watch Neg       AA+/Watch
Neg
Orient Point CDO Ltd.        A-1NVB     BB+/Watch Neg       AA+/Watch
Neg
Orient Point CDO Ltd.        A-1V       BB+/Watch Neg       AA+/Watch
Neg
Orient Point CDO Ltd.        A-2        B-/Watch Neg        A-/Watch
Neg  
Orient Point CDO Ltd.        B          CCC-/Watch Neg      BBB/Watch
Neg
Orient Point CDO Ltd.        C          CC                  BBB-/Watch
Neg
Orient Point CDO Ltd.        D          CC                  BB+/Watch
Neg
Orient Point CDO Ltd.        E          CC                  B+/Watch
Neg  
Pine Mountain CDO Ltd.       A-1        AA-/Watch Neg       AAA/Watch
Neg
Pine Mountain CDO Ltd.       A-2        BBB-/Watch Neg      AAA/Watch
Neg
Pine Mountain CDO Ltd.       A-3        B+/Watch Neg        AA-/Watch
Neg
Pine Mountain CDO Ltd.       B          CCC/Watch Neg       BBB+/Watch
Neg
Pine Mountain CDO Ltd.       C          CC                  BBB-/Watch
Neg
Pine Mountain CDO Ltd.       D          CC                  B-/Watch
Neg  
Reservoir Funding Ltd.       A-2        A+/Watch Neg        AAA/Watch
Neg
Reservoir Funding Ltd.       B          CCC+/Watch Neg      A/Watch
Neg   
Reservoir Funding Ltd.       C          CCC-/Watch Neg      BBB/Watch
Neg
Reservoir Funding Ltd.       D          CC                  BB-/Watch
Neg
South Coast Funding II Ltd.  A-1        B+/Watch Neg        AAA/Watch
Neg
South Coast Funding II Ltd.  A-2        CCC-/Watch Neg      BBB+/Watch
Neg
South Coast Funding II Ltd.  A-3        CC                  B-/Watch
Neg  
STAtic ResidenTial           A-1        AA-/Watch Neg       AAA/Watch
Neg
CDO 2005-C
STAtic ResidenTial           A-2        BBB/Watch Neg       AAA/Watch
Neg   
CDO 2005-C                             
STAtic ResidenTial           B          BB/Watch Neg        AA/Watch
Neg     
CDO 2005-C                             
STAtic ResidenTial           C          B/Watch Neg         A+/Watch
Neg    
CDO 2005-C                             
STAtic ResidenTial           D          CCC-/Watch Neg      BBB-/Watch
Neg  
CDO 2005-C                             
STAtic ResidenTial           E          CC                  BB+/Watch
Neg   
CDO 2005-C                             
TABS 2004-1 Ltd.             A-1        AAA/Watch Neg
AAA           
TABS 2004-1 Ltd.             A-2        A-/Watch Neg        AAA/Watch
Neg
TABS 2004-1 Ltd.             B          CCC+/Watch Neg      AA/Watch
Neg  
TABS 2004-1 Ltd.             C          CC                  A-/Watch
Neg  
TABS 2004-1 Ltd.             D          CC                  BBB/Watch
Neg
TAHOMA CDO II Ltd.           A-1        CC                  BBB-/Watch
Neg
TAHOMA CDO II Ltd.           A-2        CC                  CCC/Watch
Neg
Tourmaline CDO I Ltd.        I          AAA/Watch Neg
AAA           
Tourmaline CDO I Ltd.        II         BBB+/Watch Neg      AA/Watch
Neg  
Tourmaline CDO I Ltd.        III        B-/Watch Neg        BB+/Watch
Neg
Tourmaline CDO I Ltd.        IV         CC                  CCC-/Watch
Neg
Tribune Ltd.                 Series 48  CCC-/Watch Neg      B-
Whitehawk CDO Funding Ltd.   A-2        AA+                 AAA/Watch
Neg
Whitehawk CDO Funding Ltd.   B          A-                  AA-/Watch
Neg
Whitehawk CDO Funding Ltd.   C          BBB-                A-/Watch
Neg  
Whitehawk CDO Funding Ltd.   D          BB                  BBB-/Watch
Neg
  
