TCR_Public/090120.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, January 20, 2009, Vol. 13, No. 19

                            Headlines


A21 INC: Will Sell SuperStock & ArtSelect to RGB & Art.com
ACCESS PHARMACEUTICALS: Sept. Balance Sheet Upside-Down by $7MM
ACUSPHERE INC: Board Won't Pay Management Incentives in 2008
ACUSPHERE INC: Equity Non-Compliance Cues Securities Delisting
ARG ENTERPRISES: Cattle Co. Steakhouse Remains Open

ARTES MEDICAL: Nasdaq Removes Securities From Trading
ASARCO LLC: Keeps Control of Case Until March 17, 2009
ASARCO LLC: Disputes Parent's $516MM Admin. Claim for Taxes
ASARCO LLC: Pens Settlement of 10 Former Employees' Claims
ASARCO LLC: Unveils $10MM Settlement of Rosemont Property Dispute

BELOVICH GROUP: Files for Bankruptcy Protection
BLACK GAMING: Grace Period for $5.6M Interest Expires Feb. 14
BLACK GAMING: Moody's Downgrades Corporate Family Rating to 'Ca'
BLACK GAMING: Inks Executive Employment Deal With Robert Black
BLACK GAMING: S&P Cuts Corporate Credit Rating to 'D'

BLACK GAMING: Cuts Oasis Resort Operations; 500 Jobs Affected
BOOT HILL: Investor Wants Chapter 11 Case Converted to Chapter 7
CELLEGY PHARMACEUTICALS: Extends Adamis Merger Deal Until March
CCM MERGER: Moody's Junks Ratings on Amendment from Lending Group
CEL-SCI CORP: Auditor Raises Going Concern Doubt

CENT INCOME: Fitch Downgrades Rating on $100 Mil. Notes to 'C'
CENTAUR LLC: Moody's Downgrades Corporate Family Rating to 'Caa3'
CHRYSLER LLC: Fiat Mulls Acquiring 35% Stake in Chrysler
CHRISTIAN BERNARD: To Start GOB Sales at All Locations on Jan. 20
COLIBRI GROUP: Closes Operations, Goes Under Receivership

CORNERSTONE-ORLANDO: To Seek Confirmation of Plan on Feb. 25
DAVE HOUSE: Files for Bankruptcy Protection in Richmond
DBSI INC: Wachovia Looking to Foreclose on Five Properties
DEATH ROW: Wide Awake Will Buy Co. for $18 Million
DELTA PETROLEUM: S&P Puts 'B-' Corp. Credit Rating on WatchNeg.

DREIER LLP: Details Use of Clients' $380 Million
DUKE FUNDING: Fitch Withdraws Junk Ratings on Various Classes
ELIZABETH ARDEN: Revised Earnings Won't Affect S&P's 'BB-' Rating
ENCAP GOLF: Parties Balk at Competing Reorganization Plans
ENRON CORP: Two Former Lawyers Settle SEC Lawsuit

FARMINGTON CENTERS: Seeks to Avoid Foreclosure, Says Chamberlain
FRANKLIN CREDIT: Nasdaq Removes Securities From Trading
FREESCALE SEMICONDUCTOR: S&P Downgrades Corporate Rating to 'B-'
FREMONT GENERAL: May Hire KPMG as Exclusive Financial Advisor
GENCORP INC: Moody's Downgrades Corporate Family Rating to 'B3'

GLIMCHER REALTY: Moody's Gives Neg. Outlook; Keeps Low-B Ratings
GLOBAL MOTORSPORT: Panel Taps Fox Rothschild as New Counsel
GLOBAL MOTORSPORT: Wants Plan Filing Period Extended to March 30
GOLDEN FOX: Owner Files for Chapter 7 Liquidation
GOTTSCHALKS INC: Court Okays $125 Million Loan

HERBST GAMING: In Talks with Lenders on Forbearance Until Feb. 2
HINDSDALE GREYHOUND: Joseph Sullivan Denies Promising Payment
INVESCO NAVIGATOR: Fitch Lowers Ratings on $125 Mil. Notes to 'C'
ION GEOPHYSICAL: S&P Changes Outlook on 'BB-' Rating to Negative
ISCO INTERNATIONAL: Amends Note Indenture with Alexander, Et. Al.

ISCO INTERNATIONAL: Amends Registration Rights Deal with Lenders
ISCO INTERNATIONAL: Board Committee OKs Performance Compensation
ISCO INTERNATIONAL: Sells All Stake in Clarity for $325,000 Cash
LAND RESOURCE: Point Peter May Employ K&S as Special Counsel
LEHMAN BROTHERS: Seeks to Tap Consultant for Artworks Sale

LEXINGTON PRECISION: Wants Plan Filing Period Extended to April
LINGANORE DEVELOPMENT: Case Summary & 12 Largest Unsec. Creditors
LIZ CLAIBORNE: Modifications to Loan May Trigger Default Swaps
LOCAL INSIGHT: Financial Restatement Won't Affect S&P's 'B' Rating
LYONDELL CHEMICAL: U.S. Trustee Forms 7-Member Creditors Panel

LYONDELL CHEMICAL: Equistar Seeks $28MM Loan Payment from Solutia
MAGMA CDO: Moody's Downgrades Ratings on Various Notes
MEADE INSTRUMENTS: Posts $2.7MM Net Loss in Quarter Ended Nov. 30
MERRILL LYNCH: Will Pay $550MM to Settle Shareholder Lawsuits
MICROMET INC: Gets Kingsbridge's Commitment for $75MM Financing

MID-TENNESSEE ZINC: Case Summary & 20 Largest Unsecured Creditors
MEDCOMSOFT INC: To Liquidate Under Canada's Insolvency Act
MEMPHIS HEALTH: Moody's Withdraws 'Ca' Underlying Rating
MF GLOBAL: Moody's Downgrades Preferred Stock Rating to 'Ba1'
MILLENNIUM NEW: Moody's Junks Corporate Family Rating from 'B3'

MONA LISA: Case Summary & 20 Largest Unsecured Creditors
PARENT CO: Nasdaq Removes Securities From Trading
NEOSE TECHNOLOGIES: Receives Nasdaq Additional Delisting Notice
NORTEL NETWORKS: Delaware Court OKs $75-Mil. Intercompany Loan
PARENT CO: Creditors Panel Wants Auction Delayed to Enable Probe

PRECISION PARTS: To Auction Off All Assets on Feb. 23
PENN OCTANE: Net Loss Lowers to $462,000 in Qtr. Ended Sept. 30
PEPPERBALL TECH: Nasdaq Removes Securities From Trading
PERITUS I: Moody's Downgrades Ratings on Various Classes of Notes
PILGRIM'S PRIDE: Creditors Seek to Recover Prepetition Deliveries

PILGRIM'S PRIDE: Gets Court Okay to Hire Kurtzman as Notice Agent
PILGRIM'S PRIDE: Seeks to Hire CRG as Restructuring Consultants
PILGRIM'S PRIDE: Seeks to Hire Lazard as Investment Bankers
PMA CAPITAL: S&P Affirms Counterparty Credit Rating at 'B'
POTOMAC EDISON: Fitch Places 'BB+' Rating on Positive Watch

PPM RIVERA: Fitch Withdraws 'C' Rating on Three Classes of Notes
PROPEX INC: Seeks to Pay 2008 BNP Paribas DIP Loan
PROPEX INC: Court to Consider $65-Mil. Wayzata Loan on Jan. 22
PROPEX INC: Seeks Permission to Use Lenders' Cash Collateral
PROPEX INC: Seeks April 23 Extension of Plan Solicitation Period

PUGET SOUND: S&P Raises Preferred Stock Rating to 'BB+' from 'BB'
QUYNH HOANG: Faces Lawsuit; Files for Bankruptcy Protection
RAFAELLA APPAREL: Poor Performance Cues Moody's Junk Ratings
RECYCLED PAPER: Plan On Track for February Confirmation
ROBERT THOMSON: Chapter Voluntary 15 Case Summary

RYERSON INC: S&P Downgrades Corporate Credit Rating to 'B'
SAVE THE QUEEN: Jeff Klein & Tom Hix Will Sell Interest in Co.
SCIENS CFO: Fitch Downgrades Ratings on EUR183MM Notes
SEALED AIR: S&P Downgrades Corporate Credit Rating to 'BB+'
SENIOR HOUSING: Moody's Keeps 'Ba1' Senior Unsecured Debt Rating

SINOBIOPHARMA: Management Raises Going Concern Doubt
SIRIUS XM: S&P Downgrades Corporate Credit Rating to 'CCC'
SMURFIT-STONE: To Post 4thQ Results Jan. 26 As Woes Continue
SOLUTIA INC: Faces Lyondell Unit Suit for $28MM Loan Payment
SPANSION INC: Up for Sale; Cure Period for Payments Ends Feb. 14

STRATEGIC RESOURCES: Case Summary & 10 Largest Unsec. Creditors
SPECIAL DEVICES: Receives Court Nod for $22.5MM DIP Facility
SUPERIOR AIR: To Conduct Auction of Assets on Feb. 24
TERRA INDUSTRIES: Fitch Places 'BB-' Rating on Evolving Watch
TERRA INDUSTRIES: Moody's Affirms 'Ba3' Corporate Family Rating

THINKENGINE NETWORKS: Anne White Named as Chapter 7 Trustee
TRIBUNE CO: Court OKs Chicago Tribune's Pact with Dow Jones
TRIBUNE CO: Working on Business Plan, CFO Chandler Bigelow Says
TRIBUNE CO: $125,000,000 DIP Loan Approved on Final Basis
TRIBUNE CO: Panel Seeks to Hire Chadbourne as Counsel

TRIBUNE COMPANY: Panel Seeks to Retain Landis as Co-Counsel
TRIBUNE CO: Panel Hires AlixPartners as Financial Advisors
TRIPLE CROWN: S&P Withdraws 'D' Rating at Company's Request
U-SAFE: Files Amended List of 6 Largest Unsecured Creditors
U-SAFE INVESTMENTS: Files Amended Schedules of Assets and Debts

W&T OFFSHORE: S&P Affirms Corporate Credit Rating at 'B'
WADLEY REGIONAL: Files for Chapter 11 to Sell Hospital to Brim
WALL HOMES: Files for Chapter 11 Bankruptcy Protection
WESTERLY HOSPITAL: Moody's Affirms 'B2' Ratings on 1994 Bonds
WINDSOR FINANCING: Moody's Reviews Ratings for Possible Downgrade

WOODSIDE GROUP: Files Joint Plan of Reorganization under Ch. 11
YOUNG BROADCASTING: Moody's Downgrades Corporate Rating to 'Ca'

* Moody's Assigns Rating on $285.5 Mil. New York City 2009 Bonds
* Moody's Takes Rating Actions on 63 Classes of Tobacco Bonds

* Attorneys to Talk With Legislators for Bankruptcy Law Change
* J.P. Morgan Chase to Expand Program to Modify Mortgages
* U.S. Gov't Working on Second Phase of Banking Bailout

* Large Companies with Insolvent Balance Sheets


                            *********

A21 INC: Will Sell SuperStock & ArtSelect to RGB & Art.com
----------------------------------------------------------
a21, Inc. has sold subsidiaries SuperStock Inc. and ArtSelect Inc.
in an auction at substantially higher prices than the original
bids submitted to the U.S. Bankruptcy Court for the Middle
District of Florida, Mark Basch at Jacksonville.com reports.

The Florida Times-Union relates that Gardner Davis, the attorney
for a21, Inc., had said that the company had two pre-qualified
bidders for the auction of each of its subsidiaries, SuperStock
and ArtSelect.  "The company spoke with seven or eight potential
buyers for both SuperStock and ArtSelect.  If the economy was
stronger and bank credit was easier to obtain, we would have had
more bidders," The Florida Times quoted Mr. Davis as saying.

The Florida Times states that a21 already had agreements in place
to sell the two companies when it filed for Chapter 11 in the U.S.
Bankruptcy Court in Jacksonville.  Those agreements, according to
the report, were subject to higher bids being submitted to the
Court.

The Florida Times reports that Masterfile Corp. had agreed to
purchase SuperStock's assets for about $1.5 million at the time of
the bankruptcy filing, but, according to Mr. Davis, RGB Ventures
has offered a $1.75 million bid.  The Florida Times relates that
ArtSelect had an agreement to sell its assets to Metaverse Corp.
for about $700,000, but Art.com Inc. submitted a $785,000 bid.

Jacksonville.com reports that a21 will sell the assets of
SuperStock to RGB Venture Partners Inc. for $2.825 million.  The
report states that Art.com also won the right to purchase
ArtSelect for $1.625 million.

According to Jacksonville.com, RGB Venture will continue the
unit's operations and will keep most, if not all, of its 50
workers.

U.S. Bankruptcy Judge Paul Glenn also confirmed a21's
reorganization plan 43 days after the firm filed its Chapter 11
petitions, Jacksonville.com states.

a21's shareholders won't get anything, says Jacksonville.com.  The
report says that a21, after selling the two companies, will be
liquidated, and the money would be distributed to the company's
creditors.

Jacksonville, Florida-based a21, Inc. -- http://www.a21group.com-
- fdba Saratoga Holdings, Inc., fdba Agence 21, Inc., makes
images, art framing, and wall decors.  The companies filed for
Chapter 11 on Dec. 4, 2008 (Bankr. M. D. Fla. Case No. 08-07610).
Gardner F. Davis, Esq., at Foley & Lardner LLP represents the
companies in their restructuring efforts.  The companies listed
assets of $24,231,430 as Sept. 20, 2008, and debts of $30,286,282
as Sept. 20, 2008.


ACCESS PHARMACEUTICALS: Sept. Balance Sheet Upside-Down by $7MM
---------------------------------------------------------------
Access Pharmaceuticals Inc.'s balance sheet at Sept. 30, 2008,
showed total assets of $5,754,000, total liabilities of
$12,765,000, resulting in a stockholder's deficit $7,011,000.

For three months ended Sept. 30, 2008, the company posted a net
loss of $2,806,000 compared with a net loss of $1,957,000 for the
same period in the previous year.

For nine months ended Sept. 30, 2008, the company posted a net
loss of $15,644,000 compared with a net loss of $8,193,000 for the
same period in the previous year.

                  Liquidity and Capital Resources

As of Sept. 30, 2008, the company has cash and cash equivalents of
$4,618,000.  The company's net cash burn rate for the nine months
ended Sept. 30, 2008, was approximately $506,000 per month.  As of
Sept. 30, 2008, its working capital was $79,000.  The company's
working capital at Sept. 30, 2008, represented a decrease of
$6,160,000 as compared to its working capital as of Dec. 31, 2007,
of $6,239,000.  The decrease in working capital at Sept. 30, 2008,
reflects the net capital raised in the February private placement
of $2,444,000 and new licensing agreements with RHEI, ASK and
Milestone, offset by operating expenses which included
manufacturing product scale-up for its new ProLindac trial and
Somanta expenses.  Also included in the decrease are an estimated
$1,799,000 in dividends due the Series A Preferred Shareholders
which the company anticipates will be paid in shares of Access
common stock and not in cash once its registration statement has
been declared effective by the SEC.  As of Sept. 30, 2008, the
company has one convertible note outstanding in the principle
amount of $5,500,000 which is due Sept. 13, 2011.

As of Nov. 14, 2008, the company did not have enough capital to
achieve its long-term goals.  If the company raises additional
funds by selling equity securities, the relative equity ownership
of its existing investors would be diluted and the new investors
could obtain terms more favorable than previous investors.  A
failure to obtain necessary additional capital in the future could
jeopardize its operations.

A full-text copy of the 10-Q filing is available for free at
http://ResearchArchives.com/t/s?381f

                   About Access Pharmaceuticals

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

                       Going Concern Doubt

On March 31, 2008, Whitley Penn LLP, in Dallas, expressed
substantial doubt about Access Pharmaceuticals Inc.'s ability to
continue as a going concern after auditing the company's
consolidated financial statements for the year ended Dec. 31, 2007
and 2006.  The auditing firm pointed to the company's recurring
losses from operations, negative cash flows from operating
activities and an accumulated deficit.


ACUSPHERE INC: Board Won't Pay Management Incentives in 2008
------------------------------------------------------------
The board of directors of Acusphere, Inc., decided that no amounts
will be paid to any members of the company's management committee
that would have been payable under the company's fiscal year 2008
Management Incentive Plan.  However, given the importance of
retaining the executives in order to manage the regulatory and
financial uncertainties faced by the company, the board has
approved the additional measures to strengthen the retention of
the company's executives.

The board approved, effective Dec. 16, 2008, a change in the base
salaries of the executives, including the named executive
officers, that their base salaries would return to the amount in
effect immediately prior to the reduction taken pursuant to the
company's Senior Management Compensation Plan.  The base salaries
in effect as of Dec. 16, 2008, were set forth as:

Name: Sherri C. Oberg
Position: President and Chief Executive Officer
Current Salary: $371,128
Base Salary effective Dec. 16, 2008: $463,910

Name: Lawrence A. Gyenes
Position: Senior Vice President and Chief Financial Officer
Current Salary: $292,500
Base Salary effective Dec. 16, 2008: $325,000

Name: Richard Walovitch
Position: Senior Vice President, Clinical Research
Current Salary: $252,000
Base Salary effective Dec. 16, 2008: $280,000

Name: Michael Slater
Position: Senior Vice President, Regulatory Affairs and
          Operations
Current Salary: $232,000
Base Salary effective Dec. 16, 2008: $290,000

In addition, the board determined that, prior to Dec. 31, 2008,
the company would pay Ms. Oberg and Mr. Slater each a lump sum
equal to half of the base salary reduction taken in connection
with the Compensation Plan.  As a result, Ms. Oberg and Mr. Slater
will receive a lump sum payment of approximately $17,397 and
$10,320.

The board also adopted an Executive Retention Bonus Plan, which
provides that each executive, including the named executive
officers, will receive a retention bonus equal to one-third of
their base salary in effect as of Dec. 12, 2008, before taking
into account the reduction provided for in the Compensation Plan.
The company will pay the Retention Bonus in lieu of cash payments
otherwise potentially payable under the Compensation Plan, if (a)
the executive remains employed by the company through the date
that is fifteen days after the Prescription Drug User Fee Act date
for Imagify(TM) (Perflubutane Polymer Microspheres for Injectable
Suspension), currently expected to be Feb. 28, 2009, or (b) the
executive is terminated by the company as a result of the
termination of their position prior to the Payment Date, as set
forth:

Name: Sherri C. Oberg
Position: President and Chief Executive Officer
Retention Bonus: $154,637

Name: Lawrence A. Gyenes
Position: Senior Vice President and Chief Financial Officer
Retention Bonus: $108,333

Name: Richard Walovitch
Position: Senior Vice President, Clinical Research
Retention Bonus: $93,333

Name: Michael Slater
Position: Senior Vice President, Regulatory Affairs and
          Operations
Retention Bonus: $96,667

Pursuant to the Bonus Plan, if the company terminates a
participating executive for cause, or for any other reason other
than a termination of the executive's position, or if the
executive resigns his or her employment with the company prior to
the Payment Date, he or she shall not be entitled to any Retention
Bonus.  In addition, to the extent the executive receives
severance payments under the Executive Employment Agreement
between the executive and the company as a result of termination
of employment prior to the Payment Date, the executive will not be
eligible for payment under the Retention Bonus Plan in connection
with such termination of employment.

A full-text copy of the Executive Retention Bonus Plan is
available for free at: http://ResearchArchives.com/t/s?36b4

                            SVP Resigns

On Jan. 7, 2009, Acusphere disclosed in a regulatory filing at Dr.
Richard Walovitch, senior vice president of clinical research, has
resigned to pursue another opportunity.

His resignation, effective Jan. 9, 2009, follows an 11-year career
with Acusphere, in which he oversaw the company's clinical trials
for its lead product candidate, ImagifyTM (Perflubutane Polymer
Microspheres) for Injectable Suspension, a cardiovascular drug for
the detection of coronary artery disease, which addresses a
potential $2 billion U.S. marketplace.

"I am very proud to have been associated with Acusphere's efforts
on behalf of Imagify, and our work to demonstrate its benefits to
patients and physicians," Dr. Walovitch said.  As the company
awaits completion of the review by the U.S. Food and Drug
Administration, now is the right time for me to move to the next
phase of my career, and I'm grateful for the experience of working
with my many talented colleagues at Acusphere."

"[Mr. Walovitch] has made many significant contributions to
Acusphere's success over the past 11 years, and we greatly
appreciate his commitment to seeing this project through to its
final stage," Sherri C. Oberg, president and CEO of Acusphere,
said.  "We wish him well in his next venture."

                        About Acusphere Inc.

Headquartered in Watertown, Massachusetts, Acusphere Inc. (NASDAQ:
ACUS) -- http://www.acusphere.com-- is a specialty pharmaceutical
company that develops new drugs and improved formulations of
existing drugs using its proprietary microsphere technology.  The
company is focused on developing proprietary drugs that can offer
significant benefits such as improved safety and efficacy,
increased patient compliance, greater ease of use, expanded
indications or reduced cost.

Its lead product candidate, Imagify for Injectable Suspension, is
a cardiovascular drug for the detection of coronary artery
disease.  Imagify is designed to enable ultrasound to compete more
effectively with nuclear stress testing, the leading procedure for
detecting coronary artery disease.

Acusphere, Inc.'s balance sheet at Sept. 30, 2008, showed total
assets of $22.8 million and total liabilities of $33.1 million,
resulting in a stockholders' deficit of $10.3 million.

Net loss of three months ended Sept. 30, 2008, was $10.2 million
compared with a net loss of $14.0 million for the same period in
the previous year.

For nine months ended Sept. 30, 2008, the company reported a net
loss of $34.8 million compared with a net loss of $41.1 million
for the same period in the previous year.

                      Going Concern Doubt

Deloitte & Touche LLP in Boston raised substantial doubt about the
ability of Acusphere to continue as a going concern after it
audited the company's financial statements for the year ended Dec.
31, 2007.  The auditor pointed to the company's recurring losses
from operations, negative cash flows from operations, and the
projected funding needed to sustain its operations.

As of June 30, 2008, the company had cash and equivalents of
$12.0 million, current liabilities of $21.1 million and
stockholders' deficit of $0.8 million.  During the six months
ended June 30, 2008, the company incurred a net loss available to
common stockholders of $25.6 million.  During the six months ended
June 30, 2008, operating activities used about $10.4 million of
cash.  Given the company's results from operations, current
forecasts, and financial position as of June 30, 2008, the company
will require significant additional funds in order to fund
operations through and beyond the fourth quarter of 2008.

These conditions raise substantial doubt about the company's
ability to continue as a going concern.  The accompanying
financial statements have been prepared on the basis of a going
concern assumption and do not reflect any adjustments that might
result from the outcome of this uncertainty.


ACUSPHERE INC: Equity Non-Compliance Cues Securities Delisting
--------------------------------------------------------------
Acusphere, Inc., received notification that the NASDAQ Listing
Qualifications Panel has determined to delist Jan. 9, 2009.  The
delisting is the result of the company's failure to meet the
$2.5 million stockholders' equity requirement for continued
listing on The NASDAQ Capital Market or one of the alternative
continued listing criteria.

Acusphere expected that its common stock will be eligible for
trading on the Over-the-Counter Bulletin Board, an electronic
quotation service maintained by the Financial Industry Regulatory
Authority, effective Jan. 9, 2009.  The company's shares are
expected to continue to trade under the symbol ACUS.

On Dec. 10, 2008, Acusphere, Inc., disclosed that NASDAQ has
halted trading in the company's common stock.

Headquartered in Watertown, Massachusetts, Acusphere Inc. (NASDAQ:
ACUS) -- http://www.acusphere.com-- is a specialty pharmaceutical
company that develops new drugs and improved formulations of
existing drugs using its proprietary microsphere technology.  The
company is focused on developing proprietary drugs that can offer
significant benefits such as improved safety and efficacy,
increased patient compliance, greater ease of use, expanded
indications or reduced cost.

Its lead product candidate, Imagify for Injectable Suspension, is
a cardiovascular drug for the detection of coronary artery
disease.  Imagify is designed to enable ultrasound to compete more
effectively with nuclear stress testing, the leading procedure for
detecting coronary artery disease.

Acusphere, Inc.'s balance sheet at Sept. 30, 2008, showed total
assets of $22.8 million and total liabilities of $33.1 million,
resulting in a stockholders' deficit of $10.3 million.

Net loss of three months ended Sept. 30, 2008, was $10.2 million
compared with a net loss of $14.0 million for the same period in
the previous year.

For nine months ended Sept. 30, 2008, the company reported a net
loss of $34.8 million compared with a net loss of $41.1 million
for the same period in the previous year.

                      Going Concern Doubt

Deloitte & Touche LLP in Boston raised substantial doubt about
the ability of Acusphere Inc. to continue as a going concern after
it audited the company's financial statements for the year ended
Dec. 31, 2007.  The auditor pointed to the company's recurring
losses from operations, negative cash flows from operations, and
the projected funding needed to sustain its operations.

As of June 30, 2008, the company had cash and equivalents of
$12.0 million, current liabilities of $21.1 million and
stockholders' deficit of $0.8 million.  During the six months
ended June 30, 2008, the company incurred a net loss available to
common stockholders of $25.6 million.  During the six months ended
June 30, 2008, operating activities used approximately
$10.4 million of cash.  Given the company's results from
operations, current forecasts, and financial position as of
June 30, 2008, the company will require significant additional
funds in order to fund operations through and beyond the fourth
quarter of 2008.

These conditions raise substantial doubt about the company's
ability to continue as a going concern.  The accompanying
financial statements have been prepared on the basis of a going
concern assumption and do not reflect any adjustments that might
result from the outcome of this uncertainty.


ARG ENTERPRISES: Cattle Co. Steakhouse Remains Open
---------------------------------------------------
Erika Engle at Star-Bulletin reports that despite ARG Enterprises
Inc.'s bankruptcy, Cattle Company Steakhouse General Manager Lynn
Tomokiyo said that the unit on Kaahumanu remains open and is
continuing doing business.

Cattle Company is part of the Black Angus Steakhouse chain that
has 69 restaurants operating in Alaska, Arizona, California,
Hawaii, New Mexico, Nevada, and Washington.

Star Bulletin quoted ARG Enterprises' Chief Restructuring Officer
Lisa Poulin as saying, "Making matters worse, the debtors'
restaurants primarily are located in some of the areas hardest hit
by the mortgage crisis, causing consumers in those markets to cut
back on discretionary spending, such as dining out."

                     About ARG Enterprises

With headquarters in Los Altos, California, ARG Enterprises Inc.
operates 69 Black Angus Steakhouse restaurants.  It operates in
seven states in the western U.S. and employs more than 3,600.

ARG filed for bankruptcy protection on Jan. 15 (Bankr. D. Del,
Case No. 09-10171).  In its bankruptcy petition, it estimated
assets and debts each in the range of $100 million to
$500 million.


ARTES MEDICAL: Nasdaq Removes Securities From Trading
-----------------------------------------------------
The NASDAQ Stock Market has said it will delist the common stock
of Artes Medical, Inc.  Artes Medical, Inc.'s stock was suspended
on December 11, 2008 and has not traded on NASDAQ since that time.

NASDAQ will file a Form 25 with the Securities and Exchange
Commission to complete the delisting. The delisting becomes
effective 10 days after the Form 25 is filed.

Artes Medical, Inc., incorporated in 1999, is a medical technology
company focused on the development, manufacture and
commercialization of a new category of injectable aesthetic
products for the dermatology and plastic surgery markets,
principally in the United States.  The company's initial product,
ArteFill, is a non-resorbable aesthetic injectable implant for the
correction of facial wrinkles known as smile lines, or nasolabial
folds.  Artes Medical received approval from the United States
Food and Drug Administration to market ArteFill in October 2006,
and commenced commercial shipments of ArteFill during the year
ended December 2007.

Artes Medical markets and sells ArteFill to dermatologists,
plastic surgeons and cosmetic surgeons in the United States
through its direct sales force.  As part of its marketing and
sales program, Artes Medical trains physicians in the technique of
injecting ArteFill with the aim of optimizing patient and
physician satisfaction with its product.  As of Dec. 31, 2007,
over 1,200 physicians had opened accounts with the Company to
offer ArteFill to their patients, and more than 1,000
dermatologists, plastic surgeons, and cosmetic surgeons had
completed their ArteFill training in 2007.

Artes Medical filed a voluntary petition for relief under
Chapter 7 in the U.S. Bankruptcy Court for the Southern District
of California, Case No. 08-12317-7, on Dec. 1, 2008.


ASARCO LLC: Keeps Control of Case Until March 17, 2009
------------------------------------------------------
Judge Richard Schmidt of the U.S. Bankruptcy Court for the
Southern District has further extended ASARCO LLC and its debtor-
affiliates' exclusive periods (i) to file a Chapter 11 plan of
reorganization, through March 17, 2009, and (ii) to obtain
acceptances for that plan through May 18, 2009.

The Court clarified that the Debtors' Exclusive Periods will
continue to be modified solely to allow Asarco Inc. and Americas
Mining Corporation or ASARCO LLC's parent company to file a
competing plan, and solicit acceptances of that plan.

In its previous Exclusivity Order issued in mid-2008, the Court
not only extended the Debtors' Exclusive Periods but also
modified the Order to allow Asarco Inc. and AMC to file a
competing plan in the Debtors' cases.

By July 31, 2008, the Debtors filed a Joint Chapter 11 Plan
premised on the sale of their operating assets to Sterlite (USA),
Inc. for $2.6 billion.  Asarco Inc. and AMC subsequently filed a
competing plan on August 26, 2008, which offers full payment to
ASARCO LLC's creditors.  Under its Plan, the Parent pledged to
provide up to $2.7 billion in cash.  By September 2008, the
parties got Court approval of the Disclosure Statements of each
of their Chapter 11 Plans.  The confirmation hearing was set for
November 17, 2008.

However, in October 2008, Sterlite relayed its inability to close
on the ASARCO sale without a reduction of the $2.6 billion
purchase price.  Sterlite cited the volatile copper market and
the depressed credit markets as reasons for refusal to close the
deal.

With Sterlite's repudiation of the asset sale contract, the Court
directed a mediation between ASARCO LLC and its Parent.  The
mediation, however, proved to be unsuccessful.  As a result, the
Parent backed out of its $2.7 billion offer for the ASARCO
assets.

With the termination of both Sterlite's and the Parent's offer
for the ASARCO assets, the solicitation process for the ASARCO
Plans has been suspended.

The Debtors represented to the Court that they have proceeded
cautiously in assessing their options for emergence from
bankruptcy.  The Debtors have related they are considering either
entering into an amended agreement with Sterlite; pursuing a
breach of contract action against Sterlite; selling their assets
to another buyer; filing a stand-alone plan; or some combination
of their options.

                ASARCO Entertains Glencore Offer

It has been widely reported recently that ASARCO is considering a
written proposal for a joint venture submitted by Glencore
International AG.  Jack L. Kinzie, Esq., at Baker Botts L.L.P.,
in Dallas, Texas, has informed the Court of Glencore's joint
venture proposal at a January 13, 2009 hearing, according to
Reuters.

Glencore is a Swiss supplier of a wide range of commodities and
raw materials to industrial consumers, and is a creditor in the
Debtors' bankruptcy cases.

Glencore has previously been reported as one of the possible
bidders for ASARCO's operating assets along with Harbinger
Capital Partners, Citigroup Global Markets, and Sterlite (USA),
Inc.  Sterlite was ultimately named stalking horse bidder with a
bid amounting to $2.6 billion.  As widely reported, Sterlite has
refused to honor its bid and has demanded a $500 million
reduction of the agreed purchase price.

According to Reuters, which monitored the January 13 hearing,
ASARCO will consider Glencore's joint venture proposal along with
a stand-alone plan of reorganization that the Debtors are
currently putting together.  Mr. Kinzie also revealed that ASARCO
is still negotiating with Sterlite.

"Things are going to have to speed way up," Judge Schmidt said at
the hearing.  He said he hopes to see more progress in the ASARCO
cases in the next two weeks.

Reuters also quoted Mr. Kinzie as saying that ASARCO currently
has $1.3 billion in cash, but is expecting to lose around
$20 million in the first two months of 2009 citing drop in copper
prices.

The Official Committee of Unsecured Creditors was fascinated by
news of the Glencore offer, Metal Bulletin quotes the Committee's
counsel, Sander L. Esserman, Esq., of Stutzman, Bromberg,
Esserman & Plifka, APC, as saying.

                        About ASARCO LLC

Based in Tucson, Arizona, ASARCO LLC -- http://www.asarco.com/--
is an integrated copper mining, smelting and refining company.
Grupo Mexico S.A. de C.V. is ASARCO's ultimate parent.

ASARCO LLC filed for Chapter 11 protection on Aug. 9, 2005 (Bankr.
S.D. Tex. Case No. 05-21207).  James R. Prince, Esq., Jack L.
Kinzie, Esq., and Eric A. Soderlund, Esq., at Baker Botts L.L.P.,
and Nathaniel Peter Holzer, Esq., Shelby A. Jordan, Esq., and
Harlin C. Womble, Esq., at Jordan, Hyden, Womble & Culbreth, P.C.,
represent the Debtor in its restructuring efforts.  Lehman
Brothers Inc. provides the ASARCO with financial advisory services
and investment banking services.  Paul M. Singer, Esq., James C.
McCarroll, Esq., and Derek J. Baker, Esq., at Reed Smith LLP give
legal advice to the Official Committee of Unsecured Creditors and
David J. Beckman at FTI Consulting, Inc., gives financial advisory
services to the Committee.

When ASARCO LLC filed for protection from its creditors, it listed
US$600 million in total assets and US$1 billion in total debts.

ASARCO LLC has five affiliates that filed for chapter 11
protection on April 11, 2005 (Bankr. S.D. Tex. Case Nos.
05-20521 through 05-20525).  They are Lac d'Amiante Du Quebec
Ltee, CAPCO Pipe Company, Inc., Cement Asbestos Products Company,
Lake Asbestos of Quebec, Ltd., and LAQ Canada, Ltd.  Sander L.
Esserman, Esq., at Stutzman, Bromberg, Esserman & Plifka, APC, in
Dallas, Texas, represents the Official Committee of Unsecured
Creditors for the Asbestos Debtors.  Former judge Robert C. Pate
has been appointed as the future claims representative.  Details
about their asbestos-driven Chapter 11 filings have appeared in
the Troubled Company Reporter since April 18, 2005.

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

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

Six of ASARCO's affiliates, Wyoming Mining & Milling Co., Alta
Mining & Development Co., Tulipan Co., Inc., Blackhawk Mining &
Development Co., Ltd., Peru Mining Exploration & Development Co.,
and Green Hill Cleveland Mining Co. filed for Chapter 11
protection on April 21, 2008.  (Bank. S.D. Tex. Case No. 08-20197
to 08-20202).

The Debtors submitted to the Court a joint plan of reorganization
and disclosure statement on July 31, 2008.  The plan incorporates
the sale of substantially all of the Debtors' assets to Sterlite
Industries, Ltd., for US$2,600,000,000.

Americas Mining Corporation, an affiliate of Grupo Mexico SAB de
CV, submitted a reorganization plan to retain its equity interest
in ASARCO LLC, by offering full payment to ASARCO's creditors in
connection with ASARCO's Chapter 11 case.  AMC would provide up to
US$2.7 billion in cash as well as a US$440 million guarantee to
assure payment of all allowed creditor claims, including payment
of liabilities relating to asbestos and environmental claims.
AMC's plan is premised on the estimation of the approximate
allowed amount of the claims against ASARCO.

Bankruptcy Creditors' Service, Inc., publishes ASARCO Bankruptcy
News.  The newsletter tracks the chapter 11 proceeding
undertaken by ASARCO LLC and its various affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)


ASARCO LLC: Disputes Parent's $516MM Admin. Claim for Taxes
-----------------------------------------------------------
ASARCO LLC asks the U.S. Bankruptcy Court for the Southern
District of Texas to disallow Claim No. 18571 filed by Americas
Mining Corporation and Asarco Incorporated, asserting a
$516,200,000 administrative claim for the alleged payment of
postpetition taxes purportedly on behalf of ASARCO LLC under a
tax sharing agreement.

Jack L. Kinzie, Esq., at Baker Botts L.L.P., in Dallas, Texas,
argues that Claim No. 18571 is not entitled to administrative
priority because under Section 503(b)(1)(A) of the Bankruptcy
Code, the Parent has the burden of establishing that its Claim
(i) conferred a benefit on the bankruptcy estates, and (ii) arose
postpetition from a transaction with the Debtors.  The Parent
cannot meet either prong of the two-part test, he contends.

ASARCO LLC, a single-member limited liability company that is
disregarded for federal income tax purposes, has no obligation
for federal income tax after February 2005, Mr. Kinzie maintains.
February 2005 is the date by which the Parent merged Asarco Inc.
into ASARCO LLC as part of the Parent's own tax planning to avoid
liability for federal income tax on $610,000,000 of taxable gain
arising from the Parent's fraudulent transfer of Southern Peru
Copper Company to the Parent in 2003.

As a disregarded entity, ASARCO LLC is treated as a branch or
division of Asarco Inc., Mr. Kinzie relates.  Hence, he says,
ASARCO LLC is not liable for tax on its taxable income.  Instead,
taxable income from ASARCO LLC's operations is that of Asarco
Inc.'s and the resulting federal income tax is the legal
obligation of the Parent -- not ASARCO -- under applicable tax
law.

While the Parent shifted its own tax obligation to ASARCO LLC
under the prepetition tax sharing agreement dated February 2005
and enjoyed the benefits from doing so, the TSA has conferred no
benefit on the ASARCO bankruptcy estate during the postpetition
period so as to warrant an award of administrative priority for
the Claim, Mr. Kinzie contends.  Because the Claim arose under a
pre-bankruptcy contract, it is not entitled to administrative
priority, but is, at best, a general unsecured claim, he
maintains.

Mr. Kinzie adds that "[r]egardless of whether [the] Parent's
Claim is entitled to administrative priority or instead properly
treated as a general unsecured claim, such Claim must be
disallowed pursuant to [S]ection 502(d) of the Bankruptcy Code
because Parent has not turned over to the estate ASARCO's
interest in SPCC that Parent fraudulently transferred on March
31, 2003."

Claim No. 18571 is defective and grossly overstated because it
contains no evidence of payment of any tax by the Parent, Mr.
Kinzie further argues, so that ASARCO LLC cannot determine if the
Parent has actually paid any tax to the Internal Revenue Service.
Nor has the Claim been reduced to take into account net operating
losses and other tax attributes that may have already reduced,
and will likely reduce even further the Parent's ultimate tax
liability to the IRS, he adds.

Accordingly, ASARCO LLC asks the Court to disallow Claim No.
18571 and award it reimbursement for attorneys' fees and costs to
the fullest extent permissible under law.

In the alternative, if the Claim is allowed in any amount, ASARCO
LLC asks the Court to deny the Parent's request for
administrative priority status of Claim No. 18571.  If Claim No.
18571 is not disallowed as requested, ASARCO LLC asks the Court
to reduce the Claim to take into account net operating losses,
deductions and other tax attributes that have reduced the
Parent's ultimate tax liability.

            ASARCO Challenges Proposed Suit Amendments

Meanwhile, ASARCO LLC has asked the Bankruptcy Court to deny
Americas Mining Corporation's request to amend ASARCO's pleadings
in the adversary complaint against AMC.

"AMC's motion is nothing more than a thinly disguised motion for
reconsideration of the Court's August 30, 2008 Memorandum Opinion
and Order," G. Irvin Terrell, Esq., at Baker Botts, L.L.P., in
Houston, Texas, asserts.  He argues that AMC mischaracterizes
ASARCO's theory of the case, the trial record, and the Liability
Order, and relies on arguments that the Court has already
rejected.

Mr. Terrell reminds the Court that ASARCO has pleaded, tried, and
prevailed on its claim that the transfer of its Southern Peru
Copper Company shares to AMC constituted an intentional
fraudulent transfer.  He contends that AMC now seeks to narrow
ASARCO's intentional fraudulent transfer claim and the Court's
Liability Order to two "lesser included" transfers:

  (1) ASARCO's payment of its $100,000,000 Yankee Bonds; and
  (2) AMC's cancellation of its $42,000,000 loan to ASARCO.

The trial record and the Liability Order do not support AMC's
attempt to limit ASARCO's claim and its remedy, Mr. Terrell
points out.  He asserts that AMC's request proposes an
unprecedented and improper application of Rule 15(b) of the
Federal Rules of Civil Procedure because contrary to settled
practice, AMC has asked the Court to amend ASARCO's complaint,
not its own, to include narrower claims that ASARCO never pleaded
and never consented to try.  AMC's request to stretch Rule 15(b)
beyond its traditional application should be rejected, he
emphasizes.

"AMC invokes Rule 15(b) in such an unorthodox manner because it
hopes to provide the Court a new basis for not ordering AMC to
return to ASARCO the fraudulently transferred SPCC stock," Mr.
Terrell says.  "A new theory is necessary because recent events
affecting the bankruptcy case have rendered moot the main
arguments laid out in AMC's Memorandum of Law on Remedies,
particularly the contention that return of the SPCC stock would
not benefit the ASARCO estate," he avers.

                        About ASARCO LLC

Based in Tucson, Arizona, ASARCO LLC -- http://www.asarco.com/--
is an integrated copper mining, smelting and refining company.
Grupo Mexico S.A. de C.V. is ASARCO's ultimate parent.

ASARCO LLC filed for Chapter 11 protection on Aug. 9, 2005 (Bankr.
S.D. Tex. Case No. 05-21207).  James R. Prince, Esq., Jack L.
Kinzie, Esq., and Eric A. Soderlund, Esq., at Baker Botts L.L.P.,
and Nathaniel Peter Holzer, Esq., Shelby A. Jordan, Esq., and
Harlin C. Womble, Esq., at Jordan, Hyden, Womble & Culbreth, P.C.,
represent the Debtor in its restructuring efforts.  Lehman
Brothers Inc. provides the ASARCO with financial advisory services
and investment banking services.  Paul M. Singer, Esq., James C.
McCarroll, Esq., and Derek J. Baker, Esq., at Reed Smith LLP give
legal advice to the Official Committee of Unsecured Creditors and
David J. Beckman at FTI Consulting, Inc., gives financial advisory
services to the Committee.

When ASARCO LLC filed for protection from its creditors, it listed
US$600 million in total assets and US$1 billion in total debts.

ASARCO LLC has five affiliates that filed for chapter 11
protection on April 11, 2005 (Bankr. S.D. Tex. Case Nos.
05-20521 through 05-20525).  They are Lac d'Amiante Du Quebec
Ltee, CAPCO Pipe Company, Inc., Cement Asbestos Products Company,
Lake Asbestos of Quebec, Ltd., and LAQ Canada, Ltd.  Sander L.
Esserman, Esq., at Stutzman, Bromberg, Esserman & Plifka, APC, in
Dallas, Texas, represents the Official Committee of Unsecured
Creditors for the Asbestos Debtors.  Former judge Robert C. Pate
has been appointed as the future claims representative.  Details
about their asbestos-driven Chapter 11 filings have appeared in
the Troubled Company Reporter since April 18, 2005.

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

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

Six of ASARCO's affiliates, Wyoming Mining & Milling Co., Alta
Mining & Development Co., Tulipan Co., Inc., Blackhawk Mining &
Development Co., Ltd., Peru Mining Exploration & Development Co.,
and Green Hill Cleveland Mining Co. filed for Chapter 11
protection on April 21, 2008.  (Bank. S.D. Tex. Case No. 08-20197
to 08-20202).

The Debtors submitted to the Court a joint plan of reorganization
and disclosure statement on July 31, 2008.  The plan incorporates
the sale of substantially all of the Debtors' assets to Sterlite
Industries, Ltd., for US$2,600,000,000.

Americas Mining Corporation, an affiliate of Grupo Mexico SAB de
CV, submitted a reorganization plan to retain its equity interest
in ASARCO LLC, by offering full payment to ASARCO's creditors in
connection with ASARCO's Chapter 11 case.  AMC would provide up to
US$2.7 billion in cash as well as a US$440 million guarantee to
assure payment of all allowed creditor claims, including payment
of liabilities relating to asbestos and environmental claims.
AMC's plan is premised on the estimation of the approximate
allowed amount of the claims against ASARCO.

Bankruptcy Creditors' Service, Inc., publishes ASARCO Bankruptcy
News.  The newsletter tracks the chapter 11 proceeding undertaken
by ASARCO LLC and its various affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)


ASARCO LLC: Pens Settlement of 10 Former Employees' Claims
----------------------------------------------------------
Ten former employees of ASARCO LLC, or their widows, asserted
proofs of claims against the Debtors based on alleged or adjudged
liability under workers' compensation laws of the state of New
Jersey.  ASARCO LLC says it has made payments prepetition to
three of the Former Employees' widows based on judgments obtained
or settlements reached on account of work-related injuries
allegedly suffered by their now deceased husbands.

The Remaining Creditors filed employee or dependency claim
petitions against ASARCO in the New Jersey Division of Workers
Compensation before the Petition Date.  The pending claims, which
seek compensation under New Jersey's workers compensation laws,
generally allege exposure to pulmonary irritants resulting in
pulmonary disease and death.

The Debtors inform the U.S. Bankruptcy Court for the Southern
District of Texas that the Creditors have agreed to accept general
unsecured claims in an amount consistent with settlements or
judgments that were obtained by similarly situated former
employees before the Petition Date:

                                                Allowed
  Claimant                       Claim No.      Amount
  --------                       ---------      -------
  Dorothy Kesley                    9494        $12,000
  Roy Grimes                       10394          5,000
  Anna Marie Toledo                10395          5,000
  Helen Bodaj                      10396         20,000
  Teresa Jakubowski                10397          1,000
  Jennie Tarasiuk                  10398         20,000
  Elizabeth Aquino-Castillo        10401         20,000
  Margaret Samu                    11556         20,000
  Joseph Keyes                     11566          5,000
  James Reid                       14471          5,000

Accordingly, the Debtors ask the Court to approve their compromise
and settlement with each of the Creditors.  The Debtors maintain
that the Settlements are fair and equitable.

The Debtors also ask the Court for a limited modification of the
automatic stay to allow the Creditors to seek approval of the
settlement agreement in any New Jersey state court having
jurisdiction over the claims being settled.

                        About ASARCO LLC

Based in Tucson, Arizona, ASARCO LLC -- http://www.asarco.com/--
is an integrated copper mining, smelting and refining company.
Grupo Mexico S.A. de C.V. is ASARCO's ultimate parent.

ASARCO LLC filed for Chapter 11 protection on Aug. 9, 2005 (Bankr.
S.D. Tex. Case No. 05-21207).  James R. Prince, Esq., Jack L.
Kinzie, Esq., and Eric A. Soderlund, Esq., at Baker Botts L.L.P.,
and Nathaniel Peter Holzer, Esq., Shelby A. Jordan, Esq., and
Harlin C. Womble, Esq., at Jordan, Hyden, Womble & Culbreth, P.C.,
represent the Debtor in its restructuring efforts.  Lehman
Brothers Inc. provides the ASARCO with financial advisory services
and investment banking services.  Paul M. Singer, Esq., James C.
McCarroll, Esq., and Derek J. Baker, Esq., at Reed Smith LLP give
legal advice to the Official Committee of Unsecured Creditors and
David J. Beckman at FTI Consulting, Inc., gives financial advisory
services to the Committee.

When ASARCO LLC filed for protection from its creditors, it listed
US$600 million in total assets and US$1 billion in total debts.

ASARCO LLC has five affiliates that filed for chapter 11
protection on April 11, 2005 (Bankr. S.D. Tex. Case Nos.
05-20521 through 05-20525).  They are Lac d'Amiante Du Quebec
Ltee, CAPCO Pipe Company, Inc., Cement Asbestos Products Company,
Lake Asbestos of Quebec, Ltd., and LAQ Canada, Ltd.  Sander L.
Esserman, Esq., at Stutzman, Bromberg, Esserman & Plifka, APC, in
Dallas, Texas, represents the Official Committee of Unsecured
Creditors for the Asbestos Debtors.  Former judge Robert C. Pate
has been appointed as the future claims representative.  Details
about their asbestos-driven Chapter 11 filings have appeared in
the Troubled Company Reporter since April 18, 2005.

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

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

Six of ASARCO's affiliates, Wyoming Mining & Milling Co., Alta
Mining & Development Co., Tulipan Co., Inc., Blackhawk Mining &
Development Co., Ltd., Peru Mining Exploration & Development Co.,
and Green Hill Cleveland Mining Co. filed for Chapter 11
protection on April 21, 2008.  (Bank. S.D. Tex. Case No. 08-20197
to 08-20202).

The Debtors submitted to the Court a joint plan of reorganization
and disclosure statement on July 31, 2008.  The plan incorporates
the sale of substantially all of the Debtors' assets to Sterlite
Industries, Ltd., for US$2,600,000,000.

Americas Mining Corporation, an affiliate of Grupo Mexico SAB de
CV, submitted a reorganization plan to retain its equity interest
in ASARCO LLC, by offering full payment to ASARCO's creditors in
connection with ASARCO's Chapter 11 case.  AMC would provide up to
US$2.7 billion in cash as well as a US$440 million guarantee to
assure payment of all allowed creditor claims, including payment
of liabilities relating to asbestos and environmental claims.
AMC's plan is premised on the estimation of the approximate
allowed amount of the claims against ASARCO.

Bankruptcy Creditors' Service, Inc., publishes ASARCO Bankruptcy
News.  The newsletter tracks the chapter 11 proceeding undertaken
by ASARCO LLC and its various affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)


ASARCO LLC: Unveils $10MM Settlement of Rosemont Property Dispute
-----------------------------------------------------------------
ASARCO has settled its fraudulent conveyance litigation against
Augusta Resources and other defendants for $10.25 million.

Augusta Resources also made an announcement of the deal over the
weekend.

The proposed settlement, which is not binding unless approved by
the bankruptcy court after a hearing, consists of $1.25 million
cash payable to ASARCO at closing ($1 million from the Rosemont
Ranch defendants and $250,000 from Augusta Resources), plus
$9 million over 8 years from Augusta Resources, payable from
profits of production and subject to an option, which if
exercised, would require Augusta Resources to pay ASARCO the net
present value of such payments in cash.

ASARCO sold the Rosemont property to a local real estate developer
for $4 million in June 2004, while ASARCO was insolvent and under
control of Grupo Mexico S.A. de C.V.  Ten months later, the
developer optioned the property to Augusta Resources for over
$20.8 million. Augusta exercised the option and purchased the
property after ASARCO filed for bankruptcy protection in August
2005. This five-fold increase in value over ten months indicates
that ASARCO did not receive fair value for the property.

ASARCO brought suit against Augusta Resources and the Rosemont
Ranch defendants to recover for its creditors either the property
or a judgment for the lost value in the sale. Bankruptcy law
allows a debtor to avoid transfers of property made while
financially distressed, if the debtor did not receive reasonably
equivalent value for the property sold.

Both of ASARCO's creditors' committees in the bankruptcy
intervened in the lawsuit to support ASARCO. Augusta Resources
moved early in the case to dismiss ASARCO's claim, but the
bankruptcy court presiding over the litigation denied the motion.
"Several factors influenced ASARCO's and its creditors'
willingness to settle the lawsuit at this time, including the
continuing high cost of litigation, the recent drastic decline in
copper prices, and collection costs and risk if Asarco were to
prevail at trial," said Joseph F. Lapinsky, President and Chief
Executive Officer of ASARCO.

As reported by the Troubled Company Reporter on Monday, Gil
Clausen, President and CEO of Augusta, said, "This settlement
removes significant uncertainty in our efforts to develop the
Rosemont copper mine as a cornerstone asset of Augusta."

Mr. Clausen also said, "We believe ASARCO's complaint was
completely unfounded.  Augusta purchased the property in good
faith, and we are confident the court ultimately would have
vindicated Augusta's position.  Resolving this matter through
continued litigation could have taken months or years, however,
and potentially cost the Company several millions of dollars in
court fees, experts, and other expenses.  We are extremely pleased
to resolve this distraction and turn all of our attention to
developing the Rosemont mine.  Permitting, site work, and
engineering remain on schedule."

                          About Augusta

Augusta Resource Corporation -- http://www.augustaresource.com/--
is a base metals company focused on advancing the Rosemont Copper
deposit near Tucson, Arizona.  Rosemont currently hosts a large
copper/molybdenum reserve that may account for about 10% of US
copper output once in production in 2012.  The Company is traded
on the Toronto Stock Exchange and the NYSE Alternext under the
symbol AZC, and on the Frankfurt Stock Exchange under the symbol
A5R.

                        About ASARCO LLC

Based in Tucson, Arizona, ASARCO LLC -- http://www.asarco.com/--
is an integrated copper mining, smelting and refining company.
Grupo Mexico S.A. de C.V. is ASARCO's ultimate parent.

ASARCO LLC filed for Chapter 11 protection on Aug. 9, 2005 (Bankr.
S.D. Tex. Case No. 05-21207).  James R. Prince, Esq., Jack L.
Kinzie, Esq., and Eric A. Soderlund, Esq., at Baker Botts L.L.P.,
and Nathaniel Peter Holzer, Esq., Shelby A. Jordan, Esq., and
Harlin C. Womble, Esq., at Jordan, Hyden, Womble & Culbreth, P.C.,
represent the Debtor in its restructuring efforts.  Lehman
Brothers Inc. provides the ASARCO with financial advisory services
and investment banking services.  Paul M. Singer, Esq., James C.
McCarroll, Esq., and Derek J. Baker, Esq., at Reed Smith LLP give
legal advice to the Official Committee of Unsecured Creditors and
David J. Beckman at FTI Consulting, Inc., gives financial advisory
services to the Committee.

When ASARCO LLC filed for protection from its creditors, it listed
US$600 million in total assets and US$1 billion in total debts.

ASARCO LLC has five affiliates that filed for chapter 11
protection on April 11, 2005 (Bankr. S.D. Tex. Case Nos.
05-20521 through 05-20525).  They are Lac d'Amiante Du Quebec
Ltee, CAPCO Pipe Company, Inc., Cement Asbestos Products Company,
Lake Asbestos of Quebec, Ltd., and LAQ Canada, Ltd.  Sander L.
Esserman, Esq., at Stutzman, Bromberg, Esserman & Plifka, APC, in
Dallas, Texas, represents the Official Committee of Unsecured
Creditors for the Asbestos Debtors.  Former judge Robert C. Pate
has been appointed as the future claims representative.  Details
about their asbestos-driven Chapter 11 filings have appeared in
the Troubled Company Reporter since April 18, 2005.