Other Outstanding Ratings

Transaction                        Class      Rating             
-----------                        -----      ------
ABCDS 2006-1 Ltd.                   A-3
CC                              
ABCDS 2006-1 Ltd.                   B
CC                              
ABCDS 2006-1 Ltd.                   C
CC                              
ABCDS 2006-1 Ltd.                   D
CC                              
ABCDS 2006-1 Ltd.                   E
CC                              
ABCDS 2006-1 Ltd.                   Series B-1
CC                              
ABCDS 2006-1 Ltd.                   Series P-1
AAA                            
ABCDS 2006-1 Ltd.                   Series P-2
AAA                            
ABCDS 2006-1 Ltd.                   Series P-3
AAA                            
Bernoulli High Grade CDO I Ltd.     A-1A       AA-/Watch Neg        
ESP Funding I Ltd.                  B
CC                              
ESP Funding I Ltd.                  C
CC                              
Fort Dearborn CDO I Ltd.            A-1LA Inv  AAA/Watch Neg        
Fort Point CDO I Ltd.               A-1
AAA                            
Fortress ABS Opportunities Ltd.     A          AA
+                            
Fortress ABS Opportunities Ltd.     A-1a       AA
+                            
Fortress ABS Opportunities Ltd.     A-2        AA
+                            
Hereford Street ABS CDO I Ltd.      A-1        AAA/Watch Neg        
Lancer Funding Ltd.                 B
CC                              
Los Robles CDO Ltd.                 A-1a       AA/Watch Neg          
Los Robles CDO Ltd.                 A-1b       AA/Watch Neg          
Los Robles CDO Ltd.                 B
CC                              
Los Robles CDO Ltd.                 C
CC                              
Los Robles CDO Ltd.                 D
CC                              
Los Robles CDO Ltd.                 TRS        AAsrp/Watch Neg    
McKinley II Funding Ltd.            B
CC                              
McKinley II Funding Ltd.            Q
CC                              
Mulberry Street CDO II Ltd.         A-1B
AA                              
Mulberry Street CDO II Ltd.         A-1U       BBB-/Watch Neg      
Mulberry Street CDO II Ltd.         A-1W
AA                              
Mulberry Street CDO II Ltd.         A-2        CCC-/Watch Neg      
Mulberry Street CDO II Ltd.         B-F
CC                              
Mulberry Street CDO II Ltd.         B-V
CC                              
Mulberry Street CDO II Ltd.         C
CC                              
Porter Square CDO I Ltd.            A-2
AAA                           
Porter Square CDO I Ltd.            A-3
AAA                           
Porter Square CDO I Ltd.            B
AAA                            
Porter Square CDO I Ltd.            C          BBB-/Watch Neg      
Reservoir Funding Ltd.              A-1-NV
AAA                            
Reservoir Funding Ltd.              A-1-V
AAA                            
TAHOMA CDO II Ltd.                  B
CC                              
TAHOMA CDO II Ltd.                  C
CC                              
TAHOMA CDO II Ltd.                  D
CC                              
TAHOMA CDO II Ltd.                  E
CC                              
Whitehawk CDO Funding Ltd.          A-1 MT-e   AA/Watch Neg          
Whitehawk CDO Funding Ltd.          A-1 MT-f   AA/Watch Neg        
Whitehawk CDO Funding Ltd.          A-1 MT-g   AA/Watch Neg        
Whitehawk CDO Funding Ltd.          A-1 MT-h   AA/Watch Neg          
Whitehawk CDO Funding Ltd.          A-1 MT-i   AA/Watch Neg        
Whitehawk CDO Funding Ltd.          A-1 MT-j   AA/Watch Neg          
Whitehawk CDO Funding Ltd.          A-1LT      AAA     


* S&P Cuts 62 Certificates from U.S. Subprime RMBS
--------------------------------------------------
Standard & Poor's Ratings Services lowered its ratings on 62
classes of mortgage pass-through certificates from 14 U.S.
subprime residential mortgage-backed securities (RMBS)
transactions from various issuers.  S&P removed three of the
lowered ratings from two transactions from CreditWatch negative.

Additionally, S&P affirmed its ratings on 131 other classes of
certificates from these transactions and from
four other deals

S&P said "The lowered ratings reflect our lifetime loss
expectations coupled with projected future deterioration in credit
enhancement due to the step-down features of subprime transactions
issued in 2005.  As principal is released to the subordinate
classes of these transactions, less credit support will be
available to absorb the projected losses during future periods
unless their triggers fail.  Based on the current collateral
performance of these transactions, we project that future credit
enhancement percentages will be insufficient to maintain the
ratings at their previous levels."