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

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

Six of ASARCO's affiliates, Wyoming Mining & Milling Co., Alta
Mining & Development Co., Tulipan Co., Inc., Blackhawk Mining &
Development Co., Ltd., Peru Mining Exploration & Development Co.,
and Green Hill Cleveland Mining Co. filed for Chapter 11
protection on April 21, 2008.  (Bank. S.D. Tex. Case No. 08-20197
to 08-20202).

The Debtors submitted to the Court a joint plan of reorganization
and disclosure statement on July 31, 2008.  The plan incorporates
the sale of substantially all of the Debtors' assets to Sterlite
Industries, Ltd., for US$2,600,000,000.

Americas Mining Corporation, an affiliate of Grupo Mexico SAB de
CV, submitted a reorganization plan to retain its equity interest
in ASARCO LLC, by offering full payment to ASARCO's creditors in
connection with ASARCO's Chapter 11 case.  AMC would provide up to
US$2.7 billion in cash as well as a US$440 million guarantee to
assure payment of all allowed creditor claims, including payment
of liabilities relating to asbestos and environmental claims.
AMC's plan is premised on the estimation of the approximate
allowed amount of the claims against ASARCO.

Bankruptcy Creditors' Service, Inc., publishes ASARCO Bankruptcy
News.  The newsletter tracks the chapter 11 proceeding undertaken
by ASARCO LLC and its various affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)


BELOVICH GROUP: Files for Bankruptcy Protection
-----------------------------------------------
Darrin Youker at Reading Eagle reports that borough officials said
that The Belovich Group, Exeter Township, has filed for bankruptcy
protection, listing assets of more than $900,000 and liabilities
of $4.3 million.

Belovich, says Reading Eagle, was constructing 58 town homes in
the northern section of West Reading.  Reading Eagle relates that
The Belovich Group has 12 homes unfinished.

According to Reading Eagle, George I. Tindall, borough manager,
said that West Reading is collaborating with a local bank that is
holding a $285,000 line of credit for Belovich to finish some of
the work.

The Belovich Group Inc. is located in Reading, Pennsylvania.
Belovich's line of business is single-family house construction.


BLACK GAMING: Grace Period for $5.6M Interest Expires Feb. 14
-------------------------------------------------------------
Black Gaming, LLC, disclosed in a regulatory filing with the
Securities and Exchange Commission that it is in discussions with
an ad hoc committee of holders of the company's outstanding 9%
Senior Secured Notes due 2012, regarding the company's financial
alternatives.

On January 15, Black Gaming and its direct and indirect
subsidiaries failed to make the $5.625 million interest payment
then due to the holders of the $125 million 9.0% Senior Secured
Notes due 2012 issued by Black Gaming's direct and indirect
subsidiaries Virgin River Casino Corporation, RBG, LLC and B & B
B, Inc.

Under the terms of the Indenture, dated Dec. 20, 2004, governing
the Notes, the Issuers have a grace period of 30 days from the
payment due date with respect to the interest payment before the
nonpayment becomes an event of default under the Indenture.  There
is no right to accelerate the obligations under the Notes based on
the nonpayment unless interest remains unpaid upon expiration of
the grace period.  In the event that the interest payment is not
made prior to the expiration of the 30-day grace period, then the
aggregate principal amount of the Notes, plus the unpaid interest
payment and any other amounts due and owing on the Notes could be
declared immediately due and payable by the Trustee under the
Indenture or by holders of 25% or more of the aggregate principal
amount of the Notes.

Failure to make the interest payment on the Notes within the 30-
day grace period would also constitute an event of default under
the $66 million aggregate principal amount of 12.75% Senior
Subordinated Discount Notes due 2013 issued by the Issuers.  There
is no right to accelerate the obligations under the Discount Notes
based on the nonpayment of interest on the Notes unless the
obligations under the Notes are accelerated prior to their stated
maturity.  In the event, the aggregate principal amount of the
Discount Notes, plus accrued and unpaid interest, if any, and any
other amounts due and owing on the Discount Notes could be
declared immediately due and payable by the Trustee under the
indenture governing the Discount Notes or by holders of 25% or
more of the aggregate principal amount of the Discount Notes.

Failure to make the interest payment on the Notes within the 30-
day grace period would also constitute an event of default under
the company's Credit Agreement with Wells Fargo Foothill, Inc.,
dated as of Dec. 20, 2004, as amended.  In the event the interest
payment is not made and the company is unable to obtain a
forbearance or waiver under the Credit Agreement, Wells Fargo
would be able to declare the company's obligations under the
Credit Agreement immediately due and payable.  As of Jan. 15,
2009, the company's aggregate obligations under the Credit
Agreement subject to acceleration were approximately
$14.9 million.

In a separate filing, the company disclosed that an ad hoc
committee representing certain holders of the company's
outstanding 9% Senior Secured Notes due 2012 has been established
to discuss potential strategic alternatives that may be considered
on behalf of the holders of the Notes with respect to the company.

The Ad Hoc Committee consists of holders or representatives of
holders purporting to hold approximately 51% of the outstanding
Notes.

Other holders or interested parties may contact the Ad Hoc
Committee at:

     Cadwalader, Wickersham & Taft, LLP
     One World Financial Center
     New York, NY 10281
     Tel: (212) 504-6747

                      About Black Gaming, LLC

Headquartered in Las Vegas, Nevada, Black Gaming, LLC --
http://www.blackgaming.com/-- through its subsidiaries, engages
in the ownership and operation of casino hotels.  Its casino
properties include CasaBlanca Hotel & Casino, Oasis Hotel &
Casino, and Virgin River Hotel & Casino, which are located in
Mesquite, Nevada.  The company also owns the Virgin River
Convention Center in Mesquite, Nevada, which is used as a special
events facility and for overflow hotel traffic from its other
properties. Black Gaming's properties also offer amenities,
including championship golf courses, spas, a bowling center, a
movie theater, both gourmet and casual restaurants, and banquet
and conference facilities.  Founded in 1988, the company has 2,300
employees.

At Sept. 30, 2008, the company's balance sheet showed total assets
of $166.3 million and total liabilities of $221.4 million,
resulting in a members' deficit of $55.1 million.

For three months ended Sept. 30, 2008, the company posted net loss
of $10.1 million compared with net loss of $7.9 million for the
same period in the previous year.

For nine months ended Sept. 30, 2008, the company posted net loss
of $34.4 million compared with net loss of $12.1 million for the
same period in the previous year.

As of Sept. 30, 2008, and Dec. 31, 2007, cash and cash equivalents
were $11.2 million and $9.5 million.  Additionally, the Foothill
Facility is substantially fully drawn as only approximately $0.2
million was available under the Foothill Facility at Sept. 30,
2008.

                           *     *     *

As reported in the Troubled Company Reporter on Aug. 7, 2008,
Moody's Investors Service downgraded Black Gaming LLC's corporate
family rating and probability of default rating to Caa3 from Caa1.
It also downgraded the rating of the 9% senior secured notes to
Caa2 from B3 and the rating of the 12.75% senior subordinated
notes to Ca from Caa3.  The SGL-4 rating was affirmed and the
rating outlook remains negative.  The rating actions reflect
Moody's view that Black Gaming's operating performance has
deteriorated more sharply than anticipated earlier this year in
persistently weak market conditions, creating liquidity pressures
to such an extent that a default of payment or a distressed
exchange transaction could materialize in the next twelve months.


BLACK GAMING: Moody's Downgrades Corporate Family Rating to 'Ca'
----------------------------------------------------------------
Moody's Investors Service downgraded Black Gaming LLC's corporate
family and probability of default ratings to Ca from Caa3
following the announcement that it did not make the January 15,
2009 scheduled interest payment on its 9% senior secured notes due
2012.  Moody's also lowered the ratings for the 9% senior secured
notes to Caa3 from Caa2 and the 12.75% senior subordinated notes
to C from Ca.  The SGL-4 speculative grade liquidity rating was
affirmed.  The outlook remains negative.

Under the terms of the indenture governing the senior secured
notes, Black Gaming has a grace period of 30 days from the payment
due date before the nonpayment becomes an event of default under
the indenture.  Upon expiration of the grace period, the
bondholders will have the right to accelerate the obligations
under the senior secured notes.  Additionally, failure to make the
interest payment on the notes within the 30-day grace period would
also constitute an event of default under the company's unrated
senior secured revolving credit facility and the 12.75% senior
subordinated notes due 2013.

The negative outlook recognizes that, although Black Gaming is
currently in discussion with holders of the senior secured notes
regarding its financial alternatives, a payment default could
materialize at the expiration of the 30-day grace period.

Ratings lowered:

  -- Corporate family rating to Ca from Caa3

  -- Probability of default rating to Ca from Caa3

  -- 9% senior secured notes rating to Caa3 from Caa2 (LGD
     assessment revised to LGD3/38% from LGD3/37%)

  -- 12.75% senior subordinated notes rating to C from Ca
     (unchanged LGD assessment of LGD5/87%)

The last rating action was on August 5, 2008, when Moody's lowered
Black Gaming's corporate family rating to Caa3 from Caa1.

Black Gaming owns and operates the CasaBlanca, the Oasis, and the
Virgin River casino hotels in Mesquite, Nevada, located
approximately 80 miles north of Las Vegas, Nevada.  Net revenue
was approximately $141 million for the last twelve-month period
ended September 30, 2008.


BLACK GAMING: Inks Executive Employment Deal With Robert Black
--------------------------------------------------------------
Black Gaming, LLC, executed an Executive Employment Agreement with
Robert R. Black, Sr., the company's chief executive officer.
Mr. Black has been serving in this capacity since the company's
formation.

The Black Agreement provides that Mr. Black will receive a base
salary of $577,500 per year which will increase by 5% on
January 1 of each renewal period of the Black Agreement.  The
company will also pay Mr. Black a management fee equal to 5% of
its Consolidated EBITDA, as defined in the Indenture, dated as of
Dec. 20, 2004, by and among the company's direct and indirect
subsidiaries, Virgin River Casino Corporation, B & B B, Inc., and
RBG, LLC, as issuers, and The Bank of New York Trust company,
N.A., as trustee, under which the 9.000% Senior Secured Notes due
2012 were issued.  About 90% of the management fee will be paid on
January 8 of each year, which payment will be based on an estimate
of the company's Consolidated Net Income, as defined in the
Indenture, and other amounts that comprise the calculation of
Consolidated EBITDA.

Within 30 days after the determination of the Consolidated EBITDA
for the applicable year, the company will pay Mr. Black the
difference between the estimated amount paid and actual amount of
the management fee.  If the estimated amount paid is greater than
the actual amount of the fee, Mr. Black will repay the excess fee
to the company.

In addition to his salary and management fee, Mr. Black is
entitled to:

   1) reimbursement for all reasonable out-of-pocket expenses
      incurred in performing services under the Black Agreement;

   2) a car allowance of not less than $19,200 per year;

   3) various food, spa, hotel rooms and related services at no
      charge, provided, the complimentaries do not exceed $2,000
      per month;

   4) participation in the company's employee benefit programs
      and plans generally made available to its executives or
      salaried employees;

   5) executive perquisites in accordance with the terms and
      provisions of the applicable policies; and

   6) paid personal time off and paid vacation, consistent with
      past practices.

The initial term of the Black Agreement is through Dec. 31, 2009,
unless sooner terminated and will automatically renew for
successive one-year periods unless written notice is given by
either party at least 30 days prior to the otherwise scheduled
expiration of the term that the term will not renew.  If Mr. Black
is terminated without cause, he will be entitled to receive an
amount equal to his salary for the remainder of the term, any
portion of the management fee for any prior year which has not yet
been paid based upon the estimated Consolidated EBITDA, and, with
respect to the year in which the termination without cause occurs,
the management fee based upon the estimated Consolidated EBITDA
for such year through the effective date of the termination.

A full-text copy of the Executive Employment Agreement of
Robert R. Black, Sr. is available for free at:

               http://ResearchArchives.com/t/s?3829

The company also executed an Executive Employment Agreement with
Anthony Toti to serve as the company's chief operating officer.

On Dec. 23, 2008, the company appointed Mr. Toti to serve as its
COO. Mr. Toti will oversee the operations of all of its
properties.

Mr. Toti, has been employed as its vice president of gaming
operations and the general manager of its CasaBlanca Resort and
Casino since October 2007.  From July 2000 through October 2007,
Mr. Toti served as the director of casino operations at the
Suncoast Hotel and Casino in Las Vegas, Nevada.  Since 1989,
Mr. Toti has been the managing member of Las Vegas School of
Dealing, LLC in Las Vegas, Nevada.

Mr. Toti's base salary will be $250,000 per year. Further, if
Mr. Toti is employed by the company as of December 31 of any year,
the company will pay Mr. Toti a bonus of $50,000.  However, if Mr.
Toti is not employed by the company as of December 31, he will
have no right to receive any portion of the amount.  In addition
to his salary and bonus, Mr. Toti is entitled to:

   1) reimbursement for all reasonable out-of-pocket expenses
       incurred in performing services under the Toti Agreement;

   2) participation in the company's employee benefit programs
      and plans made available to its executives or salaried
      employees;

   3) executive perquisites in accordance with the terms and
      provisions of the applicable policies; and

   4) participation in all PTO and vacation programs made
      available to the company's executives or salaried
      employees.

The initial term of Mr. Toti's employment as COO will be through
Dec. 31, 2009, unless sooner terminated and will automatically
renew for successive one year periods unless written notice is
given by either party at least 30 days prior to the otherwise
scheduled expiration of the term that the term will not renew.  If
Mr. Toti is terminated without cause, he will be entitled to
receive an amount equal to his salary for the remainder of the
term.

A full-text copy of the EXECUTIVE EMPLOYMENT AGREEMENT is
available for free at:

               http://ResearchArchives.com/t/s?382b

                      About Black Gaming, LLC

Headquartered in Las Vegas, Nevada, Black Gaming, LLC --
http://www.blackgaming.com/-- through its subsidiaries, engages
in the ownership and operation of casino hotels.  Its casino
properties include CasaBlanca Hotel & Casino, Oasis Hotel &
Casino, and Virgin River Hotel & Casino, which are located in
Mesquite, Nevada.  The company also owns the Virgin River
Convention Center in Mesquite, Nevada, which is used as a special
events facility and for overflow hotel traffic from its other
properties.  Black Gaming's properties also offer amenities,
including championship golf courses, spas, a bowling center, a
movie theater, both gourmet and casual restaurants, and banquet
and conference facilities.  Founded in 1988, the company has 2,300
employees.

At Sept. 30, 2008, the company's balance sheet showed total assets
of $166.3 million and total liabilities of $221.4 million,
resulting in a members' deficit of $55.1 million.

For three months ended Sept. 30, 2008, the company posted net loss
of $10.1 million compared with net loss of $7.9 million for the
same period in the previous year.

For nine months ended Sept. 30, 2008, the company posted net loss
of $34.4 million compared with net loss of $12.1 million for the
same period in the previous year.

As of Sept. 30, 2008, and Dec. 31, 2007, cash and cash equivalents
were $11.2 million and $9.5 million.  Additionally, the Foothill
Facility is substantially fully drawn as only approximately $0.2
million was available under the Foothill Facility at Sept. 30,
2008.

                           *     *     *

As reported in the Troubled Company Reporter on Aug. 7, 2008,
Moody's Investors Service downgraded Black Gaming LLC's corporate
family rating and probability of default rating to Caa3 from Caa1.
It also downgraded the rating of the 9% senior secured notes to
Caa2 from B3 and the rating of the 12.75% senior subordinated
notes to Ca from Caa3.  The SGL-4 rating was affirmed and the
rating outlook remains negative.  The rating actions reflect
Moody's view that Black Gaming's operating performance has
deteriorated more sharply than anticipated earlier this year in
persistently weak market conditions, creating liquidity pressures
to such an extent that a default of payment or a distressed
exchange transaction could materialize in the next twelve months.


BLACK GAMING: S&P Cuts Corporate Credit Rating to 'D'
-----------------------------------------------------
Standard & Poor's Ratings Services said it lowered its corporate
credit rating on Mesquite, Nevada-based Black Gaming LLC to 'D'
from 'CCC'.  In addition, S&P lowered the issue-level rating on
the company's $125 million 9% senior secured notes to 'D' from
'CCC'.  S&P revised the recovery rating on these loans to '5' from
'3'.  The '5' recovery rating indicates S&P's expectation of
modest (10%-30%) recovery for lenders in the event of a payment
default.

In addition, S&P lowered the issue-level rating on the company's
$66 million 12.75% senior subordinated notes to 'C' from 'CC'.
The recovery rating on this debt remains at '6', indicating that
lenders can expect negligible (0%-10%) recovery in the event of a
payment default.

The rating actions stem from the company's announcement yesterday
that it failed to make the $5.625 million interest payment on its
senior secured notes.  A payment default has not occurred relative
to the legal provisions of the notes since there is a 30-day grace
period to make the payments.  "However," said Standard & Poor's
credit analyst Melissa Long, "we consider a default to have
occurred, even if a grace period exists, when the nonpayment is a
function of the borrower being under financial stress-unless S&P
is confident that the payment will be made in full during the
grace period."

If the interest payment due under the senior secured notes is not
paid during the 30-day grace period, holders of 25% of the
outstanding principal amount of the notes would be permitted to
accelerate the maturity of the notes.  This would result in a
cross-default under the company's revolving credit facility
(unrated) and under the indenture governing the company's
$66 million 12.75% senior subordinated discount notes.


BLACK GAMING: Cuts Oasis Resort Operations; 500 Jobs Affected
-------------------------------------------------------------
Black Gaming, LLC, disclosed in a regulatory filing with the
Securities and Exchange Commission that it has temporarily reduced
operations at the Oasis Resort Casino Golf and Spa.

In a statement, Black Gaming's majority owner, Robert R. "Randy"
Black, Sr. noted, "Due to the weakening economy and anticipated
future decline in demand for our casino services, Black Gaming
[has] significantly reduce[d] operations, on a temporary basis.
This move will impact approximately 500 of Black Gaming's 2,000
plus employees.  Operations at our CasaBlanca Resort and Casino
and our Virgin River Hotel and Casino will continue as normal.

"This is an action that was taken only after significant
consideration and implementation of other steps to increase
revenues and reduce operating costs.  Additionally, our fourth
quarter operating results through the end of November have been
below management's expectations, and the outlook remains the same
for the month of December.  While unprecedented for our company,
it is an action that is essential to preserve the employment for
the majority of our workforce.

"Through this challenging economy, Black Gaming has borne the
brunt of the continuing decline in the Mesquite gaming market.  We
believe that these impacts are a result of the weakening national
economy that has impacted all Nevada resort casinos.

"While we anticipate this will be a temporary scaling back of
operations at the Oasis and, therefore, a short-term workforce
reduction, the length and depth of the challenging gaming market
we face today will guide our decisions on the return to full-scale
Oasis operations, and no assurances can be made about the future
prospects.

"Our hotel, RV park, golf course, gun club and time share
facilities will remain open as will our other properties.  Please
visit our Central Human Resource office for additional information
regarding employment services and assistance.  Additionally,
customers' player points are redeemable at any of the three Black
Gaming properties and may be transferred.  For further customer-
related inquiries, please visit our Rewards Desk at any of the
three properties."

                      About Black Gaming, LLC

Headquartered in Las Vegas, Nevada, Black Gaming, LLC --
http://www.blackgaming.com/-- through its subsidiaries, engages
in the ownership and operation of casino hotels.  Its casino
properties include CasaBlanca Hotel & Casino, Oasis Hotel &
Casino, and Virgin River Hotel & Casino, which are located in
Mesquite, Nevada.  The company also owns the Virgin River
Convention Center in Mesquite, Nevada, which is used as a special
events facility and for overflow hotel traffic from its other
properties. Black Gaming's properties also offer amenities,
including championship golf courses, spas, a bowling center, a
movie theater, both gourmet and casual restaurants, and banquet
and conference facilities.  Founded in 1988, the company has 2,300
employees.

At Sept. 30, 2008, the company's balance sheet showed total assets
of $166.3 million and total liabilities of $221.4 million,
resulting in a members' deficit of $55.1 million.

For three months ended Sept. 30, 2008, the company posted net loss
of $10.1 million compared with net loss of $7.9 million for the
same period in the previous year.

For nine months ended Sept. 30, 2008, the company posted net loss
of $34.4 million compared with net loss of $12.1 million for the
same period in the previous year.

As of Sept. 30, 2008, and Dec. 31, 2007, cash and cash equivalents
were $11.2 million and $9.5 million.  Additionally, the Foothill
Facility is substantially fully drawn as only approximately $0.2
million was available under the Foothill Facility at Sept. 30,
2008.

                           *     *     *

As reported in the Troubled Company Reporter on Aug. 7, 2008,
Moody's Investors Service downgraded Black Gaming LLC's corporate
family rating and probability of default rating to Caa3 from Caa1.
It also downgraded the rating of the 9% senior secured notes to
Caa2 from B3 and the rating of the 12.75% senior subordinated
notes to Ca from Caa3.  The SGL-4 rating was affirmed and the
rating outlook remains negative.  The rating actions reflect
Moody's view that Black Gaming's operating performance has
deteriorated more sharply than anticipated earlier this year in
persistently weak market conditions, creating liquidity pressures
to such an extent that a default of payment or a distressed
exchange transaction could materialize in the next twelve months.


BOOT HILL: Investor Wants Chapter 11 Case Converted to Chapter 7
----------------------------------------------------------------
Eric Swanson at Dodge City Daily Globe reports that David G. Arst,
the attorney for Biofuel Venture I, has filed a motion in the U.S.
Bankruptcy Court for the District of Kansas, asking for the
conversion of Boot Hill Biofuels' Chapter 11 reorganization case
to Chapter 7 liquidation.

Boot Hill has a $750,000 loan from Biofuel Venture, says Dodge
City Daily.

According to Dodge City Daily, Boot Hill must file a response by
Feb. 5, 2009.

As reported by the Troubled Company Reporter on Jan. 8, 2009, Boot
Hill converted to Chapter 11 reorganization on Dec. 23, 2008, from
Chapter 7 liquidation.  Biofuel Venture filed a Chapter 7 petition
for Boot Hill on Dec. 1, 2008, seeking to recover its $750,000
start-up investment.  Boot Hill will meet with its creditors on
Jan. 23, 2009.

Boot Hill, says Dodge City Daily, collaborated with Conestoga
Energy Partners in 2006 to construct an ethanol plant near Wright
that could produce up to 110 million gallons of ethanol each year,
but construction work hasn't started.  According to the report,
Boot Hill President Gary Harshberger said this month that the
company hasn't abandoned its plans for the plant but is waiting
until the economy improves.

Biofuel Venture was the primary investor in the plant, Dodge City
Daily relates.  Biofuel Venture, the report states, filed the
involuntary bankruptcy petition against Boot Hill on Dec. 1 to try
to recoup a $750,000 loan for start-up capital.  Biofuel Venture,
according to the report, is challenging the court's decision to
convert Boot Hill's liquidation case to reorganization.

Allowing Boot Hill to remain in Chapter 11 will diminish the value
of the estate, which has no chance of rehabilitation, Dodge City
Daily reports, citing Mr. Arst.  The report quoted him as saying,
"Chapter 11 bankruptcy requires a debtor to expend a sizeable
amount of capital to remain in compliance with the Bankruptcy
Code.  With no income being generated by debtor, the single asset,
cash, is being depleted with each passing day that debtor remains
in Chapter 11.  Such a debtor should not be allowed to remain in
Chapter 11."

Boot Hill had paid a law firm $10,000 to represent it in the
bankruptcy case without seeking the Court's approval, Dodge City
Daily states, citing Mr. Arst.

Boot Hill Biofuels is based in Kansas.  It has $4 million in
unsecured debt on its books, including $2 million owed to a
Colwich-based designer of ethanol plants, according to Dodge City
Daily Globe.  Boot Hill reported $498,056 in assets.


CELLEGY PHARMACEUTICALS: Extends Adamis Merger Deal Until March
---------------------------------------------------------------
Cellegy Pharmaceuticals, Inc., disclosed in a filing with the
Securities and Exchange Commission that the company entered into
an second Amendment to Agreement and Plan of Reorganization with
Adamis Pharmaceuticals Corporation to extend the Dec. 31, 2008,
termination date in Section 9.1(b) to March 31, 2009.

On Feb. 12, 2008, Cellegy entered into an Agreement and Plan of
Reorganization, with Adamis and Cellegy Holdings, Inc., a
subsidiary of Cellegy, providing for the acquisition of Cellegy by
Adamis.  The Merger Agreement provides that Cellegy Holdings will
merge with and into Adamis, with Adamis becoming a subsidiary of
Cellegy and the surviving corporation in the merger.

Section 9.1(b) of the Merger Agreement allows either Cellegy or
Adamis to terminate the Merger Agreement if the merger has not
been consummated by Sept. 30, 2008.

On Nov. 11, 2008, Cellegy and Adamis entered into an Amendment to
Agreement and Plan of Reorganization to extend the Sept. 30, 2008,
termination date in Section 9.1(b) to Dec. 31, 2008.

Amendment to Agreement and Plan of Reorganization is available for
free at: http://ResearchArchives.com/t/s?3821

                  About Cellegy Pharmaceuticals

Headquartered in Quakertown, Pennsylvania, Cellegy Pharmaceuticals
Inc. (OTC BB: CLGY) is a specialty biopharmaceutical company that
specializes in women's health.  Savvy(R)(C31G vaginal gel), a
microbicide gel product for contraception, is currently undergoing
Phase 3 clinical studies in the United States for contraception.

In a November regulatory filing with the Securities and Exchange
Commisson, Cellegy Pharmaceuticals, Inc., bared an insolvent
balance sheet as of Sept. 30, 2008.  Cellegy had $936,000 in
total assets and $938,00 in total liabilities, resulting in a
$2,000 stockholders' deficiency, as of September 30.  The company
also had $125.7 million in accumulated deficit as of September 30.

The company posted $321,000 in net losses for the three months
ended September 30, 2008, and $1.2 million in net losses for the
nine months ended September 30.

                       Going Concern Doubt

Mayer Hoffman McCann P.C., in Plymouth Meeting, Pennsylvania,
expressed substantial doubt about Cellegy Pharmaceuticals Inc.'s
ability to continue as a going concern after auditing the
company's consolidated financial statements for the years ended
Dec. 31, 2007, and 2006.  The auditing firm reported that the
company has incurred recurring losses from operations and has
limited working capital to pursue its business alternatives.

In addition, Cellegy said that it may choose to pursue liquidation
or voluntarily file bankruptcy proceedings if the company be
unable to secure the additional shareholder votes necessary to
approve the transaction with Adamis or otherwise be unable to
close the transaction.


CCM MERGER: Moody's Junks Ratings on Amendment from Lending Group
-----------------------------------------------------------------
Moody's Investors Service lowered CCM Merger, Inc.'s ratings in
response to the company's recent disclosure that it will need to
seek an amendment from its bank lending group in order to maintain
compliance with its bank loan leverage covenant for the fiscal
year ended December 31, 2008.  The rating outlook is negative.

These ratings were lowered:

  -- Corporate Family Rating to Caa1 from B3

  -- Probability of Default Rating to Caa1 from B3

  -- $100 million 1st lien revolver expiring 2010 to B3 (LGD3,
     34%) from B2 (LGD3, 34%)

  -- $606 million 1st lien term loan B due 2012 to B3 (LGD3, 34%)
     from B2 (LGD3, 34%)

  -- $300 million 8% senior unsecured notes due 2013 to Caa3
     (LGD5, 87%) from Caa2 (LGD5, 87%)

Although CCM posted a slight increase in October monthly gaming
revenues (2008 versus 2007) following the grand opening of its
permanent casino facility, an 11% decline in December monthly
gaming revenue -- the largest monthly decline in CCM's recent
history -- placed the company in the position of not being able to
meet its year-end debt/EBITDA bank loan covenant.

Moody's also believes the large decline in December 2008 monthly
gaming revenues suggests that the pressure on earnings from
weakened economic conditions has increased further.  This
heightened earnings pressure could more than offset the expected
benefit to free cash flow in 2009 from the incremental earnings
generated by the expansion and from substantially lower capital
spending.  As a consequence, free cash flow could be negative in
2009 and debt/EBITDA -- currently at about 7 times -- could
increase further.

The negative outlook considers the uncertainty with regard to
CCM's ability to obtain waivers and/or amendments and maintain
access to its revolver availability.  This availability will be
needed to satisfy the May 2009 maturity of a $50 million Economic
Development Corporation bond.  The negative outlook also
incorporates Moody's opinion that an additional equity
contribution by CCM's owner may be needed in order for the company
to obtain the required amendments.  A $25 million contribution by
CCM's owners of cash equity to repay debt was made in September
2008 that helped CCM meet its September 30, 2008 debt/EBITDA
covenant.

Ratings would likely be lowered if CCM is unable to obtain
acceptable amendments or waivers from its lenders.  The rating
outlook could be revised to stable if covenant compliance issues
are resolved in a manner that results in a sustainable capital
structure and covenant compliance going forward.

Moody's last rating action for CCM was on December 4, 2008, when
the company's corporate family rating was lowered to B3 from B2
and a negative rating outlook was assigned.

CCM Merger, Inc., indirectly owns and operates the MotorCity
Casino in Detroit, Michigan.  The company generated net revenue of
about $480 million for the fiscal year ended December 31, 2008.


CEL-SCI CORP: Auditor Raises Going Concern Doubt
------------------------------------------------
BDO Seidman LLP, in Bethesda, Maryland, in a letter dated
January 13, 2009, to the board of directors and stockholders of
CEL-SCI Corporation, expressed substantial doubt about the
company's ability to continue as a going concern.

The firm audited the consolidated balance sheets of CEL-SCI
Corporation as of September 30, 2008 and 2007 and the related
consolidated statements of operations, stockholders' equity, and
cash flows for each of the three years in the period ended
September 30, 2008.

BDO Seidman points out that the company has suffered recurring net
losses, negative cash flows, and negative working capital. The
company has convertible debt that allows the debt holders to
exercise a put option in August 2009. In December 2008, the
company was not in compliance with certain lease requirements
related with its facility lease. "These factors raise substantial
doubt about the company's ability to continue as a going concern."

As of September 30, 2008, the company's balance sheet showed total
assets of $14,683,672, total liabilities of $3,847,637 and total
stockholders' equity of $10,836,035.  For the year ended
September 30, 2008, the company posted a net loss of $7,703,415.

Maximilian de Clara, president, and Geert R. Kersten, chief
executive, principal accounting and principal financial officer,
disclosed in a regulatory filing that the company has incurred
significant costs since its inception in connection with the
acquisition of certain patented and unpatented proprietary
technology and know-how relating to the human immunological
defense system, patent applications, research and development,
administrative costs, construction of laboratory facilities, and
clinical trials. "The company has funded these costs with proceeds
realized from the public and private sale of its common and
preferred stock. The company will be required to raise additional
capital or find additional long-term financing in order to
continue with its research efforts. To date, the company has not
generated any revenue from product sales. The ability of the
company to complete the necessary clinical trials and obtain
Federal Drug Administration approval for the sale of products to
be developed on a commercial basis is uncertain. Ultimately, the
company must complete the development of its products, obtain the
appropriate regulatory approvals and obtain sufficient revenues to
support its cost structure."

"CEL-SCI is working on a sale-leaseback program for the equipment
it owns which would provide CEL-SCI approximately $1.5 million in
additional cash. It is important to note that CEL-SCI's
expenditures for fiscal year 2008 included several very large non-
recurring expenses that amounted to several million dollars,
mostly related to the build out of its new manufacturing facility.
These expenses will not recur in fiscal year 2009, thereby
reducing CEL-SCI's expenditures significantly. Beyond those
savings CEL-SCI has also made other very significant cuts in its
expenditures and certain vendors have agreed to take common stock
in lieu of cash payments. In addition, CEL-SCI has put in place a
$5 million Equity Line of Credit.  With this Equity Line of Credit
in place CEL-SCI believes it will have the required capital to
continue operations into January 2010. However, if necessary CEL-
SCI can make further reductions in expenditures by a reduction in
force or by implementation of a salary reduction program.  The
company has determined that the convertible debt holders of the
Series K Notes may require repayment of the entire remaining
principal balance at any time after August 4, 2009.  This debt can
be paid in stock and would not require a cash payment.  In
addition, CEL-SCI is currently in negotiation with the Landlord of
the manufacturing facility for rent deferral on the lease in order
to conserve its cash."

A full-text copy of the company's annual report is available for
free at: http://researcharchives.com/t/s?383d

                          About Cel-Sci

CEL-SCI Corporation is developing products that empower immune
defenses. Its lead product is Multikine(R) which is being readied
for a global Phase III trial. The company has operations in
Vienna, Virginia, and Baltimore, Maryland. CEL-SCI's other
products, which are currently in pre-clinical stage, have shown
protection against a number of diseases in animal tests and are
being tested against diseases associated with bio-defense and
avian flu.


CENT INCOME: Fitch Downgrades Rating on $100 Mil. Notes to 'C'
--------------------------------------------------------------
Fitch Ratings has downgraded and withdrawn the ratings on the
income notes issued by CENT Income Opportunity Fund I, LLC.  These
rating actions are effective immediately:

  -- $100,000,000 income notes to 'C' from 'CCC' and withdrawn.

CENT Income Opportunity Fund I was a synthetic total rate of
return collateralized loan obligation with a market value
liquidation trigger.  The transaction was negatively impacted by
the continued decline in loan prices in the secondary market.  The
liquidation trigger was breached and uncured, resulting in an
early termination event.  There was zero recovery on the income
notes.


CENTAUR LLC: Moody's Downgrades Corporate Family Rating to 'Caa3'
-----------------------------------------------------------------
Moody's Investors Service lowered Centaur, LLC's corporate family
rating and probability of default rating to Caa3 from Caa2.
Additionally, the company's first lien revolver and first lien
term loan ratings were downgraded to B3 from B2 and the second
lien term loan rating was lowered to Caa3 from Caa2.  The rating
outlook is negative.  The rating actions reflect Moody's lower
earnings expectations for the Hoosier Park racino in Indiana,
which could compromise the company's ability to meet its material
debt service burden in the near term.  The rating actions also
consider that the near-term sale of the Valley View Downs assets
in Pennsylvania, which is critical for Centaur's going concern
operations, could prove challenging.

Moody's revised downwards its earnings expectations for the
Hoosier Park racino in Indiana due to severe economic challenges.
The weaker ramp-up than anticipated for Hoosier Park could raise
liquidity concerns given Centaur's high debt service burden in the
next twelve months.  The rating agency also believes that the
company will need to sell by the end of 2009 its Valley View Downs
assets in Pennsylvania at an acceptable price to continue to
operate on a going concern basis.  From a liquidity standpoint,
Moody's is also concerned by the tightness of the interest
coverage covenant in the next few quarters.

The rating outlook is negative, reflecting Moody's view that (1)
Hoosier Park's operating performance will continue to be affected
by the recessionary environment in the next few quarters, and (2)
the closing of the disposal of the Valley View Downs assets might
not materialize in the near term, considering the restrictive
access to credit.

These ratings were downgraded:

  -- Corporate Family Rating to Caa3 from Caa2

  -- Probability of Default Rating to Caa3 from Caa2

  -- First Lien Term Loan to B3 from B2 (LGD assessment revised
     to LGD2/18% from LGD2/20%)

  -- First Lien Revolver to B3 from B2 (LGD assessment revised to
     LGD2/18% from LGD2/20%)

  -- Second Lien Term Loan to Caa3 from Caa2 (LGD assessment
     revised to LGD4/58% from LGD4/61%)

The last rating action was on September 26, 2008, when Moody's
confirmed Centaur's Caa2 corporate family rating.

Centaur is a subsidiary of Centaur Inc., which owns and operates
Hoosier Park, a "racino", which opened in June 2008, in Anderson,
Indiana, near Indianapolis, and Fortune Valley Hotel and Casino,
located approximately 35 miles from Denver, Colorado.  The company
also owns Valley View Downs, a development project in
Pennsylvania.


CHRYSLER LLC: Fiat Mulls Acquiring 35% Stake in Chrysler
--------------------------------------------------------
The Associated Press reports that Fiat SpA is in talks with
Chrysler LLC about acquiring a stake in the U.S. car maker and
forming a partnership to let the Italian auto maker build and sell
its small cars in the U.S.

Citing people familiar with the matter, Stacy Meichtry and John
Stoll relate that Fiat is likely to take a 35% stake in Chrysler
by the middle of the year.  According to the report, the sources
said that Fiat would also have the option of taking 55% of
Chrysler over time.

Sources said that Fiat would share its engine and transmission
technology with Chrysler, which would let the U.S. automaker
introduce new, low-emission small-car models to its fleet, WSJ
states.  Citing the sources, WSJ says that Fiat would build and
sell its own small cars in the U.S., possibly through Chrysler's
U.S. dealership network.  Cost savings under the partnership would
be in the $3 billion to $4 billion range, WSJ reports, citing the
sources.

According to WSJ, most analysts believe that Chrysler has little
hope of surviving as a stand-alone company.  Analysts, says the
report, also doubted that Fiat has the scale to survive as an
independent manufacturer of small cars, which produce relatively
thin margins, making it hard to make money in the high-cost labor
market in Europe.

WSJ reports that the partnership will need the approval of Fiat's
founding family, the Agnellis, which holds a 30% controlling stake
in Fiat.  The Agnellis family, according to the report, has said
in the past that Fiat needed to collaborate with a larger rival to
stay competitive.  Citing a person familiar with the matter, the
report states that Fiat's board would discuss the potential deal
with Chrysler on Thursday, when it would approve third-quarter
results.

Sources said that Chrysler's owner, Cerberus Capital Management
LP, wants to retain an interest in the automaker, according to
WSJ.  Chrysler executives also had discussions with Nissan Motor
Co. over a possible alliance, WSJ relates, citing a person
familiar the matter.

                        About Chrysler LLC

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

                        *     *     *

As reported in the Troubled Company Reporter on Dec. 3, 2008,
Dominion Bond Rating Service downgraded the ratings of Chrysler
LLC, including Chrysler's Issuer Rating to CC from CCC (high).
Chrysler's First Lien Secured Credit Facility and Second Lien
Secured Credit Facility have also been downgraded to CCC and CC
(low) respectively.  All trends are Negative.  The ratings action
reflects Chrysler's challenge to maintain sufficient liquidity
balances amid severe industry conditions that have deteriorated
alarmingly over the past few months and are not expected to
improve in the near term.  With this ratings action, Chrysler is
removed from Under Review with Negative Implications, where it was
placed on Nov. 7, 2008.

As reported in the Troubled Company Reporter on Aug. 11, 2008,
Standard & Poor's Ratings Services lowered its ratings on Chrysler
LLC, including the corporate credit rating, to 'CCC+' from 'B-'.

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

As reported in the TCR on Dec. 3, 2008, Dominion Bond Rating
Service downgraded on Nov. 20, 2008, the ratings of Chrysler LLC,
including Chrysler's Issuer Rating to CC from CCC (high).
Chrysler's First Lien Secured Credit Facility and Second Lien
Secured Credit Facility have also been downgraded to CCC and CC
(low) respectively.  All trends are Negative.  The ratings action
reflects Chrysler's challenge to maintain sufficient liquidity
balances amid severe industry conditions that have deteriorated
alarmingly over the past few months and are not expected to
improve in the near term.  With this ratings action, Chrysler is
removed from Under Review with Negative Implications, where it was
placed on Nov. 7, 2008.


CHRISTIAN BERNARD: To Start GOB Sales at All Locations on Jan. 20
-----------------------------------------------------------------
Judge Novalyn L. Winfield of the U.S. Bankruptcy Court of the
District of New Jersey in Newark has approved a plan for the
complete liquidation of the Christian Bernard jewelry chain's
assets as presented by attorney Charles Forman, Trustee for
Christian Bernard.

Under the terms of the Court-approved plan, the company will re-
open its stores within the next few days.  A unique joint venture
of Tiger Capital, of Boston, Massachusetts; The Gordon Company of
Ft. Lauderdale, Florida; SB Capital Group of L.I., New York, and
Bobby Wilkerson, Inc of Stuttgart, AR will operate Christian
Bernard Jewelers during the inventory and asset liquidation sales.
A multi-million dollar Court Authorized Bankruptcy liquidation
sale is scheduled for all store locations starting January
20th.

Christian Bernard's Board of Directors abruptly closed all of the
chain's fifteen stores and filed for Chapter 7 Bankruptcy on
December 26th leaving employees with no jobs or paychecks and
customers without word on their merchandise.  As the Trustee, Mr.
Forman will oversee the re-opening of the stores and management of
the liquidation sales in accordance with the Bankruptcy Court
ruling.  The Christian Bernard Board of Directors and CEO,
Isabelle Fabian, have relinquished all authority for the daily
operation and management of the firm Forman has seen that all
Christian Bernard employees were paid their back wages, and will
rehire a number of the associates to work through the liquidation
sales.

"One of the first things the liquidators will do is to identify
everyone who had items at the stores and make arrangements to
return their goods," said Mr. Forman.  "We will do everything in
our power to make things right for Christian Bernard customers."
Forman's firm is in the process of responding to consumers
who've tried to contact the stores about the status of their
property, and requests that anyone that doesn't hear back within
the next few days contact him by email, cforman@formanlaw.com, or
by telephone at 201.845.1000.

Christian Bernard sales associates have all been offered the
opportunity to return to work through the liquidation sales.
Christian Bernard stores are located at the Stamford Town Center
in Stamford, CT; West Farms in Farmington, CT; Roosevelt Field
Mall in Garden City, New York; Walt Whitman in Huntington Station,
New York; The Court at King of Prussia in King of Prussia,
Pennsylvania; White Flint in Kensington, Maryland; Fair Oaks Mall
in Fairfax, Virginia; Georgetown Park in Washington, D.C.;
Tyson'sCorner Center in McLean, Virginia; Lynnhaven Mall in
Virginia Beach, Virginia; South Park Mall in
Charlotte, North Carolina; Saint Louis Galleria in Saint Louis,
Missouri; Water Tower Place in Chicago, Illinois; and Woodfield
Mall in Schaumburg, Illinois.

Christian Bernard Jewelers was ranked number 38 on the list of the
top 50 independent jewelers published by National Jeweler magazine
just last year. Established 30 years ago, Christian Bernard
Jewelers represents some of the country's most coveted designer
jewelry and watch brands including Hearts On Firer Diamonds, Guy
LaRoche, Konstantino, Ritani, Verrogio, Pandora, Hamilton and
Tissot.

The Gordon Company -- http://www.gordonco.com/--is known for
crafting uniquely successful strategies specifically designed to
help jewelers and other luxury retailers reach their financial
goals.  A leader in the managed liquidations of retail jewelry
with over 100 years of family heritage in the field, The Gordon
Co. is known to deliver the highest net recovery values for
jewelry inventories. Recent projects include renovation and
remodeling projects, store closing and reorganization sales for
some of the oldest, most respected names in the jewelry industry.

Tiger Capital Group -- http://www.tigercapitalgroup.com/-- was
formed in 2001 by Stephen Goldberger and the principals of the
Nassi Group of Westlake Village, CA and Alco Capital Group of New
York City.  Tiger Capital specializes in the promotion and
management of store closing events and inventory reduction sales
for retail companies.  Tiger also performs appraisals for lenders
in the areas of retail; consumer and industrial asset based
lending through its affiliate Tiger Valuation Services, LLC, and

Bobby Wilkerson, Inc. of Stuttgart, AR --
http://www.wilkersons.com/-- has over 30 years of experience in
the jewelry industry and a portfolio of over 5,000 successful
going out of business sales.  The company's strategically
customized, turnkey plans have consistently achieved higher
bottom-line profits than retailers achieve when running going out
of business sales on their own.

SB Capital Group, a Schottenstein affiliate, has built a global
reputation helping businesses manage change, restructure assets
and maximize profit.  Specializing in acquisitions, financial
solutions, appraisal and valuation services, and asset disposition
services, SB Capital Group serves clients around the globe with
offices in New York, Ohio, Canada, the United Kingdom and
Europe.  For more information about SB Capital Group visit
http://www.sbcapitalgroup.com/

Christian Bernard Jewelers is a jewelry retailer that operated 15
stores in the Northeast.  It is headquartered in Secaucus, New
Jersey.  It owns Westfarms and Stamford stores.


COLIBRI GROUP: Closes Operations, Goes Under Receivership
---------------------------------------------------------
Gregory Mottola at Cigar Aficionado reports that Colibri Group has
shut down its operation, laid off about 280 workers, and has gone
under receivership.

According to Cigar Aficionado, Colibri major shareholder, Founders
Equity, asked the Providence Superior Court to put the company
under receivership.

Cigar Aficionado quoted Colibri CEO Jim Fleet as saying, "The
current economic conditions and credit market turmoil are such
that Colibri cannot sustain its current operations and as such
must close its doors."  Colibri's general counsel Timothy P.
Gallogly, according to Cigar Aficionado, said, "The Colibri Group
is simply out of money."  Colibri closed due to the economic
downturn and the dropping demand for cigar accessories, the report
says, citing Mr. Gallogly.

Colibre has a $14 million debt to HSBC Bank and owes almost as
much to Sovereign Bank, Cigar Aficionado reports, citing Allan M.
Shine, Colibri's appointed receiver.

Colibri Group is known in the cigar industry for its torch
lighters.  It is based in Providence, Rhode Island.


CORNERSTONE-ORLANDO: To Seek Confirmation of Plan on Feb. 25
------------------------------------------------------------
Cornerstone-Orlando, LLC, will seek confirmation of its Chapter 11
plan on Feb. 25.  The Plan provides for, among other things,
payment in full to unsecured creditors.

According to Bill Rochelle, most real estate bankruptcies these
days are a complete wipeout for unsecured creditors, but
Cornerstone-Orlando is an exception.  The Plan calls for payment
to unsecured creditors half in cash when the plan becomes
effective and the other half six months later.

On May 28, 2008, LBUBS 2007-C2 Lake Eola Park Inc. commenced a
foreclosure action and filed a motion to appoint a receiver in
that action.  LBUBS and the company entered into an agreement that
requires the company to file for bankruptcy to obtain the
necessary equity infusion.

In conjunction with the filing, the company also filed a Chapter
11 plan of reorganization and a disclosure statement explaining
the plan.

According to Bloomberg News, all equity interest in the company
and issuing new equity to Orlando Medical Exchange LLC for about
$2 million will be canceled under the Plan.  LBUBS, holding
$24.9 million in claims, will be paid $500,000, and retain its
claim against the company, the report says.  Unsecured creditors
owing as much as $781,000 will be paid in full, the report notes.

Confirmation of the plan is expected to occur by March 9, 2008.

Bloomberg News say LBUBS will be permitted to appoint a receiver
and foreclosure on the property of the company if it failed to
obtain confirmation.

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

              http://ResearchArchives.com/t/s?34cb

A full-text copy of the company's Chapter 11 plan of
reorganization is available for free at

              http://ResearchArchives.com/t/s?34cc

Headquartered in Orlando, Florida, Cornerstone-Orlando LLC own a
149,000-square-foot office and condominium complex in Orlando,
Florida.  The Debtor filed for bankruptcy protection on Nov. 10,
2008 (Bankr. M.D. Fla., Case No. )

Elizabeth A. Green, Esq., at Latham Shuker Eden & Beaudine LLP,
has been tapped as bankruptcy counsel.  In its petition, the
Debtor listed assets of $20,000,000 and debts of $26,164,688.


DAVE HOUSE: Files for Bankruptcy Protection in Richmond
-------------------------------------------------------
David Ress at Richmond Times-Dispatch reports that Dave and Jen
House have filed for bankruptcy protection, after Dave got cancer.

According to The Times-Dispatch, the House couple put up a 190-
foot tower with a friend's help and got the business going by
signing up some neighbors for the wireless broadband Internet
service they beam from behind their small, white home in the woods
of Mecklenburg County.

The Times-Dispatch relates that the tower, where they had a
licensed wildlife rehabilitation business until the doctors said
that Dave's chemotherapy made the risk of fatal infection too
great, links about 33 subscribers.  The report says that a small
dish at the top beams a signal to a new tower the House couple set
up on the other side of Buggs Island Lake near Skipwith, where a
dozen more clients are signing up for service.  Mr. House, says
The Times-Dispatch, put together the three computer servers.

The House couple, according to The Times-Dispatch, was paying
almost $1,100 per month on their loans, including a second
mortgage on their home they took out to buy radio and electronic
equipment for the company, when the couple filed for bankruptcy.
The report quoted Mr. House as saying, "We were taking in just
enough to cover our debt.  But that's what you do sometimes when
you're getting started . . .  We had a business plan, we're
actually running about two months ahead of our plan . . . but you
can have a business plan and say: 'Well, what about fire? What
about a storm?' and we've got that coverage.  What you don't plan
for is: 'What about if you get terminal cancer?'"

The House couple has medication costing $856 per week and a twice
monthly injection that costs about $8,000, The Times-Dispatch
reports.


DBSI INC: Wachovia Looking to Foreclose on Five Properties
----------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware has
authorized DBSI Inc., to sell its assets, which included its
interests as lessor in certain master leases, at an auction on
Jan. 28.   Deadline to submit bids is on Jan. 23.  DBSI will seek
approval of the results of the auction at a hearing on Feb. 4.

According to Bloomberg's Bill Rochelle, at the same hearing,
Wachovia Bank N.A., the holder of $66.4 million in mortgages on
five of the properties, wants a modification of the automatic stay
under the Bankruptcy Code so it can foreclose its defaulted
mortgages.  Wachovia, according to the report, says there are
grounds to modify the automatic stay because the sale, by
definition, says the properties aren't needed for a
reorganization.

                            About DBSI Inc.

Headquartered in Meridian, Idaho, DBSI Inc. -- http://www.dbsi.com
-- operates a real estate company.  DBSI and 145 of its affiliates
filed for Chapter 11 protection on Nov. 10, 2008 (Bankr. D. Del.
Lead Case No. 08-12687).  The Debtors tapped Young Conaway
Stargatt & Taylor LLP as their counsel.  Kurtzman Carson
Consultants LLC is the Debtors' notice claims and balloting agent.
When the Debtors filed for protection from their creditors, they
listed assets and debts between $100 million and $500 million
each.


DEATH ROW: Wide Awake Will Buy Co. for $18 Million
--------------------------------------------------
Variety reports that Wide Awake Entertainment won the right to
purchase Death Row Records for about $18 million during an auction
in Los Angeles on Thursday.

Julie Bloom at The New York Times relates that Global Music agreed
in July 2008 to buy Death Row for about $24 million, but failed to
secure financing.

According to The NY Times, Death Row's assets include recordings
by prominent rap stars like Snoop Dogg and Dr. Dre.  Death Row
will auction the items it owns in Fullerton, California, on
Jan. 25, 2009, The NY Times states.

                          About Death Row

Headquartered in Compton, California, Death Row Records Inc.
-- http://www.deathrowrecords.net/-- is an independent record
producer.  The company and its owner, Marion Knight, Jr., filed
for chapter 11 protection on April 4, 2006 (Bankr. C.D. Calif.
Case No. 06-11205 and 06-11187).  Daniel J. McCarthy, Esq., at
Hill, Farrer & Burrill, LLP, and Robert S. Altagen, Esq.,
represent the Debtors in their restructuring efforts.  R. Todd
Neilson serves as chapter 11 Trustee for the Debtors' estate.  The
U.S. Trustee for Region 17 appointed creditors to serve on an
Official Committee of Unsecured Creditors.  The Committee selected
Pachulski Stang Ziehl & Jones as its counsel.  When the Debtors
filed for protection from their creditors, they listed total
assets of $1,500,000 and total debts of $119,794,000.


DELTA PETROLEUM: S&P Puts 'B-' Corp. Credit Rating on WatchNeg.
---------------------------------------------------------------
Standard & Poor's Ratings Services said that it placed its
ratings, including the 'B-' corporate credit rating, on
exploration and production company Delta Petroleum Corp. on
CreditWatch with negative implications.

The CreditWatch action reflects S&P's concerns about Delta's
liquidity, potential violations of its financial covenants, and
the possibility of a negative re-determination of its borrowing-
based revolving credit facility, whereby outstanding balances
could exceed a revised borrowing base threshold.  In addition, in
light of the precipitous fall in hydrocarbon prices, its lack of
hedges, and its high cost structure, Delta's ability to generate
free cash flow and maintain adequate liquidity is suspect.

Under its amended $590 million credit facility, Delta could face a
re-determination as early as Feb. 1, 2009, at which time the
existing borrowing base, determined in November 2008, could be
reduced given the fall in hydrocarbon prices.  Also, to meet
capital spending of up to $85 million during 2009, Delta will need
to accomplish planned asset divestures in a difficult credit
environment in order to maintain adequate liquidity.
Additionally, financial covenants are likely to be tight given
expectations for reduced EBITDAX levels.  Debt leverage covenants
started at 4.5x as of Dec. 31, 2008, and then step down to 4.25x
on March 31, 2009, 4x on June 30, and 3.75x on Sept. 30.  Combined
with the removal of stronger 2008 earnings from calculations, debt
leverage could breach covenants.

S&P expects to resolve the CreditWatch during the first quarter.
Key near-term rating drivers include, but are not limited to,
compliance with financial covenants, the success of Delta's
proposed asset sales, potential for a negative borrowing base
revision, and its ability and willingness to manage capital
spending levels and liquidity.


DREIER LLP: Details Use of Clients' $380 Million
------------------------------------------------
Dreier LLP Founder Marc Dreier, in his application for bail, gave
details on the $380 million he has been accused of stealing from
clients.

According to Bloomberg News, Dreier made disclosures with respect
to assets he owns including 150 pieces of artwork and numerous
cars and homes.  He and his lawyer, Gerald Shargel, also outlined
how Mr. Dreier used the money.  Mr. Shargel, according to the
report, said in a sworn declaration accompanying the filing that
all of Mr. Dreier's assets have been frozen by the government and
that Mr. Dreier isn't a risk to flee the country.  "I currently
have no money and no assets whatsoever," Mr. Dreier wrote. "I have
no money abroad.

The United States Attorney for the Southern District of New York
filed a criminal complaint alleging that Mr. Dreier committed
securities and wire fraud.  The Federal authorities arrested Mr.
Dreier on Dec. 7, 2008.  The criminal complaint was unsealed and
Mr. Dreier was presented before a United States Magistrate judge
the following day.  Mr. Dreier has been ordered detained pending
trial.

Mr. Dreier was earlier arrested on Dec. 2, 2008, by the Canadian
authorities for impersonating a lawyer with the Ontario Teachers'
Pension Fund but he was bailed on the charges three days later.

On Dec. 8, 2008, the U.S. Securities and Exchange Commission filed
a suit, alleging that Mr. Dreier made fraudulent offers and sales
of securities in several cities, selling fake promissory notes to
hedge and other private investment funds.  The SEC asserted that
Mr. Dreier also distributed phony financial statements and audit
opinions, and recruited accomplices in connection with that
scheme.

                         About Dreier LLP

Headquartered in New York, Dreier LLP -- http://www.dreierllp.com/
-- is a law firm, which was found in 1996 by Marc Dreier. Dreier
LLP filed for Chapter 11 on Dec. 16, 2008 (Bankr. S. D. N.Y., Case
No. 08-15051).  Judge Robert E. Gerber handles the case.  Stephen
J. Shimshak, Esq., at Paul, Weiss, Rifkind, Wharton & Garrison
LLP, has been retained as counsel.  The Debtor listed assets
between $100 million to $500 million, and debts between $10
million to $50 million in its filing.


DUKE FUNDING: Fitch Withdraws Junk Ratings on Various Classes
-------------------------------------------------------------
Fitch Ratings has withdrawn its ratings on these classes of notes
from Duke Funding High Grade II-S/EGAM I, LTD.:

  -- $120,000,000 class A-2 notes at 'C/DR6';
  -- $60,000,000 class B-1 notes at 'C/DR6';
  -- $78,000,000 class B-2 notes at 'C/DR6';
  -- $48,000,000 class C notes at 'C/DR6';
  -- $21,000,000 class D notes at 'C/DR6'.

Series 2:

  -- $50,000,000 class A-2 notes at 'C/DR6';
  -- $25,000,000 class B-1 notes at 'C/DR6';
  -- $32,500,000 class B-2 notes at 'C/DR6';
  -- $20,000,000 class C notes at 'C/DR6';
  -- $8,750,000 class D notes at 'C/DR6'.

The rating actions result from a trustee notification that the
repo counterparty has claimed all of the portfolio assets and will
no longer provide reports on the transaction.


ELIZABETH ARDEN: Revised Earnings Won't Affect S&P's 'BB-' Rating
-----------------------------------------------------------------
Standard & Poor's Ratings Services said that its ratings and
outlook on Elizabeth Arden Inc. (BB-/Stable/--) are currently
unaffected by the company's announcement that it has revised its
earnings guidance for fiscal 2009 because of softer operating
performance in the company's fiscal second quarter, ended Dec. 31,
2008.  During the quarter, the company estimates that sales
declined between 12.5% and 13.5% (and sales declined 9%-10%,
excluding the effect of foreign currency), as compared with the
previous year's second quarter.

Elizabeth Arden attributed much of the shortfall to weaker
prestige department store sales during the holiday season, and
margin pressure experienced in its travel retail and international
distribution.  Although S&P believes the slowdown in consumer
spending and deteriorating global economic conditions has
substantially affected the company's performance, S&P expects that
Elizabeth Arden will continue to maintain adequate liquidity by
further working down inventory levels and generating sufficient
operating cash flow to help fund capital spending and planned
growth initiatives.  As of Dec. 31, 2008, Elizabeth Arden also had
$126 million availability on its borrowing base revolving credit
facility that matures in December 2012.  The company has now
passed its peak seasonal borrowing period (between September and
November), so S&P expects debt levels will decline and that
Elizabeth Arden will continue to maintain adjusted leverage at or
below 4x outside of the company's peak borrowing period, despite
S&P's expectation that performance through the remainder of the
fiscal year will remain pressured by ongoing economic challenges.
However, if Elizabeth Arden's operating performance continues to
weaken and the company cannot achieve these expected credit
protection measures, S&P could revise the outlook to negative.


ENCAP GOLF: Parties Balk at Competing Reorganization Plans
----------------------------------------------------------
John Brennan at NorthJersey.com reports that the New Jersey
Meadowlands Commission and the boroughs of Rutherford and North
Arlington have asked the U.S. Bankruptcy Court for the Northern
District of New Jersey to deny EnCap Golf Holdings LLC and of the
Trump Organization from soliciting votes and seeking confirmation
of their competing reorganization plans for because the plans are
not confirmable.

As reported by the Troubled Company Reporter on Oct. 7, 2008, that
EnCap and Trump Organization filed competing Chapter 11 plans for
the Debtors.  EnCap Golf's plan involves finishing landfill
cleanup and prepping a 785-acre Meadowlands property for sale in
hopes of keeping claim holders at bay.  EnCap Golf said the
proposal would maximize investors' assets by remediating the
contaminated site.  EnCap Gold has warned that years of costly,
taxpayer-financed litigation could follow if the Plan were
rejected.  Michael Sirota, an attorney for EnCap Golf, said that
private stakeholders could also face tremendous risk.

On Dec. 3, 2008, the TCR reported that Wachovia Bank N.A. renewed
its attempt to have EnCap Golf and its affiliate's bankruptcy
cases dismissed.  Wachovia asserts that Encap failed to file a
confirmable plan.  In June, Wachovia and other banks that hold
mortgages on EnCap Golf Holdings' 785-acre property asked the U.S.
Bankruptcy Court for the District of New Jersey to dismiss EnCap's
bankruptcy as a "bad faith" filing.  Judge Novalyn Winfield had
rejected the request and denied Wachovia's bid to have the cases
converted to Chapter 7 liquidation.

NorthJersey.com relates that the two reorganization plans will be
heard in the Court on Jan. 27, 2009.

The commission, says NorthJersey.com, called the two plans
"patently not confirmable, which renders any attempt to solicit
approval and confirmation completely futile."  Citing commission
attorney Bruce Buechler, the report states that EnCap and Trump
improperly want to use $82 million -- including $40 million from
the Department of Environmental Protection and $42 million that
Wachovia and its partners insist is not the property of EnCap or
Trump -- toward cleanup of the Meadowlands landfills.

NewJersey.com quoted Mr. Buechler as saying, "The EnCap plan
contains glaring omissions regarding how the EnCap plan will work,
provides few details regarding how it will be implemented and
relies on funding to which EnCap has no legal rights or access."
Citing Mr. Buechler, NewJersey.com states that EnCap defaulted
more than a year ago on agreements that would have granted it
rights to that money.

The commission, according to NewJersey.com, said, "The linchpin of
the Trump plan is a non-existent settlement agreement among EnCap,
AHA, Lexington, NJDEP and the commission."  The report says that
Trump sought modification of DEP soil standard protocols, without
defining which protocols or what revisions.

EnCap's plan to wait up to a year to sell its property in the
borough is "unacceptable," NewJersey.com relates, citing
Rutherford attorney Barry Roy.  North Arlington, says the report,
objected the plans, claiming that they lacked explanation of which
North Arlington properties would be remediated and developed.

NewJersey.com quoted Rodman Honecker, the attorney for Wachovia,
as saying, "This debtor, whose negligence and incompetence has
derailed the project and the remediation of the real property for
years, now contends that dismissal of its bankruptcy case would
not be in the 'best interest of all parties concerned,' including
the community.  EnCap is the party with the least credibility here
to assert what is in the best interests of the community or the
parties concerned."

                         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
Debtors.  The U.S. Trustee for Region 3 appointed five creditors
to serve on an Official Committee of Unsecured Creditors.
Greenberg Traurig LLP represents the Committee in this case.  The
Debtors' schedules disclose total assets of $70,056,038 and total
liabilities of $458,587,968.

The Debtors filed their chapter 11 plan on September 30, 2008.
Trump Organization delivered a competing plan the following day.


ENRON CORP: Two Former Lawyers Settle SEC Lawsuit
-------------------------------------------------
Bloomberg News reports that two former Enron Corp. lawyers settled
a lawsuit filed by the U.S. Securities and Exchange Commission.
The SEC charged the two of helping Enron executives hide share
sales and conceal losses.

Rex Rogers, Enron's former associate general counsel, and
Jordan Mintz, who was the top lawyer in the company's finance
division, admitted no wrongdoing, their lawyers said, according to
a report by Bloomberg's Laurel Brubaker Calkins.

Messrs. Rogers and Mintz were banned from practicing before the
SEC for two years and will pay $25,000 civil fines.

"Mr. Rogers is very pleased to conclude this civil matter
with the SEC in a way that's acceptable because it ends the
tremendous expense of further litigation," his lawyer, Ed
Tomko, said.  Final settlement documents were filed Jan. 15 in
federal court in Houston.

The case is U.S. SEC v. Mintz, 4:07-cv-1027, U.S. District
Court, Southern District of Texas (Houston).

                     About Enron Corp.

Based in Houston, Texas, Enron Corporation filed for chapter 11
protection on Dec. 2, 2001 (Bankr. S.D. N.Y. Case No. 01-16033)
following controversy over accounting procedures, which caused
Enron's stock price and credit rating to drop sharply.

Albert Togut, Esq., at Togut Segal & Segal LLP, Brian S. Rosen,
Esq., Martin Soslan, Esq., Melanie Gray, Esq., Michael P. Kessler,
Esq., Sylvia Ann Mayer, Esq., at Weil, Gotshal & Manges LLP,
Frederick W.H. Carter, Esq., Michael Schatzow, Esq., Robert L.
Wilkins, Esq., at Venable, Baetjer and Howard, LLP, and Mark C.
Ellenberg, Esq., at Cadwalader, Wickersham & Taft, LLP,
represented the Debtors.  Jeffrey K. Milton, Esq., Luc A. Despins,
Esq., Matthew Scott Barr, Esq., and Paul D. Malek, Esq., at
Milbank, Tweed, Hadley & McCloy LLP represented the Official
Committee of Unsecured Creditors.

The Debtors filed their Chapter Plan and Disclosure Statement on
July 11, 2003.  On Jan. 9, 2004, they filed their fifth Amended
Plan and on the same day the Court approved the adequacy of the
Disclosure Statement.  On July 15, 2004, the Court confirmed the
Debtors' Modified Fifth Amended Plan and that plan was declared
effective on Nov. 17, 2004.

After the approval of the Plan, the new board of directors decided
to change the name of Enron Corp. to Enron Creditors Recovery
Corp. to reflect the current corporate purpose.  ECRC's sole
mission is to reorganize and liquidate certain of the operations
and assets of the "pre-bankruptcy" Enron for the benefit of
creditors.  (Enron Bankruptcy News; Bankruptcy Creditors' Service,
Inc., http://bankrupt.com/newsstand/or 215/945-7000).


FARMINGTON CENTERS: Seeks to Avoid Foreclosure, Says Chamberlain
----------------------------------------------------------------
Greg Stiles at Mail Tribune reports that Jeff Chamberlain, a
partner in investment group Deerpoint/Linnwood Partners, said that
Farmington Centers Inc. filed for Chapter 11 protection to avoid
foreclosure.

Deerpoint/Linnwood Partners owns part of Farmington Square Salem.

Citing Mr. Chamberlain, Mail Tribune relates that Farmington
Centers was stable and three local Farmington Square operations
weren't in any jeopardy.  Mr. Chamberlain, according to Mail
Tribune, said that Farmington Centers' Chapter 11 filing was made
to prevent New Jersey lender Ziegler Healthcare Fund I from
prematurely foreclosing on the Salem property while a
$6.4 million mortgage is refinanced.  Ziegler Healthcare demanded
payment on a loan due in 2010, the report says, citing Mr.
Chamberlain.  The report quoted him as saying, "They wanted their
money now.  They are very aggressive and searched and searched to
find a default (mechanism).  We always made our payments right on
time. The (Salem) facility is financially stable and the care is
excellent."

According to Mail Tribune, Mr. Chamberlain said that Ziegler
Health care was eager to gain capital because there are a number
of distressed businesses on the market that are undervalued.  Mail
Tribune quoted Mr. Chamberlain as saying, "They just wanted to use
those funds to do some bottom fishing."  Ziegler Healthcare found
a chance to demand the early loan payment when Farmington Square
changed chief executives last year, the report says, citing Mr.
Chamberlain.  "They found a technical default.  However, our
attorney calls it an illegal clause.  In order to terminate the
CEO we had to get their permission.  That happened last June and
the facility has done better and better every month," Mr.
Chamberlain added.

Credit-market conditions kept the owners from quickly refinancing
the mortgage on their houses, Mail Tribune states, citing Mr.
Chamberlain.  The report quoted him as saying, "We had an
appraisal done three or four months ago by (Housing and Urban
Development) and it came in at $12.5 million, so we're very well-
secured.  We just needed more time."

Portland, Oregon-based Farmington Center Salem, dba Farmington
Square Salem, filed for Chapter 11 bankruptcy protection on
Jan. 14, 2009 (Bankr. D. Ore. Case No. 09-60095).  Douglas P.
Cushing, Esq., at Jordan Schrader Ramis, PC, assists the company
in its restructuring effort.  The company listed $10 million to
$50 million in assets and $1 million to $10 million in debts.


FRANKLIN CREDIT: Nasdaq Removes Securities From Trading
-------------------------------------------------------
The NASDAQ Stock Market said January 15, 2009, that it will delist
the common stock of Franklin Credit Management Corp.

Franklin Credit Management Corp's stock was suspended November 3,
2008 and has not traded on NASDAQ since that time.  NASDAQ will
file a Form 25 with the Securities and Exchange Commission to
complete the delisting.  The delisting becomes effective ten days
after the Form 25 is filed.

Based in Jersey City, New Jersey, Franklin Credit Management
Corporation (NASDAQ:FCMC) -- http://www.franklincredit.com/-- is
a specialty consumer finance company engaged in the servicing and
resolution of its performing, reperforming and nonperforming
residential mortgage loans.  Franklin's portfolio consists of both
first- and second-lien loans secured by 1-4 family residential
real estate that generally fall outside the underwriting standards
of Fannie Mae and Freddie Mac and involve elevated credit risk as
a result of the nature or absence of income documentation, limited
credit histories, higher levels of consumer debt or past credit
difficulties.  Franklin originated non-prime loans through its
wholly-owned subsidiary, Tribeca Lending Corp., and has generally
held for investment the loans acquired and a significant portion
of the loans originated.  The company's executive, administrative
and operations offices are located in Jersey City, New Jersey.


FREESCALE SEMICONDUCTOR: S&P Downgrades Corporate Rating to 'B-'
----------------------------------------------------------------
Standard & Poor's Ratings Services said that it lowered its
corporate credit rating on Austin, Texas-based Freescale
Semiconductor Inc. to 'B-' from 'B+' and removed the rating from
CreditWatch, where it was placed on Oct. 3, 2008, with negative
implications.  At the same time, S&P lowered its senior secured
rating to 'B-' from 'BB' and changed S&P's recovery rating on
these issues to '3' from '1', indicating expectations for
meaningful (50%-70%) recovery in the event of payment default.
S&P lowered its senior unsecured and subordinated ratings to 'CCC'
from 'B-'.  The recovery rating remains '6' on these issues,
indicating negligible (0-10%) recovery in the event of a payment
default.  The outlook is negative.

"The rating actions reflect our view of Freescale's near- to
intermediate-term operating prospects and related credit measures,
which S&P believes will be adversely affected by the current
economic environment," said Standard & Poor's credit analyst Lucy
Patricola.  S&P expects the company's concentration in the
automotive sector to result in sharply lower revenues for 2009 and
possibly into 2010.  S&P believes lower revenues will hurt gross
profit margins.  At the same time, S&P believes Freescale will
maintain its research and development spending to ensure an
ongoing pipeline of new product design wins.  As a result, EBITDA
may contract sharply so debt to EBITDA could deteriorate,
potentially to over 12x for 2009.

S&P's rating on Freescale reflects its leverage, which S&P
believes is very high; S&P's expectation that the company will be
cash flow negative for the next two years; and its significant
exposure to the automotive sector.  These issues are only partly
offset, in S&P's view, by sufficient liquidity to fund negative
cash flow; the absence of performance covenants in its loan
agreements; and a market position in the semiconductor industry
that, in S&P's view, remains solid and will return to historical
characteristics over time.


FREMONT GENERAL: May Hire KPMG as Exclusive Financial Advisor
-------------------------------------------------------------
The U.S. Bankruptcy Court for the Central District of California
granted Fremont General Corp. authority to employ KPMG Corporate
Finance LLC as its exclusive financial advisor, nunc pro tunc to
the "Effective date" of a letter agreement between KPMGCF and the
Debtor dated Nov. 26, 2008.

As reported in the Troubled Company Reporter on Dec. 22, 2008,
KMGCF will:

a) meet with the Debtor's Board of Directors to discuss the
    proposed Transaction.  "Transaction" as defined in the
    agreement means a confirmation of a plan of reorganization
    that goes effective involving the sale of securities or debt
    obligations of the company to one or more investors or
    sources of financing.

b) assist the Debtor in evaluating, structuring, negotiating,
    and implementing the terms and conditions of the proposed
    Transaction.

c) work with the Debtor in preparing descriptive materials to be
    provided to potential parties to a Transaction.

d) assist the Debtor in identifying, contacting, and screening
    potential parties to a Transaction.

e) review the Debtor's due diligence data room and coordinate
    the due diligence investigations of potential parties to a
    Transaction.

f) analyze written and oral communications, proposals, or
    expressions of interest that are received from potential
    parties to a Transaction, and subject to confidentiality
    restrictions sharing such communication, proposals, and
    expressions of interest and KPMGCF's analysis and
    recommendations thereon with the Debtor, the Creditors
    Committee, and the Equity Committee.

g) if appropriate, provide testimony in court, on behalf of the
    Debtor, if necessary or as reasonably requested by the
    Debtor, subject to the terms of the Agreement.

Ricardo S. Chance, a managing director and group head of the
Special Situations Advisory Group of KPMGCF, assured the Court
that the firm does not represent or hold any interests materially
adverse to the Debtor or its estates, and the firm is a
"disinterested person" as that term is defined in Sec. 101(14) of
the Bankruptcy Code.

As compensation for its services, KPMGCF will receive an earned
upon receipt initial monthly fee of $125,000 from the Debtor in
cash upon the entry of an order approving this Application.

KPMGCF will receive two earned upon receipt initial monthly fees
of $75,000 from the Debtor in cash, with subsequent monthly fees
of $25,000 payable in cash through the remainder of the
Agreement's term.

If a "Transaction" is consummated, then KPMGCF will receive a
contingent "Transaction Fee" equal to the greater of (1) $850,000
or (2) the sum of the following percentages of the Consideration:

   i) 1.5% of the committed amount of any Consideration that is
      senior debt;

  ii) 3.5% of the Consideration with respect to any subordinated
      debt; and

iii) 5% of the Consideration with respect to any equity, either
      preferred, common, or warrants.

If the ultimate plan proponent in a "Transaction" is one of
several pre-identified parties known as the "Carve-Out Parties,"
the contingent Transaction Fee shall be reduced by 25% of the
otherwise payable fee.

                    About Fremont General

Based in Santa Monica, Calif., Fremont General Corp. (OTC: FMNTQ)
-- http://www.fremontgeneral.com/-- was a financial services
holding company with $8.8 billion in total assets at Sept. 30,
2007.  Fremont General ceased being a financial services holding
company on July 25, 2008, when its wholly owned bank subsidiary,
Fremont Reorganizing Corporation (f/k/a Fremont Investment & Loan)
completed the sale of its assets, including all of its 22
branches, and 100% of its $5.2 billion of deposits to
CapitalSource Bank.

Fremont General filed for Chapter 11 protection on June 18, 2008,
(Bankr. C.D. Calif. Case No. 08-13421).   Robert W. Jones, Esq.,
and J. Maxwell Tucker, Esq., at Patton Boggs LLP, Theodore
Stolman, Esq., Scott H. Yun, Esq., and Whitman L. Holt, Esq. at
Stutman Treister & Glatt, represent the Debtor as counsel.
Kurtzman Carson Consultants LLC is the Debtor's Noticing
Agent/Claims Processor.  Lee R. Bogdanoff, Esq., Jonathan S.
Shenson, Esq., and Jonathan D. Petrus, Esq., at Klee, Tuchin,
Bogdanoff & Stern LLP, represent the Official Committee of
Unsecured Creditors as counsel.  The Debtor filed with the Court
an amended schedule of its assets and liabilities on Oct. 30,
2008, disclosing $330,036,435 in total assets and $326,560,878 in
total debts.


GENCORP INC: Moody's Downgrades Corporate Family Rating to 'B3'
---------------------------------------------------------------
Moody's Investors Service has downgraded the Corporate Family
Rating of GenCorp, Inc. to B3 from B2 and the Probability of
Default Rating to Caa1 from B2.  In a related action, the
company's senior secured bank credit facilities were downgraded to
Ba3, convertible subordinated notes downgraded to Caa2, and senior
subordinated notes affirmed at B1.

The rating outlook remains negative.

The ratings downgrades largely reflect GenCorp's increased
probability of default, primarily associated with the potential
put of the company's $125 million 4% convertible subordinated
notes due 2024 on 1/16/2010, as well as the potential put of the
company's $146.4 million 2.25% convertible subordinated notes on
11/20/2011.  The combination of a conversion price of
approximately $15.40 on the 4% convertible and initial conversion
price of $20 on the 2.25% convertible note issue versus current
market price of the common trading at around $3 per share (12
month range $1.80 to $12.25), the notes trading substantially
below par and the relatively frozen capital markets increases the
likelihood of initiation of a form of debt exchange or other
refinancing initiative to address the put issue.

Further supportive of the B3 corporate family rating is the
company's high debt level relative to the company's size and
earnings base and a recent history of negative free cash flow
generation.  Ratings are further constrained by uncertainties
surrounding GenCorp's sizeable (albeit largely reimbursable)
environmental liabilities.  Ratings are supported by strong
revenue visibility as implied by a large and growing backlog
supporting Aerojet's position as a key supplier of solid and
liquid rocket propulsion systems for defense and space
applications.  In addition, GenCorp's substantial excess real
estate holdings in the Sacramento, CA area provide support to the
ratings as they could provide the company with the ability to
reduce debt materially over the long run if the company completes
its re-zoning, entitlement, and monetization over the next few
years.  However, support of the ratings from the value of real
estate holdings has substantially diminished due to the collapse
of demand in the Sacramento, California, real estate market.

The negative ratings outlook, despite recent improvements in
operating performance, incorporates Moody's concern regarding the
company's ability to timely address the potential put and
uncertainty regarding corporate direction, strategy, and financial
policy given the recent changes in senior management and board
control.

These ratings have been downgraded:

  * Corporate Family Rating to B3 from B2;

  * Probability of Default Rating to Caa1 from B2;

  * Senior secured credit facilities to Ba3 (LGD1, 5%) from Ba2
    (LGD2, 12%);

  * Convertible subordinated notes to Caa2 (LGD4, 60%) from Caa1
    (LGD5, 78%).

This rating was affirmed:

  * Senior subordinated notes at B1 (LGD2, 18%);

The last rating action was on May 29, 2007, when GenCorp, Inc.'s
B2 Corporate Family Rating was affirmed and the outlook was
changed to negative.

GenCorp Inc., headquartered in Rancho Cordova, California,
produces propulsion systems and products used in the aerospace and
defense industries and has a real estate segment whose activities
relate to re-zoning, entitlement, sale, and leasing of the
company's excess real estate assets in the Sacramento, California
area.  Revenues in fiscal 2007 were approximately
$745 million.


GLIMCHER REALTY: Moody's Gives Neg. Outlook; Keeps Low-B Ratings
----------------------------------------------------------------
Moody's Investors Service revised the rating outlook for Glimcher
Realty Trust to negative from stable; all ratings were affirmed.
The negative outlook reflects the deteriorating retail environment
as well as the difficult capital markets which will create
uncertainty surrounding the refinancing of the issuer's 2009 and
2010 debt maturities.  Coupled with a balance sheet highly-levered
with secured debt and low fixed charge coverage, Glimcher's
flexibility is increasingly limited.

Glimcher has approximately $100 million of debt maturities coming
due in each of the next two years (though Moody's expect all of
the 2009 maturities to be addressed by the end of the first
quarter).  Importantly, in addition to the maturities is the
company's bank line, due in December 2009, and eligible for a one
year extension.  Moody's is concerned that should enough retailers
be forced into bankruptcy or liquidation, the covenants under the
bank line potentially could be breached.  That being the case,
Moody's recognizes that Glimcher's management team has had success
in addressing near term maturities, and occupancies at the REIT's
mall remain high, at approximately 93%, for now.

The outlook would be revised to stable should Glimcher's
demonstrate sufficient liquidity to support operations and
financial requirements for the next 24 months, while maintaining
fixed charge coverage consistently above 1.7x.  An inability to
execute their refinancing strategy, or a decline in fixed charge
coverage below 1.5x for more than two quarters would likely lead
to a downgrade.  Further negative ratings pressure would result
from effective leverage near 80% of gross assets or net debt /
EBITDA over 10x.  Finally, given Glimcher's bordering metrics and
the deteriorating retail environment, any meaningful retailer
stress within the portfolio will likely lead to a ratings
downgrade.

Moody's previous rating action with respect to Glimcher took place
on August 18, 2004 when the preferred stock rating was lowered to
B1.

These ratings were affirmed with a negative outlook:

  * Glimcher Realty Trust -- (P)Ba2 senior unsecured shelf;
    (P)Ba3 senior subordinate shelf; B1 preferred equity; (P)B1
    preferred equity shelf.

  * Glimcher Realty Trust is a REIT based in Columbus, Ohio and
    is an owner, manager, acquirer and developer of regional and
    super regional malls.


GLOBAL MOTORSPORT: Panel Taps Fox Rothschild as New Counsel
-----------------------------------------------------------
The official committee of unsecured creditors of Global Motorsport
Group Inc. asks the U.S. Bankruptcy Court for the District of
Delaware for authority to retain Fox Rothschild LLP as its new
counsel, nunc pro tunc to Dec. 8, 2008.

The Creditors Committee tells the Court that the primary attorneys
at Bayard, P.A., Jeffrey M.Schlerf, Esq., and Eric M. Sutty, Esq.,
have left Bayard to join Fox.  Bayard's employment in these cases
terminated on Dec. 31, 2008.

As the Committee's counsel, Fox Rothschild will, among others,
advise the Committee with respect to its powers and duties,
represent the Committee in hearings and judicial proceedings,
advise the Committee and its other professionals on practice and
procedure in the Bankruptcy Court for the District of Delaware,
and perform all other necessary legal services for the Committee
in connection with these cases.

Fox Rotschild's current hourly rates range from $240 to $575 per
hour for attorneys and from $125 to $225 per hour for
paraprofessionals.

Jeffrey M. Schlerf, Esq., a partner at Fox Rothschild LLP, assures
the Court that the firm does not hold or represent any entity
having an adverse interest in connection with the Debtors' cases,
and that the firm is a "disinterested" person as that term is
defined in Sec. 101(14) of the Bankruptcy Code.

                    About Global Motorsport

Headquartered in Morgan Hill, California, Global Motorsport Group
Inc. -- http://www.gmgracing.com/home.shtml-- is a dealer of
European model sports cars.  The company is also known as Global
Motorsport Parts Inc.  The company and three of its affiliates
filed for protection on Jan. 31, 2008 (Bankr. D. Del. Lead Case
No. 08-10192).  Laura Davis Jones, Esq., James O'Neill, Esq., and
Joshua Fried, Esq., at Pachulski Stang Ziehl & Jones LLP,
represent the Debtors as counsel.  T. Scott Avil, Esq., at CRG
Partners Group LLC, is the Debtors' restructuring services
provider.  Federico G.M. Mennella, Esq., at Lincoln International
Advisors, LLC is the Debtors' investment banker.

The Debtors selected Epiq Bankruptcy Solution LLC as their claims
agent.

The U.S. Trustee for Region 3 has appointed five creditors to
serve on an Official Committee of Unsecured Creditors in these
cases.  Edward T. Gavin, CTP, at NachmanHaysBrownstein, Inc., is
the Committee's financial advisor.

Adam Harris, Esq., and David Hillman, Esq., at Schulte Roth &
Zabel LLP, serve as counsel to the prepetition and postpetition
secured lenders.  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.


GLOBAL MOTORSPORT: Wants Plan Filing Period Extended to March 30
----------------------------------------------------------------
Global Motorsport Group, Inc., and its debtor-affiliates ask the
U.S. Bankruptcy Court for the District of Delaware to extend their
exclusive period to file a plan through and including March 30,
2009, and their deadline to solicit acceptances of the said plan
through and including May 29, 2009.

This is the third requested extension of the Exclusive Periods.

As reported in the Troubled Company Reporter on March 12, 2008,
the Court approved the sale of substantially all of the Debtors'
assets to Dae-II USA, Inc. for $16 million.  The Debtors, however,
have not yet filed a Chapter 11 plan, which would provide details
on how the remaining proceeds will be distributed among creditors.

The Debtors, however, have told the Bankruptcy Court that an
agreement in principle has been reached among the Debtors, their
official committee of unsecured creditors and their secured lender
on the essential terms of the plan, and the parties are working on
a term sheet reflecting those terms.

                    About Global Motorsport

Headquartered in Morgan Hill, California, Global Motorsport Group
Inc. -- http://www.gmgracing.com/home.shtml-- is a dealer of
European model sports cars.  The company is also known as Global
Motorsport Parts Inc.  The company and three of its affiliates
filed for protection on Jan. 31, 2008 (Bankr. D. Del. Lead Case
No. 08-10192).  Laura Davis Jones, Esq., James O'Neill, Esq., and
Joshua Fried, Esq., at Pachulski Stang Ziehl & Jones LLP,
represent the Debtors as counsel.  T. Scott Avil, Esq., at CRG
Partners Group LLC, is the Debtors' restructuring services
provider.  Federico G.M. Mennella, Esq., at Lincoln International
Advisors, LLC is the Debtors' investment banker.

The Debtors selected Epiq Bankruptcy Solution LLC as their claims
agent.

The U.S. Trustee for Region 3 has appointed five creditors to
serve on an Official Committee of Unsecured Creditors in these
cases.  The Committee selected Fox Rothschild LLP as its new
counsel.  Edward T. Gavin, CTP, at NachmanHaysBrownstein, Inc., is
the Committee's financial advisor.

Adam Harris, Esq., and David Hillman, Esq., at Schulte Roth &
Zabel LLP, serve as counsel to the prepetition and postpetition
secured lenders.  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.


GOLDEN FOX: Owner Files for Chapter 7 Liquidation
-------------------------------------------------
Cathy Woodruff at Times Union reports that Golden Fox restaurant
owner Joseph R. Greco has filed for Chapter 7 liquidation.

According to Times Union, Mr. Greco closed the restaurant in March
2008, after being evicted for nonpayment of rent.  The report
states that the restaurant operated for a little more than a year.

Times Union relates that Greco listed $846 in assets and $609,908
in liabilities.  Citing Mr. Greco, the report says that most of
the liabilities should be obligations of The Golden Fox Ltd.

Mr. Greco, Times Union states, owed $21,113 in payroll taxes to
the Internal Revenue Service and about $17,500 in sales and
withholding taxes to the state as the "person responsible" for
those payments.  Mr. Greco disputes a $3,656 claim for state
unemployment insurance, according to the report.

Times Union reports that Mr. Greco has tens of thousands of
dollars in personal credit card debt and owes money to suppliers,
contractors, and lenders involved in the preparation and operation
of the restaurant.  The report states that Mr. Greco owed $30,000
to the city of Troy, which provided a business loan for the
restaurant.

According to Times Union, other creditors include:

   -- Sam Greco Construction, which has a $48,025 claim;

   -- Wolberg Electrical Supply Co., which holds a $23,406 claim;

   -- Merchant Cash & Capital, which has a $85,000 claim;

   -- Horowitz Management Corp., the restaurant's landlord, who
      holds a $15,257 claim;

   -- National Grid, about $15,000;

   -- Farrell Brothers plumbing and heating, about $13,298;

   -- Mills Electric of Cohoes, about $11,165;

   -- Dembling & Dembling Architects, about $9,000; and

   -- Antonucci's Wholesale Produce, about $7,800.

Mr. Greco, says Times Union, owes thousands to newspapers and
other publications in which his restaurant advertised.

Restaurant furniture and fixtures are estimated at $40,000, and
are in storage with Richard Lampariello of Central Restaurant
Equipment, Times Union reports, citing Mr. Greco.

Mr. Greco, according to Times Union, listed claims for personal
business loans from:

    -- John P. Vacarrello,
    -- Pasquale Sullo, and
    -- Phyliss Cornell of Watervliet.

Times Union says that Mr. Greco was arrested three times on
alleged shoplifting or attempts of shoplifting from area grocery
stores, and was accused in April of filing a false insurance claim
for the alleged loss of $7,000 in food during a summer 2007 power
outage.

Joseph R. Greco is the sole shareholder of Golden Fox Ltd.


GOTTSCHALKS INC: Court Okays $125 Million Loan
----------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware has
approved Gottschalks Inc.'s $125 million loan.

According to Bloomberg's Bill Rochelle, Gottschalks was given
authorization by the Bankruptcy Court to borrow money under a
secured financing agreement that the company described as
contemplating "a sale of the company's business within
approximately 60 days."

According to KFSN, the Court has allowed Gottschalks to continue
accepting returns and exchanges.  Valerie Gibbons at Gannett.com
relates that the Court has permitted Gottschalks to remain open.
KFSN says that some $6 million in gift cards are still in the
hands of clients.

Citing Gottschalks CEO Jim Famalette, Gannett.com states that new
financing will help the company find a buyer.

Gottschalks Inc. -- http://www.gottschalks.com-- is a regional
department store chain, currently operating 58 department stores
and three specialty apparel stores in six western states,
including California (38), Washington (7), Alaska (5), Oregon (5),
Nevada (1) and Idaho (2). Gottschalks offers better to moderate
brand-name fashion apparel, cosmetics, shoes, accessories and home
merchandise.

The company filed for Chapter 11 protection on January 14, 2009
(Bankr. D. Del. Case No. 09-10157).  O'Melveny & Myers LLP
represents the Debtor in its restructuring efforts.  Lee E.
Kaufman, Esq., and Mark D. Collins, Esq., at Richards, Layton &
Finger, P.A., will serve as the Debtors' co-counsel.  The Debtors
selected Kurtzman Carson Consultants LLC as its claims agent.
When the Debtor filed for protection from its creditors, it listed
$288,438,000 in total assets and $197,072,000 in total debts as of
Jan. 3, 2009.


HERBST GAMING: In Talks with Lenders on Forbearance Until Feb. 2
----------------------------------------------------------------
Herbst Gaming Inc. disclosed in a filing with the Securities and
Exchange Commission that the company and the lenders are
discussing the terms of a restructuring agreement and a
forbearance agreement through Feb. 2, 2009.

On Dec. 3, 2008, the forbearance period pursuant to Amendment No.
5 and Second Forbearance and Standstill Agreement, dated as of
Nov. 10, 2008, with Wilmington Trust Company and certain
subsidiaries of the company expired in accordance with its terms.
The expiration was due to failure of the company to enter into a
restructuring agreement with the requisite lenders.

There can be no assurance, however, that the company will be
successful in reaching agreement with the lenders regarding a new
forbearance agreement or the terms of a restructuring agreement.

Wilmington Trust had sent a notice of acceleration on Nov. 6,
2008, with respect to the company's obligations under the Second
Amended and Restated Credit Agreement dated as of Jan. 3, 2007, as
amended.  Pursuant to the Forbearance Agreement, the lenders and
Wilmington Trust agreed to forbear for a specified period of time
from exercising their respective rights and remedies under the
Credit Agreement and the other loan documents as a result of
specified defaults under the Credit Agreement, including the
failure of the company to pay the outstanding principal amount of
the loans under the Credit Agreement on Nov. 6, 2008, as required
pursuant to the Notice of Acceleration.  The company has not paid
the $5.1 million interest payment due under the Credit Agreement
on Dec. 1, 2008.

As a result of the expiration of the forbearance period, and
pursuant to the Notice of Acceleration, Wilmington Trust and the
lenders may require payment in full of all amounts outstanding
under the Credit Agreement of approximately $846.8 million as of
Dec. 1, 2008, plus accrued and unpaid interest and exercise all
rights and remedies under the Credit Agreement and the other loan
documents.

In addition, the company is in default with respect to its
8-1/8% Senior Subordinated Notes due 2012 and its 7% Senior
Subordinated Notes due 2014 due to the non-payment of semi-annual
interest payments.  Under the terms of the indentures governing
the Senior Subordinated Notes, because of the payment defaults
under the Credit Agreement the company may not make payments with
respect to the Senior Subordinated Notes.  The trustee under each
indenture may, or holders of 25% of the outstanding principal
amount of Senior Subordinated notes issued under the relevant
indenture may direct such trustee to, declare the Senior
Subordinated Notes issued under the relevant indenture to be
immediately due and payable.  As of Dec. 3, 2008, there was
$160 million principal amount outstanding of the 8-1/8% Senior
Subordinated Notes due 2102 and $170 million principal amount
outstanding of the 7% Senior Subordinated Notes due 2014.

                       About Herbst Gaming

Headquartered in Las Vegas, Nevada, Herbst Gaming Inc. --
http://www.herbstgaming.com/-- is an established casino and slot
route operator that operates casinos located in Nevada, Missouri
and Iowa.  The company owns and operates approximately 6,800 slot
machines in its slot route business and is a slot machine operator
in Nevada.

At Sept. 30, 2008, the company's balance sheet showed total assets
of $1,021,956 and total liabilities of $1,241,937, resulting in a
stockholders' deficit of $219,981.

For three months ended Sept. 30, 2008, the company posted net loss
of $22,399 compared with net loss of $28,897 for the same period
in the previous year.

For nine months ended Sept. 30, 2008, the company posted net loss
of $101,252 compared with net loss of $34,115 for the same period
in the previous year.

At Sept. 30, 2008, the company has $110.4 million in cash and cash
equivalents.  The company has fully drawn its revolving line of
credit, and the commitments of its lenders have been terminated
under the amended Credit Agreement.   As a result of the Notice of
Acceleration, the company is prohibited from making interest or
other payments related to its Subordinated Notes, including the
interest payments that are past due and that are due in November
and December 2008.

                           *     *     *

As reported on the Troubled Company Reporter on June 24, 2008,
Moody's Investors Service revised the probability of default
rating for Herbst Gaming, Inc. to Ca/LD from Ca.  All other
ratings have been affirmed and the rating outlook remains
negative.

The downgrade of the PDR to Ca/LD for Herbst follows the company's
failure to make the May 15, 2008 interest payment on its 7% senior
subordinated notes and the expiration of the 30-day grace period.


HINDSDALE GREYHOUND: Joseph Sullivan Denies Promising Payment
-------------------------------------------------------------
Phillip Bantz at The Keene Sentinel reports that the Hinsdale
Greyhound Park's President and CEO Joseph E. Sullivan 3rd has
denied that he told state gambling regulators that bettors would
be paid if the track filed for bankruptcy and closed.

The Keene Sentinel relates that Commission Chairperson Timothy J.
Connors said that Mr. Sullivan promised that bettors would be
paid.  Mr. Connors, according to the report, said that
Mr. Sullivan kept quiet about the bankruptcy so that the bettors
wouldn't try to withdraw their accounts.

According to The Keene Sentinel, Hinsdale Greyhound's Chapter 7
bankruptcy has left hundreds of bettors across the U.S. at risk of
losing a half-million dollars they had in wagering accounts.

Citing Mr. Sullivan, The Keene Sentinel relates that track owner
Hinsdale Greyhound Racing Association doesn't have the assets to
fully reimburse the bettors.  According to the report,
Mr. Sullivan provided details about the transfer of the property
the track sits on to a holding company he manages and his pending
land deal with Wal-Mart.

Mr. Sullivan, The Keene Sentinel states, said that he would have
told bettors the track was going bankrupt, but they never asked.

Hinsdale Greyhound Park is a racetrack that opened in 1958 as a
seasonal harness track.  It has featured only greyhound races
since 1985.

As reported by the Troubled Company Reporter on Jan. 9, 2009,
Hinsdale Greyhound Park filed for Chapter 7 liquidation in
December 2008.  It owes money to 200 to 1,000 people or
organizations, and it owes the state of Massachusetts about
$4,500.  It is behind on its taxes to the tune of $327,000.


INVESCO NAVIGATOR: Fitch Lowers Ratings on $125 Mil. Notes to 'C'
-----------------------------------------------------------------
Fitch Ratings has downgraded and withdrawn its ratings on income
notes issued by INVESCO Navigator Fund (Offshore), Ltd., and the
units of INVESCO Navigator Fund (Onshore), LLC:

  -- $125,000,000 securities downgraded to 'C' from 'CCC' and
     withdrawn.

INVESCO Navigator Fund was a total rate of return collateralized
loan obligation with a market value liquidation trigger.  The
transaction was negatively impacted by the continued decline in
loan prices in the secondary market.  The liquidation trigger was
initially breached on Oct. 10, 2008 and uncured, resulting in an
early termination event on Nov. 14, 2008.  Per US Bancorp Fund
Services, the collateral agent, there has been a complete loss to
the income notes and unit holders.


ION GEOPHYSICAL: S&P Changes Outlook on 'BB-' Rating to Negative
----------------------------------------------------------------
Standard & Poor's Ratings Services revised the outlook on ION
Geophysical Corp. to negative from stable and affirmed the
company's 'BB-' corporate credit rating.

The negative outlook reflects S&P's expectations that ION will
continue to face a weakening seismic market given the decline in
commodity prices and as exploration and production companies cut
back on their capital budget.  Recently ION announced that its
fourth quarter revenues will be lower than expected due to weak
North American and Russian land seismic markets.  This results in
2008 revenues being approximately 20% lower than anticipated.
Also, further decline in ION's operations could lead to tightness
in its debt to EBITDA covenant by year-end 2009.  Following the
refinancing in December 2008, ION has approximately $359 million
of debt, adjusted for operating leases and product warranties.

The rating on ION reflects a vulnerable business risk profile,
which is based on its exposure to volatile and cyclical seismic
data acquisition end markets and its small scale compared with
direct competitors, limited liquidity, and a stringent covenant
package associated with its bank facilities.  These weaknesses are
somewhat offset by low debt leverage and limited capital
requirements.


ISCO INTERNATIONAL: Amends Note Indenture with Alexander, Et. Al.
-----------------------------------------------------------------
ISCO International, Inc., disclosed in a filing with the
Securities and Exchange Commission that it entered into these
amendments:

   i) the First Amendment to Note with the Manchester Securities
      Corporation and Alexander Finance, L.P.;

  ii) Amendment Number Two to Consent and Waiver Under Loan
      Documents with the Lenders; and

iii) the First Amendment to the Registration Rights Agreement
      with Alexander.

On Jan. 3, 2008, ISCO International obtained financing from
Alexander in the amount of $1,500,000 evidenced by an amended and
restated convertible promissory note.  The Note matures on
Aug. 1, 2009, bears interest at a rate of 7% per annum, and is
convertible, together with all accrued and unpaid interest
thereon, into shares of the company's common stock at an initial
conversion price of $0.20 per share.  Also on Jan. 3, 2008, and in
connection with the financing arrangement, the company entered
into a Registration Rights Agreement with Alexander, pursuant to
which the company agreed to register for resale at least 7,500,000
shares of its common stock, representing the number of Conversion
Shares issuable upon conversion of the principal amount due on the
Note at the initial conversion price.

In connection with the Jan. 3, 2008, financing, the company,
Alexander, Manchester Securities Corporation, and the company's
former subsidiaries entered into the Amendment to and Consent and
Waiver Under the Loan Documents, pursuant to which the parties:

   i) amended, consented to and waived certain provisions in the
      company's Third Amended and Restated Loan Agreement dated
      as of Nov. 10, 2004; and

  ii) amended the company's Fourth Amended and Restated Security
      Agreement dated June 22, 2006, and the company's Fourth
      Amended and Restated Guaranties dated as of June 21, 2006.

The Amendments modify:

   i) the stockholder approval requirement related to the
      issuance of the Conversion Shares so that stockholder
      approval is necessary only if the company is listed on a
      national securities exchange requiring the approval;

  ii) the exchange approval requirement related to the issuance
      of securities to require the company to seek approval of
      the applicable exchange, if any, upon which its common
      stock is listed only if the exchange requires the approval;
      and

iii) the date by which the applicable registration statement
      must be filed with the SEC.  The Amended Registration
      Rights Agreement requires the company to file a
      registration statement related to the Conversion Shares by
      June 30, 2009, and the registration statement must be
      declared effective by the SEC by Sept. 30, 2009, or
      Nov. 30, 2009, if the registration statement is reviewed by
      the SEC, or the company will be obligated to make certain
      delay payments.

A full-text copy of the Amendment Number Two to Consent And Waiver
Under Loan Documents is available for free at:

               http://ResearchArchives.com/t/s?3823

A full-text copy of the First Amendment to Note is available for
free at:

               http://ResearchArchives.com/t/s?3824

A full-text copy of the First Amendment to Registration Rights
Agreement is available for free at:

               http://ResearchArchives.com/t/s?3825

                    About ISCO International

Headquartered in Elk Grove Village, Illinois, ISCO International
Inc. (AMEX: ISO) -- http://www.iscointl.com/-- is a supplier of
RF management and interference-control solutions for the wireless
telecommunications industry.

                      Going Concern Doubt

Grant Thornton LLP, in Chicago, expressed substantial doubt about
ISCO International Inc.'s ability to continue as a going concern
after auditing the company's consolidated financial statements for
the years ended Dec. 31, 2007, and 2006.

The auditing firm reported that the company incurred a net loss of
approximately $6.4 million during the year ended Dec. 31, 2007,
and, as of that date, the company's accumulated deficit was
approximately $171.0 million.  The auditing firm also said that
the company has consistently used, rather than provided, cash in
its operations.

ISCO International Inc. reported a consolidated net loss of
$8.5 million for the third quarter ended Sept. 30, 2008, versus a
consolidated net loss of $1.7 million during the same period of
2007.

ISCO reported consolidated net sales of $1.8 million for the
quarter ended September 30, 2008, versus $1.9 million during the
comparable period of 2007.

At Sept. 30, 2008, the company's consolidated balance sheet showed
$21.4 million in total assets; $14.5 million in total current
liabilities, $80,000 in deferred facility reimbursement, $115,280
in deferred revenue-non current and $8.5 million in notes and
related accrued interest with related parties, net; and
$1.8 million in stockholders' deficit.  The company also had
$184.4 million in accumulated deficit.


ISCO INTERNATIONAL: Amends Registration Rights Deal with Lenders
----------------------------------------------------------------
ISCO International, Inc., disclosed in a regulatory filing that it
entered into the First Amendment to the Registration Rights
Agreement with Alexander Finance, L.P., and Manchester Securities
Corporation, which amends the Original Registration Rights
Agreement.

On Aug. 18, 2008, ISCO International entered into a financing
agreement with the Lenders, pursuant to which the Lenders provided
the company with a $3,000,000 line of credit.  Also on the same
date, and in connection with the financing agreement, the company
entered into a Registration Rights Agreement with the Lenders,
pursuant to which the company agreed to register for resale at
least 15,000,000 shares of its common stock, representing the
potential number of shares of its common stock issuable upon
conversion of the maximum principal amount due on the notes issued
in connection with the financing agreement, at the initial
conversion price of $0.20 per share.

The purpose of the amendment was to extend the dates by which the
registration statement must be filed with the SEC and by which the
registration statement must be declared effective by the SEC.
Under the Amended Registration Rights Agreement, the company is
required to file the registration statement by June 1, 2009, and
the registration statement must be declared effective by the SEC
by Sept. 1, 2009, if the registration statement is not reviewed by
the SEC, or by Nov. 1, 2009, if the registration statement is
reviewed by the SEC, or the company will be obligated to make
certain delay payments.

Also under the Amended Registration Rights Agreement, at any time
after March 31, 2009, either Lender may demand by written notice,
that the company prepare and file the registration statement not
later than the date that is 30 days after the date of the Demand
Notice.  Thereafter, the company is required to use its best
efforts to have the registration statement declared effective as
soon as possible, but not later than 60 days from the Demand Date.

A full-text copy of the First Amendment to Registration Rights
Agreement is available for free at:

                http://ResearchArchives.com/t/s?3822

In a separate filing, the company disclosed that during a
preliminary review by the NYSE Alternext US of the company's
earnings release for the third quarter of 2008, the company
notified the Exchange that it no longer satisfies one of the
Exchange's standards for the continued listing of its common
stock, as set forth in Part 10 of the Exchange's company Guide.
Specifically, the company informed the Exchange that it does not
satisfy Section 1003(a)(iii) of the company Guide because its
stockholders' equity is less than $6,000,000 and the company has
sustained losses from continuing operations and net losses in the
five most recent fiscal years.  As of the date of this filing, the
company has not received a formal notice from the Exchange but it
is evaluating its options and how it will respond to the notice.

                    About ISCO International

Headquartered in Elk Grove Village, Illinois, ISCO International
Inc. (AMEX: ISO) -- http://www.iscointl.com/-- is a supplier of
RF management and interference-control solutions for the wireless
telecommunications industry.

                      Going Concern Doubt

Grant Thornton LLP, in Chicago, expressed substantial doubt about
ISCO International Inc.'s ability to continue as a going concern
after auditing the company's consolidated financial statements for
the years ended Dec. 31, 2007, and 2006.

The auditing firm reported that the company incurred a net loss of
approximately $6.4 million during the year ended Dec. 31, 2007,
and, as of that date, the company's accumulated deficit was
approximately $171.0 million.  The auditing firm also said that
the company has consistently used, rather than provided, cash in
its operations.

ISCO International Inc. reported a consolidated net loss of
$8.5 million for the third quarter ended Sept. 30, 2008, versus a
consolidated net loss of $1.7 million during the same period of
2007.

ISCO reported consolidated net sales of $1.8 million for the
quarter ended September 30, 2008, versus $1.9 million during the
comparable period of 2007.

At Sept. 30, 2008, the company's consolidated balance sheet showed
$21.4 million in total assets; $14.5 million in total current
liabilities, $80,000 in deferred facility reimbursement, $115,280
in deferred revenue-non current and $8.5 million in notes and
related accrued interest with related parties, net; and
$1.8 million in stockholders' deficit.  The company also had
$184.4 million in accumulated deficit.


ISCO INTERNATIONAL: Board Committee OKs Performance Compensation
----------------------------------------------------------------
ISCO International, Inc., disclosed in a regulatory filing that
the compensation committee of its board of directors approved the
award of performance compensation to certain named executive
officers in consideration of their performance and achievements in
fiscal year 2008.

The Committee approved these awards:

   i) 600,000 shares of restricted stock and a cash bonus in the
      amount of $49,500 to Gordon Reichard, Jr., the company's
      chief executive officer; and

  ii) 600,000 shares of restricted stock to Amr Abdelmonem, the
      company's chief operating officer and chief technology
      officer.

These award determinations represent payment at a reduced level
compared to the established target bonus level for each of
Messrs. Reichard and Abdelmonem in his restricted stock award
agreement and employment agreement.  The Committee also determined
that Mr. Reichard will not receive any increase in his base salary
in 2009, as would have been required by the terms of his
employment agreement.

The Committee also adopted the executive officer bonus program for
fiscal year 2009 pursuant to which:

   i) each of Messrs. Reichard and Abdelmonem is eligible to
      receive an award of restricted stock based on performance
      goals set by the Committee, as contemplated by his
      restricted stock agreement andor employment agreement, the
      goals of which are the same as outlined for the cash bonus;
      and

  ii) each of Messrs. Reichard and Abdelmonem and Gary Berger,
      the company's chief financial officer, is eligible to
      receive a cash bonus if the company achieves a specified
      level of positive EBITDA in 2009.  The amount of each cash
      bonus will be calculated using a formula adopted by the
      Committee based on the company's revenue and EBITDA in
      2009.  The cash bonus will be based on 2009 revenue or 60%
      of total cash bonus and 2009 EBITDA or 40% of total cash
      bonus.  Once the EBITDA threshold is achieved, the level of
      EBITDA attainment determines the total possible bonus
      payout, and the percent of revenue attainment determines
      the revenue portion of the bonus.  The maximum cash bonus
      that may be achieved under this program by each of Messrs.
      Reichard, Abdelmonem and Berger is $125,000, $100,000 and
      $80,000.  The cash bonuses will be finalized and paid upon
      conclusion of the company's audit for fiscal year 2009 and
      filing of the Form 10-K.  The cash bonus for Mr. Reichard
      replaces any cash bonus contemplated by Mr. Reichard's
      employment agreement.  Mr. Abdelmonem's employment
      agreement does not contain a cash bonus component.  The
      cash bonus for Mr. Berger is in addition to the $20,000
      bonus that Mr. Berger will receive for the first fiscal
      quarter that the company obtains positive cash flow, as
      provided in his letter agreement with the company.  Mr.
      Berger will also participate in the general employee equity
      incentive program for 2009.  The employment agreements for
      Messrs. Reichard, Abdelmonem and Berger will be
      appropriately amended to reflect the terms of the
      Committee's bonus program.  After the amendments to the
      employment agreements have been executed, the company will
      file the amendments to such agreements with the Securities
      and Exchange Commission.

                    About ISCO International

Headquartered in Elk Grove Village, Illinois, ISCO International
Inc. (AMEX: ISO) -- http://www.iscointl.com/-- is a supplier of
RF management and interference-control solutions for the wireless
telecommunications industry.

                      Going Concern Doubt

Grant Thornton LLP, in Chicago, expressed substantial doubt about
ISCO International Inc.'s ability to continue as a going concern
after auditing the company's consolidated financial statements for
the years ended Dec. 31, 2007, and 2006.

The auditing firm reported that the company incurred a net loss of
approximately $6.4 million during the year ended Dec. 31, 2007,
and, as of that date, the company's accumulated deficit was
approximately $171.0 million.  The auditing firm also said that
the company has consistently used, rather than provided, cash in
its operations.

ISCO International Inc. reported a consolidated net loss of
$8.5 million for the third quarter ended Sept. 30, 2008, versus a
consolidated net loss of $1.7 million during the same period of
2007.

ISCO reported consolidated net sales of $1.8 million for the
quarter ended September 30, 2008, versus $1.9 million during the
comparable period of 2007.

At Sept. 30, 2008, the company's consolidated balance sheet showed
$21.4 million in total assets; $14.5 million in total current
liabilities, $80,000 in deferred facility reimbursement, $115,280
in deferred revenue-non current and $8.5 million in notes and
related accrued interest with related parties, net; and
$1.8 million in stockholders' deficit.  The company also had
$184.4 million in accumulated deficit.


ISCO INTERNATIONAL: Sells All Stake in Clarity for $325,000 Cash
----------------------------------------------------------------
ISCO International, Inc., disclosed in a regulatory filing with
the Securities and Exchange Commission the sale of all of the
common stock of its subsidiary, Clarity Communication Systems Inc,
to TAA Group Inc.

On Dec. 5, 2008, ISCO International entered into a definitive
stock purchase agreement with TAA Group Inc. pursuant to which TAA
acquired all of the outstanding shares of stock of Clarity
Communication Systems Inc., a subsidiary of ISCO.  ISCO acquired
Clarity through a merger in January 2008, and Clarity's operations
and assets constituted the software segment of ISCO's business.
Clarity's operations and assets constituted the software segment
of ISCO International's business.