"As of the August 2008 remittance period, cumulative losses for
the deals ranged from 0.95% (ABFC 2005-WF1 Trust) to 4.44% (Green
Tree Mortgage Loan Trust 2005-HE1) of the original principal
balances. Total delinquencies ranged from 5.32% (Aames Mortgage
Investment Trust 2005-3) to 33.96% (Option One Mortgage Loan Trust
2005-2), while serious delinquencies (90-plus days,
foreclosures, and real estate owned {REO}) ranged from 3.50%
(Aames Mortgage Investment Trust 2005-3) to 27.92% (Option One
Mortgage Loan Trust 2005-2) of the current principal balances.  
The remaining pool factors ranged from 15.34% (CWABS Asset-Backed
Certificates Trust 2005-BC2) to 54.63% (Aames Mortgage
Investment Trust 2005-3).

The 131 rating affirmations reflect current and projected credit
support percentages that were sufficient to support the
certificates at their current rating levels as of the August 2008
distribution period.

Rating Actions

2005-CB2 Trust
Series      2005-CB2

                              Rating
Class      CUSIP         To             From
-----      -----         --             ----
B-3        04542BLR1     BB             BBB-
B-4        04542BLS9     B              BB+
B-5        04542BLT7     CCC            B

ABFC 2005-WF1 Trust
Series      2005-WF1

                              Rating
Class      CUSIP         To             From
-----      -----         --             ----
B-1        04542BMJ8     BB             BB+/Watch Neg
B-2        04542BMK5     B              BB+/Watch Neg


CWABS Asset-Backed Certificates Trust 2005-BC2
Series      2005-BC2

                              Rating
Class      CUSIP         To             From
-----      -----         --             ----
M-6        126673F31     BBB            A
M-7        126673F49     BB             A-
M-8        126673F56     B              BBB+
B          126673F64     CCC            BBB

FFMLT Trust 2005-FF2
Series      2005-FF2

                              Rating
Class      CUSIP         To             From
-----      -----         --             ----
M-6        36242DN74     BBB            A
B-1        36242DN82     BB             A-
B-2        36242DN90     B              BBB+
B-3        36242DP23     B-             BBB/Watch Neg
B-4        36242D2W2     CCC            B

MASTR Asset Backed Securities Trust 2005-HE1
Series      2005-HE1

                              Rating
Class      CUSIP         To             From
-----      -----         --             ----
M-7        57643LJL1     BB             BBB+
M-8        57643LJM9     B              BBB
M-9        57643LJN7     CCC            BB
M-10       57643LJP2     CC             CCC

MASTR Asset Backed Securities Trust 2005-OPT1
Series 2005-OPT1

                              Rating
Class      CUSIP         To             From
-----      -----         --             ----
M-5        57643LHT6     A              AA-
M-6        57643LHU3     BBB            A+
M-7        57643LHV1     BB             A
M-8        57643LHW9     CCC            BBB
M-9        57643LHX7     CCC            B
M-10       57643LHY5     CCC            B
M-11       57643LHZ2     CC             CCC

Morgan Stanley ABS Capital I Inc. Trust 2005-HE2
Series 2005-HE2

                              Rating
Class      CUSIP         To             From
-----      -----         --             ----
M-6        61744CNG7     BBB            A-
B-1        61744CNH5     BB             BBB+
B-2        61744CNJ1     B              BBB
B-3        61744CNK8     CCC            BBB-

Morgan Stanley ABS Capital I Inc. Trust 2005-NC2
Series 2005-NC2

                              Rating
Class      CUSIP         To             From
-----      -----         --             ----
B-1        61744CPN0     BBB            BBB+
B-2        61744CPP5     BB             BBB
B-3        61744CPQ3     B              BBB-

New Century Home Equity Loan Trust 2005-2
Series 2005-2

                              Rating
Class      CUSIP         To             From
-----      -----         --             ----
M-7        64352VKZ3     BBB            BBB+
M-8        64352VLA7     BB             BBB
M-9        64352VLB5     B              BB

Option One Mortgage Loan Trust 2005-2
Series 2005-2
                              Rating
Class      CUSIP         To             From
-----      -----         --             ----
M-3        68389FHD9     A              AA-
M-4        68389FHE7     BB+            A+
M-5        68389FHF4     B              BBB
M-6        68389FHG2     CCC            BB
M-8        68389FHJ6     CC             CCC
M-9        68389FHK3     CC             CCC