The purchase price consisted of:

   i) cash payments totaling $325,000;

  ii) a deferred payment of $175,000 to be made by TAA on or
      after March 5, 2009; and

iii) a percentage of future revenues of Clarity in an amount up
      to $5,000,000.

ISCO International may elect to take equity in TAA or one of its
affiliates in lieu of the $175,000 payment.  As a result of this
transaction, ISCO International's management expects to be able to
focus its efforts and resources on the success of the hardware
business.

A full-text copy of the Stock Purchase Agreement is available for
free at: http://ResearchArchives.com/t/s?3828

                    About ISCO International

Headquartered in Elk Grove Village, Illinois, ISCO International
Inc. (AMEX: ISO) -- http://www.iscointl.com/-- is a supplier of
RF management and interference-control solutions for the wireless
telecommunications industry.

                      Going Concern Doubt

Grant Thornton LLP, in Chicago, expressed substantial doubt about
ISCO International Inc.'s ability to continue as a going concern
after auditing the company's consolidated financial statements for
the years ended Dec. 31, 2007, and 2006.

The auditing firm reported that the company incurred a net loss of
approximately $6.4 million during the year ended Dec. 31, 2007,
and, as of that date, the company's accumulated deficit was
approximately $171.0 million.  The auditing firm also said that
the company has consistently used, rather than provided, cash in
its operations.

ISCO International Inc. reported a consolidated net loss of
$8.5 million for the third quarter ended Sept. 30, 2008, versus a
consolidated net loss of $1.7 million during the same period of
2007.

ISCO reported consolidated net sales of $1.8 million for the
quarter ended September 30, 2008, versus $1.9 million during the
comparable period of 2007.

At Sept. 30, 2008, the company's consolidated balance sheet showed
$21.4 million in total assets; $14.5 million in total current
liabilities, $80,000 in deferred facility reimbursement, $115,280
in deferred revenue-non current and $8.5 million in notes and
related accrued interest with related parties, net; and
$1.8 million in stockholders' deficit.  The company also had
$184.4 million in accumulated deficit.


LAND RESOURCE: Point Peter May Employ K&S as Special Counsel
------------------------------------------------------------
The U.S. Bankruptcy Court for the Middle District of Florida
granted Land Resource, LLC, and its debtor affiliates permission
to employ King & Spalding, LLP as special counsel to Point Peter,
LLLP, nunc pro tunc to Nov. 17, 2008.

King & Spalding will represent Point Peter in connection with the
litigation pertaining to the issuance of a permit for the
construction of three community day docks and two full service
marinas in the Cumberland Harbour community which was challenged
by the Center for a Sustainable Coast, Georgia River Network and
Satilla Riverwatch Alliance.  The Georgia Supreme Court has issued
a ruling in favor of Point Peter.  However, a motion for
reconsideration of the Georgia Supreme Court's ruling has been
filed by the Center.

Patricia T. Barmeyer, Esq., a partner at King & Spalding, LLP,
assured the Court that the firm does not represent or hold any
interest adverse to Point Peter, LLLP or its estate.

As of the Petition Date, K&S was owed $2,365 by Point Peter for
unpaid accounts receivables and unbilled prepetition time and
expenses.

K&S' professionals currently bill:

     Patricia T. Barmeyer, Esq.     $565 per hour
     Associate                      $310 per hour
     Paralegal                      $200 per hour

                      About Land Resource

Headquartered in Orlando, Florida, Land Resource LLC --
http://www.landresource.com-- creates residential communities,
which includes coastal, lakefront and mountain locations in
Georgia, North Carolina, West Virginia, Tennessee and Florida.

The company and its affiliates filed for Chapter 11 protection on
Oct. 30, 2008 (Bankr. M. D. Fla. Lead Case No. 08-10159).  Grace
E. Robson, Esq., at Berger Singerman, in Ft. Lauderdale, Florida,
and Jordi Guso, Esq., at Berger Singerman, P.A., in Miami Florida,
represent the Debtors as counsel.  Jeffrey I. Snyder, Esq., at
Bilzin Sumberg Baena Price & Axelrod LLP, represents the Committee
of Creditors Holding Unsecured Claims as counsel.  The company
listed assets of $100 million to $500 million and debts of
$50 million to $100 million.  Trustee Services Inc. is the
Debtors' notice, claims and balloting agent.


LEHMAN BROTHERS: Seeks to Tap Consultant for Artworks Sale
----------------------------------------------------------
Lehman Brothers Holdings, Inc., and its affiliated debtors seek
approval from the U.S. Bankruptcy Court for the Southern District
of New York to tap Kelly Matthew Wright as art consultant, nunc
pro tunc to January 7, 2009.

Pursuant to an engagement letter, Mr. Wright will provide
consulting services with respect to the disposition of the
Debtors' corporate art collections and works of lesser value for
which there is not a readily available marketplace.  Among
others, Mr. Wright will:

  * research on the collections regionally to determine their
    current market value;

  * provide on-site inspection of the collections, to determine
    condition and organize for viewing;

  * determine which companies are best suited to auction or
    purchase the works of art;

  * create appropriate inventories, organizing and conducting
    viewings;

  * negotiate, analyze and assist in finalizing the sales
    agreements;

  * coordinate and in some instances oversee the removal of the
    works of art;

  * track all sales and receipt of funds; and

  * in the event that an item does not sell at auction, arrange
    a private sale.

Since the Debtors' core business does not involve the sale of
corporate art, the Debtors believe that Mr. Wright will be able
to efficiently and effectively dispose of those assets, which in
turn will bring cash into the estate for the benefit of all
stakeholders.

The Debtors propose to pay Mr. Wright $175 per hour for on-site
work and $85 per hour for research and reports, and reimburse him
for all out-of-pocket travel related expenses that are
preapproved and comply with the Debtors' Travel Policy guidelines

For art that is sold at auctions, Mr. Wright may also receive, in
addition to his hourly fees, an "introductory commission" of 2-4%
to be paid from the commissions due to the auction house.  For
outright sales, Mr. Wright may receive a "finder's fee" of 10%
that will be paid by the buyer unless items are sold privately to
companies or individuals who have an existing relationship with
Lehman.  Standard hourly rates will apply to Services supplied in
support of these auctions or outright sales.

                      About Lehman Brothers

Lehman Brothers Holdings Inc. -- http://www.lehman.com-- was the
fourth largest investment bank in the United States.  For more
than 150 years, Lehman Brothers led in the global financial
markets by serving the financial needs of corporations,
governmental units, institutional clients and individuals
worldwide.  Through its team of more than 25,000 employees, Lehman
Brothers offered a full array of financial services in equity and
fixed income sales, trading and research, investment banking,
asset management, private investment management and private
equity.  Its worldwide headquarters in New York and regional
headquarters in London and Tokyo are complemented by a network of
offices in North America, Europe, the Middle East, Latin America
and the Asia Pacific region.  The firm, through predecessor
entities, was founded in 1850.

Lehman filed for chapter 11 bankruptcy Sept. 15, 2008 (Bankr.
S.D.N.Y. Case No. 08-13555).  Lehman's bankruptcy petition listed
$639 billion in assets and $613 billion in debts, effectively
making the firm's bankruptcy filing the largest in U.S. history.

Subsidiary LB 745 LLC, submitted a Chapter 11 petition on Sept. 16
(Case No. 08-13600).  Several other affiliates followed
thereafter.

The Debtors' bankruptcy cases are handled by Judge James M. Peck.
Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife,
Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil,
Gotshal & Manges, LLP, in New York, represent Lehman.  Epiq
Bankruptcy Solutions serves as claims and noticing agent.

On Sept. 19, 2008, the Honorable Gerard E. Lynch, Judge of the
United States District Court for the Southern District of New
York, entered an order commencing liquidation of Lehman Brothers,
Inc., pursuant to the provisions of the Securities Investor
Protection Act in the case captioned Securities Investor
Protection Corporation v. Lehman Brothers Inc., Case No. 08-CIV-
8119 (GEL).  James W. Giddens has been appointed as trustee for
the SIPA liquidation of the business of LBI

Barclays Bank Plc has agreed, subject to U.S. Court and relevant
regulatory approvals, to acquire Lehman Brothers' North American
investment banking and capital markets operations and supporting
infrastructure for US$1.75 billion.  Nomura Holdings Inc., the
largest brokerage house in Japan, on Sept. 22 reached an agreement
to purchased Lehman Brothers Holdings, Inc.'s operations in Europe
and the Middle East less than 24 hours after it reached a deal to
buy Lehman's operations in the Asia Pacific for US$225 million.
Nomura paid only $2 dollars for Lehman's investment banking and
equities businesses in Europe, but agreed to retain most of
Lehman's employees.

             International Operations Collapse

Lehman Brothers International (Europe), the principal UK trading
company in the Lehman group, was placed into administration,
together with Lehman Brothers Ltd, LB Holdings PLC and LB UK RE
Holdings Ltd. These are currently the only UK incorporated
companies in administration.  Tony Lomas, Steven Pearson, Dan
Schwarzmann and Mike Jervis, partners at PricewaterhouseCoopers
LLP, have been appointed as joint administrators to Lehman
Brothers International (Europe) on Sept. 15, 2008.  The joint
administrators have been appointed to wind down the business.
Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan Inc.
filed for bankruptcy in the Tokyo District Court on
Sept. 16.  The two units of Lehman Brothers Holdings, Inc., which
has filed for bankruptcy protection in the U.S. Bankruptcy Court
for the Southern District of New York, have combined liabilities
of JPY4 trillion -- US$38 billion).  Lehman Brothers Japan Inc.
reported about JPY3.4 trillion ($33 billion) in liabilities in its
petition.  Akio Katsuragi, a former Morgan Stanley executive, runs
Lehman's Japan units.

Lehman Brothers Asia Limited, Lehman Brothers Securities Asia
Limited and Lehman Brothers Futures Asia Limited have suspended
its operations with immediate effect, including ceasing to trade
on the Hong Kong Securities Exchange and Hong Kong Futures
Exchange, until further notice.  The Asian units' asset management
company, Lehman Brothers Asset Management Limited, will continue
to operate on a business as usual basis.  A further notice
concerning the retail structured products issued by or arranged by
any Lehman Brothers group company will be issued as soon as
possible, a press statement said.

Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers
Bankruptcy News.  The newsletter tracks the chapter 11 proceeding
undertaken by Lehman Brothers Holdings, Inc. and its various
affiliates. (http://bankrupt.com/newsstand/or 215/945-7000)


LEXINGTON PRECISION: Wants Plan Filing Period Extended to April
---------------------------------------------------------------
Lexington Precision Corp. and Lexington Rubber Group, Inc., ask
the U.S. Bankruptcy Court for the Southern District of New York to
grant them a third extension of their exclusive periods to:

  a) file a plan to April 27, 2009; and

  b) solicit acceptances of said plan to June 25,2009.

Unless extended, the Debtors' exclusive period to file a Chapter
11 plan and solicit acceptances of the plan expire on Jan. 26,
2009, and Feb. 25, 2009, respectively.

As reported in the Troubled Company Reporter on Dec 15, 2008, the
Debtors filed with on Dec. 8, 2008, their Second Amended Joint
Plan of Reorganization and proposed Disclosure Statement
explaining their Second Amended Joint Plan of Reorganization.
To fund the distributions under the Plan and their continued
operations, the Reorganized Debtors shall enter into a new secured
credit facility to which an unnamed financial institution has
expressed an interest in providing.

The Debtors tell the Court that an extension of exclusivity is
necessary to allow the them adequate time to consolidate and
restructure the connector seals business, which has been afflicted
by the same volume issues that have affected every other supplier
to the automotive OEM sector.

The Debtors recognized the need for this structural change only in
late 2008 when production forecasts continued to fall.  And it was
only in the last two weeks of 2008 that the Debtors concluded that
an exit financing commitment sufficient to fund the payments
required under the Second Amended Plan and to provide adequate
working capital for the business was not likely to be forthcoming
until they could demonstrate meaningful progress on their plan to
consolidate the connector seals business.

The Debtors have developed an operational restructuring plan for
the closing of the Vienna, Ohio facility and the transfer of a
portion of the connector seals business to the Jasper, Georgia,
Rock Hill, South Carolina, and North Canton, Ohio facilities.  The
Debtors believe that the implementation of this operational
restructuring plan will not only serve to maximize value but will
also significantly enhance their ability to consummate the new
secured credit facility that is critical to their ability to
emerge from Chapter 11.

The Debtors requested and the Court granted an adjournment of the
hearing to approve the Proposed Disclosure Statement to Feb. 9,
2009.

                      About Lexington Precision

Headquartered in New York, Lexington Precision Corp.
-- http://www.lexingtonprecision.com/-- manufactures tight-
tolerance rubber and metal components for use in medical,
automotive, and industrial applications.  As of Feb. 29, 2008, the
companies employed about 651 regular and 22 temporary personnel.

The company and its affiliate, Lexington Rubber Group Inc., filed
for Chapter 11 protection on April 1, 2008 (Bankr. S.D.N.Y. Lead
Case No.08-11153).  Christopher J. Marcus, Esq., and Victoria
Vron, Esq., at Weil, Gotshal & Manges, represent the Debtors in
their restructuring efforts.  The Debtors selected Epiq Systems -
Bankruptcy Solutions LLC as claims agent.  The U.S. Trustee for
Region 2 appointed six creditors to serve on an Official Committee
of Unsecured Creditors.  Paul N. Silverstein, Esq., and Jonathan
Levine, Esq., at Andrews Kurth LLP, represent the Committee as
counsel.

When the Debtors filed for protection from their creditors, they
listed total assets of $52,730,000 and total debts of $88,705,000.


LINGANORE DEVELOPMENT: Case Summary & 12 Largest Unsec. Creditors
-----------------------------------------------------------------
Debtor: Linganore Development Group
        dba Linganore Development
        1355 Beverly Road, Suite 240
        McLean, VA 22101

Bankruptcy Case No.: 08-36418

Debtor-affiliates filing separate Chapter 11 petitions:

        Entity                                     Case No.
        ------                                     --------
Linganore Homes, Inc.                              08-36419

Chapter 11 Petition Date: December 15, 2008

Court: Eastern District of Virginia (Richmond)

Judge: Douglas O. Tice Jr.

Debtor's Counsel: Paula S. Beran, Esq.
                  pberan@tb-lawfirm.com
                  Tavenner & Beran, PLC
                  20 North Eighth Street, Second Floor
                  Richmond, VA 23219
                  Tel: (804) 783-8300
                  Fax: (804) 783-0178

Estimated Assets: $1 million to $10 million

Estimated Debts: $10 million to $50 million

The Debtor's Largest Unsecured Creditors:

   Entity                      Nature of Claim   Claim Amount
   ------                      ---------------   ------------
Frederick LL LC                lot purchase      $500,000
c/o Craftmark Homes            deposit
6820 Elm Street Suite
Mc Lean, VA 22101

Frederick County Public School Oakdale High      $474,669
7446 Hayward Road              school cost
Frederick, MD 21702            sharing by
                               agreement

Ellis LLC                                        $149,662
c/o Frank P. Ellis
9707 Woodlake Place
New Market, MD 21774

Calvert Development                              $147,274
SK Group LLC

ESD Eaglehead L.C.             borrowed funds    $47,230

Frederick LL LC                lot purchase      $35,541
                               deposit

Frederick County                                 $32,249

Beazer Homes                                     $22,500

Fountainhead Homes, LLC        damage deposit    $6,750

Duane Schestag                 damage deposit    $750
                               escrow

Frank P. Ellis, IV             damage deposit    $750
                               escrow

Rental Services Company        security deposit  $500

The petition was signed Randy M. Lebedoff, senior vice
president and general counsel.


LIZ CLAIBORNE: Modifications to Loan May Trigger Default Swaps
--------------------------------------------------------------
Liz Claiborne Inc.'s modification of its revolving credit line
"seems likely" to trigger payment of credit-default swap contracts
on the retailer's debt, according to Bank of America Corp.
analysts, Bloomberg News reported.

Liz Claiborne announced Jan. 13 it extended the maturity of the
bank loan by two years to 2011, reduced the size of the facility
and eliminated two covenants.  The changes may count as a credit
event, forcing settlement of the swaps, Bloomberg said, citing
Glen Taksler, a strategist at the bank in New York, as saying.

Declaring Liz Claiborne's loan modification to be a credit
event "could be troubling for CDS on other companies that
extend, or already have extended, the maturity of their credit
facilities in a weak credit environment," Mr. Taksler wrote in a
note to clients, according to the report.

According to Bloomberg, retailers such as Liz Claiborne are being
hurt as the highest U.S. unemployment rate in 16 years combined
with scarce credit causes consumers to cut spending on non-
essential items.

Moody's Investors Service has recently placed all other ratings
under review for a possible downgrade.  The review for possible
downgrade follows from Liz's announcement that it now expects
earnings for the fourth quarter to fall significantly below
previous expectations and the year prior period.

According to Moody's, the weak performance resulted from a highly
promotional retail environment, which adversely impacted margins
and negative trends in sales, with comparable store sales for the
company's Juicy Couture, Lucky Brand and Kate Spade retail stores
each falling in the mid-teens.  Moody's had previously indicated
concerns that the company's Direct Brand segment could come under
increased pressure as higher end consumers showed greater spending
restraint which has been evident in Liz Claiborne's results as
well as in weak same store sales at luxury department stores.

             Loan Facility Reduced, Covenants Relaxed

As reported by the Troubled Company Reporter on January 14, 2009,
Liz Claiborne Inc. (NYSE: LIZ) said it has successfully completed
an amendment and extension of its existing bank revolving credit
facility. J.P. Morgan Securities Inc. and Banc of America
Securities LLC were Joint Lead Arrangers for this amendment and
extension.

The amended terms and conditions provide for a reduction in the
facility size to $600 million from $750 million which is
appropriate for the Company's projected needs following its recent
divestitures, an extension of the maturity date to May 31, 2011, a
secured asset-based structure, the elimination of the leverage
covenant and asset coverage covenant and an increase in fees and
interest rates. The facility may continue to be used for working
capital and general corporate purposes and will back both trade
and standby letters of credit in addition to the Company's
synthetic lease.

The amendment and extension revises the calculation and required
coverage levels of the fixed charge financial covenant which will
be calculated on a rolling twelve month basis and must exceed 1.25
times the ratio of consolidated EBITDA less capital expenditures
divided by fixed charges (all as defined in the agreement) through
November 2009, stepping up to a minimum coverage of 1.50 times
from December 2009 through the maturity of the facility.

William L. McComb, Chief Executive Officer of Liz Claiborne Inc.,
said: "We are extremely pleased to announce the successful
completion of this amendment and extension of our bank credit
facility which extends the maturity date of the facility to May
2011 from October 2009. We know that the financial community has
been closely monitoring this transaction in light of very
challenging credit market conditions. While we continue to
aggressively manage our balance sheet and preserve liquidity, this
amendment and extension affords us stability in the face of a most
uncertain 2009."

Mr. McComb continued: "During the fourth quarter, we demonstrated
exceptional balance sheet and cash flow management as we paid down
$175 million in bank debt, primarily driven by aggressive
inventory management, resulting in year end bank debt of
approximately $234 million. We also ended the year with total debt
of approximately $745 million which is below the $750 to $775
million range we guided on our November 13th earnings call."

Mr. McComb concluded: "Needless to say, the operating environment
in the fourth quarter was the most challenging we have experienced
in decades. Despite a pickup in comp store sales in the last few
weeks of the quarter, our comps for Juicy Couture, Lucky Brand and
Kate Spade were each in the negative mid-teens while Mexx's comps
were negative 12%. The highly promotional retail environment also
negatively impacted margins in both our retail and wholesale
businesses, causing us to project adjusted EPS from continuing
operations in the range of $0.00 to ($0.15) for the quarter
compared to our previously guided range of $0.19 to $0.24. We will
provide more details on the quarter during our earnings call in
early March."

The adjusted projected results exclude the impact of expenses
incurred in connection with the Company's streamlining and brand-
exiting activities and non-cash trademark impairment charges. The
Company believes that the adjusted projected results represent a
more meaningful presentation of its operations and financial
performance since these results provide period to period
comparisons that are consistent and more easily understood.

The adjusted projected results on a continuing operations basis
contained in this press release remain subject to the Company's
closing its 2008 books and records, completion of its annual
account analysis, including its goodwill and trademark impairment
testing, customary tax review, and end of season retailer
assistance reconciliation, in addition to having such information
audited. Therefore, these results may change.

                      About Liz Claiborne

Liz Claiborne Inc. -- http://www.lizclaiborneinc.com/-- designs
and markets a global portfolio of retail-based premium brands
including Kate Spade, Juicy Couture, Lucky Brand and Mexx.  The
Company also has a refined group of department store-based brands
with strong consumer franchises including the Liz Claiborne and
Monet families of brands, Kensie, Kensiegirl, Mac & Jac, and the
licensed DKNY Jeans Group.

                          *     *     *

As reported by the Troubled Company Reporter on November 27, 2008,
Moody's Investors Service downgraded its rating on Liz Claiborne
Inc.'s senior unsecured notes to Ba2 (LGD 5, 86%) from Baa3 and
assigned a Ba1 Corporate Family Rating and a Ba1 Probability of
Default Rating.  Moody's also lowered the company's Commercial
Paper Rating to Not Prime from Prime-3.  The rating outlook is
negative.  The rating actions conclude the review for possible
downgrade which commenced on Oct. 24, 2008.  The rating downgrade
results from expectations that Liz's earnings and operating
margins will remain under pressure in 2008 and financial metrics
necessary to maintain its previous ratings will not be achieved.
The company is taking actions within its control to improve its
financial position, such as an announced 50% reduction in capital
spending in fiscal 2009.  However, Moody's expects Liz will be
challenged to significantly improve its financial metrics given
the weak outlook for discretionary consumer spending which Moody's
anticipate will persist well into 2009.

As reported by the Troubled Company Reporter on Jan. 16, 2009,
Moody's Investors Service affirmed Liz Claiborne commercial paper
rating at Not Prime and placed all other ratings under review for
a possible downgrade.  The review for possible downgrade follows
from Liz's announcement that it now expects earnings for the
fourth quarter of 2008 to fall significantly below previous
expectations and the year prior period.


LOCAL INSIGHT: Financial Restatement Won't Affect S&P's 'B' Rating
------------------------------------------------------------------
Standard & Poor's Ratings Services said that its ratings and
outlook on Local Insight Regatta Holdings Inc. (B/Stable/--) are
not affected by the company's restatement of their financial
statements for the quarterly period ended Sept. 30, 2008, given
the restatement related to noncash items, and do not change the
company's measure of EBITDA.

In addition, S&P believes at this time management is taking the
necessary steps to improve its internal controls and procedures.
The restatement related to errors identified in the application of
purchase accounting adjustments.


LYONDELL CHEMICAL: U.S. Trustee Forms 7-Member Creditors Panel
--------------------------------------------------------------
Pursuant to Section 1102 of the Bankruptcy Code, Diana G. Adams,
United States Trustee for Region 2, appointed seven creditors to
serve as members of the Official Committee of Unsecured Creditors
in Lyondell Chemical Company and its 78 debtor-affiliates'
Chapter 11 cases:

(1) Wilmington Trust FSB, as Successor Trustee
    Attn: Patrick Healy, Vice President
    Rodney Square North
    1100 North Market Street
    Wilmington, DE 19890-1600
    Tel. No. (302) 636-6391

(2) Law Debenture Trust of New York
    Attn: Robert L. Bice II, Senior Vice President
    400 Madison Avenue
    New York, NY 10017
    Tel. No. (212) 750-6474

(3) Pension Benefit Guaranty Corporation
    Attn: Jennifer Messina
    1200 K. Street N.W. - Suite 2000
    Washington, DC 20004
    Tel. No.(202) 750-6474

(4) BASF Corporation
    Attn: Peter Argiriou, Credit Manager
    100 Campus Drive
    Florham Park, NJ 07932
    Tel. No. (713) 759-3092

(5) Air Liquide Large Industries U.S.LP
    c/o Air Liquide USA, LLC
    Attn: Kevin Feeney, Esq., Secretary of Air Liquide
    2700 Post Oak Blvd.
    Houston, TX 77056
    Tel. No. (713) 624-8386

(6) Veolia ES Industrial Services
    Attn: Tim Wood, Vice President Sales & Marketing
    2525 South Shore, Suite 410
    League City, TX 72573
    Tel. No.(713) 307-7138

(7) United Steel Workers
    Attn: David R. Jury, Associate General Counsel
    Five Gateway Center - Room 807
    Pittsburgh, PA 15222
    Tel. No. (412) 562-2546

Gerald A. O'Brien, vice president of Lyondell Chemical Company,
disclosed in a filing with the Securities and Exchange Commission
that on January 16, 2009, the company held an organizational
meeting for unsecured creditors wherein officers of Lyondell
Chemical Company made a presentation, a full-text copy of which
is available for free at http://ResearchArchives.com/t/s?382a

                      About LyondellBasell

Basell AF and Lyondell Chemical Company merged operations
in 2007 to form LyondellBasell Industries --
http://www.lyondellbasell.com/-- the world's third largest
independent chemical company.  Lyondellbasell produces
polypropylene and advanced polyolefins products, is a leading
supplier of polyethylene, and a global leader in the development
and licensing of polypropylene and polyethylene processes and
related catalyst sales.

LyondellBasell became saddled with debt as part of the
$12.7 billion merger.  About a year after completing the merger,
LyondellBasell Industries' U.S. operations and one of its European
holding companies -- Basell Germany Holdings GmbH -- filed
voluntary petitions to reorganize under Chapter 11 of the U.S.
Bankruptcy Code on January 6, 2009, to facilitate a restructuring
of the company's debts.  The case is In re Lyondell Chemical
Company, et al., Bankr. S.D. N.Y. Lead Case No. 09-10023).
Seventy-nine Lyondell entities, including Equistar Chemicals, LP,
Lyondell Chemical Company, Millennium Chemicals Inc., and Wyatt
Industries, Inc., filed for Chapter 11.  LyondellBasell is not
part of the bankruptcy filing.  LyondellBasell's non-U.S.
operating entities are also not included in the Chapter 11 filing.

The Hon. Robert E. Gerber presides over the case.  Deryck A.
Palmer, Esq., at Cadwalader, Wickersham & Taft LLP, in New York,
serves as the Debtors' bankruptcy counsel.  Evercore Partners
serves as financial advisors, and Alix Partners and its subsidiary
AP Services LLC, serves as restructuring advisors.  AlixPartners'
Kevin M. McShea acts as the Debtors' Chief Restructuring Officer.
Clifford Chance LLP serves as restructuring advisors to the
European entities.

Lyondell Chemical estimated that consolidated assets total $27.12
billion and debts total $19.34 billion as of the bankruptcy filing
date.

Bankruptcy Creditors' Service, Inc., publishes Lyondell Bankruptcy
News.  The newsletter tracks the chapter 11 proceeding undertaken
by Lyondell Chemical Company and its various affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)


LYONDELL CHEMICAL: Equistar Seeks $28MM Loan Payment from Solutia
-----------------------------------------------------------------
Lyondell Chemical Co's affiliate Equistar Chemicals, LP and
Solutia Inc. were parties to an Amended and Restated Chemical
Grade Propylene Sales Agreement contract wherein Equistar sold
certain chemical grade propylene to Solutia.  Since October 10,
2008, the Debtor has sent 10 invoices to Solutia.  Under the
Agreement, Solutia must pay for propylene within 30 days of each
invoice date.

Proposed counsel for the Debtors, Howard Hawkins, Esq., at
Cadwalader, Wickersham & Taft LLP, in New York, tells the U.S.
Bankruptcy Court for the Southern District of New York that
Solutia has never disputed any of the invoices, which are
due and owing for $28,928,488, yet it has refused to pay the
amounts.

Mr. Hawkins argues that the $28,928,488 is a matured debt under
Section 542(b) of the Bankruptcy Code and Solutia, thus, violated
Section 542(b) when it did not pay the matured debt to the
Debtor.

Against this backdrop, Mr. Hawkins says, the Debtor is entitled
to a judgment:

    (i) declaring that the Debtor is owed a matured debt for
        $28,928,488 pursuant to Section 542(b), and Solutia
        violated Section 542(b) because it has not paid the
        $28,928,488,

   (ii) directing Solutia to turn over to the Debtor
        $28,928,488, and

  (iii) awarding the Debtor its costs and expenses, including
        attorneys' fees incurred in connection with the Debtor's
        efforts to compel Solutia's compliance with its
        obligations.

Moreover, the Agreement is a valid, binding and enforceable
contract between the Debtor and Solutia.  Mr. Hawkins attests
that the Debtor has performed its obligations under the
Agreement.  Accordingly, Solutia's failure and refusal to remit
to the Debtor the amounts due to under Agreement constitute a
breach of contract.  Mr. Hawkins further contends that Solutia
violated Sections 362(a)(3) and (a)(7) of the Bankruptcy Code by
failing to pay the Debtor, and withholding payment of the
$28,928,488.

The Debtor asks the Court to issue judgment:

  (a) declaring that Solutia owes a matured debt to the Debtor
      for $28,928,488;

  (b) awarding damages for $28,928,488 resulting from Solutia's
      breach of the Agreement;

  (c) directing Solutia to pay $28,928,488;

  (d) declaring that Solutia's continued failure to pay the
      matured debt constitutes a violation of Sections 362(a)
      and 542(b); and

  (e) awarding the Debtor its costs, including attorney's fees,
      incurred in connection with its efforts to compel
      Solutia's compliance under the Bankruptcy Code.

                        About Solutia Inc.

Based in St. Louis, Missouri, Solutia Inc. (NYSE: SOA) --
http://www.solutia.com/-- and its subsidiaries, manufactures and
sells chemical-based materials, which are used in consumer and
industrial applications worldwide.

The company and 15 debtor-affiliates filed for chapter 11
protection on Dec. 17, 2003 (Bankr. S.D.N.Y. Lead Case No. 03-
17949).  When the Debtors filed for protection from their
creditors, they listed $2,854,000,000 in assets and $3,223,000,000
in debts.

On Feb. 14, 2006, the Debtors filed their Reorganization Plan &
Disclosure Statement.  On May 15, 2007, they filed an Amended
Reorganization Plan and on July 9, 2007, filed a 2nd Amended
Reorganization Plan.  The Bankruptcy Court approved the Debtors'
amended Disclosure Statement on Oct. 19, 2007.  On Oct. 22, 2007,
the Debtor re-filed a Consensual Plan & Disclosure Statement and
on Nov. 29, 2007, the Court confirmed the Debtors' Consensual
Plan.  Solutia emerged from chapter 11 protection Feb. 28, 2008.

Solutia was represented by Richard M. Cieri, Esq., Jonathan S.
Henes, Esq., and Michael A. Cohen, Esq., at Kirkland & Ellis LLP,
in New York, as lead bankruptcy counsel, and David A. Warfield,
Esq., and Laura Toledo, Esq., at Blackwell Sanders LLP, in St.
Louis Missouri, as special counsel.  Trumbull Group LLC was the
Debtor's claims and noticing agent.  Daniel H. Golden, Esq., Ira
S. Dizengoff, Esq., and Russel J. Reid, Esq., at Akin Gump Strauss
Hauer & Feld LLP represented the Official Committee of Unsecured
Creditors, and Derron S. Slonecker at Houlihan Lokey Howard &
Zukin Capital provided the Creditors' Committee with financial
advice.  The Official Committee of Retirees of Solutia, Inc., et
al., was represented by Daniel D. Doyle, Esq., Nicholas A. Franke,
Esq., and David M. Brown, Esq., at Spencer Fane Britt & Browne,
LLP, in St. Louis, Missouri, and Frank M. Young, Esq., Thomas E.
Reynolds, Esq., R. Scott Williams, Esq., at Haskell Slaughter
Young & Rediker, LLC, in Birmingham, Alabama.

Solutia's $2.05 billion exit financing facility was funded by
Citigroup Global Markets Inc., Goldman Sachs Credit Partners L.P.,
and Deutsche Bank Securities Inc.  The exit financing is being
used to pay certain creditors, and for ongoing operations.

Bankruptcy Creditors' Service, Inc., publishes Solutia Bankruptcy
News.  The newsletter tracks the chapter 11 proceeding undertaken
by Solutia Inc. and its various affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)

                           *     *     *

Standard & Poor's Ratings Services said its ratings on Solutia
Inc. (B+/Stable/--) will not change as a result of the company's
recent announcement of a public offering of common shares.

                      About LyondellBasell

Basell AF and Lyondell Chemical Company merged operations
in 2007 to form LyondellBasell Industries --
http://www.lyondellbasell.com/-- the world's third largest
independent chemical company.  Lyondellbasell produces
polypropylene and advanced polyolefins products, is a leading
supplier of polyethylene, and a global leader in the development
and licensing of polypropylene and polyethylene processes and
related catalyst sales.

LyondellBasell became saddled with debt as part of the
$12.7 billion merger.  About a year after completing the merger,
LyondellBasell Industries' U.S. operations and one of its European
holding companies -- Basell Germany Holdings GmbH -- filed
voluntary petitions to reorganize under Chapter 11 of the U.S.
Bankruptcy Code on January 6, 2009, to facilitate a restructuring
of the company's debts.  The case is In re Lyondell Chemical
Company, et al., Bankr. S.D. N.Y. Lead Case No. 09-10023).
Seventy-nine Lyondell entities, including Equistar Chemicals, LP,
Lyondell Chemical Company, Millennium Chemicals Inc., and Wyatt
Industries, Inc., filed for Chapter 11.  LyondellBasell is not
part of the bankruptcy filing.  LyondellBasell's non-U.S.
operating entities are also not included in the Chapter 11 filing.

The Hon. Robert E. Gerber presides over the case.  Deryck A.
Palmer, Esq., at Cadwalader, Wickersham & Taft LLP, in New York,
serves as the Debtors' bankruptcy counsel.  Evercore Partners
serves as financial advisors, and Alix Partners and its subsidiary
AP Services LLC, serves as restructuring advisors.  AlixPartners'
Kevin M. McShea acts as the Debtors' Chief Restructuring Officer.
Clifford Chance LLP serves as restructuring advisors to the
European entities.

Lyondell Chemical estimated that consolidated assets total $27.12
billion and debts total $19.34 billion as of the bankruptcy filing
date.

Bankruptcy Creditors' Service, Inc., publishes Lyondell Bankruptcy
News.  The newsletter tracks the chapter 11 proceeding undertaken
by Lyondell Chemical Company and its various affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)


MAGMA CDO: Moody's Downgrades Ratings on Various Notes
------------------------------------------------------
Moody's Investors Service announced that it has downgraded these
notes issued by Magma CDO Ltd. and insured by Financial Security
Assurance, Inc.:

  -- U.S. $282,500,000 Class A Floating Rate Notes Due
     November 15, 2012, downgraded to Aa3; previously rated Aaa,
     on July 21, 2008 placed under review for possible downgrade.

This rating reflects the current insurance financial strength
rating of Financial Security Assurance, Inc., which was downgraded
to Aa3 on November 21, 2008.  The above action is a result of, and
is consistent with, Moody's modified approach to rating structured
finance securities wrapped by financial guarantors as described in
the press release dated November 10, 2008.

In addition, Moody's has also downgraded these notes:

  -- U.S. $4,000,000 Class B-1 Subordinate Fixed Rate Notes Due
     November 15, 2012, downgraded to Ba1; previously on October
     9, 2006 downgraded to Baa3;

  -- U.S. $20,000,000 Class B-2 Subordinate Floating Rate Notes
     Due November 15, 2012, downgraded to Ba1; previously on
     October 9, 2006 downgraded to Baa3;

  -- U.S. $14,500,000 Class C Second Subordinate Fixed Rate Notes
     Due November 15, 2012, downgraded to Caa2; previously on
     October 9, 2006 downgraded to B3.

According to Moody's, these rating actions are a result of a
decline in the average credit rating (as measured through the
weighted average rating factor) of the underlying pool as well as
an increase in the dollar amount of defaulted securities.  Moody's
also observes an increase in the percentage of securities rated
Caa1 and below.  Additionally, the weighted average coupon test is
failing.

In its analysis, Moody's incorporated its revised default
probability assumptions for all corporate credits in the
underlying portfolio


MEADE INSTRUMENTS: Posts $2.7MM Net Loss in Quarter Ended Nov. 30
-----------------------------------------------------------------
Meade Instruments Corp. posted a net loss of $2,790,000 on net
sales of $23,429,000 for the three months ended November 30, 2008,
compared with a net loss of $1,622,000 on net sales of $51,441,000
for the same period a year earlier.

As of November 30, 2008, the company's balance sheet showed total
assets of $41,810,000 and total stockholders' equity of
$20,072,000.

Steven L. Muellner, president and chief executive officer, and
Paul E. Ross, senior vice president-finance and chief financial
officer, disclosed in a regulatory filing that during the nine
months ended November 30, 2008, the company funded its operations
principally from proceeds of approximately $15.3 million from the
sale of its Simmons, Weaver and Redfield brands and related assets
and by utilizing its cash on hand.  "Cash flow from operating
activities was negatively affected principally by operating losses
for the period, excluding the gain on its brand sales of
approximately $5.3 million."

"Working capital totaled approximately $15.0 million at
November 30, 2008, compared to $17.0 million at February 29, 2008.
Working capital requirements fluctuate during the year due to the
seasonal nature of the business.  These requirements are typically
financed through a combination of internally-generated cash flows
from operating activities and short-term bank borrowings."

"The company had $0.4 million in cash at November 30, 2008, a
decrease compared to $4.3 million at February 29, 2008.  The
company utilizes its availability on its bank lines of credit
to fund operations.  Availability under its domestic and foreign
bank lines of credit at November 30, 2008 was approximately
$2.5 million and $3.9 million, respectively, in addition to the
company's cash on hand.  During the nine months ended November 30,
2008, operations used approximately $20.2 million in cash,
offsetting the $15.3 million in proceeds from its brand sales,
which the company used to repay its domestic line of credit."

At November 30, 2008, the company was not in compliance with the
minimum EBITDA covenant as set forth in the Sixteenth Amendment to
the Amended and Restated Credit Agreement dated as of October 25,
2002 with Bank of America, N.A.  According to Mr. Muellner and Mr.
Ross, the company is working with its lender to obtain a waiver or
amendment.  "In addition, there is no guarantee that the company
will be in compliance with the restrictive covenants in the
future, and in the event of noncompliance, there is no guarantee
that the company will be able to obtain an amendment or waiver.
If no amendment or waiver is obtained, the company will be in
default under the provisions of the credit facility and the
company's lender may accelerate repayment.  In this event, the
company may need to raise funds to repay its lender, and there can
be no assurance that such funds will be available."

"In addition, the Sixteenth Amendment to the company's credit
agreement with Bank of America also contained provisions that
reduced the company's collateral base and availability.  Depending
on the company's performance, the resulting availability may not
be sufficient for the company to fund its operations.  In
addition, the credit facility with Bank of America expires in
September 2009 and the company expects that Bank of America may
not extend the facility because the company's projected borrowing
requirements for fiscal 2010 do not satisfy the current minimum
thresholds required by Bank of America.  As a result, the company
is planning to replace its current credit facility, but there can
be no assurance the company will be able to do so."

On September 24, 2008, the company entered into a loan agreement
with VR-Bank Westmunsterland eG.  The material terms and
conditions of the Loan Agreement include a revolving line of
credit of up to EUR7,500,000 through February 28, 2009.  The
revolving line of credit bears interest at 8.35% and is variable,
depending on certain market conditions as set forth in the Loan
Agreement.  The interest rate on the company's term loan adjusted
to Euribor plus 2%.  The revolving line of credit and term loan
are collateralized by all of the assets of Meade Europe and are
further collateralized by a guarantee by Meade Instruments Corp.
An additional condition to the Loan Agreement is a requirement
that Meade Europe maintain a minimum capitalization of
approximately EUR5,000,000 and 30% of assets.

A full-text copy of the company's quarterly report is available
for free at: http://researcharchives.com/t/s?382d

                     About Meade Instruments

Based in Irvine, California, Meade Instruments Corp. (Nasdaq GM:
MEAD) -- http://www.meade.com/-- is a designer and manufacturer
of optical products including telescopes and accessories for the
beginning to serious amateur astronomer.  The company distributes
its products worldwide through a network of specialty retailers,
mass merchandisers and domestic and foreign distributors.

                       Going Concern Doubt

Moss Adams LLP, in Irvine, California, expressed substantial doubt
about Meade Instruments Corp.'s ability to continue as a going
concern after auditing the company's consolidated financial
statements for the year ended Feb. 29, 2008.  The auditing firm
pointed to the company's declining revenues, recurring losses from
operations and accumulated deficit.


MERRILL LYNCH: Will Pay $550MM to Settle Shareholder Lawsuits
-------------------------------------------------------------
Dan Fitzpatrick and Susanne Craig at The Wall Street Journal
reports that Merrill Lynch & Co. said that it will pay
$550 million to settle shareholder lawsuits.

According to WSJ, Merrill Lynch allegedly failed to inform
investors about the risks associated with its business in the
subprime-mortgage market.  WSJ relates that Merrill Lynch
"vigorously disputed" the accusations.

WSJ states that Merrill Lynch agreed to pay $475 million to settle
a lawsuit by the Ohio State Teachers' Retirement System, and $75
million to Merrill Lynch workers who held company stock in
retirement programs.

As reported by the Troubled Company Reporter on Jan. 14, 2008,
Merrill Lynch and BofA allegedly violated the federal Fair Labor
Standards Act (FLSA) by failing to pay overtime to back office
employees who facilitate transactions of the company's derivatives
products, according to Fitapelli & Schaffer, LLP.  Andrea Levine,
of Staten Island, N.Y., and Ivey Moore, of Mount
Vernon, N.Y., both of whom are employed as Derivatives Settlement
Specialists, filed the lawsuit in New York federal court.  The
lawsuit alleges that the plaintiffs and other Merrill Lynch
Derivatives Settlement Specialists have been "blatantly
misclassified as 'exempt'" and "regularly worked in excess of 40
hours per week and were not paid time and one half for any and all
hours over 40 in a given week."  Attorney Brian Schaffer, who
represents the workers, said he would seek to have the lawsuit
certified as a collective action in order to recover unpaid wages,
liquidated damages, attorneys' fees, costs and interest for
current and former Merrill Lynch Derivatives Settlement
Specialists who elect to opt-in to the legal action and who have
been employed by Merrill Lynch at any time within the past three
years.

                       About Merrill Lynch

Merrill Lynch & Co. Inc. -- http://www.ml.com/-- is a wealth
management, capital markets and advisory companies with offices in
40 countries and territories.  As an investment bank, it is a
leading global trader and underwriter of securities and
derivatives across a broad range of asset classes and serves as a
strategic advisor to corporations, governments, institutions and
individuals worldwide.  Merrill Lynch owns approximately half of
BlackRock, one of the world's largest publicly traded investment
management companies with more than $1 trillion in assets under
management.  Merrill Lynch's operations are organized into two
business segments: Global Markets and Investment Banking (GMI) and
Global Wealth Management (GWM).  GMI provides service global
markets and origination products and services to corporate,
institutional, and government clients around the world.  GWM
creates and distributes investment products and services for
individuals, small- and mid-size businesses, and employee benefit
plans.

As reported by the Troubled Company Reporter on September 15,
2008, Merrill has had tens of billions of dollars worth of risky,
illiquid assets carried on balance sheets that were leveraged at a
debt-to-equity ratio of more than 20 to one in the past 15 months.
The Wall Street Journal said that when the crisis started, the
assets kept deteriorating in value and couldn't easily be sold,
eating into the firm's capital cushion.  Merrill's balance sheet
topped $900 billion recently, WSJ added.  As reported by the TCR
on October 21, 2008, Merrill disclosed a
net loss from continuing operations for the third quarter of 2008
of $5.1 billion, compared with a net loss from continuing
operations of $2.4 billion for the third quarter of 2007.
Merrill's net loss for the third quarter of 2008 was
$5.2 billion, compared with a net loss of $2.2 billion, for the
year-ago quarter.


MICROMET INC: Gets Kingsbridge's Commitment for $75MM Financing
---------------------------------------------------------------
Micromet, Inc., disclosed in a regulatory filing that it has
entered into an agreement expanding its Committed Equity Financing
Facility with Kingsbridge Capital Limited, a private investment
group.

Under the terms of the agreement, Kingsbridge has committed to
provide up to $75 million of capital during the next three years
through the purchase of newly-issued shares of Micromet's common
stock.  Micromet has no obligation to access the facility and will
have full control over the amount and the timing of any financing
under the facility, subject to certain conditions.  This agreement
replaces the company's 2006 CEFF agreement under which Kingsbridge
had committed up to $25 million of capital.  The company did not
raise capital under the 2006 CEFF.

"We believe that the closing of our recent $40 million PIPE
financing puts us in a strong financial position," Dr. Christian
Itin, president and CEO of Micromet, stated.  "The expanded CEFF
provides Micromet with additional financial strength and
flexibility, which has never been more important than in the
current financial environment."

Key provisions of the CEFF are:

   -- After the SEC declares effective the registration statement
      to be filed by Micromet covering the resale of the shares
      of common stock issuable in connection with the new CEFF,
      Micromet can access up to $75 million from Kingsbridge
      through Dec. 1, 2011, in exchange for newly-issued shares
      of Micromet's common stock, subject to the terms of the
      CEFF.  The maximum amount of the new CEFF will be reduced
      by any amounts drawn down on the August 2006 CEFF prior to
      the date on which the SEC declares the registration
      statement effective.  To date, Micromet, has not drawn down
      any amounts under the August 2006 CEFF.

   -- The maximum number of shares that Micromet can sell to
      Kingsbridge under the new CEFF is 10,104,919, and will be
      reduced by any shares issued under the August 2006 CEFF
      prior to the date on which the SEC declares the
      registration statement for the new CEFF effective.

   -- Micromet may access capital under the new CEFF in tranches
      of up to the greater of (a) a percentage of Micromet's
      market capitalization as determined at the time of the draw
      down of the tranche (which percentage ranges from 1.0% to
      1.5% depending upon the company's market capitalization at
      the time of the draw down) or (b) four times the average
      trading volume of the company's common stock for a
      specified period prior to the draw down notice, multiplied
      by the closing price of the common stock on the trading day
      prior to the draw down notice, in each case subject to
      certain conditions, provided that the maximum amount of any
      tranche is limited to $10 million.  Each tranche will be
      issued and priced over an eight-day pricing period.
      Kingsbridge will purchase shares of common stock pursuant
      to the new CEFF at discounts ranging from 6% to 14%
      depending on the average market price of the common stock
      during the eight-day pricing period, provided that if the
      average market price on any day during the pricing period
      is less than the greater of $2.00 or 85% of the closing
      price of the day preceding the first day of the pricing
      period, then such day would not be used in determining the
      number of shares that would be issued in the draw down and
      the aggregate amount of such draw down would be decreased
      by one-eighth.

   -- Throughout the term of the agreement, Kingsbridge is
      restricted from engaging in any shorting transaction of
      Micromet's common stock.

   -- Micromet is not obligated to utilize any of the $75 million
      available under the CEFF and there are no minimum
      commitments or minimum use penalties.  The CEFF agreement
      does not contain any restrictions on Micromet's operating
      activities, automatic pricing resets or minimum market
      volume restrictions.

   -- The agreement does not prohibit Micromet from conducting
      additional debt or equity financings, other than financings
      similar to the CEFF.

   -- In connection with the new CEFF, Micromet issued a warrant
      to Kingsbridge to purchase up to 135,000 shares of common
      stock at an exercise price of $4.44 per share, which
      represents a 10% premium over the average of the closing
      prices of Micromet's common stock during the five trading
      days immediately preceding the signing of the agreement.
      The warrant will become exercisable on June 1, 2009.  The
      warrant will remain exercisable, subject to certain
      exceptions, until June 1, 2014.  In connection with the
      August 2006 CEFF, the company issued to Kingsbridge a
      warrant to purchase up to 285,000 shares of common stock at
      an exercise price of $3.2145 per share, which warrant is
      not affected by the new CEFF.  The securities issuable in
      connection with the new CEFF and upon the exercise of the
      warrants issued to Kingsbridge have not been registered
      under the Securities Act of 1933 and may not be offered or
      sold in the United States absent registration under the
      Securities Act of 1933 and applicable state securities laws
      or available exemptions from registration requirements.
      Micromet has agreed to file a registration statement for
      the resale of the shares of common stock issuable in
      connection with the new CEFF and the shares of common stock
      underlying the warrants before Jan. 30, 2009.

A full-text copy of the COMMON STOCK PURCHASE AGREEMENT is
availabled for free at:

               http://ResearchArchives.com/t/s?3818

A full-text copy of the REGISTRATION RIGHTS AGREEMENT is
availabled for free at:

               http://ResearchArchives.com/t/s?3819

A full-text copy of the WARRANT is availabled for free at:

               http://ResearchArchives.com/t/s?381a

                       About Micromet Inc.

Micromet Inc. (Nasdaq: MITI) -- http://www.micromet-inc.com/-- is
a biopharmaceutical company developing novel, proprietary
antibodies for the treatment of cancer, inflammation and
autoimmune diseases.  Four of its antibodies are currently in
clinical trials, while the remainder of the product pipeline is in
preclinical development.

For the three months ended Sept. 30, 2008, Micromet reported a
net loss of $12.9 million, or $0.31 per basic and diluted common
share, compared to a net loss of $2.3 million, or $0.06 per basic
and diluted common share, for the same period in 2007. The net
loss for the three months ending September 30, 2008 includes a
non-cash charge of $6.8 million reflecting a change in the fair
value of warrants issued in connection with a 2007 PIPE financing.
The company recorded a $1.2 million non-cash gain for this item in
the third quarter of 2007.

For the nine months ended Sept. 30, 2008, Micromet reported a
net loss of $27.4 million, or $0.67 per basic and diluted common
share, compared to a net loss of $16.3 million, or $0.47 per basic
and diluted common share, for the same period in 2007. The net
loss for the nine months ending September 30, 2008 includes a non-
cash charge of $8.5 million reflecting a change in the fair value
of warrants issued in connection with a 2007 PIPE financing,
compared to a $1.7 million non-cash gain for this item in the same
period of 2007.

At Sept. 30, 2008, the company's balance sheet showed total assets
of $39.0 million, total liabilities of $37.1 million and
stockholders' equity of about $1.9 million.

The company has cash and cash equivalents of $15.9 million and
$27.1 million as of Sept. 30, 2008, and Dec. 31, 2007.  The
decrease resulted from its net loss of $27.4 million for the nine
months ended Sept. 30, 2008, partially offset by $14.2 million in
non-cash expenses and $4.5 million in changes in working capital.

                       Going Concern Doubt

The company disclosed in its Form 10-Q for the second quarter of
2008, that as of June 30, 2008, it had an accumulated deficit of
$179.4 million, and that it expects to continue to incur
substantial, and possibly increasing, operating losses for the
next several years.  These conditions create substantial doubt
about our ability to continue as a going concern.

The company is continuing its efforts in research and development,
preclinical studies and clinical trials of its product candidates.
These efforts, and obtaining requisite regulatory approval prior
to commercialization, will require substantial expenditures.  Once
requisite regulatory approval has been obtained, substantial
additional financing will be required to manufacture, market and
distribute its products in order to achieve a level of revenues
adequate to support its cost structure.

Management believes it has sufficient resources to fund its
required expenditures into the second quarter of 2009, without
considering any potential milestone payments that it may receive
under current or future collaborations, or any future capital
raising transactions or drawdowns from the committed equity
financing facility with Kingsbridge Capital Limited.


MID-TENNESSEE ZINC: Case Summary & 20 Largest Unsecured Creditors
-----------------------------------------------------------------
Debtor: Mid-Tennessee Zinc Corporation
        120 Zinc Mine Circle
        Gordonsville, TN 38563

Bankruptcy Case No.: 09-00390

Type of Business: The company operates a mining company.

Chapter 11 Petition Date: January 15, 2009

Court: Middle District of Tennessee (Cookeville)

Judge: George C. Paine II

Debtor's Counsel: B. Gail Reese, Esq.
                  greese@wyattfirm.com
                  Wyatt, Tarrant & Combs, LLP
                  2525 West End, Ste. 1500
                  NAashville, TN 37203
                  Tel: (615) 251-6673
                  Fax: (615) 256-1726

Estimated Assets: Less than $50,000

Estimated Debts: $10 million to $50 million

The Debtor's Largest Unsecured Creditors:

   Entity                                        Claim Amount
   ------                                        ------------
Dynatec Mining Corporation                       $5,417,857
2200 South 4000 West
Salt Lake City, UT 84120

DUX Machinery Corporation                        $907,204
615 Lavoisier
Repertigny, QC J6A 7N2

BTE USA, LLC                                     $325,078
6 Cowan Valley Lane
Hickman, TN 38567

Oldenburg Goup Inc.                              $315,790

Heartland Pump Rental & Sales, Inc.              $314,103

Brunner & Lay                                    $264,601

Harris Electric                                  $166,681

GCR Tire Center                                  $147,977

Nashville Rubber & Gasket                        $113,296

Smith County Trustee                             $112,155

Jennmar Corp.                                    $111,743

J&T Service                                      $104,140

Rankin Oil Company                               $100,508

Bullard Machine                                  $93,707

Outotec (USA), Inc.                              $91,782

Murray Guard, Inc.                               $82,232

Sandvik Mining & Construction USA,               $74,996
LLC

Blue Ridge Hydraulics                            $74,236

P.R. Engineering Limited                         $74,104

Anixter                                          $71,969

The petition was signed by Ian MacNeily, executive vice
president and chief financial officer


MEDCOMSOFT INC: To Liquidate Under Canada's Insolvency Act
----------------------------------------------------------
MedcomSoft Inc. said that, in accordance with the terms of the
Notice of Intention to Make a Proposal to Creditors under the
Bankruptcy and Insolvency Act (Canada) that it had filed on
November 3, 2008, the Company has been unable to conclude a
transaction that would allow for the continuation of its
operations and, as a result, has proceeded into bankruptcy.

The Interim Chief Executive Officer, Mr. Robert Wilson and the
Chief Financial Officer, Mr. Nick Clemenzi, have resigned as
Officers of the Company effective January 16, 2009.
Responsibility for the Company has been transferred to Mr. Ira
Smith, as Trustee.

"Although a number of prospective investors expressed an interest
in acquiring some or all of the assets of the Company, I regret
that a satisfactory transaction could not be concluded in the time
that was available to us," noted Robert Wilson. "While Nick and I
will remain available to assist in the next stage of the process,
the Trustee now has the full authority to deal with these and
other expressions of interest."