RASC Series 2005-KS3 Trust
Series 2005-KS3
                              Rating
Class      CUSIP         To             From
M-8        76110WS80     BB             BBB+
M-9        76110WS98     B              BBB
M-10       76110WT22     B-             BBB-
B-1        76110WT30     CCC            BB+
B-2        76110WT48     CCC            BB
B-3        76110WT55     D              CCC

RASC Series 2005-KS4 Trust
Series 2005-KS4

                              Rating
Class      CUSIP         To             From
-----      -----         --             ----
M-5        76110WV29     BBB            BBB+
M-6        76110WV37     BB             BBB
M-7        76110WV45     CCC            BBB-
B-1        76110WV86     CCC            BB+
B-2        76110WV94     CC             CCC

Soundview Home Loan Trust 2005-OPT1
Series 2005-OPT1

                              Rating
Class      CUSIP         To             From
-----      -----         --             ----
M-4        83611MDK1     A              AA-
M-5        83611MDL9     BB             A+
M-6        83611MDM7     B              BBB-
M-7        83611MDN5     CCC            BB-
M-8        83611MDP0     CCC            B
M-9        83611MDQ8     CC             CCC

Terwin Mortgage Trust Series, TMTS 2005-6HE
Series 2005-6HE

                              Rating
Class      CUSIP         To             From
-----      -----         --             ----
M-6        881561RE6     B              A+
B-1        881561RF3     CCC            A
B-2        881561RG1     CCC            BB
B-3        881561RH9     CC             B

Ratings Affirmed

2005-CB2 Trust
Series 2005-CB2

Class      CUSIP         Rating
-----      -----         ------
M-1        04542BLL4     AA
M-2        04542BLM2     A
M-3        04542BLN0     A-
B-1        04542BLP5     BBB+
B-2        04542BLQ3     BBB

Aames Mortgage Investment Trust 2005-3
Series 2005-3

Class      CUSIP         Rating
-----      -----         ------
A1         00252FCC3     AAA
A2         00252FCD1     AAA
A3         00252FCE9     AAA
M1         00252FCF6     AAA
M2         00252FCG4     AA
M3         00252FCH2     AA-
M4         00252FCJ8     A+
M5         00252FCK5     A
M6         00252FCL3     A-
B1         00252FCM1     BBB+
B2         00252FCN9     BBB

ABFC 2005-WF1 Trust
Series 2005-WF1

Class      CUSIP         Rating
-----      -----         ------
A-1        04542BLU4     AAA
A-2C       04542BLX8     AAA
M-1        04542BLY6     AA+
M-2        04542BLZ3     AA
M-3        04542BMA7     AA-
M-4        04542BMB5     A+
M-5        04542BMC3     A+
M-6        04542BMD1     A
M-7        04542BME9     A-
M-8        04542BMF6     BBB+
M-9        04542BMG4     BBB
M-10       04542BMH2     BBB-
B-3        04542BML3     CCC

Argent Mortgage Loan Trust 2005-W1
Series 2005-W1

Class      CUSIP         Rating
-----      -----         ------
A-1        040104MX6     BB
A-2        040104MY4     BB

CWABS Asset-Backed Certificates Trust 2005-BC2
Series 2005-BC2
Class      CUSIP         Rating
M-1        126673E81     AA+
M-2        126673E99     AA
M-3        126673D66     AA
M-4        126673D74     AA-
M-5        126673F23     A+

FFMLT Trust 2005-FF2
Series 2005-FF2

Class      CUSIP         Rating
-----      -----         ------
A-1        36242DM67     AAA
A-2C       36242DM91     AAA
M-1        36242DN25     AA+
M-2        36242DN33     AA
M-3        36242DN41     AA
M-4        36242DN58     AA-
M-5        36242DN66     A+
B-5        36242D2X0     CCC

Green Tree Mortgage Loan Trust 2005-HE1
Series 2005-HE1

Class      CUSIP         Rating
-----      -----         ------
A-2        393513AB2     AAA
A-3        393513AC0     AAA
A-4        393513AD8     AAA
A-5        393513AN6     AAA
M-1        393513AE6     AA+
M-2        393513AF3     AA+
M-3        393513AG1     AA
M-4        393513AH9     AA-
M-5        393513AJ5     A+
M-6        393513AK2     A
M-7        393513AL0     A-
M-8A            BBB+
M-8F       393513AP1     BBB+