      Contacts:

      Ira Smith Trustee & Receiver Inc.
      Mr. Ira Smith
      Tel: (905) 738-4167 x111

                         About MedcomSoft

Headquartered in Toronto, Ontario, MedcomSoft Inc. (TSE:MSF) --
http://www.medcomsoft.com/-- develops and distributes software
solutions to the healthcare industry in Canada and United States.
The company develops, markets, licenses and supports healthcare
software solutions to the office-based or ambulatory care market
designed with improving the quality of patient care.  MedcomSoft's
products include MedcomSoft record UE and MedcomSoft clinical data
repository.  Its subsidiaries include MedcomSoft Corporation,
MedcomSoft Australia Pty Ltd. and BNK Informatics Canada Inc.


MEMPHIS HEALTH: Moody's Withdraws 'Ca' Underlying Rating
--------------------------------------------------------
Moody's Investors Service has withdrawn the Ca underlying rating
on the Memphis Health, Educational, And Housing Facilities Board
Multifamily Housing Revenue Bonds, Series 2000A (Hickory Pointe
Apts.)  The rating was withdrawn due to the Trustee's acceleration
of the maturity of the Series A bonds effective January 9, 2009.
Pursuant to the Notice of the Acceleration of the Bonds provided
by the Trustee, the Series A bonds were called in full at 100% on
January 9, 2009, and paid from the funds hel by the Trustee from
the project's liquidation proceeds and funds provided by MBIA
(current financial strength rating is Baa1, with a DEV outlook) in
accordance with a bond insurance policy.  The trustee also
indicated that there will be no additional distributions and no
further notices issued with respect to the Series 2000A bonds.
Moody's does not rate the Subordinate Series 2000B bonds.

The last rating action was on July 8, 2008, when the rating of the
Memphis Health, Educational, And Housing Facilities Board
Multifamily Housing Revenue Bonds, Series 2000A (Hickory Pointe
Apts.) was downgraded to Ca from Caa3 with a negative outlook.


MF GLOBAL: Moody's Downgrades Preferred Stock Rating to 'Ba1'
-------------------------------------------------------------
Moody's Investors Service downgraded to Baa2 from Baa1 the long-
term issuer rating of MF Global Ltd.  The outlook was changed to
stable from negative.

According to Moody's, the primary reason for the downgrade is a
weakening in MF Global's earnings generation ability as a result
of both cyclical headwinds in industry trading volumes, as well as
a substantial reduction in client balances over the past several
quarters at MF Global.  Reflecting these factors, Moody's expects
MF Global's transaction and net interest revenues to continue to
come under pressure over the coming quarters, hurting the
company's profitability.

"The current uncertainty in the financial markets means that the
probability of a more severe contraction in client activity
exceeds the likelihood of a speedy recovery," said Moody's analyst
Alexander Yavorsky.  "The rating action incorporates the negative
effects of plausible downside scenarios on MF Global's
profitability and financial flexibility."

Moody's believes that despite the loss of customer balances and
lower trading volumes, MF Global's franchise has largely
stabilized and continues to benefit from its leading market share
in futures brokerage across multiple underlying asset classes.
This augurs well for MF Global's ability to return to stronger
profitability when market conditions improve in the longer-term.
At the same time, MF Global's franchise ultimately relies on
customer and counterparty confidence, which is especially fragile
for many financial institutions in the current time of stress.
This vulnerability of the business model is a contributing factor
to the downgrade.

Moody's also noted that MF Global's credit profile continues to
benefit from its liquid and well-capitalized balance sheet.  MF
Global does not have exposures to illiquid or risky assets, and
has a conservative and nimble approach to managing its daily
liquidity needs.  These characteristics, combined with the
establishment of a more sound long-term capital structure in 2008,
enabled the company to navigate a very difficult environment over
the last 12 months.

The assigned Baa2 rating and stable outlook incorporate Moody's
expectation that MF Global will continue to have a conservative
risk appetite.  The substantial declines in MF Global's customer
balances over the last several quarters combined with low short-
term interest yields have caused a decline in MF Global's net
interest revenue -- a trend that may continue for several
quarters.  Notwithstanding these revenue pressures, Moody's
expects that MF Global's practice of eschewing undue credit risk
(including large margin exposures or risky investments), as well
as market and liquidity risk (such as duration mismatches in its
matched book or investments portfolio) to remain in place.  Should
this change, this would increase the risk profile of the company
and would consequently exert negative pressure on the rating.

MF Global has taken tangible and meaningful steps toward improving
its risk management practices since its trading loss in February
2008.  In particular, this regards operational risk -- a
characteristic of MF Global's business model given the real-time
and complex nature of its technology systems and processes. MF
Global has strengthened its risk management, compliance, and
operations management teams and has implemented a number of
important enhancements to its processes for monitoring and
controlling operational risk.  Although this process is still
ongoing, management's commitment to improving risk management, and
the investments that have already been made, are a positive offset
to the vulnerabilities revealed by last year's risk management
failure.

The last rating action on MF Global was on June 18, 2008 when its
issuer rating was confirmed at Baa1 and assigned a negative
outlook.

MF Global Ltd. is a New-York based broker with leading market
share in traded contract volume at many of the world's largest,
most active commodities and futures exchanges.  For the fiscal
2008 (ended March 31st), the company reported $1.6 billion in net
revenue.

These ratings were downgraded:

Issuer: MF Global Ltd.

  -- Issuer Rating, Downgraded to Baa2 from Baa1

  -- US$150M Preference Stock Preference Stock, Downgraded to Ba1
     from Baa3

  -- US$210M 9% Senior Unsecured Conv./Exch. Bond/Debenture Due
     2038, Downgraded to Baa2 from Baa1

Outlook Actions:

Issuer: MF Global Ltd.

  -- Outlook, Changed To Stable from Negative


MILLENNIUM NEW: Moody's Junks Corporate Family Rating from 'B3'
---------------------------------------------------------------
Moody's Investors Service downgraded the corporate family and
probability of default ratings for Millennium New Jersey Holdco,
LLC to Caa2 from B3 and placed all ratings under review for
further possible downgrade.  Moody's anticipates that the fourth
quarter 2008 compliance certificate, which management must provide
to lenders by the end of March, will show a breach of the maximum
leverage covenant within Millennium's first lien credit agreement.
Dislocation in the financial markets may compound challenges in
achieving an amendment, which heightens default risk.
Furthermore, perceived erosion of asset value in the broadcast
sector would likely negatively impact lender recovery in a
restructuring scenario.

Moody's September 2008 downgrade of Millennium's ratings and the
negative outlook assigned at that time incorporated the likely
covenant breach, and Moody's continue to believe leverage will
exceed the maximum amount permitted by the covenant.  The passage
of time with no resolution, as well as expectations that cash flow
will deteriorate in 2009 due to continued declines in advertising
spending prompted the action.

The review for further possible downgrade will focus on the
company's ability to secure an amendment that alleviates covenant
pressure and the resultant impact on its liquidity (i.e., upfront
costs and/or increased future debt service costs), or to otherwise
restructure its debt, which could result in less than full lender
recovery, in Moody's view.

Millennium New Jersey Holdco, LLC

  -- Probability of Default Rating, Downgraded to Caa2 from B3,
     Under Review for Further Downgrade

  -- Corporate Family Rating, Downgraded to Caa2 from B3, Under
     Review for Further Downgrade

  -- Senior Secured First Lien Bank Credit Facility, Downgraded
     to Caa1, LGD3, 37%, from B2, Under Review for Further
     Downgrade

  -- Senior Secured Second Lien Bank Credit Facility, Downgraded
     to Ca, LGD5, 89% from Caa2, Under Review for Further
     Downgrade

  -- Outlook, Changed To Rating Under Review From Negative

In Moody's opinion, Millennium lacks the necessary liquidity to
manage through the economic downturn absent an amendment to its
credit agreement or some form of debt restructuring.  The Caa2
corporate family rating reflects expectations that Millennium's
leverage will rise from an already high 8 times debt-to-EBITDA due
to cyclical and secular pressures facing the radio industry, as
well as the company's geographic concentration and lack of scale.
Strong EBITDA margins (in the mid 40% range) and Millennium's
leading positions in its targeted markets support the ratings.

Moody's most recent rating action concerning Millennium occurred
September 15, 2008. At that time Moody's lowered the corporate
family rating to B3 from B2 and changed the ratings outlook to
negative from stable.

Millennium Radio Group, LLC, the parent company of Millennium New
Jersey Holdco LLC, operates twelve radio stations throughout New
Jersey.  It maintains its headquarters in Lawrenceville, New
Jersey, and its annual gross revenue is approximately
$50 million.


MONA LISA: Case Summary & 20 Largest Unsecured Creditors
--------------------------------------------------------
Debtor: Mona Lisa at Celebration, LLC
        225 Celebration Place
        Celebration, FL 34747

Bankruptcy Case No.: 09-00458

Debtor-affiliates filing separate Chapter 11 petitions:

        Entity                                     Case No.
        ------                                     --------
Mona Lisa Suite Hotel LLC                          09-00459
Mona Lisa Development, LLC                         09-00460
MJLF Celebration, LLC                              09-00462

Type of Business: The Debtors operate hotel and restaurant.

                  See: http://www.monalisasuitehotel.com/

Chapter 11 Petition Date: January 15, 2009

Court: Middle District of Florida (Orlando)

Judge: Karen S. Jennemann

Debtor's Counsel: R. Scott Shuker, Esq.
                  bankruptcynotice@lseblaw.com
                  Latham Shuker Eden & Beaudine LLP
                  Post Office Box 3353
                  Orlando, FL 32802
                  Tel: (407) 481-5800
                  Fax: (407) 481-5801

Estimated Assets: $10 million to $50 million

Estimated Debts: $10 million to $50 million

The Debtor's Largest Unsecured Creditors:

   Entity                      Nature of Claim   Claim Amount
   ------                      ---------------   ------------
Shumaker Loop & Kendrick       legal fees        $255,657
101 E. Kennedy Blvd.
Tampa, FL 33602-5151

Graebel Orlando Movers Inc.    trade debt        $161,852
68 Kingspointe Parkway
Suite 100
Orlando, FL 32819

Jayco International LLC        trade debt        $139,732
7451 Brokerage Drive
Orland, FL 32809

Art Fame Direct                trade debt        $96,118

Baker Barrios Architect Inc.   trade debt        $51,994

CBREI Investors AFF OCERS      trade debt        $36,444

Handrail Design Inc.           trade debt        $35,269

Down-Lite International        trade debt        $28,637

Lodgenet Entertainment         trade debt        $27,897

Kapila & Company               accounting fees   $25,200

OrlanTech Inc.                 trade debt        $24,562

OOCCVB                         trade debt        $20,111

Micro of Central Florida       trade debt        $18,768

American Express               trade debt        $18,589

Nilfisk-Advance Inc.           trade debt        $17,050

Sealy Mattress Company         trade debt        $16,980

Baltic Linen Company Inc.      trade debt        $16,623

Water Mgmt. Consultants        trade debt        $15,750

AAA                            trade debt        $15,429

AAA Auto Club South            trade debt        $12,764

The petition was signed by William E. Haberman, manager of
Mona Lisa Development.


PARENT CO: Nasdaq Removes Securities From Trading
-------------------------------------------------
The NASDAQ Stock Market said January 15, 2009, that it will delist
the common stock of The Parent Company.  The Parent Company's
stock was suspended on January 8, 2009 and has not traded on
NASDAQ since that time.

NASDAQ will file a Form 25 with the Securities and Exchange
Commission to complete the delisting. The delisting becomes
effective ten days after the Form 25 is filed.

                     About The Parent Company

Headquartered in Denver, Colorado The Parent Company --
http://www.etoys.com-- sells toys and children's products through
its Web sites.  Debtor-affiliate Parent Company is publicly traded
on the NASDAQ under the ticker symbol KIDS.  The Debtors lease two
distribution centers in Blairs, Virginia, which holds inventory
and ship products, and Ringgold, Virginia, which is used primarily
for ship-alone items off-site storage.  The company and eight of
its affiliates filed for Chapter 11 protection on December 28,
2008 (Bankr. D. Del. Lead Case No. 08-13412).  Laura Davis Jones,
Esq., and Michael Seidl, Esq., at Pachulski Stang Ziehl & Jones
LLP, represent the Debtors.  The Debtors proposed Clear Thinking
Group LLC as financial advisor; Omni Management Group LLC as
claims agent; and Gibson & Rechan LLC as chief restructuring
officer.  When the Debtors filed for protection from their
creditors, they listed $20,633,447 in total assets and
$35,722,280 in total debts.


NEOSE TECHNOLOGIES: Receives Nasdaq Additional Delisting Notice
---------------------------------------------------------------
Neose Technologies, Inc. received on January 12, 2009, an
additional Staff Determination from the Nasdaq Listing
Qualifications Department indicating that the Company's failure to
hold an annual meeting of stockholders during its fiscal year
ended December 31, 2008 constitutes an additional basis for
delisting the Company's common stock from the Nasdaq Global Market
pursuant to Marketplace Rules 4350(e), 4350(f) and IM-4350-8.

During 2008, the Company received a number of Staff Determinations
from the Department indicating deficiencies related to its failure
to satisfy certain Nasdaq listing standards. An appeal hearing was
held on December 18, 2008 before the Nasdaq Listing Qualifications
Panel.  The Panel will consider this additional deficiency in
rendering its decision.

There can be no assurance that the Panel will grant the Company's
request for continued listing, particularly in view of the
multiple deficiencies that have been raised by the Department. In
the event that the Panel denies the Company's request for
continued listing on the Nasdaq Global Market, the Company expects
that its common stock will be eligible to trade on the OTC
Bulletin Board or Pink OTC Markets Inc.

                  About Neose Technologies, Inc.

Horsham, Pa.-based Neose Technologies, Inc. --
Http://www.neose.com/ -- is a clinical-stage biopharmaceutical
company focused on the development of next-generation therapeutic
proteins that are competitive with best-in-class protein drugs
currently on the market. The lead candidates in its pipeline,
GlycoPEG-GCSF for chemotherapy-induced neutropenia, and the
GlycoPEGylated hemostasis compounds Factor VIIa, Factor VIII, and
Factor IX, target markets with aggregate 2006 sales of
approximately $8 billion.


NORTEL NETWORKS: Delaware Court OKs $75-Mil. Intercompany Loan
--------------------------------------------------------------
Nortel Networks Inc., obtained approval from the U.S. Bankruptcy
Court for the District of Delaware to loan $75 million to its
Canada-based parent Nortel Networks Limited.

Nortel Networks, Inc. and Nortel Networks Ltd. are parties to a
$1 billion revolving loan agreement dated March 21, 2008, which
permits NNL to borrow funds on an as-needed basis.

Derek C. Abbott, Esq., at Morris, Nichols, Arsht & Tunnell LLP, in
Wilmington, Delaware, the Debtors' proposed counsel, relates
that while a substantial loan balance has existed and fluctuated
in amount over time, the intercompany balance as of January 13,
2009 owed by NNL to NNI is about $295,982,134 -- the NNL Loan
Receivable.

On an interim basis, NNI and its U.S. affiliates sought and
obtained Judge Kevin Gross' consent to enter into the NNL Revolver
and to lend funds pursuant to the terms of the NNL Revolver
Agreement; provided that the Maximum Facility Amount will be
limited to $75 million which may be advanced to NNL for use by
NNL or its affiliates that are applicants in the insolvency
proceedings under the Companies' Creditors Arrangement Act in
Canada.

The U.S. Debtors are expected to seek approval for an increase in
the Maximum Facility Amount of $200 million in accordance with the
terms of the NNL Revolver at the final hearing.

Mr. Abbott says the Revolver Facility is expected to benefit both
NNI and NNL by maintaining NNL's ordinary course access to working
capital, and thereby avoiding additional fees and expenses
associated with third party financing, particularly given current
market conditions.

                         Carling Charges

Moreover, Nortel Networks Technology Corporation and NNL itself
are willing to pledge certain assets to secure the NNL Revolver.
In particular, NNL and NNTC are willing to grant, subject to the
approval of the Canadian Court and, with respect to the interest
of NNL, the consent of the owner of the land leased by NNL,
charges on all of the fee simple interest of NNTC and leasehold
interest of NNL in a research and development facility located at
3100 Carling Avenue, Ottawa, Canada, which was valued at
C$288,750,000 as of December 21, 2007 in a third party appraisal.

The Carling Charges will:

  -- rank subordinate only to the Administrative Charge sought
     to be approved by the Canadian Court and other encumbrances
     as may currently exist on the title to the Carling
     Facility; and

  -- may not be otherwise primed without the written consent of
     NNI and authorization from the Bankruptcy Court.

Under the NNL Revolver, $75 million will be immediately available
for borrowing upon approval of the Canadian Court and the
Bankruptcy Court, and the remainder is available upon obtaining
consent to the Carling Charges.

To the extent the proceeds realized from the Carling Facility are
insufficient to satisfy NNL's obligations under the NNL Revolver,
any deficiency shall be deemed an intercompany reimbursement
claim entitled to the security of an intercompany charge.  The
Carling Charges and the Intercompany Charge will secure any
outstanding balance under the NNL Revolver.

NNI believes that the making of the advance on a secured basis is
a proper and beneficial use of its assets under Section 363(c) of
the Bankruptcy Code, consistent with its prior ordinary course
business practices.

The Delaware Court will convene a hearing on February 5, 2009,
to consider the Debtors' request, on a final basis.  Parties who
wish to object have until January 30 to file written objections
to the Delaware Court.

                         About Nortel Networks

Headquartered in Ontario, Canada, Nortel Networks Corporation
(NYSE/TSX: NT) -- http://www.nortel.com/-- delivers next-
generation technologies, for both service provider and enterprise
networks, support multimedia and business-critical applications.
Nortel's technologies are designed to help eliminate today's
barriers to efficiency, speed and performance by simplifying
networks and connecting people to the information they need, when
they need it.  Nortel does business in more than 150 countries
around the world.  Nortel Networks Limited is the principal direct
operating subsidiary of Nortel Networks Corporation.

Nortel Networks Corp., Nortel Networks Inc. and other affiliated
corporations in Canada sought insolvency protection under the
Companies' Creditors Arrangement Act in the Ontario Superior Court
of Justice (Commercial List).  Ernst & Young has been appointed to
serve as monitor and foreign representative of the Canadian Nortel
Group.  The Monitor also sought recognition of the CCAA
Proceedings in the Bankruptcy Court under Chapter 15 of the
Bankruptcy Code.

Nortel Networks Inc. and 14 affiliates filed separate Chapter 11
petitions on January 14, 2009 (Bankr. D. Del. Case No. 09-10138).
Judge Kevin Gross presides over the case.  James L. Bromley, Esq.,
at Cleary Gottlieb Steen & Hamilton, LLP, in New York, serves as
general bankruptcy counsel; Derek C. Abbott, Esq., at Morris
Nichols Arsht & Tunnell LLP, in Wilmington, serves as Delaware
counsel.  The Chapter 11 Debtors' other professionals are Lazard
Freres & Co. LLC as financial advisors; and Epiq Bankruptcy
Solutions LLC as claims and notice agent.

The Chapter 15 case is Bankr. D. Del. Case No. 09-10164.  Mary
Caloway, Esq., and Peter James Duhig, Esq., at Buchanan Ingersoll
& Rooney PC, in Wilmington, Delaware, serves as Chapter 15
petitioner's counsel.

Certain of Nortel's European subsidiaries have also made
consequential filings for creditor protection.  The Nortel
Companies related in a press release that Nortel Networks UK
Limited and certain subsidiaries of the Nortel group incorporated
in the EMEA region have each obtained an administration order
from the English High Court of Justice under the Insolvency Act
1986.  The applications were made by the EMEA Subsidiaries under
the provisions of the European Union's Council Regulation (EC)
No. 1346/2000 on Insolvency Proceedings and on the basis that
each EMEA Subsidiary's centre of main interests is in England.
Under the terms of the orders, representatives of Ernst & Young
LLP have been appointed as administrators of each of the EMEA
Companies and will continue to manage the EMEA Companies and
operate their businesses under the jurisdiction of the English
Court and in accordance with the applicable provisions of the
Insolvency Act.

Several entities, particularly, Nortel Government Solutions
Incorporated and Nortel Networks (CALA) Inc., have material
operations and are not part of the bankruptcy proceedings.

As of September 30, 2008, Nortel Networks Corp. reported
consolidated assets of $11.6 billion and consolidated liabilities
of $11.8 billion.  The Nortel Companies' U.S. businesses are
primarily conducted through Nortel Networks Inc., which is the
parent of majority of the U.S. Nortel Companies.  As of
September 30, 2008, NNI had assets of about $9 billion and
liabilities of $3.2 billion, which do not include NNI's guarantee
of some or all of the Nortel Companies' about $4.2 billion of
unsecured public debt.

Bankruptcy Creditors' Service, Inc., publishes Nortel Networks
Bankruptcy News.  The newsletter tracks the chapter 11 proceeding
and ancillary foreign proceedings undertaken by Nortel Networks
Corp. and its various affiliates. (http://bankrupt.com/newsstand/
or 215/945-7000)


PARENT CO: Creditors Panel Wants Auction Delayed to Enable Probe
----------------------------------------------------------------
The official committee of unsecured creditors of The Parent Co.,
has asked the U.S. Bankruptcy Court for the District of Delaware
to delay for three weeks, the Debtor's proposed sale of its
business or assets.

The Creditors Committee, according to Bloomberg's Bill Rochelle,
says it needs more time to investigate whether sufficient
marketing took place before the Chapter 11 filing.

As reported by the Troubled Company Reporter, the Parent Company
and its debtor-affiliates have submitted to the Bankruptcy Court
procedures for the auction and sale of substantially all of their
assets.  The Debtors have targeted a Jan. 28 auction for its
assets and a Jan. 23 deadline to submit bids.

                     About The Parent Company

Headquartered in Denver, Colorado The Parent Company --
http://www.etoys.com-- sells toys and children's products through
its websites.  Debtor-affiliate Parent Company is publicly traded
on the NASDAQ under the ticker symbol KIDS.  The Debtors lease two
distribution centers in Blairs, Virginia, which holds inventory
and ship products, and Ringgold, Virginia, which is used primarily
for ship-alone items off-site storage.  The company and eight of
its affiliates filed for Chapter 11 protection on December 28,
2008 (Bankr. D. Del. Lead Case No. 08-13412).  Laura Davis Jones,
Esq., and Michael Seidl, Esq., at Pachulski Stang Ziehl & Jones
LLP, represent the Debtors.  The Debtors proposed Clear Thinking
Group LLC as financial advisor; Omni Management Group LLC as
claims agent; and Gibson & Rechan LLC as chief restructuring
officer.  When the Debtors filed for protection from their
creditors, they listed $20,633,447 in total assets and
$35,722,280 in total debts.


PRECISION PARTS: To Auction Off All Assets on Feb. 23
-----------------------------------------------------
Precision Parts International Services Corp., and its affiliated
debtors received permission from the U.S. Bankruptcy Court for the
District of Delaware to sell their business at an auction.

Bloomberg's Bill Rochelle said that the Court approved a schedule
two weeks slower than what the company had originally proposed.
The Court approved a:

     -- a Feb. 20 deadline to submit bids;

     -- a Feb. 23 auction if multiple bids are received; and

     -- a hearing to consider approval of the results of the
        auction on Feb. 25.

While it has not selected a stalking horse bidder or signed a deal
with any party, Precision Parts has said that it is talking with
three possible buyers.

The Debtors' postpetition financing terminates on March 2, 2009,
and the financing order provides for liquidation of the Debtors'
assets.  The Debtors relate that without an immediate sale, under
current economic conditions, the Debtors will be unable to
continue to operate their business and will be forced to close,
causing economic harm to all creditors and resulting in a
significant loss of jobs.

The assets to be sold, together or separately, to one or more
bidders, are substantially all of the assets of the Debtors,
including without limitation, each of the Debtors' owned
facilities, all inventories, all of the Debtors' tangible assets
used in the business, all of the Debtors' rights in and to assumed
executed contracts and unexpired leases, all of the Debtors'
interest in intellectual property used in the business, all of the
Debtors' other intangible property, excluding, however, any causes
of action arising under Chapter 5 of the Bankruptcy Code, and all
business records.

                       About Precision Parts

Headquartered in Rochester Hills, Michigan, Precision Parts
International Services Corp. -- http://www.precisionparts.com/ --
sells products to major north American automotive and non-
automotive original equipment manufacturers and Tier 1 and 2
suppliers.  The Debtors operate six manufacturing facilities
throughout north America, including a facility in Mexico operated
on the Debtors' behalf by Intermex Manufactura de Chihuahua under
a shelter and logistics agreement.

The Debtors' operations consist of two distinct lines of business:
MPI, which performs fineblanking work and conventional metal
stamping, as well as a range of value-added finishing operations,
and Skill which performs conventional metal stamping, as well as a
range of assembly and value-added finishing operations.

Four of the Debtors are holding companies that have no employees
and are not involved in the Debtors' day-to-day operations: PPI
Holdings, Inc.; PPI Sub-Holdings, Inc.; MPI International
Holdings, Inc.; and Skill Tool & Die Holdings Corp.

The company and eight of its affiliates filed for Chapter 11
protection on Dec. 12, 2008 (Bankr. D. Del. Lead Case No.
08-13291).  David M. Fournier, Esq., at Pepper Hamilton LLP; and
Robert S. Hertzberg, Esq., and Deborah Kovsky-Apap, Esq., at
Pepper Hamilton LLP, represent the Debtors in their restructuring
efforts.  The Debtors proposed Alvarez & Marsal North America LLC
as financial advisor and Kurtzman Carson Consultants LLC as
notice, claims and balloting agent.  When the Debtors filed for
protection from their creditors, they listed assets of between
$100 million to $500 million each.

According to Bloomberg News, the company is at least the 10th
auto-parts maker that sought Chapter 11 protection from its
creditors this year.


PENN OCTANE: Net Loss Lowers to $462,000 in Qtr. Ended Sept. 30
---------------------------------------------------------------
Penn Octane Corporation's balance sheet at Sept. 30, 2008, showed
total assets of $53,262,000, total liabilities of $49,909,000 and
stockholders' equity $3,353,000.

For three months ended Sept. 30, 2008, the company posted net loss
of $462,000 compared with net loss of $618,000 for the same period
in the previous year.

For nine months ended Sept. 30, 2008, the company posted net loss
of $863,000 compared with net loss of $2,838,000 for the same
period in the previous year.

As of Sept. 30, 2008, Rio Vista Energy Partners, L.P., its
subsidiary had approximately $968,000 of cash available and short-
term debt obligations of $11.8 million due within the next 12
months.  In addition, TCW could demand repayment of up to $2.2
million beginning Jan. 1, 2009, under the TCW Credit Facility.
The company will need to obtain additional sources of funding to
continue its operations, which may include debt or equity
financing, selling assets or entering into another strategic
transaction.  However, the company may not be able to obtain any
financing on terms reasonably acceptable to it, or at all.  If the
company is unable to generate sufficient revenues or obtain
financing to fund its operations, it may be required to close
certain or all of its operations or seek protection under the U.S.
bankruptcy laws.  The TCW Credit Facility which is owed by Rio
Vista Penny LLC and subsidiaries is non-recourse to Rio Vista.

                        TCW Credit Facility

The TCW Credit Facility is a $30,000,000 senior secured credit
facility available to Rio Vista Penn LLC with a maturity date of
Aug. 29, 2010.  The amount of the initial draw under the facility
was $21,700,000, consisting of $16,750,000 in assumption of the
existing indebtedness in the principal amount of $16,500,000 plus
accrued but unpaid interest in the amount of $250,000 owed by GM
Oil to TCW, $1,950,000 in consideration for TCW to enter into the
TCW Credit Facility with Rio Vista Penny and for Rio Vista Penny
to purchase an overriding royalty interest held by an affiliate of
TCW, and $3,000,000 to fund the acquisition of the membership
interests of GO by Rio Vista GO.  TCW has also approved a plan of
development for the Oklahoma assets totaling approximately
$2,000,000, increased to $3,000,000, which was funded during
December 2007.  The TCW Credit Facility is secured by a first lien
on all of the Oklahoma assets and associated production proceeds
pursuant to the Note Purchase Agreement, Security Agreement and
related agreements, including mortgages of the Oklahoma assets in
favor of TCW.

The interest rate is 10.5%, increasing an additional 2% if there
is an event of default.  Payments under the TCW Credit Facility
are interest-only until Dec. 29, 2008.  The TCW Credit Facility
carries no prepayment penalty.  Rio Vista ECO LLC, an indirect
subsidiary of Rio Vista and the direct parent of Rio Vista Penny
and Rio Vista GO, Rio Vista GO, GO and MV have each agreed to
guarantee payment of the Notes payable to the lenders under the
TCW Credit Facility.

On Sept. 29, 2008, Rio Vista Penny entered into a First Amendment
to the Note Purchase Agreement with TCW.  Under the terms of the
First TCW Amendment, TCW agreed to fund Rio Vista Penny an
additional $1,000,000 under the TCW Credit Facility for certain
APOD costs as described in the First TCW Amendment.

In addition, under the terms of the First TCW Amendment, the
interest rate under the TCW Credit Facility increased from 10.5%
per annum to 12.5% per annum beginning July 1, 2008.  The interest
rate will revert back to 10.5% per annum beginning
Jan. 1, 2009, provided that Rio Vista Penny delivers to TCW an
Effective Rate Certificate, as defined under the First TCW
Amendment, which among other things certifies that no default
exists under the TCW Credit Facility and that the collateral
coverage ratio, as defined under the TCW Credit Facility, is at
least 1.5 to 1.0 as of the applicable date based on the results of
an engineering report due Dec. 1, 2008 with an effective date of
Nov. 1, 2008.

Under the terms of the First TCW Amendment, TCW agreed to change
the period for which a notice to demand repayment from Rio Vista
Penny of up to $2,200,000 of indebtedness under the TCW Credit
Facility from May 19, 2008, to Jan. 1, 2009, and Rio Vista Penny
also agreed to extend the demand repayment option on the
$2,200,000 through the date of maturity of the TCW Credit
Facility.

In addition, under the terms of the First TCW Amendment, TCW has
agreed to waive other defaults identified in the First TCW
Amendment which either occurred and were existing prior to the
date of the First TCW Amendment.

In addition, on Sept. 29, 2008, in connection with the TCW Credit
Facility, Rio Vista Penny, Rio Vista, Operating and TCW entered
into an Amended and Restated Management Services Agreement.  Under
the terms of the Amended MSA, Operating was named as manager of
the Oklahoma properties, replacing Northport Production Company,
an Oklahoma corporation, which was named as manager under the
original management services agreement.

A full-text copy of the 10-Q filing is available for free at:

                http://ResearchArchives.com/t/s?3826

                   About Penn Octane Corporation

Headquartered in Palm Desert, California, Penn Octane Corporation
(NASDAQ:POCC) -- http://www.pennoctane.com/-- formerly known as
International Energy Development Corporation buys, transports and
sells liquefied petroleum gas for distribution in northeast
Mexico, and resells gasoline and diesel fuel.  The company has a
long-term lease agreement for approximately 132 miles of pipeline,
which connects ExxonMobil Corporation's King Ranch Gas Plant in
Kleberg County, Texas and Duke Energy's La Gloria Gas Plant in Jim
Wells County, Texas, to the company's Brownsville Terminal
Facility.

                       Going Concern Doubt

As reported in the Troubled Company Reporter on May 4, 2006,
Burton McCumber & Cortez, L.L.P., Brownsville, Texas, raised
substantial doubt about Penn Octane's ability to
continue as a going concern after auditing the company's
consolidated financial statements for the year ended
Dec. 31, 2005.

Burton McCumber pointed to the company's insufficient cash flow to
pay its obligations when due, inability to obtain additional
financing because substantially all of the company's assets are
pledged or committed to be pledged as collateral on existing debt,
existing credit facility may be insufficient to finance its
liquefied petroleum gas and Fuel Sales Business, and working
capital deficiency.


PEPPERBALL TECH: Nasdaq Removes Securities From Trading
-------------------------------------------------------
The NASDAQ Stock Market has said it will delist the common stock
and warrants of PepperBall Technologies, Inc.

PepperBall Technologies, Inc.'s securities were suspended on
November 10, 2008 and have not traded on NASDAQ since that time.
NASDAQ will file a Form 25 with the Securities and Exchange
Commission to complete the delistings.  The delistings become
effective ten days after the Form 25 is filed.

                       About PepperBall

PepperBall Technologies, Inc., develops, manufactures and markets
non-lethal compliance technology products utilizing the company's
PepperBall(R) technology.  The PepperBall product line features
compressed air launchers and inert, training and oleoresin
capsicum powder projectiles that can be used by police officers,
correction officers, private security guards, and the military and
is currently being expanded to include consumer products.  The
company's wholly owned subsidiary, Vizer Group Inc., specializes
in product design, system design, engineering, installation, and
integration of facility security systems including access control,
video surveillance and intrusion detection.  PepperBall is based
out of the company's offices in San Diego, California, which also
serves as the company's headquarters and Vizer is based out of the
company's offices in Westminster, Colorado.


PERITUS I: Moody's Downgrades Ratings on Various Classes of Notes
-----------------------------------------------------------------
Moody's Investors Service announced that it has downgraded these
notes issued by Peritus I CDO Ltd. and insured by Assured Guaranty
Corp.:

  -- U.S.$246,000,000 Class A Floating Rate Notes Due May 24,
     2015, downgraded to Aa2; previously rated Aaa, on July 21,
     2008 placed under review for possible downgrade.

This rating reflects the current insurance financial strength
rating of Assured Guaranty Corp., which was downgraded to Aa2 on
November 21, 2008.  The above action is a result of, and is
consistent with, Moody's modified approach to rating structured
finance securities wrapped by financial guarantors as described in
the press release dated November 10, 2008.

In addition, Moody's has also downgraded these notes:

  -- U.S.$20,000,000 Class X Deferrable Amortizing Fixed Rate
     Notes Due May 24, 2015, downgraded to Baa3; previously on
     May 26, 2005 Moody's assigned A3;

  -- U.S.$8,000,000 Class B Deferrable Floating Rate Notes Due
     May 24, 2015, downgraded to Baa3; previously on May 26, 2005
     Moody's assigned Baa1;

  -- U.S.$64,000,000 Class C Deferrable Fixed Rate Notes Due
     May 24, 2015, downgraded to Caa3; previously on May 26, 2005
     Moody's assigned Ba3.

According to Moody's, these rating actions are a result of a
decline in the average credit rating (as measured through the
weighted average rating factor) of the underlying pool as well as
an increase in the dollar amount of defaulted securities with
diminished expected recoveries.  Moody's also observed a
significant percentage of securities rated Caa1 and below.
Additionally, each of the Class A Overcollateralization Test,
weighted average coupon test, and the weighted average life test
is failing.

In its analysis, Moody's incorporated its revised default
probability assumptions for all corporate credits in the
underlying portfolio


PILGRIM'S PRIDE: Creditors Seek to Recover Prepetition Deliveries
-----------------------------------------------------------------
ConAgra Foods, Inc., joins a list of creditors that have filed
notices, pursuant to Sections 503 and 546 of the Bankruptcy Code,
to reclaim goods they delivered to Pilgrim's Pride Corporation or
its affiliate within the 45 days prior to the Petition Date.  The
reclamation claimants include:

Creditors                                          Amount
---------                                        ----------
ConAgra Foods, Inc.                              $1,189,722
Upshur County Rural Electric Coop, Corp.            332,586
Fay-Jay Packing                                      78,218
Phibro Animal Health Corporation                    348,818
Chem-Aqua, Inc.                                      12,839
Southern Graphic Systems                            147,479
Armstrong Water Technology, Inc.                    180,865
Camerican International Inc.                         83,319
Aviagen, Inc.                                             -
Omni Systems, Inc.                                        -
F&S Produce Co., Inc.                                     -

                     About Pilgrim's Pride

Headquartered in Pittsburgh, Texas, Pilgrim's Pride Corporation
(NYSE: PPC) -- http://www.pilgrimspride.com/-- produces,
distributes and markets poultry processed products through
retailers, foodservice distributors and restaurants in the U.S.,
Mexico and in Puerto Rico.  In addition, the company owns 34
processing plants in the United States and 3 processing plants
n Mexico.  The processing plants are supported by 42 hatcheries,
31 feed mills and 12 rendering plants in the United States and 7
hatcheries, 4 feed mills and 2 rendering plants in Mexico.
Moreover, the company owns 12 prepared food production facilities
in the United States.  The company employs about 40,000 people and
has major operations in Texas, Alabama, Arkansas, Georgia,
Kentucky, Louisiana, North Carolina, Pennsylvania, Tennessee,
Virginia, West Virginia, Mexico and Puerto Rico, with other
facilities in Arizona, Florida, Iowa, Mississippi and Utah.

Pilgrim's Pride Corporation and six other affiliates filed Chapter
11 petitions on December 1, 2008 (Bankr. N. D. of Texas, Lead Case
No. 08-45664).  Pilgrim's Pride has engaged Stephen A. Youngman,
Esq., Martin A. Sosland, Esq., and Gary T. Holzer, Esq., at Weil,
Gotshal & Manges LLP, as bankruptcy counsel.  The Debtors have
also tapped Baker & McKenzie LLP as special counsel.  Lazard
Freres & Co., LLC is the company's investment bankers and William
K. Snyder of CRG Partners Group LLC as chief restructuring
officer.  The company's claims and noticing agent is Kurtzman
Carson Consulting LLC.

At Sept. 27, 2008, the company's balance sheet showed total assets
of $3,298,709,000, total liabilities of $2,946,968,000 and
stockholders' equity of $351,741,000.

A nine-member committee of unsecured creditors has been appointed
in the case.


PILGRIM'S PRIDE: Gets Court Okay to Hire Kurtzman as Notice Agent
-----------------------------------------------------------------
Pilgrim's Pride Corp. and its affiliates seek authority from Judge
Michael Lynn of the U.S. Bankruptcy Court for the Northern
District of Texas to employ Kurtzman Carson Consulting LLC as
claims and noticing agent in connection with their Chapter 11
cases pursuant to the terms and conditions of an agreement for
services dated September 26, 2008.

Pursuant to the Services Agreement, KCC will:

  * notify all potential creditors of the filing of the Debtors'
    Chapter 11 cases and of the setting of the first meeting of
    creditors pursuant to Section 341(a) of the Bankruptcy Code;

  * prepare and serve motions, applications, requests for
    relief, hearing agendas, and related documents on behalf of
    the Debtors in the Chapter 11 cases;

  * assist the Debtors' preparation of their schedules of assets
    and liabilities and their statements of financial affairs,
    listing, among other things, their known creditors and the
    amounts owed thereto and maintain an official copy;

  * maintain a copy service or electronic from which parties may
    obtain copies of relevant documents in these cases

  * notify all potential creditors of the existence and amount
    of their respective claims as set forth in the schedules;

  * furnish a form for the filing of proofs of claim, after
    approval of the notice and form by the Court, and provide
    notice of the bar date for filing proofs of claim;

  * file with the Clerk's Office a copy of the bar date notice,
    a list of persons to whom it was mailed, and the date the
    notice was mailed; and

  * docket all claims received, maintaining the official claims
    register for the Debtors on behalf of the Clerk's office,
    and provide the Clerk's Office with a certified duplicate
    unofficial Claims Register on a monthly basis, unless
    otherwise directed.

Subject to the Court's approval, KCC will be compensated and
reimbursed for its services rendered and expenses incurred in
connection with the Debtors' Chapter 11 cases, pursuant to the
Services Agreement.  The Services Agreement however, did not
specify the rate of compensation due to KCC.  The payment is
based on the KCC Fee Structure, which is not presented in the
Agreement.

The Debtors, however, believe that the compensation rates are
reasonable and appropriate for services of this nature and
comparable to those charged by other providers of similar
services.  To reduce the administrative expenses related to KCC's
employment, the Debtors seek authorization from the Court to pay
KCC's fees and expenses without the necessity of filing formal
fee applications in accordance with the terms of the Services
Agreement.  The services Agreement provides for a $15,000
retainer for KCC.

Pursuant to the Services Agreement, KCC will continue to perform
the agreed services in the event the Debtors' Chapter 11 cases
are converted to Chapter 7 cases, and in the event that KCC's
services are terminated, KCC will perform its duties until the
occurrence of a complete transition with the Clerk's Office or
any successor claims/noticing agent.

Michael J. Frisberg, Director of Restructuring Services of KCC,
attests that KCC is a "disinterested person" as the term is
defined in Section 1019(14) of the Bankruptcy Code, as modified by
Section 1107(b) of the Bankruptcy Code.

                     About Pilgrim's Pride

Headquartered in Pittsburgh, Texas, Pilgrim's Pride Corporation
(NYSE: PPC) -- http://www.pilgrimspride.com/-- produces,
distributes and markets poultry processed products through
retailers, foodservice distributors and restaurants in the U.S.,
Mexico and in Puerto Rico.  In addition, the company owns 34
processing plants in the United States and 3 processing plants
n Mexico.  The processing plants are supported by 42 hatcheries,
31 feed mills and 12 rendering plants in the United States and 7
hatcheries, 4 feed mills and 2 rendering plants in Mexico.
Moreover, the company owns 12 prepared food production facilities
in the United States.  The company employs about 40,000 people and
has major operations in Texas, Alabama, Arkansas, Georgia,
Kentucky, Louisiana, North Carolina, Pennsylvania, Tennessee,
Virginia, West Virginia, Mexico and Puerto Rico, with other
facilities in Arizona, Florida, Iowa, Mississippi and Utah.

Pilgrim's Pride Corporation and six other affiliates filed Chapter
11 petitions on December 1, 2008 (Bankr. N. D. of Texas, Lead Case
No. 08-45664).  Pilgrim's Pride has engaged Stephen A. Youngman,
Esq., Martin A. Sosland, Esq., and Gary T. Holzer, Esq., at Weil,
Gotshal & Manges LLP, as bankruptcy counsel.  The Debtors have
also tapped Baker & McKenzie LLP as special counsel.  Lazard
Freres & Co., LLC is the company's investment bankers and William
K. Snyder of CRG Partners Group LLC as chief restructuring
officer.  The company's claims and noticing agent is Kurtzman
Carson Consulting LLC.

At Sept. 27, 2008, the company's balance sheet showed total assets
of $3,298,709,000, total liabilities of $2,946,968,000 and
stockholders' equity of $351,741,000.

A nine-member committee of unsecured creditors has been appointed
in the case.


PILGRIM'S PRIDE: Seeks to Hire CRG as Restructuring Consultants
---------------------------------------------------------------
In consideration of the size and complexity of Pilgrim's Pride
Corp. and its affiliates' businesses, the Debtors have determined
that the services of an experienced chief restructuring officer
will substantially enhance their attempts to maximize the value of
their estates.

Pursuant to Sections 105(a) and 363(b) of the Bankruptcy Code, the
Debtors seek the authority of Judge Michael Lynn of the U.S.
Bankruptcy Court for the Northern District of Texas to employ CRG
Partners Group LLC for the purpose of providing a chief
restructuring officer and additional personnel, in accordance with
the fee structure pursuant to the terms and conditions of an
engagement letter between CRG and the Debtors dated November 7,
2008.

The Debtors intend to designate William Snyder of CRG as their
CRO, nunc pro tunc to the Petition Date.

CRG specializes in turnaround management, crisis management,
performance improvement, financial restructuring, interim
management, wind-down management, asset management, fiduciary
services and financial advisory and valuation services.  Richard
Cogdill, Chief Financial Officer of Pilgrim's Pride Corporation,
says CRG has extensive experience advising companies and serving
interim management roles in industries ranging from aerospace and
agriculture to telecommunications and utilities.

According to Mr. Cogdill, CRG is familiar with the Debtors'
businesses, financial affairs, and capital structure.  Since the
firm's initial retention, CRG Professionals have worked closely
with the Debtors' management and other professionals in assisting
with the myriad requirements of the chapter 11 cases.  The
Debtors believe that CRG has developed significant relevant
experience and expertise regarding the Debtors and is thus both
well qualified and uniquely suited to deal effectively and
efficiently with matters that may arise in the context of these
cases.

Mr. Snyder is also well-suited to be the Debtors' CRO, Mr.
Cogdill tells the Court.  Mr. Snyder has served as CRO, Examiner,
and Independent Professional in other bankruptcy cases, including
the Chapter 11 case of Mirant Corporation.

Pursuant to the Engagement Letter, the CRG professionals are
expected to provide assistance to the Debtors with respect to:

  (i) reviewing and assessing the Debtors' financial
      information, including without limitation financial
      information that has been, and that will be provided by
      the Debtors to their creditors, and including but without
      limitation to short and long-term projected cash flows;

(ii) assisting in asset sales and the identification of cost
      reduction and operational improvement opportunities;

(iii) developing possible restructuring plans or strategic
      alternatives for maximizing the enterprise value of the
      Debtors and the Debtors' various business lines;

(iv) serving as the principal contact with the Debtors'
      creditors with respect to financial and operational
      matters, and regularly meeting with the Debtors' secured
      lenders;

  (v) managing the Professionals retained by the Debtors;

(vi) developing and implementing PPC's revised business plan
      and other related forecasts;

(vii) performing other services in connection with the Chapter
      11 cases as requested by the Debtors; and

(viii) consulting and obtaining input from the appropriate
      members of Debtors' senior management.

For its professional services, the Debtors propose to compensate
CRG and any additional personnel by their hourly rates.  The
hourly billing rate for the CRO is $550.  The hourly billing rate
for any additional personnel will be at the range of $175 to
$550, depending on the staff assigned.

In addition to the compensation given by the Debtors for CRG's
professional services, CRG will also be reimbursed for all
reasonable necessary out-of-pocket expenses incurred in the
performance of their services.  For administrative fees like
telephone, computer services, and copying, CRG will charge the
Debtors 4.5% of fees paid to CRG Professionals.

Pursuant to the Engagement Letter, the Debtors seek Court
authority to indemnify the CRO, all additional personnel, CRG and
its officers, directors, agents, and employees, and any
successors and assigns to the fullest lawful extent, except where
any claims or losses are due to indemnified Party's bad faith,
willful misconduct or gross negligence.  Further, the Debtors ask
the Court for authority to cause any CRG professional to be
covered under the Debtors' existing director and officer
liability insurance policy if the CRG Professional is elected as
an officer or director of PPC.

Mr. Snyder recounts that in connection with the Debtors'
prepetition retention of CRG, CRG received a retainer for
$250,000 in the aggregate.  CRG will hold the retainer for
application in accordance with the Engagement Letter; any
unearned portion of the Retainer for application in accordance
with the Engagement Letter.  Any unearned portion of the Retainer
will be returned to the Debtors upon cancellation of the
engagement.

Approximately $501,931 in expenses were incurred through the
Petition Date for prepetition services in accordance with the
Engagement Letter and were paid prior to the commencement of
these cases.  These payments represent the advisory fees for the
period from November 1, 2008, through the Petition Date, plus
reimbursement of out-of-pocket and administrative expenses for
the period.

Mr. Snyder, a Managing Partner of CRG, assures the Court that CRG
is a "disinterested person" as that term is defined in Section
101(14) of the Bankruptcy Code.  Mr. Snyder declares that CRG (i)
is not a creditor, equity security holder, or insider of the
Debtors, (ii) was not, within two years before the Petition Date,
a director, officer or employee of the Debtors, and (iii) does
not have an interest materially adverse to the interest of the
Debtors' estates or of any class of creditors or equity security
holders.

A full-text copy of the Engagement letter is available for free
at http://bankrupt.com/misc/PPC_Lazard_EngagementLetter.pdf

The Bank of Montreal, as agent for the DIP Lenders and as
Prepetition BMO lenders, disagrees with the Debtors' application
to employ CRG Partners Group, LLC, pursuant to Section 328 of the
Bankruptcy Code, unless the order providing for its employment
specifically provide that its compensation will be pursuant to
the provisions of Section 330.

                     About Pilgrim's Pride

Headquartered in Pittsburgh, Texas, Pilgrim's Pride Corporation
(NYSE: PPC) -- http://www.pilgrimspride.com/-- produces,
distributes and markets poultry processed products through
retailers, foodservice distributors and restaurants in the U.S.,
Mexico and in Puerto Rico.  In addition, the company owns 34
processing plants in the United States and 3 processing plants
n Mexico.  The processing plants are supported by 42 hatcheries,
31 feed mills and 12 rendering plants in the United States and 7
hatcheries, 4 feed mills and 2 rendering plants in Mexico.
Moreover, the company owns 12 prepared food production facilities
in the United States.  The company employs about 40,000 people and
has major operations in Texas, Alabama, Arkansas, Georgia,
Kentucky, Louisiana, North Carolina, Pennsylvania, Tennessee,
Virginia, West Virginia, Mexico and Puerto Rico, with other
facilities in Arizona, Florida, Iowa, Mississippi and Utah.

Pilgrim's Pride Corporation and six other affiliates filed Chapter
11 petitions on December 1, 2008 (Bankr. N. D. of Texas, Lead Case
No. 08-45664).  Pilgrim's Pride has engaged Stephen A. Youngman,
Esq., Martin A. Sosland, Esq., and Gary T. Holzer, Esq., at Weil,
Gotshal & Manges LLP, as bankruptcy counsel.  The Debtors have
also tapped Baker & McKenzie LLP as special counsel.  Lazard
Freres & Co., LLC is the company's investment bankers and William
K. Snyder of CRG Partners Group LLC as chief restructuring
officer.  The company's claims and noticing agent is Kurtzman
Carson Consulting LLC.

At Sept. 27, 2008, the company's balance sheet showed total assets
of $3,298,709,000, total liabilities of $2,946,968,000 and
stockholders' equity of $351,741,000.

A nine-member committee of unsecured creditors has been appointed
in the case.


PILGRIM'S PRIDE: Seeks to Hire Lazard as Investment Bankers
-----------------------------------------------------------
Pilgrim's Pride Corp. and its affiliates seek authority from Judge
Michael Lynn of the U.S. Bankruptcy Court for the Northern
District of Texas to employ Lazard Freres & Co., LLC, as
investment banker nunc pro tunc to December 1, 2008.

According to William Snyder, the Debtors' chief restructuring
officer, Lazard's professionals have worked closely with the
Debtors' management and other professionals and have become well-
acquainted with the Debtors' operations, debt structure,
creditors, business and operations, and related matters.

As the Debtors' investment banker, Lazard will assist in the
evaluation of strategic alternatives and render general
restructuring advice and investment banking services to the
Debtors in connection with the Debtors' Chapter 11 cases.

Among other things, Lazard is also expected to:

  * review and analyze the Debtors' business, operations and
    financial projections;

  * evaluate the Debtors' potential debt capacity in light of
    its projected cash flows;

  * assist in the determination of a capital structure for the
    Debtors;

  * assist in the determination of a range of values for the
    Debtors on a going concern basis;

  * advise the Debtors on tactics and strategies for negotiating
    with the stakeholders;

  * render financial advice to the Debtors and participating in
    meetings or negotiations with the stakeholders or rating
    agencies or other appropriate parties in connection with any
    restructuring;

  * advise the Debtors on the timing, nature and terms of new
    securities, other consideration or other inducements to be
    offered pursuant to the restructuring;

  * assist the Debtors in preparing documentation within
    Lazard's area of expertise that is required in connection
    with the restructuring;

  * advise and assist the Debtors in evaluating and obtaining
    potential DIP Financing.

For its services, Lazard will be compensated with:

  (a) a $250,000 monthly fee payable on execution of an
      engagement letter and on the same day of each month
      thereafter until the earlier of the completion of the
      Restructuring or the termination of Lazard's engagement;

  (b) in the event that a Restructuring or a majority Sale
      Transaction is consummated, a fee of $6,500,000, payable
      upon the consummation of the Restructuring or Majority
      Sale Transaction;

  (c) in event of any Minority Asset Sale Transaction, a fee,
      payable upon consummation of the Minority Asset Sale
      Transaction, based on the Aggregate Consideration
      calculated;

  (d) in connection with any debtor-in-possession financing
      received by the Debtors, a fee of $1,000,000, payable upon
      the execution of a commitment letter or other similar
      document in respect of that financing;

  (e) the ability to credit certain fees against others will
      only apply if all the fees provided for are approved in
      their entirety by the Court;

  (f) in addition to any fees that may be payable to Lazard and,
      regardless of whether any transaction occurs, prompt
      reimbursement to Lazard for all (1) reasonable expenses
      and (2) other reasonable expenses, including expenses of
      counsel, if any; and

  (g) the indemnification, contribution and related obligation
      of the Indemnification Agreement.

A full-text copy of Lazard's Engagement and Indemnification
Agreement is available for free at:

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

The Debtors believe that the Compensation Structure reflects
appropriately the nature and scope of services to be provided by
Lazard.

Prior to the Petition Date, the Debtors have paid Lazard
$750,000,000 in full payment of the Monthly Fees payable to date
and have reimbursed Lazard for $284 in expenses billed to the
Debtors on October 23, 2008.  In addition, the Debtors paid
Lazard $1,000,000 for the DIP Fee associated with the pending DIP
financing.  The Debtors also provided Lazard with a $15,000
retainer for reimbursement of Lazard's expenses incurred but not
yet billed to the Debtors, due to the need to process or receive
invoices or other typical delays.

Lazard Managing Director David M. Aronson assures the Court that
his firm is a "disinterested person" as defined in Section
101(14) of the Bankruptcy Code and does not hold or represent an
interest materially adverse to the Debtors or their estates.

                     Bank of Montreal Reacts

The Bank of Montreal, as the Prepetition BMO Lenders' and the DIP
Lenders' agent, disagrees with the Debtors' application for the
employment of Lazard, Freres & Co. LLC, pursuant to Section 328
of the Bankruptcy Code, unless the order providing for the
employment specifically provide that Lazard's compensation will
be pursuant to the provisions of Section 330.

BMO adds that any success fee, restructuring fee or the like for
Lazard or any other party must be subject to further review by
the Court as to actual value contributed and the opportunity of
creditors including the DIP Agent and the Prepetition BMO Agent,
to object if appropriate.

                     About Pilgrim's Pride

Headquartered in Pittsburgh, Texas, Pilgrim's Pride Corporation
(NYSE: PPC) -- http://www.pilgrimspride.com/-- produces,
distributes and markets poultry processed products through
retailers, foodservice distributors and restaurants in the U.S.,
Mexico and in Puerto Rico.  In addition, the company owns 34
processing plants in the United States and 3 processing plants
n Mexico.  The processing plants are supported by 42 hatcheries,
31 feed mills and 12 rendering plants in the United States and 7
hatcheries, 4 feed mills and 2 rendering plants in Mexico.
Moreover, the company owns 12 prepared food production facilities
in the United States.  The company employs about 40,000 people and
has major operations in Texas, Alabama, Arkansas, Georgia,
Kentucky, Louisiana, North Carolina, Pennsylvania, Tennessee,
Virginia, West Virginia, Mexico and Puerto Rico, with other
facilities in Arizona, Florida, Iowa, Mississippi and Utah.