HSBC Home Equity Loan Trust 2005-2
Series 2005-2

Class      CUSIP         Rating
-----      -----         ------
A-1        40430GAC4     AAA
A-2        40430GAD2     AAA
M-1        40430GAE0     AA+
M-2        40430GAF7     AA

MASTR Asset Backed Securities Trust 2005-HE1
Series 2005-HE1

Class      CUSIP         Rating
-----      -----         ------
A-3        57643LJD9     AAA
M-1        57643LJE7     AA+
M-2        57643LJF4     AA
M-3        57643LJG2     AA-
M-4        57643LJH0     A+
M-5        57643LJJ6     A
M-6        57643LJK3     A-

MASTR Asset Backed Securities Trust 2005-OPT1
Series 2005-OPT1

Class      CUSIP         Rating
-----      -----         ------
A-1        57643LHJ8     AAA
A-2        57643LHK5     AAA
A-5        57643LHN9     AAA
M-1        57643LHP4     AA+
M-2        57643LHQ2     AA+
M-3        57643LHR0     AA
M-4        57643LHS8     AA

Morgan Stanley ABS Capital I Inc. Trust 2005-HE2
Series 2005-HE2
Class      CUSIP         Rating
A-1ss      61744CMU7     AAA
A-2ss      61744CMW3     AAA
A-3b       61744CMZ6     AAA
M-1        61744CNB8     AA
M-2        61744CNC6     AA
M-3        61744CND4     AA-
M-4        61744CNE2     A+
M-5        61744CNF9     A

Morgan Stanley ABS Capital I Inc. Trust 2005-NC2
Series 2005-NC2

Class      CUSIP         Rating
-----      -----         ------
A-3c       61744CPE0     AAA
M-1        61744CPG5     AA
M-2        61744CPH3     AA
M-3        61744CPJ9     AA-
M-4        61744CPK6     A+
M-5        61744CPL4     A
M-6        61744CPM2     A-

New Century Home Equity Loan Trust 2005-2
Series 2005-2

Class      CUSIP         Rating
-----      -----         ------
A-1ss      64352VKK6     AAA
A-2c       64352VKR1     AAA
M-1        64352VKT7     AA
M-2        64352VKU4     AA
M-3        64352VKV2     AA-
M-4        64352VKW0     A+
M-5        64352VKX8     A
M-6        64352VKY6     A-

Option One Mortgage Loan Trust 2005-2
Series 2005-2

Class      CUSIP         Rating
-----      -----         ------
A-1A       68389FGU2     AAA
A-1B       68389FGV0     AAA
A-5        68389FGZ1     AAA
A-6        68389FHA5     AAA
M-1        68389FHB3     AA+
M-2        68389FHC1     AA
M-7        68389FHH0     CCC

RASC Series 2005-KS3 Trust
Series 2005-KS3

Class      CUSIP         Rating
-----      -----         ------
A-4        76110WR81     AAA
M-1        76110WR99     AA+
M-2        76110WS23     AA+
M-3        76110WS31     AA
M-4        76110WS49     AA-
M-5        76110WS56     A+
M-6        76110WS64     A
M-7        76110WS72     A-

RASC Series 2005-KS4 Trust
Series 2005-KS4

Class      CUSIP         Rating
-----      -----         ------
A-2        76110WU20     AAA
A-3        76110WU38     AAA
M-1        76110WU61     AA
M-2        76110WU79     A+
M-3        76110WU87     A
M-4        76110WU95     A-

Soundview Home Loan Trust 2005-OPT1
Series 2005-OPT1

Class      CUSIP         Rating
-----      -----         ------
I-A1       83611MDB1     AAA
II-A4      83611MDF2     AAA
M-1        83611MDG0     AAA
M-2        83611MDH8     AA+
M-3        83611MDJ4     AA

Terwin Mortgage Trust Series, TMTS 2005-6HE
Series 2005-6HE

Class      CUSIP         Rating
-----      -----         ------
A-1C       881561QX5     AAA
S          881561QY3     AAA
M-1        881561QZ0     AA+
M-2        881561RA4     AA+
M-3        881561RB2     AA
M-4        881561RC0     AA
M-5        881561RD8     A+


* U.S. Retail Sector Loses About 20,000 Jobs in August
------------------------------------------------------
The U.S. retail sector lost about 20,000 jobs in August, the ninth
consecutive month of job losses as companies closed stores and
reduced their sales force in response to a sharp downturn in
consumer demand and higher fuel costs, Anne D'Innocenzio of the
Associated Press reports.