Pilgrim's Pride Corporation and six other affiliates filed Chapter
11 petitions on December 1, 2008 (Bankr. N. D. of Texas, Lead Case
No. 08-45664).  Pilgrim's Pride has engaged Stephen A. Youngman,
Esq., Martin A. Sosland, Esq., and Gary T. Holzer, Esq., at Weil,
Gotshal & Manges LLP, as bankruptcy counsel.  The Debtors have
also tapped Baker & McKenzie LLP as special counsel.  Lazard
Freres & Co., LLC is the company's investment bankers and William
K. Snyder of CRG Partners Group LLC as chief restructuring
officer.  The company's claims and noticing agent is Kurtzman
Carson Consulting LLC.

At Sept. 27, 2008, the company's balance sheet showed total assets
of $3,298,709,000, total liabilities of $2,946,968,000 and
stockholders' equity of $351,741,000.

A nine-member committee of unsecured creditors has been appointed
in the case.


PMA CAPITAL: S&P Affirms Counterparty Credit Rating at 'B'
----------------------------------------------------------
Standard & Poor's Ratings Services said it affirmed its 'B'
counterparty credit and senior debt ratings on PMA Capital Corp.
The ratings are unsolicited.  Subsequently, the ratings were
withdrawn because of the lack of public interest.

The ratings were based on the company's continued progress in
lowering it overall debt obligations, strong capitalization at
operating companies, and a significantly more stabilized
franchise, which was impaired in 2003 and 2004 following
significant reserving deficiencies.  In addition Standard & Poor's
believes the pending divesture of PMA Capital Insurance Co.'s run-
off operations is a positive.  Partially offsetting these positive
factors is the franchise's ability to improve its operating
performance in a more competitive market.  Its combined ratio
improved greatly over the past three years but is still weaker
than market averages.


POTOMAC EDISON: Fitch Places 'BB+' Rating on Positive Watch
-----------------------------------------------------------
Fitch Ratings has placed the 'BB+' Issuer Default Rating and 'BBB'
senior secured rating of The Potomac Edison Company d/b/a
Allegheny Power on Rating Watch Positive following a December
regulatory ruling by the Virginia State Corporation Commission and
the successful completion of a competitive-bid power supply
auction.  The VSCC's ruling and the favorable power prices
resulting from the auction will result in a substantially less
severe financial impact to Potomac Ed than had been anticipated in
the summer of 2007, when Potomac Ed's ratings were downgraded.

Fitch's ratings of Potomac Ed's parent company, Allegheny Energy,
Inc. (Allegheny; IDR: 'BBB-'), and Allegheny's other subsidiaries
are not affected by the rating action.

Potomac Ed completed its power supply auction at the end of
December, and the overall financial impact was much more favorable
than had been anticipated in July 2007 when the ratings of Potomac
Ed were downgraded.  With higher power prices in the summer of
2007, Fitch estimated that the negative financial impact to
Potomac Ed could be more than $125 million, spread over the years
2009 to 2011.  However, due to the recent decline in the market
price of power and the outcome of the VSCC's ruling, Fitch
estimates that the amount of power supply cost not subject to
recovery from customers will be limited to a small fraction of the
July 2007 estimated amount, and will still be spread over the
years 2009 to 2011.

The completion of the power supply auction and the transition to
charging its Virginia customers market rates in 2011 resolve the
issues related to Potomac Ed's under-recovery of purchased power
costs in the Virginia portion of its service territory and the
uncertainty over its future tariff structure.

In December the VSCC approved an agreement between Potomac Ed and
the staff of the VSCC, a group of large and mid-sized commercial
and industrial customers, and the Office of the Virginia Attorney
General that enabled Potomac Ed to recover purchased power costs
in Virginia.  The VSCC's ruling permitted Potomac Ed to continue
to collect a previously allowed interim rate increase of
$73 million per annum through June 30, 2009.  In addition, Potomac
Ed was permitted to hold a competitive-bid auction for power to
provide generation service to its Virginia customers from June 1,
2009 through June 30, 2011, with the understanding that Potomac Ed
would be able to recover from its customers those purchased power
costs only up to a certain dollar amount.  Furthermore, the ruling
allowed Potomac Ed to recover its fuel costs in Virginia at market
rates starting on July 1, 2011.

Fitch originally placed the ratings of Potomac Ed on Negative
Outlook on May 29, 2007.  At that time, Potomac Edison had a
pending request to implement a rate stabilization plan in VA to
manage the customer rate increases relating to the transition to
market power prices.  The proposed RSP would have resulted in a
rate increase of $36.3 million and a year-one purchased power cost
under-recovery of $50 million with a three-year deferral period,
and Fitch noted that if actual under-recovery was materially
greater than this amount, then negative rating actions were
likely.  A hearing on the matter had been scheduled at the VSCC
for Aug. 7, 2007.  The VSCC dismissed the request for the RSP and
associated rate increase and canceled the August hearing on June
26, 2007.  Fitch then downgraded the ratings of Potomac Ed on July
24, 2007 and maintained the Negative Rating Outlook after it was
determined that the purchased power cost under-recovery could be
much more than originally expected, and given the uncertainty over
the tariff structure in VA after the capped rate period expired.
Potomac Ed's fuel cost under-recovery in Virginia since July 1,
2007, resulted in a material deterioration of credit metrics.  For
the 12 months ended Sept. 30, 2008, Potomac Ed's debt to EBITDA
ratio was more than 13 times (x) and its EBITDA interest coverage
was just over 1.1x.  With the new purchased power recovery plan in
place, it is expected that these metrics will improve greatly in
2009 and could eventually return to the levels experienced before
2007.  The ratings will remain on Rating Watch Positive until
Fitch completes a full review of the credit.

The Potomac Edison Company d/b/a Allegheny Power is a regulated
transmission and distribution utility subsidiary of Allegheny
Energy, Inc. that serves approximately 480,000 customers in
western Maryland, northeast West Virginia, and northern Virginia.
About 25% of Potomac Ed's entire customer load is in Virginia.
The largest portion of its service territory is in Maryland (about
50%).  A plan was approved on March 30, 2007, by the Maryland
Public Service Commission to transition its Maryland residential
customers to market rates for power over a four-year period,
allowing for approximately 15% price increases each year.
Purchased power contracts for residential customers are in place
through 2010, after which time the market rates will take effect.
The remaining 25% of customer load is in West Virginia, which is
fully regulated and supported by a fuel clause that allows for
full recovery of power costs on an annual basis.

Fitch has placed these ratings on Rating Watch Positive:

The Potomac Edison Company d/b/a Allegheny Power

  -- Issuer Default Rating 'BB+';
  -- Senior secured debt 'BBB'.


PPM RIVERA: Fitch Withdraws 'C' Rating on Three Classes of Notes
----------------------------------------------------------------
Fitch Ratings has withdrawn the ratings on three classes of notes
issued by PPM Riviera Fund.  These ratings are withdrawn,
effective immediately:

  -- $21,735,000 class A-1 at 'C';
  -- $11,665,000 class A-2 at 'C';
  -- $22,000,000 class B at 'C'.

PPM Riviera Fund was a synthetic total rate of return
collateralized loan obligation with a market value liquidation
trigger.  The transaction was negatively impacted by the continued
decline in loan prices in the secondary market.  The liquidation
trigger was breached and uncured, resulting in an early
termination event.  There was zero recovery for all classes.


PROPEX INC: Seeks to Pay 2008 BNP Paribas DIP Loan
--------------------------------------------------
Propex Inc. and its debtor-affiliates sought and obtained interim
and final orders of a $60 million postpetition financing with BNP
Paribas Securities Corp. and certain other lenders.  The U.S.
Bankruptcy Court for the Eastern District of Tennessee also gave
them permission to use their cash collateral.

The Debtors used the proceeds of the BNP Paribas Revolver Loan to
satisfy their working capital needs while operating in their
Chapter 11 cases.  The 2008 Credit Agreement also authorized the
Debtors to continue using Cash Collateral, provided the Debtors'
prepetition lenders were afforded adequate protection of their
liens.

The terms of the 2008 Credit Facility is set to expire on
January 23, 2009.

Henry J. Kaim, Esq., at King & Spalding LP, in Houston, Texas,
informs the Court that, although the 2008 Credit Agreement
contains provisions for an extension of the maturity date until
April 23, 2009, the DIP Lenders have declined to extend the
January 23 Maturity Date.

The 2008 Credit Agreement provides that upon the Maturity Date no
further Court action is required.  Nevertheless, out of an
abundance of caution, the Debtors seek the Court's authority to
pay and satisfy their outstanding loans under the 2008 Credit
Agreement.

The Debtors intend to make the loan payment from cash they
currently have on deposit.  Mr. Kaim adds that under the 2008
Credit Agreement, payment of the DIP Loans on the Maturity Date
incurs no penalty or prepayment costs or fees.

The Debtors disclose that the payoff, as of January 23, 2009,
will be $32,774,377, plus $420,000 to cash collateralize a letter
of credit, and any reasonable professional fees of the existing
agent for its counsel and financial advisors incurred prior to
January 23, 2009.

The Debtors seek that upon payment of the Payoff Amount to the
DIP Lenders:

  (a) they and their estates will be deemed not having
      additional or remaining liabilities with respect to the
      2008 Credit Agreement or any related documents and
      agreement;

  (b) the 2008 Credit Agreement and all related documents and
      agreements will immediately be terminated; and

  (c) any claims, security interests, or other interests granted
      to the DIP Lenders and the 2008 DIP Agent under the 2008
      Credit Agreement will immediately be released and
      terminated.

                       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.

Propex Inc., and its affiliates delivered to the Court a Joint
Plan of Reorganization and Disclosure Statement on October 29,
2008.  Propex's exclusive period to solicit acceptances of the
Plan expires Dec. 29, 2008.

As of June 29, 2008, the Debtors' balance sheet showed total
assets of US$562,700,000, and total debts of US$551,700,000.

The Debtors have filed their Disclosure Statement and Plan of
Reorganization on October 29, 2008.

Bankruptcy Creditors' Service, Inc., publishes Propex Bankruptcy
News.  The newsletter tracks the chapter 11 proceedings
undertaken by Propex Inc. and its various affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)


PROPEX INC: Court to Consider $65-Mil. Wayzata Loan on Jan. 22
--------------------------------------------------------------
The U.S. Bankruptcy Court for the Eastern District of Tennessee
will convene a hearing January 22, 2009, to consider the request
of Propex Inc. and its debtor-affiliates to obtain up to
$65,000,000 of postpetition financing under a 2009 secured credit
facility with Wayzata Investment Partners LLC and certain other
financial institutions.

In February 2008, the Debtors obtained final Court approval of a
$60,000,000 postpetition loan from BNP Paribas and certain other
lenders.  The 2008 DIP Facility will expire on its own terms on
January 23, 2009.

As BNP Paribas has declined to extend the 2008 DIP Facility, the
Debtors reveal that they negotiated a new replacement DIP
facility with Wayzata Investment Partners LLC.

Pursuant to arm's-length negotiations, the Debtors and Wayzata
agree on the terms of a financing facility for the Debtors'
estates for 2009.  The salient terms of the 2009 DIP Facility
are:

Borrower:        Propex Inc.

Guarantors:      Propex Holdings Inc. and each direct and
                  indirect subsidiary of Propex Inc.  Propex
                  Inc. pledges 100% of all its equity interest
                  in its Guarantors, including non-domestic
                  subsidiaries.

Lenders:         A syndicate of funds manages by Wayzata
                  Investment Partners LLC.  Wayzata will appoint
                  an administrative agent under the 2009 DIP
                  Facility.

Commitment &
Availability:    The 2009 Credit Agreement provide for a
                  delayed draw term credit facility of
                  $65,000,000 in the aggregate.

Availability:    $30,000,000 will be available upon the
                  Bankruptcy Court's entry of an interim order
                  approving the 2009 DIP Facility.  The
                  remaining $35,000,000 will be available on
                  the Bankruptcy Court's entry of a final, non-
                  appealable order approving the 2009 DIP
                  Facility, draws upon which will not be less
                  than $1,000,000 and not more than $5,000,000.

                  The Debtors may not make more than two draws
                  within a calendar month, and no more than
                  $10,000,000 in draws may be made in any 30 day
                  rolling period.  Furthermore, any draws in
                  excess of $40,000,000 will be allowed in the
                  sole discretion of the Required Lenders.

Maturity Date:   The Credit Agreement will mature on the
                  earliest to occur of:

                  (1) April 23, 2009;

                  (2) the effective date of any plan of
                      reorganization;

                  (3) the consummation of any sale pursuant to
                      Section 363 of the Bankruptcy Code;

                  (4) at the sole discretion of the Lenders,
                      upon the occurrence and continuation of an
                      Event of Default under the Loan Documents;

                  (5) the date of payment in full in cash of all
                      obligations under the Loan Documents; and

                  (6) failure of the Debtors to obtain a final
                      order approving the 2009 DIP Facility
                      within 20 days, subject to the Bankruptcy
                      Court's availability, of the date of the
                      initial loan made under the 2009 DIP
                      Facility.

Purpose:         The proceeds 2009 DIP Facility will be used
                  to:

                    (i) pay fees and expenses associated with
                        the financings; and

                   (ii) provide for the working capital
                        requirements and other general corporate
                        purposes of Propex Inc., Propex Holdings
                        and their subsidiaries during the
                        pendency of the Debtors' Chapter 11
                        cases.

Priority
and Liens:       As security for all of Propex's obligations
                  under the 2009 DIP Facility, each Guarantor
                  and Parent Guarantor will grant the Agent
                  a valid and perfected superpriority security
                  interest in, and lien on, all collateral of
                  the Borrower and Guarantors pursuant to
                  Section 364 of the Bankruptcy Code, with the
                  lien being senior and prior in all respects to
                  any other lien of any kind, including, without
                  limitation, the liens and security interest
                  securing the prepetition indebtedness of
                  Propex under that certain Credit Agreement
                  dated as of January 31, 2006, and as amended
                  from time to time.

Carve-Out:       The liens and superpriority claims granted to
                  the Lenders with respect to the 2009 DIP
                  Facility will be subject and subordinate to,
                  following the occurrence and during the
                  pendency of a Carve-Out Event:

                  (a) a carve-out of $1,000,000 for the allowed
                      fees and expenses of the retained
                      professionals of the Debtors and the
                      Official Committee of Unsecured Creditors
                      incurred after the Carve -Out Event;

                  (b) quarterly fees required to be paid
                      pursuant to Section 28 of the Bankruptcy
                      Code; and

                  (c) any fees payable to the Clerk of the
                      Bankruptcy Court and any agent, plus all
                      fees and expenses prior to the Carve-Out
                      event but not yet paid to the extent the
                      fees and expenses are approved and allowed
                      by the Bankruptcy Court, subject to the
                      rights of the Agent, the Lenders, and any
                      other party-in-interest to object to the
                      award of any fees and expenses.

Interest:        All amounts outstanding under the Senior
                  Credit Facilities will bear interest at the
                  LIBOR Rate plus 1000 basis points, assessed on
                  a 360/actual basis.

                  The LIBOR Rate is defined as including a floor
                  of 5%, which is subject to upward adjustment.

Fees and
Expenses:        Propex will pay the Agent:

                  -- 1.5% of the Facility Threshold upon entry
                     of the Interim Order; and

                  -- 1.5% of the Facility Threshold upon entry
                     of the Final Order.

                  If Propex is allowed to make draws above
                  $40,000,000, then Propex will immediately pay
                  Agent, for the ratable account of each Lender,
                  a fully earned, non-refundable fee equal to 3%
                  of the difference between the Gross Commitment
                  and the Facility Threshold.  The fees will be
                  paid from draws facility.

                  Upon termination, repayment or refinancing in
                  full of the 2009 DIP Facility, Propex will pay
                  the Agent a fully earned, non-refundable exit
                  fee equal to 3% of the Gross Commitment other
                  in connection with a Plan or disposition
                  pursuant to Section 363 of the Bankruptcy Code
                  acceptable to the Requisite Lenders.

Chapter 11
Process:         Under the Credit Agreement, the Debtors will
                  covenant to take certain actions in their
                  Chapter 11 cases, among other things, seeking
                  confirmation of an amended Chapter 11 plan,
                  which will incorporate a sale of substantially
                  all of their assets, or in the absence of a
                  confirmed plan, a sale of substantially all of
                  their assets pursuant to Section 363 of the
                  Bankruptcy Code, within time periods prior to
                  April 23, 2009.

The 2009 DIP Facility also provides for the usual and customary
terms of borrowing conditions, events of default and
indemnification provisions.

A full-text copy of the 2009 Wayzata DIP Facility can be accessed
for free at http://bankrupt.com/misc/PropexWayzataDIP.pdf

Henry J. Kaim, Esq., at King & Spalding, LLP, in Houston, Texas,
maintains that the Debtors' ability to maintain business
relationships with their vendors and suppliers and otherwise
finance their operations is dependent on their ability to obtain
the funds made available under the 2009 DIP Facility.

                       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.

Propex Inc., and its affiliates delivered to the Court a Joint
Plan of Reorganization and Disclosure Statement on October 29,
2008.  Propex's exclusive period to solicit acceptances of the
Plan expires Dec. 29, 2008.

As of June 29, 2008, the Debtors' balance sheet showed total
assets of US$562,700,000, and total debts of US$551,700,000.

The Debtors have filed their Disclosure Statement and Plan of
Reorganization on October 29, 2008.

Bankruptcy Creditors' Service, Inc., publishes Propex Bankruptcy
News.  The newsletter tracks the chapter 11 proceedings
undertaken by Propex Inc. and its various affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)


PROPEX INC: Seeks Permission to Use Lenders' Cash Collateral
------------------------------------------------------------
Propex Inc. and its debtor-affiliates have lined up $65,000,000 in
postpetition financing under a 2009 financing facility with
Wayzata Investment Partners LLC and certain other financial
institutions, to replace a $60,000,000 postpetition loan BNP
Paribas extended last year.

In line with their request for a replacement DIP Facility with
Wayzata, the Debtors seek authority from the U.S. Bankruptcy Court
for the Eastern District of Tennessee to use the cash collateral
securing their obligations to their prepetition lenders.

The Debtors require the immediate use of the Cash Collateral for,
among other things, their purchase of inventory, maintenance of
their facilities, and other working capital needs, says Henry J.
Kaim, Esq., at King & Spalding, LLP, in Houston, Texas.
Moreover, he adds, it is essential that the Debtors immediately
stabilize their operations and resume paying for ordinary,
postpetition expenses.

Moreover, the Debtors intend to use the Cash Collateral for
purposes and amounts set forth in an applicable budget, a copy of
which is yet to be filed by the Debtors to the Court.

Before the Petition Date, the working capital needs of the
Debtors were met primarily by a $360,000,000 senior credit
facility extended by a syndicate of financial institutions
arranged by BNP Paribas Securities Corp., which also served as
the Prepetition Lenders' administrative agent.  The Prepetition
Loan is secured by perfected, valid, binding and non-avoidable
first priority security interests and liens upon substantially
all of the Debtors' assets.

When the Debtors filed for bankruptcy, they obtained Court
approval of a $60,000,000 postpetition financing with BNP Paribas
and certain other lenders.  Mr. Kaim notes that since the Court's
entry of its interim order approving the BNP Paribas DIP
Facility, the Prepetition Lenders have been provided adequate
protection, which includes the accrual of interest that the
Debtors have paid in a full and timely manner.  The Debtors
propose to continue paying the Prepetition Lenders those amounts
under the proposed 2009 DIP Facility as well as payments to
counsel for the Prepetition Agent, Mr. Kaim informs the Court.

The Debtors also intend to provide the Prepetition Lenders these
additional adequate protection for the use of Cash Collateral:

  (i) Replacement liens on all collateral, which liens are
      junior to the DIP Liens;

(ii) To the extent the replacement liens are insufficient to
      provide adequate protection, adequate protection claims
      arising under Section 507(b) of the Bankruptcy Code, which
      claims will be junior to the DIP Claims, and be payable
      from and have recourse to all assets and property of the
      Debtors, excluding the Avoidance Actions;

(iii) Cash payment of interest due and payable at the non-
      default rate set forth in the Prepetition Credit
      Agreement; and

(iv) Payment of certain fees and expenses of Administrative
      Agent under the Prepetition Credit Agreement.

Mr. Kaim avers that absent immediate use of Cash Collateral and
financing, the Debtors will be unable to pay ongoing operational
expenses.  Consequently, if interim relief is not obtained, the
Debtors' assets will be immediately and irreparably jeopardized,
to the detriment of their estates, their creditors and other
parties-in-interest, he continues.

                       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.

Propex Inc., and its affiliates delivered to the Court a Joint
Plan of Reorganization and Disclosure Statement on October 29,
2008.  Propex's exclusive period to solicit acceptances of the
Plan expires Dec. 29, 2008.

As of June 29, 2008, the Debtors' balance sheet showed total
assets of US$562,700,000, and total debts of US$551,700,000.

The Debtors have filed their Disclosure Statement and Plan of
Reorganization on October 29, 2008.

Bankruptcy Creditors' Service, Inc., publishes Propex Bankruptcy
News.  The newsletter tracks the chapter 11 proceedings
undertaken by Propex Inc. and its various affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)


PROPEX INC: Seeks April 23 Extension of Plan Solicitation Period
----------------------------------------------------------------
Propex Inc. and its affiliates ask the U.S. Bankruptcy Court for
the Eastern District of Tennessee to extend their exclusive period
to solicit acceptances of their Plan of Reorganization through
April 23, 2009, to coincide with and compliment their new
replacement postpetition financing facility.

The Debtors' current Exclusive Solicitation Period is set to
expire on January 31, 2009.

The Debtors assert that they need more time for the Solicitation
Period as they still have unresolved contingencies in their
bankruptcy cases.  The Debtors' current DIP Lenders have declined
to extend the terms of the Debtors' existing DIP Facility, set to
mature on January 23, 2009.  In this light, the Debtors'
attention has been focused on obtaining a new DIP Facility with
Wayzata Investment Partners LLC in an amount in excess of the
current DIP Facility and on substantially similar terms, Henry J.
Kaim, Esq., at King & Spalding, LLP, in Houston, Texas, relates.
The Wayzata DIP Facility provides for maturity date of
April 23, 2009.

Moreover, the Debtors relate that they recently got Court
authority to execute an exit financing term sheet with Wayzata,
and are moving towards integrating the exit term sheet into their
plan discussions.  Mr. Kaim adds that additional time is
necessary for the Debtors to finalize the terms of their proposed
exit from Chapter 11 and provide creditors with reasonable amount
of time to review the terms of the exit plan, as well as cast
ballots and seek confirmation of the amended plan of
reorganization.

"The new DIP Facility with Wayzata provides the appropriate
platform to re-energize the exit process," Mr. Kaim says.

Mr. Kaim further contends that "cause" exists to extend the
Debtors' Solicitation Period, considering the size and complexity
of their businesses and the unprecedented credit freeze and
economic downturn, not only in the United States, but around the
world.

The Debtors emphasize that they are not seeking to "hide-out" in
Chapter 11 for the purpose of pressuring their creditors to
unreasonable demands.  To the contrary, Mr. Kaim says, the
Debtors are attempting to reorganize and obtain confirmation as
soon as possible.

                       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.

Propex Inc., and its affiliates delivered to the Court a Joint
Plan of Reorganization and Disclosure Statement on October 29,
2008.  Propex's exclusive period to solicit acceptances of the
Plan expires Dec. 29, 2008.

As of June 29, 2008, the Debtors' balance sheet showed total
assets of US$562,700,000, and total debts of US$551,700,000.

The Debtors have filed their Disclosure Statement and Plan of
Reorganization on October 29, 2008.

Bankruptcy Creditors' Service, Inc., publishes Propex Bankruptcy
News.  The newsletter tracks the chapter 11 proceedings
undertaken by Propex Inc. and its various affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)


PUGET SOUND: S&P Raises Preferred Stock Rating to 'BB+' from 'BB'
-----------------------------------------------------------------
Standard & Poor's Ratings Services raised its corporate credit
rating on integrated electric and gas utility company Puget Sound
Energy Inc. to 'BBB' from 'BBB-', its secured ratings to 'A-' from
'BBB+', and its preferred stock and junior subordinated debt
ratings to 'BB+' from 'BB'.  At the same time, Standard & Poor's
lowered its corporate credit rating on Puget Energy Inc. to 'BB+'
from 'BBB-'.  Standard & Poor's removed all the ratings from
CreditWatch with negative implications.  The outlook is stable.

The rating actions on PSE and Puget reflect their acquisition led
by Macquarie Infrastructure Partners.  All federal and state
regulatory and shareholder approvals required for the merger have
now been obtained, and the company expects the transaction to
close by Feb. 6, 2009.

"The upgrade of PSE and its related securities reflects Standard &
Poor's view that plans to place an independent director on the
board of directors of the utility company, coupled with other
commitments, such as dividend restrictions, provides insulation to
the utility company.  In addition, the utility company's stand-
alone financial metrics are expected to improve post-transaction
as some debt is repaid and, on a forward basis, the capital
structure is expected to be managed to a more credit supportive
level," said Standard & Poor's credit analyst Antonio Bettinelli.
"The downgrade of Puget Energy reflects the additional transaction
debt and our expectation that the amount of priority debt,
including all operating company debt and credit facilities, in
addition to the insulation of the utility company, is a
disadvantage to creditors of Puget Energy."


QUYNH HOANG: Faces Lawsuit; Files for Bankruptcy Protection
-----------------------------------------------------------
Ryan McCarthy at Appeal-Democrat Quynh Hoang and Ty Thi Hoang
Tran, the owners of an Olivehurst mobile home park, have filed for
bankruptcy protection.

According to Appeal-Democrat, the Hoangs failed to pay its bills
from PG&E.  The Hoangs were sued for allegedly leaving residents
without laundry facilities after a water pipe broke, the report
says, citing Molly Stafford, an attorney with California Rural
Legal Assistance and who is representing seven residents.

Appeal-Democrat relates that the Yuba County and CRLA are asking
the Yuba County Superior Court to let a nonprofit agency or
individual take over responsibility for the park.

Appeal-Democrat states that Ronald Javor, the assistant deputy
director of the state Housing and Community Development
Department, said that permits for the park were revoked more than
a year ago.


RAFAELLA APPAREL: Poor Performance Cues Moody's Junk Ratings
------------------------------------------------------------
Moody's Investors Service downgraded the debt ratings of Rafaella
Apparel Group, Inc., including its Corporate Family and
Probability of Default Ratings to Caa1 from B2, and the rating on
its 11.25% second lien notes to Caa2 from B3.  The ratings outlook
is negative.  The actions conclude the review for possible
downgrade that commenced on October 3, 2008.

The downgrade to Caa1 and negative outlook reflect Rafaella's
deteriorating operating performance and credit metrics due to the
declining macro-economic environment, that has resulted in volume
declines at the company's higher margined department store
customers, as well as significant gross margin erosion due to
increased sales to off-price customers and inventory mark downs.
Moody's anticipates that Rafaella's performance will remain under
pressure through at least the first half of 2009 given the
expectation for weak discretionary consumer spending and pressure
on its retail customers to keep inventory levels down.

Despite the expectation for modest near-term free cash flow and
revolver availability, in Moody's opinion, Rafaella's liquidity is
weak due to the considerable near-term economic uncertainty.
Although the company's covenant cushion is currently adequate,
compliance with its net income test could become tenuous as
certain add-backs and gains roll off later in the fiscal year.  As
a result, further ratings pressure could arise from continued
revenue and profitability declines, an inability to reduce
inventories resulting in negative free cash flow, or a
deterioration in liquidity, including reduced revolver
availability, covenant violations or difficulty renewing/extending
the credit facility that expires in June 10, 2010.

These ratings were downgraded:

  -- Corporate Family Rating to Caa1 from B2

  -- Probability of Default Rating to Caa1 from B2

  -- Senior secured notes due June 2011 to Caa2 (LGD4, 59%) from
     B3 (LGD4, 64%)

The ratings outlook is negative.

Moody's last rating action for Rafaella was on October 3, 2008
when all ratings were placed on review for a possible downgrade.

Rafaella Apparel Group, Inc. based in New York, New York, is a
designer, sourcer, and marketer of a full line of women's career
and casual sportswear separates under the Rafaella brand and
private label brands of its customers.  For the LTM period ended
September 30, 2008, the company reported net sales of about
$180 million.


RECYCLED PAPER: Plan On Track for February Confirmation
-------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware has
authorized Recycled Paper Greetings Inc., to reject its management
services agreement with "out-of-the-money" equity sponsor, Monitor
Clipper Partners.

According to Bloomberg's Bill Rochelle, the Court required Monitor
Clipper to file a claim by laying out its damages.  Where a proof
of claim ordinarily in bankruptcy can be terse, the judge in this
instance required Monitor Clipper to give a "detailed description"
of the "factual and legal basis" for the claim.  Objections to the
proof of claim is due Jan. 21.  A hearing on the objections is the
scheduled for Feb. 18, the same day as the confirmation hearing
for approval of Recycled Paper's prepackaged Chapter 11 plan.

Mr. Rochelle notes that, to confirm its prepackaged Chapter 11
plan, which is built around the sale of its business to American
Greetings Corp., Recycled Paper must not only reject the
management services agreement, it also must persuade the
Bankruptcy Court to rule that the owner doesn't have any damages
from terminating the contract.  If the contract isn't rejected
with Monitor Clipper having no damages, American Greetings
effectively has the right to terminate the purchase on Feb. 28.

             Termination of Deal Necessary for Plan

As reported by the Troubled Company Reporter on Jan. 9, 2009,
Recycled Paper Greetings and its affiliated debtors have asked the
Delaware Bankruptcy Court to enter orders:

   -- authorizing the rejection of a Corporate Services Agreement,
      dated December 5, 2005, between Recycled Paper Greetings,
      Inc. and Monitor Clipper Partners, LLC, nunc pro tunc, as of
      Jan. 2, 2009l;

   -- setting a deadline by which MCP must file any claims it has
      against the Debtors, including any claims arising from the
      rejection of, or related to, the Services Agreement that MCP
      may assert in RPG's Chapter 11 cases;

   -- establishing procedures for the timely disposition of
      the MCP Claim, if any; and

   -- disallowing any MCP Claim in its entirety or, in the
      alternative, estimating any MCP Claim at zero dollars for
      allowance, treatment and distribution purposes pursuant to
      such procedures.

Mark D. Collins, Esq., at Richards, Layton & Finger, P.A.,
explained that the termination of the Services Agreement is a
necessary component of the prepackaged Plan of Reorganization
filed by RPG on January 2, 2009.  As reported by the Troubled
Company Reporter, the Plan is premised on rival American Greeting
Corporation's acquisition of RPG.

Mr. Collins notes that absent the termination of the MCP Services
Agreement by February 28, 2009, American Greeting has the right to
terminate the agreement upon which the Plan is based, potentially
derailing a prepackaged plan supported by all of the Debtors'
constituencies except one -- MCP5 -- an out-of-the-money equity
sponsor and counterparty to the Services Agreement.

The Plan effectuates the restructuring of the Debtors by the
implementation of an Agreement, dated December 30, 2008, among
RPG, RPG Holdings and American Greetings Corporation, under which
the Debtors would be relieved of the debt incurred in connection
with MCP's leveraged buy-out of RPG in December 2005.  The Debtors
believe that the Plan and the Agreement represent the best
possible outcome for the Debtors' stakeholders.

The Prepetition Lenders hold approximately $207 million of secured
debt, incurred to effect MCP's highly leveraged majority share
acquisition of RPG in the LBO.  All of the Prepetition Lenders
have voted in favor of the POR, which provides for recoveries to
them that are substantially less than the amount of their secured
claims.  Thus, MCP's equity interests are worthless.  However,
despite the absence of any viable alternative to the POR, MCP has
set out on a course to derail the POR in an effort to unfairly
leverage its position as majority shareholder.  This comes through
clearly in MCP's press release issued on the Petition Date.

Mr. Collins notes that MCP caused RPG to enter into the Services
Agreement, which was a condition precedent to the LBO.  Thus, for
all intents and purposes, MCP was on both sides of the transaction
and "negotiated" the terms of the Services Agreement with itself.
Under the Services Agreement, MCP was to be paid a fee of
$500,000 per year in exchange for the possible provision of
advisory and other services to RPG, and MCP was entitled to the
reimbursement of certain expenses and, in certain circumstances,
MCP would receive a financial advisory fee, commonly known as a
"success fee," if certain transactions were completed.

The terms of the Services Agreement, according to Mr. Collins,
were not the product of arms' length negotiations but, rather,
were imposed on RPG by MCP as part of its "price" for doing the
LBO and have served as a means for MCP to siphon precious cash
from the Debtors despite their substantial performance shortfall
and precarious financial circumstances -- at a time when a
dividend almost certainly would have been illegal under Delaware
law.  The Services Agreement remains unduly burdensome to the
Debtors and provides no benefit to their estates.  If the
Services Agreement were permitted to stand, the Debtors would be
required to pay perpetual Annual Fees relating to "management and
advisory" services from MCP even though, among other things, (a)
MCP has not provided any services or assistance in the Debtors'
restructuring, (b) MCP would not be providing such services post-
reorganization and (c) certain of the tasks for which MCP could
earn a fee would require MCP to be retained as an estate
professional under section 327 of the Bankruptcy Code, which
approval is not being sought and would almost certainly not be
granted.  Accordingly, the Debtors seek to reject the Services
Agreement, nunc pro tunc, as of the Petition Date.

In addition, the Debtors anticipate, based on their numerous
inquiries to MCP and the Press Release, that MCP will assert a
claim.  Given that the Plan has been accepted by 100% of all
creditors entitled to vote, the quick disposition of this insider
claim is critical to the Debtors' successful restructuring,
Mr. Collins relates.  Pursuant to Section 9.1(d) of the Plan, it
is a condition precedent to the Effective Date of the Plan that
the MCP Claim either be disallowed in its entirety or estimated in
an amount acceptable to AG and each of the Administrative Agents
under the First Lien Credit Agreement and Second Lien Credit
Agreement, as applicable.  Pursuant to Section 3.4 of the
Agreement, if the Plan is not effective by February 28, 2009, AG
may terminate the Agreement.  Accordingly, RPG asserts that the
prompt disallowance of the MCP Claim or, alternatively, the
estimation of the MCP Claim for allowance, treatment and
distribution purposes is critical to the Debtors' successful
reorganization.

The Debtors intend to object to any MCP Claim and believe that any
such claim should be disallowed in its entirety or, alternatively,
estimated at zero dollars for allowance, treatment and
distribution purposes, pursuant to sections 502(b)(4) and 502(d)
of the Bankruptcy Code.

                       About Recycled Paper

Headquartered in Chicago, Illinois, Recycled Paper Greetings Inc.
designs, manufactures, and distributes greetings cards and social
expression products throughout the U.S. and Canada.  RPG is the
third largest greeting card company in North America.  The company
and three of its affiliates filed for Chapter 11 protection on
Jan. 2, 2009 (Bankr. D. Del. Lead Case No. 09-10002).  Michael F.
Walsh, Esq. and Rachel Ehrlich Albanese, Esq., at Weil, Gotshal &
Manges LLP, represent as the Debtors' bankruptcy counsel.  Mark D.
Collins, Esq., Chun I. Jang, Esq., and Lee E. Kaufman, Esq., at
Richards, Layton & Finger, P.A., represents as the Debtors' local
counsel.  The Debtor proposed Rothschild Inc. as financial and
restructuring advisor and Kurtzman Carson Consultants LLC as
claims and noticing agent.  When the Debtors filed for protection
from their creditors, they listed assets and debts between $100
million to $500 million each.


ROBERT THOMSON: Chapter Voluntary 15 Case Summary
-------------------------------------------------
Chapter 15 Petitioner: Mary F. April, Esq.
                       The Coates Law Firm
                       12012 South Shore Blvd., Suite 107
                       Wellington, FL 33414
                       Tel: (561) 333-4911
                       Fax: (561) 333-4988

Chapter 15 Debtor: Robert Thomson
                   Flat 5/2 Wishaw Terrace
                   Edinburgh, Scotland
                   West Palm Beach, FL 33401

Chapter 15 Case No.: 09-10665

Chapter 15 Petition Date: January 15, 2009

Court: Southern District of Florida (West Palm Beach)

Chapter 15 Petitioner's Counsel: Spencer Gollahon, Esq.
                                 spencergollahon@earthlink.net
                                 12012 S Shore Blvd #107
                                 Wellington, FL 33414
                                 Tel: (561) 333-4911
                                 Fax: (561) 333-4988

Estimated Assets: unstated

Estimated Debts: unstated


RYERSON INC: S&P Downgrades Corporate Credit Rating to 'B'
----------------------------------------------------------
Standard & Poor's Ratings Services said that it lowered its
ratings on Chicago, Illinois-based Ryerson Inc.  S&P lowered the
corporate credit rating and issue-level rating to 'B' from 'B+',
and removed all the ratings from CreditWatch, where S&P placed
them on Aug. 28, 2008 with negative implications.  The outlook is
stable.

The downgrade reflects S&P's expectation that debt leverage
measures will be higher than anticipated over the near term.
Previously, S&P had expected debt to EBITDA to strengthen to about
5.5x by the end of 2008.  However, based on current operating
conditions, S&P expects debt to EBITDA of about 7x at the end of
2008.  The weaker credit measures are due to weak end markets due
to lower demand in the consumer and housing sectors, particularly
in the company's stainless steel and aluminum products segments.

The outlook is stable.  The stable outlook reflects S&P's
expectations that despite the current weak business environment,
Ryerson can show margin and EBITDA improvement based on the
execution of its cost initiatives.  "In addition, S&P expects that
the company will generate significant cash flow due to working
capital management, which S&P expects Ryerson will use to reduce
debt balances," noted Standard & Poor's credit analyst Maurice
Austin.  As a result, S&P expects credit measures to improve to a
level more consistent with the rating, with debt to EBITDA about
7x by year-end 2008.

"Still, an outlook revision to negative or a ratings downgrade
could occur if, as a result of the combination of weaker-than-
expected operating results or the company failing to realize cost-
saving benefits, its financial profile does not strengthen from
current levels," he continued.  An outlook revision to positive
seems less likely in the near term, given operating conditions.
However, one could occur if Ryerson achieves improved credit
metrics that S&P believes are sustainable for the longer term.
Specifically, debt to EBITDA below 6x.


SAVE THE QUEEN: Jeff Klein & Tom Hix Will Sell Interest in Co.
--------------------------------------------------------------
Harry Saltzgaver at Gazettes.com reports that a foreclosure sale
of the managing partners' interest in Save The Queen, LLC, is set
for Jan. 28 in New York City.

Gazettes.com relates that Jeff Klein and Tom Hix are the principal
partners in Save The Queen.

According to Gazettes.com, the sale is being conducted by GCRE I
LLC, which provided the financing for Save The Queen's purchase of
the Queen Mary lease in 2007.

Gazettes.com quoted David R. Moson, GCRE's representative in New
York City, as saying, "Effectively, the owner is in default.  It
is in essence a realignment of the partnership, and will not
effect the management, guests or crew members of the ship."

Events of default have occurred and the indebtedness is now due
and payable in full, Gazettes.com relates.

Mr. Klein, according to Gazettes.com, said, "Garrison Investments
[GCRE] is essentially taking over the investment.  Once this is
done, they'll have a controlling interest in Save The Queen.  I
don't know what my involvement will be.  I'm not ducking the
question, I simply won't know until after the 28th."

Save the Queen LLC acquired Queen's Seaport Development Inc., the
owner of the famed Queen Mary, for $43 million in a U.S.
Bankruptcy Court auction in Los Angeles.  The 50-acre mixed-use
waterfront property and the 66-year lease to oversee the
operations of the 71-year-old ship were awarded to the company.


SCIENS CFO: Fitch Downgrades Ratings on EUR183MM Notes
------------------------------------------------------
Fitch Ratings has downgraded five tranches from Sciens CFO I Ltd.:

  -- EUR 121,200,000 class A downgraded to 'CCC/DR1' from 'AA';
     removed from Rating Watch Negative;

  -- EUR 21,000,000 class B downgraded to 'CC/DR5' from 'BBB';
     removed from Rating Watch Negative;

  -- EUR 13,900,000 class C downgraded to 'C/DR6' from 'BB';
     removed from Rating Watch Negative;

  -- EUR 18,600,000 class D downgraded to 'C/DR6' from 'B';
     removed from Rating Watch Negative;

  -- EUR 7,800,000 class E downgraded to 'C/DR6' from 'CCC'.

Sciens has breached its Minimum Coverage Test as of Oct. 31, 2008.
In addition, the fund has experienced significantly worse
performance than the Credit Suisse Tremont hedge fund index over
the September 2008 through November 2008 period.  These losses
have been in excess of loss assumptions used for the rating
actions taken in November 2008 and have been due in part to the
portfolio's Madoff related investments of approximately 6%.  The
rating actions reflect the fund's performance as of the end of
November along with Fitch's liquidation analysis that incorporates
expectations of further stress in the coming months as the fund
redeems its positions.

The Sciens portfolio of hedge fund investments has experienced a
significant amount of gating and suspensions resulting in an
extension of the transaction's liquidity profile.  In addition,
fund concentrations will increase as more liquid portfolio
positions are redeemed.  The combined effect of an extended
redemption period and higher fund concentrations results in
significantly higher subordination requirements at each rating
level.  Fitch expects continued performance volatility and reduced
liquidity in the hedge fund sector.


SEALED AIR: S&P Downgrades Corporate Credit Rating to 'BB+'
-----------------------------------------------------------
Standard & Poor's Ratings Services lowered its ratings, including
its corporate credit rating, on Sealed Air Corp. to 'BB+' from
'BBB-' and removed the ratings from CreditWatch where they had
been placed with negative implications on Nov. 18, 2008.  The
outlook is stable.

At the same time, S&P lowered the issue rating on Sealed Air's
existing senior unsecured notes to 'BB+' from 'BBB-' and assigned
a recovery rating of '3'.  These ratings indicate S&P's
expectation of meaningful (50% to 70%) recovery in a payment
default.

The downgrade was prompted by a financial profile that S&P
believes will remain too weak to support investment-grade ratings
as well as by lingering concerns about management's commitment to
increase cash flow to debt to the extent necessary to maintain
investment-grade ratings.  Underpinning the revised rating and
outlook is the assumption that Sealed Air will obtain additional
committed financing of $250 million to $500 million to fund its
asbestos settlement payment (currently about $700 million
including accrued interest) in the W.R. Grace & Co. bankruptcy and
assure that liquidity remains comfortable.  S&P expects the
financing to be in place well in advance of Grace's exit from
bankruptcy, which could occur in 2009.  In addition, S&P expects
Sealed Air to address its potentially large 2010 debt maturities
in a timely manner.

S&P's concerns regarding financial performance center on the
likelihood of somewhat weaker demand, particularly in the
protective packaging business, in the current recession.  S&P
believes the financial profile will remain weak despite benefits
from recent restructuring, lower plastic resin costs, and
advantages associated with actions taken during the past few years
to move more manufacturing to geographic areas with lower
operating costs and growing demand, as well as lower capital
spending.  Total adjusted debt outstanding at Sept. 30, 2008, was
about $1.9 billion.  In December 2008, the company successfully
tendered for about $90 million of its notes due in May 2009.  S&P
adjust debt to include off-balance-sheet receivables and lease
financing and a small amount of unfunded postretirement
obligations.

The ratings on Sealed Air reflect its strong business risk profile
and its fairly consistent free cash flow.  These factors are
offset by an aggressive financial profile.


SENIOR HOUSING: Moody's Keeps 'Ba1' Senior Unsecured Debt Rating
----------------------------------------------------------------
Moody's Investors Service has affirmed the Ba1 senior unsecured
debt rating of Senior Housing Properties Trust and revised the
rating outlook to positive from stable.  Moody's has also upgraded
the REIT's preferred stock shelf rating to (P)Ba2 from (P)Ba3 to
conform with Moody's notching practices for REITs and REOCs with
strong bond covenants.  The outlook revision reflects the REIT's
expansion into medical office, clinic and biotech buildings, which
should lead to greater tenant diversification and earnings
stability over the long term.  The positive outlook also reflects
Senior Housing's ability to execute its growth strategy while
preserving financial flexibility and strong credit metrics.

In May 2008, Senior Housing announced a series of agreements to
acquire 48 medical office, clinic, and biotech lab buildings for
$565 million from HRPT Properties Trust, an affiliated REIT with
whom it shares an external manager.  Moody's views positively
Senior Housing's expansion into the MOB sub-segment, as these
assets have historically demonstrated greater relative earnings
stability with higher occupancy rates and lower turnover.
Furthermore, the nature of the MOB business lends itself to tenant
diversification, a material issue for Senior Housing.  Senior
Housing has long had a large tenant concentration with Five Star
Quality Care, which contributed about 66% of annualized rents as
of 3Q08.  Moody's expects the Five Star concentration to decrease
once the remaining MOB purchases are completed
($347 million of these assets had been purchased as of 12/24/08).

Moody's also notes that Senior Housing has a long history of
conservative financial management and the REIT has ample liquidity
to meet its funding needs at least through 2011.  Senior Housing
has grown substantially in recent years, with gross assets
increasing about 45% from 2006 through 3Q08.  However, the REIT
funded its growth predominately with common equity and effective
leverage was a low 21% at 3Q08 with fixed charge coverage of about
5.1x.  Furthermore, liquidity remains sound.  Senior Housing's
only material debt maturity prior to 2012 is its $550 million line
of credit ($93 million outstanding at 3Q08) which matures in
December 2010 (extendable at Senior Housing's option until
December 2011).  Funding needs are $215 million of acquisitions
remaining from the HRPT transaction.  The two REITs recently
agreed to grant both parties the option to change the possible
timing of these purchases to as late as 2Q10, providing Senior
Housing with time to raise external capital.

Moody's expects deteriorating senior housing fundamentals will be
a key credit challenge for Senior Housing to manage as the
economic slowdown continues.  But even as Moody's expect the
environment to remain challenging, Senior Housing's property level
coverage ratios are solid with cushion to absorb modest
deterioration in operators' earnings.

Other key credit challenges for Senior Housing are its large
tenant concentration with Five Star and external management
structure.  Although Five Star's performance has been improving in
recent years, this is still a large exposure for Senior Housing to
have with one operator.  In addition, Moody's views cautiously
Senior Housing's external management structure.  The REIT is
managed by Reit Management & Research, which also manages HRPT
Properties Trust and Hospitality Properties Trust, as well as some
other property funds and Five Star, a particular and material
issue for Senior Housing.  RMR earns a fee based on the amount of
assets under management, which can promote a conflict of interest
as the management company has an interest in growing the REIT and
not necessarily operating earnings.  Moody's also notes that
additional conflicts of interest may arise as RMR also provides
management services to Five Star.

Moody's indicated that a rating upgrade would likely reflect
Senior Housing's purchase of the remaining MOB assets from HRPT,
while obtaining sufficient external capital to preserve financial
flexibility for future growth.  Stable tenant operating
performance, with property level coverage ratios on major master
leases comfortably above 1x, will also be necessary for a ratings
upgrade.  A return to a stable outlook would likely result from
weak operating performance at Five Star or sustained deterioration
in property level coverage ratios from other major tenants.  Given
Senior Housing's Five Star concentration, Moody's expect the REIT
to maintain relatively conservative balance sheet metrics.
Therefore, an increase in leverage above 35% or a sustained
decline in fixed charge coverage below 3x would also be viewed
negatively.

Moody's last rating action with respect to Senior Housing
Properties Trust was on November 19, 2007, when its senior debt
rating was upgraded to Ba1 with a stable outlook.

These ratings were affirmed with a positive outlook:

  * Senior Housing Properties Trust -- Senior unsecured debt at
    Ba1; senior unsecured shelf at (P)Ba1; senior subordinate
    shelf at (P)Ba2; subordinate shelf at (P)Ba2; junior
    subordinate shelf (P)Ba2.

This rating was raised with a positive outlook:

  * Senior Housing Properties Trust -- preferred stock shelf to
    (P)Ba2 from (P)Ba3.

Senior Housing Properties Trust is a real estate investment trust
which owns senior living properties throughout the United States.
As of September 30, 2008, the REIT owned $2.6 billion of primarily
senior living properties with approximately 26,000 living units
located in 34 states.


SINOBIOPHARMA: Management Raises Going Concern Doubt
----------------------------------------------------
Sinobiopharma, Inc., President and Chief Executive Officer Lequn
Lee Huang disclosed in a regulatory filing dated January 14, 2009,
that the company has experienced losses since commencement of
operations amounting to $6,291,018 and has negative working
capital as of November 30, 2008, which raises substantial doubt
about the company's ability to continue as a going concern.  "The
ability of the company to meet its commitments as they become
payable is dependent on the ability of the company to obtain
necessary financing or achieve a consistently profitable level of
operations.  There are no assurances that the company will be
successful in achieving these goals."

"The company is in the process of developing markets for its
existing products and researching, developing, testing and
evaluating proposed new pharmaceutical products, and has not yet
determined whether these products are technically or economically
feasible.  The underlying value of the company is dependent on the
successful implementation of one or more of these products, the
ability of the company to obtain the necessary financing to
complete development and upon future profitable production or
sufficient proceeds from the disposition of manufacturing rights.
Management's plan is to actively search for new sources of capital
through equity investment."

As of November 30, 2008, the company's balance sheet showed total
assets of $5,274,458, total liabilities of $5,082,600 and total
stockholders' equity of $191,858.

The company realized a net loss of $897,376 for the six months
ended November 30, 2008, as compared to $66,063 for the six months
ended November 30, 2007.  The company had $147,138 in cash at
November 30, 2008.  The company had a working capital deficiency
of $3,908,091 at November 30, 2008.  The company has insufficient
cash available to sustain operations."

A full-text copy of the company's quarterly report is available
for free at: http://researcharchives.com/t/s?383c

                       About Sinobiopharma

On September 22, 2008, Sinobiopharma, Inc., completed the reverse
acquisition of Dongying Pharmaceutical Co, Limited, a company
organized under the laws of the Territory of the British Virgin
Islands, and all the subsidiaries of Dongying BVI in accordance
with the Share Exchange Agreement, whereby the company acquired
100% of the issued and outstanding shares in the capital of
Dongying BVI, in exchange for the issuance of 40,000,000 (post
forward stock split) shares of common stock of the company in
aggregate to the shareholders of Dongying BVI on a pro rata basis.
Dongying BVI is the registered owner of 100% of the capital of Big
Global Limited, a company organized under the laws of Hong Kong,
and Big Global Limited is the registered owner of 100% of the
capital of Dong Ying (Jiangsu) Pharmaceutical Co., Ltd., a company
organized under the laws of the People's Republic of China.  Dong
Ying China is in the business of the research, production and
development of biopharmaceutical products.


SIRIUS XM: S&P Downgrades Corporate Credit Rating to 'CCC'
----------------------------------------------------------
Standard & Poor's Ratings Services said it lowered its corporate
credit rating on Sirius XM Radio Inc. to 'CCC' from 'CCC+'.  S&P
also lowered the issue-level ratings on the debt of Sirius XM
Radio Inc. and of Sirius' unrestricted subsidiaries, XM Satellite
Radio Holdings Inc. and XM Satellite Radio Inc., which remain on
CreditWatch, though the implications are revised to negative from
developing.  S&P could affirm or lower the issue-level ratings
pending S&P's review of additional information and follow-up
discussions with management.  The outlook is negative.  New York
City-based Sirius XM had total debt outstanding of $3.37 billion
as of Sept. 30, 2008.

"The downgrade reflects our increased concern over the company's
ability to refinance roughly $960 million of debt maturities in
2009 (the first maturity of which is due in February) amid
persistently weak credit market conditions," said Standard &
Poor's credit analyst Hal F. Diamond.  In addition, S&P believes
the company may be challenged to meet its 2009 financial targets
of $300 million of EBITDA and modestly positive free cash flow,
considering the sharp decline in U.S. auto sales, which is likely
to slow subscriber growth.


SMURFIT-STONE: To Post 4thQ Results Jan. 26 As Woes Continue
------------------------------------------------------------
Smurfit-Stone Container Corp., is scheduled to report its fourth
quarter 2008 results on January 26, 2009, amid concerns that the
company may have continued to burn cash due to slumping demand of
its corrugated packaging.

Smurfit-Stone's continued financial woes have spurred concerns
that the company wouldn't be able to meet debt obligations this
year or that it might seek bankruptcy protection from creditors.

                       Significant Debt

Standard & Poor's says that continuing poor demand in 2009 due to
weak economic conditions makes it challenging for the company to
continue to meet its financial covenants.

The company posted assets of $7.45 billion, and stockholders'
equity of $1.725 billion as of Sept. 30, 2008.  The company,
however, has $316 million in debt payments due in 2009.  The
company also needs to refinance a $800 million revolving credit
line due in November 2009.

"This story highlights the risk of financial distress" within the
paper and forest-products industries, Mark Wilde, an analyst at
Deutsche Bank Securities in New York, said Jan. 15 in a note to
clients, according to Bloomberg News.

Mr. Wilde said Smurfit-Stone's competitors AbitibiBowater Inc.,
Temple-Inland Inc. and International Paper Co. also have
significant debt.

                  Bankruptcy Attorney Tapped

Smurfit-Stone has told bondholders that it could file for
bankruptcy, the Wall Street Journal reported Jan. 14.  According
to WSJ, sources said that Smurfit-Stone has hired Sidley Austin
Brown & Wood as bankruptcy counsel, and it has hired financial
advisers to try to line up about $750 million in debtor-in-
possession financing.  Citing people familiar with the matter, WSJ
states that Smurfit-Stone Container has tapped Lazard Ltd. to
negotiate for financing with existing lenders, which includes
Deutsche Bank and J.P. Morgan.

The company may file for bankruptcy "imminently," Gimme Credit, a
New York-based provider of fixed-income research, said Jan. 15,
according to Bloomberg.

The potential bankruptcy, however, "could be a negotiating ploy by
Smurfit" to pressure bondholders, who would fare worse than bank
lenders if the company filed for bankruptcy, Chip Dillon, an
independent paper and forest products analyst, said, according to
Bloomberg.

            Restructuring Actions May Not Be Enough

The company reported a $67 million adjusted net loss for the nine
months ended Sept. 30, 2008, compared with a $30 million net
income for the same period in 2007.

Smurfit-Stone said in November 2008, when it released its third
quarter results, that while the global economic slowdown is
impacting the U.S. packaging market, it expects to post improved
results for the fourth quarter of 2008 "as a result of higher
average selling prices and declining costs for reclaimed fiber,
energy and freight."

The company also said that it expects incremental savings from our
strategic initiatives.  The company in 2008 was in the final year
of its three-year transformation plan to achieve $525 million in
savings and productivity improvements, net of transition costs,
from its strategic initiatives.  It expected to achieve the $525
million in cumulative annual savings in 2008.  For the nine months
ended Sept. 30, 2008, the company closed five converting
facilities and announced the closure of three additional
converting facilities.  As a result of these closures and other
ongoing strategic initiatives, the company reduced its headcount
by approximately 610 employees.

Bloomberg, however, said Jan. 14, the global economic recession is
reducing demand for paper used to make containers for industrial
and consumer goods, still raising concerns that the company might
not be able to meet financial covenants.  The Chicago Tribune has
said that as a provider of boxes and other materials used in
transporting goods, Smurfit's fortunes are affected by the
quantity of items emerging from U.S. factories, and the drop in
manufacturing has hit hard.

In a Jan. 14 with the Securities and Exchange Commission, the
company said that with respect to its management incentive
program, "The performance threshold of $767 Million for payment of
the portion of awards based on meeting or exceeding the 2008
budgeted corporate EBITDA operating results was not achieved in
fiscal 2008 and no MIP awards were made to any of the executive
officers with respect to this performance objective."   The
company also said that $87 million target for certain cost
reductions for fiscal 2008 would have been achieved but for the
significant market-related mill downtime taken in the fourth
quarter of fiscal 2008 in response to the extraordinary economic
circumstances facing the company and the U.S. economy generally.

           Shares at Less than $1 Apiece Since November

Smurfit-Stone closed 6 cents on Friday, January 16 amid concerns
that it will end up in bankruptcy.

Bloomberg's Bill Rochelle noted that Smurfit-Stone lost 83% of its
value in Thursday's trading, closing below 6 cents, down 30 cents
a share in Nasdaq Stock Market trading.  Mr. Rochelle says traders
are concerned the corrugated container and containerboard maker
will end up in bankruptcy.

Smurfit has been trading under $1 a share since November 10, 2008.

Under the absolute priority rule of the Bankruptcy Code, creditors
have priority over a company's equity holders.  Secured creditors
have priority over unsecured creditors to the extent of the value
of their collateral.  Unsecured creditors stand ahead of investors
in the receiving line and their claims must be satisfied before
any investment loss is compensated.

         Credit Default Swaps Rise on Potential Bankruptcy

According to Bloomberg, Smurfit-Stone's credit-default swaps rose
on speculation that it may seek bankruptcy as demand for shipping
boxes slows and debt repayments loom.  The cost to protect $10
million of Smurfit-Stone's debt from default for five years
increased to $9.6 million a year from $6.9 million, the report
said, citing CMA Datavision prices.

                       About Smurfit-Stone

Smurfit-Stone Container Corp. is North American's second largest
maker of corrugated packaging.  Headquartered in Chicago,
Illinois, Smurfit-Stone Container (Nasdaq: SSCC) --
http://www.smurfit-stone.com/-- is a publicly traded holding
company that operates through a wholly owned subsidiary company,
Smurfit-Stone Container Enterprises Inc.  The company is an
integrated producer of containerboard and corrugated containers
(paper-based industrial packaging) and is a large collector,
marketer, and exporter of recycled fiber.  Smurfit-Stone operates
approximately 170 facilities and employs approximately 22,000
people.

                           *     *     *

As reported by the Troubled Company Reporter on Jan. 19, 2009,
Standard & Poor's Ratings Services said that it lowered its
ratings on Smurfit-Stone Container Corp. and its subsidiaries,
including its corporate credit rating to 'CCC' from 'B'.  "The
downgrade reflects our increasing concerns about the company's
ability to meet its financial obligations because of continuing
poor demand and the still frozen credit markets," said Standard &
Poor's credit analyst Pamela Rice.

Fitch Ratings also downgraded its issuer default rating of Smurfit
to 'C' from 'B'.  "The ratings downgrades have been prompted by
concerns that SSCC may seek bankruptcy protection imminently,
precipitated by a sudden decline in business conditions in the
fourth quarter of 2008, yet to be reported," Fitch said.


SOLUTIA INC: Faces Lyondell Unit Suit for $28MM Loan Payment
------------------------------------------------------------
Lyondell Chemical Co's affiliate Equistar Chemicals, LP and
Solutia Inc. were parties to an Amended and Restated Chemical
Grade Propylene Sales Agreement contract wherein Equistar sold
certain chemical grade propylene to Solutia.  Since October 10,
2008, the Debtor has sent 10 invoices to Solutia.  Under the
Agreement, Solutia must pay for propylene within 30 days of each
invoice date.

Proposed counsel for the Debtors, Howard Hawkins, Esq., at
Cadwalader, Wickersham & Taft LLP, in New York, tells the U.S.
Bankruptcy Court for the Southern District of New York that
Solutia has never disputed any of the invoices, which are
due and owing for $28,928,488, yet it has refused to pay the
amounts.

Mr. Hawkins argues that the $28,928,488 is a matured debt under
Section 542(b) of the Bankruptcy Code and Solutia, thus, violated
Section 542(b) when it did not pay the matured debt to the
Debtor.

Against this backdrop, Mr. Hawkins says, the Debtor is entitled
to a judgment:

    (i) declaring that the Debtor is owed a matured debt for
        $28,928,488 pursuant to Section 542(b), and Solutia
        violated Section 542(b) because it has not paid the
        $28,928,488,

   (ii) directing Solutia to turn over to the Debtor
        $28,928,488, and

  (iii) awarding the Debtor its costs and expenses, including
        attorneys' fees incurred in connection with the Debtor's
        efforts to compel Solutia's compliance with its
        obligations.

Moreover, the Agreement is a valid, binding and enforceable
contract between the Debtor and Solutia.  Mr. Hawkins attests
that the Debtor has performed its obligations under the
Agreement.  Accordingly, Solutia's failure and refusal to remit
to the Debtor the amounts due to under Agreement constitute a
breach of contract.  Mr. Hawkins further contends that Solutia
violated Sections 362(a)(3) and (a)(7) of the Bankruptcy Code by
failing to pay the Debtor, and withholding payment of the
$28,928,488.

The Debtor asks the Court to issue judgment:

  (a) declaring that Solutia owes a matured debt to the Debtor
      for $28,928,488;

  (b) awarding damages for $28,928,488 resulting from Solutia's
      breach of the Agreement;

  (c) directing Solutia to pay $28,928,488;

  (d) declaring that Solutia's continued failure to pay the
      matured debt constitutes a violation of Sections 362(a)
      and 542(b); and

  (e) awarding the Debtor its costs, including attorney's fees,
      incurred in connection with its efforts to compel
      Solutia's compliance under the Bankruptcy Code.

                        About Solutia Inc.

Based in St. Louis, Missouri, Solutia Inc. (NYSE: SOA) --
http://www.solutia.com/-- and its subsidiaries, manufactures and
sells chemical-based materials, which are used in consumer and
industrial applications worldwide.

The company and 15 debtor-affiliates filed for chapter 11
protection on Dec. 17, 2003 (Bankr. S.D.N.Y. Lead Case No. 03-
17949).  When the Debtors filed for protection from their
creditors, they listed $2,854,000,000 in assets and $3,223,000,000
in debts.

On Feb. 14, 2006, the Debtors filed their Reorganization Plan &
Disclosure Statement.  On May 15, 2007, they filed an Amended
Reorganization Plan and on July 9, 2007, filed a 2nd Amended
Reorganization Plan.  The Bankruptcy Court approved the Debtors'
amended Disclosure Statement on Oct. 19, 2007.  On Oct. 22, 2007,
the Debtor re-filed a Consensual Plan & Disclosure Statement and
on Nov. 29, 2007, the Court confirmed the Debtors' Consensual
Plan.  Solutia emerged from chapter 11 protection Feb. 28, 2008.

Solutia was represented by Richard M. Cieri, Esq., Jonathan S.
Henes, Esq., and Michael A. Cohen, Esq., at Kirkland & Ellis LLP,
in New York, as lead bankruptcy counsel, and David A. Warfield,
Esq., and Laura Toledo, Esq., at Blackwell Sanders LLP, in St.
Louis Missouri, as special counsel.  Trumbull Group LLC was the
Debtor's claims and noticing agent.  Daniel H. Golden, Esq., Ira
S. Dizengoff, Esq., and Russel J. Reid, Esq., at Akin Gump Strauss
Hauer & Feld LLP represented the Official Committee of Unsecured
Creditors, and Derron S. Slonecker at Houlihan Lokey Howard &
Zukin Capital provided the Creditors' Committee with financial
advice.  The Official Committee of Retirees of Solutia, Inc., et
al., was represented by Daniel D. Doyle, Esq., Nicholas A. Franke,
Esq., and David M. Brown, Esq., at Spencer Fane Britt & Browne,
LLP, in St. Louis, Missouri, and Frank M. Young, Esq., Thomas E.
Reynolds, Esq., R. Scott Williams, Esq., at Haskell Slaughter
Young & Rediker, LLC, in Birmingham, Alabama.

Solutia's $2.05 billion exit financing facility was funded by
Citigroup Global Markets Inc., Goldman Sachs Credit Partners L.P.,
and Deutsche Bank Securities Inc.  The exit financing is being
used to pay certain creditors, and for ongoing operations.

Bankruptcy Creditors' Service, Inc., publishes Solutia Bankruptcy
News.  The newsletter tracks the chapter 11 proceeding undertaken
by Solutia Inc. and its various affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)

                           *     *     *

Standard & Poor's Ratings Services said its ratings on Solutia
Inc. (B+/Stable/--) will not change as a result of the company's
recent announcement of a public offering of common shares.

                      About LyondellBasell

Basell AF and Lyondell Chemical Company merged operations
in 2007 to form LyondellBasell Industries --
http://www.lyondellbasell.com/-- the world's third largest
independent chemical company.  Lyondellbasell produces
polypropylene and advanced polyolefins products, is a leading
supplier of polyethylene, and a global leader in the development
and licensing of polypropylene and polyethylene processes and
related catalyst sales.

LyondellBasell became saddled with debt as part of the
$12.7 billion merger.  About a year after completing the merger,
LyondellBasell Industries' U.S. operations and one of its European
holding companies -- Basell Germany Holdings GmbH -- filed
voluntary petitions to reorganize under Chapter 11 of the U.S.
Bankruptcy Code on January 6, 2009, to facilitate a restructuring
of the company's debts.  The case is In re Lyondell Chemical
Company, et al., Bankr. S.D. N.Y. Lead Case No. 09-10023).
Seventy-nine Lyondell entities, including Equistar Chemicals, LP,
Lyondell Chemical Company, Millennium Chemicals Inc., and Wyatt
Industries, Inc., filed for Chapter 11.  LyondellBasell is not
part of the bankruptcy filing.  LyondellBasell's non-U.S.
operating entities are also not included in the Chapter 11 filing.

The Hon. Robert E. Gerber presides over the case.  Deryck A.
Palmer, Esq., at Cadwalader, Wickersham & Taft LLP, in New York,
serves as the Debtors' bankruptcy counsel.  Evercore Partners
serves as financial advisors, and Alix Partners and its subsidiary
AP Services LLC, serves as restructuring advisors.  AlixPartners'
Kevin M. McShea acts as the Debtors' Chief Restructuring Officer.
Clifford Chance LLP serves as restructuring advisors to the
European entities.

Lyondell Chemical estimated that consolidated assets total $27.12
billion and debts total $19.34 billion as of the bankruptcy filing
date.

Bankruptcy Creditors' Service, Inc., publishes Lyondell Bankruptcy
News.  The newsletter tracks the chapter 11 proceeding undertaken
by Lyondell Chemical Company and its various affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)


SPANSION INC: Up for Sale; Cure Period for Payments Ends Feb. 14
----------------------------------------------------------------
Spansion Inc. (NASDAQ: SPSN) said Jan. 15 that it has been
exploring strategic alternatives, including, but not limited to,
opportunities to merge with or sell to similar U.S. or foreign
businesses.  These strategic alternatives would be designed to
build on Spansion's position as a leading supplier of NOR flash
memory by creating significantly greater scale and to provide
Spansion's customers with a broader range of more cost effective
memory solutions. Spansion has engaged Barclays Capital to assist
the company in exploring these strategic alternatives.

Spansion also announced that in connection with the exploration of
strategic alternatives it has initiated discussions to begin an
organized process of potential balance sheet restructuring
opportunities.  In anticipation of this process, Spansion has
decided to delay make the Jan. 15 scheduled interest payment on
its outstanding 11.25% senior notes that mature in 2016.  Under
the indenture governing the 11.25% Notes, a failure to make an
interest payment is subject to a 30-day cure period.  Noteholders
wishing to participate in this process should contact Geoffrey
Zbikowski at Gordian Group LLC at 212-486-3600 x143

Standard & Poor's Ratings Services lowered its corporate credit
rating on Spansion Inc. to 'D' from 'CCC', and the issue-level
rating on Spansion LLC's $250 million 11.25% senior unsecured
notes due 2016 to 'D' from 'CC'.  "Although the indenture on the
2016 notes permits a 30-day cure period, S&P's rating action
indicates that S&P does not currently expect the company to make
the interest payment within this time frame," said Standard &
Poor's credit analyst Bruce Hyman.

Moody's Investor Service lowered its ratings on the Senior
Unsecured Notes to Ca from Caa3.

According to Bloomberg's Bill Rochelle, debt for Sunnyvale,
California-based Spansion was $1.6 billion as of Sept. 28.  He
added that Spansion doesn't have any material debt maturities
until 2013 and no covenants on secured borrowings, although
neither matters much when there's a payment default.

The company has been hurt by falling prices in the memory market
and inventory issues, and it has had to try to sell assets and
shut down facilities, analysts said, according to Reuters.

"They're running into a time constraint," Reuters cited Caris & Co
analyst Betsy Van Hees as saying.  "They could do with money to
continue to run the company.  And without the ability to go out
and get additional credit, it's either a sale or merger or
unfortunately -- the worst case scenario -- bankruptcy.

                           About Spansion

Spansion (NASDAQ: SPSN) -- http://www.spansion.com-- is a leading
Flash memory solutions provider, dedicated to enabling, storing
and protecting digital content in wireless, automotive, networking
and consumer electronics applications.  Spansion, previously a
joint venture of AMD and Fujitsu, is the largest company in the
world dedicated exclusively to designing, developing,
manufacturing, marketing, selling and licensing Flash memory
solutions.


STRATEGIC RESOURCES: Case Summary & 10 Largest Unsec. Creditors
---------------------------------------------------------------
Debtor: Strategic Resources Acquisition Corporation
        One University Avenue, Suite 401
        Toronto, Ontario MSJ 2P1

Bankruptcy Case No.: 09- 00392

Chapter 11 Petition Date: January 15, 2009

Court: Middle District of Tennessee (Nashville)

Judge: George C. Paine II

Debtor's Counsel: B. Gail Reese, Esq.
                  greese@wyattfirm.com
                  Wyatt, Tarrant & Combs, LLP
                  2525 West End, Suite 1500
                  Nashville, TN 37203
                  Tel: (615) 251-6673
                  Fax: (615) 256-1726

Estimated Assets: $500,000 $1 million

Estimated Debts: $50 million to $100 million

The Debtor's Largest Unsecured Creditors:

   Entity                                        Claim Amount
   ------                                        ------------
Blackmont Capital Inc.                           $78,750
181 Bay Street, BCE Place,
Suite 900
P.O Box 779
Toronto, ON M5J 2T3

Stikeman Elliott LLP                             $77,961
5300 Commerce Court West
199 Bay Street
Toronto, ON M5L 1B9

Victor Wyprysky                                  $50,097
151 Lytton Blvd.
Toronto, ON M2M 4J2

Wellpoint Systems Inc.                           $11,893

Scotiabank VISA - Ian MacNeily                   $9,195

Telemerge Canada Inc.                            $5,576

Scotiabank - ScotiaGold Passport                 $4,314

Receiver General                                 $2,500
Canada Revenue Agency

Scotiabank VISA - Christine Pullen               $1,959

Resources Global Professionals                   $1,410

The petition was signed by Ian MacNeily, executive vice president
and chief financial officer.


SPECIAL DEVICES: Receives Court Nod for $22.5MM DIP Facility
------------------------------------------------------------
Special Devices Inc. received final approval from the U.S.
Bankruptcy Court for the District of Delaware to enter into a
$22.5 million secured financing with Wayzata Opportunities Fund
LLC, one of the pre-bankruptcy lenders.

According to Bloomberg's Bill Rochelle, the loan encompasses the
pre-bankruptcy secured debt.

Moorpark, California-based Special Devices Inc. --
http://www.specialdevices.com/-- was founded in the 1950s to
manufacture explosives for film special effects, also makes
initiators for the defense and mining industries.  The company
makes a component that causes car air-bags to deploy.

Special Devices filed for Chapter 11 protection on December 15,
2008 (Bankr. D. Del. 08-13312) after failing to refinance $73.6
million in debt.  The Hon. Mary F. Walrath oversees the case.
Jason M. Madron, Esq., and Mark D. Collins, Esq., at Richards,
Layton & Finger, P.A., serve as the Debtor's counsel.  Gibson,
Dunn & Crutcher LLP acts as special corporate counsel, and
Kurztman Carson Consultants LLC acts as claims agent.  When it
filed for bankruptcy, the Debtor estimated both assets and debts
to be between $50 million and $100 million.


SUPERIOR AIR: To Conduct Auction of Assets on Feb. 24
-----------------------------------------------------
Superior Air Parts Inc. will further market test its assets or
business at an auction scheduled for February 24, 2009.

Superior Air has signed an asset purchase agreement pursuant to
which, it has agreed to sell its assets to Avco Corporation,
absent higher bids for those assets at the auction.

The U.S. Bankruptcy Court for the Northern District of Texas has
approved the proposed bid procedures, which contemplate a Feb. 19
deadline to submit bids.  The auction will be held if competing
bids are received.  The Court also set a Feb. 24 hearing to
consider approval of the sale.

Avco, a subsidiary of Textron, Inc., has offered to purchase
Superior Air for $11.5 million.

According to the Debtor, the Chapter 11 case was filed to
liquidate the assets of Superior and to obtain the highest and
best price for creditors, either through the purchase agreement
with Textron Inc. or a public auction.

The Debtor, however, seeks a fast-tracked sale of its assets.
Superior Air said that due to the nature of its business, it is
not feasible for the Debtor to continue to assemble and sell small
engines or to sell parts when the sale of substantially all of its
assets is pending.  The longer the Debtor must continue to operate
in this mode, the less funds will be available to pay creditors.

The Debtor is still accepting bids and will conduct an auction if
qualified bids are received.  Avco may terminate the APA if
the Court does not approve the sale by March 31.

                        About Superior Air

Superior Air Parts, Inc. is a Texas corporation with its offices
and operating facilities located in Coppell, Dallas County, Texas.
It was founded in 1967 in order to supply the United States Air
Force and commercial customers with replacement parts for piston
powered aircraft engines.  Superior is one of the largest
suppliers of parts under Federal Aviation Administration's  Parts
Manufacturer Approval regulations for piston engines.  It provides
Superior-brand parts for engines created by two primary original
equipment manufacturers, the Continental division of Teledyne,
Inc. and the Lycoming division of Textron Inc. Its customers are
companies that perform maintenance and overhaul work in the
general aviation industry.  Superior is also an OEM for the 180-
horsepower Vantage Engine and owner-built XM-360 engines for
various aircraft companies.

In 2006, 100% of the ownership interests of Superior was acquired
by Thielert, AG, a German corporation based out of Hamburg,
Germany. Also in 2006, Thielert purchased the debt of Superior's
senior secured lender and subordinated lenders secured by
substantially all of the Debtor's assets.

Superior Air Parts filed for Chapter 11 on Dec. 31, 2008 (Bankr. ,
N.D. Tex., Case No. 08-36705).  Judge Barbara J. Houser handles
the case.  The Debtor's counsel is Stephen A. Roberts, Esq., at
Strasburger & Price, LLP, in Austin Texas.  In its bankruptcy
petition, the Debtor estimated assets and debts of $10 million to
$50 million each.


TERRA INDUSTRIES: Fitch Places 'BB-' Rating on Evolving Watch
-------------------------------------------------------------
Fitch Ratings has placed the Issuer Default Ratings and
outstanding debt ratings of Terra Industries, Inc., and its
subsidiaries on Rating Watch Evolving following an unsolicited
offer by CF Industries Holdings, Inc., to acquire the company.
Terra's debt ratings and those of its subsidiaries are:

Terra Industries

  -- IDR - 'BB';
  -- Convertible preferred shares - 'BB-'.

Terra Capital

  -- IDR - 'BB';
  -- Senior unsecured notes - 'BB';
  -- Senior secured bank credit - 'BB+'.

Terra Nitrogen, L.P.

  -- IDR - 'BB';
  -- Senior secured bank credit - 'BB+'.

Terra's Board of Directors in consultation with its financial and
legal advisors is evaluating CF Industries' proposal.  CF
Industries has offered .4235 of its common shares for each of
Terra's common shares.  The offer is subject to the negotiation of
a definitive merger agreement, necessary shareholder approvals and
the approval of Terra's Board of Directors.

The Rating Watch Evolving responds to a fluid situation, the
resolution of which could have positive, negative or no impact on
the risks to Terra's creditors.  Terra Capital, Inc., has a sole
7.0% senior unsecured notes issue outstanding totaling
$330 million maturing in 2017.  The notes may be put back to the
company at 101% of par upon a 'change of control' as defined in
the notes' indenture.  Terra Capital, Inc., also has a
$150 million secured revolving credit facility maturing in 2012,
while Terra Nitrogen Company, L.P. has a coterminous $50 million
secured revolving credit facility.  There were no outstanding
borrowings under either of these facilities at the close of the
September 2008 third quarter.  Terra's rolling twelve month EBITDA
through the third quarter totaled $863 million, bringing total
debt to rolling twelve month's EBITA to 0.40 times (x).

Terra Industries is a major North American fertilizer company.
Terra earned $883 million in EBITDA in 2007 on approximately
$2.6 billion in revenues.  Terra manufactures anhydrous ammonia,
urea, ammonium nitrate, urea ammonium nitrate and methanol.  Terra
owns roughly 75% of Terra Nitrogen Company, L.P. which runs the
second largest UAN production facility in North America.


TERRA INDUSTRIES: Moody's Affirms 'Ba3' Corporate Family Rating
---------------------------------------------------------------
Moody's Investors Service affirmed the Ba3 Corporate Family Rating
(CFR) rating of Terra Industries Inc. and also affirmed Terra's B1
senior unsecured rating.  This action reflects the announcement by
Terra of the receipt of an unsolicited proposal from CF Industries
Holdings, Inc. (CFI - unrated) to acquire Terra for a fixed
exchange ratio of 0.4235 CF Industries shares for each Terra
common share.  Terra's Board of Directors, consistent with their
fiduciary duties and in consultation with the company's
independent financial and legal advisors, is expected to consider
and evaluate the proposal and will pursue the course of action
that is in the best interests of Terra and its shareholders.

The developing outlook reflects the possibility that Terra, as a
result of this unsolicited bid, may continue to be the subject of
actual and speculated merger and acquisition activity.  The
ratings outlook for Terra is developing as the ratings may change
depending on the final structure of any deal that is consummated.

Moody's most recent announcement concerning the ratings for Terra
was on January 24, 2007 when the CFR ratings were raised to Ba3
reflecting a number of positive actions taken by management to
strengthen the capital structure along with expected improvements
in operating performance that, when combined, will result in
improved cash flow and meaningful improvement in credit metrics.

Ratings affirmed:

Terra Industries Inc.

  * Corporate family rating: Ba3

Terra Capital, Inc.

  * $330 million of guaranteed senior unsecured notes due 2017:
    B1 (LGD4, 65%)

Terra Industries, Inc., headquartered in Sioux City, Iowa,
produces nitrogen fertilizer products including ammonia, urea,
nitrogen solutions, and ammonium nitrate.  The company has
facilities and joint ventures in the Midwestern and Southern U.S.,
Canada, Trinidad, and the United Kingdom.  Terra is the world's
largest UAN producer and controls 40% of domestic production
capacity.  Revenue for the LTM period ending
September 30, 2008 was approximately $2.8 billion.


THINKENGINE NETWORKS: Anne White Named as Chapter 7 Trustee
-----------------------------------------------------------
The United States Bankruptcy Court for the District of
Massachusetts has appointed Anne J. White as trustee to oversee
ThinkEngine Networks, Inc.'s Chapter 7 liquidation case.

Ms. White's address is c/o Klieman Lyons Schindler and Gross, 21
Custom House Street, Boston, Massachusetts 02110 and her telephone
number is 617-443-1000.

As a result of the bankruptcy filing and the related termination
of its employees, the Company has suspended business operations.

The Company's Chapter 7 filing constitutes an event of default
under the Company's Loan and Security Agreement with Vencore
Solutions LLC, as amended, and has resulted in the acceleration of
all outstanding obligations under the Loan Agreement, which are
currently approximately $1,048,618.16.

Effective January 14, 2009, Robert C. Fleming, Michael G. Mitchell
and John E. Sweeney resigned from their respective positions as
members of the Company's Board of Directors.

Effective December 31, 2008, the Company terminated the employment
of all of its employees, including Michael G. Mitchell, its
President and Chief Executive Officer and John E. Steinkrauss, its
Vice President, Treasurer and Chief Financial Officer.  Messrs.
Mitchell and Steinkrauss resigned from their respective officer
positions with the Company effective January 14, 2009.
Mr. Steinkrauss has agreed to provide consulting services on an
hourly basis at a rate of $120 per hour through January 23, 2009
in order to facilitate the bankruptcy filing and related
liquidation of the Company by the trustee.

Headquartered in Marlborough, Mass., ThinkEngine Networks Inc.
(Pink Sheets: THNK) -- http://www.thinkengine.com/-- is a
provider of time division multiplexer (TDM) and Internet Protocol
(IP) capable conferencing bridges and media servers.

ThinkEngine Networks, Inc., filed a voluntary petition under
Chapter 7 of the Bankruptcy Code on January 14, 2009 (Bankr. D.
Mass. Case Number 09-40115).

ThinkEngine Networks Inc.'s balance sheet at Sept. 30, 2008,
showed $1,355,000 in total assets and $3,349,000 in total
liabilities resulting in a $1,994,000 stockholders' deficit.

The company's balance sheet also showed strained liquidity with
$1,048 in total current assets available to pay $2,411,000 in
total current liabilities.

The company reported $624,000 net loss on total revenues of
$997,000 for the three months ended Sept. 30, 2008, compared to
$1,498,000 net loss on total revenues of $1,799,000 for the same
period a year ago.

                      Going Concern Doubt

Carlin, Charron & Rosen, LLP, in Glastonbury, Conn., expressed
substantial doubt about Thinkengine Networks Inc.'s ability to
continue as a going concern after auditing the company's financial
statements for the years ended Dec. 31, 2007, and 2006.  The
auditing firm pointed to the company's net losses for the years
ended Dec. 31, 2007, and 2006, accumulated deficit, stockholders'
deficit and limited working capital at Dec. 31, 2007.

A full-text copy of the company's regulatory filing is available
for free at: http://ResearchArchives.com/t/s?345d


TRIBUNE CO: Court OKs Chicago Tribune's Pact with Dow Jones
-----------------------------------------------------------
Judge Kevin J. Carey of the U.S. Bankruptcy Court for the District
of Delaware authorized Tribune Company's affiliate to enter into
the joint agreement with Dow Jones & Company, Inc.

Under the deal, Chicago Tribune will print the daily weekend
editions of The Wall Street Journal and Barron's in the Midwest
region.

The Bankruptcy Court also authorized the Debtors to file under
seal the un-redacted version of a master services agreement with
Dow Jones.  Per Court's directive, the Debtors filed the amended
service agreement.

Kate J. Stickles, Esq., at Cole, Schotz, Meisel, Forman &
Leonard, P.A., in Wilmington, Delaware, said no objection as to
the motion was filed.

              Chicago Tribune's Deal with Dow Jones

Pursuant to Section 363 of the Bankruptcy Code, Chicago Tribune
signed a master services agreement and related statement of work 1
with Dow Jones, a subsidiary of News Corporation.  Its Consumer
Media Group publishes The Wall Street Journal, Barron's,
MarketWatch and the Far Eastern Economic Review.

Ms. Stickles said that to meet its business needs commencing as of
the start of the year, Dow Jones has retained Chicago Tribune for
a provisional 90-day term, pending the Court's approval, to print
daily and weekend editions of The Wall Street Journal and the
weekly Barron's in the Midwest.

If the MSA is granted by the Court, Chicago Tribune will perform
services to Dow Jones for ten years, which includes printing,
pre-printing and transportation and inserting services.

The Debtors, including Chicago Tribune, have previously entered
numerous other outsourcing agreements pursuant to which they
print or deliver other newspaper publications.  Accordingly,
Chicago Tribune believes that its proposed entry into the MSA is
within the ordinary course of business for purposes of Section
363 and therefore does not require Court approval.  However,
certain unique circumstances, including the appointment of the
Official Committee of Unsecured Creditors have caused Chicago
Tribune to seek Court authority out of abundance of caution.

In a company press release, Becky Brubaker, Tribune senior vice
president of manufacturing and distribution, says "[w]e're
thrilled to be growing our business relationship with Dow Jones."

Chicago Tribune said printing the Dow Jones papers at the
Tribune's Freedom Center -- a deal anticipated in early November
2009 when Dow Jones said it planned to shutter its printing
facility in Naperville -- is expected to net the Chicago Tribune
more than $2 million annually, while reducing Dow Jones' expenses
in the region.

A redacted version of the MSA and related Statement of Work is
available for free at http://ResearchArchives.com/t/s?368d

                       About Tribune Company

Tribune Co. is America's largest employee-owned media company,
operating businesses in publishing, interactive and broadcasting.
In publishing, Tribune's leading daily newspapers include the Los
Angeles Times, Chicago Tribune, The Baltimore Sun, Sun Sentinel
(South Florida), Orlando Sentinel, Hartford Courant, Morning Call
and Daily Press.  The company's broadcasting group operates 23
television stations, WGN America on national cable, Chicago's WGN-
AM and the Chicago Cubs baseball team.  Popular news and
information Web sites complement Tribune's print and broadcast
properties and extend the company's nationwide audience.

The company and 110 of its affiliates filed for Chapter 11
protection on December 8, 2008 (Bankr. D. Del. Lead Case No.
08-13141). The Debtors proposed Sidley Austion LLP as their
counsel; Cole, Schotz, Meisel, Forman & Leonard, PA, as Delaware
counsel; Lazard Ltd. and Alvarez & Marsal North Americal LLC as
financial advisors; and Epiq Bankruptcy Solutions LLC as claims
agent. As of Dec. 8, 2008, the Debtors have $7,604,195,000 in
total assets and $12,972,541,148 in total debts.

Bankruptcy Creditors' Service, Inc., publishes Tribune Bankruptcy
News.  The newsletter tracks the chapter 11 proceeding undertaken
by Tribune Company and its various affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)


TRIBUNE CO: Working on Business Plan, CFO Chandler Bigelow Says
---------------------------------------------------------------
Chandler Bigelow III, senior vice president and chief financial
officer of Tribune Company, said the media company is working on
a business plan that will help it emerge from bankruptcy, the
Associate Press reported on January 16, 2009.

Tribune is beginning to form a strategy for holding the company's
major assets together, instead of tearing them apart, The Chicago
Tribune said, citing sources close to the situation.

"We are facing very difficult cyclical and sector pressures in
our key businesses," AP said quoting Mr. Bigelow as saying during
the Section 341 meeting of Tribune creditors on January 16.
Nevertheless, he said Tribune is focused on reorganizing its
balance sheet and capital structure and creating a platform to
continue operating its businesses.

"We continue to work very, very hard to maximize the value of
those assets and feel like we're making progress, and we're doing
everything we can to drive liquidity into the company," Mr.
Bigelow told AP.  "When we have something to announce, we will
publicly announce it."

The Chicago Tribune related that Tribune executives are on the
assumption that the company's assets are probably worth more when
held together than if they are chopped and sold at distressed
prices.  The media company owns dailies like the Chicago Tribune,
the Los Angeles Times, and the Hartford Courant, 23 television
stations, and the Chicago Cubs baseball team.

The Cubs, which is not part of the Chapter 11 cases, is being
sold outside the bankruptcy proceedings.

The newspaper added that Tribune chairman, Sam Zell, is bent on
preserving the company's S-Corp. Employee Stock Ownership Plan
corporate structure, stating that the structure's tax advantages
will continue to have significant value if the company can emerge
from bankruptcy protection as a going concern.

Several creditors, according to the Chicago Tribune, expressed
support in keeping the current structure intact but said that
"making a deal succeed in that framework would be difficult."
Tax experts opined that reworking Tribune's financing could be
hampered by restrictive tax rules that govern S-Corp ESOPs, the
newspaper related.

                    Minutes of Sec. 341 Meeting

The U.S. Trustee for Region 3 held a meeting, pursuant to Section
341 of the Bankruptcy Code, of the creditors in Tribune Company
and its affiliates' bankruptcy cases on January 16, 2009.

During the Sec. 341 meeting, Mr. Bigelow faced questions
from Joseph McMahon, Jr., Esq., counsel to the U.S. Trustee, on
why the second of two solvency opinions issued in connection with
the company's 2007 leveraged buy-out was never made public, The
Chicago Tribune related.

Mr. Bigelow, in response, deferred to a Tribune bankruptcy lawyer
who said the company is willing to provide the information later,
the newspaper said.

Mr. Bigelow explained during the Sec. 341 meeting that the buyout
was conducted in two steps, the first is the establishment of an
employee stock ownership plan and an initial purchase of half of
Tribune's outstanding shares for about $4 billion, the newspaper
related.  The second step, the newspaper added, involved approval
by federal regulators and the borrowing of about $3.7 billion to
purchase remaining shares.

In a public statement released after the Sec. 341 meeting, Mr.
Bigelow stated that "Tribune received two solvency opinions from
an independent valuation firm with regard to this transaction.
The first was obtained in May 2007, during the first-step tender
offer portion of the transaction.  The second opinion was
received in December 2007, and addressed the solvency of the
company immediately after giving effect to the closing of the
transaction.  Completion of the transaction was contingent on the
receipt of this December 2007 opinion confirming the company's
solvency.  Both opinions reached the same conclusion, that
Tribune was solvent."

"The first opinion," Mr. Bigelow continued, "was filed publicly
in connection with the company?s tender offer which closed in
June 2007; federal securities laws governing tender offers
required this filing.  Because no similar filing requirement
applied to the December 2007 solvency opinion, the company did
not publicly file this second opinion."

Bryan Krakauer, Esq., at Sidley Austin LLP, and Norman L.
Pernick, Esq., at Cole, Schotz, Meisel, Forman & Leonard, P.A.,
represented the Debtors during the Sec. 341 meeting.

Appearing on behalf of the Official Committee of Unsecured
Creditors were Jason Porter, Esq., at Chadbourne & Parke LLP, and
Mona Parikh, Esq., at Landis Rath & Cobb LLP.

The Sec. 341 meeting will be continued to a date to be determined
after the Debtors have filed their Schedules of Assets and
Liabilities and Statements of Financial Affairs, the Chicago
Tribune said.

Headquartered in Chicago, Illinois, Tribune Company --
http://www.tribune.com/-- is a media company, operating
businesses in publishing, interactive and broadcasting, including
ten daily newspapers and commuter tabloids, 23 television
stations, WGN America, WGN-AM and the Chicago Cubs baseball
team. The company and 110 of its affiliates filed for Chapter 11
protection on December 8, 2008 (Bankr. D. Del. Lead Case No.
08-13141). The Debtors proposed Sidley Austion LLP as their
counsel; Cole, Schotz, Meisel, Forman & Leonard, PA, as Delaware
counsel; Lazard Ltd. and Alvarez & Marsal North Americal LLC as
financial advisors; and Epiq Bankruptcy Solutions LLC as claims
agent. As of Dec. 8, 2008, the Debtors have $7,604,195,000 in
total assets and $12,972,541,148 in total debts.

Bankruptcy Creditors' Service, Inc., publishes Tribune
Bankruptcy News.  The newsletter tracks the chapter 11 proceeding
undertaken by Tribune Company and its various affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)


TRIBUNE CO: $125,000,000 DIP Loan Approved on Final Basis
---------------------------------------------------------
Judge Kevin Carey of the U.S. Bankruptcy Court for the District of
Delaware authorized Tribune Company and its affiliates, on a final
basis, to amend the $300 million accounts receivable
securitization facilities, dated July 1, 2008, with Barclays Bank
PLC, as Funding Agent, Administrative Agent and Issuing Bank, to
extend the Debtors' access under the facilities until April 10,
2009.

Judge Carey also authorized the Debtors to transfer free and
clear of liens, claims and encumbrances, the Receivables Purchase
Agreement Assets to non-debtor Tribune Receivables LLC, without
recourse.

The liens and superpriority claims securing the collateral under
the prepetition Receivables Loan Agreement granted to the RLA
Agent will be subject and subordinate to a carve-out for payment
of allowed fees and disbursements incurred by the professionals
retained by the Debtors and the Official Committee of Unsecured
Creditors in an amount not to exceed $7,500,000.

Judge Carey held that if any amount is paid out under the Carve-
Out, the liens in the RLA collateral and superpriority claims
granted to RLA agent will extend to the proceeds of avoidance
actions.

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

                   Terms of Receivables Facility

Under the Receivables Facility Agreement, certain Debtors sell
their accounts receivables to their parent, Tribune Co., which
then sells the accounts to a special purpose vehicle buyer, non-
Debtor Tribune Receivables, LLC, through loans provided by
certain lenders, currently Barclays.  Tribune Receivables grants
Barclays a first-priority perfected security interest in, among
other things, the Receivables purchased by it, all accounts to
which collections on the Receivables are remitted, the related
concentration accounts, and permitted investments held in a
controlled money market fund account at Bank of America, N.A.
About $225 million of the Facility has been used up by Tribune
Receivables prepetition.

Chandler Bigelow III, senior vice president and chief financial
officer of Tribune Co., has explained to the Court that the
purpose of the Receivables Facility is to provide liquidity to
Tribune Co. and certain of its Debtor affiliates by enabling them
to realize the cash equivalent value of certain of their accounts
receivables prior to the usual collection period.

The Receivables Facility Accounts, Mr. Bigelow said, primarily
receive collections on the Receivables, including credit card
receipts.  The majority of the funds deposited into the
Receivables Facility Accounts are advertising revenue generated
by the Debtors' broadcasting and publishing entities.  The
Receivables Facility Accounts receive approximately 80% of the
incoming cash receipts from the Debtors' operations.

During the days leading to their bankruptcy filing, the Debtors
sought amendments to the Receivables Facility and its accompanying
agreements in these respects:

* The Facility Limit under the Receivables Loan Agreement is
   reduced to $225 million until the time as the prepetition
   loan balance has been reduced to zero.

* The Facility Termination Date for the loans under the RLA is
   changed to April 10, 2009.

* The various representations, covenants, defaults and
   amortization triggers in the RLA, the Receivables Purchase
   Agreement and the Servicing Agreement are revised to provide
   that the filing of the Motion does not, in and of itself,
   trigger a termination of the facility or the amortization of
   the loans outstanding hereunder.

* Additional Facility Termination Events relating to the
   bankruptcy proceedings are incorporated into the RLA.

* Additional covenants governing sales, purchases,
   investments, dividend distributions, incurrence of debt and
   other actions of Tribune Co. are incorporated into the RPA.

                       Additional Changes

Prior to the final hearing on the DIP Motion, the Debtors,
Tribune Receivables, and Barclays effectuated two amendments to
the RLA Agreement, one on January 8, and one on January 13.

The January 8 Amendment provides that "any transaction at any
future time to the extent that consummation of those transactions
would not otherwise have been permitted as of the date of
entering into that transaction and the obligation of the
applicable Originators or Subsidiaries to consummate that
transaction remains subject to the consent of the Administrative
Agent.  A full-text copy of the January 8 Amendment is available
for free at http://bankrupt.com/misc/2ndAmendedRLA.pdf

The January 13 Amendment adds "Postpetition PDT Debt" in the
defined terms portion.  "Postpetition PDT Debt" means the Senior
Credit Agreement as in effect on December 8, 2008, to the extent
such PDT Debt is incurred after the filing of the Chapter 11
cases."  A full-text copy of the January 13 Amendment is
available for free at http://bankrupt.com/misc/3rdAmendedRLA.pdf

Headquartered in Chicago, Illinois, Tribune Company --
http://www.tribune.com/-- is a media company, operating
businesses in publishing, interactive and broadcasting, including
ten daily newspapers and commuter tabloids, 23 television
stations, WGN America, WGN-AM and the Chicago Cubs baseball
team. The company and 110 of its affiliates filed for Chapter 11
protection on December 8, 2008 (Bankr. D. Del. Lead Case No.
08-13141). The Debtors proposed Sidley Austion LLP as their
counsel; Cole, Schotz, Meisel, Forman & Leonard, PA, as Delaware
counsel; Lazard Ltd. and Alvarez & Marsal North Americal LLC as
financial advisors; and Epiq Bankruptcy Solutions LLC as claims
agent. As of Dec. 8, 2008, the Debtors have $7,604,195,000 in
total assets and $12,972,541,148 in total debts.

Bankruptcy Creditors' Service, Inc., publishes Tribune
Bankruptcy News.  The newsletter tracks the chapter 11 proceeding
undertaken by Tribune Company and its various affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)


TRIBUNE CO: Panel Seeks to Hire Chadbourne as Counsel
-----------------------------------------------------
The official committee of unsecured creditors appointed in the
bankruptcy cases of Tribune Company seeks permission from the U.S.
Bankruptcy Court for the District of Delaware to retain Chadbourne
& Parke LLP as counsel, effective as of December 18, 2008.

The Committee has selected Chadbourne because of its extensive
experience in litigation, corporate, tax, employment and benefit,
real estate, intellectual property, and media, law.

As counsel, Chadbourne will:

  (a) advise the Committee with respect to its rights, duties,
      and powers in the Chapter 11 cases;

  (b) assist and advise the Committee in its consultation with
      the Debtors' relative to the administration of the Chapter
      11 cases;

  (c) assist in analyzing the claims of the Debtors' creditors
      and the Debtors' capital structure and in negotiating with
      holders of claims and equity interests;

  (d) assist the Committee and its professionals in the
      investigation of the acts, conducts, assets, liabilities,
      and financial condition of the Debtors and of the
      operation of their businesses;

  (e) assist the Committee and its professionals in the analysis
      of, and negotiation with, the Debtors or any third party
      concerning matters related to the assumption or rejection
      of certain leases of non-residential real property leases
      and executory contracts, asset dispositions, financing,
      or other transactions and the terms of any plan of
      reorganization or liquidation for the Debtors and
      accompanying disclosure statement and related plan
      documents;

  (f) assist and advise the Committee as to its communications
      to the general creditor body regarding significant matters
      in the Chapter 11 cases;

  (g) represent the Committee at hearings and other proceedings;

  (h) review and analyze all applications, orders, statements of
      operations, and Schedules of Assets and Liabilities filed
      with the Bankruptcy Court and advise the Committee as to
      their propriety;

  (i) advise and assist the Committee with respect to any
      legislative, regulatory, or governmental activities;

  (j) assist the Committee in preparing pleadings and
      applications, including, without limitation, motions,
      memoranda, responses, complaints, and objections, as may
      be necessary;

  (k) assist the Committee in its review and analysis of the
      Debtors' various commercial agreements;

  (l) investigate and analyze claim against third-parties and
      the Debtors' non-debtor affiliates, including avoidance of
      actions; and

  (m) perform other legal services as may be required or are
      deemed to be in the best interest of the Committee with
      respect to its powers and duties.

The Committee requests that all fees and expenses incurred by
Chadbourne be paid as administrative claim pursuant to Sections
327, 330(a), 331, 503(b), and 507(a)(1) of the Bankruptcy Code.
The current hourly rates for Chadbourne's professionals and
paraprofessionals are:

              Partners                $635-$955
              Counsel                 $585-$745
              Associates              $345-$595
              Paraprofessionals       $135-$295

David M. Lemay, Esq., at Chadbourne & Parke LLP, in New York,
assures the Court that his firm is a "disinterested person"
within the meaning of Section 101(14) of the Bankruptcy Code, as
modified by Section 1103(b).

Headquartered in Chicago, Illinois, Tribune Company --
http://www.tribune.com/-- is a media company, operating
businesses in publishing, interactive and broadcasting, including
ten daily newspapers and commuter tabloids, 23 television
stations, WGN America, WGN-AM and the Chicago Cubs baseball
team. The company and 110 of its affiliates filed for Chapter 11
protection on December 8, 2008 (Bankr. D. Del. Lead Case No.
08-13141). The Debtors proposed Sidley Austion LLP as their
counsel; Cole, Schotz, Meisel, Forman & Leonard, PA, as Delaware
counsel; Lazard Ltd. and Alvarez & Marsal North Americal LLC as
financial advisors; and Epiq Bankruptcy Solutions LLC as claims
agent. As of Dec. 8, 2008, the Debtors have $7,604,195,000 in
total assets and $12,972,541,148 in total debts.

Bankruptcy Creditors' Service, Inc., publishes Tribune
Bankruptcy News.  The newsletter tracks the chapter 11 proceeding
undertaken by Tribune Company and its various affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)


TRIBUNE COMPANY: Panel Seeks to Retain Landis as Co-Counsel
-----------------------------------------------------------
The Official Committee of Unsecured Creditors in Tribune Company's
bankruptcy cases seeks to retain Landis Rath & Cobb LLP as
bankruptcy co-counsel.  The Committee selected Landis Rath due to
its familiarity of the Debtors' business and capital structure.

As the Committee's co-counsel, Landis Rath will:

  (a) render legal advice with respect to its powers and duties
      and the other participants in the Debtors' cases;

  (b) assist the Committee in its investigation of the acts,
      conducts, assets, liabilities and financial condition of
      the Debtors, the operation of the Debtors' businesses and
      any other matter relevant to the Debtors' cases, to the
      extent the matters may affect the Debtors' creditors;

  (c) participate in negotiations with parties-in-interest with
      respect to any disposition of the Debtors' assets, plan of
      reorganization and disclosure statement in connection with
      the plan, and otherwise protect and promote the interest
      of the Debtors' creditors;

  (d) assist with the preparation of all necessary applications,
      motions, answers, orders, reports and papers on behalf of
      the Committee, and appear on behalf of the Committee at
      Court hearings as necessary and appropriate;

  (e) render legal advise and perform legal services in
      connection with the Debtors' Bankruptcy cases; and

  (e) perform all other necessary legal services in connection
      with the Chapter 11 cases, as may be requested by the
      Committee.

The primary professionals at Landis Rath who will represent the
Committee:

          Professional                  Rate/Hour
          ------------                  ---------
          Adam G. Landis                  $595
          Matthew B. McGuire               370
          Mona A. Parikh                   275

Adam G. Landis, Esq., at Landis Rath & Cobb LLP, in Wilmington,
Delaware, assures the Court that his firm is a "disinterested
person" as that term is defined in Section 101(14) of the
Bankruptcy Code.

Headquartered in Chicago, Illinois, Tribune Company --
http://www.tribune.com/-- is a media company, operating
businesses in publishing, interactive and broadcasting, including
ten daily newspapers and commuter tabloids, 23 television
stations, WGN America, WGN-AM and the Chicago Cubs baseball
team. The company and 110 of its affiliates filed for Chapter 11
protection on December 8, 2008 (Bankr. D. Del. Lead Case No.
08-13141). The Debtors proposed Sidley Austion LLP as their
counsel; Cole, Schotz, Meisel, Forman & Leonard, PA, as Delaware
counsel; Lazard Ltd. and Alvarez & Marsal North Americal LLC as
financial advisors; and Epiq Bankruptcy Solutions LLC as claims
agent. As of Dec. 8, 2008, the Debtors have $7,604,195,000 in
total assets and $12,972,541,148 in total debts.

Bankruptcy Creditors' Service, Inc., publishes Tribune
Bankruptcy News.  The newsletter tracks the chapter 11 proceeding
undertaken by Tribune Company and its various affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)


TRIBUNE CO: Panel Hires AlixPartners as Financial Advisors
----------------------------------------------------------
The Official Committee of Unsecured Creditors in Tribune Company's
bankruptcy cases has brought on board AlixPartners, LLP, as
financial advisors, nunc pro tunc to December 19, 2008.  The
committee is seeking approval from the U.S. Bankruptcy Court for
the Districtd of Delaware to approve the engagement.

As the Committee's financial advisor, AlixPartners will:

  (a) advise and assist in the analysis and monitoring of the
      Debtors' historical, current and projected financial
      affairs, including without limitation, Schedules of Assets
      and Liabilities, Statement of Financial Affairs, periodic
      operating reports, analyses of cash receipts and
      disbursements and analyses of cash flow forecasts;

  (b) analyze the Debtors' business plans, including prospective
      financial statements and the related underlying
      assumptions and support;

  (c) develop periodic monitoring reports to enable the
      Committee to effectively evaluate the Debtors' performance
      on an ongoing basis;

  (d) advise and assist the Committee and its counsel in
      reviewing and evaluating any Court motions filed or to be
      filed by the Debtors or any other parties-in-interest;

  (e) analyze the Debtors' assets and claims and assess
      potential recoveries to the various creditor
      constituencies under various scenarios;

  (f) assist the Committee and its advisors in developing,
      analyzing, negotiating and implementing alternative
      reorganization scenarios in an effort to maximize the
      recovery to unsecured creditors;

  (g) advise and assist the Committee in its assessment of the
      Debtors' management team, including a review of any bonus,
      incentive and retention plans;

  (h) advise and assist the Committee in its review of (i)
      intercompany transactions, including those between the
      Debtors and non-Debtors subsidiaries and affiliates and
     (ii) related-party transactions;

  (i) advise and assist the Committee in identifying and
      reviewing preference payments, fraudulent conveyances and
      other cause of action that the Debtors' estates may hold
      against third parties;

  (j) render expert testimony and litigation support services,
      as requested from time to time by the Committee and its
      counsel, regarding any of the matters to which
      AlixPartners is providing services;

  (k) attend Committee's meetings and Court hearings as may be
      required in the role of advisor to the Committee; and

  (l) provide other services that are consistent with the
      Committee's role and duties as may be requested from time
      to time and that fall within AlixPartners' expertise.

Alixpartners will be paid pursuant to the firm's current hourly
rates:

          Managing Directors           $685-$995
          Directors                    $510-$685
          Vice Presidents              $395-$505
          Associates                   $260-$365
          Analysts                     $235-$260
          Paraprofessionals            $180-$200

Pursuant to the Engagement Letter, the Debtors will indemnify
Alixpartners and its affiliates from any claims, liabilities,
losses or expenses except to the extent they arise as a result of
any gross negligence or willful misconduct.

Alan D. Holtz, a managing director at AlixPartners, LLP, assures
the Court that his firm has no materially adverse interest to the
Debtors' estates or their creditors.

Headquartered in Chicago, Illinois, Tribune Company --
http://www.tribune.com/-- is a media company, operating
businesses in publishing, interactive and broadcasting, including
ten daily newspapers and commuter tabloids, 23 television
stations, WGN America, WGN-AM and the Chicago Cubs baseball
team. The company and 110 of its affiliates filed for Chapter 11
protection on December 8, 2008 (Bankr. D. Del. Lead Case No.
08-13141). The Debtors proposed Sidley Austion LLP as their
counsel; Cole, Schotz, Meisel, Forman & Leonard, PA, as Delaware
counsel; Lazard Ltd. and Alvarez & Marsal North Americal LLC as
financial advisors; and Epiq Bankruptcy Solutions LLC as claims
agent. As of Dec. 8, 2008, the Debtors have $7,604,195,000 in
total assets and $12,972,541,148 in total debts.

Bankruptcy Creditors' Service, Inc., publishes Tribune
Bankruptcy News.  The newsletter tracks the chapter 11 proceeding
undertaken by Tribune Company and its various affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)


TRIPLE CROWN: S&P Withdraws 'D' Rating at Company's Request
-----------------------------------------------------------
Standard & Poor's Ratings Services said it withdrew its ratings on
Lawrenceville, Georgia-based Triple Crown Media LLC at the
company's request.

On Jan. 8, 2009, S&P lowered both the corporate credit rating and
the rating on the company's second-lien term loan to 'D' after the
company missed an interest payment due Dec. 31, 2008.  The rating
on the company's first-lien debt was lowered to 'C' and S&P
believes that the company remains current on interest payments due
on the first-lien credit facility.


U-SAFE: Files Amended List of 6 Largest Unsecured Creditors
-----------------------------------------------------------
U-Safe Investments, LLC, filed with the Northern District of
California an amended list of its six largest unsecured creditors:

    Entity                     Nature of Claim    Amount of Claim
    ------                     --------------     ---------------
Malibu Reconveyance LLC for                          $6,000,000
JCRA Investment Co.
PO Box 4987
Chatsworth, CA 91313

Shei Ming Djang                 Personal               $300,000
21345 Hawthorne Blvd.           unsecured loan
Suite 223                       for opening of
Torrance, CA 90503              hotel

American Discount Security      Services                $50,000
33231 Transit Avenue
Union City, CA 94587

Theo Insurance Services, Inc.   Insurance               $12,456
3600 Wilshire Boulevard         Installment
Suite 414
Los Angeles, CA 90010

San Francisco Fire Protection                            $2,000
1355 Fairfax Avenue, Suite 13
San Francisco, CA 94124

National Construction           Fence rental               $800
Rentals
PO Box 4503
Pacoima, CA 91333

Oakland, Calif.-based U-Safe Investments, LLC filed for Chapter 11
relief on Oct. 14, 2008 (Bankr. N.D. Calif. Case No. 08-45880).
Fayedine Coulter, Esq, at the Law Offices of Fayedine Coulter, and
Marc Voisenat, Esq., at the Law Offices of Marc Voisenat,
represent the Debtor as counsel.  In its schedules, the Debtor
listed total assets of $27,462,062, and total debts of
$18,025,256.


U-SAFE INVESTMENTS: Files Amended Schedules of Assets and Debts
---------------------------------------------------------------
U-Safe Investments, LLC, filed with the U.S. Bankruptcy Court for
the Northern District of California, an amended schedule of its
assets and liabilities, disclosing:

    Name of Schedule               Assets        Liabilities
    ----------------            -----------      -----------
A. Real Property               $27,000,000
B. Personal Property              $462,062
C. Property Claimed as
    Exempt
D. Creditors Holding
    Secured Claims                               $17,660,000
E. Creditors Holding
    Unsecured Priority
    Claims
F. Creditors Holding
    Unsecured Non-priority
    Claims                                          $365,256
                                 -----------     -----------
TOTAL                            $27,462,062     $18,025,256

Oakland, Calif.-based U-Safe Investments, LLC filed for Chapter 11
relief on Oct. 14, 2008 (Bankr. N.D. Calif. Case No. 08-45880).
Fayedine Coulter, Esq, at the Law Offices of Fayedine Coulter, and
Marc Voisenat, Esq., at the Law Offices of Marc Voisenat,
represent the Debtor as counsel.