"The industry is under pressure from the demand side but also the
cost side," said Michael P. Niemira, chief economist at The
International Council of Shopping Centers.  "I suspect holiday
hiring will be on the light side."

Carl Steidtmann, chief economist at Deloitte Research, said that  
August's figures reflect the "weakness in spending" and all the
bankruptcies that have taken place.  Among retailers that have
filed for bankruptcy protection in recent months are Linens 'N
Things, Mervyns LLC and fashion chain Steve & Barry's.  
Restaurants have struggled as well, with Mrs. Fields' Original
Cookies Inc. filing for Chapter 11 bankruptcy protection in August
and joining other chains that had done so earlier this year.

Mr. Steidman added that the losses in August are in line with the
retail industry's average monthly pace of about 18,000 job losses.

Department stores lost 6,900 jobs, while general merchandise
retailers shed 3,100 jobs.  The food and beverage store sector,
which includes grocery chains and convenience stores, eliminated
10,600 jobs.


* IWIRC Seeking Nominations for Woman of the Year in Restructuring
------------------------------------------------------------------
The International Women's Insolvency and Restructuring
Confederation is seeking nominations for its 2008 Woman of the
Year in Restructuring Award. The purpose of the award is to
identify and recognize exceptional women across the globe who have
made extraordinary contributions to the insolvency and turnaround
profession.

Nominations can be submitted by any interested party.  The
deadline is October 13, 2008.

Nominees must be women who are actively engaged or recently
retired from the restructuring industry and may include attorneys,
turnaround managers, bankers, investors, academics, and judges
anywhere in the world.

Nominations should be emailed to info@iwirc.com and include a
statement of the candidate's specific achievements.  Extraordinary
performance, leadership, innovative application of laws,
negotiating skill, creative restructuring strategies, teamwork,
and support of other women in the industry are just a few of the
criteria that will be considered.

IWIRC's Woman of the Year will be honored at the ABI's Winter
Leadership Conference at the Westin La Paloma in Tuscon Arizona on
Dec. 5, 2008 at the luncheon featuring guest speaker William
Safire.  IWIRC Board Chair, Debra Kuptz of AlixPartners, LLP, will
make the presentation.

"Women in the restructuring business are remarkable for the
combination of analytical insight, business savvy and ‘grace under
fire' they bring to the field," says Ms. Kuptz. "These are
important characteristics in an industry where getting a good
outcome requires the ability to manage many competing points of
view.  Ms. Kuptz and Deirdre Martini, Managing Director at
Wachovia Capital Finance and the inaugural recipient of this award
are co-chairing this event.

Luncheon tickets are available through the ABI's Winter Leadership
Conference registration.  For further question, please Email
info@IWIRC.com; fax 703-802-0207; or call 703-449-1316.

The IWIRC International Board of Directors ratifies all selections
and its decisions are final.  Ms. Kuptz adds that sponsorships are
important to IWIRC efforts.  As a non-profit entity, IWIRC looks
to industry leaders and institutions to support recognition
activities and, in the future, possible scholarships for students
pursuing an education in restructuring or a related field.

Potential sponsors may call 703-449-1316 or e-mail info@iwirc.com.
IWIRC is located at PMB 130, 10332 Main Street, Fairfax, Virginia
22030-2410.

Founded in 1994, IWIRC's mission is to enhance the professional
status and reputation of women in the insolvency practice.  IWIRC
-- http://www.iwirc.com-- provides opportunities for networking,  
professional development, leadership and mentoring on the local
and international levels.  The organization has more than 800
members worldwide, with 27 active networks in Asia-Pacific, Europe
and North America.


* Large Companies with Insolvent Balance Sheets
-----------------------------------------------