W&T OFFSHORE: S&P Affirms Corporate Credit Rating at 'B'
--------------------------------------------------------
Standard & Poor's Ratings Services affirmed its ratings, including
the 'B' corporate credit rating, on oil and gas exploration &
production company W&T Offshore Inc.  At the same time, S&P
revised the outlook to stable from positive.

The outlook revision reflects W&T's recent announcement that
proved reserves for 2008 are expected to be significantly lower
than at year-end 2007.  The rating action also reflects S&P's more
bearish outlook on near-term U.S. oil and natural gas prices, the
expectation of a prolonged recessionary period, and W&T's
geographic concentration in the Gulf of Mexico.

The ratings on W&T reflect the company's geographic concentration
in the high risk offshore Gulf of Mexico, its high cost structure,
aggressive financial leverage, and current softness in the E&P
industry.  The ratings also reflect satisfactory liquidity,
management's long operating history in the Gulf, and a good
production mix between crude oil and natural gas.


WADLEY REGIONAL: Files for Chapter 11 to Sell Hospital to Brim
--------------------------------------------------------------
Wadley Regional Medical Center sought bankruptcy protection before
the U.S. Bankruptcy Court for the Eastern District of Texas to
sell its assets after failing to find new financing, Bloomberg
News reports.

Wadley entered bankruptcy protection to "maintain quality
patient care and to prevent deterioration" of its assets before
the sale, Chief Executive Officer Michael Lieb said in court
papers, according to Bloomberg.  The company has been hurt in the
past year by bond defaults and tightening credit, Mr. Lieb said,
according to the report.

According to Bloomberg, Wadley has signed a deal to sell all its
assets to Brim Healthcare of Texas LLC, for $5 million, subject to
higher and better offers.  Pursuant to the deal, Brim also would
assume as much as $9.8 million of Wadley's debt.  Brim agreed to
lease the hospital for $250,000 a year for at least five years
under the sale agreement.  The parties have agreed to a March 6
deadline to complete the sale.

Wadley intends to further market test its assets pursuant to a
protocol which requires competing bids will be due Feb. 17.
Wadley will conducta n auction for its assets if multiple bids are
received.

Wadley said it will seek the Bankruptcy Court's permission to loan
up to $3.5 million from Brim to fund its chapter 11 case.

                       About Wadley Regional

Wadley Regional Medical Center -- http://www.wadleyhealth.com/--
is a nonprofit owner of a 372-bed hospital in Texarkana, Texas.
Wadley and three affiliates, including the Wadley Health System,
filed for Chapter 11 protection from creditors on Jan. 14, 2009
(Bankr. E.D. Tex., Case No. 09-50006).  Bruce H. White, Esq., at
Greenberg Traurig LLP, has been tapped as counsel.  Grant Thornton
LLP and Cain Brother & Company LLC have also been tapped as
financial advisor and investment banker, respectively.  In its
bankruptcy petition, Wadley estimated
assets of $50 million to $100 million and debts of $10 million to
$50 million.


WALL HOMES: Files for Chapter 11 Bankruptcy Protection
------------------------------------------------------
Andrea Jares at Star-Telegram reports that Wall Homes filed for
Chapter 11 bankruptcy protection on Saturday due to the housing
industry crisis.

According to Star-Telegram, Wall Homes CEO and founder Steve Wall
said that the company will complete houses under construction and
that the bankruptcy filing will help it become leaner.  Mr. Wall
said in a statement, "This will then position Wall Homes to
compete more effectively as we pull out of the housing market
downturn."

Citing Wall Homes spokesperson Erin Kolp, Star-Telegram says that
Wall Homes is "limited in how much it can say as it works with its
vendors."

According to Wall Homes statement, the company will sell homes as
it reorganizes.  "With the continued support from its lenders,
Wall Homes also intends to continue the construction of homes
already in progress and to sell those homes as scheduled," Wall
Homes said in a statement.

Star-Telegram quoted Mr. Wall as saying, "We appreciate the
support we have received from our lenders in the midst of such a
tight credit market.  With this support, we believe we have the
opportunity to leverage our market position and the strength of
our brand, both key to a productive future."

Arlington-based Wall Homes built a north Fort Worth house for ABC
television's Extreme Makeover: Home Edition.  It operates in
Austin, Dallas, Fort Worth, Houston, and San Antonio.  The houses
are generally in the $100,000 to $200,000 range, and clients can
make many adjustments to the floor plan as they choose.


WESTERLY HOSPITAL: Moody's Affirms 'B2' Ratings on 1994 Bonds
-------------------------------------------------------------
Moody's Investors Service has affirmed the B2 rating assigned to
Westerly Hospital's Series 1994 bonds ($10.6 million outstanding),
issued by Rhode Island Health & Educational Building Corporation.
The outlook remains negative given the recent decline in
liquidity, despite a noted improvement in financial performance,
and the bank's ability to call amounts outstanding under the lines
of credit if unrestricted cash falls below the requirement
collateral amount.

Legal security: The Series 1994 Bonds are secured by a lien on the
hospital's gross receipts.  There is no mortgage lien. Debt
service reserve fund maintained.

Interest Rate Derivatives: None

                             Strengths

* Recent improvement in financial performance with positive
  operating cash flow achieved in (unaudited) FY 2008 results;
  operating cash flow grew to $4.6 million (5.7% operating cash
  flow margin) from a negative $193,000 (-0.3% operating cash
  flow margin) in FY 2007

* Increase in volumes as admissions and outpatient surgeries rose
  4.8% and 4.1%, respectively, in FY 2008 over FY 2008, following
  new physician recruitments and favorable managed care terms

* Leading market share with over 70% market share in a favorable
  service area

* Fully funded debt service reserve fund; all fixed rate debt

                            Challenges

* Large amount of debt besides the Series 1994 bonds. Bank lines
  of $9.3 million that are required to be collateralized by a
  minimum of $10.2 million from unrestricted investments (110%
  collateral requirement); $10.2 million represents a high 81% of
  Westerly's total unrestricted cash as of November 30, 2008;
  management is in current discussion with the bank regarding
  alternatives or changes to the collateral requirement. The bank
  has the right to call the line of credit if unrestricted cash
  falls below the required collateral amount.

* Declining unrestricted cash position to $12.5 million or 55
  days cash on hand as of November 31, 2008 due to losses in the
  investment portfolio; down from $16.1 million or 76 days cash
  at the end of FY 2008 (September 30)

* Large exposure to equities (60%) equities with no more than 6%
  allowed in any one company and no more than 20% allowed in any
  one industry.  Four managers are utilized along with an outside
  investment advisor.  No changes to the investment allocation is
  anticipated.

* Underfunded pension liability that continues to pressure
  Westerly's cash position

* Expectations for a decline in financial performance in FY 2009

                              Outlook

The negative outlook reflects ongoing concern that Westerly's cash
will continue to decline given the high exposure to equities and
expectations for a larger operating loss in FY 2009.  Moody's also
remain concerned over the bank's ability to call the line of
credit in the event that the hospital's unrestricted cash falls
below the collateral requirement.

                 What could change the rating--UP

A consistent trend of improving operating profits and operating
cash flow; increased inpatient and outpatient volume

                What could change the rating--DOWN

Further decline in cash reserves; continued operating deficits
that are in line with results from the last three fiscal years;
increase in debt without commensurate improvement in cash flow and
liquidity

                         Key Indicators

Assumptions & Adjustments:

  * Based on financial statements for The Westerly Hospital and
    Subsidiary

  * First number reflects audit year ended September 30, 2007

  * Second number reflects unaudited year ended September 30,
    2008

  * Investment returns normalized at 6% unless otherwise noted

  * Inpatient admissions: 4,199; 4,402

  * Total operating revenues: $71.6 million; $80.1 million

  * Moody's-adjusted net revenue available for debt service:
    $1.7 million; $6.7 million

  * Total debt outstanding: $22.9 million; $22.6 million

  * Maximum annual debt service (MADS): $2.25 million;
    $2.25 million

  * MADS Coverage with reported investment income: 1.81 times;
    2.76 times

  * Moody's-adjusted MADS Coverage with normalized investment
    income: 0.77 times; 7.18 times

  * Debt-to-cash flow: 124.7 times; 4.25 times

  * Days cash on hand: 85.9 days; 76.2 days

  * Cash-to-debt: 76.9%; 70.9%

  * Operating margin: -8.2%; -1.4%

  * Operating cash flow margin: -0.3%; 5.7%

Rated Debt (debt outstanding as of 9/30/2007)

  * Series 1994 ($10.6 million outstanding) rated B2


WINDSOR FINANCING: Moody's Reviews Ratings for Possible Downgrade
-----------------------------------------------------------------
Moody's Investors Service placed on review for downgrade the Baa3
rating on Windsor Financing LLC's senior secured bonds due 2017
and the Ba2 rating on Windsor's subordinated secured notes due
2016.

The review for downgrade reflects the consistently lower than
expected financial performance over the last 12 months resulting
from three primary factors: a) lower coal quality, which resulted
in operating inefficiencies; b) bottlenecks in the supply of coal,
thereby increasing the level of replacement power purchases; and
c) the higher than expected levels of dispatch.  The project
benefits from three separate power purchase agreements with an
investment grade offtaker, Virginia Electric Power Company (VEPCO:
Baa1 senior unsecured), which have high capacity payments.
However, these high capacity payments have been offset by losses
incurred through the sale of energy since the contractual price
that VEPCO pays for energy is less than the project's marginal
cost of production.  This problem is exacerbated when the project
is dispatched more than expected.  Over the past year, the Windsor
facilities have been dispatched at approximately 90-95% vs. the
80-85% initially projected by the sponsors.

The review for downgrade will assess the likelihood of Windsor
improving its financial performance such that it achieves
financial metrics more commensurate with its rating.  While some
improvement may be forthcoming in 2009 due to stabilization in
coal prices and a return to a more economic dispatch profile,
Moody's does not anticipate that performance will meet initial
forecasts projected by the sponsors in the short to medium term.
The review will also consider the degree to which Windsor expects
to improve project operations, how Windsor can better manage
exposure to fuel supply quality and fuel shortfalls, the potential
implications of increased maintenance costs resulting from the use
of lower than expected coal quality, and what the company's future
financial performance is likely to be.

Moody's notes that Windsor recently cured a potential technical
default resulting from erroneous distributions of approximately
$3.1 million to Subordinated Secured Parties.  This event did not
cause material harm to Windsor's financials and all collateral
accounts have since been replenished to the levels had the
payments not been made.  The sponsors contributed roughly $124,000
as part of the cure.

Windsor Financing, LLC is the financing arm of Windsor's operating
subsidiaries Spruance Genco, LLC, and Edgecombe Genco, LLC, which
own the power projects Richmond and Rocky Mount, respectively.
The Richmond project (Virginia) and the Rocky Mount project (North
Carolina) are both coal-fired, electric and steam generating
plants and have a combined generating capacity of approximately
330 megawatts.  The facilities operate as Qualifying Facilities
under PURPA and sell their electricity to Virginia Electric Power
Co (VEPCO: Baa1, senior unsecured), a subsidiary of Dominion
Resources, Inc. Both sell their steam output to manufacturing
facilities.

The last rating action on Windsor occurred on February 3, 2006,
when the project was assigned a Baa3 rating on the senior secured
bonds due 2017 and a Ba2 rating on the subordinated secured notes
due 2016.


WOODSIDE GROUP: Files Joint Plan of Reorganization under Ch. 11
---------------------------------------------------------------
Woodside Group, LLC, and its debtor affiliates, filed with the
U.S. Bankruptcy Court for the Central District of California a
Joint Plan of Reorganization under Chapter 11 of the Bankruptcy
Code and a disclosure statement explaining the Plan to enable
holders of Claims against and Interests in the Debtors to make an
informed decision to accept or reject the Plan.

The Debtors believe that, with respect to each impaired Class that
either has accepted the Plan or will receive or retain under the
Plan on account of its Claim or Interest, property of a value, as
of the Plan's Effective Date, that is at least equal to the amount
that said member of the Class would receive or retain if the
Debtors were liquidated under Chapter 7 of the Bankruptcy Doce.

                          Plan Overview

The Plan effectuates a reorganization of the Debtors through the
issuance of debt and equity in the Reorganized Debtors, and the
preservation of the Debtors' business operations and going concern
value.  Holders of Interests will neither receive, nor retain, any
property under the Plan, and any potential estate claims against
Insiders will be preserved through the mechanism of a Litigation
Trust.  The Plan will be funded by way of the Debtors' cash on
hand, revenues from ordinary course operations, proceeds of asset
sales, and, if necessary, new financing.  There will no
substantive consolidation of the Debtor's estates under the Plan.

Pursuant to the Plan, holders of Allowed Unsecured Non-Priority
Claims will be allocated Restructured Debt of the Reorganized
Debtors and Restructured Equity in Reorganized Woodside and
Reorganized Pleasant Hill Investments, LC in proportion to each
Allowed Unsecured Non-Priority Claim and the particular Debtors
against which such claim is allowed.  While the Restructured Debt
to be issued by Reorganized PHI will be unsecured, it will be
guaranteed by the other Reorganized Debtors (except Alameda
Investments, LLC).

Holders of Allowed Trade Claims will receive a 90% payment on
account of their claims.

Holders of Allowed Alameda Claims will receive their pro rata
share of any available assets of Alameda, after satisfaction of
certain senior claims.

The Litigation Trust will be established pursuant to the Plan and
related Trust Agreement, to which certain Trust Cash and Potential
Insider Actions will be transferred.  Those holders of Allowed
Unsecured Non-Priority Claims receiving Restructured Debt and
Restructured Equity under the Plan will also receive beneficial
interests in the Trust in accordance with the Plan.

All existing Interests in Woodside and PHI will be extinguished
and the holders of such Interests will not receive or retain any
property on account of such Interests.  Reorganized Woodside will
be vested with the Interests in the Subsidiary Debtors and the
Unrestricted Subsidiaries.  Holders of Allowed Intercompany Claims
will be taken into account in assessing the value of the
respective Debtors, but shall not directly receive or retain any
property under the Plan.

Finally, all other claims, such as Administrative Claims, Priority
Tax Claims, Priority Non-Tax Claims and Secured Claims, will be
paid or otherwise satisfied under the Plan.

                Treatment of Claims and Interests

The Plan provides the following classification and treatment of
Claims against and Interests in the Debtors:

                                Estimated Amount
Class       Type of Claim       or Value of Claims    Treatment
-----  ---------------------    ------------------    ---------
  1    Priority Non-Tax             $4,000,000        Unimpaired
       Claims

  2    Secured Claims               $2,200,000        Unimpaired

  3    Bank Claims                  $331,300,000      Impaired

  4    Noteholder Claims            $385,700,000      Impaired

  5    Bond Indemnity               $30,000,000       Impaired
       Claims

  6    Joint Venture Claims         $125,000,000      Impaired

  7    Construction Defect          $29,000,000       Impaired
       Claims

  8    Trade Claims                 $2,600,000        Impaired

  9    General Unsecured            $16,000,000       Impaired
       Claims

10    Alameda Claims             To be determined    Impaired

11    Pre-Relief Date            To be submitted     Impaired
       Intercompany Claims

12    Interests                        N/A           Impaired

Each holder of an Allowed Claim against the Debtors under Classes
3, 4, 5, 7 and 9 shall receive, along with other holders of
Allowed Unsecured Non-Priority Claims, a percentage share of the
Aggregate Unsecured Distribution obtained by applying the
Unsecured Distribution Formula as to each Debtor against which
said Claim under Classes 3, 4, 5, 7 and 9 is Allowed.

Each holder of an Allowed Joint Venture Claim against Woodside
and/or PHI under Class 6 will receive, along with other holders of
Allowed Unsecured Non-Priority Claims, a percentage share of the
Aggregate Unsecured Distribution obtained by applying the
Unsecured Distribution Formula as to each of Woodside and/or PHI
against which said Joint Venture Claim is allowed.

Classes 1 and 2 are not impaired under the Plan and are deemed to
have accepted the Plan.  Classes 3, 5, 5, 6, 7, 8, 9 and 10 are
impaired under the Plan and are entitled to vote to accept or
reject the Plan.  Class 11, which is impaired under the Plan, has
consented to the Plan.  Interests under Class 12 is impaired under
the Plan, and is presumed to reject the Plan.

                             Cramdown

Notwithstanding the rejection of any Class that votes on the Plan,
the Debtors may still obtain confirmation of the Plan under the
"cramdown" provision of the Bankruptcy Code under Sec. 1129(b).

A full-text copy of the Debtors' Disclosure Statement, dated
Jan. 14, 2009, in support of the Debtors' Joint Plan of
Reorganization is available for free at:

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

Headquartered in North Salt Lake, Utah, Woodside Group LLC
http://www.woodside-homes.com/-- is the parent company of
multiple subsidiaries and through approximately 185 of those
subsidiaries is primarily engaged in homebuilding operations in
eight states.  The operations of the Woodside Group are financed
through Woodside Group's affiliate Pleasant Hill Investments, LC.
Woodside Group, Pleasant Hill Investments and each of the 185
subsidiaries are the Debtors.  Woodside Group also has
subsidiaries and affiliates that are not debtors.

On March 31, 2008, Woodside AMR 107, Inc. and Woodside Portofino,
Inc. filed voluntary petitions for relief under Chapter 11 of the
United States Bankruptcy Code.  On Aug. 20, 2008, an Ad Hoc
Group of Noteholders commenced the filing of involuntary petitions
against the Debtors (other than AMR 107 and Portofino).  On Aug.
20, 2008, JPMorgan Chase Bank, N.A., on behalf of the Bank Group,
commenced the filing of certain Joinders in the Involuntary
Petition.  On Sept. 16, 2008, the Debtors filed a "Consolidated
Answer to Involuntary Petitions and Consent to Order for Relief"
and the Court entered the "Order for Relief Under Chapter 11."

The Debtors are jointly administered under Case No. 08-20682.
The Bankruptcy Cases are currently pending before the Honorable
Peter Carroll in the United States Bankruptcy Court for the
Central District of California (Riverside).

Jeremy V. Richards, Esq., Linda F. Cantor, Esq., and Maxim B.
Litvak, Esq., at Pachulski Stang Ziehl & Jones LLP, in Los
Angeles, represent the Debtors as counsel.  Susy Li, Esq., and
Michael A. Sherman, Esq., at Bingham McCutchen LLP, in Los
Angeles, Michael J. Reilly, Esq., Jonathan B. Alter, Esq., and
Mark W. Deveno, Esq., at Bingham McCutchen LLP, in Hartford,
Connecticut, act as counsel to the Ad Hoc Group of Noteholders.

Donald L. Gaffney, Esq., at Snell & Wilmer LLP, in Phoenix
Arizona, Michael B. Reynolds, Esq., Eric S. Pezold, Esq., at Snell
& Wilmer LLP, in Costa Mesa, California, are counsel for JPMorgan
Chase Bank, N.A., as Administrative Agent to Participant Lenders.

David L. Gaffney, Esq., at Snell & Wilmer LLP, in Phoenix Arizona,
and Michael B. Reynolds, Esq., and Eric S. Pezold, Esq., at Snell
& Wilmer LLP, in Costa Mesa, California, are the proposed counsel
to the Official Committee of Unsecured Creditors.

During 2007, the Woodside Entities generated revenues exceeding
$1 billion on a consolidated basis.  As of Dec. 31, 2007, the
Woodside Entities had consolidated assets and liabilities of
approximately $1.5 billion and $1.1 billion, respectively.  As of
the Sept. 16, 2008 petition date, the Debtors have approximately
$70 million in cash.  The Woodside Entities employ approximately
494 employees.

In its schedules, Woodside Group, LLC listed total assets of
$1,000,285,578 and total liabilities of $691,352,742.  The
schedules are unaudited.


YOUNG BROADCASTING: Moody's Downgrades Corporate Rating to 'Ca'
---------------------------------------------------------------
Moody's Investors Service has downgraded Young Broadcasting Inc.'s
Corporate Family Rating and Probability of Default Rating to Ca
from Caa3 and $370 million secured credit facility ($20 million
revolver, $350 million term loan) to Caa1 from B2.  In addition,
Moody's downgraded Young's 10% Senior Subordinated Notes due 2011
to C from Ca and 8_% Senior Subordinated Notes due 2014 to C from
Ca. The ratings have been placed on review for further possible
downgrade.

These rating actions are prompted by the announcement that Young
has determined to forego making the $6.125 million interest
payment due yesterday on its 8.75% Senior Subordinated Notes due
2014 in an attempt to preserve liquidity and Moody's expectation
that a bankruptcy filing in the near future is highly likely.
Under the indenture relating to the company's 8.75% Senior
Subordinated Notes, a 30-day grace period will apply to the missed
interest payment.  The review will focus on the Young's decision
with regard to the missed interest payment and its restructuring
plan.

Young has expressed its intention to pursue discussions with its
debtholders to restructure its balance sheet, improve liquidity,
and strengthen it business operations.  The company has retained
UBS Investment Bank and Sonnenschein Nath & Rosenthal LLP to
provide advisory services in connection with these restructuring
efforts.

Moody's has taken these rating actions:

Young Broadcasting Inc.

  * Corporate family rating - downgraded to Ca from Caa3

  * Probability-of-default rating - downgraded to Ca from Caa3

  * $370 million senior secured credit facility -- downgraded to
    Caa1 (LGD 2, 17%) from B2 (LGD 2, 13%)

  * 10% Senior Subordinated Notes due 2011 -- downgraded to C
    (LGD 5, 73%) from Ca (LGD 4, 68%)

  * 8 3/4 % Senior Subordinated Notes due 2014 -- downgraded to C
    (LGD 5, 73%) from Ca (LGD 4, 68%)

In the most recent rating action, on September 25, 2008, Moody's
downgraded Young's Corporate Family Rating and probability-of-
default rating to Caa3 from Caa1.  The outlook remained negative.

Young Broadcasting Inc., headquartered in New York, New York owns
and operates 10 television stations in 10 markets and a national
television sales representative firm, Adam Young Inc.


* Moody's Assigns Rating on $285.5 Mil. New York City 2009 Bonds
----------------------------------------------------------------
Moody's Investors Service has assigned a Baa3 underlying rating to
the New York City Industrial Development Agency's
$285.5 million Pilot Revenue Bonds Series 2009 (Yankee Stadium
Project).  Moody's have additionally affirmed the outstanding Baa3
underlying rating on $942.6 million outstanding PILOT revenue
bonds as well as the Baa3 underlying rating on $25 million of
taxable Rental Revenue Bonds.  The outlook for all the bonds is
stable.  The new bonds may be insured if cost effective.  The
outstanding bonds are insured by FGIC (Caa1, Negative Outlook) and
MBIA (Baa1, Developing Outlook).

LEGAL SECURITY: PILOT Revenue Bonds: Payments in lieu of taxes
paid by Yankee Stadium LLC, a special purpose entity created to
construct, operate and maintain the new stadium, which it will
lease from the NYC IDA and sublease to the Yankees.

Revenues for the PILOT payments are derived from ticket and suite
revenues generated from the new stadium, and these revenues are
assigned to Yankee Stadium LLC by the Yankees.  Each annual
obligation to pay PILOTS is secured by a separate leasehold PILOT
mortgage, which imposes a lien on the stadium.  Failure to make
PILOTS, if not cured, would trigger a foreclosure on the stadium
by the PILOT trustee.  A debt service reserve fund equivalent to
MADS is also available as security for bondholders.

Rental Revenue Bonds are secured by rent payments due from Yankee
Stadium LLC to the NYC IDA under the lease agreement.  Rent
payments are also derived from ticket and suite revenues assigned
to Yankee Stadium LLC.  A debt service reserve fund equivalent to
MADS is provided.

                    Interest Rate Derivatives

In 2006 Yankee Stadium LLC entered into eight fixed-annuity basis
swap agreements, where the LLC pays a BMA-based floating rate and
various counterparties (primarily Goldman Sachs Bank USA,
currently rated Aa3, Negative Outlook) pay a LIBOR-based floating
rate plus a fixed annuity payment.  Payments made under the
agreement are unsecured general obligations of the Stadium LLC,
paid from ticket and suite revenues and subordinate to bonds.  The
swaps have a combined notional amount of approximately $1.0
billion and are designed for cash flow savings; they do not hedge
any bonds.  While the swaps have reportedly performed well to date
on a cash flow basis, the swaps are valued in the current market
at a combined negative $77 million, exposing Yankee Stadium LLC to
termination and collateral posting risks with its counterparties.
Additionally, the NYC IDA entered into a
$198 million notional swap with Goldman Sachs Bank USA that hedges
the maturities of some of the outstanding bonds that are tied to
the Consumer's Consumer Price Index for Urban Consumers (CPI-U).
Payments are unsecured obligations of the NYC IDA, paid from
PILOTs, subordinate to bonds.  The swap is currently valued at a
negative $31.6 million; the NYC IDA does not pay collateral.

                            Strengths

* Revenue sources pledged by the team to pay PILOTS, which secure
  the bonds, can withstand significant stress and PILOT payments
  could still be made.  Projected 2009 revenues would cover
  combined PILOT and rental bonds MADS by 4.2 times

* Construction of the new stadium is nearly complete

* Suite revenues will continue to be received in the event of a
  strike; approximately 75% of revenue is collected in December
  through February and will fully fund annual debt service; a
  $42 million surety is also provided in the event of a strike

* Strong incentive for Stadium LLC to pay PILOT obligations
  because any uncured shortfall in PILOT payments would trigger a
  foreclosure similar to a tax lien foreclosure.  If this were to
  occur, the LLC would lose control over the stadium and the team
  would not be permitted to play at the stadium

* Non-relocation agreement ensures team will play at new stadium
  until bonds are paid.  Liquidated damage provisions sufficient
  to pay down bonds are incorporated into the agreement

* Participation by New York City (Aa3/Stable) and State of New
  York (Aa3/Stable) in the project

* Stadium LLC is a bankruptcy remote special purpose entity,
  which would likely not be consolidated if the Yankees were to
  file for bankruptcy.  Stadium LLC will be responsible for
  paying PILOTS and construction and operation and maintenance of
  the stadium

                           Challenges
* The PILOT payment may not exceed pro-forma real estate taxes as
  determined by the city. Pro-forma property tax for the
  completed stadium is projected to be $80 million, which covers
  MADS of $76.4 million and is expected to rise over time.

* Lower than projected ticket sales due to team underperformance
  or an economic downturn could pressure the team's finances

* Some construction risk still remains as the project is
  approaching its substantial completion date of February 17.

* Swap counterparty risk has grown, and collateral postings or
  termination could pressure Stadium LLC and the team's finances

* The once-planned taxable bond portion of the stadium completion
  financing is expected to be funded through approximately
  $128 million of more expensive bank debt, although Stadium LLC
  has received approval to issue additional rental bonds if the
  long-term taxable markets improve.

                            Outlook

The stable rating outlook is based on the expected completion of
the stadium on time and the successful execution of bond financing
to cover the increased project cost, and the continued strong
revenue performance of the Yankees franchise.

                 What could change the rating - UP

Better than projected revenues along with the increase in pro-
forma taxes relative to the PILOT payments, and completion of
construction could result in an upgrade.

                What could change the rating - DOWN

Unexpected delays in stadium completion and lower than projected
ticket and suite license revenue could result in a downgrade.

Key Indicators:

  * Stadium size: 52,325 capacity
  * Expected completion date: February 2009
  * Final bond maturity March 1, 2049

The last rating action was on December 26, 2007, when the ratings
on the outstanding bonds were affirmed.

New York City IDA ratings for Yankee Stadium were assigned by
evaluating factors believed to be relevant to the credit profile
of the issuer, such as i) the business risk and competitive risk
of the issuer versus others within its industry or sector, ii) the
capital structure and financial risk of the issuer, iii) the
projected performance of the issuer over the near to intermediate
term, iv) the issuer's history of achieving consistent operating
performance and meeting budget or financial plan goals, v) the
nature of the dedicated revenue stream pledged to the bonds, vi)
the debt service coverage provided by such revenue stream, vii)
the legal structure that documents the revenue stream and the
source of payment, and viii) the issuer's management and
governance structure related to payment.


* Moody's Takes Rating Actions on 63 Classes of Tobacco Bonds
-------------------------------------------------------------
Moody's Investors Service has taken rating actions on 63 classes
of tobacco settlement bonds sponsored by certain New York
counties.  These bonds are backed by varying percentages of
payments under the Master Settlement Agreement that are owed by
tobacco manufacturers to the State of New York and are shared with
its counties.

On November 25, 2008, Judge Alvin K. Hellerstein, of the district
court in the Southern District of New York in the Second Circuit,
issued his preliminary bench ruling on the merits for Freedom
Holdings, et al v. Cuomo, et al: the plaintiffs had failed to make
a claim.  The judge finalized his preliminary decision in a
written opinion issued on January 12, 2009.  The judge dismissed
the plaintiffs' claims on all counts and dissolved the preliminary
injunction preventing New York from repealing the Allocable Share
Release Clause in its Escrow Statute.  This favorable ruling for
the defendants (the attorney general and the commissioner of
taxation and finance of the State of New York) is a positive
development for the tobacco settlement bonds sponsored by the New
York counties.  As a result of this positive development, Moody's
has removed its one notch ratings distinction between bonds
sponsored by states or governmental authorities located within the
Second Circuit and in other federal circuits.  However, like all
other tobacco settlement bonds rated by Moody's, the bonds
sponsored by the New York counties are under review with direction
uncertain because of the risks associated with other legal
challenges to the MSA and related legislation.  The rating actions
on the New York counties sponsored tobacco deals are based on the
favorable Freedom Holdings ruling and the review of paydown trends
on the bonds to date.  These transactions, with exception of New
York Counties Tobacco Trust III, Series 2003, benefit from a super
sinker fund structure that acts as a partial turbo structure that
uses a portion of available cash to retire term bond principal.
The New York Counties Tobacco Trust III, Series 2003 has a full
turbo structure.  The super sinker fund and turbo features
accelerate the payment of outstanding principal and decrease the
risk of bond default.  By accelerating the reduction of principal
the actual amount of interest payable currently due is less than
the amount on the expected amortization schedule.  This results in
each transaction having a slightly higher rated debt coverage
ratio then expected at closing.

Complete rating actions are:

Issuer: New York Counties Tobacco Trust I, Series 2000


  -- Serial Bond Class 8, Upgraded to Baa3 and Placed Under
     Review Direction Uncertain; previously on 4/21/2004
     Downgraded to Ba1 and Placed Under Review Direction
     Uncertain

  -- Serial Bond Class 9, Upgraded to Baa3 and Placed Under
     Review Direction Uncertain; previously on 4/21/2004
     Downgraded to Ba1 and Placed Under Review Direction
     Uncertain

  -- Serial Bond Class 10, Upgraded to Baa3 and Placed Under
     Review Direction Uncertain; previously on 4/21/2004
     Downgraded to Ba1 and Placed Under Review Direction
     Uncertain

  -- Serial Bond Class 11, Upgraded to Baa3 and Placed Under
     Review Direction Uncertain; previously on 4/21/2004
     Downgraded to Ba1 and Placed Under Review Direction
     Uncertain

  -- Serial Bond Class 12, Upgraded to Baa3 and Placed Under
     Review Direction Uncertain; previously on 4/21/2004
     Downgraded to Ba1 and Placed Under Review Direction
     Uncertain

  -- Serial Bond Class 13, Upgraded to Baa3 and Placed Under
     Review Direction Uncertain; previously on 4/21/2004
     Downgraded to Ba1 and Placed Under Review Direction
     Uncertain

  -- Serial Bond Class 14, Upgraded to Baa3 and Placed Under
     Review Direction Uncertain; previously on 4/21/2004
     Downgraded to Ba1 and Placed Under Review Direction
     Uncertain

  -- Term Bond 1, Upgraded to Baa3 and Placed Under Review
     Direction Uncertain; previously on 4/21/2004 Downgraded to
     Ba1 and Placed Under Review Direction Uncertain

  -- Flex. Amort. Term Bond 2, Upgraded to Baa3 and Placed Under
     Review Direction Uncertain; previously on 4/21/2004
     Downgraded to Ba1 and Placed Under Review Direction
     Uncertain

  -- Flex. Amort. Term Bond 3, Upgraded to Baa3 and Placed Under
     Review Direction Uncertain; previously on 4/21/2004
     Downgraded to Ba1 and Placed Under Review Direction
     Uncertain

  -- Flex. Amort. Term Bond 4, Upgraded to Baa3 and Placed Under
     Review Direction Uncertain; previously on 4/21/2004
     Downgraded to Ba1 and Placed Under Review Direction
     Uncertain

Issuer: New York Counties Tobacco Trust II, Series 2001

  -- Serial Bond Class 4, Upgraded to Baa3 and Placed Under
     Review Direction Uncertain; previously on 4/21/2004
     Downgraded to Ba1 and Placed Under Review Direction
     Uncertain

  -- Serial Bond Class 5, Upgraded to Baa3 and Placed Under
     Review Direction Uncertain; previously on 4/21/2004
     Downgraded to Ba1 and Placed Under Review Direction
     Uncertain

  -- Serial Bond Class 6, Upgraded to Baa3 and Placed Under
     Review Direction Uncertain; previously on 4/21/2004
     Downgraded to Ba1 and Placed Under Review Direction
     Uncertain

  -- Serial Bond Class 7, Upgraded to Baa3 and Placed Under
     Review Direction Uncertain; previously on 4/21/2004
     Downgraded to Ba1 and Placed Under Review Direction
     Uncertain

  -- Serial Bond Class 8, Upgraded to Baa3 and Placed Under
     Review Direction Uncertain; previously on 4/21/2004
     Downgraded to Ba1 and Placed Under Review Direction
     Uncertain

  -- Serial Bond Class 9, Upgraded to Baa3 and Placed Under
     Review Direction Uncertain; previously on 4/21/2004
     Downgraded to Ba1 and Placed Under Review Direction
     Uncertain

  -- Serial Bond Class 10, Upgraded to Baa3 and Placed Under
     Review Direction Uncertain; previously on 4/21/2004
     Downgraded to Ba1 and Placed Under Review Direction
     Uncertain

  -- Serial Bond Class 11, Upgraded to Baa3 and Placed Under
     Review Direction Uncertain; previously on 4/21/2004
     Downgraded to Ba1 and Placed Under Review Direction
     Uncertain

  -- Super Sinker Term Bond 1, Upgraded to Baa3 and Placed Under
     Review Direction Uncertain; previously on 4/21/2004
     Downgraded to Ba1 and Placed Under Review Direction
     Uncertain

  -- Super Sinker Term Bond 2, Upgraded to Baa3 and Placed Under
     Review Direction Uncertain; previously on 4/21/2004
     Downgraded to Ba1 and Placed Under Review Direction
     Uncertain

  -- Super Sinker Term Bond 3, Upgraded to Baa3 and Placed Under
     Review Direction Uncertain; previously on 4/21/2004
     Downgraded to Ba1 and Placed Under Review Direction
     Uncertain

Issuer: New York Counties Tobacco Trust III, Series 2003

  -- 2003 TTB-1, Upgraded to Baa3 and Placed Under Review
     Direction Uncertain; previously on 4/21/2004 Downgraded to
     Ba1 and Placed Under Review Direction Uncertain

  -- 2003 TTB-2, Upgraded to Baa3 and Placed Under Review
     Direction Uncertain; previously on 4/21/2004 Downgraded to
     Ba1 and Placed Under Review Direction Uncertain

  -- 2003 TTB-3, Upgraded to Baa3 and Placed Under Review
     Direction Uncertain; previously on 4/21/2004 Downgraded to
     Ba1 and Placed Under Review Direction Uncertain

Issuer: Niagara Tobacco Asset Securitization Corporation, Series
2000

  -- Serial 9, Upgraded to Baa3 and Placed Under Review Direction
     Uncertain; previously on 4/21/2004 Downgraded to Ba1 and
     Placed Under Review Direction Uncertain

  -- Serial 10, Upgraded to Baa3 and Placed Under Review
     Direction Uncertain; previously on 4/21/2004 Downgraded to
     Ba1 and Placed Under Review Direction Uncertain

  -- Serial 11, Upgraded to Baa3 and Placed Under Review
     Direction Uncertain; previously on 4/21/2004 Downgraded to
     Ba1 and Placed Under Review Direction Uncertain

  -- Serial 12, Upgraded to Baa3 and Placed Under Review
     Direction Uncertain; previously on 4/21/2004 Downgraded to
     Ba1 and Placed Under Review Direction Uncertain

  -- Serial 13, Upgraded to Baa3 and Placed Under Review
     Direction Uncertain; previously on 4/21/2004 Downgraded to
     Ba1 and Placed Under Review Direction Uncertain

  -- Serial 14, Upgraded to Baa3 and Placed Under Review
     Direction Uncertain; previously on 4/21/2004 Downgraded to
     Ba1 and Placed Under Review Direction Uncertain

  -- Serial 15, Upgraded to Baa3 and Placed Under Review
     Direction Uncertain; previously on 4/21/2004 Downgraded to
     Ba1 and Placed Under Review Direction Uncertain

  -- Serial 16, Upgraded to Baa3 and Placed Under Review
     Direction Uncertain; previously on 4/21/2004 Downgraded to
     Ba1 and Placed Under Review Direction Uncertain

  -- Serial 17, Upgraded to Baa3 and Placed Under Review
     Direction Uncertain; previously on 4/21/2004 Downgraded to
     Ba1 and Placed Under Review Direction Uncertain

  -- Serial 18, Upgraded to Baa3 and Placed Under Review
     Direction Uncertain; previously on 4/21/2004 Downgraded to
     Ba1 and Placed Under Review Direction Uncertain

  -- Serial 19, Upgraded to Baa3 and Placed Under Review
     Direction Uncertain; previously on 4/21/2004 Downgraded to
     Ba1 and Placed Under Review Direction Uncertain

  -- Serial 20, Upgraded to Baa3 and Placed Under Review
     Direction Uncertain; previously on 4/21/2004 Downgraded to
     Ba1 and Placed Under Review Direction Uncertain

  -- Term 3, Upgraded to Baa3 and Placed Under Review Direction
     Uncertain; previously on 4/21/2004 Downgraded to Ba1 and
     Placed Under Review Direction Uncertain

  -- Term 4, Upgraded to Baa3 and Placed Under Review Direction
     Uncertain; previously on 4/21/2004 Downgraded to Ba1 and
     Placed Under Review Direction Uncertain

  -- Term 5, Upgraded to Baa3 and Placed Under Review Direction
     Uncertain; previously on 4/21/2004 Downgraded to Ba1 and
     Placed Under Review Direction Uncertain

Issuer: Rensselaer Tobacco Asset Securitization Corporation,
Series A

  -- Serial Bond Class 4, Upgraded to Baa3 and Placed Under
     Review Direction Uncertain; previously on 4/21/2004
     Downgraded to Ba1 and Placed Under Review Direction
     Uncertain

  -- Serial Bond Class 5, Upgraded to Baa3 and Placed Under
     Review Direction Uncertain; previously on 4/21/2004
     Downgraded to Ba1 and Placed Under Review Direction
     Uncertain

  -- Serial Bond Class 6, Upgraded to Baa3 and Placed Under
     Review Direction Uncertain; previously on 4/21/2004
     Downgraded to Ba1 and Placed Under Review Direction
     Uncertain

  -- Serial Bond Class 7, Upgraded to Baa3 and Placed Under
     Review Direction Uncertain; previously on 4/21/2004
     Downgraded to Ba1 and Placed Under Review Direction
     Uncertain

  -- Serial Bond Class 8, Upgraded to Baa3 and Placed Under
     Review Direction Uncertain; previously on 4/21/2004
     Downgraded to Ba1 and Placed Under Review Direction
     Uncertain

  -- Serial Bond Class 9, Upgraded to Baa3 and Placed Under
     Review Direction Uncertain; previously on 4/21/2004
     Downgraded to Ba1 and Placed Under Review Direction
     Uncertain

  -- Serial Bond Class 10, Upgraded to Baa3 and Placed Under
     Review Direction Uncertain; previously on 4/21/2004
     Downgraded to Ba1 and Placed Under Review Direction
     Uncertain

  -- Serial Bond Class 11, Upgraded to Baa3 and Placed Under
     Review Direction Uncertain; previously on 4/21/2004
     Downgraded to Ba1 and Placed Under Review Direction
     Uncertain

  -- Super Sinker Term Bond, Upgraded to Baa3 and Placed Under
     Review Direction Uncertain; previously on 4/21/2004
     Downgraded to Ba1 and Placed Under Review Direction
     Uncertain

  -- Super Sinker Term Bond 2, Upgraded to Baa3 and Placed Under
     Review Direction Uncertain; previously on 4/21/2004
     Downgraded to Ba1 and Placed Under Review Direction
     Uncertain

  -- Super Sinker Term Bond 3, Upgraded to Baa3 and Placed Under
     Review Direction Uncertain; previously on 4/21/2004
     Downgraded to Ba1 and Placed Under Review Direction
     Uncertain

Issuer: Rockland Tobacco Asset Securitization Corporation, Series
2001

  -- Serial Bond Class 4, Upgraded to Baa3 and Placed Under
     Review Direction Uncertain; previously on 4/21/2004
     Downgraded to Ba1 and Placed Under Review Direction
     Uncertain

  -- Serial Bond Class 5, Upgraded to Baa3 and Placed Under
     Review Direction Uncertain; previously on 4/21/2004
     Downgraded to Ba1 and Placed Under Review Direction
     Uncertain

  -- Serial Bond Class 6, Upgraded to Baa3 and Placed Under
     Review Direction Uncertain; previously on 4/21/2004
     Downgraded to Ba1 and Placed Under Review Direction
     Uncertain

  -- Serial Bond Class 7, Upgraded to Baa3 and Placed Under
     Review Direction Uncertain; previously on 4/21/2004
     Downgraded to Ba1 and Placed Under Review Direction
     Uncertain

  -- Serial Bond Class 8, Upgraded to Baa3 and Placed Under
     Review Direction Uncertain; previously on 4/21/2004
     Downgraded to Ba1 and Placed Under Review Direction
     Uncertain

  -- Super Sinker Term Bond 1, Upgraded to Baa3 and Placed Under
     Review Direction Uncertain; previously on 4/21/2004
     Downgraded to Ba1 and Placed Under Review Direction
     Uncertain

  -- Super Sinker Term Bond 2, Upgraded to Baa3 and Placed Under
     Review Direction Uncertain; previously on 4/21/2004
     Downgraded to Ba1 and Placed Under Review Direction
     Uncertain

  -- Super Sinker Term Bond 3, Upgraded to Baa3 and Placed Under
     Review Direction Uncertain; previously on 4/21/2004
     Downgraded to Ba1 and Placed Under Review Direction
     Uncertain

Issuer: Ulster Tobacco Asset Securitization Corporation, Series
2001

  -- Term CI Bond-1, Upgraded to Baa3 and Placed Under Review
     Direction Uncertain; previously on 4/21/2004 Downgraded to
     Ba1 and Placed Under Review Direction Uncertain

  -- Term CI Bond-2, Upgraded to Baa3 and Placed Under Review
     Direction Uncertain; previously on 4/21/2004 Downgraded to
     Ba1 and Placed Under Review Direction Uncertain

  -- Term CCA Bond-1, Upgraded to Baa3 and Placed Under Review
     Direction Uncertain; previously on 4/21/2004 Downgraded to
     Ba1 and Placed Under Review Direction Uncertain

  -- Term CCA Bond-2, Upgraded to Baa3 and Placed Under Review
     Direction Uncertain; previously on 4/21/2004 Downgraded to
     Ba1 and Placed Under Review Direction Uncertain


* Attorneys to Talk With Legislators for Bankruptcy Law Change
--------------------------------------------------------------
Jerry Lynott at Times Leader reports that David Harris and 25
other members of the National Association of Consumer Bankruptcy
Attorneys will be in Washington D.C. on Feb. 9 and 10 for training
and discussions with legislators on possible changes in the
bankruptcy law.

Times Leader relates that Mr. Harris will discuss with legislators
on the increasing number of foreclosures.  Citing Mr. Harris, the
report says that President-elect Barack Obama and lawmakers are
supporting the Helping Families Save Their Homes in Bankruptcy Act
of 2009.

According to Times Leader, Mr. Harris said that he will meet with
U.S. Reps. Chris Carney, Paul Kanjorski, and the legislators who
introduced the act -- Sen. Dick Durbin, and Reps. Brad Miller and
John Conyers.

Times Leader quoted Mr. Harris as saying, "We need court
supervised loan modifications that are feasible for the homeowner,
but at the same time fair to the banks and investors of the
securitized trusts that hold the bundles of residential
mortgages."

Mr. Harris said that the planned amendment in the bankruptcy law
emphasizes reducing foreclosures.  The proposal before Congress
would likely undergo revisions, the report says, citing Mr.
Harris.  According to the report, the law would let bankruptcy
judges modify mortgages on a homeowner's principal place of
residence, but this wouldn't apply to future mortgages, only those
that are in effect.  The report states that modifications could
include decreasing the interest rate and lengthening the repayment
time.

The law, Times Leader relates, would ease some requirements in
Chapter 13 bankruptcy filings.

Citing supporters of the planned bankruptcy law amendment, Times
Leader reports that the modifications would help homeowners avoid
foreclosure, provide stability to the housing market, and could
boost the economy.


* J.P. Morgan Chase to Expand Program to Modify Mortgages
---------------------------------------------------------
Robin Sidel at The Wall Street Journal reports that J.P. Morgan
Chase & Co. will expand its two-month-old program to modify
mortgages.  According to the report, J.P. Morgan will include more
than $1 trillion of loans the bank sold to investors.

J.P. Morgan, says WSJ, launched in October 2008 a plan to modify
the terms of $70 billion in mortgages it owns for borrowers behind
on payments or showing signs they couldn't pay.

WSJ relates that lawmakers are considering a Senate bill that
would let judges set new repayment terms for mortgage holders in
bankruptcy, an amendment that Citigroup Inc. supports.

According to WSJ, J.P. Morgan's mortgage business services loans
on the bank's books and those sold off to investors, or
securitized.  The report states that securitized mortgages are
more than three-quarters of the $1.5 trillion in mortgages that
J.P. Morgan services.

J.P. Morgan, WSJ states, said that it held talks with a dozen
major trustees that represent investors of securitized mortgages
in formulating the plan.  According to the report, J.P. Morgan
said that it believes it can legally change the "vast majority" of
investor-owned mortgages and will seek investor approval in other
cases.

JPMorgan Chase & Co. (NYSE: JPM) -- http://www.jpmorganchase.com/
-- is a global financial services firm with assets of about
$2.3 trillion and operations in more than 60 countries.  The firm
provides services in investment banking, financial services for
consumers, small business and commercial banking, financial
transaction processing, asset management, and private equity.  A
component of the Dow Jones Industrial Average, JPMorgan Chase
serves millions of consumers in the U.S. and many of the world's
most prominent corporate, institutional and government clients
under its J.P. Morgan, Chase, and WaMu brands.


* U.S. Gov't Working on Second Phase of Banking Bailout
-------------------------------------------------------
Deborah Solomon, Jon Hilsenrath, and Damian Paletta at The Wall
Street Journal report that the U.S. government is working on a
second phase of its rescue attempt, as the banking crisis is worse
than originally thought.

According to WSJ, the government plans to purge bad assets that
are paralyzing the financial system.  Citing government officials,
the report says that the U.S. Treasury, Federal Reserve, and
Federal Deposit Insurance Corp. are consulting with the incoming
Obama administration and are discussing a plan to form a
government bank that would purchase the bad investments and loans
that are behind the U.S. banks' huge losses.  The report states
that the agencies are also considering an additional and giant
government guarantee of banks' assets against further losses.

WSJ relates that the deterioration of bank assets is outpacing the
government's rescue efforts, and banks are now struggling with the
real-estate investments that sparked the crisis and with car
loans, credit-card debt, and other consumer debt.

The government is trying to attract private capital back to the
banking system, WSJ says.  The report quoted FDIC Chairperson
Sheila Blair as saying, "All of these ideas are designed
ultimately to facilitate more lending in the economy.  It's
essential to get some private capital back into these banks."

Financial institutions and investors will ultimately realize about
$2 trillion in losses on U.S. loans, WSJ reports, citing Goldman
Sachs economists.  The economists said that those institutions and
investors have recognized half those losses, WSJ states.
Regulators, according to the report, said that they are worried
that the government is the remaining source of capital for banks.

Treasury Secretary Henry Paulson, WSJ relates, first came up with
the idea of purchasing bad bank assets.  Citing Mr. Paulson, WSJ
says that regulators are still interested in removing bad bank
assets from the financial system and are considering the ways of
doing that, including an "aggregator bank" that could buy the
securities, transferring the risk of holding them to the
government.  The report quoted Federal Reserve Chairperson Ben
Bernanke as saying, "The presence of these assets significantly
increases uncertainty about the underlying value of these
institutions and may inhibit both new and private investment and
new lending."

WSJ states that bailout funds could be used to capitalize a "bad
bank," which could then raise a substantial amount of cash by
issuing government-backed debt.  Banks selling assets to the
government fund could become part owners, WSJ says, citing Ms.
Bair.  The government bank, WSJ relates, could hold the assets,
sell them or securitize them.

Ms. Bair, according to WSJ, said that the assets could be sold at
fair value, which banks use to value their own assets.

WSJ reports that the government could broaden a technique it has
already used in its rescue of Citigroup and Bank of America.  The
government, says WSJ, agreed to share losses with the banks on a
certain group of assets.  WSJ states that the banks would take the
first hit, and the government would take the rest.

According to WSJ, policymakers are considering expanding an
existing program that aims to spur lending by encouraging
investors to purchase newly issued, high-rated securities backed
by consumer loans.


* Large Companies with Insolvent Balance Sheets
-----------------------------------------------

                                               Total
                                              Share-      Total
                                   Total     holders    Working
                                   Assets     Equity    Capital
Company             Ticker          ($MM)      ($MM)      ($MM)
-------             ------         ------    -------    -------
APP PHARMACEUTIC    APPX US        1,105        (42)       260
ARBITRON INC        ARB US           162         (9)       (39)
BARE ESCENTUALS     BARE US          272        (25)       125
BLOUNT INTL         BLT US           485        (20)       119
CABLEVISION SYS     CVC US         9,717     (4,966)    (1,583)
CENTENNIAL COMM     CYCL US        1,432     (1,021)       101
CHENIERE ENERGY     CQP US         2,021       (312)       179
CHENIERE ENERGY     LNG US         3,049       (266)       423
CHOICE HOTELS       CHH US           350        (91)        (8)
CLOROX CO           CLX US         4,587       (364)      (396)
CV THERAPEUTICS     CVTX US          392       (226)       286
DELTEK INC          PROJ US          188        (62)        34
DISH NETWORK-A      DISH US        7,177     (2,129)    (1,318)
DOMINO'S PIZZA      DPZ US           441     (1,437)        84
DUN & BRADSTREET    DNB US         1,642       (554)      (206)
DYAX CORP           DYAX US           91        (28)        33
ENERGY SAV INCOM    SIF-U CN         464       (263)       (92)
EXELIXIS INC        EXEL US          255        (23)        (1)
EXTENDICARE REAL    EXE-U CN       1,621        (31)       125
FERRELLGAS-LP       FGP US         1,510        (12)      (114)
GARTNER INC         IT US          1,115        (15)      (253)
GENCORP INC         GY US          1,014        (22)        66
GENERAL MOTO-CED    GM AR        110,425    (58,994)   (18,461)
GENERAL MOTORS      GM US        110,425    (58,994)   (18,461)
HEALTHSOUTH CORP    HLS US         1,980       (874)      (218)
IMAX CORP           IMAX US          238        (91)        41
IMAX CORP           IMX CN           238        (91)        41
INCYTE CORP         INCY US          265       (177)       216
INDEVUS PHARMACE    IDEV US          263       (130)        19
INTERMUNE INC       ITMN US          206        (92)       134
ION MEDIA NETWOR    IION US        1,137     (1,621)        96
KNOLOGY INC         KNOL US          647        (44)        13
LINEAR TECH CORP    LLTC US        1,498       (306)       991
MEDIACOM COMM-A     MCCC US        3,688       (279)      (311)
MOODY'S CORP        MCO US         1,694       (894)      (331)
NATIONAL CINEMED    NCMI US          569       (476)        86
NAVISTAR INTL       NAV US        10,390     (1,495)     1,660
NPS PHARM INC       NPSP US          202       (208)        90
OCH-ZIFF CAPIT-A    OZM US         2,224       (173)         -
OSIRIS THERAPEUT    OSIR US           29         (8)       (14)
OVERSTOCK.COM       OSTK US          145         (4)        33
PALM INC            PALM US          661       (151)       (40)
REGAL ENTERTAI-A    RGC US         2,557       (224)      (112)
REVLON INC-A        REV US           877       (999)         8
ROTHMANS INC        ROC CN           545       (213)       102
SALLY BEAUTY HOL    SBH US         1,527       (697)       367
SONIC CORP          SONC US          818        (55)        (9)
SUCCESSFACTORS I    SFSF US          168         (3)         4
SUN COMMUNITIES     SUI US         1,222        (28)         -
SYNTA PHARMACEUT    SNTA US           91        (35)        58
TAUBMAN CENTERS     TCO US         3,182        (20)         -
TEAL EXPLORATION    TEL SJ            70        (36)       (80)
THERAVANCE          THRX US          255       (125)       184
UAL CORP            UAUA US       20,731     (1,282)    (1,583)
UST INC             UST US         1,402       (326)       237
WEIGHT WATCHERS     WTW US         1,110       (901)      (270)
WESTERN UNION       WU US          5,504        (90)       319
WR GRACE & CO       GRA US         3,754       (179)       970



                            *********

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.

The Sunday TCR delivers securitization rating news from the week
then-ending.

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.  Ronald C. Sy, Joel Anthony G. Lopez, Cecil R. Villacampa,
Luke Caballos, Sheryl Joy P. Olano, Carlo Fernandez, Christopher
G. Patalinghug, and Peter A. Chapman, Editors.

Copyright 2009.  All rights reserved.  ISSN: 1520-9474.

This material is copyrighted and any commercial use, resale or
publication in any form (including e-mail forwarding, electronic
re-mailing and photocopying) is strictly prohibited without prior
written permission of the publishers.  Information contained
herein is obtained from sources believed to be reliable, but is
not guaranteed.

The TCR subscription rate is $775 for 6 months delivered via e-
mail.  Additional e-mail subscriptions for members of the same
firm for the term of the initial subscription or balance thereof
are $25 each.  For subscription information, contact Christopher
Beard at 240/629-3300.

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