                                           Total
                                          Share-
                                 Total   holders  Working
                                Assets    Equity  Capital
Company              Ticker      ($MM)     ($MM)    ($MM)
-------              ------     ------    ------
-------                                                            
ABSOLUTE SOFTWRE     ABT CN        103    (3)       31
AFC ENTERPRISES      AFCE US       145    (45)     (10)        
APP PHARMACEUTIC     APPX US         1    (42)     260
ARIAD PHARM          ARIA US        82    (39)     40
BARE ESCENTUALS      BARE US       263    (49)     113
BLOUNT INTL          BLT US        482    (33)     148
CABLEVISION SYS      CVC US          9    (5)     (633)        
CENTENNIAL COMM      CYCL US         1    (1)       57
CHENIERE ENERGY      CQP US          2    (289)    185
CHENIERE ENERGY      LNG US          3    (202)    293
CHOICE HOTELS        CHH US        349    (115)    (16)        
CLOROX CO            CLX US          5    (370)   (412)        
COLUMBIA LABORAT     CBRX US        48    (6)       11
CONEXANT SYS         CNXT US       625    (133)    206
COREL CORP           CREL US       255    (12)     (20)        
COREL CORP           CRE CN        255    (12)     (20)        
CROWN MEDIA HL-A     CRWN US       682    (661)    (35)        
CV THERAPEUTICS      CVTX US       351    (207)    267
CYBERONICS           CYBX US       144    (7)      119
CYTORI THERAPEUT     CYTX US        17    (12)     754
DELTEK INC           PROJ US       181    (72)      39
DEXCOM               DXCM US        57    (15)      34
DISH NETWORK-A       DISH US         8    (2)     (466)        
DOMINO'S PIZZA       DPZ US        466    (1)       78
DUN & BRADSTREET     DNB US          2    (512)   (192)        
DYAX CORP            DYAX US        85    (14)      21
EINSTEIN NOAH RE     BAGL US       160    (22)     (48)        
ENDEVCO INC          EDVC US        24    (9)      (18)        
EXTENDICARE REAL     EXE-U CN        2    (20)     128
FORD MOTOR CO        F US          270    (3)       20
FORD MOTOR CO        F BB          270    (3)       20
GARTNER INC          IT US           1    (42)    (266)        
GENCORP INC          GY US         994    (24)      67
GENERAL MOTO-CED     GM AR         136    (56)     (19)        
GENERAL MOTORS       GM US         136    (56)     (19)        
GENERAL MOTORS C     GMB BB        136    (56)     (19)        
GLG PARTNERS INC     GLG US        581    (350)     80
GLG PARTNERS-UTS     GLG/U US      581    (350)     80
HEALTHSOUTH CORP     HLS US          2    (872)   (161)        
HUMAN GENOME SCI     HGSI US       847    (120)    (36)        
IMAX CORP            IMX CN        216    (89)      (4)        
IMAX CORP            IMAX US       216    (89)      (4)        
IMS HEALTH INC       RX US           2    (10)     324
INCYTE CORP          INCY US       205    (237)    152
INTERMUNE INC        ITMN US       210    (81)     143
IPCS INC             IPCS US       553    (38)      60
JAZZ PHARMACEUTI     JAZZ US       187    (36)    (107)        
KNOLOGY INC          KNOL US       650    (43)       2
LIFE SCIENCES RE     LSR US        202    (14)      10
LINEAR TECH CORP     LLTC US         2    (434)      1
MEDIACOM COMM-A      MCCC US         4    (283)   (295)        
MOLECULAR INSIGH     MIPI US       146    (10)     114
MOODY'S CORP         MCO US          2    (822)   (248)        
NATIONAL CINEMED     NCMI US       540    (475)     58
NAVISTAR INTL        NAV US         12    (228)      2
NPS PHARM INC        NPSP US       188    (197)     95
OCH-ZIFF CAPIT-A     OZM US          2    (208)    N.A.
OSIRIS THERAPEUT     OSIR US        32    (15)     (23)        
PROTECTION ONE       PONE US       654    (52)       4
RADNET INC           RDNT US       510    (77)      10
RASER TECHNOLOGI     RZ US          73    (11)     (12)        
REGAL ENTERTAI-A     RGC US          3    (214)   (124)        
RESVERLOGIX CORP     RVX CN         21    (6)       16
RH DONNELLEY         RHD US         13    (98)     (98)        
ROK ENTERTAINMEN     ROKE US        21    (26)      15
ROTHMANS INC         ROC CN        545    (213)    102
RURAL CELLULAR-A     RCCC US         1    (558)    169
SALLY BEAUTY HOL     SBH US          2    (695)    413
SEALY CORP           ZZ US           1    (105)     41
SEMGROUP ENERGY      SGLP US       262    (55)     (10)        
SHERWOOD COOPER      SWC CN        291    (22)     (55)        
SONIC CORP           SONC US       798    (87)     (41)        
ST JOHN KNITS IN     SJKI US       213    (52)      80
SUN COMMUNITIES      SUI US          1    (11)     N.A.
SYNTA PHARMACEUT     SNTA US        87    (10)      60
TAUBMAN CENTERS      TCO US          3    (649)    N.A.
TEAL EXPLORATION     TL CN          47    (19)     (42)        
TEAL EXPLORATION     TEL SJ         47    (19)     (42)        
THERAVANCE           THRX US       281    (112)    202
UAL CORP             UAUA US        21    (570)     (3)        
UST INC              UST US          1    (394)    165
VALENCE TECH         VLNC US        37    (60)      11
WARNER MUSIC GRO     WMG US          5    (99)    (750)        
WEIGHT WATCHERS      WTW US          1    (893)   (210)        
WESTMORELAND COA     WLB US        796    (192)      3
WR GRACE & CO        GRA US          4    (273)    934
XM SATELLITE -A      XMSR US         2    (1)     (683)


                             *********

Monday's edition of the TCR delivers a list of indicative prices
for bond issues that reportedly trade well below par.  Prices are
obtained by TCR editors from a variety of outside sources during
the prior week we think are reliable.  Those sources may not,
however, be complete or accurate.  The Monday Bond Pricing table
is compiled on the Friday prior to publication.  Prices reported
are not intended to reflect actual trades.  Prices for actual
trades are probably different.  Our objective is to share
information, not make markets in publicly traded securities.
Nothing in the TCR constitutes an offer or solicitation to buy or
sell any security of any kind.  It is likely that some entity
affiliated with a TCR editor holds some position in the issuers'
public debt and equity securities about which we report.

Each Tuesday edition of the TCR contains a list of companies with
insolvent balance sheets whose shares trade higher than $3 per
share in public markets.  At first glance, this list may look like
the definitive compilation of stocks that are ideal to sell short.  
Don't be fooled.  Assets, for example, reported at historical cost
net of depreciation may understate the true value of a firm's
assets.  A company may establish reserves on its balance sheet for
liabilities that may never materialize.  The prices at which
equity securities trade in public market are determined by more
than a balance sheet solvency test.

A list of Meetings, Conferences and Seminars appears in each
Wednesday's edition of the TCR. Submissions about insolvency-
related conferences are encouraged.  Send announcements to
conferences@bankrupt.com/

On Thursdays, the TCR delivers a list of recently filed chapter 11
cases involving less than $1,000,000 in assets and liabilities
delivered to nation's bankruptcy courts.  The list includes links
to freely downloadable images of these small-dollar petitions in
Acrobat PDF format.

Each Friday's edition of the TCR includes a review about a book of
interest to troubled company professionals.  All titles are
available at your local bookstore or through Amazon.com.  Go to
http://www.bankrupt.com/books/to order any title today.

Monthly Operating Reports are summarized in every Saturday edition
of the TCR.

For copies of court documents filed in the District of Delaware,
please contact Vito at Parcels, Inc., at 302-658-9911.  For
bankruptcy documents filed in cases pending outside the District
of Delaware, contact Ken Troubh at Nationwide Research &
Consulting at 207/791-2852.

                             *********

S U B S C R I P T I O N   I N F O R M A T I O N

Troubled Company Reporter is a daily newsletter co-published
by Bankruptcy Creditors' Service, Inc., Fairless Hills,
Pennsylvania, USA, and Beard Group, Inc., Frederick, Maryland,
USA.  Sheryl Joy P. Olano, Shimero R. Jainga, Ronald C. Sy, Joel
Anthony G. Lopez, Cecil R. Villacampa, Melanie C. Pador, Ludivino
Q. Climaco, Jr., Loyda I. Nartatez, Tara Marie A. Martin, Joseph
Medel C. Martirez, Ma. Cristina I. Canson, Christopher G.
Patalinghug, and Peter A. Chapman, Editors.

Copyright 2008.  All rights reserved.  ISSN: 1520-9474.

This material is copyrighted and any commercial use, resale or
publication in any form (including e-mail forwarding, electronic
re-mailing and photocopying) is strictly prohibited without prior
written permission of the publishers.  Information contained
herein is obtained from sources believed to be reliable, but is
not guaranteed.

The TCR subscription rate is $775 for 6 months delivered via e-
mail. Additional e-mail subscriptions for members of the same firm
for the term of the initial subscription or balance thereof are
$25 each.  For subscription information, contact Christopher Beard
at 240/629-3300.

                    *** End of Transmission ***